UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-SB - AMENDMENT NO 5
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of The Securities Exchange Act of 1934
ENGENYOUS Technologies, Inc.
(Name of Small Business Issuer in its charter)
Delaware 13-375-4705
(State or other jurisdiction of (I. R. S. Employer incorporation or
organization Identification No
400 S Dixie Highway Hallandale Beach FL 33009
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (954) 458-3311
Securities to be registered pursuant to Section 12(b) of the Act.
Title of each class Name of each exchange on
which registered
NONE NONE
Securities to be registered pursuant to Section 12(g) of the Act.
Common Stock Class A
TABLE OF CONTENTS
PART 1
Item 1. Description of Business
Item 2. Management Discussion and Analysis or Plan of Operation
Item 3. Description of Property
Item 4. Security Ownership of Certain Beneficial Owners and
Management
Item 5. Directors and Executive Officers
Item 6. Executive Compensation
Item 7. Certain Relationship and Related Transactions
Item 8. Description of Securities
PART 2
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Related Stockholder Matters
Item 2. Legal Proceedings
Item 3. Changes in and Disagreements with Accountants
Item 4. Recent Sales of Unregistered Securities
Item 5. Indemnification of directors and Officers
PART F/S
Item 1. Financial Statements
PART 3
Item 1. Index to Exhibits
PART 1
Item 1. Description of business
ENGENYOUS Technologies, Inc. (the "Company") was incorporated
under the laws of the State of Delaware on April 7, 1998. ETI develops
and is marketing encryption software, encryption and decryption protocol
for LANs, WANs and E-Commerce digital certificate to secure
information and e-commerce transactions.
ETI is considered a development stage Company and our objective is to
strengthen our position as a leading provider of online services to IT
professionals worldwide. Our Internet-based services are focused on the
highly fragmented and underserved security market in the e-commerce. We
intend to establish this leadership position by implementing the following
key strategies: establish leadership and expand our presence in targeted
industries and continue to improve our Internet-based technology
infrastructure.
We differentiate ourselves from our competition by having developed and
provided a multilingual encryption logistic technology for protocol for
LANs, WANs and e-commerce digital certificate to secure information and
e-commerce transactions for business-to-business, UEL/2001 a sophisticated
encryption product with cryptographic algorithms with keys and block sizes
larger than 2480-6144 bits, which we believe is not currently available in
a similar format on the Internet. The Company has two patents pending that
will address the security issues pertaining to Internet Security,
e-commerce and Accountability. These two products deriving from UEL/2001
are ElectraDoc (Cyber Document Delivery Evidence Tracking) soon available
on the Company's web site ElectraDoc.com and AMEC (Accountability
Multihop e-Message Communication) that also will appear soon.
Our first solution is to ensure total security with our document delivery
system ElectraDoc, an Encoded Cyber Document Delivery Tracking
System, that uses new-patented technology for sending and receiving and
tracking e-document with confirmation to how the document was received
and traveled over the Internet. ElectraDoc provides total security with its
new encryption that uses 2480-6144bits and 10 tiers to encrypt the files
before they are sent. As a result, we believe that a significant
opportunity exists for this product that offers individuals and businesses
easy-to-use, cost-effective and reliable document delivery.
Our second solution is for conversion of websites, e-Conversions2.com
ETI's latest business-to-business multilingual web site for development,
maintenance, and e-commerce solutions is well versed in developing and
conversions, true distributed multi-user applications, web sites and
conversion of large UNIX or NT based networks. We do not translate and
adapt the software content, but rebuild, test and fix the localized product
by converting it into any language of the world. e-Conversions2.com will
enable a successful web conversion for e-commerce for the customer on an
international scale. Our proprietary technology and broad range of
knowledge in e-commerce; networking, software development, conversions
of networks, websites and user interface design. We believe that the growth
of the Internet e-commerce has created a significant market opportunity for
our conversion services.
Our third solution eDocShop offers individuals free multilingual turnkey
websites that carry quality merchandise and offer the Company's products.
Members can also chose a free web site for fund raising of their choice and
have access to free e-mail addresses. eDocShop.com has several different
programs and creates new businesses, at present in eleven different
languages; Japanese, Chinese, Taiwan Chinese, Korean, Spanish,
Portuguese, French, German, Italian, English and Russian and exists on
search engines in each respective country. The Company's strategy for this
site will be to focus on Asia, South-and North America and Europe and offer
eDocShop members the opportunity to be in their own cyber business at no
cost.
