BYLAWS

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VA+uOQYv0xfGAB+CVsqxP/OfkMAW5VNiYgX7ffY3Z657j8FXk7sqhs9KpgeeTDOm 4TmN0E3HYYL1VoIjSrrd3g== 0001145906-01-500002.txt : 20021127 0001145906-01-500002.hdr.sgml : 20021127 20010801204727 ACCESSION NUMBER: 0001145906-01-500002 CONFORMED SUBMISSION TYPE: 10SB12G PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20010802 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEOPLENET INTERNATIONAL CORP CENTRAL INDEX KEY: 0001145906 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 943261986 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10SB12G SEC ACT: 1934 Act SEC FILE NUMBER: 000-33033 FILM NUMBER: 01695645 BUSINESS ADDRESS: STREET 1: 1600 ADAMS DRIVE STREET 2: 2ND FLOOR CITY: MENLO PARK STATE: CA ZIP: 94025 BUSINESS PHONE: 650-323-6688 MAIL ADDRESS: STREET 1: 1600 ADAMS DRIVE STREET 2: 2ND FLOOR CITY: MENLO PARK STATE: CA ZIP: 94025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN CHAMPION ENTERTAINMENT INC CENTRAL INDEX KEY: 0001034840 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 943261987 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10SB12G SEC ACT: 1934 Act SEC FILE NUMBER: 000-33033-01 FILM NUMBER: 01695646 BUSINESS ADDRESS: STREET 1: 100 MARINE PARKWAY STREET 2: SUITE 325 CITY: REDWOOD SHORES STATE: CA ZIP: 94065 BUSINESS PHONE: 6508028299 MAIL ADDRESS: STREET 1: 100 MARINE PARKWAY STREET 2: SUITE 325 CITY: REDWOOD SHORES STATE: CA ZIP: 94065 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN CHAMPION ENTERTAINMENT INC DATE OF NAME CHANGE: 19970228 10SB12G 1 body10sb.htm BODY FORM 10-SB

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________

FORM 10-SB

GENERAL FORM FOR REGISTRATION OF SECURITIES

PURSUANT TO SECTION 12(b) OR 12(g) OF

THE SECURITES EXCHANGE ACT OF 1934

PEOPLENET INTERNATIONAL CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation or Organization)

94-3261986

(I.R.S. Employer Identification No.)

22320 Foothill Boulevard, Suite 260

Hayward, California 94541

(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code: (510) 728-0200

Securities to be registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $ .0001 par value

INDEX

                                                                              Page
PART I  

   Item 1. Description of Business                                             2
   Item 2. Management's Discussion and Analysis or
             Plan of Operation                                                 6
   Item 3. Description of Property                                             9
   Item 4. Security Ownership of Certain Beneficial Owners and Management      9
   Item 5. Directors, Executive Officers, Promoters and Control Persons        10
   Item 6. Executive Compensation                                              10
   Item 7. Certain Relationships and Related Transactions                      12
   Item 8. Description of Securities                                           12

PART II

   Item 1. Market Price of and Dividends on the Registrant's Common
             Equity and Other Shareholder Matters                              13
   Item 2. Legal Proceedings                                                   13
   Item 3. Changes in and Disagreements with Accountants                       13
   Item 4. Recent Sales of Unregistered Securities                             13
   Item 5. Indemnification of Directors and Officers                           13

PART F/S

    Financial Statements
      Interim Statements for the six-month period ended June 30, 2001          14
      Audited Statements for the years ended December 31, 2000 and 1999        21

PART III

   Item 1. Index to Exhibits                                                   33

PART I

Item 1. Description of Business

General

PeopleNet International Corporation, is engaged in:

the development, production and marketing of "ADVENTURES WITH KANGA RODDY", a television program aimed at pre-school and primary school children;
the licensing of merchandising rights related to the Kanga Roddy series;
the development, production and marketing of various audio tapes, video tapes and workbooks that specialize in fitness information; and
the licensing of rights to other intellectual properties.

PeopleNet, formerly known as American Champion Media, Inc., is a Delaware corporation headquartered in Hayward, California and incorporated on February 5, 1997. PeopleNet was formed by, and has been, a wholly owned subsidiary of American Champion Entertainment, Inc., a Delaware corporation. American Champion, has been a publicly traded company since July 31, 1997 and its common stock currently trades on the OTC Bulletin Board under the symbol ACEI. Concurrently with the effectiveness of this registration statement, American Champion will distribute its entire holdings of PeopleNet to the stockholders of American Champion.

We have developed and produced 29 half-hour episodes of the Kanga Roddy series which features a six-foot tall kangaroo character named Kanga Roddy who is a martial arts expert. Unlike other martial arts programs which feature violence, Kanga Roddy never fights because he understands that conflict can always be resolved through traditional martial arts values such as knowledge, compassion, humility, discipline, respect and an open mind. The show merges these values, with contemporary music, dance, vibrant colors and exciting movements designed to capture the attention of its target audience consisting primarily of pre-school and primary school children.

Each episode of the Kanga Roddy series focuses on a group of children at a community center and their teachers (played by Jennifer Montana and Karen Lott, wives of former San Francisco 49ers football players, Joe Montana and Ronnie Lott), working on activities such as reading, physical fitness and arts and crafts. During these activities, the children encounter an ethical or social problem, which cause uneasiness or unhappiness among some of the children. The teachers sense the problem and suggest that the children seek help from their friend Uncle Pat, the proprietor of a rare bookstore, played by actor Pat Morita, who was previously featured in "The Karate Kid" movies. Uncle Pat, with the assistance of his pet bookworm, Shakespeare, magically transports the children to the land of Hi-Yah where Kanga Roddy lives.

Once in the land of Hi-Yah, Kanga Roddy and his friends Bantu - a female African snake, Tackle Bear - his workout partner, Cimbop and Kimbop - a pair of feline sisters, and Zatochi - a wise old snow monkey, help the children solve their problem by giving examples presented through songs. Kanga Roddy gets inspiration for a proper solution to the problem through flashbacks to lessons learned from his martial arts teacher Zatochi or parallels drawn from encounters with his buddy Tackle Bear. The children and the costumed cast present the answers in song and dance routines. When the children return to the community center, they review what they have learned with their teachers.

In May 1997, we and KTEH, the public broadcasting station serving the San Jose, California area, entered into a distribution agreement which granted KTEH the exclusive right to distribute, advertise, market or otherwise exploit the Kanga Roddy series on public broadcast affiliated stations throughout the United States for a two-year period which ended in May 1999. KTEH cleared the broadcast of the Kanga Roddy series with 40 other public broadcast stations, which broadcast, to approximately 50% of the households in the United States (approximately 40 million households). We delivered 13 half-hour episodes to KTEH for broadcast and received $430,000 for exclusive broadcast rights for the series for the two-year period. Under the agreement, we also committed to sharing with KTEH 8% of revenues from the sale (less fees and commissions) and licensing of non-broadcast ancillary rights of educational products such as video tapes, books and music tapes, and 5% of our gross profits (less fees and commissions) fro m the sale and licensing of toys and clothing.

On April 20, 1998, we entered into a continuing distribution agreement with KTEH for the distribution of 26 more half-hour Kanga Roddy shows and two one-hour specials. Under the continuing distribution agreement, KTEH received the exclusive domestic broadcast rights to the new episodes for two years and agreed to pay us $30,000 for each half-hour program and $60,000 for each of the two one-hour shows. For this continuing distribution agreement, we completed and delivered 14 half-hour episodes to KTEH. The distribution agreements with KTEH ended on April 1, 2001.

In September 1999, we signed a licensing agreement with Brighter Child of Westerville, Ohio, for the licensing of the Kanga Roddy story and all related characters for use in interactive CD-Rom games. In October 1999, we signed a licensing agreement with Prestige Toys of New York, New York, for the licensing of the Kanga Roddy and all related characters for use and manufacturing of plush toy items in all sizes. The agreement with Brighter Child expires on December 31, 2002.

In December 2000, we signed a licensing agreement with World Channel, Inc. of South San Francisco, California, for a five-year worldwide licensing of the Kanga Roddy program and its related products. Pursuant to terms of the agreement, World Channel has the exclusive right to license all products of the Kanga Roddy program and its intellectual property and shall pay PeopleNet $600,000 in licensing fees per year from 2001 through 2005, or a total of $3 million.

We also host a website known as "Hiyah.com" where colorful graphics and streaming audio bring old-time stories and fables to children. We enjoy steadily increasing visits to this site with the average duration per visit of over 10 minutes. We intend to continue to provide this service to our ever increasing loyal user base.

We plan to retain worldwide rights to the characters and images developed in the Kanga Roddy series, to protect our rights to such characters and images through appropriate registration, and to license their use to manufactures for specific products. There is no assurance that we will be able to do so. If the Kanga Roddy series does not attain and maintain widespread television distribution, or widespread popularity, it is unlikely that any significant licensing or merchandising opportunities or revenue will arise or be maintained. In connection with the distribution of our stock by American Champion, we entered into an agreement with American Champion pursuant to which we agreed that all future cashflow related to the Kanga Roddy series and its intellectual property shall be allocated between the two companies on a 50/50 basis until such time that the note payable to American Champion is re-paid.

ChiBrow

In June 2001, we signed an agreement with ECapital Group, Inc. to purchase the exclusive licensing and marketing rights to ChiBrow, a safe web browser software for children. Under the terms of the agreement, upon the effectiveness of the spin-off of PeopleNet from American Champion, we will issue 375,000 shares of our common stock, with registration rights, to ECapital in exchange for the worldwide exclusive rights to market and distribute ChiBrow for three years. We intend to file a registration statement on form SB-2 for such shares immediately after the effectiveness of our spin-off transaction. Pursuant to the terms of the agreement, we shall retain 35% of all revenues generated from such marketing efforts and the balance shall be paid to ECapital. ChiBrow, once installed on personal computers, allows children to browse the World Wide Web by accessing sites from a pre-selected list of approved sites known as the Safe-Sites List. Selection criteria include age-appropriateness, educational value, b alance in social issues, and meaningful content. Through password control, parents can access and modify the Safe-Sites List as well as set a time limit for browsing after which the computer automatically shuts down. ChiBrow also incorporates a search engine called CoolNetwork which allows young web surfers a safe and educational environment on the Internet. It organizes information based on age-appropriateness and functionality, and provides a feature-filled online experience including safe e-mail, public chat rooms and forums, plus a wide variety of children friendly programs such as art gallery, contests, games and community service activities.

Through ChiBrow, children can use the Internet safely to explore and learn, absent of "inappropriate" adult contents such as violence, pornography, hate speeches, and profanity, while giving parents and educators the ability to define where their children can venture. ChiBrow is a browser, not a filtering software. Consequently, ChiBrow circumvents many of the issues filtering technologies have difficulties addressing:

alcohol and tobacco marketing;
unsafe privacy practices;
"inappropriate" adult images and sounds; and
sophisticated use of language in which the words themselves are harmless, but the content is not.

ChiBrow avoids these problems and simplifies security management by giving parents complete control. Parents define what is appropriate for their children by determining what Web sites they can access. They can create or build on an existing list of safe Web sites called the Safe-Sites List, restrict access to a Safe-Sites Search Engine containing 10,000+ safe Web sites, and/or open access to sites based on domains realms (.edu, .gov and .org). Because parents have complete control over the browser, and hence the content that is displayed, they can be certain that sites they allow their children to visit meet their safety standards.

Children browse the Web by selecting a site from ChiBrow's Safe-Sites List, by clicking on links within an approved site, or through the Safe-Sites Search Engine (when allowed). Sites in either the Safe-Sites List or Search Engine have been screened to meet our safety criteria. Each link a child visit is checked against the list approved sites (Safe-Sites List), Search Engine, and/or domain realms before it is opened. If the site belongs to the same domain and/or is located within a domain/site in the Safe-Sites List or security options, ChiBrow displays the Web page. If it isn't, ChiBrow ignores the click and sends an alert at the bottom of the screen. In order to visit that site, the child must have permission from the parent. Because parental approval is required for each new site added, parents can rest assured that their child will only visit the sites they determined to be safe.

Today's generation of children embraces the Internet and the personal computer with the same enthusiasm that previous generations embraced television. According to Computer Economics, the number of children using the Internet will grow from 26 million worldwide in 2001, to 77 million by 2005. Although the U.S. remains the dominant Internet market, this is truly a global phenomenon and the growth rate in Asia and Europe is expected by many to surpass that of the U.S.

Copyright of all of the ChiBrow software and computer codes, and registered trademarks remain the property of ECapital Group.

Competition

Each of the industries in which we compete is highly competitive and most of the companies with which we compete have greater financial and other resources than us. With respect to our media activities, we compete with major production companies, and competition for access to a limited supply of facilities and talented creative personnel to produce our programs which is often based on relationships and pricing. Our programs compete for time slots, ratings, distribution channels and financing, and related advertising revenues with other programming products. Our competitors include motion picture studios, television networks, and independent television production companies, which have become increasingly active in children's programming. We compete for broadcast commitments and production funding for public television projects with Children's Television Workshop, other independent production companies, and projects produced by local public television stations.

If we attempt to expand into other areas, including commercial television, we will face more intense competition from other, larger entities, such as The Walt Disney Company, Fox, Nickelodeon, Jim Henson Productions, Scholastic Productions, Cinar, Lancit Media Entertainment, and certain television syndicators, production companies, and networks which also seek to attract the children's/family audiences segment with their programming. In addition, there is a strong trend toward vertical integration in the business, with more networks owning productions, making it more difficult for smaller, independent companies such as us to obtain favorable production financing and distribution terms.

Other approaches to safety for children browsing the Internet involve filtering technology that is subject to attack by de-filtering software and interference with other programs on the host computer. Examples of such filtering software currently on the market are NetNanny, SurfMonkey, SurfControl, InternetGuard, CyberSitter and others. However since there is no previous commercial launch of a children's portal using similar approaches to ours, we cannot gauge how users may react to our offer of software and services. We may have difficulty converting the currently free users of ChiBrow into paying subscribers, or securing advertisers and corporate sponsors.

Employees

As of July 20, 2001, we employed two employees on a full-time basis, both of which are management.

Item 2. Management's Discussion and Analysis or Plan of Operation

The following section discusses the significant operating changes, business trends, financial condition, earnings and liquidity that have occurred in the one-year period ended December 31, 2000. This discussion should be reads in conjunction with our consolidated financial statements and notes appearing elsewhere in this report.

The following discussion may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties could cause actual results to differ materially from those indicated. For a discussion of factors that could cause actual results to differ, please see the discussion contained herein. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. We undertake no obligation to publicly revise these forward-looking statements to reflect subsequence events or circumstances. Readers are also encouraged to review our publicly available filings with the Securities and Exchange Commission.

Results of Operation

PeopleNet was formed in February 1997, under the name of American Champion Media, as a wholly owned subsidiary of America's Best Karate, which is a wholly owned subsidiary of ACEI. During the year ended December 31, 2000, our total revenue was $ 555,215 as compared to total revenue for the year ended December 31, 1999 of $531,643. For the year ended December 31, 2000, we recognized $154,520 in film income and sponsorship fees as compared to $517,995 for the year ended December 31, 1999. We also received a one-time sporting events promotion revenue of $400,000.

For the six-month period ended June 30, 2001, we recognized $300,000 in licensing fee revenue from the licensing of products from our television show "Adventures With Kanga Roddy" to World Channel, Inc. Under the terms of the 5-year licensing agreement, World Channel pays us $600,000 per year for the world-wide licensing rights. Under an agreement we have with ACEI, cashflow from the licensing agreement will be equally shared between PeopleNet and ACEI.

Costs and Expenses

We recognized $3,697,224 in expenses as a reserve of film cost. These costs were capitalized production costs for the television show "Adventures With Kanga Roddy", for the year ended December 31, 2000 as compared to none of such charges for 1999. During the year-ended December 31, 2000 management reviewed the net realizable value of the capitalized film costs. The licensing and sponsorship fees to date have been less than the original estimates of the Company. During the third quarter of 2000 a reserve of $1,000,000 was taken against the related capitalized costs. As of December 31, 2000 the net amount of capitalized film costs was reserved to $3,950,000, which is based on current licensing agreements and planned and probable future distribution of the television show.

For the six-month period ended June 30, 2001, we charged $301,616 to cost of sales offsetting revenues we recognized from film income.

Our expenses for salaries and payroll taxes were $1,021,683 for the year 2000, an increase of $640,319 from $381,364 in 1999. Total selling, general and administrative expenses was $2,402,509 for 2000, an increase of $1,343,872 from $1,058,637 in 1999. The increase is due to certain of such expenses no longer being captured into capitalized film costs as were in the year 1999.

For the six-month period ended June 30, 2001, we adopted aggressive cost-cutting measures and salaries and payroll taxes were reduced to 131,811 while selling, general and administration expenses were contained to $99,215.

As a result of foregoing factors, our net loss was ($6,719,478) for the year ended December 31, 2000 as compared to ($1,487,878) for the year ended December 31, 1999. Net loss per share increased to ($3.34) in 2000 from ($0.74) in 1999, while weighted average number of shares outstanding remained the same at 2,010,000 shares when adjusted for the 20,100 to 1 forward-split of our common stock in July 2001.

Net loss for the six months ended June 30, 2001 was ($289,052) resulting in a basic loss per share of ($0.14) for the period.

Liquidity and Capital Resources

Stockholders' equity decreased to a negative ($7,742,212) at the end of 2000, from a negative ($1,022,734) from 1999. Subsequent to year-end 2000, we adopted a plan to spin-off PeopleNet to the shareholders as a tax-free dividend. As part of this plan, some of the inter-company accounts will be offset against each other and the net amount due the parent company is adjusted to $1,500,000 with the balance converted to additional paid-in-capital. The proforma effect of the conversion of inter-company notes to additional paid-in-capital will result in a net stockholders' equity of $2,518,967. Please refer to Note 1 following the financial statements for details. Selected data demonstrating the effect of the spin-off:

                                           December 31, 2000
                                --------------------------------------------
                                Without spin-off     Proforma after spin-off
                                ----------------     -----------------------
Due from parent                 $   930,678          $         0
Total assets                    $ 5,286,961          $ 4,356,283

Due to parent                   $12,691,656          $ 1,500,000
Total liabilities               $13,029,173          $ 1,837,517

Additional paid-in-capital      $   678,680          $10,939,859
Total stockholders' equity     ($ 7,742,212)         $ 2,518,967

Cashflow from operations for the twelve months ended December 31, 2000 was a positive $229,148. Cash used for investing activities for the twelve months ended December 31, 2000 was ($125,148) and cash from financing activities for the twelve months ended December 31, 2000 was a decrease of ($104,000).

For the six-month period ended June 30, 2001, cashflow from operations was a negative ($32,845) and our financing activities brought in $33,000.

We historically financed our operating and capital outlays from funds we receive from our parent company ACEI. We intend to complete a private placement in the amount of $1 million upon the spin-off of PeopleNet for immediate working capital, and employ between 12 to 16 persons including 2 software engineers, 2 technical support persons and the remainder in management and marketing of ChiBrow. As of the end of July 2001, we have not yet identified any potential investors for the intended private placement.

Accounts payable and accrued expenses as of December 31, 2000 was $298,631 as compared to $708,213 at December 31, 1999. Loans payable to related parties as of December 31, 2000 was $36,000 as compared to $70,000 as of December 31, 1999.

We anticipate the conversion of free users of ChiBrow into paying subscribers and to launch ChiBrow as a fee for service site beginning with the third calendar quarter of 2001. Currently, ChiBrow is offered free of charge and has a world-wide user base. Our business model for the exploitation of ChiBrow is based on:

individual subscription between $30 to $60 per family per year;
corporate subscription between $60 to $100 per station per year;
advertising banners;
corporate sponsors; and
paid positioning preference on ChiBrow and CoolNetwork's webpages and searches.

We have no current plan to produce additional episodes of the TV series Kanga Roddy.

Item 3. Description of Property

We lease approximately 2,000 square feet of space for our Hayward, California, headquarters pursuant to a four-year lease expiring in August 2004, at approximately $6,000 per month.

Item 4. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of the date of the spin-off of PeopleNet from American Champion, certain information with respect to stock ownership of:

all persons known by us to be beneficial owners of 5% or more of its outstanding shares of Common Stock;

each director; and

all directors and officers as a group.

Name and Address of Beneficial Owner (1)	Number of Shares of Common Stock	Percentage of Common Stock Ownership*
Holley Holding USA, Inc.	738,387	36.7%
ECapital Group, Inc.	375,000	18.7%
Anthony K. Chan (Director)	27,000	1.3%
George Chung (Director)	0	0%
All Directors and Officers as a group (two persons)	27,000	1.3%

_______________________

The addresses for the directors and executive officers is c/o PeopleNet International Corporation, 22320 Foothill Blvd., Suite 260, Hayward, California 94541.

Item 5. Directors, Executive Officers, Promoters and Control Persons

As of July 20, 2001, our directors, executive officers and control persons are:

  Name                Age   Position                             Director Since

  Anthony K. Chan     46    President, Chief Executive Officer,     1997
                            Chief Financial Officer, Chairman and
                            Director

  George Chung        40    Managing Director                       1997

Anthony K. Chan. Mr. Chan has served as President, Chief Executive Officer, and a Director of American Champion Entertainment, Inc. since February 1997, and has served as our Chief Executive Officer, Chairman and Director since 1997. From 1985 to 1990, Mr. Chan served as the Director of Chinese Affairs for the Eisenberg Company, a diversified business enterprise, where Mr. Chan's principal duty was to negotiate contracts in the People's Republic of China. Prior to 1985, Mr. Chan was employed by the Bank of America NT & SA as an economic forecaster. Mr. Chan received his MBA from the University of California at Berkeley.

George Chung. Mr. Chung has served as Chairman of the Board and a Director of American Champion Entertainment, Inc. since February 1997, and as our Director since 1997. From 1981 to 1991, Mr. Chung owned and operated a karate studio in Los Gatos, California. Mr. Chung was inducted into the Black Belt Hall of Fame in 1983. He is regarded in the martial arts industry as a pioneer in the modernization of what is known as contemporary martial arts training, which includes the use of music in both training and performance. He has been featured in magazines, books, television and motion pictures. He is a published author and wrote "Defend Yourself," a worldwide published self-defense system for Sybervision Systems. In 1995, he was awarded a "Superbowl Ring" from the San Francisco 49ers in recognition for his outstanding martial arts work with their championship football team.

Item 6. Executive Compensation

The following table sets forth certain summary information with respect to the compensation paid to our Chief Executive Officer and President, and our Chairman of the Board, for services rendered in all capacities for the period through December 31, 2000. We had no other executive officers whose total annual salary and bonus exceeded $100,000 for that fiscal year:

Name	Position	Year	Salary	Other Compensation	Bonus	Long-Term Compensation
						Awards		Payouts
						Restricted Stock Award(s) ($)	Securities Underlying Options/ SARs(#)(1)	LTIP Payout($)	All Other Compensation ($)
Anthony Chan	President & Chief Executive Officer & Chief Financial Officer & Chairman of the Board & Director	2000 1999	$135,000 $127,262	None	None	None	None	None	None
George Chung	Managing Director	2000 1999	$135,000 $127,262	None	None	None	None	None	None

STOCK OPTIONS GRANTS AND EXERCISES

Option/SAR Grants within 2000

Option/SAR Grants in Last Fiscal Year

Individual Grants
Name	Number of Securities Underlying Option Granted (#)	% of Total Options Granted to all persons in Fiscal Year	Exercise or Base Price ($/Sh)	Expiration Date
Anthony Chan	None	0
George Chung	None	0

The following table shows the value at July 20, 2001 of unexercised options held by the named executive officers:

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-end Option Values.

