SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ____)
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 PURSUANT TO RULE 14A-11(C) OR 14A-12
FUEL CENTERS, INC.
(Name of Registrant as Specified In Its Charter)
Commission File Number: 000-33321
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| x | No Fee Required
Fee computed on table below per Exchange Act Rules 14(a)6(i)(1) and 011. (1)
Title of each class of securities to which investment applies:
(2) Aggregate number of securities to which investment applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 011: (set forth the amount on which the filing fee is
calculated and state how it was determined): Purchase price of assets to be
acquired.
(4) Proposed aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by Exchange Act Rule
011(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:
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FUEL CENTERS, INC.
9323 Vista Serena
Cypress, California 90630
October ___, 2003
DEAR FELLOW STOCKHOLDER:
On behalf of the Board of Directors, I am pleased to invite you to
attend a special meeting of stockholders of Fuel Centers, Inc., to be held on
____________, 2003, at 11:00 a.m., local time, at 4100 Newport Place, Suite 830,
Newport Beach, California 92660. The Notice of Special Meeting, Proxy Statement
and form of proxy are enclosed with this letter.
The matters expected to be acted upon at the meeting are described in
detail in the following Notice of Special Meeting and Proxy Statement.
I am delighted you have chosen to invest in Fuel Centers, Inc. and hope
that, whether or not you plan to attend the special meeting, you will vote as
soon as possible by completing, signing and returning the enclosed proxy card in
the envelope provided. Your vote is important. Voting by written proxy will
ensure your representation at the special meeting if you do not attend in
person.
I look forward to seeing you at the special meeting.
Very truly yours,
--------------------------
JOHN R. MUELLERLEILE
Chief Executive Officer
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FUEL CENTERS, INC.
9323 VISTA SERENA
CYPRESS, CALIFORNIA 90630
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On ____________, 2003
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the special meeting of stockholders of Fuel
Centers, Inc, a Nevada corporation, will be held on ____________, 2003, at
11:00 a.m., local time, at 4100 Newport Place, Suite 830, Newport Beach,
California 92660, to vote on the following proposals:
1. To approve proposed amendments to our Articles of Incorporation, a copy of
which is attached hereto as Exhibit A, to effect the following:
o change our corporate name to Fellowes Energy Ltd.
--------------------
o increase our authorized Common Stock from 50,000,000 shares to
100,000,000 shares $.001 par value per share;
o increase our authorized Preferred Stock from 5,000,000 shares to
25,000,000 shares $.001 par value per share;
o allow future shareholder meetings to be conducted by written consent.
2. To ratify the 2003 Stock Option Plan attached hereto as Exhibit B.
3. To act upon such other matters and transact such other business as may
properly come before the special meeting or any adjournments or postponements
thereof.
The Board of Directors has fixed the close of business on October 10,
2003 as the record date for determining the stockholders entitled to receive
notice of and to vote, either in person or by proxy, at the special meeting and
at any and all adjournments or postponements thereof. To vote your shares,
please sign, date and complete the enclosed proxy and mail it promptly in the
enclosed, postage-paid return envelope.
PLEASE NOTE THAT THE COMPANY'S CONTROLLING STOCKHOLDERS HAVE INFORMED
THE COMPANY THAT THEY WILL BE VOTING "FOR" PROPOSALS 1 AND 2 ABOVE. THE NUMBER
OF VOTES HELD BY THE CONTROLLING STOCKHOLDERS ARE SUFFICIENT TO SATISFY THE
STOCKHOLDER VOTE REQUIREMENT FOR BOTH OF THE PROPOSALS AND NO ADDITIONAL VOTES
WILL CONSEQUENTLY BE NEEDED TO APPROVE EITHER OF THE PROPOSALS.
By Order of the Board of Directors:
JOHN R. MUELLERLEILE
Chief Executive Officer
Cypress, California 90630
October ___, 2003
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-----------------
PROXY STATEMENT
-----------------
This Proxy Statement is furnished to the stockholders of Fuel Centers,
Inc. ("Fuel Centers" or the "Corporation") in connection with the solicitation
on behalf of our Board of Directors of proxies to be voted at the Special
Meeting of Stockholders of Fuel Centers (together with any adjournments or
postponements thereof, the "Special Meeting"). The Special Meeting will be held
on ____________, 2003 at 11:00 a.m., local time, at 4100 Newport Place, Suite
830, Newport Beach, California 92660.
This Proxy Statement and the accompanying proxy card were first mailed
to our stockholders on or about _____________, 2003.
All shares represented by properly executed proxies will be voted in
accordance with directions on the proxies. If no direction is indicated, the
shares will be voted at the Special Meeting FOR the amendments to the Articles
of Incorporation to change our corporate name, increase the authorized common
stock, increase the authorized preferred stock, authorize future shareholder
meetings to be conducted by written consent, and shares will be voted to ratify
the 2003 Stock Option Plan. A stockholder executing and returning a proxy may
revoke it at any time before it is exercised by written notice to the Secretary
of Fuel Centers or by voting in person at the Special Meeting.
The Board of Directors does not know of any matters to be brought
before the Special Meeting other than the items set forth in the accompanying
Notice of Special Meeting of Stockholders. The enclosed proxy confers
discretionary authority to the persons appointed by the Board of Directors to
vote on any other matter that is properly presented for action at the Special
Meeting.
The cost of solicitation of proxies by the Board of Directors is to be
borne by Fuel Centers. In addition to the use of the mails, proxies may be
solicited by telephone and telecopier transmission by our directors, officers
and employees. Arrangements may also be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of solicitation material
to the beneficial owners of stock held of record by such persons, and we may
reimburse such custodians, nominees and fiduciaries for reasonable out-of-pocket
expenses incurred by them in connection with the solicitation.
PLEASE NOTE THAT THE COMPANY'S CONTROLLING STOCKHOLDERS HAVE INFORMED
THE COMPANY THAT THEY WILL BE VOTING "FOR" PROPOSALS 1 AND 2 ABOVE. THE NUMBER
OF VOTES HELD BY THE CONTROLLING STOCKHOLDERS ARE SUFFICIENT TO SATISFY THE
STOCKHOLDER VOTE REQUIREMENT FOR BOTH OF THE PROPOSALS AND NO ADDITIONAL VOTES
WILL CONSEQUENTLY BE NEEDED TO APPROVE EITHER OF THE PROPOSALS.
YOU ARE HEREBY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS TO COMPLETE, SIGN,
DATE AND RETURN THE PROXY IN THE ACCOMPANYING ENVELOPE, WHICH IS POSTAGE-PAID IF
MAILED IN THE UNITED STATES.
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ABOUT THE MEETING
What is the purpose of the Special Meeting?
At our Special Meeting, stockholders will act upon the matters outlined
in the Notice of Special Meeting of Stockholders on the cover page of this proxy
statement, including the proposed amendments to our Articles of Incorporation
and adoption of the 2003 Stock Option Plan. In addition, management will respond
to appropriate questions from stockholders.
Who is entitled to vote at the meeting?
Only stockholders of record of shares of Common Stock at the close of
business on October ___, 2003 (the "Record Date") will be entitled to vote at
the Special Meeting. On the Record Date, there were 12,550,450 shares of Common
Stock issued and outstanding. These shares of Common Stock were the only
outstanding voting securities of Fuel Centers. If you were a stockholder of
record of shares of Common Stock on that date, you will be entitled to vote all
of the shares that you held on that date at the Special Meeting.
What are the voting rights of the holders of our Common Stock?
Each share of Common Stock is entitled to one vote on each proposal
submitted to stockholders. Stockholders of record may vote on a matter by
marking the appropriate box on the proxy.
Who can attend the Special Meeting?
Any stockholder of record may attend the Special Meeting.
What constitutes a quorum?
A majority of the outstanding shares of our Common Stock, represented
in person or by proxy, shall constitute a quorum for the transaction of business
at the Special Meeting. As of the Record Date, 12,550,450 shares of our Common
Stock were outstanding. Thus, the presence, in person or by proxy, of the
stockholders of Common Stock representing at least 6,275,226 votes will be
required to establish a quorum. Action on all matters scheduled to come before
the Special Meeting, including the amendments to our Articles of Incorporation,
and ratification of the 2003 Stock Option Plan will be authorized by the
affirmative vote of the majority of shares present at the Special Meeting and
entitled to vote on such matters. Abstentions will be treated as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum but as unvoted for purposes of determining the approval of any matter
submitted to the stockholders for a vote. If a broker indicates on the proxy
that it does not have discretionary authority as to certain shares to vote on a
particular matter, those shares will not be considered as present and entitled
to vote with respect to that matter.