While E-Commerce and the Internet Technology has reached
into a global market worldwide, it has been fragmented in keeping up
with the demand of different types of new products and services. The E-
Commerce and Internet will continue to lag behind because of capital
required and lack of technical expertise needed to developed and
introduce new products. According to IT Strategies, the worldwide output
for E-Commerce and the Internet product and services will surpass $ 17
billion in revenue year 1998, an increase of thirty per cent over 1996.
However, they foresee that year 2001 over $35 billion in annual revenue
is possible on a worldwide output basic, such tremendous growth will be
possible based on the current products and services and from new
products and services for E-Commerce and the Internet that will come
from innovated ideas and new technology. E-Commerce (the Internet)
have tremendous synergy's and will replace a large portion of
conventional marketing and sales of services and products.
ENGENYOUS Technologies, Inc. will continue to expand its products
and services with new technology for E-Commerce and the Internet.
Products
The company has developed a high-integrity electronic document-mail
delivery system ElectraDoc. ElectraDoc provides for the protection of
any type of documents, files or information that can be sent using your
network or the Internet. This includes: Online stock transactions,
Legal and medical documents, Financial documents, School records,
Company presentations and any other critical documents or information
that require proof of delivery and tracking information of data/documents
and evidence tracking, that is of the essence to the success of doing
business world wide and online. ElectraDoc can be used directly from the
Internet or download the service to your system.
ElectraDoc - 100% E-commerce Secure & Accountability for Multihop
Messages Communication - ElectraDoc.com's patented technology offers
100% Secure, Accountability and Authentication of ANY document and
information that is sent using ElectraDoc This technology is based on
evidence creation mechanism with proof of transmittal with two patents
pending:
1. 60116311; proof of transmittal, proof of delivery and proof
of reception, and
2. 60116494; proof of delivery, proof of sale and proof of
receipt with its evidence tracking stations.
The underlying principle is based on Civil Court's practice of the
"Preponderance of Evidence" approach.
AMEC - Multihop e-Message Communication a high integrity electronic
commerce system that can track, certify and provide evidence from
transactions that are enacted over the Internet, particularly focusing on
the transactions for the electronic commerce systems. The explosive
growth of the Internet, a popularity of the business transactions over the
web has led to a growing need for accountability in such electronic
transactions.
UNIVERSAL ENCRYPTION LOCK/2001 TM.
ETI has developed the latest cryptographic algorithms for this encryption
technology that will keep pace with the emerging of faster computers online,
networks or on the Internet and provide TOTAL Security and Privacy from
unauthorized people. This new Technology's encryption keys are variable,
from 2480bits - 6144bits with 10 tiers. UEL/2001 technology is twelve
times greater than the 512bit public key that uses two prime factors in
its modules and if you know these two prime factors it is possible to
calculate the private key. UEL/2001 has the capability to set up password
to be used with encrypted/decrypted files or both and features unlimited
combinations, random combinations and with never the same combination.
UEL/2001 will protect your information in today's complex technical and
business environments.
The following definition of an unbreakable code is offered as a mean of
establishing a benchmark criterion for comparing the UEL Technology
algorithm to other encryption schemes. A code is exactly unbreakable if
its keys cannot be deciphered in a finite number of tries. This definition
implies a non-finite or infinite number of tries. A statistically unbreakable
code is one that does not yield its key in less than a large number of tries.
This number is large enough to make the cost of trying unrewarding or even
prohibitive. For starters the UEL/2001 code is an efficient easy to use
means of private key encryption. This product has been developed in both
English and Spanish and can be downloaded direct from Engenyous.com website.
The Company previous developed Foreign Language Products for the
growing multiculturalism in our society. Skills in bilingualism are
becoming essential assets for individuals, students and professionals in
practically every community or institution or at any place of work or
leisure. The Company produced its Universal Communication Series
(UCS); part of the series consists of our language products (English,
Spanish) just for this purpose - learning and improving language skills
interactive with the use of computers
Services
With the E-Commerce and the Internet phenomena encompassing the
globe, there has been a drastic change from within the E-Commerce,
Internet Industry and the way all businesses view products and services
sold on the Internet. Now, more than ever, E-Commerce and the Internet will
play a key role in the marketing scheme of any business. This type of
products and services is exactly what ETI specializes in with its new family
of products and services.
