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SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549
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FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) and (g) of the Securities Exchange Act of 1934
VERIDA INTERNET CORP.
(Name of Small Business Issuer in its charter)
STATE OF NEVADA 98-0164651
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 California Street
Suite 1500
San Francisco, California 94111
(Address of Principal Executive Offices) (Zip Code)
Issuer's telephone number, including area code: (415)-439-5395
Securities to be registered pursuant to Section 12(b) of the Act:
NONE
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of class)
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
BUSINESS DEVELOPMENT
Verida Internet Corp. (the "Registrant") was incorporated under
the laws of the State of Nevada on November 1, 1996 as Austral Pacific
Energy Corporation. On November 8, 1996, Austral Pacific Energy
Corporation changed its name to Austral Pacific Energy Corp. The common
shares of the Registrant commenced trading in January 1997 on the
Bulletin Board operated by the National Association of Securities
Dealers Inc. under the symbol "APCE". The head office of the Registrant
was relocated in March 1999 to Suite 1500, 50 California Street, San
Francisco, California 94111. On March 11, 1999, the Registrant changed
its name to Verida Internet Corp.
From inception through to February 1999, the Registrant was
engaged in the business of oil and gas exploration. On February 4, 1999
the Board of Directors of the Registrant determined that given the
depressed status of the oil and gas exploration industry, it would be
in the best interests of the Registrant and its Shareholders to
consider an alternative business focus of the Registrant. The Board of
Directors made the decision that the Registrant would investigate
business opportunities in the internet-based, business services sector.
On February 23, 1999 the Registrant publicly announced that the Board
of Directors had resolved to pursue Internet related growth
opportunities. The Registrant is taking steps to a acquire technology
and retain personnel to enable it to provide secure and comprehensive
Internet-based electronic commerce ("e-commerce") solutions for
business-to-business transactions.
B. BUSINESS OF THE ISSUER
Other than investigating potential technologies and recruiting
personnel in support of the Registrant's new business purpose, the
Registrant has had no material business operations since its inception
in 1996. At present the Registrant has yet to acquire or develop the
necessary technology assets in support of its new business purpose to
become a provider of Internet-based, secure and comprehensive e-
commerce solutions in support of business-to-business electronic
commerce.
The Internet is a world-wide medium of interconnected electronic
and/or computer networks. Individuals and companies have recently
recognised that the communication capabilities of the Internet provide
a medium for not only the promotion and communication of ideas and
concepts, but also for the presentation and sale of information, goods
and services.
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Electronic commerce, generally refers to utilizing electronic
networks to facilitate buying and selling of products, information, and
services. In electronic commerce, computers and telecommunications take
the place of paper documents, mail and faxes. Businesses now use
computers to electronically send and receive a wide variety of business
documents. These include, for example, product catalogs, price lists,
purchase orders and invoices. Electronic Data Interchange ("EDI") is a
specific form of electronic commerce. It refers to the transmission of
data between a business and its customers or its vendors in the course
of a business transaction. A typical example of EDI is electronically
placing a purchase order for merchandise with a vendor, and having the
vendor electronically confirm the order and produce an invoice when the
goods are shipped. The computers of the buyer and the seller
communicate and exchange the relevant information. They use an agreed-
upon or standard format to do so. In an earlier stage of electronic
commerce, companies that wanted to do business electronically needed to
have an arrangement with a special type of computer network. That
network is referred to as a value-added computer network, or "VAN."
Traditionally, much of the EDI and e-commerce market was serviced by
companies which provide their services through VANs. A VAN provides
standardized forms and acts as a kind of electronic post office, where
data and forms are exchanged, parties can communicate via email, and
funds can be electronically transferred.
More recently the Internet has provided an alternative means for
companies to conduct electronic commerce. Rather than using a
proprietary VAN, companies can use the Internet as the medium over
which electronic commerce is conducted. The Registrant intends to
utilize this medium to develop business to business e-commerce
solutions with its initial products providing Internet-based
functionality for commercial transactions, marketing, data management
and analysis.
Planned, Products and Services
The Registrant plans on offering a product "suite" of World Wide
Web ("Web") based services in order to allow potential clients to take
advantage of the technology of the Internet cost-effectively finding
and selling to customers online, while developing ongoing electronic
commerce relationships with them, which in turn will help establish
company brands and capture customer loyalty.
The product suite of services intended to be offered by the
Registrant to its clients will be located on servers controlled by the
Registrant, allowing potential clients to access these services through
their own existing Internet connections utilizing standard Internet
browsers such as Netscape's "Communicator" or Microsoft's "Internet
Explorer". The client would not require any specialized software or
hardware to use the Registrant's services. The Registrant's products
will be provided as a "web service" that can be accessed on a cost-
effective, as-needed basis at anytime over the Internet.
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The Registrant's planned product suite proposes to offer four types
of services in support of business-to-business e-commerce under the
following names:
1. VeriStore
The proposed VeriStore service will provide e-commerce
transactional capabilities to manage and process transactions between
the client and its customers. VeriStore will offer two different levels
of e-commerce solutions. The first level of service will be tailored
towards clients which do not currently have a Web presence to advertise
their products ("E-Stores"). The service will allow customers to use
the Registrant's own Internet storefront as their "retail" location and
the Registrant's virtual back office infrastructure for their own E-
Stores. With minimal programming or Internet expertise, clients will be
able to immediately develop a secure, fully customized, commerce ready
online storefront and ordering system without programming. Clients
would simply create their E-Store, which would profile their products,
provide ordering instructions and product pricing, by filling in their
information through user friendly Web forms.
In addition to providing a client with the capability to create
and maintain an E-Store on the Web, VeriStore will also provide a
virtual back office infrastructure to enable clients to handle all
aspects of online transactions. The virtual back office services will
provide clients with the necessary tools to manage and process online
transactions which occur when the client's customer purchases goods from
their E-Store. The back office services will include: (1) processing of
the client's customers orders and sending confirmations (2) online
payment processing in real time (3) calculating applicable shipping
costs and taxes (4) running multiple reports detailing online sales
statistics for any given period and (5) managing customer queries.
The back office services would also be available to clients who
already have established their own E-Store without the support of the
Registrant. While the client's E-Store Web page may be located elsewhere
on the Internet, it is intended that the back office services to be
offered by the Registrant will be flexible enough to be interoperable
with the client's pre-existing E-Store regardless of the design or
format in which it was created.
2. VeriMark
The proposed VeriMark service is intended to be a package of
automated online marketing solutions which will allow online marketers
to deploy, track and measure the cost effectiveness of their online
marketing efforts. The service will work as an automated electronic
marketing manager which will essentially automate the online marketing
process from the first customer contact to the "thank you" email at the
end of a sale.
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The VeriMark service will allow its clients to accomplish online
marketing campaign management including the sending of marketing email,
the posting of banner ads, building databases of prospects, sending
fulfillment and follow-up materials to prospects, and tracking
effectiveness ratios and statistics
3. VeriBase
The proposed VeriBase service is intended to provide data
warehousing services to clients in order to allow clients to
electronically store their customer's contact and demographic
information, track customer and prospect activity from online sales and
marketing activities and perform analysis including demographic
profiling and modeling. Through the tracking and analysis tools the
Registrant's clients will have the ability to better understand and
profile customers which will help define and target future marketing
and prospecting efforts.
4. VeriPlace
The proposed VeriPlace service is intended to create and support
Internet business communities ("IBCs"). IBCs are industry specific web
exchanges or portals that provide an exchange and communications link
for buyers and sellers in a specific industry. The main purpose of the
VeriPlace service is to provide Web technology to the Registrant's
clients which will allow them to aggregate, search, organize and
distribute information within their specific industry primarily through
the integrated use of the VeriStore, VeriMark and VeriBase services.
The VeriStore, VeriMark and VeriBase services are intended to
operate in an integrated manner where a client may use one or more of
the services in conjunction with another or as stand-alone services
where the client has the need for only one of the services.
At this time the Registrant is still at the business investigation
and planning stage and has yet to acquire, license or develop the
necessary software and hardware technology to offer the products and
services that it proposes to offer. The Registrant's proposed plan of
operations has not been completed as of the date hereof and there are
no assurances that the plan will ever be implemented. The Registrant is
currently implementing a plan of operations in order to achieve this
goal (see Item 2. "Plan of Operation") and is currently seeking
qualified parties with the intent of securing a contract to access the
necessary technology. However, at this time, there can be no assurances
that the Registrant will be successful in negotiating such a contract.
Without securing the necessary technology the Registrant will not be in
a position to offer the services it is proposing.
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Number of Total Employees and Number of Full Time Employees
In addition to the Registrant's two pre-existing Officers, the
Registrant has recently hired an additional two Executive Officers who
have considerable experience within the computer industry. Mr. Richard
Cohn will fulfill the duties of Executive Vice President of the
Registrant; while Mr. Steve Zimmerman has been hired to fulfill the
role of Chief Technology Officer. Under the terms of their respective
employment agreements, Mr. Zimmerman will receive $4,000 per month in
salary and Mr. Cohn will receive $90,000 per year. In addition to his
salary, Mr Zimmerman's employment agreement grants him an option to
purchase 150,000 shares of the Registrant's common stock at a price to
be determined no later than May 1, 1999. Mr. Cohn's employment agreement
grants him an option to purchase 200,000 shares of the Registrant's
common stock at a price to be determined no later than May 1, 1999. The
Registrant intends to hire any further employees on an as needed basis.
Risks Associated with the Year 2000
The Year 2000 issue is the result of computer programs written
using two digits rather than four to define the applicable year. As a
result, date sensitive software may recognize a date using "00" as the
year 1900 rather than the year 2000. This could result in system
failures or miscalculations causing disruptions of operations,
including among others, temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
Since the Registrant has yet to acquire any technology in support
of its services, the planned acquisitions will most likely involve
hardware and software which is relatively new and therefore management
does not anticipate that it will incur significant operating expenses
or be required to invest heavily in computer systems improvements to be
Year 2000 compliant. As the Registrant makes arrangements with
significant hardware and software suppliers, the Registrant intends to
determine the extent to which the Registrant's systems may be vulnerable
should those third parties fail to address and correct their own Year
2000 issues and take measures to reduce the Registrant's exposure, such
as, finding alternative suppliers or requiring the suppliers to correct
Year 2000 compliance issues prior to the Registrant acquiring the
product. The Registrant anticipates that this will be an ongoing
process as the Registrant begins to implement its Item 2, "Plan of
Operation" through 1999. There can be no assurances that the systems of
suppliers or other companies on which the Registrant may rely on will
be converted in a timely manner and will not have a materially adverse
effect on the Registrant's systems.
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Additionally there can be no assurances that the computer systems
necessary to maintain the viability of the Internet will be Year 2000
compliant. The registrant believes that it is taking the steps
necessary regarding Year 2000 compliance issues with respect to matters
within its control. However, no assurance can be given that the
Registrant's systems will be made Year 2000 compliant in a timely
manner or that the Year 2000 problem will not have a material adverse
effect on the Registrant's business, financial condition and results of
operations.
Risk Factors.
In any business venture, there are substantial risks specific to
the particular enterprise. At a minimum, the Registrant's present and
proposed business operations will be highly speculative and subject to
the same types of risks inherent in any new or unproven venture, and
will include those types of risk factors outlined below.
1. No History of Operations and Reliance on Expertise of Certain
Persons. The Registrant has no history of operations. The management
of the Registrant and the growth of the Registrant's business depends
on certain key individuals who may not be easily replaced if they
should leave the Registrant. Persons in management have other business
interests which may result in them devoting, from time to time, some of
their time to such other interests.
2. Limited Financial Resources. The Registrant has limited or
no financial resources and, if the business is not profitable, may not
be able to raise sufficient funds to sustain, continue or expand its
business. The Registrant currently has limited revenues and relies
principally on the issuance of common shares to raise funds to finance
the business of the Registrant. There is no assurance that market
conditions will continue to permit the Registrant to raise funds if
required. The Registrant has virtually no assets and has had no
operational revenues since its inception in November 1996, nor will the
Registrant receive any revenues until it completes an acquisition of
the technology necessary to provide its proposed products and services,
at the earliest. The Registrant can provide no assurance that any
acquired technology will produce any material revenues for the
Registrant or its stockholders or that any such business will operate
on a profitable basis.
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3. Lack of Technology. Management has not finalized an
agreement to acquire the technological assets necessary to provide the
products and services it proposes. The Registrant may never acquire the
necessary technology needed to begin operations.
4. Business Competition. The business of facilitating business-
to-business e-commerce is intensely competitive and fragmented, and is
characterized by rapidly evolving technology. In addition, numerous
companies, substantially all of which have significantly greater
financial and other resources than the Registrant, are currently
engaged in business-to-business e-commerce. These companies provide a
range of e-commerce functionality and applications including, but not
limited to, EDI-based VAN; Internet store-fronts; Internet catalogues;
secure Internet payment processing; Internet transaction processing
including ordering, fulfillment, shipping, and confirmation elements;
Internet database generation and analysis; automated Internet
marketing; and vertical Internet business communities or exchanges.
The Registrant anticipates that existing competitors are likely to
expand the range and scope of their e-commerce offerings, and that new
competitors, which may include telephone companies, media companies,
and industrial companies, are likely to increasingly offer business-
to-business e-commerce applications that function similarly and compete
with those proposed by the Registrant.
5. Need for Additional Capital. In order to initiate
operations, the Registrant will have to raise additional capital for
operations through the issuance of securities or loans. There is no
assurance that the Registrant will be able to raise the additional
capital.