How do I vote?
If you complete and properly sign the accompanying proxy card and
return it to Fuel Centers, it will be voted as you direct. If you are a
stockholder of record and attend the Special Meeting, you may deliver your
completed proxy card in person. "Street name" stockholders who wish to vote at
the Special Meeting will need to obtain a proxy form from the institution that
holds their shares.
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Can I change my vote after I return my proxy card?
Yes. Even after you have submitted your proxy card, you may change your
vote at any time before the proxy is exercised by filing with the Secretary of
Fuel Centers either a notice of revocation or a duly executed proxy bearing a
later date. The powers of the proxy holders will be suspended if you attend the
Special Meeting in person and so request, although attendance at the Special
Meeting will not by itself revoke a previously granted proxy.
THE FOLLOWING ARE ANSWERS TO SOME OF THE QUESTIONS ABOUT THE STOCK OPTION PLAN
THAT YOU, AS ONE OF OUR STOCKHOLDERS, MAY HAVE. WE URGE YOU TO READ THIS PROXY
STATEMENT, INCLUDING THE STOCK OPTION PLAN, CAREFULLY BECAUSE THE INFORMATION IN
THIS SECTION IS NOT COMPLETE.
Has the Board of Directors approved the Stock Option Plan?
Yes. On October 9, 2003 our directors approved the 2003 Stock Option
Plan.
Will my vote have any effect on the outcome?
No, it will not. Our officers, directors and controlling stockholders
hold enough votes to approve all of the proposals and they has informed us that
they will be voting their shares in favor of all the proposals discussed herein.
How many shares will I have after the approval of these proposals?
The number of shares you own will remain the same. Nonetheless, your ownership
percentage may be diluted if we issue any stock in the future or if any options
issued pursuant to the Stock Option Plan are exercised, allowing recipients of
those options to purchase shares of our common stock.
Do I have any dissenters' rights?
The Nevada Revised Statutes do not provide for any dissenters'
rights for these proposed actions, including: (i) the name change, (ii) the
increase in the number of shares of authorized common stock or increase in the
number of authorized preferred stock, (iii) allowing for shareholder votes to be
conducted by written consent in lieu of a shareholders meeting, and (iv)
adoption of the stock option plan.
What are the recommendations of the Board of Directors?
Unless you give other instructions on your proxy card, the persons
named as proxy holders on the proxy card will vote in accordance with the
recommendations of the Board of Directors. The recommendation of the Board of
Directors is set forth with the description of each item in this proxy
statement. In summary, the Board of Directors recommends a vote in favor of the
amendments to the Articles of Incorporation of Fuel Centers, and makes no
recommendation as to the ratification of the 2003 Stock Option Plan, all as
described in detail in this Proxy Statement.
With respect to any other matter that properly comes before the Special
Meeting, the proxy holders will vote as recommended by the Board of Directors,
or, if no recommendation is given, in their own discretion.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Some statements in this Proxy Statement contain certain
"forward-looking" statements of management of Fuel Centers. Forward-looking
statements are statements that estimate the happening of future events are not
based on historical fact. Forward-looking statements may be identified by the
use of forward-looking terminology, such as "may", "shall", "could", "expect",
"estimate", "anticipate", "predict", "probable", "possible", "should",
"continue", or similar terms, variations of those terms or the negative of those
terms. The forward-looking statements specified in the following information
have been compiled by our management on the basis of assumptions made by
management and considered by management to be reasonable. Our future operating
results, however, are impossible to predict and no representation, guaranty, or
warranty is to be inferred from those forward-looking statements.
The assumptions used for purposes of the forward-looking statements
specified in the following information represent estimates of future events and
are subject to uncertainty as to possible changes in economic, legislative,
industry, and other circumstances. As a result, the identification and
interpretation of data and other information and their use in developing and
selecting assumptions from and among reasonable alternatives require the
exercise of judgment. To the extent that the assumed events do not occur, the
outcome may vary substantially from anticipated or projected results, and,
accordingly, no opinion is expressed on the achievability of those
forward-looking statements. We cannot guaranty that any of the assumptions
relating to the forward-looking statements specified in the following
information are accurate, and we assume no obligation to update any such
forward-looking statements.
PLEASE NOTE THAT THE COMPANY'S CONTROLLING STOCKHOLDERS HAVE INFORMED
THE COMPANY THAT THEY WILL BE VOTING "FOR" PROPOSALS 1 AND 2 ABOVE. THE NUMBER
OF VOTES HELD BY THE CONTROLLING STOCKHOLDERS ARE SUFFICIENT TO SATISFY THE
STOCKHOLDER VOTE REQUIREMENT FOR BOTH OF THE PROPOSALS AND NO ADDITIONAL VOTES
WILL CONSEQUENTLY BE NEEDED TO APPROVE EITHER OF THE PROPOSALS.
PROPOSAL 1
AMENDMENTS TO THE ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK, INCREASE THE NUMBER OF AUTHORIZED SHARES OF PREFERRED
STOCK, AND AUTHORIZE FUTURE STOCKHOLDER MEETINGS TO BE HELD BY WRITTEN CONSENT.
THE BOARD OF DIRECTORS OF FUEL CENTERS RECOMMENDS THAT HOLDERS OF COMMON STOCK
VOTE "FOR" THE APPROVAL OF THE NAME CHANGE, AN INCREASE IN THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK AND PREFERRED STOCK, AND ALLOWING FOR THE
CONDUCT OF FUTURE SHAREHOLDER VOTES BY WRITTEN CONSENT.
On October 9, 2003, our Board of Directors approved, subject to
stockholder approval, an Amendment to our Articles of Incorporation to change
our corporate name to Fellowes Energy Ltd., authorize an increase from
50,000,000 shares of authorized Common Stock to 100,000,000 shares of authorized
Common Stock, $.001 par value per share, to increase the number of authorized
shares of Preferred Stock $.001 par value per share from 5,000,000 to 25,000,000
and allow for future shareholders votes to be conducted by written consent in
lieu of a meeting. We propose to amend the applicable Articles of our Articles
of Incorporation to read as set forth below in this Proxy Statement:
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CONSEQUENCES OF APPROVAL OF AMENDMENTS TO THE ARTICLES OF INCORPORATION
If the amendments to our Articles of Incorporation to change our
corporate name, to increase the authorized shares of our capital stock to one
hundred million (100,000,000) shares of Common Stock and twenty-five million
(25,000,000) shares of Preferred Stock, and to authorize future shareholder
votes to be conducted by written consent in lieu of a meeting, is approved, we
will cause such amendments to our Articles of Incorporation to be filed with the
Secretary of State of Nevada, which will thereby amend our Articles of
Incorporation with those provisions.
The affirmative vote of a majority of the outstanding shares of our
Common Stock at the Special Meeting, whether in person or by proxy, is required
to approve these amendments to the Articles of Incorporation.
The Board of Directors recommends that the stockholders vote FOR the
amendments to the Articles of Incorporation to change our corporate name,
increase the number of shares of authorized Common Stock, to increase the number
of shares of authorized Preferred Stock, and to authorize that future
shareholder meetings be conducted by written consent in lieu of a meeting.
Proxies solicited by the Board of Directors will be voted for these amendments
to the Articles of Incorporation unless stockholders specify in their proxies a
contrary choice.
GENERAL
On October 9, 2003, our Board of Directors unanimously approved,
subject to shareholder approval, an amendment to our Articles of Incorporation
to change our corporate name to "Fellowes Energy Ltd." to approve the authorized
increase in common stock to 100,000,000 shares and preferred stock to 25,000,000
shares, and provide for future shareholder votes to be conducted by written
consent in lieu of a shareholders meeting. The full text of the proposed
amendment to the Articles of Incorporation is attached hereto as Exhibit A.