ETI provides customer support with all of its products with a 30-day warranty
with each purchase. ETI provides service support for ElectraDoc members
free of charge. ETI feels that customer support will build customer loyalty.
This will increase our market share by standing by the quality of our
products.
C. Service and Support Plans
The Company's products will be of an extremely technical nature.
Superior electronic support of such products will play a key role in the
Company's reputation and acceptance in the market.
The Company intends to use technology and automated systems to
lower support costs and reduce the time required to solve customer
problems.
The company plan to setup companies as License Certified Electronic
Registered D/M Agencies for its Electronic Certified and Electronic
Registered Document/Mail System on the Internet. This new service has
a patent pending and will compete with the US Postal Office's Electronic
Certified and Registered Document and Mail system.
UNITED STATES PATENT & TRADEMARKS
The Company has two patent applications pending at the date of this
memorandum.
1. Electronic Registered and Electronic Certified Document/Email
Delivery Evidence Tracking System for the Internet and Networks. The
system is based on the Civil Court's practice of the "Preponderance of
Evidence" approach (market under the name ElectraDoc TM)
2. Accountability Multihop e-Message Communication. The system is
based on tracking, certifying and providing evidence for e-transactions
that is enacted over the Internet, and particularly focusing on
transactions for electronic commerce systems using part of the
technology based on our "Preponderance of Evidence" approach (market
under the name AMEC TM).
COMPETITION
Our marketing efforts will include hiring and training a public relations
staff, which will be responsible for news releases targeted to major
print media, we also intend to enter into strategic relationships with
other key Internet companies as we believe such relationships may enable
us to increase traffic and name awareness of our products. Greater
recognition, in turn, may translate into a steadily building user base
with great potential value. Current and potential customers are
Multinational Companies, Institutions, Government Agencies and
Individual computer users of UEL/2001 encryption product for e-Commerce
and the Internet and the ElectraDoc (Cyber Document Delivery Evidence
Tracking), AMEC (Accountability Multihop e-Message Communication).
Our products and services will provide Companies and Individuals that
use e-Commerce and the Internet TOTAL SECURITY with our new and unique
technology.
The Company will rely on a combination of both direct and indirect channels
to distribute its products and services. Its initial vertical market focus
will include Bank/Finance/Insurance, Telecommunications and multinational
manufacturing sectors since these sectors are amongst the highest growth
and tend to be early adopters of new technology. These markets will be
addressed through direct sales force composed of telemarketing, telesales,
field sales and field systems communications engineers who will focus on
large accounts
The Company's marketing will include advertising agencies, trade shows
and convention promoters, computer retailers, municipalities, political
organizations, as moreover, fortune 500 companies, giving them
consistency in their brand name promotions. The company will implement a
very serious and aggressive Marketing and Internet Marketing campaign,
seeking alliances with other major Companies and Internet Providers,
Service and Product companies with a strong Internet presence.
Market Analysis
The Internet is dramatically changing the way that business is conducted.
Companies, their customers, suppliers, partners and distributors now have
the means to more fully automate and extend the reach of their businesses.
As a result, Internet commerce is growing exponentially. Forrester Research
estimates that revenue from Internet commerce will increase from $43 billion
in 1998 to $1.3 trillion in 2003. This anticipated growth will have a
profound effect on virtually every industry throughout the industrialized
world. Not only have industry giants embraced Internet commerce by allocating
large budgets to developing Internet commerce sales channels, but also
thousands of pure Internet-based businesses have emerged in just a few
years. Internet commerce is progressively eliminating traditional barriers to
entry, eroding geographic boundaries, and increasing customer choice and
power. Entirely new business models now pose competitive threats to
traditional market leaders. These competitive pressures force businesses to
continuously advance their Internet commerce capabilities. As a result,
businesses require infrastructure solutions to build, grow, and extend their
Internet commerce businesses.
This, in turn, leaves developer of products and services such as us, at an
advantage. For the traditional delivery methods (overnight delivery with
various courier services) businesses spend in excess over $320 billion
annually. ElectraDoc is the first online company with multilingual patented
document delivery and evidence tracking system that can be used in civil
court as evidence. The evolution of the World Wide Web in the United
States shows that early movers capture a larger market share in the long
run.