			Number of securities underlying unexercised options at fiscal year-end (#)	Value of unexercised in-the-money options at fiscal year-end ($)
Name	Shares acquired on exercise (#)	Value Realized ($)	Exercisable/ unexercisable	Exercisable/ unexercisable
Anthony Chan, President, Chief Executive Officer and Chief Financial Officer, Chairman of The Board and Director	None	None	None	None
George Chung, Director	None	None	None	None

---------------------------

The compensation for our key management will be evaluated from time to time by the Board. The Board may, in its discretion, award these individuals cash bonuses, options to purchase shares of common stock under our Equity Incentive Plan and such other compensation, including equity-based compensation, as the Board, or a committee thereof, shall approve from time to time.

Item 7. Certain Relationships and Related Transactions

An agreement was made between ACEI and PeopleNet on July 10, 2001 where cashflow generated from the licensing agreement between ACM and World Channel, Inc. will be equally shared between ACEI and PeopleNet.

As of July 20, 2001, we had an unsecured loan in the amount of $54,000 from our director and Chief Executive Officer, Anthony Chan. Upon the effectiveness of this registration statement, the entire amount of this loan will be converted into 27,000 shares of our common stock.

Item 8. Description of Securities

General

We have an authorized capital of 100,000,000 shares of common stock, $.0001 par value, and 10,000,000 shares of preferred stock, $.0001 par value, of which 2,010,000 shares of common stock and no shares of preferred stock are currently outstanding. The issued and outstanding shares of common stock are fully paid and non-assessable.

Common Stock

Holders of shares of common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders and do not have cumulative voting rights in the election of directors. Such holders are entitled to share pro rata in such dividends as may be declared by the board of directors out of funds legally available. On any dissolution, liquidation or winding-up of our business, the holders of common stock will be entitled to share pro rata in all distributions made after payment of or provision for the payment of all debts and prior claims. There are no preemptive rights or conversion privileges applicable to the common stock.

Preferred Stock

The preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by the Board of Directors, without further action by stockholders, and may include voting rights (including the right to vote as a series on particular matters), preferences as to dividends and liquidation, conversion rights, redemption rights and sinking fund provisions. The issuance of any such preferred stock could adversely affect the rights of the holders of common stock and, therefore, reduce the value of the common stock. The ability of the Board of Directors to issue preferred stock could discourage, delay or prevent a takeover of us. We do not have any current plans to issue any Preferred Stock.

PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and Other Stockholder Matters

Until the effective date of this registration statement, our common stock has been privately held and has not traded on any securities exchange or quotation system. Upon distribution of our common stock to the stockholders of American Champion, we intend to have the common stock included for quotation in the over-the-counter electronic bulletin board.

We have not paid any cash dividends on our common stock and we currently intend to retain any future earnings to fund the development and growth of our business. Any future determination to pay dividends on our common stock will depend upon our results of operations, financial condition and capital requirements, applicable restrictions under any credit facilities or other contractual arrangements and such other factors deemed relevant by our Board of Directors.

Item 2. Legal Proceedings

There are currently no lawsuits or legal proceedings by or against us.

Item 3. Changes in and Disagreements with Accountants

Not applicable.

Item 4. Recent Sale of Unregistered Securities

None.

Item 5. Indemnification of Directors and Officers

Our Certificate of Incorporation limits, to the maximum extent permitted by Delaware law, the personal liability of directors for monetary damages for breach of their fiduciary duties as a director. Our Bylaws provided that we shall indemnify our officers and directors and may indemnify our employees and other agents to the fullest extent permitted by Delaware law.

Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify a director, officer, employee or agent made a party to an action by reason of that fact that he or she was a director, officer employee or agent of the corporation or was serving at the request of the corporation against expenses actually and reasonably incurred by him or her in connection with such action if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and with respect to any criminal action, had no reasonable cause to believe his or her conduct was unlawful.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or controlling persons pursuant to the foregoing provisions, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

PART F/S. FINANCIAL STATEMENTS

PeopleNet International Corporation - Interim Financial Statements for the six-month period ended June 30, 2001

BALANCE SHEET

                                           June 30
                                             2001
                                         ------------
                                          (unaudited)
ASSETS
  Cash                                   $       155
  Accounts receivable                        416,340
  Due from parent                            936,057
  Inventory                                   15,412
  Property and equipment, net                165,678
  Film costs, net                          3,645,000
                                         -----------
    Total Assets                         $ 5,178,642
                                         ===========

LIABILITIES
  Accounts payable and
    accrued expenses                     $   269,817
  Due to parent                           12,868,461
  Other                                        2,628
  Related party note payable                  39,000
  Notes payable                               30,000
                                         -----------
                                          13,209,906
                                         -----------
STOCKHOLDERS' EQUITY
  Preferred stock, $0.0001 par value;            -
    10,000,000 shares authorized
  Common stock, $0.0001 par value;
    100,000,000 shares authorized                201
  Additional paid-in capital                 678,680
  Accumulated deficit                     (8,710,145)
                                         -----------
    Total Stockholders' Equity            (8,031,264)
                                         -----------

                                         $ 5,178,642
                                         ===========

STATEMENT OF OPERATIONS

                                          Six-month
                                         Period Ended
                                         June 30, 2001
                                         -------------
                                          (unaudited)
REVENUE
  Licensing fee                                300,000
  Other                                          3,690
                                         -------------
    Total revenue                              303,690
                                         -------------

COSTS AND EXPENSES
  Cost of sales - Film income                  301,616
  Inter-company interest
    expense, net                                60,000
  Selling                                       16,595
  Salaries and payroll taxes                   131,811
  General and administrative                    82,620
                                         -------------
    Total costs and expenses                   592,642
                                         -------------

LOSS FROM OPERATIONS BEFORE
  PROVISION FOR INCOME TAXES                  (288,952)

PROVISION FOR INCOME TAXES                         100
                                         -------------
NET LOSS                                      (289,052)
                                         =============

Weighted average number of
  shares outstanding                         2,010,000
                                         =============

Basic and diluted loss per share               $(0.14)
                                         =============

STATEMENT OF CASH FLOWS

                                                    Six-month
                                                   Period Ended
                                                     June 30
                                                       2001
                                                   ------------
                                                   (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                         $  (289,052)
  Adjustments to reconcile net loss
    to net cash used for operating activities
      Depreciation and amortization                    337,210
  (Increase) decrease in
    Accounts receivable                               (228,612)
    Inventory                                              255
    Due from parent                                     (5,380)
  Increase (decrease) in
    Accounts payable and accrued expenses              (24,071)
    Due to parent                                      176,805
                                                   ------------
      Net cash used for operating activities           (32,845)
                                                   ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of equipment                                    -
  Payments for film costs                                  -
                                                   ------------
    Net cash used for investing activities                 -
                                                   ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds on loans from related parties                 3,000
  Payments on loans from related parties                   -
  Proceeds on notes payable                             30,000
  Payments on notes payable                                -
                                                   ------------
    Net cash provided by financing activities           33,000
                                                   ------------

NET DECREASE IN CASH                                       155

CASH, beginning of year                                    -
                                                   ------------
CASH, end of year                                  $       155
                                                   ============


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Cash paid during the period for
    Foreign and state income taxes                 $       100
                                                   ============

NOTES TO INTERIM FINANCIAL STATEMENTS

For the six-month period ended June 30, 2001
Note 1. Nature of Operations, Going Concern, Significant Transactions and Subsequent Events

Nature of Operations - PeopleNet International Corporation (the "Company") focuses on operating and managing media-related programs. These programs consist of production of educational television programs for children, which emphasize martial arts values and fun. The Company is a wholly owned subsidiary of America's Best Karate ("ABK"), which is a wholly owned subsidiary of American Champion Entertainment, Inc. ("ACEI").

Going Concern. Management's plans and the ongoing operations of the Company are expected to require additional working capital during 2001. In addition, the Company has experienced losses from continuing operations since inception. These factors cause substantial doubt about the ability of the Company to continue as a going concern. The Company has historically financed operating and capital cash requirements from funds received from the parent company ACEI. While the Company does not have an agreement or commitment in place, management plans to raise additional capital through a private placement subsequent to the spin-off, which is described below, in the amount of approximately $1,000,000. Management also expects to generate additional cash flow from the operations of the Company.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of operations. The continuation of the Company as a going concern is dependent upon the success of obtaining additional capital and, thereafter, on attaining profitability. There can be no assurance that management will be successful in the implementation of its plan. The financial statements do not include any adjustments in the event the Company is unable to continue as a going concern.

Significant Transactions and Subsequent Events. On July 24, 2001 the Company changed its name from American Champion Media, Inc. to PeopleNet International Corporation. The name change was made to more accurately reflect changes in the Company's core business.

On July 23, 2001 the Company declared a 20,100 for 1 stock split. The accompanying financial statements reflect the effect of this split. The Company also increased the authorized shares of common stock to 100,000,000 and provided for the issuance of up to 10,000,000 shares of preferred stock. The preferred stock can be issued at the by the Board of Directors and may include voting rights, preferences as to dividends and liquidation, conversion rights, redemption and sinking fund provisions. All share and per share data in the accompanying notes have been adjusted to reflect the effect of this split.

In July 2001 the Company adopted the 2001 Stock Option Plan. The plan provides for the issuances of up to 1,500,000 options to purchase common stock of the company. No options have been issued under the plan.

In July 2001 the Company adopted the Non-Employee Directors Stock Option Plan. The plan provides for the issuances of up to 500,000 options to purchase common stock of the company. No options have been issued under the plan.

In July 2001 the Company adopted the 2001 Stock Incentive Plan. The plan provides for the issuances of up to 500,000 shares of common stock of the company. No shares have been issued under the plan.

In June 2001, the Company signed an agreement with ECapital Group, Inc. ("ECapital") to purchase the exclusive licensing and marketing rights to ChiBrow, a safe web browser software for children. Under the terms of the agreement, upon the effectiveness of the spin-off of the Company from ACEI, the Company will issue 375,000 shares of common stock, with registration rights, to ECapital in exchange for the worldwide exclusive rights to market and distribute ChiBrow for three years. The Company intends to file a registration statement for such shares immediately after the effectiveness of the spin-off transaction. Pursuant to the terms of the agreement, the Company shall retain 35% of all revenues generated from such marketing efforts and the balance shall be paid to ECapital.

On June 22, 2001 ACEI approved a plan to spin-off the Company to the shareholders as a tax-free distribution. Under the plan, each stockholder of ACEI will receive one share of ACM stock for approximately every 17 shares of ACEI stock held as of the effective date of the spin-off. Subsequent to and as part of the spin-off, ECapital, an unrelated entity, will contribute intangible property consisting primarily of Internet sites, content and a web browser, described above, in exchange for approximately 18% of the Company. The related party note payable will also be converted to common stock amounting to approximately 1% of the Company. The Company expects to operate in the business of providing Internet content subsequent to the spin-off.

As part of this plan, the advances to ABK will be offset against the amounts due to ACEI and the net amount due adjusted down to $1,500,000 with the balance converted to additional paid-in-capital. This $1,500,000 will be converted to a note payable and will be due in annual installments of $300,000 plus interest at 8 percent. The television program, "The Adventures With Kanga Roddy", and all licensing and distribution rights associated with the program will also secure the note.

The proforma effect of the conversion of inter-company notes to additional paid-in-capital as if the conversion took place as of December 31, 2000 is as follows:

  ASSETS
    Accounts receivable                       $   187,728
    Inventory                                      15,667
    Property and equipment, net                   202,888
    Film costs, net                             3,950,000
                                              -----------
      Total Assets                            $ 4,356,283
                                              ===========

  LIABILITIES
    Accounts payable and accrued expenses     $   298,631
    Due to parent                               1,500,000
    Other                                           2,886
    Related party note payable                     36,000
                                              -----------
      Total Liabilities                         1,837,517
                                              -----------

  STOCKHOLDERS' EQUITY
    Common stock                                      201
    Additional paid-in capital                 10,939,859
    Accumulated deficit                        (8,421,093)
                                              -----------
      Total Stockholders' Equity                2,518,967
                                              -----------
                                              $ 4,356,484
                                              ===========

NOTES TO INTERIM FINANCIAL STATEMENTS

For the six-month period ended June 30, 2001

Note 2. Summary of Significant Accounting Policies

Revenue Recognition - Revenue from films is recognized on delivery of each master. Film costs are amortized using the individual-film-forecast-computation method, which amortizes costs in the ratio that current gross revenues bear to anticipated total gross revenues from all sources. The management of the Company periodically reviews its estimates of future revenues for each master and if necessary a revision is made to amortization rates and a write down to net realizable value may occur. During the year ended December 31, 2000, management determined that based on the current licensing agreements in place with respect to films released, a reserve of $3,697,224 should be established.

Concentrations of Risk - Financial instruments which potentially subject the Company to concentrations of credit risk are cash and accounts receivable arising from its normal business activities. The Company places its cash with financial institutions deemed by management to be of high credit quality. The amount on deposit in any one institution that exceeds federally insured limits is subject to credit risk.

Cash and Cash Equivalents - The Company considers certain highly liquid instruments purchased with original maturities of three months or less to be cash equivalents.

Property and Equipment - Property and equipment is stated at cost. Depreciation for property and equipment is computed using the straight-line method over an estimated useful life of five years.

Film Costs - Film costs consist of the capitalized costs related to the production of original film masters for videos and television programs. Film costs are amortized using the individual-film-forecast-computation method. The net film costs are presented on the balance sheet at the net realizable value for each master. During 2000 the Company established a reserve against the capitalized film costs to reduce the carrying amount to the estimated net realizable value.

Fair Values of Financial Instruments - The carrying values of cash, receivables, accounts payable and short-term borrowings approximate fair value due to the short maturity of these instruments. The carrying values of long-term obligations approximate fair value since the interest rates either fluctuate with the lending banks' prime rates or approximate market rate. None of the financial instruments are held for trading purposes.

Basic Loss Per Share - Basic loss per share is based on the weighted average outstanding shares issued. Because the Company has a net loss, the common stock equivalents would have an anti-dilutive effect on earnings per share. Accordingly, basic earnings per share and diluted earnings per share are the same.

Income Taxes - Income taxes are accounted for using an asset and liability approach, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between financial statement and tax basis of assets and liabilities at the applicable enacted tax rates. Generally accepted accounting principles require a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Presentation - Management believes utilizing a classified balance sheet presentation is not appropriate, as the operating cycle of the Company is expected to exceed 12 months. Accordingly, an unclassified presentation is utilized for the accompanying balance sheet, which is an acceptable method under SFAS No. 53, "Financial Reporting by Producers and Distributors of Motion Picture Films."

Use of Estimates, Risks and Uncertainties - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant estimates used in these financial statements include the recovery of film costs, which has a direct relationship to the net realizable value of the related asset. It is at least reasonably possible that management's estimate of revenue from films could change in the near term, which could have a material adverse effect on the Company's financial condition and results of operations.

NOTES TO INTERIM FINANCIAL STATEMENTS

For the six-month period ended June 30, 2001

Note 3. Basis of Reporting

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and disclosures required by generally accepted accounting principles for completed financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the financial position of the Company on June 30, 2001 and the results of its operations and its cash flows for the six-month period ended June 30, 2001. The accompanying unaudited financial statements should be read in conjunction with the financial statements and notes for the year ended December 31, 2000 included elsewhere in this Form 10-SB.

NOTES TO INTERIM FINANCIAL STATEMENTS

For the six-month period ended June 30, 2001

Note 4. Uses of Estimates, Risks and Uncertainties

The preparation of financial statements in confirmity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could difer from those estimates. Significant estimates used in these financial statements include the recovery of film costs which has a direct relationship to the net realizable value of the related asset. It is at least reasonably possible that management's estimate of revenue from films could change in the near term which could have a material adverse effect on the Company's financial condition and results of operations.

PEOPLENET INTERNATIONAL CORPORATION

INDEPENDENT AUDITOR'S REPORT

AND

FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors

PeopleNet International Corporation

We have audited the accompanying consolidated balance sheet of PeopleNet International Corporation, (the "Company") a wholly owned subsidiary of American Champion Entertainment, Inc., as of December 31, 2000 and 1999, and the related statements of operations, stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, based on our audits, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2000 and 1999, and the results of its consolidated operations and its consolidated cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company had limited cash reserves at December 31, 2000 and based on management's current cash flow estimates, will not have sufficient cash to meet obligations over the next twelve months without additional sources of capital. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plan in this regard is discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Moss Adams LLP

San Francisco, California

February 15, 2001, except for Note 1 as to which the date is July 24, 2001

PEOPLENET INTERNATIONAL CORPORATION

BALANCE SHEET

                                       December 31,
                                --------------------------
                                    2000           1999
                                -----------    -----------
                                 (audited)      (audited)
ASSETS
  Accounts receivable           $   187,728    $   472,251
  Due from parent                   930,678        929,743
  Inventory                          15,667         13,220
  Property and equipment, net       202,888        291,066
  Film costs, net                 3,950,000      7,553,133
                                -----------    -----------
    Total Assets                $ 5,286,961    $ 9,259,413
                                ===========    ===========

LIABILITIES
  Accounts payable and
    accrued expenses            $   298,631    $   708,213
  Due to parent                  12,691,656      9,433,439
  Other                               2,886            495
  Related party note payable         36,000         70,000
  Notes payable                         -           70,000
                                -----------    -----------
                                 13,029,173     10,282,147
                                -----------    -----------

COMMITMENTS AND CONTINGENCIES,
  Note 8                                -              -

STOCKHOLDERS' EQUITY
  Preferred stock, $0.0001 par value;   -              -
    10,000,000 shares authorized
  Common stock, $0.0001 par value;
    100,000,000 shares authorized       201            201
  Additional paid-in capital        678,680        678,680
  Accumulated deficit            (8,421,093)    (1,701,615)
                                -----------    -----------
    Total Stockholders' Equity   (7,742,212)    (1,022,734)
                                -----------    -----------
                                $ 5,286,961    $ 9,259,413
                                ===========    ===========

STATEMENT OF OPERATIONS


                                     Year Ended December 31,
                                   --------------------------
                                       2000           1999
                                   -----------    -----------
                                    (audited)      (audited)
REVENUE
  Film income and sponsorship
    fees                           $   154,520        517,995
  Sporting events promotion            400,000            -
  Other                                    695         13,648
                                   -----------    -----------
    Total revenue                      555,215        531,643
                                   -----------    -----------

COSTS AND EXPENSES
  Cost of sales - Film income           33,177        458,274
  Film cost reserve                  3,697,224            -
  Inter-company interest
    expense, net                       120,000        120,000
  Selling                            1,419,034        317,405
  Salaries and payroll taxes         1,021,683        381,364
  General and administrative           983,475        741,232
                                   -----------    -----------
    Total costs and expenses         7,274,593      2,018,275
                                   -----------    -----------

LOSS FROM OPERATIONS BEFORE
  PROVISION FOR INCOME TAXES        (6,719,378)    (1,486,632)

PROVISION FOR INCOME TAXES                 100          1,246
                                   -----------    -----------
NET LOSS                            (6,719,478)    (1,487,878)
                                   ===========    ===========

Weighted average number of
  shares outstanding                 2,010,000      2,010,000
                                   ===========    ===========

Basic and diluted loss per share       $(3.34)        $(0.74)
                                   ===========    ===========

STATEMENT OF STOCKHOLDERS' EQUITY

                          Common
                          Stock                                      Total
                          Number     Common  Paid-in   Accumulated   Stockholders'
                          of Shares  Stock   Capital   Deficit       Equity
                          ---------  ------  --------  ------------  ------------
Balance
  December 31, 1998       2,010,000  $  201  $678,680  $(  213,737)  $   465,144

Net loss for year ended
  December 31, 1999             -       -         -     (1,487,878)   (1,487,878)
                          ---------  ------  --------  ------------  ------------
Balance
  December 31, 1999       2,010,000     201   678,680   (1,701,615)   (1,022,734)

Net loss for year ended
December 31, 2000               -       -         -     (6,719,478)   (6,719,478)
                          ---------  ------  --------  ------------  ------------
Balance
  December 31, 2000       2,010,000     201   678,680   (8,421,093)   (7,742,212)
                          =========  ======  ========  ============  ============

STATEMENT OF CASH FLOWS

                                                  Year Ended December 31,
                                                --------------------------
                                                    2000          1999
                                                ------------  ------------
                                                 (audited)     (audited)
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                      $(6,719,478)  $(1,487,878)
  Adjustments to reconcile net loss
    to net cash used for operating activities
      Depreciation and amortization                 119,235       538,165
      Bad debts                                     692,437           -
      Film cost reserve                           3,697,224           -
  (Increase) decrease in
    Accounts receivable                            (407,914)     (440,393)
    Inventory                                        (2,447)       (2,038)
    Due from parent                                    (935)      (37,408)
  Increase (decrease) in
    Accounts payable and accrued expenses          (407,191)      (80,719)
    Due to parent                                 3,258,217     3,995,516
                                                ------------  ------------
      Net cash used for operating activities        229,148     2,485,245
                                                ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of equipment                                 -          (3,341)
  Payments for film costs                          (125,148)   (2,621,904)
                                                 ------------  ------------
    Net cash used for investing activities         (125,148)   (2,625,245)
                                                 ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds on loans from related parties             36,000        70,000
  Payments on loans from related parties            (70,000)          -
  Proceeds on notes payable                             -          70,000
  Payments on notes payable                         (70,000)          -
                                                 ------------  ------------
    Net cash provided by financing activities      (104,000)      140,000
                                                 ------------  ------------

NET DECREASE IN CASH                                    -             -

CASH, beginning of year                                 -             -
                                                 ------------  ------------
CASH, end of year                                $      -      $      -
                                                 ============  ============


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Cash paid during the period for
    Foreign and state income taxes               $      100    $    1,246
                                                 ============  ============

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

Note 1. Nature of Operations, Going Concern and Subsequent Events

Subsequent Events. On July 24, 2001 the Company changed its name from American Champion Media, Inc. to PeopleNet International Corporation. The name change was made to more accurately reflect changes in the Company's core business.

In July 2001 the Company adopted the 2001 Stock Incentive Plan. The plan provides for the issuances of up to 500,000 shares of common stock of the company. No shares have been issued under the plan.

The proforma effect of the conversion of inter-company notes to additional paid-in-capital as if the conversion took place as of December 31, 2000 is as follows:

  ASSETS
    Accounts receivable                       $   187,728
    Inventory                                      15,667
    Property and equipment, net                   202,888
    Film costs, net                             3,950,000
                                              -----------
      Total Assets                            $ 4,356,283
                                              ===========

  LIABILITIES
    Accounts payable and accrued expenses     $   298,631
    Due to parent                               1,500,000
    Other                                           2,886
    Related party note payable                     36,000
                                              -----------
      Total Liabilities                         1,837,517
                                              -----------

  STOCKHOLDERS' EQUITY
    Common stock                                      201
    Additional paid-in capital                 10,939,859
    Accumulated deficit                        (8,421,093)
                                              -----------
      Total Stockholders' Equity                2,518,967
                                              -----------
                                              $ 4,356,484
                                              ===========

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

Note 2. Summary of Significant Accounting Policies

Cash and Cash Equivalents - The Company considers certain highly liquid instruments purchased with original maturities of three months or less to be cash equivalents.