PURPOSE OF CHANGE IN NAME OF THE CORPORATION AND INCREASING OUR AUTHORIZED
COMMON AND PREFERRED STOCK
Our Board of Directors believes it is desirable to change the name of the
Company to "Fellowes Energy Ltd." Our purpose in changing our name to Fellowes
Energy Ltd. and increasing our authorized common and preferred stock reflects
the fact that we anticipate that we will enter into an agreement to acquire
additional assets or privately held company to expand our operations and our
business focus. We believe that this transaction will increase our profitability
and the total value of the corporation to our investors. We believe that the
other changes to our Articles of Incorporation will increase the total value of
the corporation to our investors and better position us to take advantage
possible future financings and acquisition opportunities, and other corporate
purposes as the board of directors determines in its discretion to be in the
best interest of the corporation, and which may include future stock splits,
stock dividends or other distributions, future financings, acquisitions and
stock options and other equity benefits under employee benefit plans. To
facilitate the contemplated transaction we are increasing the number of
authorized shares of common stock, increasing the number of authorized shares of
preferred stock, and amending our Articles to allow for future shareholders
votes to be conducted by written
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consent in lieu of a shareholders meeting, all of which we believe will enable
us to promptly take advantage of future favorable opportunities that may present
themselves without the delay and expense associated with holding a special
meeting of stockholders.
PROCEDURE FOR APPROVAL OF NAME CHANGE AND INCREASE IN COMMON STOCK AND PREFERRED
STOCK; VOTE REQUIRED
The Nevada Revised Statutes requires that, in order for us to amend
our Articles of Incorporation, such amendment must be approved by our Board of
Directors and approved by a majority of the outstanding shares entitled to vote.
On October 9, 2003, the record date for determination of the
shareholders entitled to receive this Proxy Statement, there were 12,550,450
shares of common stock outstanding. The holders of common stock are entitled to
one vote for each share held of record on all matters submitted to a vote of our
shareholders. We need the affirmative vote of at least a majority of the
outstanding shares of our common stock to approve the name change, the increase
in authorized shares of common stock and in preferred stock. Our Board, by its
unanimous written consent, adopted resolutions approving an amendment to our
Articles of Incorporation to effect the name change and approve the increase in
authorized shares of common and preferred stock.
PURPOSE OF AMENDING ARTICLES TO ALLOW FOR FUTURE SHAREHOLDER VOTES TO BE
CONDUCTED BY WRITTEN CONSENT IN LIEU OF MEETINGS
Our Board of Directors believes it is desirable to allow for future
shareholder votes to be conducted by written consent in lieu of a shareholders
meeting in that the process of obtaining shareholder approval will be
streamlined by such a change. We believe that this change will allow for us to
more easily take advantage of future opportunities with out the delay and
expense associated with conducting a special shareholders meeting.
EFFECTIVE DATE OF AMENDMENT
The amendment to our Articles of Incorporation will become effective
upon the filing with the Nevada Secretary of State of the Certificate of
Amendment to our Articles of Incorporation, attached hereto as Exhibit A. We
intend to file the Certificate of Amendment ten days after this Proxy Statement
is first mailed to shareholders.
EFFECT ON CERTIFICATES EVIDENCING SHARES OF FUEL CENTERS, INC. STOCK
The change in the name of Fuel Centers, Inc. will be reflected in
its stock records by book-entry in Fuel Centers, Inc.'s records. For those
shareholders that hold physical certificates, please do not destroy or send to
Fuel Centers, Inc. your common stock certificates. Those certificates will
remain valid for the number of shares shown thereon, and should be carefully
preserved by you.
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PROPOSAL 2
RATIFICATION OF THE 2003 STOCK OPTION PLAN
We desire to adopt the Fuel Centers, Inc., 2003 Stock Option Plan (the
"Plan") attached hereto as Exhibit B. Under the Plan, our key employees,
advisors and consultants (including directors and officers who are employees)
may be granted options to purchase shares of our common stock. Options granted
to employees may qualify as incentive stock options under Section 422 of the
Internal Revenue Code.
The Plan permits the granting of 2,000,000 shares of common stock. The
exercise price of options granted that are intended to qualify as incentive
stock options must be at a price equal to one hundred percent (100%) of the fair
market value of the common stock on the date that the option is granted
provided, however, that the price shall not be less than the par value of the
common stock which is subject to the option. Further, no incentive stock option
may be granted to an employee owning common stock having more than 10% of the
voting power of our common stock unless the option price for such employee's
option is at least 110% of the fair market value of the common stock subject to
the option at the time the option is granted and the option is not exercisable
after the expiration of five years from the date of granting. Non-qualified
grants under the plan may be made at whatever price the Board of Directors or
the compensation committee that will be appointed deem appropriate in their best
business judgment. The par value of our common stock is $.001 per share. No
option may be granted under the Plan after the tenth anniversary of the adoption
of the Plan. Unless otherwise specified by the board of directors, options
granted under the Plan to our employees are incentive stock options under the
provisions and subject to the limitations of Section 422 of the Internal Revenue
Code. Options granted to non-employees may not be eligible for the tax treatment
provided by Section 422.
ADMINISTRATION OF THE PLAN
The Plan shall be administered by our Board of Directors until such
time as a Compensation Committee is appointed. Subject to the provisions of the
Plan, the Board of Directors will determine the employees or other individuals
who will receive options under the Plan, the number of shares subject to each
option and the terms of those options, and shall interpret the Plan and makes
such rules of procedure as the Board of Directors may deem proper.
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Upon the granting of any option, the optionee must enter into a written
agreement with us setting forth the terms upon which the option may be
exercised. Such an agreement will set forth the length of the term of the option
and the timing of its exercise as determined by our Board of Directors. The
Compensation Committee, or if there is none, our Board of Directors, in its sole
discretion will determine the vesting schedule and exercise dates of any equity
security granted under the Plan at the time each grant is made. No equity
security granted under the plan shall be exercisable within six months of the
date of grant without approval of our Compensation Committee or our board of
directors. In no event shall the length of an option extend beyond ten years
from the date of its grant. An optionee may exercise an option by delivering
payment to us in cash.
Under the Plan, if the employment of any person to whom an option has
been granted is terminated for any reason other than the death or disability of
the optionee, the option shall automatically terminate. If the termination is by
reason of retirement, the optionee may exercise such portion of the option as
has vested, within three months of termination or within the remaining term of
the option, whichever is shorter. If the optionee dies while employed by us or
our subsidiaries, or during a period after termination of employment in which
the optionee could exercise an option, the optionee's beneficiary may exercise
the option within one year of the date of the optionee's death but in no event
may the option be exercised later than the date on which the option would have
expired if the optionee had lived. If the termination is by reason of
disability, the optionee may exercise the option, in whole or in part, at any
time within one year following such termination of employment but in no event
may the option be exercised later than the date on which the option would have
expired had the optionee not become disabled.
FEDERAL INCOME TAX CONSEQUENCES
With respect to the tax effects of non-qualified stock options, since
the options granted under the Plan do not have a "readily ascertainable fair
market value" within the meaning of the Federal income tax laws, an optionee of
an option will realize no taxable income at the time the option is granted. When
a non-qualified stock option is exercised, the optionee will generally be deemed
to have received compensation, taxable at ordinary income tax rates, in an
amount equal to the excess of the fair market value of the shares of our common
stock on the date of exercise of the option over the option price. We will
withhold income and employment taxes in connection with the optionee's
recognition of ordinary income as a result of the exercise by an optionee of a
non-qualified stock option. We generally can claim an ordinary deduction during
our fiscal year which includes the last day of the taxable year of the optionee
which includes the exercise date or the date on which the optionee recognizes
income. The amount of such deduction will be equal to the ordinary income
recognized by the optionee. When stock acquired through the exercise of a
non-qualified stock option is sold, the difference between the optionee's basis
in the shares and the sale price will be taxed to the optionee as a capital gain
(or loss).
With respect to the tax effects of Incentive Stock Options, the
optionee does not recognize any taxable income when the option is granted or
exercised. If no disposition of shares issued to an optionee pursuant to the
exercise of an Incentive Stock Option is made by the optionee within two years
after the date the option was granted or within one year after the shares were
transferred to the optionee, then (a) upon sale of such shares, any amount
realized in excess of the option price (the amount paid for the shares) will be
taxed to the optionee as long-term capital gain and any loss sustained will be a
long-term capital loss and (b) no deduction will be allowed to Fuel Centers,
Inc. for Federal income tax purposes. The exercise of an Incentive Stock Option
will give rise to an item of tax preference that may result in alternative
minimum tax liability for the optionee.