COMPETITION
The computer software business is intensively competitive. The company is
aware of a number of competitors that will compete directly with
ENGENYOUS technologies. Inc. Not one company has dominated the
market for security software, but may have financial resources necessary to
enable them to withstand price competition and downturn in the security and
communications market. The company feels it has no direct competition for
its NEW products ElectraDoc that soon will appear on the Internet and
AMEC that are under development and its LEAD software product
UEL/2001 for securing information on Networks, e-Commerce, Digital
Signature and Internet Communications. Its new products and services will
place ETI ahead of the competition for e-Commerce and the Internet. There
is no assurance the Company will be able to overcome competitive
disadvantages it will face as a small company with limited capital.
Competitive Comparison
At present ENGENYOUS Technologies Inc. has within its possession a new
patented technology for delivery of e-document with its electradoc.com and
conversions of websites with e-conversion2.com into any language of the
world that supersedes most competitors. It would be safe to assume that
there are only a small number of companies that are identical to ETI given
the company's mission as well as product line and new technology. ETI will
continue with its leading edge technology by staying ahead of the
competition in technology and quality of our products and services. The
United Nations Development Program states that 80 percent of all Web sites
are in English, which is spoken by less than 10 percent of the world's
population. ETI has already converted its websites to several languages and
continue to do so.
Government Regulation and Legal Uncertainties
The Company is subject, both directly and indirectly, to various
laws and governmental regulations relating to its business. The
Company believes it is currently in compliance with such laws and that
they do not have a material impact on its operations.
Item 2. Management's Discussion and Analysis or Plan of Operation
The following discussion of our financial condition and results of
operations should be read in conjunction with the selected financial
data and the audited financial statements and related notes appearing
elsewhere in this text.
The Company commenced operations in its Hallandale Beach location on
January 1998. The Founder has been developing and marketing encryption
software, encryption and decryption protocol for LANs, WANs and E-
commerce digital certificate to secure information and e-commerce
transactions. The Company has been marketing its languages courses
Learn English, Learn Spanish and Aprenda Ingles on CD-Rom for
computers parallel with the development of its encryption Software
UEL/2001. We currently sell our Languages products through indirect
and direct channels.
During 1999 the Company developed four web sites: Engenyous.com to
serve as an identity site and sell its encryption and languages products,
ElectraDoc.com to serve as e-commerce communication site for secure
document delivery with evidence tracking, e-Conversions2.com as a
business-to-business website that enables fully turnkey conversions of
e-commerce websites into any language of the world and EDocShop as a
commercial site with merchandise for sale and free turnkey web sites for
eDocShop members to start their own business in the cyber space in eleven
different languages.
In the next twelve months, the Company expect to generate revenues
from its current products and the sales and marketing of our Internet
services: ElectraDoc - encoded document delivery with evidence tracking
and from the e-conversion.com web site application - that enables
multilingual global e-commerce websites. Because we will derive our
revenues from subscription fees for ElectraDoc, we do not recognize the
entire amount of subscription fees received in the quarter the subscription
agreements are executed. Revenues from e-conversions will be based on
the size of the websites and can therefore not be predictable. However,
our goal is to aggressively market these two products. Our operating
expenses, that we will recognize as they are incurred, will increase more
rapidly than our revenues due to expanded selling and marketing efforts
and investments in administrative infrastructure to support subscription
sales that we will recognize as revenue in subsequent periods. We anticipate
that this trend will continue and that our operating expenses, particularly
selling and marketing and general administrative expenses, will grow at a
faster rate than our revenues in the near term.
Item 3. Description of Property
The Company's principal executive office is located in Hallandale, Florida
where the Company is leasing approximately 1,500 square feet of office
space for $1500 per month. As of the date hereof, the Company has 6
full-time employees at this office.
The Company plans to move into larger quarter of approximately 5,000
sq. ft. The additional space is needed for the company's expanded growth.
Item 4. Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth certain information with respect to the
beneficial ownership of the Company's common stock with respect to each
director of the Company, each beneficial owner of more than 5 percent (5%)
of said securities, and all directors and executive officers of the
Company as a group.