6. Rapid Technological Change; Need for New Products;
Introduction of Competitive Products. The market for the Registrant's
proposed services is characterized by rapidly changing technology and
frequent new product introductions. Even if the Registrant's proposed
e-commerce service gains initial acceptance, the Registrant's success
will depend on, among other things, its ability to enhance its products
and to develop and introduce new products and services that keep pace
with technological developments, respond to evolving customer
requirements and achieve continued market acceptance. There can be no
assurance that the Registrant will be able to identify, develop,
market, support or acquire new products or deploy new services
successfully, that such new products or services will gain market
acceptance, or that the Registrant will be able to respond effectively
to technological changes or product announcements by competitors. Any
failure by the Registrant to anticipate or respond adequately to
technological developments and customer requirements or any significant
delays in product development or introductions could result in a loss
of market share or revenues.
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9. Uncertainties Relating to Commercial Use of the Internet.
The Registrant's strategy is to apply its efforts to the development of
service products for use in connection with the Internet. The success
of these proposed products is dependent on the continued development
and acceptance of the Internet as a medium for the exchange of business
documents and effecting business-to-business transactions. The failure
of the Internet to be an effective channel could have a material
adverse effect on the Registrant's business and prospects. There can
be no assurance that business-to-business commerce over the Internet
will become widespread and it is not known whether this market will
develop to the extent necessary for demand for the Registrant's
proposed services to emerge and become commercially sustainable.
Changes in or insufficient availability of telecommunications services
to support the Internet also could result in slower response times
which might adversely affect customers' ability or willingness to use
the Internet as a commercial marketplace. In addition, the security
and privacy concerns of existing and potential customers, as well as
concerns related to computer viruses, may inhibit the growth of the
Internet marketplace.
10. Inadequacy of Public Market. There is no assurance that the
public market for the common shares of the Registrant will be
maintained or that the holder of common shares will be able to sell
such shares in the quantity and at the price desired by such holder.
Governmental Regulation
The Registrant's proposed services would be transmitted to its
clients over dedicated and public telephone lines. These transmissions
are governed by regulatory policies establishing charges and terms for
communications. Changes in the legislative EDI or the Internet access
industry, including regulatory or legislative changes which directly or
indirectly affect telecommunication costs or increase the likelihood of
competition from regional telephone companies or others, could have an
adverse effect on the Company's business; as could potential
governmental actions outside of the United States
Safe Harbor Provisions
Except for the description of historical facts contained herein,
this Form 10-SB contains certain forward-looking statements within the
meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995 concerning future applications of the
technologies to be acquired by the Registrant and the Registrant's
proposed services and future prospects, that involve risks and
uncertainties, including the possibility that the Registrant will: (i)
be unable to commercialize services based on its technology, (ii) ever
achieve profitable operations, or (iii) not receive additional
financing as required to support future operations, as detailed
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herein and under "Item 2, Management's Discussion and Analysis or Plan
of Operations" and from time to time in the Registrant's future filings
with the Securities and Exchange Commission and elsewhere. Such
statements are based on management's current expectations and are
subject to a number of factors and uncertainties which could cause
actual results to differ materially from those described in the
forward-looking statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Registrant has been largely inactive since its incorporation
and hence has not yet received revenues from operations, profitability
or break-even cash flow other than the one time sale of assets not in
the ordinary course of business (see "Item 7. Certain Relationships And
Related Transactions").
The Registrant has experienced losses in each fiscal period
reported on. At the end of the Registrant's 1998 fiscal year it had
$200,656 in working capital. For the fiscal 1999 year, the Registrant
does not have sufficient funds to acquire and/or develop any business
without seeking additional funds. The Registrant relies principally on
the issuance of common shares by private placements to raise funds to
finance the business of the Registrant. There is no assurance that
market conditions will continue to permit the Registrant to raise funds
if required. The Registrant may issue more common shares at prices
determined by the Board of Directors, possibly resulting in dilution of
the value of common shares, and, given there is no preemptive right to
purchase common shares, if a member does not purchase additional common
shares, the percentage share ownership of the member in the Registrant
will be reduced.
Other than the following discussion with regard the Registrant's
plans to acquire the technological assets necessary to support the
Registrant's proposed products and services, as of the date hereof, the
Registrant's plan of operations has not been completed and there are no
assurances that the plan will ever be implemented.
Management has determined that, consistent with the Registrant's
new business plan, part of its plan of operation for the next 12 month
period is to seek out the necessary technological assets to support the
proposed services to be offered by the Registrant. The initial focus by
the Registrant will be on acquiring or licensing the software
technology from an existing software company which is willing to
license their technology to the Registrant through a technology
licensing agreement. With regard to other necessary hardware assets,
such as Internet computer servers, which are necessary to support the
Registrant's proposed services and products, the Registrant's initial
focus will be on leasing these assets from an as yet unidentified
lessor. The Registrant recognizes that as a result of its limited
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financial, managerial or other resources, the number of suitable
potential software licensors and hardware lessors that may be available
to it will be limited. Until such time that management has been able to
secure the terms of appropriate licensing and leasing agreements, it is
impossible to determine the needs of the Registrant both on a financial
and personnel basis. Additionally, there can be no assurances that the
Registrant will be successful in securing any licensing or leasing
agreements.
The analysis of the above potential technology acquisition
endeavors will be undertaken by or under the supervision of the
Registrant's directors. The directors are comprised of individuals of
varying business experiences, and management will rely on their own
business judgment in formulating decisions as to the types of
technology which the Registrant may acquire or in which the Registrant
may participate. It is quite possible that management will not have any
specific business experience or expertise in the type of technology
engaged in by a company which may be investigated by the Registrant.
In analyzing prospective software licensors and hardware lessors,
Management will consider such factors as available technical, financial
and managerial resources; experience of management services which may
be available and the depth of that management; the potential for
further research and development; risk factors; trade or service marks;
its name identification; and other relevant factors.
As part of the Registrant's investigation of software licensing
and hardware leasing agreements, management expects that it will meet
personally with the management and personnel of the software licensors
and hardware lessors, obtain independent analysis or verification of
certain information provided, check references of the target's
management and key personnel, and conduct other reasonable measures, to
the extent that the Registrant's limited resources and management's
technical expertise, if any, permit. Generally, the Registrant will
analyze all available information and make a determination based upon
a composite of available facts, without reliance upon a single factor
as controlling.
ITEM 3. DESCRIPTION OF PROPERTIES
The Registrant does not currently own any real property. The
Registrant's executive office is located at Suite 1500, 50 California
Street, San Francisco, California 94111. The rental space is provided
by a corporate support services firm under a month to month rental
agreement at a rate of $125 per month. The rental agreement may be
terminated by the Registrant on 30 days notice.
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ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The Registrant's securities are recorded on the books of its
transfer agent in registered form. However, a majority of such shares
are registered in the name of intermediaries such as brokerage houses
and clearing houses on behalf of their respective clients and the
Registrant does not have knowledge of the beneficial owners thereof.
The Registrant is not directly or indirectly owned or controlled by a
corporation or foreign government.
As of March 12, 1999, the Registrant had an authorized share
capital of 100,000,000 common shares with a par value of $0.00001 per
share of which 8,887,000 shares were issued and outstanding.
The following table sets forth, as of March 12, 1999, the
beneficial shareholdings of persons or entities holding five per cent
or more of the Registrant's common stock, each director individually,
each named executive officer and all directors and officers of the
Registrant as a group. Each person has sole voting and investment power
with respect to the shares of Common Stock shown, and all ownership is
of record and beneficial.
Amount and
Nature of
Name and Address Beneficial Percent
of Beneficial Owner Owner Position of Class
Michael Hinshaw 2,000,000 President, Chief 22.50%
San Fransisco, CA Executive Officer and
a member of the
Board of Directors
Richard Cohn[1] 0 Executive Vice 0.00%
San Francisco, CA President
Steve Zimmerman[2] 0 Chief Technology 0.00%
San Francisco, CA Officer
Officer
Mark Katsumata 0 Secretary/Treasurer 0.00%
Vancouver, BC and Chief Financial
Canada Officer
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Bernhard Zinkhofer 200,000 Director 2.25%
Vancouver, BC
Canada
Peter Rantucci 0 Director 0.00%
Vancouver, BC
Canada
All officers and
directors as a group.
(6 persons) 2,200,000 24.75%
Alex Guidi 3,026,000 34.05%
Vancouver, BC
Canada
Brad Holland 784,500 8.83%
Dhahran, Saudi Arabia
Peter & Tanya Loretto[3] 699,500 7.87%
Vancouver, BC
Canada
Jack & Zena Loretto[4] 519,500 5.85%
Vancouver, BC
Canada
Tracy Godoy 547,000 6.16%
Vancouver, BC
Canada
[1] Within his employment agreement with the Registrant, Mr. Cohn has
been granted the option to purchase 200,000 shares of the Common
Stock of the Registrant at a price to be determined no later than
May 1, 1999.
[2] Within this employment agreement with the Registrant, Mr.
Zimmerman has been granted the option to purchase 150,000 shares
of the Common Stock of the Registrant at a price to be determined
no later than May 1, 1999.
[3] Of the 669,500 shares in total, Mr. Peter Loretto owns 598,000
shares while his spouse, Tanya Loretto is the beneficial owner of
101,500 shares
[4] Of the 519,500 shares in total, Mr. Jack Loretto is the beneficial
owner of 200,000 shares while his spouse, Zena Loretto is the
owner of 319,500 shares.
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No arrangements exist which may result in a change in control of
the Registrant.
Other than the options granted to Mr. Cohn and Mr. Zimmerman in
April 1999, as further disclosed under the section entitled Item 1
"Number of Total Employees and Number of Full Time Employees", the
Registrant has not granted any other stock options or stock
appreciation rights to any other individuals as of the date hereof.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS
The name, age and position held by each of the directors and
officers of the Registrant are as follows:
Name Age Position Held
Michael Hinshaw 37 President, Chief Executive Officer &
Director
Bernhard Zinkhofer 43 Director
Peter Rantucci 29 Director
Richard Cohn 46 Executive Vice President
Steve Zimmerman 34 Chief Technology Officer
Mark Katsumata 33 Secretary, Treasurer and Chief Financial
Officer
All directors have a term of office expiring at the next annual
general meeting of the Registrant, unless re-elected or earlier vacated
in accordance with the bylaws of the Registrant. All officers have a
term of office lasting until their removal or replacement by the board
of directors.
Michael Hinshaw - President, Chief Executive Officer and member of the
Board of Directors.
Mr. Michael Hinshaw was elected to the position of President,
Chief Executive Officer and member of the Board of Directors on
February 4, 1999. Mr. Hinshaw attended the University of San Francisco
and the Academy of Art College in San Francisco, receiving a Bachelor
of Arts in 1985 and a Masters of Fine Arts in Graphic Design from the
Academy in 1988. As President and CEO of Verida Internet Corp., Mr.
Hinshaw brings 15 years of strategic creative, marketing and management
experience to his post.
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In 1985 Mr. Hinshaw co-founded an advertising and corporate design
firm Hinshaw, Young & Partners in San Francisco. While there he
developed advertising, direct mail, marketing and branding programs for
several high-technology and financial service corporations including
Apple Computer, Wells Fargo Bank, GTE and Hitachi Data Systems. In
1989, Mr. Hinshaw cofounded Resource Net, a San Francisco based company
which enabled ad agencies and design firms to share management and
marketing knowledge and resources using the technology of the Internet
through an extensive corporate intranet and extranet. In 1994, Mr.
Hinshaw joined the San Francisco based Triad Inc., a marketing and
communications company, to pursue the hands-on creation of effective
branding, advertising and design. As Co-Creative Director and Vice
President of the firm, he drove both traditional and Internet based
marketing and business programs for clients including Wells Fargo,
Novell, Apple Computer and Household Credit Services. Mr. Hinshaw
became President of Triad Inc. in 1997.
Bernhard Zinkhofer - Member of the Board of Directors.
Mr. Bernhard Zinkhofer has been a member of the Board of Directors
since February 4, 1999. Mr. Zinkhofer obtained a Bachelor of Commerce
Degree from the University of Calgary in 1977, became a member of the
Canadian Institute of Chartered Accountants in 1980 after articling
with a predecessor of KPMG Peat Marwick Thorne and obtained a Bachelor
of Law Degree from the University of Victoria in 1983. From 1983 to
1990, Mr. Zinkhofer practiced law with Sobolewski & Anfield, a law firm
in Vancouver, British Columbia, in the corporate and securities areas.
In 1990 Mr. Zinkhofer became an associate of, and in 1991 a partner of,
the firm of Lang Michener Lawrence & Shaw of Vancouver, B.C. and
Toronto, Ontario. Mr. Zinkhofer continues to be a partner in Lang
Michener Lawrence & Shaw of Vancouver to this day. Mr. Zinkhofer is
also a director of Trans-Orient Petroleum Ltd., Durum Cons. Energy
Corp., W.M. Helijet Airways Inc., Strategic Technologies Inc. and Foran
Mining Corporation.
Peter Rantucci - Member of the Board of Directors.
Mr. Peter Rantucci has been a member of the board of directors
since January 28, 1999. Mr. Rantucci received a Bachelor of Commerce
Degree (Honors) from the University of British Columbia in 1992 and a
Bachelor of Law Degree from the University of Manitoba in 1996. Mr.