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If shares of common stock acquired upon the exercise of an Incentive
Stock Option are disposed of prior to the expiration of the two year and one
year holding periods described above (a "Disqualifying Disposition") generally
(a) the optionee will realize ordinary income in the year of disposition in an
amount equal to the excess (if any) of the fair market value of the shares at
exercise (or, if less, the amount realized upon the sale of such shares) over
the option price thereof, and (b) we will be entitled to deduct such amount,
subject to applicable withholding requirements. Any further gain realized will
be taxed as short-term or long-term capital gains and will not result in any
deduction by us. A Disqualifying Disposition will eliminate the item of tax
preference associated with the exercise of the Incentive Stock Option.
CHANGES IN PLAN
The Plan may be terminated, suspended, or modified at any time by our
Board of Directors, but no amendment increasing the maximum number of shares for
which options may be granted (except to reflect a stock split, stock dividend or
other distribution), reducing the option price of outstanding options, extending
the period during which options may be granted, otherwise materially increasing
the benefits accruing to optionees or changing the class of persons eligible to
be optionees shall be made without first obtaining approval by a majority of our
shareholders. No termination, suspension or modification of the Plan shall
adversely affect any right previously acquired by the optionee or other
beneficiary under the Plan.
Options granted under the Plan may not be transferred other than by
will or by the laws of descent and distribution and, during the optionee's
lifetime may be exercised only by the optionee. All of the Options previously
issued under the prior plan remain unchanged and outstanding.
VOTE REQUIRED
Approval of the Fuel Centers, Inc., 2003 Stock Option Plan requires the
affirmative vote of a majority of the shares of our common stock voting in
person or by proxy on the amendment. If the proposal is not approved by
shareholders, the Plan will not become effective.
THE BOARD OF DIRECTORS OF FUEL CENTERS MAKES NO RECOMMENDATION TO HOLDERS OF
COMMON STOCK AS TO THE RATIFICATION OF THE STOCK OPTION PLAN.
On October 9, 2003 Fuel Center's Board of Directors approved the 2003
Stock Option Plan (the "Plan") attached hereto as Exhibit B. The Plan provides
for 2,000,000 shares to be reserved for issuances as stock options for those
employees and consultants as the Option Committed to be appointed by our Board
of Directors shall approve, however, such Plan shall provide that not more than
15% of shares issuable under that Plan shall be issued to any one individual.
The Plan is attached hereto as Exhibit B.
CONSEQUENCES OF RATIFICATION OF THE STOCK OPTION PLAN
Although our Board of Directors has approved the 2003 Stock Option
Plan, we require the ratification by a majority vote of shares for the plan to
remain valid. If the 2003 Stock Option Plan is ratified, we may issue options
under that Plan to directors, key employees or consultants as an incentive to
retain their services. Options issued under the Plan will be administered by a
committee of independent directors.
12
DISSENTERS' RIGHTS
Under Nevada law, a stockholder is entitled to dissent from, and
obtain payment for the fair value of his or her shares (i) in the event of
consummation of a plan of merger or plan of exchange in which the Nevada
corporation is a constituent entity, and (ii) any corporate action taken
pursuant to a vote of the stockholders to the extent that the articles of
incorporation, by-laws or a resolution of the board of directors provides that
voting or non-voting stockholders are entitled to dissent and obtain payment for
their shares. The Nevada Revised Statutes do not provide for dissenters' right
of appraisal in connection with (i) the name change, (ii) the increase in the
number of shares of authorized common stock or increase in the number of
authorized preferred stock, (iii) allowing for shareholder votes to be conducted
by written consent in lieu of a shareholders meeting, and (iv) adoption of the
stock option plan.
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No director, executive officer, nominee for election as a director,
associate of any director, executive officer or nominee or any other person has
any substantial interest, direct or indirect, by security holdings or otherwise,
in the proposed name change, which is not shared by all other shareholders of
Fuel Centers, Inc., except that persons serving as our officers, employees or
consultants may be eligible to receive options to purchase shares of our common
stock pursuant to the terms of our 2003 Stock Option Plan. Should such options
be granted, the Plan will be administered by a committee of disinterested
directors of Fuel Centers, Inc.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the shares of our common stock as of October 9, 2003 by:
o Each person who we know to be the beneficial owner of 5% or more of our
outstanding common stock; o Each of our executive officers; o Each of our
directors; and o All of our executive officers and directors as a group.
Beneficial ownership is determined in accordance with the rules of
the Securities and Exchange Commission. As of October 9, 2003, there were
12,550,450 shares of our common stock issued and outstanding. Unless otherwise
indicated in the table, the persons and entities named in the table have sole
voting and sole investment power with respect to the shares set forth opposite
the shareholder's name, subject to community property laws, where applicable.
The address of each shareholder is listed in the table.
13
================== =================================== ======================= ================
Title of Class Name of Beneficial Owner Amount of Beneficial Percent of
Owner Class
------------------ ----------------------------------- ----------------------- ----------------
Common Stock Jack Muellerleile 7,419,500 shares 59.12%
9323 Vista Serena, president, secretary,
Cypress, CA 90630 director
------------------ ----------------------------------- ----------------------- ----------------
Common Stock K. John Shukur 104,500 shares
5 Hidalgo
Rancho Santa Margarita, CA 92688 treasurer, director 0.83%
------------------ ----------------------------------- ----------------------- ----------------
Common Stock Cede & Co.
P.O. Box 222
Bowling Green Station
New York, NY 10274 2,350,000 shares 18.72%
------------------ ----------------------------------- ----------------------- ----------------
Common Stock All directors and named executive 7,524,000 shares 59.95%
officers as a group
================== =================================== ======================= ================
COMPENSATION OF DIRECTORS
To date, no director has received any compensation for services on the board of
directors. We currently have not adopted any type of director compensation plan.
ADDITIONAL INFORMATION
We file annual and quarterly reports with the Securities and Exchange
Commission. Stockholders may obtain, without charge, a copy of our most recent
Form 10-KSB with exhibits by requesting a copy in writing from us. We will also
furnish without charge to any stockholder, upon written or oral request, any
documents filed by Fuel Centers pursuant to the Securities Exchange Act.
Requests for such documents should be addressed to Fuel Centers, Inc. 9323 Vista
Serena, Cypress, California 90630. Documents filed by Fuel Centers pursuant to
the Securities Exchange Act may also be reviewed and/or obtained through the
Securities and Exchange Commission's Electronic Data Gathering Analysis and
Retrieval System, which is publicly available through the Securities and
Exchange Commission's web site (http://www.sec.gov).
OTHER MATTERS
The Board of Directors knows of no business which will be presented for
consideration at the Special Meeting other than that shown above. However, if
any business shall properly come before the Special Meeting, the persons named
in the enclosed proxy or their substitutes will vote the proxy in respect of any
such business in accordance with their best judgment pursuant to the
discretionary authority conferred thereby.
October ___, 2003
---------------------------------------------------------------
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED ADDRESSED ENVELOPE, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES.
---------------------------------------------------------------
14
FUEL CENTERS
PROXY SOLICITED BY THE BOARD OF DIRECTORS
Special Meeting of Stockholders - ____________, 2003
-----------------------------------------------------
The undersigned stockholder of FUEL CENTERS, INC. ("Fuel Centers"), revoking all
previous proxies, hereby constitutes and appoints John R. Muellerleile and K.