Property and Equipment - Property and equipment is stated at cost. Depreciation for property and equipment is computed using the straight-line method over an estimated useful life of five years.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

Note 3. Property and Equipment

                                                   2000         1999
                                                ----------   ----------
Equipment                                       $   47,172   $   47,172
Production equipment                               404,387      404,387
                                                ----------   ----------
                                                   451,559      451,559

Less accumulated depreciation and amortization     248,671      160,493
                                                ----------   ----------
                                                $  202,888   $  291,066
                                                ==========   ==========

Depreciation expense was $88,178 and $88,066 for the years ended December 31, 2000 and 1999, respectively.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

Note 4. Film Costs

Film costs consist of the capitalized costs related to the production of videos and programs for television as follows:

                                                      2000         1999
                                                   ----------   ----------
Television program
  The Adventures With Kanga Roddy, net of
    reserve of $3,537,259 at December 31, 2000     $4,665,557   $8,077,669

Videos
  Montana Exercise Video, net of reserve of
    $148,253 at December 31, 2000                         -        148,253
  Strong Mind Fit Body, net of reserve of
    $18,042 at December 31, 2000                          -         18,042
                                                   ----------   ----------
                                                    4,665,557    8,243,964

Less accumulated amortization                         715,557      690,831
                                                   ----------   ----------
                                                   $3,950,000   $7,553,133
                                                   ==========   ==========

A reserve was established to reduce the capitalized film costs of The Adventures With Kanga Roddy to its net realizable value at December 31, 2000. Other investments in both Montana Exercise Video and the videos of the Strong Mind Fit Body were fully reserved as management believes these videos would not generate future revenues for the Company.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

Note 5. Notes Payable, Related Parties

The notes payable to a major stockholder of ACEI bear interest at 0% to 12% and are unsecured. Substantially all amounts due have been repaid subsequent to year-end.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

Note 6. Notes Payable

The notes payable to individuals bear interest at 0% to 12% and are unsecured. All amounts were due during 2000 and have been repaid.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

Note 7. Income Taxes

Reconciliation of the federal statutory tax rate of 34% and state tax rate of 8.8% to the recorded amounts are as follows:

                                               2000           1999
                                           ------------   ------------
Federal tax benefit at statutory rates     $(2,100,000)   $  (500,000)
State tax benefit at statutory rates          (600,000)      (100,000)
Increase in valuation allowance              2,700,100        601,246
                                           ------------   ------------
                                           $       100    $     1,246
                                           ============   ============

The Company files a consolidated income tax return with ACEI. The Company has net operating loss (NOL) carry forwards for federal and state income tax purposes of approximately $4,000,000, the benefits of which expire in 2012 through 2020 for federal purposes and through 2005 for state purposes. Because of changes in ownership of the Company and ACEI, the utilization of NOL's in any one-year will be limited by Section 382 of the Internal Revenue Code. Significant components of the Company's deferred tax assets and liabilities are as follows:

                                               2000           1999
                                           ------------   ------------
DEFERRED TAX ASSETS
  NOL carryforward                         $ 1,614,000    $   340,000
  Deferred revenue                                 -              -
  Amortization of film costs                 1,416,100            -
  Valuation allowance                       (3,010,100)      (310,000)
                                           ------------   ------------
                                                20,000         30,000
                                           ------------   ------------
DEFERRED TAX LIABILITIES
  Depreciation                                  20,000         30,000
                                           ------------   ------------
                                                20,000         30,000
                                           ------------   ------------
                                           $       -      $       -
                                           ============   ============

Management believes that some of the excess NOL carry forwards over temporary differences and the benefits from the amortization of the film costs may be utilized in future periods. However, due to the uncertainty of future taxable income and limitations related to Section 382 of the Internal Revenue Code, a valuation allowance for the net amount of the deferred tax assets and liabilities has been recorded at December 31, 2000 and 1999.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

Note 8. Commitments and Contingencies

In September 1996, the Company entered into an agreement with the director of The Adventures With Kanga Roddy television program, whereby the director would receive 2% in the distribution of net profits from the TV broadcasting, syndication, and video sales of the first 13 episodes of that program.

During 1997 the Company has entered into a distribution agreement with KTEH, the public broadcasting system ("PBS") station serving the San Jose, California area, for the exclusive right to distribute the "The Adventures with Kanga Roddy" series throughout the United States. Under the terms of the Distribution Agreement, the Company will receive $430,000, which is based on delivery of 13 episodes to KTEH. This amount was recognized in revenue in prior years. During 1998 KTEH agreed to purchase an additional 26 episodes and 2 one-hour specials for approximately $900,000. The Company recognized revenue of $-0- and $433,000 during 2000 and 1999 under this agreement as no episodes have been delivered subsequent to 1999. The agreement expires in April 2001 and will not be renewed.

During 1998, the Company entered into a non-exclusive toy licensing agreement with Timeless Toys with respect to the "The Adventures with Kanga Roddy" television program. Under the agreement, the Company is entitled to an 8% royalty. The agreement expires in January 2001.

In September 1999, the Company signed a licensing agreement with Brighter Child of Westerville, Ohio, for the licensing of the Kanga Roddy story and all related characters for use in interactive CD-Rom games. In October 1999, the Company signed a licensing agreement with Prestige Toys of New York, New York, for the licensing of the Kanga Roddy character and all related characters for use and manufacturing of plush toy items in all sizes. The agreement with Brighter Child expires on December 31, 2002.

On December 27, 2000, the Company entered into a worldwide distribution agreement with respect to "The Adventures with Kanga Roddy" television program with World Channel, Inc.. Under the agreement, World Channel will have the exclusive rights for exhibition, distribution, process and reproduction and all commercial exploitation of the program for a period of five years. The agreement requires World Channel to make five annual installments of $600,000 on or before the end of each of the years 2001 through 2005. As of December 31, 2000 the Company has recorded no amounts related to this agreement.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

Note 9. Related Party Transactions

Certain financing transactions of the Company and management oversight duties have been provided by ACEI. Although ACM employees have provided management of the operations of the Company, the ability of the Company to obtain financing has been dependent upon its relationship with ACEI. Had the relationship between the Company and ACEI not been in place, the results of operations and financial position of the Company may have been different.

The Company has received advances from ACEI to fund its operations. It has been the policy of ACEI and the consolidated group to not charge interest on inter-company advances. Interest has been imputed on $1,500,000 of the balance at a rate of 8%. This interest has been accrued as ACEI intends to charge interest on this amount in future periods. At December 31, 2000 and 1999 accrued interest payable on these advances amounted to $420,000 and $300,000, respectively, and is included in the outstanding balance of the note. Subsequent to year-end the net principal balance of the note was reduced to $1,500,000, by converting the balance of the note to additional paid-in-capital (see Note 1).

The Company has also made advances to ABK. These advances are also non-interest bearing. Interest income has not been accrued on these advances as it is not expected that this interest will ever be charge or collected. Subsequent to year-end the amounts due under this advance where offset against the amounts due to ACEI (see note 1).

During 2000 and 1999, the Company paid $5,000 and $2,500, respectively, to two stockholders for story lines and scripts for the production of the television series "The Adventures with Kanga Roddy."

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

Note 10. New Authoritative Pronouncements

During 2000 Statement of Position ("SOP") 00-2, Accounting by Producers or Distributors of Films, was issued. This new standard replaces Statement of Financial Accounting Standards No. 53, Financial Reporting by Producers and Distributors of Motion Picture Films. SOP 00-2 is effective for years beginning after December 15, 2000. Management does not expect the adoption of this new standard to have a material effect on the Company's financial statements.

PART III

Item 1. Index to Exhibits

2.1 Certificate of Incorporation, as amended on July 24, 2001

2.2 By-laws

3.1 2001 Stock Option Plan

3.2 2001 Non-Employee Director Stock Option Plan

3.3 2001 Stock Incentive Plan

6.1 Agreement between American Champion Media, Inc. and American Champion Entertainment, Inc., dated as of July 10, 2001

6.2 Purchase Agreement by and Among American Champion Entertainment, Inc., American Champion Media, Inc., eCapital Group, Inc. and Anthony Chan, dated as of June 20, 2001

6.3 Agreement between American Champion Media, Inc. and World Channel, Inc., dated as of December 27, 2000

10.1 Consent of Moss Adams LLP

In accordance with Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: August 2, 2001

PeopleNet International Corporation

By: /s/ Anthony K. Chan

Anthony K. Chan

Chief Executive Officer

(Principal Executive Officer)

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
By: /s/ Anthony K. Chan Anthony K. Chan	Chief Executive Officer (Principal Executive Officer) and Director	August 2, 2001
By: /s/ George Chung George Chung	Director	August 2, 2001

EX-2 4 exh0201.htm EXHIBIT 2.1CERTIFICATE OF INCORPORATION BYLAWS CERTIFICATE OF INCORPORATION

OF

PEOPLENET INTERNATIONAL CORPORATION

As Amended on July 24, 2001

1. The name of this corporation is PEOPLENET INTERNATIONAL CORPORATION.

2. The address of this corporation's registered office in the State of Delaware is located at 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.

3. The purpose of this corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

4. The total number of shares of stock which the Corporation shall have authority to issue is One Hundred Ten Million (110,000,000) consisting of (i) One Hundred Million (100,000,000) shares of Common Stock of the par value of $.0001 per share and (ii) Ten Million (10,000,000) shares of Preferred Stock of the par value of $.0001 per share.

A. The designations and the powers, preferences and rights, and the qualifications, limitations or restrictions thereof of the Preferred Stock, and of the Common Stock are as follows:

1. Preferred Stock.

The Board of Directors is authorized, subject to limitations prescribed by law and the provisions of this Article FOURTH, to provide for the issuance of the Preferred Stock in series and by filing a Certificate pursuant to the Delaware General Corporation Law to establish the number of shares to be included in each such series. The Preferred Stock may be issued either as a class without series, or as so determined from time to time by the Board of Directors, either in whole or in part in one or more series, each series to be appropriately designated by a distinguishing number, letter or title prior to the issue of any shares thereof. Whenever the term "Preferred Stock" is used in this Article FOURTH, it shall be deemed to mean and include Preferred Stock issued as a class without series, or one or more series thereof, or both, unless the context shall otherwise require. There is hereby expressly granted to the Board of Directors of the Corporation authority, subject to the limitations provided by l aw, to fix the voting power, the designations, and the relative preferences, powers, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of the shares of each series of said Preferred Stock and the variations in the relative powers, rights, preferences and limitations as between series, and to increase the number of shares constituting each series, and to decrease such number of shares (but not to less than the number of outstanding shares of the series), in the resolution or resolutions adopted by the Board of Directors providing for the issue of said Preferred Stock.

The authority of the Board of Directors of the Corporation with respect to each series shall include, but shall not be limited to, the authority to determine the following:

a. The designation of the series;

b. The number of shares initially constituting such series;

c. The increase, and the decrease to a number not less than the number of the outstanding shares of such series, of the number of shares constituting such series theretofore fixed;

d. The rate or rates and the times and conditions under which dividends on the shares of such series shall be paid, and, (i) if such dividends are payable in preference to, or in relation to, the dividends payable on any other class or classes of stock, the terms and conditions of such payment, and (ii) if such dividends shall be cumulative, the date or dates from and after which they shall accumulate;

e. Whether or not the shares of such series shall be redeemable, and, if such shares shall be redeemable, the terms and conditions of such redemption, including, but not limited to, the date or dates upon or after which such shares shall be redeemable and the amount per share which shall be payable upon such redemption, which amount may vary under conditions and at different redemption dates;

f. The amount payable on the shares of such series in the event of the dissolution of, or upon any distribution of the assets of, the Corporation;

g. Whether or not the shares of such series may be convertible into, or exchangeable for, shares of any other class or series and the price or prices and the rates of exchange and the terms of any adjustments to be made in connection with such conversion or exchange;

h. Whether or not the shares of such series shall have voting rights in addition to the voting rights provided by law, and, if such shares shall have such voting rights, the terms and conditions thereof, including but not limited to, the right of the holders of such shares to vote as a separate class either alone or with the holders of shares of one or more other series of Preferred Stock and the right to have more or less than one vote per share;

i. Whether or not a purchase fund shall be provided for the shares of such series, and, if such a purchase fund shall be provided, the terms and conditions thereof;

j. Whether or not a sinking fund shall be provided for the redemption of the shares of such series and if such a sinking fund shall be provided, the terms and conditions thereof; and

k. Any other powers, preferences and relative, participating, optional, or other special rights, and qualifications, limitations or restrictions thereof, as shall not be inconsistent with the provisions of this Article FOURTH or the limitations provided by law.

2. Common Stock.

a. Subject to the rights of the Preferred Stockholders, the holders of the Common Stock shall be entitled to receive such dividends as may be declared thereon by the Board of Directors of the Corporation in its discretion, from time to time, out of any funds or assets of the Corporation lawfully available for the payment of such dividends.

b. In the event of any liquidation, dissolution or winding up of the Corporation, or any reduction of its capital, resulting in a distribution of its assets to its stockholders, whether voluntary or involuntary, then, after there shall have been paid or set apart for the holders of the Preferred Stock the full preferential amounts to which they are entitled, the holders of the Common Stock shall be entitled to receive as a class, pro rata, the remaining assets of the Corporation available for distribution to its stockholders.

c. For any and all purposes of this Certificate of Incorporation, neither the merger or consolidation of the Corporation into or with any other corporation, nor the merger or consolidation of any other corporation into or with the Corporation, nor a sale, transfer or lease of all or substantially all of the assets of the Corporation, or any other transaction or series of transactions having the effect of a reorganization shall be deemed to be a liquidation, dissolution or winding-up of the Corporation.

d. Except as otherwise expressly provided by law or in a resolution of the Board of Directors providing voting rights to the holders of the Preferred Stock, the holders of the Common Stock shall possess exclusive voting power for the election of directors and for all other purposes and each holder thereof shall be entitled to one vote for each share thereof.

B. As of the close of business on July 25, 2001, the outstanding shares of common stock of the Corporation shall be forward split on a 20,100-for-one basis (whereupon each holder of one share of common stock shall receive 20,099 additional shares of common stock).

5. The name and mailing address of the incorporator is:

Anthony J. Bishop, Esquire

333 S. Hope Street, 48th Floor

Los Angeles, California 90071

6. In furtherance and not in limitation of the powers conferred by statute, the board of directors of this corporation is expressly authorized to make, alter or repeal the bylaws of this corporation.

7. Elections of directors need not be by written ballot except and to the extent provided in the bylaws of this corporation.

8. No director of this corporation shall be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the corporation and its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of Delaware or (iv) for any transaction from which the director derived any improper personal benefit.

9. Neither the amendment nor repeal of Article 8, nor the adoption of any provision of this Certificate of Incorporation inconsistent with Article 8, shall eliminate or reduce the effect of Article 8 in respect of any matter occurring, or any cause of action, suit or claim that, but for Article 8, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.

10. The undersigned incorporator hereby acknowledges that the foregoing Certificate of Incorporation is his act and deed and that the facts stated therein are true.

Dated: February 5, 1997

State of California

County of Los Angeles

/s/ Anthony J. Bishop

Anthony J. Bishop, Incorporator

EX-2 5 exh0202.htm EXHIBIT 2.2 BY-LAWS BYLAWS BYLAWS

OF

AMERICAN CHAMPION MEDIA, INC.

(Originally Adopted on February 5, 1997.)

ARTICLE I

OFFICES

Section 1. Principal Office. The principal office of the Corporation shall be 26203 Production Avenue, Suite 5, Hayward, California 94545.

Section 2. Registered Office. The registered office of the Corporation required by the Delaware General Corporation Law to be maintained in the State of Delaware may, but need not, be identical with the principal office, and the address of the registered office may be changed from time to time by the Board of Directors.

Section 3. Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE II

STOCKHOLDERS' MEETINGS

Section 1. Annual Meeting. The annual meeting of the holders of shares of each class or series of stock as are entitled to notice thereof and to vote thereat pursuant to applicable law for the purpose of electing directors and transacting such other proper business as may come before it shall be held in each year at the principal office of the Corporation, or at such other time and place as may be designated by the Board of Directors. If this day shall be a legal holiday, then the meeting shall be held on the next succeeding business day at the same hour. At the annual meeting, the stockholders shall elect a Board of Directors, consider reports of the affairs of the Corporation and transact such other business as may properly be brought before the meeting.

Section 2. Special Meetings. In addition to such special meetings as are provided by law, special meetings of the holders of any class or series or of all classes or series of the Corporation's stock for any purpose or purposes may be called at any time by the President, Vice President, Secretary, Assistant Secretary or the Board of Directors, and may be held on such day, at such time and at such place as shall be designated by the Board of Directors.

Section 3. Director Nominations. Only persons who are nominated in accordance with the procedures set forth in this Section 3 shall be eligible for election as directors. Nominations of persons for election to the board of directors of the corporation may be made at a meeting of stockholders by or at the direction of the board of directors or by any stockholder of the corporation entitled to vote for the election of directors at the meeting who complies with the notice procedure set forth in this Section 3. Such nominations, other than those made by or at the direction of the board of directors, shall be made pursuant to timely notice in writing to the secretary of the corporation. To be timely, a stockholder notice shall be delivered to or mailed and received at the principal executive office of the corporation not less than sixty (60) days nor more than ninety (90) days prior to the meeting; provided, however, that in the event that less than sixty (60) days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director, (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the corporation that are beneficially owned by such person and (iv) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required in such case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including without limitation such person's written consent to being named in the proxy statemen t as a nominee and to serving as a director if elected); and (b) as to the stockholder giving the notice (i) the name and address, as they appear on the corporation's books, of such stockholder and (ii) the class and number of shares of the corporation that are beneficially owned by such stockholder. At the request of the board of directors, any person nominated by the board of directors for election as a director shall furnish to the secretary of the corporation that information required to be set forth in a stockholder's notice of nomination pertaining to the nominee. No person shall be eligible for election as a director of the corporation unless nominated in accordance with the procedures set forth in this Section 3. The chairman of the meeting shall, if the facts warrant, determine that a nomination was not made in accordance with the procedures prescribed by these Bylaws, and if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded.

Section 4. Business Introduced by Stockholders. With respect to business introduced by a stockholder that is not specified in the notice of annual meeting, the stockholder must have given timely notice thereof in writing to the secretary of the corporation for that business to be properly introduced at the annual meeting. To be timely, the notice must be delivered to or mailed and received by the secretary of the corporation in the same manner and subject to the same time requirements in accordance with the procedure set forth in Section 3. As to each matter the stockholder proposes to bring before the meeting, the stockholder's notice must set forth the following: (i) a brief description of the business sought to be presented at the meeting and the reasons for conducting such business at the meeting, (ii) the name and record address of the stockholder proposing such business, (iii) the class, series and number of shares of corporation stock that are beneficially owned by the stockholder and (iv) a ny material interest of the stockholder in such business.

Section 5. Notice of Meetings and Adjourned Meetings. Except as otherwise provided by law, written notice of any meeting of stockholders shall be given either by personal delivery or by mail to each stockholder of record. Notice of each meeting shall be in such form as is approved by the Board of Directors and shall state the date, place and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, such written notice shall be given not less than 10 nor more than 60 days before the date of the meeting. Except when a stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened, presence in person or by proxy of a stockholder shall constitute a waiver of notice of such meeting. Except as otherwise provided by law, the business that may be transacted at any such mee ting shall be limited to and consist of the purpose or purposes stated in such notice. If a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken, unless additional notice is required by law or by the Certificate of Incorporation.

Section 6. Quorum. Except as otherwise provided by law, the holders of a majority of the Corporation's stock issued and outstanding and entitled to vote at a meeting, present in person or represented by proxy, without regard to class or series, shall constitute a quorum at all meetings of the stockholders for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the holders of a majority of shares of stock, present or represented by proxy, may adjourn any meeting from time to time without notice other than announcement at the meeting, except as otherwise required by law, until a quorum shall be present or represented. At any such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally called.

Section 7. Organization. Meetings of the stockholders shall be presided over by the Chairman of the Board of Directors or, in the absence thereof, by the President or any Vice President, or in the absence of any of such officers, by a chairman to be chosen by a majority of the stockholders entitled to vote at the meeting who are present in person or by proxy. The Secretary or, in the absence thereof, any Assistant Secretary or any person appointed by the President shall act as secretary of all meetings of the stockholders.

Section 8. Voting. Each stockholder of voting common stock of record, as determined pursuant to Section 9 of this Article II, shall be entitled to one vote, in person or by proxy, for each share of such stock registered in such holder's name on the books of the Corporation. Election of directors need not be by written ballot, and, unless otherwise provided by law, no vote on any question before the meeting need be by ballot unless the Chairman of the meeting shall determine that it shall be by ballot or the holders of a majority of the shares of stock present in person or by proxy and entitled to participate in such vote shall so demand. In a vote by ballot, each ballot shall state the number of shares voted and the name of the stockholder or proxy voting. Except as otherwise provided by law or these Bylaws, all elections of directors and all other matters before the stockholders shall be decided by the vote of the holders of a majority of the shares of stock present in person or by proxy at the me eting and entitled to vote in the election or on the question. In the election of directors, votes shall not be cumulated.

Section 9. Stockholders Entitled to Vote. Except as otherwise provided by law, the Board of Directors may fix a date not more than 60 days nor less than 10 days prior to the date of any meeting of stockholders, or in the case of corporate action by written consent in accordance with the terms of Section 11 of this Article II, not more than 60 days prior to such action, as a record date for the determination of the stockholders of voting common stock entitled to vote at such meeting and any adjournment thereof, or to act by written consent, and in such case only stockholders of record on the date so fixed shall be entitled to vote at such meeting and any adjournment thereof, or to act by written consent, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after such record date.

Section 10. Order of Business. The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seem to the chairman to be in order.

Section 11. Action by Written Consent. Unless otherwise provided by law, any action required or permitted to be taken by the stockholders or the Corporation may be taken without notice and an actual meeting if a consent in writing setting forth the action so taken shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Except as provided above, no action shall be taken by the stockholders by written consent.

ARTICLE III

DIRECTORS

Section 1. Management. The property, affairs and business of the Corporation shall be managed by or under the direction of its Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by these Bylaws directed or required to be exercised or done by the stockholders.

Section 2. Number and Term. The authorized number of directors shall be not less than two (2). Directors shall be elected at the annual meeting of the stockholders to serve for one year or until their successors are elected and have qualified. The term of office of the directors shall begin immediately after election. Elections for directors need not be by ballot unless a stockholder demands election by ballot at the election and before the voting begins, or unless these Bylaws so require. No director may be elected by written consent without a meeting of stockholders except by unanimous written consent of all shares entitled to vote for the election of the director. The authorized number of directors may be changed by amendment to this Section adopted by the vote or written consent of the stockholders entitled to exercise two-thirds of the voting power.

Section 3. Quorum and Manner of Action. At all meetings of the Board of Directors, a majority of the total number of directors holding office shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by law or these Bylaws. If at any meeting of the Board of Directors there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum is obtained, and no further notice thereof need be given other than by announcement at such adjourned meeting. Attendance by a director at a meeting shall constitute a waiver of notice of such meeting except where a director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened.