Rantucci began his articles in July 1996 with a large law firm situated
in Calgary, Alberta called Milner Fenerty where he continued to
practice commercial and tax law until his departure in January 1998.
Since January 1998 until present Mr. Rantucci has been acting as
executive and legal administrator for Indo-Pacific Energy Ltd.
<PAGE> 16
Richard G. Cohn - Executive Vice President.
Mr. Richard G. Cohn serves as Executive Vice President for the
Registrant. Mr. Cohn holds a Bachelor of Arts from the University of
Pennsylvania and a J.D. from Emory University. Mr. Cohn brings more
than twenty years of diverse communications experience to the
Registrant. From 1995 to 1998 Mr. Cohn was Vice President,
Communications Technology/Employee Communications, with Charles Schwab
& Co. in San Francisco, California. At Charles Schwab & Co., Mr. Cohn
spearheaded efforts to align a geographically dispersed work force
through Web technology. He also directed a national series of town hall
meetings featuring CEO Charles Schwab launching the company's new
strategic direction. From 1992 to 1995, Mr. Cohn was the Manager of
Employee Communications with Sun Microsystems, at their Mountain View
California office. While at Sun Microsystems Inc., Mr. Cohn helped
pioneer online communications tools such as desktop video-on-demand and
Web-based audio programming. He also directed global sensing efforts
and managed communications campaigns around the world for Sun
Microsystems Inc. Prior to his technology experience, Mr. Cohn served
as a Senior Attorney for the Department of Energy in both Washington
and San Francisco from 1980 to 1984 and has worked as a Legislative
Assistant to the U.S. House of Representatives in Washington, D.C. from
1977 to 1978.
Steven Zimmerman - Chief Technology Officer
Mr. Steven Zimmerman serves as Chief Technology Officer for the
Registrant. He holds a Bachelor of Arts in economics from the
University of Virginia and a Masters of Business Administration from
San Francisco State University. Mr. Zimmerman brings over 13 years of
technology leadership experience to the Registrant. From 1986 to 1994
Mr. Zimmerman served as Vice President and MIS director for Barclay &
Company, Inc. In 1996 Mr. Zimmerman co-founded NetOpus Incorporated,
an Internet hosting and development company. As President of NetOpus
Incorporated, Mr. Zimmerman oversaw the design, development and
implementation of Internet-based e-commerce solutions, with an
emphasis on transaction processing, security, and database
integration. While there, he also developed the Sales Associate
System, a line of web based applications that enable companies to
sell their products and services securely over the Internet.
Mark Katsumata - Secretary/Treasurer and Chief Financial Officer
Mr. Mark Katsumata has been the Corporate Secretary, Treasurer and
Chief Financial Officer of the Registrant since June 1998. Mr.
Katsumata is a certified general accountant who was in public practice
from 1990 to 1994 with De Visser & Company in Vancouver, B.C. On
October 1994 Mr. Katsumata joined Indo-Pacific Energy Ltd. and
presently continues to occupy the position of Secretary, Treasurer and
Chief Financial Officer. Mr. Katsumata is also the Secretary, Treasurer
and Chief Financial Officer of Trans-Orient Petroleum Ltd.
<PAGE> 17
None of the individuals listed above are subject to any
anticipated or threatened legal proceedings of a material nature.
ITEM 6. EXECUTIVE COMPENSATION
Directors and Officers of the Registrant, both past and present,
have received the following compensation:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted Securities
Name and Annual Stock Underlying LTIP All
Other
Principal Compen- Options/ Compen-
Position Year Salary Bonus sation Award(s) SARs Payouts sation
($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alex Guidi, 1998 18,000
President 1997
1996
Michael 1998
Hinshaw 1997
President 1996
& CEO
John Holland 1998
Secretary 1997
1996
Ronald 1998
Bertuzzi 1997
Vice 1996
President
Richard Cohn 1998
Executive 1997
Vice 1996
President
Steven
Zimmerman 1998
Chief 1997
Technology 1996
Officer
Mark
Katsumata 1998
Secretary, 1997
Treasurer & 1996
Chief Financial
Officer
</TABLE>
Other than the options granted to Mr. Cohn and Mr. Zimmerman in
April 1999, as further disclosed under the section entitled Item 1
"Number of Total Employees and Number of Full Time Employees", as of
the date hereof, the Registrant has not granted any other stock options
or stock appreciation rights to its officers or directors since its
inception on November 1, 1996.
<PAGE> 18
The Registrant does not have any long-term incentive plans to its
officers and directors during the 1998 fiscal year.
There are no standard or other arrangements pursuant to which the
Registrant's directors were compensated in their capacity as such during
the 1998 fiscal year.
There are no compensation arrangements for employment, termination
of employment or change-in-control between the Registrant and the Named
Executive Officers.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Share Acquisitions of Associated Company.
During the 1998 fiscal year, the Registrant acquired within the
public market at prevailing prices a total of 59,800 common shares of
Trans-Orient Petroleum Ltd. ("Trans-Orient") at a total cost of
$174,930. The 59,800 shares of Trans-Orient were subsequently sold on
the market at the prevailing market price on January 27, 1999 for total
net proceeds of $81,972.25. Alex Guidi is the former President and a
former member of the board of directors of the Registrant. Mr. Guidi
is also the Chairman of the Board and a member of the board of
directors of Trans-Orient. Mr. Bernhard Zinkhofer is a member of the
board of directors of the Registrant and is also a member of the board
of directors of Trans-Orient. Mark Katsumata is the Secretary and
Treasurer of the Registrant. Mr. Katsumata is also the corporate
secretary of Trans-Orient.
Transactions with Promoters.
Since the Registrant's incorporation until present, Alex Guidi has
been the promoter of the Registrant. During the 1998 fiscal year,
consulting fees of $18,000 were paid to Pacific Reach Management Ltd.,
a private company wholly-owned by Mr. Guidi. During the 1997 fiscal
year, the Registrant issued, pursuant to Regulation S of the 1933
Securities Act, 3,000,000 common of its common stock to International
Resource Management Corporation (formerly 437577 B.C. Ltd.) a private
company wholly owned by Mr. Guidi. On February 3, 1999, Mr. Guidi
signed, in his capacity as the sole shareholder, director and officer
of International Resource Management Corporation, an agreement with the
Registrant which cancelled, in its entirety, the 3,000,000 common
shares issued by the Registrant to International Resource Management
Corporation.
ITEM 8. LEGAL PROCEEDINGS
There are no material legal proceedings to which the Registrant is
subject to or which are anticipated or threatened.
<PAGE> 19
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND OTHER SHAREHOLDER MATTERS
The Registrant's shares traded on the Bulletin Board under the
trading symbol "APCE" until March 10, 1999. On March 11, 1999 the
Registrant's shares began trading on the Bulletin Board under the symbol
"VERY". Summary trading by quarter for the 1998 and 1997 fiscal years
are as follows:
Fiscal Quarter High Bid(1) Low Bid(1)
1998
First Quarter .562 .032
Second Quarter .875 .033
Third Quarter .875 .1
Fourth Quarter .6875 .1
1997
First Quarter .375 .25
Second Quarter .25 .1875
Third Quarter .25 .1875
Fourth Quarter .4375 .1875
Note:
(1) These quotations reflect inter-dealer prices, without retail mark-
up, mark-down or commission and may not represent actual
transactions.
At March 29, 1999, there were 8,887,000 common shares of the
Registrant issued and outstanding.
March 29, 1999, there were 28 holders of record including common
shares held by brokerage clearing houses, depositories or otherwise in
unregistered form. The beneficial owners of such shares are not known
by the Registrant.
No cash dividends have been declared by the Registrant nor are any
intended to be declared. The Registrant is not subject to any legal
restrictions respecting the payment of dividends, except that they may
not be paid to render the Registrant insolvent. Dividend policy will
be based on the Registrant's cash resources and needs and it is
anticipated that all available cash will be needed for property
acquisition, exploration and development for the foreseeable future.
<PAGE> 20
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
The Registrant was incorporated in November 1996. In the past
three fiscal years, the Registrant has issued the following
unregistered securities at the following prices. There were no
underwriters engaged and no underwriting discounts or commissions paid.
All issues were made pursuant to exemptions from registration contained
in Regulation D, Rule 504, Regulation S, Rules 901-905 and Section 4(2)
of the 1933 Securities Act.
Date Type of Security Number Proceeds Exemption
1996
12/12/96 Common Shares 1,000,000 $ 10,000 Reg. D (504)
12/12/96 Common Shares 1,000,000 $100,000 Reg. D (504)
1997
08/11/97 Common shares 3,000,000 $ 30,000 Reg. S (901-904)[1]
12/18/97 Common Shares 1,600,000 $ 48,000 Reg. D (504)
1998
04/21/98 Common Shares 1,967,000 $ 59,010 Reg. D (504)
1999
02/01/99 Common Shares 800,000 $ 24,000 Reg. D (504)
02/08/99 Common Shares 1,000,000 $ 1,000 Section 4(2)
02/08/99 Common Shares 1,120,000 $ 33,600 Reg. D (504)
02/08/99 Common Shares 100,000 $ 100 Reg. S (901-905)
02/17/99 Common Shares 300,000 $ 75,000 Reg. D (504)
[1] Cancellation of Shares.
During the 1997 fiscal year, the Registrant issued, pursuant to
Regulation S of the 1933 Securities Act, 3,000,000 common shares to
International Resource Management Corporation (then 437577 B.C. Ltd.),
a private company wholly owned by Alex Guidi. On February 3, 1999, Mr.
Guidi signed, in his capacity as the sole shareholder, director and
officer of to International Resource Management Corporation an
agreement with the Registrant which cancelled, in its entirety, the
3,000,000 common shares issued by the Registrant to International
Resource Management Corporation.
<PAGE> 21
ITEM 11. DESCRIPTION OF SECURITIES.
The Registrant's securities consist of common stock with a par
value of $0.00001 per share. The Registrant's authorized capital is
100,000,000 common shares of which 8,887,000 common shares are issued
and outstanding. All of the Registrant's common stock, both issued and
unissued, is of the same class and ranks equally as to dividends,
voting powers and participation in the assets of the Registrant on a
winding-up or dissolution. No common shares have been issued subject
to call or assessment. Each common share is entitled to one vote with
respect to the election of directors and other matters. The shares of
common stock do not have cumulative voting rights. Therefore, the
holders of a majority of shares voting for the election of directors
can elect all the directors then standing for election, if they chose
to do so, and in such event the holders of the remaining shares will
not be able to elect any directors.
The common shares have no preemptive or conversion rights, and no
provisions for redemption, purchase for cancellation, surrender of
sinking fund or purchase fund. Provisions as to the creation or
modifications, amendments or variations of such rights or such
provisions are contained in the Private Corporations Act, Chapter 78,
Nevada Revised Statutes.
Neither the Articles of Incorporation nor the Bylaws of the
Registrant contain provisions which would delay, defer or prevent a
change in control of the Registrant.
The Registrant's transfer agent is American Securities Transfer &
Trust, Inc. 938 Quail Street, Suite 101, Lakewood, Co 80215, telephone
(303) 234-5300, facsimile (303) 234-5340.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The constating documents of the Registrant provide that the
Registrant shall indemnify any director, officer, employee or agent of
the Registrant to the full extent permitted by the laws of the State of
Nevada. Chapter 78, rules 78.7502, 78.751 and 78.752 of the Nevada
Revised Statutes contain the provisions which, subject to certain
restrictions, in general provide for the Registrant's ability to
indemnify, and thereby limit the personal liability of, the directors
and officers of the Registrant against certain liabilities. Officers
and directors of the Registrant are indemnified generally against
expenses, actually and reasonably, incurred in connection with
proceedings, whether civil or criminal, provided that it is determined
that they acted in good faith, were not found guilty and, in any
criminal matter, had reasonable cause to believe their conduct was not
unlawful.
<PAGE> 22
ITEM 13. FINANCIAL STATEMENTS.
Jorgensen Telford Sadovnick, P.L.L.C.
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of Austral Pacific Energy
Corp.
We have audited the accompanying balance sheets of Austral Pacific
Energy Corp. as of December 31, 1998 and 1997 and the related
statements of loss and comprehensive loss, changes in stockholders'
equity and cash flows for the years ended December 31, 1998 and 1997
and for the period from November 1, 1996 (inception) to December 31,
1998. 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. Those standards require that we plan and perform
the audit 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, the financial statements referred to above present
fairly, in all material respects, the financial position of Austral
Pacific Energy Corp. as of December 31, 1998 and 1997 and the results
of its operations and its cash flows for the years ended December 31,
1998 and 1997 and for the period from November 1, 1996 (inception) to
December 31, 1998 in conformity with generally accepted accounting
principles.
/s/ Jorgensen Telford Sadovnick, P.L.L.C.
CERTIFIED PUBLIC ACCOUNTANTS
Seattle, Washington
February 9, 1999
F-1
<PAGE> 23
AUSTRAL PACIFIC ENERGY CORP.