John Shukur, and each of them acting individually, as the agents and proxies of
the undersigned, with full power of substitution in each, for and in the name
and stead of the undersigned, to attend the Special Meeting of Stockholders of
Fuel Centers to be held on ____________, 2003 at 11:00 A.M., local time, at 4100
Newport Place, Suite 830, Newport Beach, California 92660, and to vote all
shares of Common Stock of Fuel Centers which the undersigned would be entitled
to vote if personally present at the Special Meeting, and at any adjournment or
postponement thereof; provided, that said proxies are authorized and directed to
vote as indicated with respect to the matters set forth on the reverse side
hereof:
This Proxy will be voted in the manner directed herein by the undersigned
stockholder(s). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED "FOR" ALL
AMENDMENTS TO FUEL CENTER'S ARTICLES OF INCORPORATION. This Proxy also delegates
discretionary authority to vote with respect to any other business which may
properly come before the Special Meeting or any adjournment or postponement
thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF THE SPECIAL MEETING
AND THE PROXY STATEMENT FURNISHED IN CONNECTION THEREWITH. The undersigned also
hereby ratifies all that the said agents and proxies may do by virtue hereof and
hereby confirms that this Proxy shall be valid and may be voted whether or not
the stockholder's name is signed as set forth below or a seal is affixed or the
description, authority or capacity of the person signing is given or other
defect of signature exists.
1. To approve proposed amendments to the Company's Articles of Incorporation, a
copy of which is attached hereto as Exhibit A, to effect the following:
o change our name to Fellowes Energy Ltd.
o increase our authorized Common Stock from 50,000,000 shares to
100,000,000 shares $.001 par value per share;
o increase our authorized Preferred Stock from 5,000,000 shares to
25,000,000 shares $.001 par value per share;
o authorize future shareholder votes to be conducted by written consent
in lieu of a shareholders meeting.
|_| FOR |_| AGAINST |_| ABSTAIN
2. To ratify the 2003 Stock Option Plan.
|_| FOR |_| AGAINST |_| ABSTAIN
15
In their discretion, the proxies will vote on such other business as may
properly come before the 2003 Special Meeting.
|_| Please check here if you plan to attend the Special Meeting in person.
NOTE: PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE. Please sign this Proxy exactly as name(s) appear in address below.
When signing as attorney-in-fact, executor, administrator, trustee or guardian,
please add your title as such. Corporations please sign with full corporate name
by a duly authorized officer and affix the corporate seal.
------------------------------------
------------------------------------
Signature(s) Date
16
Exhibit A
CERTIFICATE OF AMENDMENT
TO ARTICLES OF INCORPORATION OF
FUEL CENTERS, INC.,
a Nevada corporation
Pursuant to the provisions of the Nevada Revised Statutes, Fuel
Centers, Inc., a Nevada corporation, adopts the following amendment to its
Articles of Incorporation.
1. The undersigned hereby certify that on the 9th day of October, 2003,
acting by written consent without a meeting, in accordance with the provisions
of section 78.315 of the Nevada General Corporation Law and Article III of the
Bylaws of this Corporation the Board of Directors approved, consented to,
affirmed, and adopted the following resolution:
That the Articles of Incorporation of this corporation be amended as
follows:
FIRST. The name of this corporation is Fellowes Energy, Ltd.
FOURTH. The total number of shares of capital stock which this
corporation shall have authority to issue is one hundred twenty-five million
(125,000,000) with a par value of $.001 per share amounting to $125,000.00. One
hundred million (100,000,000) of those shares are Common Stock and twenty-five
million (25,000,000) of those shares are Preferred Stock. Each share of Common
Stock shall entitle the holder thereof to one vote, in person or by proxy, on
any matter on which action of the stockholders of this corporation is sought.
The holders of shares of Preferred Stock shall have no right to vote such
shares, except (i) determined by the Board of Directors of this corporation in
accordance with the provisions of Section (3) of ARTICLE FIFTH of these Articles
of Incorporation, or (ii) as otherwise provided by the Nevada General
Corporation Law, as amended from time to time.
FOURTEENTH. Any action required to be taken or which may be taken at
any annual or special meeting of stockholders of this corporation may be taken
without a meeting, and the power of stockholders to consent in writing, without
a meeting, to the taking of any action is specifically permitted.
In witness whereof, the undersigned being the President and Secretary
of Fuel Centers, Inc., a Nevada corporation, hereunto affixes his signatures
this ___ day of _________ 2003.
Fuel Centers, Inc.
By: _______________________
John R. Muellerleile, President
By: _______________________
John R. Muellerleile, Secretary
17
Exhibit B
2003 STOCK OPTION PLAN
Article
I. Purposes of the Plan
II. Amount of Stock Subject to Plan
III. Effective Date and Term of the Plan
IV. Administration
V. Eligibility
VI. Limitation on Exercise of Incentive Options
VII. Options: Price and Payment
VIII. Use of Proceeds
IX. Term of Options and Limitations on the Right of Exercise
X. Exercise of Options
XI. Nontransferability of Options
XII. Termination of directorship or Employment
XIIII. Adjustment of Shares; Effect of Certain Transactions
XIV. Right to Terminate Employment
XV. Purchase for Investment
XVI. Issuance of Certificates; Legends; Payment of Expenses
XVII. Withholding Taxes
XVIII. Listing of Shares and Related Matters
XIX. Amendment of the Plan
XX. Termination or Suspension of the Plan
XXI. Governing Law
XXII. Partial Invalidity
18
FUEL CENTERS, INC.
2003 STOCK OPTION PLAN
I. PURPOSES OF THE PLAN
1.01 Fuel Centers, Inc., a Nevada corporation ("Company"), desires to
provide to certain of its directors, key employees and consultants, and the
directors, key employees and consultants of any subsidiary corporation or parent
corporation of the Company who are responsible for the continued growth of the
Company an opportunity to acquire a proprietary interest in the Company, and,
therefore, to create in such directors, key employees and consultants an
increased interest in and a greater concern for the welfare of the Company.
The Company, by means of this Fuel Centers, Inc. 2003 Stock Option Plan
("Plan"), seeks to retain the services of persons now serving in certain
capacities and to secure the services of persons capable of serving in similar
capacities.
1.02 The stock options ("Options") offered pursuant to the Plan are a
matter of separate inducement and are not in lieu of any salary or other
compensation for the services of any director, key employee or consultant.
1.03 The Options granted pursuant to the Plan are intended to be either
incentive stock options ("Incentive Options") within the meaning of Section 422A
of the Internal Revenue Code of 1986, as amended (the "Code"), or options that
do not satisfy the requirements for Incentive Options ("Non-Qualified Options"),
but the Company makes no warranty as to the qualification of any Option as an
Incentive Option.
II. AMOUNT OF STOCK SUBJECT TO THE PLAN
2.01 The total number of shares of common stock of the Company which
either may be purchased pursuant to the exercise of Options shall not exceed, in
the aggregate, Two Million (2,000,000) shares of the authorized common stock,
$.001 par value per share, of the Company ("Shares"), which is less than 30% of
the Twelve Million Five Hundred Fifty Thousand Four Hundred and Fifty
(12,550,450) shares issued and outstanding common stock of the Company as of the
date of this Plan. The number of Shares that may be subject to this Plan may
only be increased beyond 30% or 3,765,135 shares by vote of at least two-thirds
(2/3) of shares entitled to vote on such matters.
2.02 Shares which may be acquired pursuant to the Plan may be either
authorized but unissued Shares, Shares of issued stock held in the Company's
treasury, or both, at the discretion of the Company. If and to the extent that
Options granted pursuant to the Plan expire or terminate without having been
exercised, new Options may be granted with respect to the Shares subject to by
such expired or terminated Options; provided, however, that the grant and the
terms of such new Options shall in all respects comply with the provisions of
the Plan.
19
2.03 Under no circumstances may more than fifteen percent (15%) of the
Shares reserved for issuance under the terms of the Plan, i.e., the total of
Three Hundred Thousand (300,000) Shares, may be issued to any one individual
pursuant to this Plan, regardless of whether that individual serves in multiple
capacities in the Company's service or employ.
III. EFFECTIVE DATE AND TERM OF THE PLAN
3.01 The Plan shall become effective on the date ("Effective Date") on
which it is adopted by the Board of Directors of the Company ("Board of
Directors"); provided, however, that if the Plan is not approved by a vote of
the shareholders of the Company within twelve (12) months before or after the
Effective Date, the Plan and any Options shall terminate.
3.02 The Company may, from time to time during the period beginning on
the Effective Date and ending on October 10, 2005 ("Termination Date"), grant
Options to persons eligible to participate in the Plan, pursuant to the terms of
the Plan. Options granted prior to the Termination Date may extend beyond that
date, in accordance with the terms thereof.