<TABLE>
<C> <C> <C>
Name and address of Number of % of Shares
Common Stock Owner Shares Held
Clyde Smyth (Note 1) 2.193.500 60.0
3401 N Country Club Dr
Aventura, FL 33180
Margareta Totems(Note 2) 610.300 16.5
3475 N Country Club Dr
Aventura, Fl 33180
Cynthia B Robinson (Note 3) 225.000 6.0
375 Van Dalindar
Teaneck, NJ 07666
Total Officer and Director
As a group 3.028.800 82.5
Other Shareholders as a group 649.700 17.5
Total shares 3.678.500 100.0
</TABLE>
(Note 1)
Mr. Smyth, the founder provided the technology for English, Spanish
and Encryption Products and for the Electradoc Document Delivery
Product. Mr. Smyth has served as the Company's CEO since
inception and has not been paid any salary during this period.
Mr Smyth received 1.193.500 shares of Commons stock for the
Services above at Value of $37.775 and bought 1.000.000 shares
of Common Stock for $ 50.000 in cash at the inception.
(Note 2)
Ms M Totems has served as the Company's CFO and Secretary since
inception and has not been paid any salary during this period.
Ms Totems has received 500.000 shares of common stock for the
Services at a Value of $ 5.000. Ms Totems bought 61.500 shares of
common stock for $ 61.500 in cash in 1998 and another 48.800 shares
for $4.800 in cash in 1999.
(Note 3)
Ms Robinson designed the packaging for our English and Spanish
product. Ms Robinson received 225.000 shares of common stock at
Value of $22.500 for the services.
Shares of Common Stock for Services Rendered
Shares below were issued for services rendered or to settle debt
of ETI and are valued at the value of the services received or debt
retired. Exemptions from Registration Relied Upon. ETI issued shares
under Rule 506 of Regulation D that are subject to restrictions.
Mr. Larry Berk served as an Investment adviser and received
05/01/98 5.000 shares of common stock at a value of $3.000
Ms Rosetta Brownlee proofread the Spanish User Manuals and
received
05/01/98 25.000 shares of Common Stock at a value of $7.500
Mr Bill Ellison of Interspace provided service for screening
employees and received
05/01/98 1.500 shares of Common Stock at a value of $525
Mr. Ted Robinson helped with our Business and Marketing
Strategies and received
05/01/98 5.000 shares ofCommon Stock at a value of $1.500
Mr. Jesse Seymore of Seymore Systems provided programming
services for our Learn to speak English and Learn to speak
Spanish Software. Mr Seymore received
05/01/98 50.000 shares of Common Stock at a value of $25.000
Mr. Corey Smyth provided writing the text for our UEL/2001
encryption User manual.Mr Smyth received
05/01/98 73.200 shares of Common Stock at avalue of $25.000
Ms. Cecilia Hunter proofread the text on the packaging for our
English, Spanish product boxes and the English User manual.
Ms Hunter received
05/01/98 5.000 shares of Common Stock at a value of $1.500
Ms Melba Outler wrote the User Manual for English and Spanish
Encryption products. Ms Outler received
05/01/98 75.000 shares Common Stock at a value of $ 35.000.
Ms Rosa Porter provided corrections to the User Encryption
manuals. Ms Porter received
05/01/98 15.000 shares of Common Stock at a avalue of $1.500
Ms. Valerie Reaves provided Word processing and proofreading for
our Electradoc Patent Specification, System Specification and
Web Site Specification for filing with US Patent Office.
Ms Reaves received
05/01/98 15.000 shares of Common Stock at a value of $1.000.
For all the above shares of common stock each certificate issued for
unregistered securities contained a legend stating that the securities
have not been registered under the Act and setting forth the restrictions
on the transferability and the sale of the securities. No underwriter
participated in, nor did the Company pay any commissions or fees to any
underwriter in connection with any of these transactions. None of the
transactions involved a public offering.
Item 5. Directors and Executive Officers, Promoters and control Persons
The following table sets forth the directors, executive officers and
other significant employees of the Company, their ages, and all offices
and positions with the Company. Each director is elected for a period of
one year and thereafter serves until his successor is duly elected by the
stockholders and qualifies. Officers and other employees serve at the
will of the Board of Directors.