(A Development Stage Enterprise)
Balance Sheets
<TABLE>
<CAPTION>
As of December 31, 1998 1997
<S> <C> <C>
Assets
Current
Cash and short-term deposits $ 21,178 $ 153,670
Subscriptions receivable (Note 8) 133,700 -
Marketable securities (Note 3) 80,356 -
---------- ---------
Total Assets $ 235,234 $ 153,670
========== =========
Liabilities
Current
Accounts payable and
accrued liabilities $ 4,578 $ 2,000
Loan payable to related party (Note 6) 30,000 30,000
---------- ---------
Total Liabilities 34,578 32,000
---------- ---------
Stockholders' Equity
Common stock, $0.00001 par value;
100,000,000 shares authorized
(1998: 8,887,000 shares issued
and outstanding) (1997: 3,600,000
shares issued and outstanding) 89 36
Additional paid-in capital 340,621 147,964
Deficit accumulated during
the development stage (45,480) (26,330)
Cumulative comprehensive adjustment (94,574) -
---------- ---------
Total Stockholders' Equity 200,656 121,670
---------- ---------
Total Liabilities and
Stockholders' Equity $ 235,234 $ 153,670
========== =========
</TABLE>
F-2
<PAGE> 24
AUSTRAL PACIFIC ENERGY CORP.
(A Development Stage Enterprise)
Statements of Loss and Comprehensive Loss
<TABLE>
<CAPTION>
November
1, 1996
Year Ended Year Ended (inception) to
December 31, December 31, December 31,
1998 1997 1998
<S> <C> <C> <C>
Revenues
Interest income $ 3,491 $ 1,986 $ 5,477
---------- --------- ----------
Expenses
General and
administrative 22,641 21,547 50,957
---------- --------- ----------
Net loss for the period (19,150) (19,561) (45,480)
Unrealized loss on
marketable securities (94,574) - (94,574)
---------- --------- ----------
Comprehensive loss
for the period $ (113,724) $ (19,561) $ (140,054)
========== ========= ==========
Basic and diluted
loss per share $ (0.00) $ (0.01) $ (0.03)
========== ========= ==========
</TABLE>
F-3
<PAGE> 25
AUSTRAL PACIFIC ENERGY CORP.
(A Development Stage Enterprise)
Statements of Cash Flows
<TABLE>
<CAPTION>
November
1, 1996
Year Ended Year Ended (inception) to
December 31, December 31, to December 31,
1998 1997 1998
<S> <C> <C> <C>
Operating Activities
Net loss for the period $ (113,724) $ (19,561) $ (140,054)
Changes in non-cash
working capital:
Accounts payable and
accrued liabilities 2,578 1,082 4,578
Unrealized loss on
marketable securities 94,574 - (80,356)
---------- --------- ----------
Net cash used in operating
activities (16,572) (18,479) (215,832)
---------- --------- ----------
Financing Activities
Loan from related party,
net - 20,000 30,000
Common shares issued
for cash 59,010 48,000 217,010
Cost of common stock
offering - - (10,000)
---------- --------- ----------
Net cash provided by
financing activities 59,010 68,000 237,010
---------- --------- ----------
Investing Activities
Purchase of marketable
securities (174,930) - -
---------- --------- ----------
Net cash used in
investing activities (174,930) - -
---------- --------- ----------
Net increase (decrease)
in cash (132,492) 49,521 21,178
Cash position -
Beginning of period 153,670 104,149 -
---------- --------- ----------
Cash position -
End of period $ 21,178 $ 153,670 $ 21,178
========== ========= ==========
</TABLE>
F-4
<PAGE> 26
AUSTRAL PACIFIC ENERGY CORP.
(A Development Stage Enterprise)
Statements of Changes in Stockholders' Equity
For the periods ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
Premium
Paid on
Common Stock Common
Shares Amount Stock
<S> <C> <C> <C>
Balance at inception on
November 1, 1996 - $ - $ -
Common stock issued for cash
at $0.01 and $0.10 per share 2,000,000 20 109,980
Cost of common stock offering - (10,000)
Net loss during the period
--------- ----- ---------
Balance at December 31, 1996 2,000,000 20 99,980
Common stock issued for cash
at $0.03 per share (Note 6) 1,600,000 16 47,984
Net loss during the year
--------- ----- ---------
Balance at December 31, 1997 3,600,000 36 147,964
Common stock issued for
cash at $0.03 per share 1,967,000 20 58,990
Common stock issued for
cash at $0.001, $0.03 and
$0.25 per share (Note 8) 3,320,000 33 133,667
Net loss during the year
Unrealized loss on
marketable securities
--------- ----- ---------
Balance at December 31, 1998 8,887,000 $ 89 $ 340,621
========= ===== =========
</TABLE>
F-5a
<PAGE> 27
AUSTRAL PACIFIC ENERGY CORP.
(A Development Stage Enterprise)
Statements of Changes in Stockholders' Equity
For the periods ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
Deficit
Accumulated
during the Cumulative Total
Development Comprehensive Stockholders
Stage Adjustment Equity
<S> <C> <C> <C>
Balance at inception on
November 1, 1996 $ - $ - $ -
Common stock issued for cash
at $0.01 and $0.10 per share 110,000
Cost of common stock offering (10,000)
Net loss during the period (6,769) (6,769)
--------- --------- ---------
Balance at December 31, 1996 (6,769) - 93,231
Common stock issued for cash
at $0.03 per share (Note 6) 48,000
Net loss during the year (19,561) (19,561)
--------- --------- ---------
Balance at December 31, 1997 (26,330) - 121,670
Common stock issued for
cash at $0.03 per share 59,010
Common stock issued for
cash at $0.001, $0.03 and
$0.25 per share (Note 8) 133,700
Net loss during the year (19,150) (19,150)
Unrealized loss on
marketable securities (94,574) (94,574)
--------- --------- ---------
Balance at December 31, 1998 $ (45,480) $ (94,574) $ 200,656
========= ========= =========
</TABLE>
F-5b
<PAGE> 28
AUSTRAL PACIFIC ENERGY CORP.
(A Development Stage Enterprise)
Notes to the Financial Statements
For the Period from November 1, 1996 (Inception) to December 31, 1998
NOTE 1 - NATURE OF OPERATIONS
The Company was incorporated under the laws of the State of Nevada on
November 1, 1996. The Company is in the development stage and has been
relatively inactive since its inception.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Accounting Principles and Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the fiscal year. Actual results may differ from
those estimates.
b) Translation of Foreign Currencies
Revenues and expenses arising from foreign currency transactions are
translated into United States dollars at the average rate for the
period. Monetary assets and liabilities are translated into United
States dollars at the rates prevailing at the balance sheet date.
Other assets and liabilities are translated into United States dollars
at the rates prevailing on the transaction dates. Exchange gains and
losses are recorded as income or expense in the period in which they
occur.
c) Financial Instruments and Financial Risk
The Company's financial instruments consist of current assets and
current liabilities. The fair values of the current assets and
liabilities approximate the carrying amounts due to the short-term
nature of these instruments.
d) Accounting Pronouncements Recently Issued
The Financial Accounting Standards Board ("FASB") issued Statement of
Financial Accounting Standards No. 128: Earnings per Share ("SFAS
128"), effective for fiscal periods ending after December 15, 1997 and
requiring restatement of all prior period earnings per share data.
SFAS 128 replaces the presentation of primary earnings per share
("EPS") with a presentation of both basic and diluted EPS for all
entities with complex capital structures. Basic EPS excludes dilutive
securities and is computed by dividing income available to common
shareholders by the weighted average number of common shares
outstanding for the period. Diluted EPS reflects the potential
dilution that could occur if dilutive securities were converted into
common shares and is computed similarly to fully diluted EPS pursuant
to previous accounting pronouncements. SFAS 128 applies equally to
loss per share presentations.
F-6
<PAGE> 29
AUSTRAL PACIFIC ENERGY CORP.
(A Development Stage Enterprise)
Notes to the Financial Statements
For the Period from November 1, 1996 (Inception) to December 31, 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The FASB issued Statement of Financial Accounting Standards No. 130:
Reporting Comprehensive Income ("SFAS 130"), effective for fiscal
periods beginning after December 15, 1997 and requiring restatement of
all comparative financial statements disclosed. SFAS 130 requires that
all items required to be recognized under accounting standards as
components of comprehensive income be reported as part of the basic
financial statements. The Company does not expect adoption of this new
standard to have a material effect on its financial reporting.
e) Cash and Short-term Deposits
Cash and short-term deposits include government treasury bills and
bankers' acceptances with maturities no longer than 90 days, together
with accrued interest.
NOTE 3 - MARKETABLE SECURITIES
Marketable securities are comprised of 59,800 (1997 - Nil) shares of
Trans-Orient Petroleum Ltd., which were acquired at a cost of $174,930.
At December 31, 1998, the market value of these shares is $80,356 (1997
- - Nil). These securities are classified as trading securities and are
reported at market value, with unrealized gains and losses included in
earnings.
Trans-Orient Petroleum Ltd. is a public company related by an
individual who is a common director, officer and principal shareholder.
Refer to Note 6
NOTE 4 - COMMON STOCK
Stock Options and Share Purchase Warrants
There were no stock options granted or share purchase warrants issued
during the 1998 and 1997 fiscal years. No stock options or share
purchase warrants were outstanding at December 31, 1998.
NOTE 5 - LOSS PER SHARE
Net loss per common share is computed based on the weighted-average
number of common shares and common share equivalents outstanding.
There were no dilutive securities outstanding for the periods
presented. No differences existed between basic and diluted loss per
share for the periods presented. The weighted-average number of shares
outstanding after giving retroactive effect to share transactions are
8,294,205 for the 1998 fiscal year and 2,061,370 for the 1997 fiscal
year.
Refer to Note 8
F-7
<PAGE> 30
AUSTRAL PACIFIC ENERGY CORP.
(A Development Stage Enterprise)
Notes to the Financial Statements
For the Period from November 1, 1996 (Inception) to December 31, 1998
NOTE 6 - RELATED PARTY TRANSACTIONS
During the 1998 fiscal year, the Company paid $18,000 (1997 - $ Nil) in
consulting fees to a private company wholly-owned by the President of
the Company.
During the 1998 fiscal year, the Company purchased 59,800 common shares
of Trans-Orient Petroleum Ltd., a public company related by an
individual who is a common director, officer and principal shareholder.
Refer to note 3
During the 1997 fiscal year, the Company repaid a $10,000 loan to a
shareholder of the Company.
During the 1997 fiscal year, the Company issued 3,000,000 shares for
total cash proceeds of $30,000 to a private company wholly-owned by the
President of the Company. This private placement was rescinded by
mutual agreement on February 3, 1999. Refer to Note 8
NOTE 7 - INCOME TAXES
There are no income taxes payable by the Company at December 31, 1998.
NOTE 8 - SUBSEQUENT EVENTS
The following material events have occurred subsequent to the year-end:
a) Private Placements
Subsequent to the 1998 fiscal year, the Company issued a total of
3,320,000 shares pursuant to private placements for total cash proceeds
of $133,700. Additionally, 3,000,000 shares previously issued in the
1997 fiscal year under a private placement for total cash proceeds of
$30,000 were cancelled in its entirety. Since these transactions
affect the Company's permanent capital, the financial statements have
been prepared giving retroactive effect to these transactions. The
3,000,000 shares issued in the 1997 fiscal year and cancelled
subsequent to the 1998 fiscal year are not shown as issued. The
3,320,000 shares which were issued in February 1999 are shown as if
they had been outstanding for all of the 1998 fiscal year.
b) Sale of Marketable Securities
Subsequent to the 1998 fiscal year, the Company sold 59,800 shares of
Trans-Orient Petroleum Ltd. for cash proceeds of $81,972, net of
commissions, resulting in a gain of $1,616.
F-8
<PAGE> 31
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Registrant's former independent auditor, Terrence J. Dunne,
Certified Public Accountant was dismissed by the Registrant on February
11,1999. The former auditor expressed an unqualified opinion on the
financial statements of the Registrant for the period ended December
31, 1996.
The decision to change auditors was approved by the Registrant's
board of directors. The board of directors decided to dismiss Mr. Dunne
due to the belief that Mr. Dunne would not be able to consistently meet
the time requirements for the preparation of the Registrant's financial
statements. There were no disagreements with the former auditor on any
audit or accounting issues.
The Registrant engaged the firm of Jorgensen Telford Sadovnick,
PLLC, Certified Public Accountants, as its new auditor, on February 9,
1999.
ITEM 15. INDEX TO EXHIBITS
The following exhibits required by Item 601 of Regulation S-B are
filed herewith:
Exhibit
Number Description
3.1 Initial Articles of Incorporation, as filed November 1,
1996
3.2 Bylaws
3.3 Articles of Amendment to the Articles of Incorporation,
as filed on November 8, 1996
3.4 Articles of Amendment to the Articles of Incorporation,
as filed on March 11, 1999
23.1 Consent of Jorgensen Telford Sadovnickk, PLLC
27.1 Financial Data Schedule
99.1 Cohn Employment Agreement
99.2 Zimmerman Employment Agreement
<PAGE> 32
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the Registrant has caused this signature page to be signed on its
behalf by the undersigned, thereunto duly authorized.
VERIDA INTERNET CORP.
Name Title Date
/s/ Michael Hinshaw President, Chief Executive April 7, 1999
Michael Hinshaw Officer and member of the
Board of Directors
/s/ Peter Rantucci Director April 7, 1999
Peter Rantucci
/s/ Bernhard Zinkhofer Director April 7, 1999
Bernhard Zinkhofer
/s/ Mark Katsumata Secretary, Treasurer April 7, 1999
Mark Katsumata and Chief Financial
Officer
<PAGE> 33
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
AUSTRAL PACIFIC ENERGY CORPORATION
* * * * *
FIRST
The name of the corporation is AUSTRAL PACIFIC ENERGY
CORPORATION.
SECOND
Its principal office in the state of Nevada is located at 1
East First Street, Reno, Nevada 89501. The name and address of its
resident agent is The Corporate Trust Company of Nevada, 1 East First
Street, Reno, Nevada 89501.