3.03 As used in the Plan, the terms "subsidiary corporation" and
"parent corporation" shall have the meanings ascribed to such terms,
respectively, in Sections 425(f) and 425(e) of the Code.
3.04 An employee or director to whom Options are granted may be
referred to herein as a "Participant".
IV. ADMINISTRATION
4.01 The Board of Directors shall designate an option committee
("Committee") which shall consist of no fewer than three (3) directors, each of
whom shall be a "disinterested person" within the meaning of Rule 16b-3 (or any
successor rule or regulation) promulgated pursuant to the Securities Exchange
Act of 1934, as amended ("Exchange Act"), to administer the Plan. A majority of
the members of the Committee shall constitute a quorum, and the act of a
majority of the members of the Committee shall be the act of the Committee. Any
member of the Committee may be removed at any time either with or without cause
by resolution adopted by the Board of Directors, and any vacancy on the
Committee may at any time be filled by resolution adopted by the Board of
Directors.
20
4.02 Any or all powers and functions of the Committee may at any time
and from time to time be exercised by the Board of Directors; provided, however,
that, with respect to the participation in the Plan by members of the Board of
Directors, such powers and functions of the Committee may be exercised by the
Board of Directors only if, at the time of such exercise, a majority of the
members of the Board of Directors, as the case may be, and a majority of the
directors acting in the particular matter, are "disinterested persons" within
the meaning of Rule 16b-3 (or any successor rule or regulation) promulgated
pursuant to the Exchange Act. Any reference in the Plan to the Committee shall
be deemed also to refer to the Board of Directors, to the extent that the Board
of Directors is exercising any of the powers and functions of the Committee.
4.03 Subject to the express provisions of the Plan, the Committee
shall have the authority, in its discretion,
(i) to determine the directors, employees and consultants to whom
Options shall be granted, the time when such Options shall be
granted, the number of Shares which shall be subject to each
Option, the purchase price or exercise price of each Share
which shall be subject to each Option, the period(s) during
which such Options shall be exercisable (whether in whole or
in part), and the other terms and provisions of the respective
Options (which need not be identical);
(ii) to construe the Plan and Options;
(iii) to prescribe, amend and rescind rules and regulations relating
to the Plan; and
(iv) to make all other determinations necessary or advisable for
administering the Plan.
4.04 Without limiting the generality of the foregoing, the Committee
also shall have the authority to require, in its discretion, as a condition of
the granting of any Option, that the Participant agree (i) not to sell or
otherwise dispose of Shares acquired pursuant to such Option for a period of
twelve (12) months following the date of acquisition of such Shares and (ii)
that in the event of termination of directorship or employment of such
Participant, other than as a result of dismissal without cause, such Participant
will not, for a period to be fixed at the time of the grant of such Option,
enter into any employment or participate directly or indirectly in any business
or enterprise which is competitive with the business of the Company or any
subsidiary corporation or parent corporation of the Company, or enter into any
employment in which such employee will be called upon to utilize special
knowledge obtained through directorship or employment with the Company or any
subsidiary corporation or parent corporation thereof.
The determination of the Committee on matters referred to in this
Article IV shall be conclusive.
4.05 The Committee may employ such legal counsel, consultants and
agents as it may deem desirable for the administration of the Plan and may rely
upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. Expenses incurred by the
Committee in the engagement of such counsel, consultant or agent shall be paid
by the Company. No member or former member of the Committee or of the Board of
Directors shall be liable for any action or determination made in good faith
with respect to the Plan or any Option.
21
V. ELIGIBILITY
5.01 Non-Qualified Options may be granted only to directors, officers
and other salaried key employees of the Company, or of any subsidiary
corporation or parent corporation of the Company now existing or hereafter
formed or acquired, except as hereinafter provided. Any person who shall have
retired from active employment by the Company, although such person shall have
entered into a consulting contract with the Company, shall not be eligible to
receive an Option.
5.02 An Incentive Option may be granted only to salaried key employees
of the Company or any subsidiary corporation or parent corporation of the
Company now existing or hereafter formed or acquired, and not to any director or
officer who is not also an employee.
VI. LIMITATION ON EXERCISE OF INCENTIVE OPTIONS
6.01 Except as otherwise provided pursuant to the Code, to the extent
that the aggregate fair market value of Shares with respect to which Incentive
Options are exercisable for the first time by an employee during any calendar
year (pursuant to all stock options plans of the Company and any parent
corporation or subsidiary corporation of the Company) exceeds One Hundred
Thousand Dollars ($100,000), such Options shall be treated as Non-Qualified
Options. For purposes of this limitation, (i) the fair market value of Shares is
determined as of the time the Option is granted, and (ii) the limitation will be
applied by taking into account Options in the order in which they were granted.
VII. OPTIONS: PRICE AND PAYMENT
7.01 The purchase price for each Share purchasable pursuant to any
Non-Qualified Option granted pursuant to the Plan shall be such amount as the
Committee shall deem appropriate.
7.02 The purchase price for each Share purchasable pursuant to any
Incentive Option granted pursuant to the Plan shall be such amount as the
Committee shall, in its best judgment, determine to be not less than one hundred
percent (100%) of the fair market value per Share on the date the Option is
granted; provided, however, that in the case of an Incentive Option granted to a
Participant who, at the time such Incentive option is granted, owns stock of the
Company or any subsidiary corporation or parent corporation of the Company
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any subsidiary corporation or parent
corporation of the Company, the purchase price for each Share shall be such
amount as the Committee shall, in its best judgment, determine to be not less
than one hundred ten percent (110%) of the fair market value per Share at the
date such Option is granted.
22
7.03 If the Shares are listed on a national securities exchange in the
United States on any date on which the fair market value per Share is to be
determined, the fair market value per Share shall be deemed to be the average of
the high and low quotations at which such Shares are sold on such national
securities exchange on such date. If the Shares are listed on a national
securities exchange in the United States of America on such date but the Shares
are not traded on such date, or such national securities exchange is not open
for business on such date, the fair market value per Share shall be determined
as of the closest preceding date on which such exchange shall have been open for
business and the Shares were traded. If the Shares are listed on more than one
national securities exchange in the United States of America on the date any
such Option is granted, the Committee shall determine which national securities
exchange shall be used for the purpose of determining the fair market value per
Share.
7.04 If a public market exists for the Shares on any date on which the
fair market value per Share is to be determined, but the Shares are not listed
on a national securities exchange in the United States of America, the fair
market value per Share shall be deemed to be the mean between the closing bid
and asked quotations in the over-the-counter market for the Shares on such date.
If there are no bid and asked quotations for the Shares on such date, the fair
market value per Share shall be deemed to be the mean between the closing bid
and asked quotations in the over-the-counter market for the Shares on the
closest date preceding such date for which such quotations are available.
7.05 If no public market exists for the Shares on any date on which the
fair market value per Share is to be determined, the Committee shall, in its
sole discretion and best judgment, determine the fair market value of a Share.
For purposes of the Plan, the determination by the Committee of the
fair market value of a Share shall be conclusive.
7.06 Upon the exercise of an Option, the Company shall cause the
purchased Shares to be issued only when it shall have received the full and
complete purchase price for the Shares in cash or by certified check; provided,
however, that in lieu of cash or certified check, the Participant may, if and to
the extent the terms of such Option so provide and to the extent permitted by
applicable law, exercise an Option in whole or in part, by delivering to the
Company shares of common stock of the Company (in proper form for transfer and
accompanied by all requisite stock transfer tax stamps or cash in lieu thereof)
owned by such Participant having a fair market value equal to the purchase price
of the Shares as to which the Option is being exercised. The fair market value
of such stock so delivered shall be determined as of the date immediately
preceding the date on which such common Option is exercised, or as may be
required in order to comply with or to conform to the requirements of any
applicable laws or regulations.
23
VIII. USE OF PROCEEDS
8.01 The cash proceeds of the sale of Shares subject to Options are to
be added to the general funds of the Company and used for its general corporate
purposes as the Board of Directors shall determine.