Section 4. Vacancies. Except as otherwise provided by law, in the case of any increase in the number of directors or of any vacancy in the Board of Directors, however created, the additional director or directors may be elected, or the vacancy or vacancies may be filled, by majority vote of the directors remaining on the whole Board although less than a quorum, or by the sole remaining director. If one or more directors shall resign, effective at a future date, such vacancy or vacancies shall be filled as provided herein. Except as otherwise provided by law, any director elected or chosen as provided herein shall serve for the unexpired term of office and until a successor is elected and qualified or until earlier resignation or removal. No reduction of the number of directors shall have the effect of removing any director prior to the expiration of the term of office.

Section 5. Resignations. A director may resign at any time upon written notice of resignation to the Corporation. Any resignation shall be effective immediately upon receipt of notice thereof by the Corporation unless a certain effective date is specified therein, in which event it will be effective upon such date. Acceptance of any resignation shall not be necessary to make it effective.

Section 6. Removals. Except as provided by the Certificate of Incorporation, any director may be removed with or without cause, and another person may be elected to serve for the remainder of such term by the holders of a majority of the shares of the Corporation entitled to vote in the election of directors. If any vacancy so created shall not be filled by the stockholders, such vacancy may be filled by the directors as provided in Section 4 of this Article III.

Section 7. Annual Meetings. The annual meeting of the Board of Directors shall be held, if a quorum be present, immediately following each annual meeting of the stockholders at the place such meeting of the stockholders took place, for the purpose of organization and transaction of any other business that might be transacted at a regular meeting thereof, and no notice of such meeting shall be necessary. If a quorum is not present, such annual meeting may be held at any other time or place that may be specified in a notice given in the manner provided in Section 9 of this Article III for special meetings of the Board of Directors.

Section 8. Regular Meetings. Regular meetings of the Board of Directors may be held without notice at the principal office of the Corporation at such times as shall be determined from time to time by resolution of the Board of Directors or written consent of all the members of the Board, provided that meetings of the Board of Directors will in all events be held at least once each calendar quarter. Except as otherwise provided by law, any business may be transacted at any regular meeting of the Board of Directors.

Section 9. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President, the Secretary or by any director stating the purpose or purposes of such meeting. Notices of special meetings, if mailed, shall be mailed to each director not later than two days before the day the meeting is to be held or if otherwise given in the manner permitted by these Bylaws, not later than the day before such meeting. Neither the business to be transacted at, nor the purpose of, any special meeting need be specified in any notice unless required by these Bylaws and, unless limited by law, any and all business may be transacted at a special meeting.

Section 10. Conduct of Business. At any meeting of the Board of Directors, business shall be transacted in such order and manner as the Board may from time to time determine, and all matters shall be determined by the vote of a majority of the directors present, except as otherwise provided herein or required by law.

Section 11. Place of Meetings. The Board of Directors may hold their meetings and have one or more offices, and keep the books of the Corporation, at any office or offices of the Corporation, or at any other place as they may from time to time by resolution determine.

Section 12. Minutes of Meetings. Minutes of all meetings shall be taken and shall be kept in the minute book of the Corporation.

Section 13. Compensation of Directors. Directors shall not receive any stated salary for their services as directors, but by resolution of the Board of Directors a fixed honorarium or fee, and reimbursement of any expense of attendance may be allowed for attendance at each meeting. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed a like honorarium or fee for attending committee meetings.

Section 14. Waiver of Notice. When the entire Board of Directors is present at any Board meeting, however called or noticed, and a written consent thereto is signed on the records of such meeting, or if a majority of the Board are present, and if those not present sign a written waiver of notice of such meeting, whether prior to or after the holding of such meeting, which waiver is then filed with the Secretary of the Corporation, the transactions thereof are as valid as if had at a meeting regularly called and noticed.

Section 15. Action by Unanimous Written Consent. Unless otherwise restricted by law or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

Section 16. Participation in Meetings by Telephone. Members of the Board of Directors may participate in a meeting of such Board by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting in such manner shall constitute presence in person at such meeting.

ARTICLE IV

COMMITTEES OF THE BOARD

Section 1. Membership and Authorities. The Board of Directors may, by resolution adopted by the affirmative vote of a majority of the authorized directors, designate one or more directors to constitute an Executive Committee and such other committees as the Board may determine, each of which committees to the extent provided in such resolution or resolutions or in these Bylaws shall have and may exercise all the powers of the Board of Directors in the management of the business and affairs of the Corporation, except in those cases where the authority of the Board of Directors is specifically denied to the Executive Committee or such other committee or committees by law or these Bylaws, and may authorize the seal of the Corporation to be affixed to all papers that may require it, but no such committee shall have the power or authority to (a) amend the Certificate of Incorporation; (b) adopt an agreement of merger or consolidation; (c) recommend to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets; (d) recommend to the stockholders a dissolution of the Corporation or a revocation of a dissolution or (e) amend these Bylaws and, unless the resolution expressly so provides, no such committee shall have the power or authority to declare a dividend, authorize the issuance of stock or adopt a certificate of ownership and merger under Section 253 of the Delaware General Corporate Law. The designation of an Executive Committee or other committee and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed by law.

Section 2. Conduct of Business. Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; one-third of the members shall constitute a quorum unless the committee shall consist of one or two members, in which event one member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present.

Section 3. Minutes of Meetings. Each committee designated by the Board shall keep regular minutes of its proceedings and report the same to the Board when required.

Section 4. Vacancies. Unless otherwise restricted by law, the Board of Directors may designate one or more of its members as alternate members of any committee who may replace any absent or disqualified member at any meeting of such committee. The Board of Directors shall have the power at any time to fill vacancies in, to change the membership of and to dissolve any committee.

Section 5. Telephone Meetings. Members of any committee designated by the Board may participate in a meeting of such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this Section shall constitute presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened.

Section 6. Action Without Meeting. Unless otherwise restricted by law or these Bylaws, any action required or permitted to be taken at any meeting of any committee designated by the Board may be taken without a meeting if all members of the committee consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of such committee.

ARTICLE V

OFFICERS

Section 1. Number and Title. The officers of the Corporation shall be chosen by the Board of Directors. The Board of Directors shall elect a Chief Executive Officer, a President and a Secretary. The Board of Directors may also choose a Chairman of the Board, a Vice Chairman of the Board, one or more Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers, and one person may hold any two or more of these offices.

Section 2. Term of Office: Vacancies. So far as is practicable, and except to the extent a written employment agreement is entered into with any such officer with a term in excess of one year, all elected officers shall be elected by the Board of Directors at the annual meeting of the Board of Directors in each year, and except as otherwise provided in this Article V. shall hold office until the next such meeting of the Board of Directors in the subsequent year and until their respective successors are elected and qualify or until their earlier resignation or removal. All appointed officers shall hold office at the pleasure of the Board of Directors. If any vacancy shall occur in any office, the Board of Directors may elect or appoint a successor to fill such vacancy for the remainder of the term.

Section 3. Removal of Elected Officers. Except as restricted by the terms of a written employment agreement, any elected officer may be removed at any time, either for or without cause, by the affirmative vote of a majority of the authorized directors, at any regular meeting or at any special meeting called for such purpose.

Section 4. Resignations. Any officer may resign at any time upon written notice of resignation to the Board of Directors, or to the President or to the Secretary of the Corporation. Any resignation shall be effective immediately unless a date certain is specified for it to take effect, in which event it shall be effective upon such date, and acceptance of any resignation shall not be necessary to make it effective, irrespective of whether the resignation is tendered subject to such acceptance.

Section 5. Chairman of the Board. The Chairman of the Board shall, if present, preside at all meetings of the Board of Directors and Stockholders and shall exercise and perform such other powers and duties as may be from time to time assigned by the Board of Directors or prescribed by these Bylaws. If at any time there is no Chief Executive Officer or President, the Chairman of the Board shall in addition have the powers and duties prescribed in Section 6 or 7 of this Article V. as applicable.

Section 6. Chief Executive Officer. The Chief Executive Officer shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business, affairs and officers of the corporation. The Chief Executive Officer shall have the general powers and duties of management usually vested in the chief executive officer of a corporation, and shall have such other powers and duties with respect to the administration of the business and affairs of the corporation as may from time to time be assigned to him or her by the Board of Directors or as prescribed by these Bylaws. In the absence of the Chairman of the Board, the Chief Executive Officer shall preside at all meetings of the stockholders and at all meetings of the Board of Directors. The Chief Executive Officer may sign and execute, in the name of the corporation, any instrument authorized by the Board of Directors, except when a signing and/or execution thereof shall have been expressly delegated by the Board o f Directors or by these Bylaws to some other officer or agent of the corporation.

Section 7. President. The President shall exercise and perform such powers and duties with respect to the administration of the business and the affairs of the corporation as may from time to time be assigned to him or her by the Chief Executive Officer (unless the President is also the Chief Executive Officer) or by the Board of Directors or as is prescribed in these Bylaws. In the absence or disability of the Chairman of the Board and the Chief Executive Officer, the President shall perform all of the duties of the Chief Executive Officer and when so acting shall have all the powers and be subject to all of the restrictions upon the Chief Executive Officer. The President may sign and execute, in the name of the corporation, any instrument authorized by the Board of Directors, except when a signing and/or execution thereof shall have been expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the corporation.

Section 8. Vice President. In the absence or disability of the President, the Vice Presidents, in order of their rank as fixed by the Board of Directors or, if not ranked, the Vice President designated by the Board of Directors, shall, upon request, perform all the duties of the President, and when so acting shall have all the power of, and be subject to all the restrictions upon, the President. The Vice Presidents shall have such other powers and perform such other duties as from time to time may be prescribed by the Board of Directors or these Bylaws.

Section 9. Secretary. The Secretary, if available, shall attend all meetings of the Board of Directors and all meetings of the stockholders and record the proceedings of the meetings in a book to be kept for that purpose and shall, upon request, perform like duties for any committee of the Board of Directors. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and meetings of the Board of Directors and committees thereof and shall perform such other duties incident to the office of Secretary or as may be prescribed by the Board of Directors or the President. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary, as well as any Assistant Secretary or other person whom the Board of Directors may designate, shall have authority to affix the same to any instrument requiring it, and when so affixed the seal may be attested by the Secretary's signature or by the signature of any Assistant Secretary or other authorized person so affixing such seal.

Section 10. Assistant Secretaries. Each Assistant Secretary shall have the usual powers and duties pertaining to such office, together with such other powers and duties as may be assigned by the Board of Directors, the President or the Secretary. The Assistant Secretary, or such other person as may be designated by the President, shall exercise the powers of the Secretary during that officer's absence or inability to act.

Section 11. Treasurer. The Treasurer shall have custody of and be responsible for the corporate funds and securities, keep full and accurate accounts of receipts and disbursements in the books of the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all transactions as Treasurer and of the financial condition of the Corporation and shall perform all other duties incident to the position of Treasurer, or as may be prescribed by the Board of Directors or the President. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with su ch surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of such office and for the restoration to the Corporation, in case of death, resignation, retirement or removal from office, of all books, papers, vouchers, monies and other property of whatever kind belonging to the Corporation and in the possession or under the control of the Treasurer.

Section 12. Subordinate Officers. The Board of Directors may (a) appoint such other subordinate officers and agents as it shall deem necessary who shall hold their offices for such terms, have such authority and perform such duties as the Board of Directors may from time to time determine, or (b) delegate to any committee or officer the power to appoint any such subordinate officers or agents.

Section 13. Salaries and Compensation. The salary or other compensation of officers shall be fixed from time to time by the Board of Directors. The Board of Directors may delegate to any committee or officer the power to fix from time to time the salary or other compensation of subordinate officers and agents appointed in accordance with the provisions of Section 11 of this Article V.

Section 14. Action with Respect to Securities of Other Corporations. Unless otherwise directed by the Board of Directors, any officer shall have the power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect to any action of stockholders of any other corporation in which the Corporation may hold securities and otherwise to exercise any and all rights and powers which the Corporation may possess by reason of its ownership of securities in such other corporation.

ARTICLE VI

INDEMNIFICATION

Section 1. Indemnification of Directors and Officers. (a) The Corporation shall indemnify and hold harmless any person who was or is a witness, a party or is threatened to be made a party to or involved in any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person or a person of whom such person is the legal representative is or was, at any time prior to or during which this Article VI is in effect, a director, officer, employee or agent

of the Corporation, or is or was, at any time prior to or during which this Article VI is in effect, serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise, including service with respect to an employee benefit plan, whether the basis of such claim, action, suit, or proceeding is alleged action or inaction in an official capacity as a director, officer, employee or agent, against any liability, loss or expense (including attorneys' fees), judgment, fine, penalty, excise tax pursuant to the Employee Retirement Income Security Act of 1974, amount paid in settlement and other liabilities actually and reasonably incurred or suffered by such person in connection with such claim, action, suit or proceeding if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his conduct was unlawful. The termination of any claim, action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that such person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation or, with respect to any criminal action or proceeding, create a presumption that such person had reasonable cause to believe that his conduct was unlawful.

(b) The Corporation shall indemnify and hold harmless any person who was or is a witness, a party or is threatened to be made a party to or involved in any threatened, pending or completed claim, action, suit or proceeding by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person or a person of whom such person is the legal representative is or was, at any time prior to or during which this Article VI is in effect, a director, officer, employee or agent of the Corporation, or is or was, at any time prior to or during which this Article VI is in effect, serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, whether the basis of such claim, action, suit or proceeding is alleged action or inaction in an official capacity as a director, officer, employee or agent, against all expenses (inclu ding attorneys' fees) and amounts paid in settlement, actually and reasonably incurred or suffered by such person in connection with the defense or settlement of such claim, action, suit or proceeding if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to the amounts paid in settlement, the settlement is determined to be in the best interests of the Corporation; provided that no indemnification shall be made under this subsection (b) in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for gross negligence, recklessness or willful misconduct in the performance of his duty to the Corporation unless and only to the extent that the Delaware Court of Chancery, or other court of appropriate jurisdiction, shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reason ably entitled to indemnity of such expenses which the Delaware Court of Chancery, or other court of appropriate jurisdiction, shall deem proper.

(c) Any indemnification under subsections (a) and (b) (unless ordered by the Delaware Court of Chancery or other court of appropriate jurisdiction) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of such person is proper in the circumstances because he has met the applicable standard of conduct set forth in subsections (a) and (b). Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors not parties to such claim, action, suit or proceeding, (2) if such a quorum is not obtainable or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel, selected by the Board of Directors or (3) by the stockholders. In the event a determination is made under this subsection (c) that the director, officer, employee or agent has met the applicable standard of conduct as to some matters but not as to others, amounts to be indemnified may be reasonably prora ted.

(d) Notwithstanding the other provisions of this Article VI, to the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any claim, action, suit or proceeding referred to in subsection (a), or in defense of any issue or matter therein, such person shall be indemnified against all expenses (including attorney's fees) actually and reasonably incurred in connection therewith.

(e) The right of indemnification conferred in this Article VI shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in appearing at, participating in or defending any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative, and shall be paid by the Corporation at reasonable intervals in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Corporation as authorized by this Article VI.

(f) It is the intention of the Corporation to indemnify the persons referred to in this Article Vito the fullest extent permitted by law with respect to any claim, action, suit or proceeding arising from events which occur at any time prior to or during which this Article VI is in effect. The indemnification provided by this Article VI shall not be deemed exclusive of any other rights to which those seeking indemnification may be or become entitled to under any law, the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, or under any policy or policies of insurance purchased and maintained by the Corporation on behalf of any such person, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be director, officer, employee or agent, and shall inure to the benefit of the heirs, executors and administrators or other legal representatives of such pe rson.

(g) The indemnification provided by this Article VI shall be subject to all valid and applicable laws and, if this Article VI or any of the provisions hereof or the indemnification contemplated hereby are found to be inconsistent with or contrary to any such valid laws, the latter shall be deemed to control and this Article VI shall be regarded as modified accordingly and, as so modified, shall continue in full force and effect.

(h) Notwithstanding the other provisions of this Article VI, if the Corporation is determined to be subject to the provisions of the California General Corporation Law relating to indemnification, it shall indemnify and hold harmless any director, officer, employee or agent of the Corporation involved in any claim, action, suit or proceeding referred to in subsection (a) to the fullest extent authorized by the California General Corporation Law as it presently exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment).

ARTICLE VII

CORPORATE RECORDS AND REPORTS - INSPECTION

Section 1. Records. The Corporation shall maintain adequate and correct accounts, books and records of its business and properties at its principal place of business in the State of California, as fixed by the Board of Directors from time to time.

Section 2. Inspection of Books and Records. All books and records of the Corporation shall be open to the inspection of the Directors and stockholders from time to time and in the manner provided in Section 220 of the Delaware General Corporation Law.

Section 3. Checks. All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness issued in the name of or payable to the Corporation shall be signed or endorsed by such person or persons and in such manner as shall be determined from time to time by resolution of the Board of Directors.

Section 4. Contracts. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation. Such authority may be general or confined to specific instances. Unless so authorized by the Board of Directors no officer, agent or employee shall have any power or authority to bind the Corporation in any material matter by any contract or engagement or to pledge its credit to any significant extent or to render it liable for any material purpose or to any significant amount.

ARTICLE VIII

CERTIFICATES AND TRANSFER OF SHARES

Section 1. Certificates for Shares. Certificates for shares shall be of such form and device as the Board of Directors may designate and shall state the name of the record holder of the shares represented thereby; its number; date of issuance; the number of shares for which it is issued; a statement of the rights, privileges, preferences and restrictions, if any; a statement as to the redemption or conversion, if any; a statement of liens or restrictions upon transfer or voting, if any; if the shares be assessable or, if assessments are collectible by personal action, a plain statement of such facts.

Section 2. Transfer on the Books. Upon surrender to the Secretary or transfer agent by the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

Section 3. Lost. Stolen or Destroyed Certificates. Where the holder of a share certificate claims that the certificate has been lost, stolen or destroyed, the holder shall deliver an affidavit of such facts to the Board of Directors and shall, if the directors require, give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of such certificate on the issuance of a new certificate thereof or whereupon a new certificate shall be issued in the same tenor and for the same number of shares as the one alleged to be lost, stolen or destroyed or if the owner so requests before the Corporation has notice that the shares represented by such certificate have been acquired by a bona fide purchaser.

Where a share certificate has been lost, stolen or destroyed and the owner fails to notify the Corporation of that fact within a reasonable time after notice thereof, and the Corporation registers a transfer of the shares represented by the certificate before receiving such a notification, the owner is precluded from asserting against the Corporation any claim to a new certificate.

If after the issue of a new certificate as a replacement for a lost, stolen or destroyed certificate, a bona fide purchaser of the original certificate presents it for registration of transfer, the Corporation must register the transfer unless registration would result in over-issue. In addition to any rights on the indemnity bond, the Corporation may recover the new certificate from the person to whom it was issued or any assignee thereof except a bona fide purchaser.

Section 4. Transfer Agents and Registrars. The Board of Directors may appoint one or more transfer agents or transfer clerks, and one or more registrars which shall be an incorporated bank or trust company, either domestic or foreign, and which shall be appointed at such times and places as the requirements of the Corporation may necessitate and the Board of Directors may designate.

Section 5. Fixing Date for Determination of Stockholders of Record for Certain Purposes. (a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of capital stock or notice of or participation in any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than 60 days prior to the date of payment of such dividend or other distribution or allotment of such rights or the date when any such rights in respect of any change, conversion or exchange of stock may be exercised or the date of such other action. In such case, only such stockholders of record on the date so fixed shall be entitled to receive any such dividend or other distribution or allotment of rights, or to exercise such rights or for any other purpose, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid.

(b) If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 6. Registered Stockholders. Except as expressly provided by law or these Bylaws, the Corporation shall be entitled to treat registered stockholders as the only holders and owners in fact of the shares standing in their respective names, and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not it shall have express or other notice thereof.

Section 7. Transfer of Stock. Transfers of shares of the capital stock of the Corporation shall be made only on the books of the Corporation by the registered owners thereof, or by their legal representatives or their duly authorized attorneys, and upon such transfer the old certificates shall be surrendered to the Corporation by the delivery thereof to the person in charge of the stock transfer books and ledgers, by whom they shall be canceled and new certificates shall thereupon be issued.

ARTICLE IX

MISCELLANEOUS PROVISIONS

Section 1. Corporate Seal. If one be adopted, the corporate seal shall have inscribed thereon the name of the Corporation and shall be in such form as may be approved by the Board of Directors. Such seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced.

Section 2. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

Section 3. Notice and Waiver of Notice. Whenever notice is required to be given to any director or stockholder under the provisions of applicable law, or of these Bylaws, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder at his address as it appears on the records of the Corporation, with postage thereon prepaid (unless prior to the mailing of such notice he shall have filed with the Secretary a written request that notices intended for him be mailed to some other address in which case such notice shall be mailed to the address designated in the request), and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telegram, cable or other form of recorded communication or by personal delivery, telephone or electronic facsimile. Whenever notice is required to be given under any provision of law or these Bylaws, a waiver thereof in writing or by electronic facsimile or by telegraph, cable or other form of recorded communication, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice unless so required by these Bylaws.

ARTICLE X

AMENDMENTS TO BYLAWS

Section 1. By Stockholders. New Bylaws may be adopted or these Bylaws may be repealed or amended at the annual meetings, or any other meeting of the stockholders called for that purpose, by affirmative vote of stockholders entitled to exercise two-thirds of the voting power of the Corporation or by written assent of such stockholders.

Section 2. Powers of Directors. Subject to the right of the stockholders to adopt, amend or repeal Bylaws, as provided in Section 1 of this Article X, the Board of Directors may adopt, amend or repeal any of these Bylaws other than a Bylaw or amendment thereof changing the authorized number of directors.

Section 3. Record of Amendments. Whenever an amendment or new Bylaw is adopted, it shall be copied in the book of Bylaws with the original Bylaws in the appropriate place. If any Bylaw is repealed, the fact of repeal with the date of the meeting at which the repeal was enacted or written consent was filed shall be stated in such book.

ARTICLE XI

INCORPORATION BY REFERENCE

Whenever any reference is made in these Bylaws to any legislative enactment whether law, statute or ordinance such enactment shall be deemed incorporated by reference herein.

EX-3 6 exh0301.htm EXHIBIT 3.1 STOCK OPTION PLAN AMERICAN CHAMPION ENTERTAINMENT, INC

PEOPLENET INTERNATIONAL CORPORATION

2001 STOCK OPTION PLAN

A Total Of 1,500,000 Shares Reserved Under The Plan

1. Purpose. The purposes of the PeopleNet International Corporation 2001 Stock Option Plan (the "Plan") are to encourage key personnel of PeopleNet International Corporation (the "Company") and its subsidiaries to increase their interest in the Company's long-term success, to enhance the profitability and value of the Company for the benefit of its shareholders and to assist the Company and its subsidiaries in attracting, retaining and motivating key personnel by giving suitable recognition for services which contribute materially to the Company's success.

2. Definitions. The following definitions shall be applicable throughout the

Plan:

"Act" means the Securities Act of 1933, as amended from time to time.