THIRD
The purpose or purposes for which the corporation is
organized:
To engage in and carry on any lawful business
activity or trade, and to engage in the business of oil and
gas exploration, production, marketing, selling, leasing and
refining.
FOURTH
The amount of the total authorized capital stock of the
corporation is One Thousand Dollars ($1,000.00) consisting of One
Hundred Million (100,000,000) shares of common stock of the par value
of $0.00001 each.
FIFTH
The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be
increased or decreased in such manner as shall be provided by the
bylaws of this corporation.
There will be two initial members of the Board of Directors
and their names and addresses are:
NAME POST-OFFICE ADDRESS
Alex P. Guidi 3516 Athalmer Road
Kelowna, British Columbia V1Y 9M8
John B. Holland 816-235 Keith Road Street
West Vancouver, British Columbia V7T 1L5
<PAGE> 34
Ronald L. Bertuzzi 4489 Angus Drive
Vancouver, British Columbia V6J 4J2
The number of members of the Board of Directors shall not be
less than three nor more than thirteen.
SIXTH
The capital stock, after the amount of the subscription
price, or par value, has been paid in shall not be subject to
assessment to pay the debts of the corporation.
SEVENTH
The name and addresses of each of the incorporators signing
the Articles of Incorporation are as follows:
NAME POST-OFFICE ADDRESS
Conrad C. Lysiak 601 West First Avenue
Suite 503
Spokane, Washington 99204
EIGHTH
The corporation is to have perpetual existence.
NINTH
In furtherance, and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized:
Subject to the bylaws, if any, adopted by the stockholders,
to make, alter or amend the bylaws of the corporation.
To fix the amount to be reserved as working capital over and
above its capital stock paid in, to authorize and cause to be executed
mortgages and liens upon the real and personal property of this
corporation.
By resolution passed by a majority of the whole board, to
designate one (1) or more committees, each committee to consist of one
(1) or more of the directors of the corporation, which, to the extent
provided in the resolution or in the bylaws of the corporation, shall
have and may exercise the powers of the board of directors in the
management of the business and affairs of the corporation, and may
authorize the seal of the corporation to be affixed to all papers which
may require it. Such committee or committees shall have such name or
names as may be stated in the bylaws of the corporation or as may be
determined from time to time by resolution adopted by the board of
directors.
<PAGE> 35
When and as authorized by the affirmative vote of
stockholders holding stock entitling them to exercise at least a
majority of the voting power given at a stockholders' meeting called
for that purpose, or when authorized by the written consent of the
holders of at least a majority of the voting stock issued and
outstanding, the board of directors shall have power and authority at
any meeting to sell, lease or exchange all of the property and assets
of the corporation, including its good will and its corporate
franchises, upon such terms and conditions as its board of directors
deem expedient and for the best interests of the corporation.
TENTH
Meeting of stockholders may be held outside the State of
Nevada, if the bylaws so provide. The books of the corporation may be
kept (subject to any provision contained in the statutes) outside the
State of Nevada at such place or places as may be designated from time
to time by the board of directors or in the bylaws of the corporation.
ELEVENTH
This corporation reserves the right to amend alter, change or
repeal any provision contained in the Articles of Incorporation, in the
manner now or hereafter prescribed by statute, or by the Articles of
Incorporation, and all rights conferred upon stockholders herein are
granted subject to this reservation.
TWELFTH
The corporation shall indemnify its officers, directors,
employees and agents to the full extent permitted by the laws of the
State of Nevada.
I, THE UNDERSIGNED, being the incorporator hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Nevada, do make and file these Articles
of Incorporation, hereby declaring and certifying that the facts herein
stated are true, and accordingly have hereunto set my hand this 30th
day of October, 1996.
/s/ Conrad C. Lysiak
CONRAD C. LYSIAK
STATE OF WASHINGTON )
)
COUNTY OF SPOKANE )
On this 30th day of October, 1996, before me, a Notary
Public, personally appeared CONRAD C. LYSIAK, who severally
acknowledged that he executed the above instrument.
/s/ Judy Terese Lysiak
Notary Public, residing in the State of
Washington, residing in Spokane.
My Commission Expires: October 8, 1998
<PAGE> 36
BYLAWS
OF
AUSTRAL PACIFIC ENERGY CORP.
I. SHAREHOLDER'S MEETING.
.01 Annual Meetings.
The annual meeting of the shareholders of this Corporation, for
the purpose of election of Directors and for such other business
as may come before it, shall be held at the registered office of
the Corporation, or such other places, either within or without
the State of Nevada, as may be designated by the notice of the
meeting, on the first week in November of each and every year, at
1:00 p.m., commencing in 1997, but in case such day shall be a
legal holiday, the meeting shall be held at the same hour and
place on the next succeeding day not a holiday.
.02 Special Meeting.
Special meetings of the shareholders of this Corporation may be
called at any time by the holders of ten percent (10%) of the
voting shares of the Corporation, or by the President, or by the
Board of Directors or a majority thereof. No business shall be
transacted at any special meeting of shareholders except as is
specified in the notice calling for said meeting. The Board of
Directors may designate any place, either within or without the
State of Nevada, as the place of any special meeting called by the
president or the Board of Directors, and special meetings called
at the request of shareholders shall be held at such place in the
State of Nevada, as may be determined by the Board of Directors
and placed in the notice of such meeting.
.03 Notice of Meeting.
Written notice of annual or special meetings of shareholders
stating the place, day, and hour of the meeting and, in the case
of a special meeting, the purpose or purposes for which the
meeting is called shall be given by the secretary or persons
authorized to call the meeting to each shareholder of record
entitled to vote at the meeting. Such notice shall be given not
less than ten (10) nor more than fifty (50) days prior to the date
of the meeting, and such notice shall be deemed to be delivered
when deposited in the United States mail addressed to the
shareholder at his/her address as it appears on the stock transfer
books of the Corporation.
.04 Waiver of Notice.
Notice of the time, place, and purpose of any meeting may be
waived in writing and will be waived by any shareholder by his/her
attendance thereat in person or by proxy. Any shareholder so
waiving shall be bound by the proceedings of any such meeting in
all respects as if due notice thereof had been given.
<PAGE> 37
.05 Quorum and Adjourned Meetings.
A majority of the outstanding shares of the Corporation entitled
to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders. A majority of the shares
represented at a meeting, even if less than a quorum, may adjourn
the meeting from time to time without further notice. At 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 notified. The
shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
.06 Proxies.
At all meetings of shareholders, a shareholder may vote by proxy
executed in writing by the shareholder or by his/her duly
authorized attorney in fact. Such proxy shall be filed with the
secretary of the Corporation before or at the time of the meeting.
No proxy shall be valid after eleven (11) months from the date of
its execution, unless otherwise provided in the proxy.
.07 Voting of Shares.
Except as otherwise provided in the Articles of Incorporation or
in these Bylaws, every shareholder of record shall have the right
at every shareholder's meeting to one (1) vote for every share
standing in his/her name on the books of the Corporation, and the
affirmative vote of a majority of the shares represented at a
meeting and entitled to vote thereat shall be necessary for the
adoption of a motion or for the determination of all questions and
business which shall come before the meeting.
II. DIRECTORS.
.01 General Powers.
The business and affairs of the Corporation shall be managed by
its Board of Directors.
.02 Number, Tenure and Qualifications.
The number of Directors of the Corporation shall be not less than
one nor more than thirteen. Each Director shall hold office until
the next annual meeting of shareholders and until his/her
successor shall have been elected and qualified. Directors need
not be residents of the State of Nevada or shareholders of the
Corporation.
.03 Election.
The Directors shall be elected by the shareholders at their annual
meeting each year; and if, for any cause the Directors shall not
have been elected at an annual meeting, they may be elected at a
<PAGE> 38
special meeting of shareholders called for that purpose in the
manner provided by these Bylaws.
.04 Vacancies.
In case of any vacancy in the Board of Directors, the remaining
Director, whether constituting a quorum or not, may elect a
successor to hold office for the unexpired portion of the terms of
the Director whose place shall be vacant, and until his/her
successor shall have been duly elected and qualified.
.05 Resignation.
Any Director may resign at any time by delivering written notice
to the secretary of the Corporation.
.06 Meetings.
At any annual, special or regular meeting of the Board of
Directors, any business may be transacted, and the Board may
exercise all of its powers. Any such annual, special or regular
meeting of the Board of Directors of the Corporation may be held
outside of the State of Nevada, and any member or members of the
Board of Directors of the Corporation may participate in any such
meeting by means of a conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other at the same time;
the participation by such means shall constitute presence in
person at such meeting.
A. Annual Meeting of Directors.
Annual meetings of the Board of Directors shall be held
immediately after the annual shareholders' meeting or at such
time and place as may be determined by the Directors. No
notice of the annual meeting of the Board of Directors shall
be necessary.
B. Special Meetings.
Special meetings of the Directors shall be called at any time
and place upon the call of the president or any Director.
Notice of the time and place of each special meeting shall be
given by the secretary, or the persons calling the meeting,
by mail, radio, telegram, or by personal communication by
telephone or otherwise at least one (1) day in advance of the
time of the meeting. The purpose of the meeting need not be
given in the notice. Notice of any special meeting may be
waived in writing or by telegram (either before or after such
meeting) and will be waived by any Director in attendance at
such meeting.
<PAGE> 39
C. Regular Meetings of Directors.
Regular meetings of the Board of Directors shall be held at
such place and on such day and hour as shall from time to
time be fixed by resolution of the Board of Directors. No
notice of regular meetings of the Board of Directors shall be
necessary.
.07 Quorum and Voting.
A majority of the Directors presently in office shall constitute
a quorum for all purposes, but a lesser number may adjourn any
meeting, and the meeting may be held as adjourned without further
notice. At each meeting of the Board at which a quorum is
present, the act of a majority of the Directors present at the
meeting shall be the act of the Board of Directors. The Directors
present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of
enough Directors to leave less than a quorum.
.08 Compensation.
By resolution of the Board of Directors, the Directors may be paid
their expenses, if any, of attendance at each meeting of the Board
of Directors and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as Director.
No such payment shall preclude any Director from serving the
Corporation in any other capacity and receiving compensation
therefor.
.09 Presumption of Assent.
A Director of the Corporation who is present at a meeting of the
Board of Directors at which action on any corporate matter is
taken shall be presumed to have assented to the action taken
unless his/her dissent shall be entered in the minutes of the
meeting or unless he/she shall file his/her written dissent to
such action with the person acting as the secretary of the meeting
before the adjournment thereof or shall forward such dissent by
registered mail to the secretary of the Corporation immediately
after the adjournment of the meeting. Such right to dissent shall
not apply to a Director who voted in favor of such action.
.10 Executive and Other Committees.
The Board of Directors, by resolution adopted by a majority of the
full Board of Directors, may designate from among its members an
executive committee and one of more other committees, each of
which, to the extent provided in such resolution, shall have and
may exercise all the authority of the Board of Directors, but no
such committee shall have the authority of the Board of Directors,
in reference to amending the Articles of Incorporation, adoption
a plan of merger or consolidation, recommending to the
shareholders the sale, lease, exchange, or other disposition of
<PAGE> 40
all of substantially all the property and assets of the
dissolution of the Corporation or a revocation thereof,
designation of any such committee and the delegation thereto of
authority shall not operate to relieve any member of the Board of
Directors of any responsibility imposed by law.
.11 Chairman of Board of Directors.
The Board of Directors may, in its discretion, elect a chairman of
the Board of Directors from its members; and, if a chairman has
been elected, he/she shall, when present, preside at all meetings
of the Board of Directors and the shareholders and shall have such
other powers as the Board may prescribe.
.12 Removal.
Directors may be removed from office with or without cause by a
vote of shareholders holding a majority of the shares entitled to
vote at an election of Directors.
III. ACTIONS BY WRITTEN CONSENT.
Any corporate action required by the Articles of Incorporation, Bylaws,
or the laws under which this Corporation is formed, to be voted upon or
approved at a duly called meeting of the Directors or shareholders may
be accomplished without a meeting if a written memorandum of the
respective Directors or shareholders, setting forth the action so
taken, shall be signed by all the Directors or shareholders, as the
case may be.
IV. OFFICERS.
.01 Officers Designated.
The Officers of the Corporation shall be a president, one or more
vice presidents (the number thereof to be determined by the Board
of Directors), a secretary and a treasurer, each of whom shall be
elected by the Board of Directors. Such other Officers and
assistant officers as may be deemed necessary may be elected or
appointed by the Board of Directors. Any Officer may be held by
the same person, except that in the event that the Corporation
shall have more than one director, the offices of president and
secretary shall be held by different persons.
.02 Election, Qualification and Term of Office.
Each of the Officers shall be elected by the Board of Directors.
None of said Officers except the president need be a Director, but
a vice president who is not a Director cannot succeed to or fill
the office of president. The Officers shall be elected by the
Board of Directors. Except as hereinafter provide, each of said
Officers shall hold office from the date of his/her election until
the next annual meeting of the Board of Directors and until
his/her successor shall have been duly elected and qualified.
<PAGE> 41
.03 Powers and Duties.
The powers and duties of the respective corporate Officers shall
be as follows:
A. President.
The president shall be the chief executive Officer of the
Corporation and, subject to the direction and control of the
Board of Directors, shall have general charge and supervision
over its property, business, and affairs. He/she shall,
unless a Chairman of the Board of Directors has been elected
and is present, preside at meetings of the shareholders and
the Board of Directors.