IX. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE
9.01 Any Option shall be exercisable at such times, in such amounts and
during such period or periods as the Committee shall determine at the date of
the grant of such Option; provided, however, that an Incentive option shall not
be exercisable after the expiration of ten (10) years from the date such Option
is granted; and provided, further, that, in the event that an Incentive Option
granted to a Participant who, at the time such Option is granted, owns stock of
the Company or any subsidiary corporation or parent corporation of the Company
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any subsidiary corporation or parent
corporation of the Company, such Option shall not be exercisable after the
expiration of five (5) years from the date such Option is granted.
9.02 Subject to the provisions of Article XIX of the Plan, the
Committee shall have the right to accelerate, in whole or in part, from time to
time, conditionally or unconditionally, the right to exercise any Option.
9.03 The Company shall permit the exercise of Options by Participants
at a rate of at least twenty percent (20%) of Options held per year, during the
period commencing five (5) years from the date of the Grant.
9.04 To the extent that an Option is not exercised within the period of
exerciseability specified therein, such Option shall expire as to the then
unexercised part.
In no event shall an Option granted pursuant to the Plan be exercisable
for a fraction of a Share.
X. EXERCISE OF OPTIONS
10.01 Any Option shall be exercised by the Participant holding such
Option as to all or part of the Shares contemplated by such Option by giving
written notice of such exercise to the Secretary of the Company at the principal
business office of the Company, specifying the number of Shares to be purchased
and specifying a business day not more than fifteen (15) days from the date such
notice is given, for the payment of the purchase price against delivery of the
Shares being purchased. Subject to the terms of Articles XV, XVII and XVIII of
the Plan, the Company shall cause certificates for the Shares so purchased to be
delivered to the Participant at the principal business office of the Company, in
exchange for by payment of the full and complete purchase price, on the date
specified in the notice of exercise.
24
XI. NONTRANSFERABILITY OF OPTIONS
11.01 No Option shall be transferable, whether by operation of law or
otherwise, other than by Will or the laws of descent and distribution, and any
Option shall be exercisable, during the lifetime of the Participant, only by
such Participant.
XII. TERMINATION OF DIRECTORSHIP OR EMPLOYMENT
12.01 Upon termination of the directorship or employment of any
Participant with the Company and all subsidiary corporations and parent
corporations of the Company, any Option previously granted to the Participant,
unless otherwise specified by the Committee in the Option, shall, to the extent
not theretofore exercised, terminate and become null and void, provided that:
(a) if the Participant shall die while serving as a director or
while in the employ of such corporation or during either the
three (3) month or one (1) year period, whichever is
applicable, specified in clause (b) below and at a time when
such Participant was entitled to exercise an Option, as
provided in the Plan, the legal representative of such
Participant, or such person who acquired such Option by
bequest or inheritance or by reason of the death of the
Participant, may, not later than one (1) year from the date of
death, exercise such Option, to the extent not theretofore
exercised, in respect of any or all of such number of Shares
as specified by the Committee in such Option; and
(b) if the directorship or employment of any Participant to whom
such Option shall have been granted shall terminate by reason
of the Participant's retirement (at such age or upon such
conditions as shall be specified by the Committee), disability
(as described in Section 22(e)(3) of the Code) or dismissal by
the employer other than for cause (as defined below), and
while such Participant is entitled to exercise such Option as
herein provided, such Participant shall have the right to
exercise such Option, to the extent not theretofore exercised,
in respect of any or all of such number of Shares as specified
by the Committee in such Option, at any time up to and
including (i) six (6) months after the date of such
termination of directorship or employment in the case of
termination by reason of retirement or dismissal other than
for cause, (ii) one (1) year after the date of termination of
directorship or employment in the case of termination by
reason of disability, or thirty (30) days after the date of
such termination of directorship or employment in the case of
termination by reason of dismissal for other cause.
25
In no event, however, shall any person be entitled to exercise any
Option after the expiration of the period of exerciseability of such Option as
specified therein.
12.02 If a Participant voluntarily terminates his directorship or
employment, or is discharged for cause, any Option granted pursuant to the Plan
shall, unless otherwise specified by the Committee in such Option, forthwith
terminate with respect to any unexercised portion thereof.
12.03 If an Option shall be exercised by the legal representative of a
deceased Participant, or by a person who acquired such Option by bequest or
inheritance or by reason of the death of any Participant, written notice of such
exercise shall be accompanied by a certified copy of letter testamentary or
equivalent proof of the right of such legal representative or other person to
exercise such Option, and must be exercised within six (6) months of the date of
death of the Participate.
12.04 For the purposes of the Plan, the term "for cause" shall mean (i)
with respect to an employee who is a party to a written agreement with, or,
alternatively, participates in a compensation or benefit plan of the Company or
a subsidiary corporation or parent corporation of the Company, which agreement
or plan contains a definition of "for cause" or "cause" (or words of similar
import) for purposes of termination of employment pursuant thereto by the
Company or such subsidiary corporation or parent corporation of the Company,
"for cause" or "cause" as defined in the most recent of such agreements or
plans, or (ii) in all other cases, as determined by the Board of Directors, in
its sole discretion, (a) the willful commission by an employee of a criminal or
other act that causes or probably will cause substantial economic damage to the
Company or a subsidiary corporation or parent corporation of the Company or
substantial injury to the business reputation of the Company or a subsidiary
corporation or parent corporation of the Company; (b) the commission by an
employee of an act of fraud in the performance of such employee's duties on
behalf of the Company or a subsidiary corporation or parent corporation of the
Company; (c) the continuing willful failure of an employee to perform the duties
of such employee to the Company or a subsidiary corporation or parent
corporation of the Company (other than such failure resulting from the
employee's incapacity due to physical or mental illness) after written notice
thereof (specifying the particulars thereof in reasonable detail) and a
reasonable opportunity to be heard and cure such failure are given to the
employee by the Board of Directors; or (d) the order of a court of competent
jurisdiction requiring the termination of the employee's employment. For
purposes of the Plan, no act, or failure to act, on the employee's part shall be
considered "willful" unless done or omitted to be done by the employee not in
good faith and without reasonable belief that the employee's action or omission
was in the best interest of the Company or a subsidiary corporation or parent
corporation of the Company.
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12.05 For the purposes of the Plan, an employment relationship shall be
deemed to exist between a person and a corporation if, at the time of the
determination, the individual was an "employee" of such corporation for purposes
of Section 422A(a) of the Code. If a person is on maternity, military, or sick
leave or other bona fide leave of absence, such person shall be considered an
"employee" for purposes of the exercise of an Option and shall be entitled to
exercise such Option during such leave if the period of such leave does not
exceed ninety (90) days, or, if longer, so long as such person's right to
reemployment with his employer is guaranteed either by statute or by contract.
If the period of leave exceeds ninety (90) days, the employment relationship
shall be deemed to have terminated on the ninety-first (91) day of such leave,
unless such person's right to reemployment is guaranteed by statute or contract.
12.06 A termination of employment shall not be deemed to occur by
reason of (i) the transfer of a Participant from employment by the Company to
employment by a subsidiary corporation or a parent corporation of the Company or
(ii) the transfer of a Participant from employment by a subsidiary corporation
or a parent corporation of the Company to employment by the Company or by
another subsidiary corporation or parent corporation of the Company.
XIII. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS
13.01 In the event of any change in the outstanding Shares as a result
of merger, consolidation, reorganization, recapitalization, stock dividend,
stock split, split-up, split-off, spin-off, combination or exchange of shares,
or other similar change in capital structure of the Company, an adjustment shall
be made to each outstanding Option such that each such Option shall thereafter
be exercisable for such securities, cash or other property as would have been
received in respect of the Shares subject to such Option had such Option been
exercised in full immediately prior to such change, and such an adjustment shall
be made successively each time any such change shall occur. The term "Shares"
after any such change shall refer to the securities, cash or property then
receivable upon exercise of an Option. In addition, in the event of any such
change, the Committee shall make any additional adjustment as may be appropriate
to the maximum number of Shares subject to the Plan, the maximum number of
Shares, if any, for which Options may be granted to any one employee, and the
number of Shares and price per Share subject to outstanding Options as shall be
equitable to prevent dilution or enlargement of rights under such Options, and
the determination of the Committee as to these matters shall be conclusive.
Notwithstanding the foregoing, (i) each such adjustment with respect to an
Incentive Option and any related Right shall comply with the rules of Section
425(a) of the Code, and (ii) in no event shall any adjustment be made which
would render any Incentive Option granted hereunder other than an "incentive
stock option" for purposes of Section 422A of the Code.