Name of Director Age
Clyde Smyth. 50*
Margareta Totems 60*
Cynthia Robinson 52
Larry Walker 45*
* Serve as Office/Directors Since inception 9/15/98
Positions
Clyde Smyth, CEO & Chairman President & Director
Larry Walker, Secretary/Treasurer & Director
Margareta, Totems, Vice President/Director
*These individuals will serve as the officers and directors of the
Company. A brief description of their positions, proposed duties,
background and business experience follows:
Clyde Smyth
Clyde Smyth received his bachelors degree in Electronic Engineering
from Columbia University. Mr. Smyth began his career in the computer
field over thirty years ago where he became expert for the designing,
developing and managing mission critical software that ran on different
computer platforms. Mr. Smyth management experiences extend also
over thirty years of diversified business and management experience
where he held management positions for some of the top company in
THE world. Such company as Hitachi Ltd. , Barclay Bank, Essex
International Division United Technologies, William's Companies, Wards
and Blue Cross and Blue Shield of Illinois.
Margareta Totems
Ms Margareta Totems received her bachelors degree in Sweden in
Accounting and in Mathematics. She has held different management's
positions in finance businesses; Banque de L_Union Europeenne, Paris
France and Systems Programming Ltd., London UK and Institut for
International Research, Stockholm Sweden. Before leaving IIR, Ms
Totems was the Company Accountant for the Stockholm Office and the
controller for the Scandinavian Operation of the Company, while in this
position Ms Totems gained valuable new venture experience.
Ms Cynthia B Robinson received her bachelor's degree in Mathematics from
Fish University. Ms Robinson began her career with IBM. Ms Robinson's
management experience extends 30 years in various diversified business
and management positions with IBM. She received various award from IBM
in the performance of her duties. Ms Robinson will be responsible for the
marketing and sales of the company's products and services.
Larry Walker
Mr. Walker has over twenty years of successful business experience that
includes Management, Sales, Market Planning, Project management and
application Programming in companies such as SBC and Pan America
Inc. Mr. Walker organized, implemented, managed a Marketing and
Marketing Support program that achieving 125% of company business
objectives resulted in over $12 million in revenue.
Item 6. Executive compensation
The company has not paid any compensation to its executive officers and
directors to date. The Company anticipates that A 10-year employment
agreement, for $125.000 per year for the CEO, and Five year employment
agreement, for $100.000 per year for the CFO, will be in effect from
January 2000, annual salary, plus benefits, plus performance bonuses to
be set by the board of directors. The Company has no key man life insurances
with respect to management, but plans to implement these in due course. The
Chairman, CEO and CFO have not taken a salary since inception. The Secretary
will only devote part time to the Company but will be paid $1,000 per month
for the services as corporate secretary. There is no assurance regarding the
time that these arrangements may continue, nor any assurance that the
services of the officers will continue to be available to the Company for
any specified time, other than outlined above. The terms of any future
employment and compensation will be determined at such time in the future
that such arrangements are entered into.
Item 7. Certain Relationships and Related Transactions
The Company has not entered into any transactions during the last two
fiscal years with any director, executive officer, director nominee, 5%
or more shareholder, nor has the Company entered into transactions with
any member of the immediate families of the foregoing persons.
Item 8. Description of Securities
The Company's authorized capital stock consists of 20.000.000 shares of
Common Stock and 1.000.000 of Preferred Stock. As of March 31, 2000 the
Company had 3.678.500 shares of Common Stock outstanding and no
shares of Preferred Stock issued or outstanding. As of the same date,
there were no options, warrants, stock appreciation rights, or other
rights similar in nature outstanding which obligate the company to issue
any additional Common Stock. The company does, however, reserve the right
to issue additional shares of its capital stock from time to time, as well
as stock options, warrants and similar rights when and as authorized by the
Company's board of directors.
The following statements do not purport to be complete and are qualified in
their entirety by reference to the detailed provisions of the Company's
Articles of Incorporation and Bylaws, copies of which will be furnished to an
investor upon written request therefore. See "Additional Information."
Common Stock
The holders of common stock are entitled to one vote per share on all
matters submitted to a vote of the shareholder of the Company. In addition,
such holders are entitled to equal dividends and distributions, per share,
with respect to the common stock when, as and if declared by the Board of
Directors from funds legally available therefore. See "Dividend Policy". No
holder of any shares of common stock has a pre-emotive right to subscribe
for any securities of the neither Company nor are any common shares
subject to redemption or convertible into other securities of the Company.