B. Vice President.
In the absence of the president or his/her inability to act,
the senior vice president shall act in his place and stead
and shall have all the powers and authority of the president,
except as limited by resolution of the Board of Directors.
C. Secretary.
The secretary shall:
1. Keep the minutes of the shareholder's and of the
Board of Directors meetings in one or more books
provided for that purpose;
2. See that all notices are duly given in accordance
with the provisions of these Bylaws or as required
by law;
3. Be custodian of the corporate records and of the
seal of the Corporation and affix the seal of the
Corporation to all documents as may be required;
4. Keep a register of the post office address of each
shareholder which shall be furnished to the
secretary by such shareholder;
5. Sign with the president, or a vice president,
certificates for shares of the Corporation, the
issuance of which shall have been authorized by
resolution of the Board of Directors;
6. Have general charge of the stock transfer books of
the corporation; and,
7. In general perform all duties incident to the
office of secretary and such other duties as from
time to time may be assigned to him/her by the
president or by the Board of Directors.
<PAGE> 42
D. Treasurer.
Subject to the direction and control of the Board of
Directors, the treasurer shall have the custody, control and
disposition of the funds and securities of the Corporation
and shall account for the same; and, at the expiration of
his/her term of office, he/she shall turn over to his/her
successor all property of the Corporation in his/her
possession.
E. Assistant Secretaries and Assistant Treasurers.
The assistant secretaries, when authorized by the Board of
Directors, may sign with the president or a vice president
certificates for shares of the Corporation the issuance of
which shall have been authorized by a resolution of the Board
of Directors. The assistant treasurers shall, respectively,
if required by the Board of Directors, give bonds for the
faithful discharge of their duties in such sums and with such
sureties as the Board of Directors shall determine. The
assistant secretaries and assistant treasurers, in general,
shall perform such duties as shall be assigned to them by the
secretary or the treasurer, respectively, or by the president
or the Board of Directors.
.04 Removal.
The Board of Directors shall have the right to remove any Officer
whenever in its judgment the best interest of the Corporation will
be served thereby.
.05 Vacancies.
The Board of Directors shall fill any office which becomes vacant
with a successor who shall hold office for the unexpired term and
until his/her successor shall have been duly elected and
qualified.
.06 Salaries.
The salaries of all Officers of the Corporation shall be fixed by
the Board of Directors.
V. SHARE CERTIFICATES
.01 Form and Execution of Certificates.
Certificates for shares of the Corporation shall be in such form
as is consistent with the provisions of the Corporation laws of
the State of Nevada. They shall be signed by the president and by
the secretary, and the seal of the Corporation shall be affixed
thereto. Certificates may be issued for fractional shares.
<PAGE> 43
.02 Transfers.
Shares may be transferred by delivery of the certificates
therefor, accompanied either by an assignment in writing on the
back of the certificates or by a written power of attorney to
assign and transfer the same signed by the record holder of the
certificate. Except as otherwise specifically provided in these
Bylaws, no shares shall be transferred on the books of the
Corporation until the outstanding certificate therefor has been
surrendered to the Corporation.
.03 Loss or Destruction of Certificates.
In case of loss or destruction of any certificate of shares,
another may be issued in its place upon proof of such loss or
destruction and upon the giving of a satisfactory bond of
indemnity to the Corporation. A new certificate may be issued
without requiring any bond, when in the judgment of the Board of
Directors it is proper to do so.
VI. BOOKS AND RECORDS.
.01 Books of Accounts, Minutes and Share Register.
The Corporation shall keep complete books and records of accounts
and minutes of the proceedings of the Board of Directors and
shareholders and shall keep at its registered office, principal
place of business, or at the office of its transfer agent or
registrar a share register giving the names of the shareholders in
alphabetical order and showing their respective addresses and the
number of shares held by each.
.02 Copies of Resolutions.
Any person dealing with the Corporation may rely upon a copy of
any of the records of the proceedings, resolutions, or votes of
the Board of Directors or shareholders, when certified by the
president or secretary.
VII. CORPORATE SEAL.
The following is an impression of the corporate seal of this
Corporation:
VIII. LOANS.
Generally, no loans shall be made by the Corporation to its Officers or
Directors, unless first approved by the holder of two-third of the
voting shares, and no loans shall be made by the Corporation secured by
its shares. Loans shall be permitted to be made to Officers, Directors
and employees of the Company for moving expenses, including the cost of
procuring housing. Such loans shall be limited to $25,000.00 per
individual upon unanimous consent of the Board of Directors.
<PAGE> 44
IX. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
.01 Indemnification.
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any 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 is or was a Director, Trustee, Officer,
employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a Director, Trustee, Officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorneys' fees), judgment, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with
such action, suit or proceeding if such person acted in good faith
and in a manner such person 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 such person's conduct was unlawful. The termination of
any 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 the person did not
act in good faith and in a manner which such person reasonably
believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action proceeding,
had reasonable cause to believe that such person's conduct was
unlawful.
.02 Derivative Action
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to
procure a judgment in the Corporation's favor by reason of the
fact that such person is or was a Director, Trustee, Officer,
employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a Director, Trustee, Officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorney's fees) and amount paid in settlement actually and
reasonably incurred by such person in connection with the defense
or settlement of such action or suit if such person acted in good
faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with
respect to amounts paid in settlement, the settlement of the suit
or action was in the best interests of the Corporation; provided,
however, that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been
adjudged to be liable for gross negligence or willful misconduct
in the performance of such person's duty to the Corporation unless
and only to the extent that, the court in which such action or
suit was brought shall determine upon application that, despite
circumstances of the case, such person is fairly and reasonably
<PAGE> 45
entitled to indemnity for such expenses as such court shall deem
proper. The termination of any action or suit by judgment or
settlement shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which such person
reasonably believed to be in or not opposed to the best interests
of the Corporation.
.03 Successful Defense.
To the extent that a Director, Trustee, Officer, employee or Agent
of the Corporation has been successful on the merits or otherwise,
in whole or in part in defense of any action, suit or proceeding
referred to in Paragraphs .01 and .02 above, or in defense of any
claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
.04 Authorization.
Any indemnification under Paragraphs .01 and .02 above (unless
ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that
indemnification of the Director, Trustee, Officer, employee or
agent is proper in the circumstances because such person has met
the applicable standard of conduct set forth in Paragraphs .01 and
.02 above. Such determination shall be made (a) by the Board of
Directors of the Corporation by a majority vote of a quorum
consisting of Directors who were not parties to such action, suit
or proceeding, or (b) is such a quorum is not obtainable, by a
majority vote of the Directors who were not parties to such
action, suit or proceeding, or (c) by independent legal counsel
(selected by one or more of the Directors, whether or not a quorum
and whether or not disinterested) in a written opinion, or (d) by
the Shareholders. Anyone making such a determination under this
Paragraph .04 may determine that a person has met the standards
therein set forth as to some claims, issues or matters but not as
to others, and may reasonably prorate amounts to be paid as
indemnification.
.05 Advances.
Expenses incurred in defending civil or criminal action, suit or
proceeding shall be paid by the Corporation, at any time or from
time to time in advance of the final disposition of such action,
suit or proceeding as authorized in the manner provided in
Paragraph .04 above upon receipt of an undertaking by or on behalf
of the Director, Trustee, Officer, employee or agent to repay such
amount unless it shall ultimately be by the Corporation is
authorized in this Section.
<PAGE> 46
.06 Nonexclusivity.
The indemnification provided in this Section shall not be deemed
exclusive of any other rights to which those indemnified may be
entitled under any law, bylaw, agreement, vote of shareholders or
disinterested Directors or otherwise, both as to action in such
person's 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 a Director, Trustee, Officer, employee or agent
and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
.07 Insurance.
The Corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a Director,
Trustee, Officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a Director,
Trustee, Officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any
liability assessed against such person in any such capacity or
arising out of such person's status as such, whether or not the
corporation would have the power to indemnify such person against
such liability.
.08 "Corporation" Defined.
For purposes of this Section, references to the "Corporation"
shall include, in addition to the Corporation, an constituent
corporation (including any constituent of a constituent) absorbed
in a consolidation or merger which, if its separate existence had
continued, would have had the power and authority to indemnify its
Directors, Trustees, Officers, employees or agents, so that any
person who is or was a Director, Trustee, Officer, employee or
agent of such constituent corporation or of any entity a majority
of the voting stock of which is owned by such constituent
corporation or is or was serving at the request of such
constituent corporation as a Director, Trustee, Officer, employee
or agent of the corporation, partnership, joint venture, trust or
other enterprise, shall stand in the same position under the
provisions of this Section with respect to the resulting or
surviving Corporation as such person would have with respect to
such constituent corporation if its separate existence had
continued.
X. AMENDMENT OF BYLAWS.
.01 By the Shareholders.
These Bylaws may be amended, altered, or repealed at any regular
or special meeting of the shareholders if notice of the proposed
alteration or amendment is contained in the notice of the meeting.
<PAGE> 48
.02 By the Board of Directors.
These Bylaws may be amended, altered, or repealed by the
affirmative vote of a majority of the entire Board of Directors at
any regular or special meeting of the Board.
XI. FISCAL YEAR.
The fiscal year of the Corporation shall be set by resolution of the
Board of Directors.
XII. RULES OF ORDER.
The rules contained in the most recent edition of Robert's Rules or
Order, Newly Revised, shall govern all meetings of shareholders and
Directors where those rules are not inconsistent with the Articles of
Incorporation, Bylaws, or special rules or order of the Corporation.
XIII. REIMBURSEMENT OF DISALLOWED EXPENSES.
If any salary, payment, reimbursement, employee fringe benefit, expense
allowance payment, or other expense incurred by the Corporation for the
benefit of an employee is disallowed in whole or in part as a
deductible expense of the Corporation for Federal Income Tax purposes,
the employee shall reimburse the Corporation, upon notice and demand,
to the full extent of the disallowance. This legally enforceable
obligation is in accordance with the provisions of Revenue Ruling
69-115, 1969-1 C.B. 50, and is for the purpose of entitling such
employee to a business expense deduction for the taxable year in which
the repayment is made to the Corporation. In this manner, the
Corporation shall be protected from having to bear the entire burden of
disallowed expense items.
<PAGE> 49
EXHIBIT 3.3
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock)
AUSTRAL PACIFIC ENERGY CORPORATION
We the undersigned, Alex P. Guidi, President and John Holland,
Secretary, of Austral Pacific Energy Corporation do hereby certify:
That the Board of Directors of said corporation at a meeting
duly convened, held on the 6th day of November, 1996, adopted
resolutions to amend the original articles as follows:
Article "First" is hereby amended to read as follows:
FIRST: The name of the corporation is Austral
Pacific Energy Corp.
The number of shares of the corporation outstanding and
entitled to vote on an amendment to the Articles of Incorporation
is 1,000,000; that the said change and amendment have been
consented to and approved by a majority of the stockholders holding
at least a majority of each class of stock outstanding and entitled
to vote thereon.
/s/ Alex P. Guidi
Alex P. Guidi, President
/s/ John Holland
John Holland, Secretary
PROVINCE OF BRITISH COLUMBIA
On November 7, 1996, personally appeared before me, a Notary
Public, Alex P. Guidi, President, and John Holland, Secretary, who
acknowledged that they executed the above instrument.
/s/ Bernard Zinkhofer
Barrister & Solicitor
Lang Michener Lawrence & Shaw
2600 - 595 Burrard Street
P. O. Box 49200
Vancouver, British Columbia V7X 1L1
Commission is lifetime
<PAGE> 50
EXHIBIT 3.4
AUSTRAL PACIFIC ENERGY CORP.
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock)
We the undersigned, Michael Hinshaw, President and Chief
Executive Officer, and Mark Katsumata, Secretary, of Austral
Pacific Energy Corp. do hereby certify:
THAT the Board of Directors of said corporation adopted
resolutions on the first day of March, 1999, to amend the
original articles as follows:
Article "First" is hereby amended to read as follows:
FIRST: The name of the corporation is Verida Internet
Corp.
The number of shares of the corporation outstanding and
entitled to vote on an amendment to the Articles of Incorporation
is 8,887,000; that the said change and amendment have been
consented to and approved by a majority of the stockholders
holding at least a majority of each class of stock outstanding
and entitled to vote thereon.
/s/ Michael Hinshaw
Michael Hinshaw, President and CEO
/s/ Mark Katsumata, Secretary
On March 8, 1999, Michael Hinshaw, President and CEO,
personally appeared before me, a Notary Public, who acknowledged
that he executed the above instrument.
/s/ Wayne Lang
Wayne Lang, Commission #1182710 Notary Public
- California, Marin County, My Commission
Expires May 7, 2002
On March 9, 1999, Mark Katsumata, Secretary, personally
appeared before me, a Notary Public, who acknowledged that he
executed the above instrument.
/s/ Bernhard Zinkhofer, Barrister & Solicitor & Notary Public
Lang Michener Lawrence & Shaw
1500 - 1055 West Georgia Street
P. O. Box 11117
Vancouver, British Columbia V6E 4N7
<PAGE> 51
EXHIBIT 23.1
JORGENSEN TELFORD SADOVNICK, PLLC
CERTIFIED PUBLIC ACCOUNTANTS
CONSENT OF INDEPENDENT AUDITORS' REPORT
We consent to the inclusion in the registration statement on Form
10-SB of Austral Pacific Energy Corp. of our report on our
examinations of the financial statements of Austral Pacific
Energy Corp. for the years ended December 31, 1998 and 1997 and
for the period from November 1, 1996 (inception) to December 31,
1998 depicted in said registration statement.