13.02 For purposes of the Plan, a "change in control" of the Company
occurs if: (a) any "person" (defined as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act, as amended) other than the current owner is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing ten percent (10%) or more of the combined voting power of
the Company's outstanding securities then entitled to vote for the election of
directors; or (b) during any period of two consecutive years, persons who at the
beginning of such period constitute the Board of Directors cease for any reason
to constitute at least a majority thereof; or (c) the Board of Directors shall
approve the sale of all or substantially all of the assets of the Company or any
merger, consolidation, issuance of securities or purchase of assets, the result
of which would be the occurrence of any event described in clause (a) or (b)
above.
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13.03 In the event of a change in control of the Company (defined
above), the Committee, in its discretion, may determine that, upon the
occurrence of a transaction described in the preceding paragraph, each Option
outstanding pursuant to the Plan shall terminate within a specified number of
days after notice to the holder, and such holder shall receive, with respect to
each Share subject to such Option, an amount of cash equal to the excess of the
fair market value of such Share immediately prior to the occurrence of such
transaction increases the exercise price per Share of such Option. The
provisions specified in the preceding sentence shall be inapplicable to an
Option granted within six (6) months before the occurrence of a transaction
described above if the holder of such Option is a director or officer of the
Company or a beneficial owner of the Company who is described in Section 16(a)
of the Exchange Act, unless such holder dies or becomes disabled (within the
meaning of Section 22(e)(3) of the Code) prior to the expiration of such
six-month period.
Alternatively, the Committee may determine, in its discretion, that all
then outstanding Options shall immediately become exercisable upon a change of
control of the Company.
XIV. RIGHT TO TERMINATE EMPLOYMENT
14.01 The Plan shall not impose any obligation on the Company or on any
subsidiary corporation or parent corporation thereof to continue the employment
of any Participant; and it shall not impose any obligation on the part of any
Participant to remain in the employ of the Company or of any subsidiary
corporation or parent corporation thereof.
XV. PURCHASE FOR INVESTMENT
15.01 Except as provided otherwise in the Plan, a Participant shall,
upon any exercise of an Option, execute and deliver to the Company a written
statement, in form satisfactory to the Company, in which such Participant
represents and warrants that such Participant is purchasing or acquiring the
Shares acquired pursuant thereto for such Participant's own account, for
investment only and not with an intention of the resale or distribution thereof,
and agrees that any subsequent offer for sale or sale or distribution of any of
such Shares shall be made only pursuant to either (a) a Registration Statement
on an appropriate form pursuant to the Securities Act of 1933, as amended
("Securities Act"), which Registration Statement has become effective and is
current with regard to the Shares being offered or sold, or (b) a specific
exemption from the registration requirements of the Securities Act, but in
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claiming such exemption the holder shall, if so requested by the Company, prior
to any offer for sale or sale of such Shares, obtain a prior favorable written
opinion, in form and substance satisfactory to the Company, from counsel for or
approved by the Company, as to the applicability of such exemption thereto. The
foregoing restriction shall not apply to (i) issuances by the Company so long as
the Shares being issued are registered pursuant to the Securities Act and a
prospectus in respect thereof is current or (ii) reofferings of Shares by
affiliates of the Company (as defined in Rule 405 or any successor rule or
regulation promulgated pursuant to the Securities Act) if the Shares being
reoffered are registered pursuant to the Securities Act and a prospectus in
respect thereof is current.
XVI. ISSUANCE OF CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES
16.01 Upon any exercise of an Option and payment of the purchase price,
a certificate or certificates for the Shares as to which such Option has been
exercised shall be issued by the Company in the name of the person exercising
such Option and shall be delivered to or upon the order of such person or
persons.
16.02 The Company may endorse such legend or legends upon the
certificates for Shares issued upon exercise of an Option and may issue such
"stop transfer" instructions to its transfer agent in respect of such Shares as,
in its discretion, the Company determines to be necessary or appropriate to (i)
prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act, (ii) implement the provisions of the Plan
and any agreement between the Company and the optionee with respect to such
Shares, or (iii) permit the Company to determine the occurrence of a
disqualifying disposition, within the meaning of Section 421(b) of the Code, of
Shares transferred upon exercise of an Incentive Option granted pursuant to the
Plan.
16.03 The Company shall pay all issue or transfer taxes with respect to
the issuance or transfer of Shares, as well as all fees and expenses incurred by
the Company in connection with such issuance or transfer.
All Shares issued as provided in the Plan shall be fully paid and
non-assessable to the extent permitted by law.
XVII. WITHHOLDING TAXES
17.01 The Company may require an employee exercising a Non-Qualified
Option or disposing of Shares acquired pursuant to the exercise of an Incentive
Option in a disqualifying disposition (within the meaning of Section 421(b) of
the Code), to reimburse the corporation that employs such employee for any taxes
required by any government to be withheld or otherwise deducted and paid by such
corporation in respect of the issuance or disposition of such Shares. In lieu
thereof, the employer corporation shall have the right to withhold the amount of
such taxes from any other amounts due or to become due from such corporation to
the employee upon such terms and conditions as the Committee shall prescribe.
The employer corporation may, in its discretion, hold the stock certificate to
which such employee is entitled upon the exercise of an Option as security for
the payment of such withholding tax liability, until cash sufficient to pay that
liability has been accumulated.
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XVIII. LISTING OF SHARES AND RELATED MATTERS
18.01 If at any time the Board of Directors shall determine in its
discretion that the listing, registration or qualification of the Shares subject
to the Plan upon any national securities exchange or pursuant to any state or
federal law, or the consent or approval of any governmental regulatory agency,
is necessary or desirable as a condition of, or in connection with, the sale or
purchase of Shares pursuant to the Plan, no Shares shall be issued unless and
until such listing, registration, qualification, consent or approval shall have
been effected or obtained, or otherwise provided for, free of any conditions not
acceptable to the Board of Directors.
XIX. AMENDMENT OF THE PLAN
19.01 The Board of Directors or the Committee may, from time to time,
amend the Plan, provided that, notwithstanding anything to the contrary in the
Plan, no amendment shall be made, without the approval of the shareholders of
the Company, that will (i) increase the total number of Shares reserved for
Options pursuant to the Plan (other than an increase resulting from an
adjustment provided for in Article XII), (ii) reduce the exercise price of any
Incentive Option granted pursuant to the Plan to an amount less than the price
required by Article VI, (iii) modify the provisions of the Plan relating to
eligibility, or (iv) materially increase the benefits accruing to participants
pursuant to the Plan. The Board of Directors or the Committee shall be
authorized to amend the Plan and the Options to permit the Incentive Options to
qualify as "incentive stock options" within the meaning of Section 422A of the
Code. The rights and obligations pursuant to any Option granted before amendment
of the Plan or any unexercised portion of such Option shall not be adversely
affected by amendment of the Plan without the consent of the holder of such
Option.
XX. TERMINATION OR SUSPENSION OF THE PLAN
20.01 The Board of Directors or the Committee may at any time and for
any or no reason suspend or terminate the Plan. The Plan, unless sooner
terminated pursuant to Article III of the Plan or by action of the Board of
Directors, shall terminate at the close of business on the Termination Date. An
Option may not be granted while the Plan is suspended or after the Plan is
terminated. Options granted while the Plan is in effect shall not be altered or
impaired by suspension or termination of the Plan, except upon the consent of
the person to whom such Option was granted. The power of the Committee pursuant
to Article IV of the Plan to construe and administer any Options granted prior
to the termination or suspension of the Plan shall continue after such
termination or during such suspension.
XXI. GOVERNING LAW
21.01 The Plan and all Options as may be granted pursuant thereto and
all related matters shall be governed by, and construed and enforced in
accordance with, the laws of the State of Nevada, as from time to time amended.
XXII. PARTIAL INVALIDITY
22.01 The invalidity or illegality of any provision of the Plan shall
not be deemed to affect the validity of any other provision of the Plan.
ADOPTED BY THE BOARD OF DIRECTORS OF FUEL CENTERS, INC., AS OF OCTOBER 9, 2003.
APPROVED BY THE SHAREHOLDERS AS OF ____________________________.
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