"Affiliate" means any parent or subsidiary (as defined in Section 424(e) and

(f) of the Code) of the Company.

"Award" means an Option, Stock Appreciation Right or Other Stock Award.

"Board" means the Board of Directors of the Company.

"Change of Control" means, unless the Board otherwise directs by resolution adopted prior thereto, (i) the acquisition by any entity, person or group (other than the Company or its Affiliates or an employee benefit plan maintained by the Company or one of its Affiliates) of beneficial ownership of 20% or more of the outstanding voting stock of the Company; or (ii) the occurrence of a transaction requiring shareholder approval for the acquisition of the Company by the purchase of stock or assets, or by merger, or otherwise; or (iii) the election during any period of 24 months or less of 50% or more of the members of the Board without the approval of the nomination of such members by a majority of the Board consisting of members who were serving at the beginning of such period.

"Code" means the Internal Revenue Code of 1986, as amended from time to time.

"Committee" means a committee of the Board consisting of one or more directors, that has the authority to administer the Plan.

"Consultant" means any consultant or advisor engaged by the Company who renders bona fide services to the Company or all Affiliate in connection with its business, provided that such services must not be in connection with the offer or sale of securities in a capital-raising transaction.

"Disability" means permanent and total disability as defined in Section 22(e)(3) of the Code.

"Company" means PeopleNet International Corporation, a Delaware corporation.

"Employee" means any person who is employed by the Company or an Affiliate.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Fair Market Value" means for any given day (i) the closing sales price on such date of a share of Stock as reported on the principal securities exchange on which such shares of Stock are then listed or admitted to trading, or as reported by Nasdaq or the OTC Bulletin Board, or (ii) if not so reported, the average of the bid and ask prices on such date as reported on the exchange, or (iii) if no such quotations are available, as determined by the Committee in good faith in their absolute discretion.

"Grant Limit" means the total number of shares of Stock that can be issued to any Participant in any fiscal year pursuant to an Award granted hereunder.

"Incentive Stock Option" means an Option granted by the Committee to an Employee Participant under the Plan which is designated by the Committee as an Incentive Stock Option pursuant to Section 422 of the Code.

"Non-Qualified Stock Option" means an Option granted by the Committee to a Participant under the Plan which is not designated by the Committee as an Incentive Stock Option.

"Option" means an Award granted under Section 6 of the Plan.

"Other Stock Awards" means an Award granted under Section 8 of the Plan.

"Participant" means any individual designated by the Committee to participate in the Plan.

"Performance-Based Compensation" means (i) an Option granted at less than 100% of the Fair Market Value of the Stock at the time of grant, (ii) a Restricted Stock Award or (iii) a Stock Bonus, in each case which has been granted with the intention that such award will be deductible under Section 162(m) of the Code, or successor provision.

"Plan" means this PeopleNet International Corporation 2001 Stock Option Plan.

"Restricted Stock Award" means an Award granted under Section 8(a) of the Plan.

"Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act, or any successor rule or regulation.

"Stock" means the common stock of the Company, $.0001 par value.

"Stock Appreciation Right" means an Award granted under Section 7 of the Plan.

"Stock Bonus" means an Award granted under Section 8(b) of the Plan.

"Termination Date" means the date an optionee ceases to be employed or

engaged by the Company.

3. Administration. The Plan shall be administered by the Committee. The Committee shall have full power, discretion and authority to interpret, construe and administer the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan, to provide for conditions and assurances deemed necessary or advisable to protect the interests of the Company and to make all other determinations necessary or advisable for the administration of the Plan, to the extent not contrary to the explicit provisions of the Plan. Determinations, interpretations and other actions by the Committee pursuant to the Plan shall be final, conclusive and binding on all persons for all purposes.

The Committee shall have full power, discretion and authority to establish applicable performance measures for Awards intended to be Performance-Based Compensation, which performance measures shall include one or more of the following:

improvements in revenues, earnings per share, profit before taxes, net income or operating income; return on shareholder equity; return on net assets; and stock price performance. Further, the Committee shall determine the specific targets related to each such performance measure and the performance period for each such Award. The Committee shall establish in writing such performance measures, specific targets and performance periods as provided in Section 162(m) of the Code and the regulations promulgated thereunder, or successor provision or regulation.

The Committee's decisions and determinations under the Plan need not be uniform and may be made selectively among Participants whether or not such Participants are similarly situated. The Committee may, in its discretion, delegate to others responsibilities to assist in administering the Plan.

Prior to the date when securities of the Company are first registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered by the Board.

4. Eligibility. Any Employee selected by the Committee, except a member of the Committee or a director whose principal employment is not with the Company or an Affiliate, and any Consultant selected by the Committee shall be eligible for Awards contemplated under the Plan except that Consultants shall not be eligible for Incentive Stock Option grants.

5. Stock Subject to Plan and Grant Limit. The total number of shares of Stock subject to issuance under the Plan may not exceed 1,500,000 subject to adjustments as provided in the Plan. Shares to be delivered under the Plan may consist, in whole or in part, of authorized but unissued shares or shares purchased by the Company on the open market or by private purchase. The Grant Limit shall equal the number of shares available for issuance under the Plan, subject to adjustment as provided in Section 10 hereof.

Except as otherwise provided in the Plan, shares of Stock that are subject to an Option or Stock Appreciation Right which, for any reason, expires or is terminated unexercised as to such shares, and shares of Stock subject to a Restricted Stock Award made under the Plan which are reacquired by the Company pursuant to the Plan, shall again become available for issuance under the Plan.

6. Stock Options. The Committee may grant stock Options alone or in addition to any other Awards granted under the Plan. Options granted under the Plan may be of two types: (i) Incentive Stock Options; and (ii) Non-Qualified Stock Options. Subject to the limitations contained herein with respect to Incentive Stock Options, the Committee may grant Incentive Stock Options, Non-Qualified Stock Options, or both types of Options to a Participant and the Committee shall have complete discretion in determining the number of Options granted to each Participant, subject to the Grant Limit. To the extent that any Option does not qualify as an Incentive Stock Option, it shall constitute a separate Non-Qualified Stock Option. The provisions of Options need not be the same with respect to each Participant granted an Option.

Each Option shall be set forth in a written agreement, shall be subject to the following terms and conditions and shall contain such additional terms and conditions not inconsistent with the terms of the Plan as the Committee deems appropriate:

(a) The exercise price of shares subject to any Incentive Stock Option shall not be less than the Fair Market Value of the Stock at the time the Incentive Stock Option is granted; the exercise price of shares subject to any Non-Qualified Stock Option shall be such price as the Committee shall determine on the date on which such Non-Qualified Stock Option is granted, provided that such exercise price may not be less than 85% of the Fair Market Value of the Stock at the time the Non-Qualified Stock Option is granted;

(b) If the exercise price of a Non-Qualified Stock Option is less than 100% of the Fair Market Value of the Stock at the time the Non-Qualified Stock Option is granted, the Committee may designate such award as Performance-Based Compensation in which event the Committee shall establish performance measures for such award, the specific targets applicable to such measures and the performance period for such award;

(c) The exercise price of any shares exercised under any Option must be paid in full upon such exercise in cash or stock of the Company held for at least six months, or in such other form as the Committee may determine;

(d) The term of each Option shall be fixed by the Committee but no Option may be exercised after the expiration of 10 years from the date such Option is granted;

(e) In the event that an optionee shall cease to be employed or engaged by the Company or an Affiliate, the vesting of such optionee's Options shall immediately and automatically terminate on the Termination Date and if the cessation of employment or engagement is:

(1) due to any reason other than due to retirement, Disability or death, such optionee's Options exercisable on the Termination Date shall remain exercisable for 30 days after the Termination Date;

(2) due to retirement, such optionee's Options exercisable on the Termination Date shall remain exercisable for three months after the Termination Date;

(3) due to a Disability, such optionee's Options exercisable on the Termination Date shall remain exercisable for one year after the Termination Date, or;

(4) due to death while employed or engaged by the Company or its Affiliate, or during the three month period following retirement or during the one year period following cessation of employment due to a Disability, the optionee's Options exercisable at the time of death shall remain exercisable for one year after the date of the optionee's death;

provided, however, that notwithstanding anything herein to the contrary, if any Option would otherwise expire on an earlier date than described above, such Option shall remain exercisable only until the earlier expiration date;

(f) Options shall become exercisable at such time or times subject to such terms and conditions (including, without limitation, installment exercise provisions) as shall be determined by the Committee, and if the Committee provides that any Option is exercisable only in installments, the Committee may waive such installment exercise provisions at any time in whole or in part based on any factors as the Committee may determine;

(g) Incentive Stock Options may be granted only to Employees;

(h) In the case of an Incentive Stock Option, the aggregate Fair Market Value (determined as of the time the Option is granted) of the Stock with respect to which Options are exercisable for the first time by any Employee during any calendar year (under all such plans of the Company and its Affiliates) shall not exceed $200,000;

(i) No Incentive Stock Option shall be granted to a Participant who, at the time the Incentive Stock Option is granted, owns (within the meaning of Section 422 of the Code) Stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate unless the exercise price per share of Stock is at least 110% of the Fair Market Value of the Stock at the time the Incentive Stock Option is granted and the Incentive Stock Option by its terms is not exercisable after the expiration of five years from the date of grant;

(j) No Option shall be sold, transferred, pledged, assigned or otherwise alienated or hypothecated otherwise than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Code; and

(k) All Options shall be exercisable during the optionee's lifetime only by the optionee or by a transferee permitted pursuant to Section 6(j) above.

Anything in the Plan to the contrary notwithstanding, no term of this Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify the Plan under Section 422 of the Code or, without the consent of the Participants affected, to disqualify any Incentive Stock Option under Section 422.

7. Stock Appreciation Rights. The Committee may grant Stock Appreciation Rights alone or in conjunction with all or part of any Option granted under the Plan, subject to the Grant Limit. In the case of a Non-Qualified Stock Option, such Stock Appreciation Rights may be granted either at or after the time of the grant of such Non-Qualified Stock Option. In the case of an Incentive Stock Option, such Stock Appreciation Rights may be granted only at the time of the grant of the Incentive Stock Option.

Each Stock Appreciation Right shall be set forth in a written agreement, shall be subject to the following terms and conditions and shall contain such additional terms and conditions not inconsistent with the terms of the Plan as the Committee deems appropriate:

(a) Subject to subparagraphs (b) and (c) below, a Stock Appreciation Right granted in connection with an Option shall become exercisable and shall lapse according to the same vesting schedule and lapse rules that are established for the Option; a Stock Appreciation Right granted independently of an Option shall become exercisable and shall lapse in accordance with the vesting schedule and lapse rules established by the Committee;

(b) A Stock Appreciation Right and any related Option shall not be exercisable during the first six months of their terms by any Participant;

(c) A Stock Appreciation Right shall be exercisable only when the Fair Market Value of the Stock relating to the Stock Appreciation Right exceeds the exercise price thereof;

(d) If the exercise price of a Stock Appreciation Right is less than 100% of the Fair Market Value of the Stock at the time the Stock Appreciation Right is granted, such award may be designated by the Committee to be Performance-Based Compensation in which event the Committee shall establish performance measures for such award, the specific targets applicable to such measures and the performance period for such award;

(e) Upon the exercise of a Stock Appreciation Right with respect to any number of shares of Stock, the holder shall be entitled to receive payment of an amount (subject to subparagraph (f), below) determined by multiplying (i) the difference between the Fair Market Value per share of Stock on the date of exercise and the exercise price of the related Option (or in the case of an Stock Appreciation Right granted independent of an Option, the exercise price of the Stock Appreciation Right as established by the Committee) by (ii) the number of shares in respect of which the Stock Appreciation Right is exercised. At the discretion of the Committee, payment for Stock Appreciation Rights may be made in cash or stock of the Company held for at least six months, or in a combination thereof. If payment is made in Stock, the value of such Stock shall be the Fair Market Value determined as of the date of exercise;

(f) At the time of grant, the Committee may establish, in its sole discretion, a maximum amount per share which will be payable upon exercise of a Stock Appreciation Right;

(g) Notwithstanding any other provisions of the Plan, the Committee may impose such conditions on exercise of a Stock Appreciation Right (including, without limitation, the right of the Committee to limit the time of exercise to specified periods) as may be required to satisfy the requirements of Rule 16b-3;

(h) The Committee may provide that upon exercise of a Stock Appreciation Right granted in conjunction with an Option, the number of shares of Stock for which the related Option shall be exercisable shall reduce by the number of shares of Stock for which the Stock Appreciation Right shall have been exercised and the number of shares of Stock for which a Stock Appreciation Right shall be exercisable shall be reduced upon any exercise of a related Option by the number of shares of Stock for which such Option shall have been exercised;

(i) The term of a Stock Appreciation Right granted under the Plan shall not exceed ten years;

(j) No Stock Appreciation Right granted under the Plan may be sold, transferred, pledged, signed or otherwise alienated or hypothecated otherwise than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Code, and all Stock Appreciation Rights shall be exercisable during the Participant's lifetime only by the Participant or by a transferee permitted pursuant to Section 7(j) above.

(k) The Committee may provide, at the time of grant, that such Stock Appreciation Right can be exercised only in the event of a Change of Control, subject to terms and conditions as the Committee may specify at grant.

8. Other Stock Awards. In addition to Options and Stock Appreciation Rights, the Committee may grant Other Stock Awards payable in Stock upon such terms and conditions as the Committee may determine, subject to the provisions of the Plan. Other Stock Awards may include, but are not limited to, the following types of Awards:

(a) Restricted Stock Awards. The Committee may grant Restricted Stock Awards, each of which consists of a grant of shares of Stock subject to restrictions, terms and conditions not inconsistent with the terms of the Plan, including the Grant Limit, as the Committee deems appropriate, which such restrictions, terms and conditions shall be set forth in written agreements. The Committee may designate a Restricted Stock Award as Performance-Based Compensation in which event the Committee shall establish performance measures for such award, the specific targets applicable to such measures and the performance period for such award. Stock certificates evidencing a Restricted Stock Award shall be issued by the Company in the name of the Participant, and such Participant shall be entitled to all voting rights, rights to dividends and other rights of holders of Stock, subject to the provisions of the Plan. The certificates representing a Restricted Stock Award issued under the Plan and an y dividends paid thereon, shall remain in the physical custody of the Company or an escrow holder or be placed in trust until the restrictions imposed under the Plan have lapsed. The Committee may also require that a legend or legends be placed on any certificates representing a Restricted Stock Award to reference the various restrictions imposed on such Stock. If a Restricted Stock Award is granted which requires the payment of an exercise price by the Participant, then such Award must be accepted within a period of 60 days (or such shorter periods as the Committee may specify at grant) after the date of grant. The shares of Stock granted under a Restricted Stock Award may not be sold, transferred, assigned, or otherwise alienated or hypothecated until the lapse or release of restrictions in accordance with the terms of the Restricted Stock Award agreement and the Plan. Prior to the lapse or release of restrictions, all shares of Stock are subject to forfeiture in accordance with conditions as may be determ ined by the Committee. The provisions of a Restricted Stock Award need not be the same with respect to each recipient.

(b) Stock Bonuses. The Committee may grant Stock Bonuses in such amounts as it shall determine from time to time, subject to the Grant Limit. A Stock Bonus shall be paid at such time and be subject to such conditions as the Committee shall determine at the time of the grant of such Stock Bonus. The Committee may designate a Stock Bonus as Performance-Based Compensation in which event the Committee shall establish performance measures for such award, the specific targets applicable to such measures and the performance period for such award. Certificates for shares of Stock granted as a Stock Bonus shall be issued in the name of the Participant to whom such grant was made and delivered to such Participant as soon as practicable after the date on which such Stock Bonus is required to be paid.

9. General Provisions. The grant of any Award under the Plan may also be subject to such other provisions (whether or not applicable to any Award granted to any other Participant) as the Committee determines appropriate including, without limitation, provisions to assist the Participant in financing the purchase of Stock through the exercise of Options, provisions for restrictions on resale or other disposition of shares acquired under any Award, provisions giving the Company the right to repurchase Stock acquired under any Award in the event the Participant elects to dispose of such Stock, provisions to comply with compensation expense deductibility under the Code and provisions to comply with federal and state securities laws and federal and state income tax withholding requirements.

The obligation of the Company to make payment of Awards in Stock or otherwise shall be subject to applicable laws, rules and regulations, and to such approvals by governmental agencies as may be required. The Company shall be under no obligation to register under the Act any of the shares of Stock delivered under the Plan. All certificates for shares of Stock or other securities delivered under the Plan shall be subject to such stock-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Stock is then listed and any applicable federal or state securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. The Committee may require each Participant acquiring shares pursuant to an Award under the Plan to represent to and agree with the Company in writing tha t the Participant is acquiring the Stock without a view to distribution thereof.

The Company shall have the right to deduct from all Awards, to the extent paid in cash, all federal state or local taxes as required by law to be withheld with respect to such Awards and, in the case of Awards paid in Stock, the Participant or other person receiving such Stock may be required to pay to the Company prior to delivery of such Stock, the amount of any such tax which the Company is required to withhold, if any, with respect to such Stock. At the discretion of the Committee, the Company may accept shares of Stock, or withhold shares of Stock otherwise issuable upon exercise of an Award, of equivalent Fair Market Value in payment of such withholding tax obligations or provide alternative methods of complying with such withholding tax obligations.

No Employee or other person shall have any claim or right to be granted an Award under the Plan nor, having been selected for the grant of an Award, to be selected for a grant of any other Award. Neither this Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the employ of the Company or its Affiliates.

Each Participant may file with the Committee a written designation of one or more persons as the beneficiary who shall be entitled to receive the amounts payable with respect to the benefits of an Award, if any, due under the Plan upon such Participant's death. A Participant may, from time to time, revoke or change the beneficiary designation without the consent of any prior beneficiary by filing a new designation with the Committee. The last designation received by the Committee shall be controlling; provided, however, that no designation, or change or revocation therein shall be effective unless received by the Committee prior to the Participant's death, and in no event shall it be effective as of a date prior to such receipt. In the absence of any such designation, benefits remaining unpaid at the Participant's death shall be paid to the Participant's estate.

Except as otherwise specifically provided in the Plan, no Participant shall be entitled to the privileges of stock ownership in respect of Stock which is subject to an Option, Stock Appreciation Right or Other Stock Award until such Stock has been issued to that Participant upon exercise of an Option or Stock Appreciation Right according to its terms or upon sale or grant of Stock in accordance with an Other Stock Award.

No Participant or other person shall have any right with respect to this Plan, shares reserved under this Plan, or in any Award, contingent or otherwise, until written evidence of the Award shall have been delivered to the Participant and all the terms, conditions and provisions of the Plan applicable to such Participant have been met.

10. Changes in Capital Structure. In the event of changes in the outstanding Stock or in the capital structure of the Company by reason of any stock dividend, stock split, exchange of shares, recapitalization, reorganization, subdivision or consolidation of shares, or other similar transaction, the aggregate number of shares available under the Plan, the number of shares subject to each outstanding Award and the price per share of any Award, shall all be proportionately adjusted. In the event the Company shall be a party to a transaction involving a sale of substantially all of its assets, a merger or a consolidation, the Board shall make such adjustment as shall be necessary or appropriate which may include assumption of Awards by the surviving Company, for their continuation, for the acceleration of vesting and expiration, or for settlement in cash. In the case of dissolution of the Company (other than a dissolution following the sale of substantially all of the Company's asset s), the Awards outstanding hereunder shall terminate; provided, however, that each Participant shall have 30 days' prior written notice of such event, during which time the Participant shall have the right to exercise in full any partly or wholly unexercised Award, including the portion not yet exercisable pursuant to the vesting schedule set forth in any Award agreement. In the event of any change in applicable laws or any change in circumstances which results in or would result in any substantial dilution or enlargement of the rights granted to or available for Participants in the Plan, or which otherwise warrants equitable adjustment because it interferes with the intended operation of the Plan, the Committee may make such adjustments or substitutions to Awards or agreements evidencing Awards as the Committee determines appropriate in its sole discretion. Any adjustment in Incentive Stock Options under this Section 10 shall be made only to the extent not constituting a "modification" within the meaning of Section 424(h)(3) of the Code. The Company shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustments shall be conclusive and binding for all purposes.

11. INTENTIONALLY OMITTED.

12. Amendments and Termination. The Board may, from time to time, amend, suspend or terminate the Plan in whole or in part and, if terminated, may reinstate any or all of the provisions of the Plan, except that no amendment, suspension or termination shall be made which would impair the rights of a Participant under an Award theretofore granted, without such Participant's consent. The Board shall obtain stockholder approval of any amendment to this Plan which would be necessary to allow this Plan to continue to meet the conditions of Rule 16b-3.

13. Effective Date and Term. The Plan shall become effective as of the date of the declared effectiveness of the Company's spin-off from its parent company American Champion Entertainment, Inc. Unless sooner terminated by the Committee, the Plan shall continue until the tenth anniversary of the Plan's effective date, when it shall terminate and no Award shall be granted under the Plan thereafter. The Plan shall continue in effect, however, insofar as is necessary to complete all the Company's obligations under outstanding Awards and to conclude the administration of the Plan.

14. Governing Law. The Plan and all agreements hereunder shall be construed in accordance with and be governed by the laws of the State of Delaware.

EX-3 7 exh0302.htm EXHIBIT 3.2 NON-EMPLOYEE DIRECTOR STOCK OPTION PLA AMERICAN CHAMPION ENTERTAINMENT, INC PEOPLENET INTERNATIONAL CORPORATION
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

A total of 500,000 shares reserved under the plan,

Approved by the Board of Directors on July 5, 2001, and

Approved by stockholders on July 5, 2001.

1. Purpose. PeopleNet International Corporation, a Delaware corporation (the "Company"), hereby establishes its Non-Employee Directors Stock Option Plan (the "Plan"). The purpose of the Plan is to provide non-employee directors with an opportunity to participate in the growth of the Company through stock ownership.

2. Eligibility. Only non-employee directors of the Company shall be eligible to participate in the Plan.

3. Stock Available for Options Under the Plan. Subject to adjustment as provided in Section 5 hereof, the aggregate number of shares of the common stock of the Company ("Common Stock") as to which options may be granted under the Plan shall not exceed 500,000 shares. Any of such shares which may remain unsold and which are not subject to outstanding options at the termination of the Plan shall cease to be reserved for the purpose of the Plan, but until termination of the Plan, the Company shall at all times reserve a sufficient number of shares to meet the requirements of the Plan.

In the event that any option granted under the Plan shall expire or terminate for any reason, including termination by the voluntary surrender thereof for cancellation, without having been exercised in whole or in part, the unpurchased shares subject thereto shall again be available for options to be granted under the Plan.

4. Stock Option. The options granted under the Plan shall be evidenced by
a written option agreement which shall contain the following terms and conditions:

a. Option Price. The option price of shares of Common Stock covered by each option shall be 100% of the fair market value of the Common Stock on the date such option is granted. The fair market value shall be equal to (i) the closing sales price on such date of a share of Common Stock as reported on the principal securities exchange on which such shares of Common Stock are then listed or admitted to trading, or as reported on Nasdaq or the OTC Bulletin Board (ii) if not so reported, the average of the closing bid and ask prices on such date as reported on the exchange, or (iii) if no such quotations are available, as determined by the Board of Directors of the Company in good faith in their absolute discretion.

b. Number of Shares.