/s/ Jorgensen Telford Sadovnick PLLC
CERTIFIED PUBLIC ACCOUNTANTS
Seattle, Washington
April 12, 1999
720 Third Avenue, Suite 1910, Seattle, Washington 98104
Telephone: (206) 521-0403 Facsimile: (206) 624-3301
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Financial Condition at December 31, 1998 Audited
and the Consolidated Statement of Income for the year ended December 31,
1998 Audited and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 21,178
<SECURITIES> 80,356
<RECEIVABLES> 133,700
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 235,234
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 235,234
<CURRENT-LIABILITIES> 34,578
<BONDS> 0
0
0
<COMMON> 89
<OTHER-SE> 340,621
<TOTAL-LIABILITY-AND-EQUITY> 235,234
<SALES> 0
<TOTAL-REVENUES> 3,491
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 22,641
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (19,150)
<INCOME-TAX> 0
<INCOME-CONTINUING> (19,150)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19,150)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<PAGE> 53
EXHIBIT 99.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated for reference purposes only as of March 15,
1999, is entered into by and between VERIDA INTERNET CORP.
("Employer"), and RICHARD G. COHN ("Employee"). Employer and Employee
agree to the following terms and conditions of employment.
1. Period of Employment. Employer shall employ Employee
commencing March 15, 1999, and continuing until the employment is
terminated in accordance with Section 4.
2. Position and Responsibilities.
(a) Position. Employee accepts employment with Employer as
Executive Vice President and shall perform all services appropriate to
that position, as well as such other services as may be assigned by
Employer. Employee shall devote his best efforts to the performance of
his duties. He shall report to the President of Employer.
(b) Other Activity. Except upon the prior written consent of
Employer, Employee (during his employment with Employer) shall not (i)
accept any other employment; or (ii) engage, directly or indirectly, in
any other business, commercial, or professional activity (whether or
not pursued for pecuniary advantage) that is competitive with Employer,
that might create a conflict of interest with Employer, or that
otherwise might interfere with the business of Employer. So that
Employer may be aware of the extent of any other demands upon Employee's
time and attention, Employee shall disclose in confidence to Employer
the nature and scope of any other business activity in which he is or
becomes engaged during his employment with Employer.
3. Compensation and Benefits.
(a) Compensation.
(1) Employer shall pay Employee a salary at the rate of
Ninety Thousand Dollars ($90,000) per year in accordance with
Employer's regularly established policies.
(2) Employee shall be granted an option to purchase 200,000
shares of Employee's common stock at a price to be determined no
later than May 1, 1999. The stock option shall be granted
concurrently with the initial granting of stock options to other
key officers, directors, and/or employees of Employer, and shall
be at the same price as those stock options. Employee's stock
option shall vest in four (4) equal amounts of 50,000 shares per
period, based on the following vesting schedule following the date
of this Agreement: 25% at six (6) months; 25% at twelve (12)
<PAGE> 54
months; 25% at twenty-four (24) months; and 25% at thirty-six (36)
months. The foregoing notwithstanding, in the event that this
Agreement is terminated by Employer without cause pursuant to
Section 4(a) below, Employee's stock option shall vest on a pro
rata basis through the effective date of termination, based upon
30-day months, with a minimum of 50,000 shares vesting in the
event of any termination. Furthermore, Employee understands and
agrees that Employee's sale of any vested shares shall be
restricted as follows, which restriction shall survive any
termination of this Agreement: In any given month (or in an 30-day
period), unless otherwise agreed in writing by Employer, Employee
may sell no more than 10% of the total vested shares held by
Employee.
(b) Benefits. Employee shall be entitled to receive benefits from
all present and future benefit plans set forth in Employer's policies
and generally made available to similarly situated employees (as these
policies may be amended). Employer may, in its sole discretion, adjust
Employee's benefits provided under this Agreement.
(c) Expenses. Employer shall reimburse Employee for reasonable
travel and other business expenses incurred by Employee in the
performance of his duties, in accordance with Employer's policies, as
they may be amended in Employer's sole discretion.
4. Termination of Employment.
(a) By Employer Not For Cause. At any time, Employer may
terminate Employee for any reason, with or without cause, by providing
Employee thirty (30) days' advance written notice. Employer shall have
the option, in its complete discretion, to terminate Employee at any
time prior to the end of such notice period, provided Employer pays
Employee all compensation due and owing through the last day actually
worked, plus an amount equal to the base salary Employee would have
earned through the balance of the above notice period; thereafter, all
of Employer's obligations under this Agreement shall cease.
(b) By Employee Not for Cause. At any time, Employee may
terminate his employment for any reason, with or without cause, by
providing Employer thirty (30) days' advance written notice. Employer
shall have the option, in its complete discretion, to make Employee's
termination effective at any time prior to the end of such notice
period, provided Employer pays Employee all compensation due and owing
through the last day actually worked, plus an amount equal to the base
salary Employee would have earned through the balance of the above
notice period, not to exceed thirty (30) days; thereafter, all of
Employer's obligations under this Agreement shall cease.
<PAGE> 55
(c) Termination Obligations. Employee agrees that all property,
including, without limitation, all equipment, tangible Proprietary
Information (as defined below), documents, records, notes, contracts,
and computer-generated materials furnished to or prepared by Employee
incident to his employment belongs to Employer and shall be returned
promptly to Employer upon termination of Employee's employment.
Employee's obligations under this subsection shall survive the
termination of his employment and the expiration of this Agreement.
5. Proprietary Information. "Proprietary Information" is all
information pertaining in any manner to the business of Employer (or
any Employer affiliate), its employees, clients, consultants, or
business associates, which was produced by any employee of Employer in
the course of his or her employment or otherwise produced or acquired
by or on behalf of Employer. Proprietary Information shall include,
without limitation, trade secrets, product ideas, inventions,
processes, formulas, data, know-how, software and other computer
programs, copyrightable material, marketing plans, strategies, sales,
financial reports, forecasts, and customer lists. All Proprietary
Information not generally known outside of Employer's organization, and
all Proprietary Information so known only through improper means, shall
be deemed "Confidential Information." During his employment by
Employer, Employee shall use Proprietary Information, and shall
disclose Confidential Information, only for the benefit of Employer and
as is necessary to perform his job responsibilities under this
Agreement. Following termination, Employee shall not use any
Proprietary Information and shall not disclose any Confidential
Information, except with the express written consent of Employer. By
way of illustration and not in limitation of the foregoing, following
termination, Employee shall not use any Confidential Information to
compete against Employer or employ any of its employees. Employee
further agrees that for one (1) year following termination, he shall
not solicit any customer or employee of Employer. Employee's obligations
under this Section shall survive the termination of his employment and
the expiration of this Agreement.
6. Arbitration.
(a) Arbitrable Claims. To the fullest extent permitted by law,
all disputes between Employee (and his attorneys, successors, and
assigns) and Employer (and its affiliates, shareholders, directors,
officers, employees, agents, successors, attorneys, and assigns) of any
kind whatsoever, including, without limitation, all disputes relating
in any manner to the employment or termination of Employee, and all
disputes arising under this Agreement, ("Arbitrable Claims") shall be
resolved by arbitration. All persons and entities specified in the
preceding sentence (other than Employer and Employee) shall be
considered third-party beneficiaries of the rights and obligations
created by this Section on Arbitration. Arbitrable Claims shall
include, but are not limited to, contract (express or implied) and tort
<PAGE> 56
claims of all kinds, as well as all claims based on any federal, state,
or local law, statute, or regulation, excepting only claims under
applicable workers' compensation law and unemployment insurance claims.
By way of example and not in limitation of the foregoing, Arbitrable
Claims shall include (to the fullest extent permitted by law) any
claims arising under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act,
and the California Fair Employment and Housing Act, as well as any
claims asserting wrongful termination, harassment, breach of contract,
breach of the covenant of good faith and fair dealing, negligent or
intentional infliction of emotional distress, negligent or intentional
misrepresentation, negligent or intentional interference with contract
or prospective economic advantage, defamation, invasion of privacy, and
claims related to disability.
(b) Procedure. Arbitration of Arbitrable Claims shall be in
accordance with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association, as amended, and as
augmented in this Agreement. Arbitration shall be final and binding
upon the parties and shall be the exclusive remedy for all Arbitrable
Claims. Either party may bring an action in court to compel arbitration
under this Agreement and to enforce an arbitration award. Otherwise,
neither party shall initiate or prosecute any lawsuit or administrative
action in any way related to any Arbitrable Claim. Notwithstanding the
foregoing, either party may, at its option, seek injunctive relief
pursuant to section 1281.8 of the California Code of Civil Procedure.
All arbitration hearings under this Agreement shall be conducted in San
Francisco, California. If the allocation of responsibility for payment
of the arbitrator's fees would render the obligation to arbitrate
unenforceable, the parties authorize the arbitrator to modify the
allocation as necessary to preserve enforceability. THE PARTIES HEREBY
WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE
CLAIMS, INCLUDING WITHOUT LIMITATION ANY RIGHT TO TRIAL BY JURY AS TO
THE MAKING, EXISTENCE, VALIDITY, OR ENFORCEABILITY OF THE AGREEMENT TO
ARBITRATE.
/i/ MCH /s/ RGE
[Employer's Initials] [Employee's Initials]
(c) Confidentiality. All proceedings and all documents prepared
in connection with any Arbitrable Claim shall be confidential and,
unless otherwise required by law, the subject matter thereof shall not
be disclosed to any person other than the parties to the proceedings,
their counsel, witnesses and experts, the arbitrator, and, if involved,
the court and court staff.
(d) Continuing Obligations. The rights and obligations of
Employee and Employer set forth in this Section on Arbitration shall
survive the termination of Employee's employment and the expiration of
this Agreement.
<PAGE> 57
7. Notices. Any notice or other communication under this
Agreement must be in writing and shall be effective upon delivery by
hand, upon facsimile transmission to Employer (but only upon receipt by
Employee of a written confirmation of receipt), or three (3) business
days after deposit in the United States mail, postage prepaid,
certified or registered, and addressed to Employer at the address or
fax number below, or to Employee at the last known address maintained
in Employee's personnel file. Employee shall be obligated to notify
Employer in writing of any change in his address. Notice of change of
address shall be effective only when done in accordance with this
Section.
Employer's Notice Address:
VERIDA INTERNET CORP.
Attention: President
50 California Street, Suite 1500
San Francisco, CA 94111
Fax Number:(415) _____________
8. Action by Employer. All actions required or permitted to be
taken under this Agreement by Employer, including, without limitation,
exercise of discretion, consents, waivers, and amendments to this
Agreement, shall be made and authorized only by the President or by his
or her representative specifically authorized in writing to fulfill
these obligations under this Agreement.
9. Integration. This Agreement is intended to be the final,
complete, and exclusive statement of the terms of Employee's employment
by Employer. This Agreement supersedes all other prior and
contemporaneous agreements and statements, whether written or oral,
express or implied, pertaining in any manner to the employment of
Employee, and it may not be contradicted by evidence of any prior or
contemporaneous statements or agreements. To the extent that the
practices, policies, or procedures of Employer, now or in the future,
apply to Employee and are inconsistent with the terms of this
Agreement, the provisions of this Agreement shall control.
10. Amendments. This Agreement may not be amended except by a
writing signed by each of the parties. Failure to exercise any right
under this Agreement shall not constitute a waiver of such right.
11. Assignment. Employee shall not assign any rights or
obligations under this Agreement. Employer may, upon prior written
notice to Employee, assign its rights and obligations hereunder.
12. Severability. If a court or arbitrator holds any provision of
this Agreement to be invalid, unenforceable, or void, the remainder of
this Agreement shall remain in full force and effect.
<PAGE> 58
13. Attorneys' Fees. In any legal action, arbitration, or other
proceeding brought to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to recover reasonable attorneys'
fees and costs.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of California.
15. Interpretation. This Agreement shall be construed as a whole,
according to its fair meaning, and not in favor of or against any
party. By way of example and not in limitation, this Agreement shall
not be construed in favor of the party receiving a benefit nor against
the party responsible for any particular language in this Agreement.
Captions are used for reference purposes only and should be ignored in
the interpretation of the Agreement.
16. Employee Acknowledgment. Employee acknowledges that he has
had the opportunity to consult legal counsel in regard to this
Agreement, that he has read and understands this Agreement, that he is
fully aware of its legal effect, and that he has entered into it freely
and voluntarily and based on his own judgment and not on any
representations or promises other than those contained in this
Agreement.
WHEREFORE, the parties have duly executed this Agreement as of the
date first written above.
EMPLOYER: EMPLOYEE:
VERIDA INTERNET CORP.,
A Nevada corporation /s/ Richard G. Cohn
RICHARD G. COHN
By: /s/ Michael C. Hinshaw
Michael C. Hinshaw
Its: President
<PAGE> 59
EXHIBIT 99.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated for reference purposes only as of APRIL 5,
1999, is entered into by and between VERIDA INTERNET CORP., a Nevada
corporation ("Employer"), and STEVE ZIMMERMAN ("Employee"). Employer
and Employee agree to the following terms and conditions of employment.
1. Period of Employment. Employer shall employ Employee
commencing April 1, 1999, and continuing until the employment is
terminated in accordance with Section 4.
2. Position and Responsibilities.
(a) Position. Employee accepts employment with Employer as Chief
Technology Officer ("CTO"), and shall perform all services appropriate
to that position to the best of his ability, as well as such other
services as may be assigned by Employer. He shall report to the
President of Employer. Employee shall perform his responsibilities on
a part-time basis, working twenty (20) hours per week (half-time).
(b) Other Activity. Except upon the prior written consent of
Employer, Employee (during his employment with Employer) shall not
engage, directly or indirectly, in any other business, commercial, or
professional activity (whether or not pursued for pecuniary advantage)
that puts the Employee in direct competition with Employer across the
depth and breadth of the services and products that Employer provides,
or that directly interferes with the business of Employer. So that
Employer may be aware of the extent of any other demands upon Employee's
time and attention, Employee shall disclose in confidence to Employer
the nature and scope of any other business activity in which he is or
becomes engaged during his employment with Employer. Notwithstanding
the foregoing, Employer and Employee acknowledge and understand that
Employee is a principal of NetOpus Incorporated, a California
corporation ("NetOpus"), which is in the business of website
development, specializing in database integration and e-commerce.
Accordingly, that nothing in this paragraph shall be construed as
restricting Employee's and NetOpus's right to continue to provide
website and e-commerce development services so long as this work is not
knowingly performed for an individual or entity seeking to provide the
same general set of services that Employer provides.
3. Compensation and Benefits.
(a) Compensation.
(1) Employer shall pay Employee a salary at the rate of Four
Thousand Dollars ($4,000) per month in accordance with
Employer's regularly established policies.
<PAGE> 60
(2) Employee shall be granted an option to purchase 150,000
shares of Employee's common stock at a price to be
determined. The stock option shall be granted concurrently
with the initial granting of stock options to other key
officers, directors, and/or employees of Employer, and shall
be at the same price as those stock options. Employee's stock
option shall vest in four (4) equal amounts of 37,500 shares
per period, based on the following vesting schedule following
the date of this Agreement: 25% at six (6) months; 25% at
twelve (12) months; 25% at twenty-four months (24); and 25%
at thirty-six (36) months. The foregoing notwithstanding, in
the event that this Agreement is terminated by Employer
without cause pursuant to Section 4(a) below, Employee's
stock option shall vest on a pro rata basis through the
effective date of termination, based upon 30-day months,
provided further that if Employee is terminated without cause
within the first twelve (12) months of the term of this
Agreement, seventy-five thousand (75,000) of shares covered
by Employees stock option shall be subject to vesting
(provided that Employee duly exercises his option and pays
the applicable option price.) Furthermore, Employee
understands and agrees that Employee's sale of any vested
shares shall be restricted as follows, which restriction
shall survive any termination of this Agreement: In any given
month (or in an 30-day period), unless otherwise agreed in
writing by Employer, Employee may sell no more than 10% of
the total vested shares held by Employee.
(b) Benefits. Employee shall be entitled to receive benefits from
all present and future benefit plans set forth in Employer's policies
and generally made available to similarly situated employees (as these
policies may be amended), subject to adjustment to reflect Employee's
half-time employment hereunder. Employer may, in its sole discretion,
adjust Employee's benefits provided under this Agreement.
(c) Expenses. Employer shall reimburse Employee for reasonable
travel and other business expenses incurred by Employee in the
performance of his duties, in accordance with Employer's policies, as
they may be amended in Employer's sole discretion.
4. Termination of Employment.
(a) By Employer Not For Cause. At any time, Employer may
terminate Employee without Cause (as defined in Paragraph 4(b) below)
by providing Employee thirty (30) days' advance written notice. Employer
shall have the option, in its complete discretion, to terminate
Employee at any time prior to the end of such 30-day notice period,
provided Employer pays Employee all compensation due and owing through
the last day actually worked, plus an amount equal to the base salary
Employee would have earned through the balance of the above
<PAGE> 61
notice period; thereafter, all of Employer's obligations under this
Agreement shall cease, except as otherwise expressly set forth in
Paragraph 3(a)(1) above. Furthermore, in the event Employer terminates
Employee pursuant to this paragraph 4(a) (i.e., without cause) within
the first six (6) months of the term of this Agreement, then Employer
shall continue to pay Employee's salary pursuant to Paragraph 2(a) above
for the remainder of such six (6)-month period.
(b) By Employer For Cause. At any time, and without prior notice,
Employer may terminate Employee for Cause. Employer shall pay Employee
all compensation then due and owing, and thereafter, all of Employer's
obligations under this Agreement shall cease. Termination shall be for
"Cause" if Employee: (i) acts in bad faith and to the detriment of
Employer; (ii) refuses or fails to act in accordance with any specific
reasonable direction or order of Employer; (iii) exhibits in regard to
his employment unfitness or unavailability for service, unsatisfactory
performance, misconduct, dishonesty, habitual neglect, or incompetence;
(iv) is convicted of a crime involving dishonesty, breach of trust, or
physical or emotional harm to any person; or (v) breaches any material
term of this Agreement.
(c) By Employee. At any time, Employee may terminate his
employment for any reason, with or without cause, by providing Employer
thirty (30) days' advance written notice. Employer shall have the
option, in its complete discretion, to make Employee's termination
effective at any time prior to the end of such notice period, provided
Employer pays Employee all compensation due and owing through the last
day actually worked, plus an amount equal to the base salary Employee
would have earned through the balance of the above notice period, not
to exceed thirty (30) days; thereafter, all of Employer's obligations
under this Agreement shall cease.
(d) Termination Obligations. Employee agrees that all property,
including, without limitation, all equipment, tangible Proprietary
Information (as defined below), documents, records, notes, contracts,
and computer-generated materials furnished to or prepared by Employee
incident to his employment belongs to Employer and shall be returned
promptly to Employer upon termination of Employee's employment.
Employee's obligations under this subsection shall survive the
termination of his employment and the expiration of this Agreement.
5. Proprietary Information. "Proprietary Information" is all
information pertaining in any manner to the business of Employer (or
any Employer affiliate), its employees, clients, consultants, or
business associates, which was produced by any employee of Employer in
the course of his or her employment or otherwise produced or acquired
by or on behalf of Employer. Proprietary Information shall include,
without limitation, trade secrets, product ideas, inventions,
processes, formulas, data, know-how, software and other computer
programs, copyrightable material, marketing plans, strategies, sales,
<PAGE> 62
financial reports, forecasts, and customer lists. All Proprietary
Information not generally known outside of Employer's organization, and
all Proprietary Information so known only through improper means, shall
be deemed "Confidential Information." During his employment by
Employer, Employee shall use Proprietary Information, and shall
disclose Confidential Information, only for the benefit of Employer and
as is necessary to perform his job responsibilities under this
Agreement. Following termination, Employee shall not use any
Proprietary Information and shall not disclose any Confidential
Information, except with the express written consent of Employer. By
way of illustration and not in limitation of the foregoing, following
termination, Employee shall not use any Confidential Information to
compete against Employer or employ any of its employees. Employee
further agrees that for one (1) year following termination, he shall
not knowingly solicit any customer or employee of Employer. Employee's
obligations under this Section shall survive the termination of his
employment and the expiration of this Agreement. It is understood and
agreed by the parties that efficient website development requires the
reuse of small sections or snippets of code across multiple projects.
Such snippets of do not constitute full applications in and of
themselves, but they are components that can be accessed to create
applications in an efficient manner. Employee currently has access to
a wide range of such code snippets developed during prior projects that
will be used to expedite any programming that he performs for Employer.
At the same time, Employer acknowledges that Employee has the right to
use any such code snippets developed while working for Employer on
other development projects.
6. Arbitration.
(a) Arbitrable Claims. To the fullest extent permitted by law,
all disputes between Employee (and his attorneys, successors, and
assigns) and Employer (and its affiliates, shareholders, directors,
officers, employees, agents, successors, attorneys, and assigns) of any
kind whatsoever, including, without limitation, all disputes relating
in any manner to the employment or termination of Employee, and all
disputes arising under this Agreement, ("Arbitrable Claims") shall be
resolved by arbitration. All persons and entities specified in the
preceding sentence (other than Employer and Employee) shall be
considered third-party beneficiaries of the rights and obligations
created by this Section on Arbitration. Arbitrable Claims shall
include, but are not limited to, contract (express or implied) and tort
claims of all kinds, as well as all claims based on any federal, state,
or local law, statute, or regulation, excepting only claims under
applicable workers' compensation law and unemployment insurance claims.
By way of example and not in limitation of the foregoing, Arbitrable
Claims shall include (to the fullest extent permitted by law) any
claims arising under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act,
and the California Fair Employment and Housing Act, as well as any
<PAGE> 63
claims asserting wrongful termination, harassment, breach of contract,
breach of the covenant of good faith and fair dealing, negligent or
intentional infliction of emotional distress, negligent or intentional
misrepresentation, negligent or intentional interference with contract
or prospective economic advantage, defamation, invasion of privacy, and
claims related to disability.
(b) Procedure. Arbitration of Arbitrable Claims shall be in
accordance with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association, as amended, and as
augmented in this Agreement. Arbitration shall be final and binding
upon the parties and shall be the exclusive remedy for all Arbitrable
Claims. Either party may bring an action in court to compel arbitration
under this Agreement and to enforce an arbitration award. Otherwise,
neither party shall initiate or prosecute any lawsuit or administrative
action in any way related to any Arbitrable Claim. Notwithstanding the
foregoing, either party may, at its option, seek injunctive relief
pursuant to section 1281.8 of the California Code of Civil Procedure.
All arbitration hearings under this Agreement shall be conducted in San
Francisco, California. If the allocation of responsibility for payment
of the arbitrator's fees would render the obligation to arbitrate
unenforceable, the parties authorize the arbitrator to modify the
allocation as necessary to preserve enforceability. THE PARTIES HEREBY
WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE
CLAIMS, INCLUDING WITHOUT LIMITATION ANY RIGHT TO TRIAL BY JURY AS TO
THE MAKING, EXISTENCE, VALIDITY, OR ENFORCEABILITY OF THE AGREEMENT TO
ARBITRATE.
(c) Confidentiality. All proceedings and all documents prepared
in connection with any Arbitrable Claim shall be confidential and,
unless otherwise required by law, the subject matter thereof shall not
be disclosed to any person other than the parties to the proceedings,
their counsel, witnesses and experts, the arbitrator, and, if involved,
the court and court staff.
(d) Continuing Obligations. The rights and obligations of
Employee and Employer set forth in this Section on Arbitration shall
survive the termination of Employee's employment and the expiration of
this Agreement.
7. Notices. Any notice or other communication under this
Agreement must be in writing and shall be effective upon delivery by
hand, upon facsimile transmission to Employer (but only upon receipt by
Employee of a written confirmation of receipt), or three (3) business
days after deposit in the United States mail, postage prepaid,
certified or registered, and addressed to Employer at the address or
fax number below, or to Employee at the last known address maintained
in Employee's personnel file. Employee shall be obligated to notify
Employer in writing of any change in his address.
<PAGE> 64
Employer's Notice Address:
VERIDA INTERNET CORP.
Attention: President
50 California Street, Suite 1500
San Francisco, CA 94111
8. Action by Employer. All actions required or permitted to be
taken under this Agreement by Employer, including, without limitation,
exercise of discretion, consents, waivers, and amendments to this
Agreement, shall be made and authorized only by the President or by his
or her representative specifically authorized in writing to fulfill
these obligations under this Agreement.
9. Integration. This Agreement is intended to be the final,
complete, and exclusive statement of the terms of Employee's employment
by Employer. This Agreement supersedes all other prior and
contemporaneous agreements and statements, whether written or oral,
express or implied, pertaining in any manner to the employment of
Employee, and it may not be contradicted by evidence of any prior or
contemporaneous statements or agreements. To the extent that the
practices, policies, or procedures of Employer, now or in the future,
apply to Employee and are inconsistent with the terms of this
Agreement, the provisions of this Agreement shall control.
10. Amendments. This Agreement may not be amended except by a
writing signed by each of the parties. Failure to exercise any right
under this Agreement shall not constitute a waiver of such right.
11. Assignment. Employee shall not assign any rights or
obligations under this Agreement. Employer may, upon prior written
notice to Employee, assign its rights and obligations hereunder.
12. Severability. If a court or arbitrator holds any provision of
this Agreement to be invalid, unenforceable, or void, the remainder of
this Agreement shall remain in full force and effect.
13. Attorneys' Fees. In any legal action, arbitration, or other
proceeding brought to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to recover reasonable attorneys'
fees and costs.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of California.
15. Interpretation. This Agreement shall be construed as a whole,
according to its fair meaning, and not in favor of or against any
party. By way of example and not in limitation, this Agreement shall
not be construed in favor of the party receiving a benefit nor against
<PAGE> 65
the party responsible for any particular language in this Agreement.
Captions are used for reference purposes only and should be ignored in
the interpretation of the Agreement.
16. Employee Acknowledgment. Employee acknowledges that he has
had the opportunity to consult legal counsel in regard to this
Agreement, that he has read and understands this Agreement, that he is
fully aware of its legal effect, and that he has entered into it freely
and voluntarily and based on his own judgment and not on any
representations or promises other than those contained in this
Agreement.
WHEREFORE, the parties have duly executed this Agreement as of the
date first written above.
EMPLOYER: EMPLOYEE:
VERIDA INTERNET CORP.,
A Nevada corporation /s/ Steve Zimmerman
STEVE ZIMMERMAN
By: /s/ Michael C. Hinshaw
Michael C. Hinshaw