(i) Each non-employee director shall automatically receive an option to purchase 10,000 shares of Common Stock on the date of his or her first
election as a director (the "Initial Grant").

(ii) Each year, as of the date of the Annual Meeting of Stockholders of the Company, each non-employee director who has been elected or re-elected or who is continuing as a member of the Board of Directors as of the adjournment of the Annual Meeting (other than any non-employee director eligible for an initial grant pursuant to Section 4(b)(i) hereof by reason of first election at such meeting) shall automatically receive an option to purchase 5,000 shares of Common Stock (the " Annual Grant").

(iii) The Board of Directors may issue to a new director Initial Grants and Annual Grants that are different from the above-described numbers, only with unanimous approval from all members of the Board of Directors.

c. Expiration and Termination of Options.

(i) Expiration. Each option and all rights and obligations thereunder shall, subject to the provisions of Section 4(c)(ii) hereof, expire ten (10) years from the date of grant.

(ii) Termination. In the event that an optionee shall cease to be a director of the Company for any reason, the vesting of his or her options shall immediately and automatically terminate. In the event that an optionee shall cease to be a director of the Company for any reason other than a disability (as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended from time to time, herein "Disability") or death, the vested portion of the option at the time the optionee ceases to be a director shall be exercisable for 30 days subsequent to the date the optionee ceased to be a director unless such option would expire pursuant to Section 4(c)(i) hereof at an earlier date, in which case such option shall remain exercisable only until the earlier expiration date. In the event that the optionee shall cease to be a director of the Company due to Disability, the portion of his or her options vested at the date the optionee ceased to be a director shall remain exercisable for o ne year after such cessation unless such options would expire pursuant to Section 4(c)(i) at an earlier date, in which case such options shall remain exercisable only until the earlier expiration date. In the event that the optionee should die while a director of the Company or during the one year period following resignation as a director due to Disability, the portion of his or her options vested at the date the optionee ceased to be a director shall remain exercisable for one year after the date of the optionee's death, unless such options would expire pursuant to Section 4(c)(i) at an earlier date, in which case the options shall remain exercisable only until the earlier expiration date.

d. Non-Transferability of the Options. An option granted under the Plan may not be transferred otherwise than by will or the laws of descent and distribution or as permitted by Rule 16b-3 of the Securities Exchange Act of 1934, as amended, or successor rule or regulation ("Rule 16b-3"). An option granted under the Plan may, during the lifetime of the optionee to whom granted, be exercised only by such optionee, his or her guardian or legal representative, or by a transferee permitted by Rule 16b-3.

e. Exercise of Options.

(i) Subject to the provisions of the Plan, an Initial Grant pursuant to Section 4(b)(i) of the plan shall be exercisable as follows:

Percentage

From To Exercisable

Date of Grant Day prior to 1^st 0%

Anniversary

1^st Anniversary Expiration Date 100%

(ii) Subject to the provisions of the Plan, an Annual Grant pursuant to Section 4(b)(ii) shall be exercisable in full beginning on the first anniversary date of the date of grant.

(iii) Options may be exercised by giving written notice to the Secretary of the Company stating the number of shares of Common Stock with respect to which the option is being exercised and tendering payment therefor. Payment for shares of Common Stock shall be made in full at the time that an option or any part thereof is exercised. Payment may be made (i) in cash, or (ii) by delivery of shares of stock of the Company held by optionee for at least six months, which shares shall be valued, for purposes of payment, at their fair market value on the date of payment, determined in accordance with procedures established in Subsection 4(a).

5. Capital Adjustments and Changes in the Company. In the event of any stock dividend, stock split, exchange of shares, recapitalization, subdivision or consolidation of shares, or other similar transaction, the aggregate number of shares available under the Plan, the number of shares subject to each outstanding option and the option price per share, shall all be proportionately adjusted.

In the event the Company shall be a party to a transaction involving a sale of substantially all its assets, a merger or a consolidation, all then outstanding options under the Plan may be cancelled by the Company as of the effective date of any such transaction by giving notice to each optionee of its intention to do so and by permitting the exercise, during the 30-day period preceding the effective date of such transaction, of all partly or wholly unexercised options in full, including the portion not yet exercisable pursuant to the vesting schedule set forth in Subsection 4( e) above.

In the case of dissolution of the Company (other than a dissolution following a sale of substantially all of the Company's assets), every option outstanding hereunder shall terminate; provided, however, that each optionee shall have 30 days' prior written notice of such event, during which time the optionee shall have a right to exercise any partly or wholly unexercised option in full, including the portion not yet exercisable pursuant to the vesting schedule set forth in Subsection 4(e) above.

6. No Obligation. The granting of an option shall impose no obligation on the Company to continue optionee's service as a director for any period.

7. Legal and Other Requirements. The obligation of the Company to issue or transfer shares of Common Stock under options granted under the Plan shall be subject to all applicable laws, regulations, rules and approvals including, but not by way of limitation, the effectiveness of a registration statement under the Securities Act of 1933, as amended, the qualification of the options and the shares of Common Stock reserved for issuance upon exercise of options under applicable state securities laws, the satisfaction of applicable listing requirements of the principal securities exchange on which the Company's Common Stock is listed or admitted to trading, if deemed necessary or appropriate by the Company, and the payment by the optionee to the Company, upon its demand, of such amount or in lieu thereof, of such number of shares of Common Stock of the Company as may be requested by the Company for the purpose of satisfying any liability to withhold federal, state or local income or other tax es incurred by reason of the exercise of such options or the delivery of shares of Common Stock incident thereto.

8. Termination and Amendment of Plan. The Board of Directors, without further action on the part of the stockholders, may suspend or terminate the Plan except that no such action may materially and adversely affect any outstanding option without the consent of the optionee. Only if and to the extent stockholder approval is necessary to allow this Plan to meet the conditions of Rule 16b-3, the Board of Directors shall obtain stockholder approval of any amendments to this Plan which would: (a) materially increase the benefits accruing to participants under the Plan, (b) materially increase the number of securities which may be issued under the Plan, or (c) materially modify the requirements as to eligibility for participation in the Plan. This Plan may not be amended more than once every six months, other than to comport with changes in the Internal Revenue Code, the Employee Retirement Income Security Act or the rules thereunder.

9. Effective Date and Duration of Plan. This Plan shall become effective as of the effective date of the Company's spin-off from its parent company, American Champion Entertainment, Inc. ("Effective Date"). Unless sooner terminated by the Committee, the Plan shall continue until the tenth anniversary of the Effective Date, when it shall terminate and no options shall be granted under the Plan thereafter. The Plan shall continue in effect, however, insofar as is necessary to complete all the Company's obligations under outstanding options and to conclude the administration of the Plan.

10. Governing Law. The Plan and all agreements hereunder shall be construed in accordance with and be governed by the laws of the State of Delaware.

EX-3 8 exh0303.htm EXHIBIT 3.3 STOCK INCENTIVE PLAN PEOPLENET INTERNATIONAL CORPORATION

2001 STOCK INCENTIVE PLAN

ARTICLE 1.

PURPOSE AND ADOPTION OF THE PLAN

1.1. Purpose. The purpose of the PeopleNet International Corporation 2001 Stock Incentive Plan (hereinafter referred to as the "Plan") is to assist in attracting and retaining highly competent key employees, non-employee directors and consultants and to act as an incentive in motivating key employees, non-employee directors, legal counsel and consultants of American Champion Entertainment, Inc. and its Subsidiaries (as defined below) to achieve long-term corporate objectives.

1.2. Adoption and Term. The Plan has been approved by the Board of Directors (hereinafter referred to as the "Board") of PeopleNet International Corporation (hereinafter referred to as the "Company"), to be effective as of July 5, 2001 (the "Effective Date"). The Plan is intended to be a broad based plan which all employees, non-employee directors and consultants of the Company are eligible for, and grants to be made to management personnel and members of the board of directors shall not exceed 50% of the total number of shares issuable under the Plan. Therefore the Plan does not require shareholder approval pursuant to applicable rules and regulations of the Nasdaq Stock Market. The Plan shall remain in effect until terminated by action of the Board of Directors.

ARTICLE II.

DEFINITIONS

For the purposes of this Plan, capitalized terms shall have the following meanings:

2. 1. Award means any grant to a Participant of one or more of a combination of Restricted Shares described in Article VII and Performance Awards described in Article VIII.

2.2. Award Agreement means a written agreement between the Company and a Participant or a written notice from the Company to a Participant specifically setting forth the terms and conditions of an Award granted under the Plan.

2.3. Award Period means, with respect to an Award, the period of time set forth in the Award Agreement during which specified target performance goals must be achieved or other conditions set forth in the Award Agreement must be satisfied.

2.4. Beneficiary means an individual, trust or estate who or which, by a written designation of the Participant filed with the Company or by operation of law, succeeds to the rights and obligations of the Participant under the Plan and an Award Agreement upon the Participant's death.

2.5. Board means the Board of Directors of the Company.

2.6. Change in Control means, and shall be deemed to have occurred upon the occurrence of, any one of the following events:

(a) The acquisition in one or more transactions by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership (within the meaning of Rule l3d-3 promulgated under the Exchange Act) of shares or other securities (as defined in Section 3(a)(10) of the Exchange Act) representing 30% or more of either (i) the Outstanding Common Stock or (ii) the Company Voting Securities; provided, however, that a Change in Control as defined in this clause (a) shall not be deemed to occur in connection with any acquisition by the Company, an employee benefit plan of the Company or any Person who immediately prior to the Effective Date is a holder of Outstanding Common Stock or Company Voting Securities (a "Current Stockholder") so long as such acquisition does not result in any Person other than the Company, such employee benefit plan or such Current Stockholder beneficially owning shares or secur ities representing 30% or more of either the Outstanding Common Stock or Company Voting Securities; or

(b) Any election has occurred of persons as directors of the Company that causes two-thirds or more of the Board to consist of persons other than (i) persons who, were members of the Board on the Effective Date and (ii) persons who were nominated by the Board for election as members of the Board at a time when at least two-thirds of the Board consisted of persons who were members of the Board on the Effective Date; provided, however, that any person nominated for election by the Board when at least two-thirds of the members of the Board are persons described in subclause (i) or (ii) and persons who were themselves previously nominated in accordance with this clause (b) shall, for this purpose, be deemed to have been nominated by a Board composed of persons described in subclause (ii); or

(c) Approval by the stockholders of the Company of a reorganization, merger, consolidation or similar transaction (a "Reorganization Transaction"), in each case, unless, immediately following such Reorganization Transaction, more than 50% of, respectively, the outstanding shares of common stock (or similar equity security) of the corporation or other entity resulting from or surviving such Reorganization Transaction and the combined voting power of the securities of such corporation or other entity entitled to vote generally in the election of directors, is then beneficially owned, directly or indirectly, by the individuals and entities who were the respective beneficial owners of the Outstanding Common Stock and the Company Voting Securities immediately prior to such Reorganization Transaction in substantially the same proportions as their ownership of the Outstanding Common Stock and Company Voting Securities immediately prior to such Reorganization Transaction; or

(d) Approval by the stockholders of the Company of (i) a complete liquidation or dissolution of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the Company to a corporation or other entity, unless, with respect to such corporation or other entity, immediately following such sale or other disposition more than 50% of, respectively, the outstanding shares of common stock (or similar equity security) of such corporation or other entity and the combined voting power of the securities of such corporation or other entity entitled to vote generally in the election of directors, is then beneficially owned, directly or indirectly, by the individuals and entities who were the respective beneficial owners of the Outstanding Common Stock and the Company Voting Securities immediately prior to such sale or disposition in substantially the same proportions as their ownership of the Outstanding Common Stock and Company Voting Securities immediatel y prior to such sale or disposition.

2.7 Code means the Internal Revenue Code of 1986, as amended. References to a section of the Code include that section and any comparable section or sections of any future legislation that amends, supplements or supersedes said section.

2.8 Committee means the committee established in accordance with Section 3.1.

2. 9. Company means PeopleNet International Corporation, a Delaware corporation, and its successors.

2.10 Common Stock means Common Stock of the Company, par value $0.0001 per share.

2.11. Company Voting Securities means the combined voting power of all outstanding securities of the Company entitled to vote generally in the election of directors of the Company.

2.12. Date of Grant means the date designated by the Committee as the date as of which it grants an Award, which shall not be earlier than the date on which the Committee approves the granting of such Award.

2.13. Effective Date shall have the meaning given to such term in Section 1.2.

2.14. Exchange Act means the Securities Exchange Act of 1934, as amended.

2.15. Merger means any merger, reorganization, consolidation, share exchange, transfer of assets or other transaction having similar effect involving the Company.

2.16. Non-Employee Director means a member of the Board who (i) is not currently an officer or otherwise employed by the Company or a parent or a subsidiary of the Company, (ii) does not receive compensation directly or indirectly from the Company or a parent or a subsidiary of the Company for services rendered as a consultant or in any capacity other than as a director, except for an amount for which disclosure would not be required pursuant to Item 404(a) of Regulation S-K, (iii) does not possess an interest in any other transaction for which disclosure would be required pursuant to Item 404(a) of Regulation S-K, and (iv) is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K.

2.17. Outstanding Common Stock means, at any time, the issued and outstanding shares of Common Stock.

2.18. Participant means a person designated to receive an Award under the Plan in accordance with Section 5. 1.

2.19. Performance Awards means Awards granted in accordance with Article VIII.

2.20. Plan means the PeopleNet International Corporation 2001 Stock Incentive Plan as described herein, as the same may be amended from time to time.

2.21 Restricted Shares means Common Stock subject to restrictions imposed in connection with Awards granted under Article VII.

2.22. Retirement means early or normal retirement under a pension plan or arrangement of the Company or one of its Subsidiaries in which the Participant participates.

2.23. Subsidiary means a subsidiary of the Company within the meaning of Section 424(f) of the Code.

2.24. Termination of Employment means the voluntary or involuntary termination of a Participant's employment with the Company or a Subsidiary for any reason, including death, disability, retirement or as the result of the divestiture of the Participant's employer or any similar transaction in which the Participant's employer ceases to be the Company or one of its Subsidiaries. Whether entering military or other government service shall constitute Termination of Employment, or whether a Termination of Employment shall occur as a result of disability, shall be determined in each case by the Committee in its sole discretion. In the case of a consultant who is not an employee of the Company or a Subsidiary, Termination of Employment shall mean voluntary or involuntary termination of the consulting relationship for any reason. In the case of a Non-Employee Director, Termination of Employment shall mean voluntary or involuntary termination, non-election, removal or other act wh ich results in such Non-Employee Director no longer serving in such capacity.

ARTICLE III.

ADMINISTRATION

3.1. Committee. The Plan shall be administered by a committee of the Board (the "Committee") comprised of at least one person. The Committee shall have exclusive and final authority in each determination, interpretation or other action affecting the Plan and its Participants. The Committee shall have the sole discretionary authority to interpret the Plan, to establish and modify administrative rules for the Plan, to impose such conditions and restrictions on Awards as it determines appropriate, and to take such steps in connection with the Plan and Awards granted hereunder as it may deem necessary or advisable. The Committee may, subject to compliance with applicable legal requirements, with respect to Participants who are not subject to Section 16(b) of the Exchange Act, delegate such of its powers and authority under the Plan as it deems appropriate to designated officers or employees of the Company. In addition, the Board may exercise any of the authority con ferred upon the Committee hereunder. In the event of any such delegation of authority or exercise of authority by the Board, references in the Plan to the Committee shall be deemed to refer to the delegate of the Committee or the Board, as the case may be.

ARTICLE IV.

SHARES

4.1. Number of Shares Issuable. The total number of shares initially authorized to be issued under the Plan shall be 500,000 shares of Common Stock. The number of shares available for issuance under the Plan shall be subject to adjustment in accordance with Section 9.7. The shares to be offered under the Plan shall be authorized and unissued shares of Common Stock, or issued shares of Common Stock which will have been reacquired by the Company.

4.2 Increase in the Number of Shares Issuable. The total number of shares may be increased by approval of the Board of Directors.

ARTICLE V.

PARTICIPATION

5.1. Eligible Participants. Participants in the Plan shall be such key employees, consultants, legal counsel and non-employee directors of the Company and its Subsidiaries, whether or not members of the Board, as the Committee, in its sole discretion, may designate from time to time. The Committee's designation of a Participant in any year shall not require the Committee to designate such person to receive Awards in any other year. The designation of a Participant to receive an Award under one portion of the Plan does not require the Committee to include such Participant under other portions of the Plan. The Committee shall consider such factors as it deems pertinent in selecting Participants and in determining the types and amounts of their respective Awards. Subject to adjustment in accordance with Section 9.7, during any fiscal year no Participant shall be granted Awards in respect of more than 200,000 shares of Common Stock.

ARTICLE VI.

INTENTIONALLY LEFT BLANK

ARTICLE VII.

RESTRICTED SHARES

7.1. Restricted Share Awards. The Committee may grant to any Participant an Award of such number of shares of Common Stock on such terms, conditions and restrictions, whether based on performance standards, periods of service, retention by the Participant of ownership of purchased or designated shares of Common Stock or other criteria, as the Committee shall establish. It is not a criteria of the Plan that the Restricted Shares be issued pursuant to any specific criteria. With respect to performance-based Awards of Restricted Shares intended to qualify for deductibility under Section 162(m) of the Code, performance targets will include specified levels of one or more of operating income, return or investment, return on stockholders' equity, earnings before interest, taxes, depreciation and amortization and/or earnings per share. The terms of any Restricted Share Award granted under this Plan shall be set forth in an Award Agreement which shall contain provisions determine d by the Committee and not inconsistent with this Plan.

(a) Issuance of Restricted Shares. As soon as practicable after the Date of Grant of a Restricted Share Award by the Committee, the Company shall cause to be transferred on the books of the Company or its agent, shares of Common Stock, registered on behalf of the Participant, evidencing the Restricted Shares covered by the Award, subject to forfeiture to the Company as of the Date of Grant if an Award Agreement with respect to the Restricted Shares covered by the Award is not duly executed by the Participant and timely returned to the Company. All shares of Common Stock covered by Awards under this Article VII shall be subject to the restrictions, terms and conditions contained in the Plan and the applicable Award Agreements entered into by the appropriate Participants. Until the lapse or release of all restrictions applicable to an Award of Restricted Shares the share certificates representing such Restricted Shares may be held in custody by the Company, its designee , or, if the certificates bear a restrictive legend, by the Participant. Upon the lapse or release of all restrictions with respect to an Award as described in Section 7.1 (d), one or more share certificates, registered in the name of the Participant, for an appropriate number of shares as provided in Section 7.1 (d), free of any restrictions set forth in the Plan and the related Award Agreement (however subject to any restrictions that may be imposed by law) shall be delivered to the Participant.

(b) Stockholder Rights. Beginning on the Date of Grant of a Restricted Share Award and subject to execution of the related Award Agreement as provided in Section 7.1 (a), and except as otherwise provided in such Award Agreement, the Participant shall become a stockholder of the Company with respect to all shares subject to the Award Agreement and shall have all of the rights of a stockholder, including, but not limited to, the right to vote such shares and the right to receive dividends; provided, however, that any shares of Common Stock distributed as a dividend or otherwise with respect to any Restricted Shares as to which the restrictions have not yet lapsed, shall be subject to the same restrictions as such Restricted Shares and held or restricted as provided in Section 7.1 (a).

(c) Registration of Shares. None of the Restricted Shares may be sold, assigned, pledged, hypothecated or transferred without Registration under the Securities Act of 1933 as amended or exemption there from. It is anticipated that at the time of issuance the Company will have in effect a Registration Statement on Form S-8 or such other comparable form such that the Restricted Shares will be registered for resale upon issuance.

(d) Delivery of Shares Upon Vesting. Upon expiration or earlier termination of the forfeiture period without a forfeiture and the satisfaction of or release from any other conditions prescribed by the Committee, or at such earlier time as provided under the provisions of Section 7.3, the restrictions applicable to the Restricted Shares shall lapse. As promptly as administratively feasible thereafter, subject to the requirements of Section 9.5, the Company shall deliver to the Participant or, in case of the Participant's death, to the Participant's Beneficiary, one or more share certificates for the appropriate number of shares of Common Stock, free of all such restrictions, except for any restrictions that may be imposed by law.

7.2. Terms of Restricted Shares.

(a) Forfeiture of Restricted Shares. Subject to Sections 7.2(b) and 7.3, Restricted Shares shall be forfeited and returned to the Company and all rights of the Participant with respect to such Restricted Shares shall terminate unless the Participant continues in the service of the Company or a Subsidiary as an employee until the expiration of the forfeiture period for such Restricted Shares and satisfies any and all other conditions set forth in the Award Agreement. The Committee shall determine the forfeiture period (which may, but need not, lapse in installments) and any other terms and conditions applicable with respect to any Restricted Share Award.

(b) Waiver of Forfeiture Period. Notwithstanding anything contained in this Article VII to the contrary, the Committee may, in its sole discretion, waive the forfeiture period and any other conditions set forth in any Award Agreement under appropriate circumstances (including the death, disability or Retirement of the Participant or a material change in circumstances arising after the date of an Award) and subject to such terms and conditions (including forfeiture of a proportionate number of the Restricted Shares) as the Committee shall deem appropriate.

7.3. Change in Control. Unless otherwise provided by the Committee in the applicable Award Agreement, in the event of a Change in Control, all restrictions applicable to the Restricted Share Award shall terminate fully and the Participant shall immediately have the right to the delivery of share certificates for such shares in accordance with Section 7.1 (d).

ARTICLE VIII.

PERFORMANCE AWARDS

8.1. Performance Awards.

(a) Award Periods and Calculations of Potential Incentive Amounts. The Committee may grant Performance Awards to Participants. A Performance Award shall consist of the right to receive a payment (measured by the Fair Market Value of a specified number of shares of Common Stock, increases in such Fair Market Value during the Award Period and/or a fixed cash amount) contingent upon the extent to which certain predetermined performance targets have been met during an Award Period. Performance Awards may be made in conjunction with, or in addition to, Restricted Share Awards made under Article VII. The Award Period shall be two or more fiscal or calendar years as determined by the Committee. The Committee, in its discretion and under such terms as it deems appropriate, may permit newly eligible employees, such as those who are promoted or newly hired, to receive Performance Awards after an Award Period has commenced.

(b) Performance Targets. The performance targets may include such goals related to the performance of the Company and/or the performance of a Participant as may be established by the Committee in its discretion. In the case of Performance Awards intended to qualify for deductibility under Section 162(m) of the Code, the targets will include specified levels of one or more of operating income, return on investment, return on stockholders' equity, earnings before interest, taxes, depreciation and amortization and/or earnings per share. The performance targets established by the Committee may vary for different Award Periods and need not be the same for each Participant receiving a Performance Award in an Award Period. Except to the extent inconsistent with the performance-based compensation exception under Section 162(m) of the Code, in the case of Performance Awards granted to employees to whom such section is applicable, the Committee, in its discretion, but only under extraordinary circumstances as determined by the Committee, may change any prior determination of performance targets for any Award Period at any time prior to the final determination of the value of a related Performance Award when events or transactions occur to cause such performance targets to be an inappropriate measure of achievement.

(c) Earning Performance Awards. The Committee, on or as soon as practicable after the Date of Grant, shall prescribe a formula to determine the percentage of the applicable Performance Award to be earned based upon the degree of attainment of performance targets.

(d) Payment of Earned Performance Awards. Payments of earned Performance Awards shall be made in cash or shares of Common Stock or a combination of cash and shares of Common Stock, in the discretion of the Committee. The Committee, in its sole discretion, may provide such terms and conditions with respect to the payment of earned Performance Awards as it may deem desirable.

8.2. Terms of Performance Awards.

(a) Termination of Employment. Unless otherwise provided below or in Section 8.3, in the case of a Participant's Termination of Employment prior to the end of an Award Period, the Participant will not have earned any Performance Awards for that Award Period.

(b) Retirement. If a Participant's Termination of Employment is because of Retirement prior to the end of an Award Period, the Participant will not be paid any Performance Award, unless the Committee, in its sole and exclusive discretion, determines that an Award should be paid. In such a case, the Participant shall be entitled to receive a pro-rata portion of his or her Award as determined under subsection (d) of this Section 8.2.

(c) Death or Disability. If a Participant's Termination of Employment is due to death or to disability (as determined in the sole and exclusive discretion of the Committee) prior to the end of an Award Period, the Participant or the Participant's personal representative shall be entitled to receive a pro-rata share of his or her Award as determined under subsection (d) of this Section 8.2.

(d) Pro-Rata Payment. The amount of any payment to be made to a participant whose employment is terminated by Retirement, death or disability (under the circumstances described in subsections (b) and (c)) will be the amount determined by multiplying (i) the amount of the Performance Award that would have been earned through the end of the Award Period had such employment not been terminated by (ii) a fraction, the numerator of which is the number of whole months such Participant was employed during the Award Period, and the denominator of which is the total number of months of the Award Period. Any such payment made to a Participant whose employment is terminated prior to the end of an Award Period shall be made at the end of such Award Period, unless otherwise determined by the Committee in its sole discretion. Any partial payment previously made or credited to a deferred account for the benefit of a Participant in accordance with Section 8. 1 (d) of the Plan sha ll be subtracted from the amount otherwise determined as payable as provided in this Section 8.2(d).

(e) Other Events. Notwithstanding anything to the contrary in this Article VIII, the Committee may, in its sole and exclusive discretion, determine to pay all or any portion of a Performance Award to a Participant who has terminated employment prior to the end of an Award Period under certain circumstances (including the death, disability or Retirement of the Participant or a material change in circumstances arising after the Date of Grant), subject to such terms and conditions as the Committee shall deem appropriate.

8.3. Change in Control. Unless otherwise provided by the Committee in the applicable Award Agreement, in the event of a Change in Control, all Performance Awards for all Award Periods shall immediately become fully payable to all Participants and shall be paid to Participants within thirty (30) days after such Change in Control.

ARTICLE IX.

TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN

9.1. Plan Provisions Control Award Terms. The terms of the Plan shall govern all Awards granted under the Plan, and in no event shall the Committee have the power to grant any Award under the Plan the terms of which are contrary to any of the provisions of the Plan. In the event any provision of any Award granted under the Plan shall conflict with any term in the Plan as constituted on the Date of Grant of such Award, the term in the Plan as constituted on the Date of Grant of such Award shall control. Except as provided in Section 9.3 and Section 9.7, the terms of any Award granted under the Plan may not be changed after the Date of Grant of such Award so as to materially decrease the value of the Award without the express written approval of the holder.

9.2. Award Agreement. No person shall have any rights under any Award granted under the Plan unless and until the Company and the Participant to whom such Award shall have been granted shall have executed and delivered an Award Agreement or the Participant shall have received and acknowledged notice of the Award authorized by the Committee expressly granting the Award to such person and containing provisions setting forth the terms of the Award.

9.3. Modification of Award After Grant. No Award granted under the Plan to a Participant may be modified (unless such modification does not materially decrease the value of that Award) after its Date of Grant except by express written agreement between the Company and such Participant, provided that any such change (a) may not be inconsistent with the terms of the Plan, and (b) shall be approved by the Committee.

9. 4. Limitation on Transfer. Except as provided in Section 7.1(c) in the case of Restricted Shares, a Participant's rights and interest under the Plan may not be assigned or transferred other than by will or the laws of descent and distribution and, during the lifetime of a Participant, only the Participant personally (or the Participant's personal representative) may exercise rights under the Plan. The Participant's Beneficiary may exercise the Participant's rights to the extent they are exercisable under the Plan following the death of the Participant.

9. 5. Taxes. The Company shall be entitled, if the Committee deems it necessary or desirable, to withhold (or secure payment from the Participant in lieu of withholding) the amount of any withholding or other tax required by law to be withheld or paid by the Company with respect to any amount payable and/or shares issuable under such Participant's Award and the Company may defer payment of cash or issuance of shares upon exercise or vesting of an Award unless indemnified to its satisfaction against any liability for any such tax. The amount of such withholding or tax payment shall be determined by the Committee and shall be payable by the Participant at such time as the Committee determines in accordance with the following rules:

(a) The Participant shall have the right to elect to meet his or her withholding requirement (i) by having withheld from such Award at the appropriate time that number of shares of Common Stock, rounded up to the next whole share, the Fair Market Value of which is equal to the amount of withholding taxes due, (ii) by direct payment to the Company in cash of the amount of any taxes required to be withheld with respect to such Award or (iii) by a combination of withholding such shares and paying cash.

(b) The Committee shall have the discretion as to any Award to cause the Company to pay to tax authorities for the benefit of the applicable Participant, or to reimburse such Participant for, the individual taxes which are due on the grant, exercise or vesting of any Award or the lapse of any restriction on any Award (whether by reason of such Participant's filing of an election under Section 83(b) of the Code or otherwise), including, but not limited to, Federal income tax, state income tax, local income tax and excise tax under Section 4999 of the Code, as well as for any such taxes as may be imposed upon such tax payment or reimbursement.

(c) In the case of Participants who are subject to Section 16 of the Exchange Act, the Committee may impose such limitations and restrictions as it deems necessary or appropriate with respect to the delivery or withholding of shares of Common Stock to meet tax withholding obligations.

9. 6. Surrender of Awards. Any Award granted under the Plan may be surrendered to the Company for cancellation on such terms as the Committee and the Participant approve.

9. 7. Adjustments to Reflect Capital Changes.

(a) Recapitalization. The number and kind of shares subject to outstanding Awards, the Purchase Price or Exercise Price for such shares, the number and kind of shares available for Awards subsequently granted under the Plan and the maximum number of shares in respect of which Awards can be made to any Participant in any calendar year shall be appropriately adjusted to reflect any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other change in capitalization with a similar substantive effect upon the Plan or the Awards granted under the Plan. The Committee shall have the power and sole discretion to determine the amount of the adjustment to be made in each case.

(b) Merger. After any Merger in which the Company is the surviving corporation, each Participant shall, at no additional cost, be entitled upon any exercise of an Option or receipt of any other Award to receive (subject to any required action by stockholders), in lieu of the number of shares of Common Stock receivable or exercisable pursuant to such Award prior to such Merger, the number and class of shares or other securities to which such Participant would have been entitled pursuant to the terms of the Merger if, at the time of the Merger, such Participant had been the holder of record of a number of shares of Common Stock equal to the number of shares of Common Stock receivable or exercisable pursuant to such Award. Comparable rights shall accrue to each Participant in the event of successive Mergers of the character described above. In the event of a Merger in which the Company is not the surviving corporation, the surviving, continuing, successor or purchasing corp oration, as the case may be (the "Acquiring Corporation), will either assume the Company's rights and obligations under outstanding Award Agreements or substitute awards in respect of the Acquiring Corporation's stock for outstanding Awards, provided, however, that if the Acquiring Corporation does not assume or substitute for such outstanding Awards, the Board shall provide prior to the Merger that any unexercisable and/or unvested portion of the outstanding Awards shall be immediately exercisable and vested as of a date prior to such merger or consolidation, as the Board so determines. The exercise and/or vesting of any Award that was permissible solely by reason of this Section 9.7(b) shall be conditioned upon the consummation of the Merger. Any Options which are neither assumed by the Acquiring Corporation not exercised as of the date of the Merger shall terminate effective as of the effective date of the Merger.

(c) Options to Purchase Shares or Stock of Acquired Companies. After any merger in which the Company or a Subsidiary shall be a surviving corporation, the Committee may grant substituted options under the provisions of the Plan, pursuant to Section 424 of the Code, replacing old options granted under a plan of another party to the merger whose shares of stock subject to the old options may no longer be issued following the merger. The manner of application of the foregoing provisions to such options and any appropriate adjustments shall be determined by the Committee in its sole discretion. Any such adjustments may provide for the elimination of any fractional shares which might otherwise become subject to any Options.

9.8. No Right to Employment. No employee or other person shall have any claim of right to be granted an Award under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any employee any right to be retained in the employ of the Company or any of its Subsidiaries.

9.9. Awards Not Includable for Benefit Purposes. Payments received by a Participant pursuant to the provisions of the Plan shall not be included in the determination of benefits under any pension, group insurance or other benefit plan applicable to the Participant which is maintained by the Company or any of its Subsidiaries, except as may be provided under the terms of such plans or determined by the Board.

9.10. Governing Law. All determinations made and actions taken pursuant to the Plan shall be governed by the laws of the State of Delaware and construed in accordance therewith.

9.11. No Strict Construction. No rule of strict construction shall be implied against the Company, the Committee or any other person in the interpretation of any of the terms of the Plan, any Award granted under the Plan or any rule or procedure established by the Committee.

9.12. Captions. The captions (i.e., all Section headings) used in the Plan are for convenience only, do not constitute a part of the Plan, and shall not be deemed to limit, characterize or affect in any way any provisions of the Plan, and all provisions of the Plan shall be construed as if no captions had been used in the Plan.

9.13. Severability. Whenever possible, each provision in the Plan and every Award at any time granted under the Plan shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Plan or any Award at any time granted under the Plan shall be held to be prohibited by or invalid under applicable law, then (a) such provision shall be deemed amended to accomplish the objectives of the provision as originally written to the fullest extent permitted by law and (b) all other provisions of the Plan, such Award and every other Award at any time granted under the Plan shall remain in full force and effect.

9.14. Amendment and Termination.

(a) Amendment. The Board shall have complete power and authority to amend the Plan at any time without the authorization or approval of the Company's stockholders, unless the amendment (i) materially increases the benefits accruing to Participants under the Plan, (ii) materially increases the aggregate number of securities that may be issued under the Plan or (iii) materially modifies the requirements as to eligibility for participation in the Plan, but in each case only to the extent then required by the Code or applicable law, or deemed necessary or advisable by the Board. No termination or amendment of the Plan may, without the consent of the Participant to whom any Award shall theretofore have been granted under the Plan, materially adversely affect the right of such individual under such Award.

(b) Termination. The Board shall have the right and the power to terminate the Plan at any time. No Award shall be granted under the Plan after the termination of the Plan, but the termination of the Plan shall not have any other effect and any Award outstanding at the time of the termination of the Plan may be exercised after termination of the Plan at any time prior to the expiration date of such Award to the same extent such Award would have been exercisable had the Plan not been terminated.

EX-6 9 exh0601.htm EXHIBIT 6.1 ACM-ACEI AGREEMENT Agreement Agreement

This Agreement is made on the 10^th day of July, 2001

Between American Champion Media, Inc. ("ACM")

22320 Foothill Blvd., Suite 260

Hayward, CA 94541

And American Champion Entertainment, Inc. ("ACEI")

22320 Foothill Blvd., Suite 260

Hayward, CA 94541

WHEREAS ACM is a wholly owned subsidiary of ACEI since the formation of both companies in February 1997, and

WHEREAS ACM has been receiving all of its funding for the production of a 29-episode TV series, Adventures With Kanga Roddy, from its parent company ACEI between 1997 and 2000, and

WHEREAS ACEI intends to spin-off ACM by filing a form 10-SB with the U.S. Securities and Exchange Commission and distributing ACM shares to the current ACEI shareholders.

NOW THEREFORE, the parties hereby agree that all future cashflow generated from the Licensing Agreement signed between ACM and World Channel Inc., dated December 27, 2000, for the licensing of products from ACM's above mentioned TV series shall be equally shared between ACEI and ACM.

For and on behalf of                         For and on behalf of
American Champion Media, Inc.                American Champion Entertainment, Inc.

/s/ George Chung                             /s/ Anthony K. Chan
George Chung                                 Anthony K. Chan
Managing Director                            Chief Executive Officer

EX-6 10 exh0602.htm EXHIBIT 6.2 PURCHASE AGREEMENT NYFS11

PURCHASE AGREEMENT

BETWEEN

AMERICAN CHAMPION ENTERTAINMENT, INC., and

AMERICAN CHAMPION MEDIA, INC.

AND

ECAPITAL GROUP, INC.

AND

ANTHONY K. CHAN

Dated as of June 20, 2001

TABLE OF CONTENTS

Article I REORGANIZATION OF AMERICAN CHAMPION MEDIA, INC.

1.1 Transfer of Assets and Liabilities

1.2 Retained Assets

1.3 Increase Authorized Shares Base and Forward Split Existing Shares

1.4 Name Change

1.5 Purchase of Marketing Rights to ChiBrow

1.6 Redemption of Personal Loan from Anthony K. Chan

1.7 Spin-off of New Company

1.8 Registration of Shares

Article II PURCHASE OF MARKETING RIGHTS TO CHIBROW

2.1 Ownership of ChildrenBrowsser.com

2.2 License Fee and Rights Granted

2.3 Delivery of Materials

2.4 Copyrigths, Patents and Trademarks

Article III REGISTRATION OF SHARES

3.1 Assignment of Shares

3.2 Filing of Registration Statement on Form SB-2

3.3 Distribution of Shares

Article IV REPRESENTATIONS AND WARRANTIES OF PURCHASER

4.1 Authorization of Agreement

4.2 Conflicts; Consents of Third Parties

4.3 No Undisclosed Liabilities

4.4 Litigation

4.5 No Misrepresentation

4.6 No Broker Fees

Article V REPRESENTATIONS AND WARRANTIES OF THE SELLER

5.1 Authorization of Agreement

5.2 Conflicts; Consents of Third Parties

5.3 No Undisclosed Liabilities

5.4 Litigation

5.5 No Misrepresentation

5.6 No Broker Fees

Article VI COVENANTS

6.1 Access to Information

6.2 Consents

6.3 Other Actions

6.4 No Solicitation

6.5 Publicity

6.6 Board of Directors Representation

Article VII INDEMNIFICATION

7.1 Indemnification

7.2 Indemnification Procedures

Article VIII MISCELLANEOUS

8.1 Payment of Taxes

8.2 Survival of Representations and Warranties

8.3 Expenses

8.4 Further Assurances

8.5 Submission to Jurisdiction; Consent to Service of Process

8.6 Entire Agreement; Amendments and Waivers

8.7 Governing Law

8.8 Table of Contents and Headings

8.9 Notices

8.10 Severability

8.11 Binding Effect; Assignment

PURCHASE AGREEMENT

This PURCHASE AGREEMENT, dated as of June 20, 2001 (the "Agreement"), by and between

American Champion Entertainment, Inc. ("ACEI"), a Delaware corporation with address at 22320 Foothill Blvd., Suite 260, Hayward, CA 94541, and

American Champion Media, Inc. ("ACM", also to be known as the "Purchaser"), a Delaware corporation with address at

22320 Foothill Blvd., Suite 260, Hayward, CA 94541, and

ECapital Group, Inc. ("ECapital", also to be known as the "Seller"), a Delaware corporation with address at

1600 Adams Drive, Menlo Park, CA 94025.

W I T N E S S E T H:

WHEREAS, ACM is wholly owned subsidiary of America's Best Karate, and America's Best Karate is a wholly owned subsidiary of ACEI. There are currently 100 ACM shares outstanding and the authorized base is 1,000 shares; and

WHEREAS, ECapital is a duly organized Delaware corporation that owns and processes in its entirety the property of ChiBrow ("ChiBrow"), a child-safe internet portal; and

WHEREAS, ACM desires to purchase the exclusive marketing rights to ChiBrow from ECapital at terms as defined in this Agreement; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter contained, the parties hereby agree as follows:

ARTICLE I

REORGANIZATION OF AMERICAN CHAMPION MEDIA, INC.

1.1 Transfer of Asset and Liabilities

ACM has been engaging in the production and marketing of media projects since 1995 with the "Strong Mind, Fit Body" weight-loss motivational program comprising of audio and video tapes and a workbook, the "Montana Exercise Video" starring the legendary football quarterback Joe Montana and his wife Jennifer, and the 29 half-hour episodes television series "Adventures with Kanga Roddy" that teaches social skills and emotional intelligence to children.

Such properties, including unamortized assets on ACM's accounts, ownership of copyrights, trademarks and licenses that belong to ACM, and all existing liabilities including loans, accounts payables and any incurred obligations of ACM, shall be transferred to the accounts of ACEI which the parent company of ACM.

1.2 Retained Assets

ACM processes the domain name of "Hiyah.com" and its content of 36 interactive children's stories narrated by certain celebrities. Such domain name and content shall remain the assets of ACM with full authority to promote, market, engage in commerce, and also create similar programs in the future.

1.3 Increase Authorized Share Base and Forward Split Existing Shares

ACM shall increase its shares base to 100 million shares of authorized common stock and 10 million shares of authorized preferred stock with terms determinable by its board of directors at the time of issuance pursuant to guidelines allowable according the corporate laws of the State of Delaware.

ACM shall forward split its 100 shares of common stock currently outstanding to 2,010,000 shares.

1.4 Name Change

ACM shall change its official name to "PeopleNet International Corporation" and hereinafter shall be referred to as "New Company".

1.5 Purchase of Marketing Rights to ChiBrow

New Company shall purchase the exclusive marketing rights to ChiBrow ("ChiBrow") for 375,000 shares of New Company common stock pursuant to terms as described hereunder in Article II.

1.6 Redemption of Personal Loan from Anthony K. Chan

As of March 31, 2001, ACM has incurred a non-interest bearing loan from its President and Chief Executive Officer, Anthony K. Chan, in the total amount of $54,000. Both ACM and Anthony K. Chan agree that the loan is redeemed in full by an issuance to Anthony K. Chan of New Company common stock in the amount of 27,000 shares.

1.7 Spin-off of New Company

New Company shall file a Form-10 with the U.S. Securities and Exchange Commission ("SEC") to effectuate the spin-off of New Company from ACEI. ACEI shall provide the necessary legal and accounting documentation for such filing and ECapital shall assist ACEI in formatting a new business plan and description for New Company which will become an integral part of such filing.

1.8 Registration of Shares

Immediately upon the effectiveness of New Company's spin-off from ACEI, New Company shall file with the SEC a registration statement on form SB-2 to register the 2,010,000 shares of common stock.

ARTICLE ii
PURCHASE of marketing rights to ChiBrow

2.1 Ownership of ChiBrow

ECapital hereby warrants that it is the legal owner of the property of ChiBrow including but not limited to its assets and liabilities, copyrights, trademarks (pending or granted), patents (pending or granted), domain names, goodwill and all commercially exploitable rights that exists now and in the future. ACM has the right to obtain from ECapital evidence of its ownership of ChiBrow, and ECapital shall deliver such evidence within a reasonable time to ACM upon request. ECapital warrants and guarantees that its has the full authority to enter into and completely perform according to the terms of this Agreement and to grant the rights hereinunder described to New Company. ECapital remains to be the owner of the property of ChiBrow.

2.2 Licensing Fee and Rights Granted

Subject to the payment of the Licensing Fee described hereunder, ECapital hereby grants to New Company, and ACM hereby accepts on behalf of New Company, the exclusive and sole rights for marketing, exhibition, distribution, process and reproduction, and all commercial exploitation of ChiBrow under the following terms and conditions:

Licensing Fee: 375,000 shares (post-forward split) of common stock of New Company with registration rights. A registration statement on form SB-2 is to be filed by New Company immediately after the effectiveness of the spin-off of New Company from ACEI.

Compensation to ACM: ACM shall retain 35% of all revenues generated via the marketing and sales of ChiBrow and shall remit 65% of such revenues to ECapital.

Rights: All commercially exploitable rights under all electronic and non-electronic formats.

Territory: Worldwide.

License Period: Three (3) years commencing on date of delivery of materials. New Company has the first right of refusal to extend the License Period for another three years at terms to be amicably negotiated between the parties.

Language: All.

The rights granted herein are exclusive to New Company within the Territory and for the duration of the License Period specified in this Agreement, and ECapital shall not grant, license, assign, or to otherwise transfer any of the rights granted herein to any other party within the Territory and the License Period.

2.3 Delivery of Materials

ECapital shall make delivery of one complete set of materials of ChiBrow to New Company, including but not limited to all programs and codes, digitized graphics, e-commerce components, electronic files for documentations and promotional materials, and other relevant information and descriptive material such as press releases and printed reviews and writeups, etc. to New Company in order for New Company to facilitate the marking of ChiBrow. Such delivery shall be made within two weeks after this Agreement is executed.

2.4 Copyrights, Patents and Trademarks

ECapital shall continue to pursue copyrights, patents and trademarks protection to the property of ChiBrow, including any pending applications and filing new applications for additional materials is necessary. ECapital have the right to take any legal and remedial means to enforce and protect the copyrights, patents and trademarks of the property whether in criminal or civil jurisdiction and to compromise or settle such claims for such damages or compromised amounts.

ARTICLE III
REGISTRATION OF SHARES

3.1 Assignment of Shares

Upon the forward split of ACM outstanding shares (Clause 1.3 above), New Company shall have total outstanding of 2,010,000 shares. According to the terms of the purchase of exclusive marketing rights of ChiBrow from ECapital (Clause 1.5 and Article II above) and the redemption of personal loan from Anthony K. Chan (Clause 1.6 above), the capital structure of New Company after such assignment and issuance of shares shall be as follows

Common stock Owned by Ownership percentage

1,608,000 shares ACEI shareholders 80.0%

375,000 shares ECapital or its assignees 18.7%

27,000 shares Anthony K. Chan 1.3%

-------------------- ----------

2,010,000 shares 100.0%

3.2 Filing of Registration Statement on Form SB-2

Immediately upon the effectiveness of New Company's spin-off from ACEI, New Company shall file with the SEC a registration statement on form SB-2 to register the 2,010,000 shares of common stock as identified in Clause 4.1 above. New Company shall be responsible in answering comments from the SEC on such registration statement in order to cause the registration statement to become effective in the most expedited manner.

3.3 Distribution of Shares

Upon effectiveness of the SB-2 registration statement, the shares shall be distributed according to the owners as identified in Clause 4.1 above. The 1,608,000 shares that belong to ACEI shareholders shall be distributed by ACEI's transfer agent, Continental Stock Transfer and Trust Company, on a pro-rata basis to each ACEI shareholder.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

4.1 Authorization of Agreement

The Purchaser, American Champion Media, Inc. ("ACM") has full corporate power and authority to execute and deliver this Agreement, and each other agreement, document, instrument or certificate contemplated by this Agreement or to be executed by the Purchaser in connection with the consummation of the transactions contemplated hereby and thereby ("Purchaser Documents"), and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by the Purchaser of this Agreement and each Purchaser Document have been duly authorized by all necessary corporate action on behalf of the Purchaser. This Agreement has been, and each Purchaser Document will be at or prior to closing, duly executed and delivered by the Purchaser and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement constitutes, and each Purchaser Document when so executed and delivered will constitute, legal, v alid and binding obligations of the Purchaser, enforceable against the Purchaser in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).

4.2 Conflicts; Consents of Third Parties.

(a) Neither of the execution and delivery by the Purchaser of this Agreement and of the Purchaser Documents, nor the compliance by the Purchaser with any of the provisions hereof or thereof will (i) conflict with, or result in the breach of, any provision of the certificate of incorporation or by-laws of the Purchaser, (ii) conflict with, violate, result in the breach of, or constitute a default under any note, bond, mortgage, indenture, license, agreement or other obligation to which the Purchaser is a party or by which the Purchaser or its properties or assets are bound or (iii) violate any statute, rule, regulation, order or decree of any Governmental Body or authority by which the Purchaser is bound, except, in the case of clauses (ii) and (iii), for such violations, breaches or defaults as would not, individually or in the aggregate, have a material adverse effect on the business, properties, results of operations, prospects, conditions (financial or otherwise) of the Purchaser and its subsidi aries, taken as a whole.

(b) No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Body is required on the part of the Purchaser in connection with the execution and delivery of this Agreement or the Purchaser Documents or the compliance by Purchaser with any of the provisions hereof or thereof, except for compliance with the applicable requirements of the HSR Act.

4.3 No Undisclosed Liabilities

The Purchaser has no indebtedness, obligations or liabilities of any kind (whether accrued, absolute, contingent or otherwise, and whether due or to become due) that would encumber the Purchaser in its execution of this Agreement.

4.4 Litigation

There are no Legal Proceedings pending or, to the best knowledge of the Purchaser, threatened that are reasonably likely to prohibit or restrain the ability of the Purchaser to enter into this Agreement or consummate the transactions contemplated hereby.

4.5 No Misrepresentation

No representation or warranty of the Purchaser contained in this Agreement or in any schedule hereto or in any certificate or other instrument furnished by the Purchaser to the Seller pursuant to the terms hereof, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading.

4.6 No Broker Fees

No person has acted, directly or indirectly, as a broker, finder or financial advisor for the Purchaser in connection with the transactions contemplated by this Agreement and no person is entitled to any fee or commission or like payment in respect thereof.

article v

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

5.1 Authorization of Agreement

The Seller, ECapital Group, Inc. ("ECapital") has all requisite power, authority and legal capacity to execute and deliver this Agreement, and each other agreement, document, or instrument or certificate contemplated by this Agreement or to be executed by such Seller in connection with the consummation of the transactions contemplated by this Agreement (together with this Agreement, the "Seller Documents"), and to consummate the transactions contemplated hereby and thereby. This Agreement has been, and each of the Seller Documents will be at or prior to closing, duly and validly executed and delivered by each Seller and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement constitutes, and each of the Seller Documents when so executed and delivered will constitute, legal, valid and binding obligations of each Seller, enforceable against each Seller in accordance with their respective terms, subject to applicable bankruptcy, ins olvency, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).

5.2 Conflicts; Consents of Third Parties

(a) None of the execution and delivery by any Seller of this Agreement and the Seller Documents, the consummation of the transactions contemplated hereby or thereby, or compliance by any Seller with any of the provisions hereof or thereof will (i) conflict with, or result in the breach of, any provision of the certificate of incorporation or by-laws or comparable organizational documents of the Seller; (ii) conflict with, violate, result in the breach or termination of, or constitute a default under any note, bond, mortgage, indenture, license, agreement or other instrument or obligation to which the Seller is a party or by which any of them or any of their respective properties or assets is bound; (iii) violate any statute, rule, regulation, order or decree of any governmental body or authority by which the Seller is bound; or (iv) result in the creation of any Lien upon the properties or assets of the Seller except, in case of clauses (ii), (iii) and (iv), for such violations, breaches or defaults as would not, individually or in the aggregate, have a Material Adverse Effect.

(b) No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Body is required on the part of any Seller, in connection with the execution and delivery of this Agreement or the Seller Documents, or the compliance by the Seller as the case may be, with any of the provisions hereof or thereof.

5.3 No Undisclosed Liabilities

The Seller has no indebtedness, obligations or liabilities of any kind (whether accrued, absolute, contingent or otherwise, and whether due or to become due) that would encumber the Seller in its execution of this Agreement.

5.4 Litigation

There is no suit, action, proceeding, investigation, claim or order pending or, to the knowledge of the Seller, overtly threatened against the Seller (or to the knowledge of the Seller, pending or threatened, against any of the officers, directors or key employees of the Seller with respect to their business activities on behalf of the Seller), or to which the Seller is otherwise a party, which, if adversely determined, would have a Material Adverse Effect, before any court, or before any governmental department, commission, board, agency, or instrumentality; nor to the knowledge of the Seller is there any reasonable basis for any such action, proceeding, or investigation, that would encumber the Seller in its execution of this Agreement. The Seller is not subject to any judgment, order or decree of any court or governmental agency except to the extent the same are not reasonably likely to have a Material Adverse Effect and the Seller is not engaged in any legal action to recover monies due it or for damages sustained by it that would encumber the Seller in its execution of this Agreement.

5.5 No Misrepresentation

No representation or warranty of the Seller contained in this Agreement or in any schedule hereto or in any certificate or other instrument furnished by the Seller to the Purchaser pursuant to the terms hereof, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading.

5.6 No Broker Fees

No person has acted, directly or indirectly, as a broker, finder or financial advisor for the Sellers or the Selling Company in connection with the transactions contemplated by this Agreement and no Person is entitled to any fee or commission or like payment in respect thereof.

ARTICLE VI

COVENANTS

6.1 Access to Information

The parties agree that, each party shall be entitled, through its officers, employees and representatives (including, without limitation, its legal advisors and accountants), to make such investigation of the properties, businesses and operations of each other party and such examination of the books, records and financial condition of each other party as it reasonably requests and to make extracts and copies of such books and records. Any such investigation and examination shall be conducted during regular business hours and under reasonable circumstances, and the parties shall cooperate with each other fully therein. No investigation by either party prior to or after the date of this Agreement shall diminish or obviate any of the representations, warranties, covenants or agreements of the parties contained in this Agreement. In order that each party may have full opportunity to make such physical, business, accounting and legal review, examination or investigation as it may reasonably request of the affairs of the other parties, each party shall cause the officers, employees, consultants, agents, accountants, attorneys and other representatives of itself to cooperate fully with such representatives in connection with such review and examination.

6.2 Consents

Each party shall use its best efforts, and shall cooperate with each other, to obtain at the earliest practicable date all consents and approvals required to consummate the transactions contemplated by this Agreement.

6.3 Other Actions

Each of the parties shall use its best efforts to (i) take all actions necessary or appropriate to consummate the transactions contemplated by this Agreement and (ii) cause the fulfillment at the earliest practicable date of all of the conditions to their respective obligations to consummate the transactions contemplated by this Agreement.

6.4 No Solicitation

The Seller will not, and will not cause or permit any of the Seller's directors, officers, employees, representatives or agents (collectively, the "Representatives") to, directly or indirectly over the next twenty four months, (i) discuss, negotiate, undertake, authorize, recommend, propose or enter into, any transaction involving the selling of the marketing rights to ChiBrow, (ii) facilitate, encourage, solicit or initiate discussions, negotiations or submissions of proposals or offers in respect of the selling of the marketing rights to ChiBrow, (iii) furnish or cause to be furnished, to any person, any information concerning the business, operations, properties or assets of the Seller in connection with the selling of marketing rights to ChiBrow, or (iv) otherwise cooperate in any way with, or assist or participate in, facilitate or encourage, any effort or attempt by any other Person to do or seek any of the foregoing. The Sellers will inform the Purchaser in wr iting immediately following the receipt by the Seller or any Representative of any proposal or inquiry in respect of any of the foregoing.

6.5 Publicity

None of the parties shall issue any press release or public announcement concerning this Agreement or the transactions contemplated hereby without obtaining the prior approval of the other party hereto, which approval will not be unreasonably withheld or delayed, unless, in the sole judgment of the Purchaser, disclosure is otherwise required by applicable Law or by the applicable rules of any stock exchange on which the Purchaser lists securities, provided that, to the extent required by applicable law, the party intending to make such release shall use its best efforts consistent with such applicable law to consult with the other party with respect to the text thereof.

6.6 Board of Directors Representation

Effective upon the completion of the steps involved in ACM's reorganization as stated in Clauses 1.1 through 1.6 above, the Board of Directors of New Company shall comprise of Benedict Van, Anthony K. Chan, and two more persons to be identified and agreed upon between ECapital and New Company.

Article VII
INDEMNIFICATION

7.1 Indemnification

(a) The Seller hereby agrees to indemnify and hold the Purchaser, and its respective directors, officers, employees, affiliates, agents, successors and assigns (collectively, the "Purchaser Indemnified Parties") harmless from and against:

(i) any and all liabilities of the Seller of every kind, nature and description, absolute or contingent, existing as against the Seller prior to and including the date of the execution of this Agreement or thereafter coming into being or arising by reason of any state of facts existing, or any transaction entered into, except to the extent that the same have been fully provided for or disclosed to the Purchaser prior to the execution of this Agreement;

(ii) any and all losses, liabilities, obligations, damages, costs and expenses based upon, attributable to or resulting from the breach of any covenant or other agreement on the part of the Sellers under this Agreement;

(iii) any and all losses (including any loss of use of the Seller's property), liabilities, obligations, claims, damages, costs and expenses arising from:

(iv) any and all notices, actions, suits, proceedings, claims, demands, assessments, judgments, costs, penalties and expenses, including attorneys' and other professionals' fees and disbursements (collectively, "Expenses") incident to any and all losses, liabilities, obligations, damages, costs and expenses with respect to which indemnification is provided hereunder (collectively, "Losses").

(b) The Purchaser hereby agrees to indemnify and hold the Sellers and their respective affiliates, agents, successors and assigns (collectively, the "Seller Indemnified Parties") harmless from and against:

(i) any and all losses based upon, attributable to or resulting from the failure of any representation or warranty of the Purchaser set forth in this Agreement, or any representation or warranty contained in any certificate delivered by or on behalf of the Purchaser pursuant to this Agreement, to be true and correct as of the date made;

(ii) any and all Losses based upon, attributable to or resulting from the breach of any covenant or other agreement on the part of the Purchaser under this Agreement; and

(iii) any and all Expenses incident to the foregoing.

7.2 Indemnification Procedures

(a) In the event that any legal proceedings shall be instituted or that any claim or demand ("Claim") shall be asserted by any person in respect of which payment may be sought under Clause 8.1 hereof, the indemnified party shall reasonably and promptly cause written notice of the assertion of any Claim of which it has knowledge which is covered by this indemnity to be forwarded to the indemnifying party. The indemnifying party shall have the right, at its sole option and expense, to be represented by counsel of its choice, which must be reasonably satisfactory to the indemnified party, and to defend against, negotiate, settle or otherwise deal with any Claim which relates to any losses indemnified against hereunder. If the indemnifying party elects to defend against, negotiate, settle or otherwise deal with any Claim which relates to any losses indemnified against hereunder, it shall within five (5) days (or sooner, if the nature of the Claim so requires) notify the indemnified party of its intent to do so. If the indemnifying party elects not to defend against, negotiate, settle or otherwise deal with any Claim which relates to any losses indemnified against hereunder, fails to notify the indemnified party of its election as herein provided or contests its obligation to indemnify the indemnified party for such losses under this Agreement, the indemnified party may defend against, negotiate, settle or otherwise deal with such Claim. If the indemnified party defends any Claim, then the indemnifying party shall reimburse the indemnified party for the Expenses of defending such Claim upon submission of periodic bills. If the indemnifying party shall assume the defense of any Claim, the indemnified party may participate, at his or its own expense, in the defense of such Claim; provided, however, that such indemnified party shall be entitled to participate in any such defense with separate counsel at the expense of the indemnifying party if, (i) so requested by the indemnifying party to part icipate or (ii) in the reasonable opinion of counsel to the indemnified party, a conflict or potential conflict exists between the indemnified party and the indemnifying party that would make such separate representation advisable; and provided, further, that the indemnifying party shall not be required to pay for more than one such counsel for all indemnified parties in connection with any Claim. The parties hereto agree to cooperate fully with each other in connection with the defense, negotiation or settlement of any such Claim.

(b) After any final judgment or award shall have been rendered by a court, arbitration board or administrative agency of competent jurisdiction and the expiration of the time in which to appeal therefrom, or a settlement shall have been consummated, or the indemnified party and the indemnifying party shall have arrived at a mutually binding agreement with respect to a Claim hereunder, the indemnified party shall forward to the indemnifying party notice of any sums due and owing by the indemnifying party pursuant to this Agreement with respect to such matter and the indemnifying party shall be required to pay all of the sums so due and owing to the indemnified party by wire transfer of immediately available funds within 10 business days after the date of such notice.

(c) The failure of the indemnified party to give reasonably prompt notice of any Claim shall not release, waive or otherwise affect the indemnifying party's obligations with respect thereto except to the extent that the indemnifying party can demonstrate actual loss and prejudice as a result of such failure.

Article VIII

MISCELLANEOUS

8.1 Payment of Taxes

All sales, use, transfer, intangible, recordation, documentary stamp or similar taxes or charges, of any nature whatsoever, applicable to, or resulting from, the transactions contemplated by this Agreement shall be borne by each incurring party.

8.2 Survival of Representations and Warranties

The parties hereto hereby agree that the representations and warranties contained in this Agreement or in any certificate, document or instrument delivered in connection herewith, shall survive the execution and delivery of this Agreement, regardless of any investigation made by the parties hereto; provided, however, that any claims or actions with respect thereto shall terminate unless within thirty-six (36) months after the execution of this Agreement written notice of such claims is given by the claiming party or such actions are commenced.

8.3 Expenses

The parties shall each bear its own expenses incurred in connection with the negotiation and execution of this Agreement and each other agreement, document and instrument contemplated by this Agreement and the consummation of the transactions contemplated hereby and thereby.

8.4 Further Assurances.

The parties agree to execute and deliver such other documents or agreements and to take such other action as may be reasonably necessary or desirable for the implementation of this Agreement and the consummation of the transactions contemplated hereby.

8.5 Submission to Jurisdiction; Consent to Service of Process

(a) The parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of any federal or state court located within the State of California over any dispute arising out of or relating to this Agreement or any of the transactions contemplated hereby and each party hereby irrevocably agrees that all claims in respect of such dispute or any suit, action proceeding related thereto may be heard and determined in such courts. The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(b) Each of the parties hereto hereby consents to process being served by any party to this Agreement in any suit, action or proceeding by the mailing of a copy thereof in accordance with the provisions of Clause 9.9.

8.6 Entire Agreement; Amendments and Waivers

This Agreement (including the schedules and exhibits hereto) represents the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and can be amended, supplemented or changed, and any provision hereof can be waived, only by written instrument making specific reference to this Agreement signed by the party against whom enforcement of any such amendment, supplement, modification or waiver is sought. No action taken pursuant to this Agreement, including without limitation, any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representation, warranty, covenant or agreement contained herein. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any party to exercise, and no delay in e xercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law.

8.7 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of California.

8.8 Table of Contents and Headings

The table of contents and section headings of this Agreement are for reference purposes only and are to be given no effect in the construction or interpretation of this Agreement.

8.9 Notices

All notices and other communications under this Agreement shall be in writing and shall be deemed given when delivered personally or mailed by certified mail, return receipt requested, to the parties (and shall also be transmitted by facsimile to the Persons receiving copies thereof) at the following addresses (or to such other address as a party may have specified by notice given to the other party pursuant to this provision):

If to the Purchaser: American Champion Media, Inc.

22320 Foothill Blvd., Suite 260

Hayward, CA 94541

Attn: Anthony K. Chan

With a copy to Purchaser's counsel:

Sichenzia, Ross & Friedman LLP

135 West 50^th Street, 20^th Floor

New York, New York 10020

Attn: Gregory Sichenzia, Esq.

If to the Sellers: ECapital Group, Inc.

1600 Adams Drive

Menlo Park, CA 94025

Attn: Benedict Van

8.10 Severability

If any provision of this Agreement is invalid or unenforceable, the balance of this Agreement shall remain in effect.

8.11 Binding Effect; Assignment and Amendments

This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any person or entity not a party to this Agreement except as provided below. No assignment of this Agreement or of any rights or obligations hereunder may be made by either party (by operation of law or otherwise) without the prior written consent of the other parties hereto and any attempted assignment without the required consents shall be void. Any amendments to this Agreement shall not be valid unless mutual written consent from the parties are obtained.

IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to be executed by their respective duly authorized officers and the individual parties have executed this Agreement as of the day and year first above written.

AMERICAN CHAMPION ENTERTAINMENT, INC.

By: /s/ Anthony K. Chan

Anthony K. Chan, CEO

AMERICAN CHAMPION MEDIA, INC.

By: /s/ Anthony K. Chan

Anthony K. Chan, CEO

ECAPITAL GROUP, INC.

By: /s/ Benedict Van

Benedict Van, Chairman & CEO

ANTHONY K. CHAN

By: /s/ Anthony K. Chan

Anthony K. Chan

Creditor to American Champion Media, Inc.

EX-6 11 exh0603.htm EXHIBIT 6.3 LICENSING AGREEMENT Licensing Agreement Licensing Agreement

This Agreement is made on the 27^th day of December, 2000

Between American Champion Media, Inc. (The Licensor)

22320 Foothill Blvd., Suite 260

Hayward, CA 94541

And World Channel Inc. (The Licensee)

131 So. Maple Ave., Suite 6

So. San Francisco, CA 94080

WHEREBY IT IS MUTUALLY AGREED as follows:

The Licensor warrants that the Licensor owns all rights to a-29 episode TV Series and its related products and intellectual properties, as described in Schedule I and hereinafter called the "Series", which are hereby licensed to the Licensee.
Subject to the payment of the Licensing Fee described hereunder, the Licensor hereby grants to the Licensee, and the Licensee hereby accepts, the exclusive and sole rights for exhibition, distribution, process and reproduction, and all commercial exploitation of the Series under the following terms and conditions:

RIGHTS:

All commercially exploitable rights.

THE TERRITORY:

Worldwide.

LICENSE PERIOD:

Five (5) years commencing on date of delivery of materials. Licensee has the first right of refusal to extend the License Period for another five years at terms to be amicably negotiated between the parties.

LANGUAGE:

All.

The Licensee shall have the right to dub and/or subtitle the Series in any other language and the Licensee shall promptly deliver to the Licensor one (1) sample of each form of video device of the Series without charge to the Licensor.
The Licensee shall have the right to take any legal and remedial means to enforce and protect the copyright of the Series whether in criminal or civil jurisdiction and to compromise or settle such claims for such damages or compromised amounts. Licensee shall be entitled to the proceeds of such claims.
All transportation cost, handling charges, duties and custom fees incurred by the Licensor prior to this Agreement shall be paid by the Licensor.
The Licensee shall pay to the Licensor in consideration of the right granted under this Agreement a Licensing Fee of US$3,000,000 in total. The Licensee shall make five annual installment payments of US$600,000 each on or before the end of the years 2001 through 2005.

Licensee shall pledge the amount of $800,000 in its appraised value of company equipment as collateral for the above payments. In the event that Licensee fails to make the License Fee payments to Licensor on time, Licensor should notice Licensee in writing and has the right to liquidate Licensee's pledged equipment to compensate for the lost of License Fee, and Licensor may terminate this Agreement with a 30-day written notice.

The Licensor agrees to supply to the Licensee the following materials at no cost to the Licensee:

posters and/or publicity materials
color stills or slides
one set of Betacam SP master tapes
one set of synopsis
all inventories related with "Kangaroddy" series

The Licensee shall use its best efforts to exploit the Series in the Territory.
For the purpose of advertising and publicizing the Series, the Licensor shall provide the Licensee with relevant information and descriptive material such as press releases, printed synopsis, etc.
The Licensor warrants and guarantees that the Licensor has the full authority to enter into and completely perform this Agreement and to license all of the licensed rights to the Licensee. Licensor remains to be the copyright owner of the Series.
All costs of reproduction, operation and distribution within the Territory are the sole responsibility of Licensee.
The rights granted herein are exclusive to the Licensee within the Territory and for the duration of the License Period specified in this Agreement, and the Licensor shall not grant, license, assign, or to otherwise transfer any of the rights granted herein to any other party within the Territory during the term of this Agreement.
In the event of litigation arising from any breach of, interruption of, or enforcement of, any of the terms, conditions and stipulations of this Agreement, costs pre- and past-judgment interest, and reasonable attorney fees shall be awarded to the prevailing party.

The Licensee may sub-license to a third party distribution rights granted to it hereunder, totally or in part, but no such sub-license shall relieve the Licensee of any of its obligations hereunder.
This Agreement may not be altered, changed, modified, or amended, except in writing by the parties.
If either party defaults in the performance of any of its material obligations hereunder and if the defaulting party fails to cure such default within thirty (30) days following receipt of notice from the other party (the claiming party) specifying such default, then and only in such event the claiming party may terminate this Agreement by notice to the defaulting party sent not later than ten (10) days after the expiration of said thirty (30) days period. In the event of such termination, the claiming party shall be entitled to its damages due to the default without prejudice to any other rights the claiming party may have against the defaulting party. In the event of the breach of this Agreement hereunder by the defaulting party, both parties hereby acknowledge that in addition to the damages against the defaulting party, the claiming party is entitled to the equitable relief of injunction and/or specific performance to enforce the performance of this Agreement.
Any modification of this Agreement or any supplementary agreements between the parties must be in writing and signed by the parties. No arrangements made verbally will be considered binding or effective.
All notices which either party desires or is required to give to the other party hereunder shall be in writing sent by registered mail, return receipt requested, or by telegraph or telex or by facsimile. Such notice shall be deemed to have been validly given if addressed to the other party at last known address and numbers, and shall be deemed to have been served on the expiry of forty-eight hours after the date of posting or the sending through the telegraph, telex, or facsimile.
If any provision of this Agreement is ruled invalid under any law, it shall be deemed modified or omitted to the extent necessary, and the remainder of this Agreement shall continue in full force and effect.
It is hereby declared that where the context permits or requires, the singular number shall include the plural and vice versa; and the masculine gender shall include the feminine and the neuter and vice versa.
This Agreement shall be governed by the Law of California and subject to the applicable jurisdiction of the Federal Courts.

IN WITNESS WHEREOF the parties hereto have duly executed this Agreement as of the day and year first above written by affixing their respective corporate seals under the hands of their proper signing officers duly authorized on that behalf.

For and on behalf of                        For and on behalf of
American Champion Media, Inc.               World Channel Inc.

/s/ Anthony K. Chan                         /s/ Alan Mok     
Anthony K. Chan                             Alan Mok
Chief Executive Officer	                    President

EX-10 12 exh1001.htm EXHIBIT 10.1 CONSENT FROM MOSS ADAMS CONSENT OF INDEPENDENT AUDITORS CONSENT OF INDEPENDENT AUDITORS

American Champion Entertainment, Inc.:

We consent to the incorporation by PeopleNet International Corporation of our report dated February 15, 2001 appearing in this Report on Form 10-SB of PeopleNet International Corporation for the year ended December 31, 2000.

/s/ Moss Adams LLP

San Francisco, California

July 31, 2001

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