In the event of the dissolution, liquidation, or winding up of the Company,
and after payment of creditors and preferred stockholders, if any, the assets
will be divided pro-rata on a share-for-share basis among the holders of the
shares of common stock. Each share of common stock is entitled to one
vote with respect to the election of any director or any other matter upon
which shareholders are required or permitted to vote. Holders of the
Company's common stock do not have cumulative voting rights, so that the
holders of more than 50% of the combined shares voting for the election of
directors may elect all the directors, if they choose to do so and, in that
event, the holders of the remaining shares will not be able to elect any
members to the Board of Directors. All outstanding shares of Common
Stock are, and when issued, the shares of Common Stock offered hereby,
fully paid, validly issued and non-assessable.
Preferred Stock
The board of directors has the authority, without further vote or action or
action by the shareholders, to issue up to 1,000,000 shares of Preferred
Stock in one or more series and to fix the rights, preferences, privileges
and restrictions thereof, including dividend rights, conversion rights,
voting rights, terms of redemption, liquidation preferences, sinking fund
terms and the number of shares constituting any series or the designation
of such series. The issuance of preferred Stock could adversely affect the
voting poser of holders of Common Stock and the likelihood that such holders
will receive dividend payments and payments upon liquidation. The company
has no present plans to issue any Preferred Stock.
PART 2
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Related Stockholder Matters.
There is no public trading market for the company's Common Stock.
The company intends to apply to have the Common Stock traded
on the OTC Bulletin Board. No assurance can be given that such
application will be approved and, if approved, that an active trading
market for the Common Stock will be established or maintained.
There are no outstanding options or warrants to purchase, or securities
convertible into, shares of Common Stock.
The Company is not, and has not proposed to, publicly offer any shares
of Common Stock.
Item 2. Legal Proceedings
As of the date hereof, the Company is not a party to any material
pending legal proceeding and is not aware of any threatened legal
proceeding.
Item 3. Changes in and Disagreements with Accountants
NONE
Item 4. Recent Sales of Unregistered Securities
ETI sold certain shares of stock for cash. ETI sold shares in 1998 and 1999
at various prices, ranging from $0.05 to $6.00. The sale and issuance of the
shares of stock were exempt from registration under the Securities Act of
1933, as amended, by virtue of either section 3(b) or 4(2) and, in certain
cases, Regulation D promulgated thereunder. Purchasers in transactions
exempt under Section 4(2) and Rule 506 purchased shares from ETI for
investment and not with a view to distribution to the public. ETI sold
shares under Rule 506 of Regulation D that are subject to restrictions.
Each certificate issued for unregistered securities contained a legend stating
that the securities have not been registered under the Act and setting forth
the restrictions on the transferability and the sale of the securities. No
underwriter participated in, nor did the Company pay any commissions or
fees to any underwriter in connection with any of these transactions. None
of the transactions involved a public offering.
The Company believes that the investors below had knowledge and
experience in financial and business matters which allowed them to
evaluate the merits and risk of the receipt of these securities of the
Company, and that they were knowledgeable about the Company's
operations and financial condition.
<TABLE>
<C> <C> <C> <C> <C>
Date Relationship Common Name Paid
To Company Stock $
# shares
05/01/98 None 5.000 Alexandra Das 2.500.00
05/01/98 None 2.000 Eric Palmer 240.00
05/30/98 None 900 Charlie Smith 360.00
05/01/98 Officer of ETI 61.500 Margareta Totems 61.500.00
05/01/98 None 10.000 Joe Sander 500.00
05/01/98 None 5.000 James Terrell 250.00
05/01/98 None 20.000 Pearl Terrell 1.000.00
05/01/98 None 30.000 W Alexander 2.550.00
05/01/98 None 300 Charlie Smith 150.00
05/01/98 None 5.000 Shirley Benjamin 250.00
05/01/98 None 5.000 Daniel Fields 150.00
05/01/98 None 10.000 Fannie Fields 500.00
05/01/98 None 5.000 Bertice Hazelhurt 250.00
05/01/98 None 5.000 Dawn Palmer 250.00
05/01/98 None 25.000 Larry Reaves 2.500.00
05/01/98 None 5.000 Louise Williams 250.00
05/01/98 None 15.000 Beatrice Wise 750,00
05/01/98 None 5.000 Ralph Wise 250.00
04/14/99 None 100.000 264646 Alberta Ltd 9.950.00
</TABLE>
Item 5. Indemnification of Directors and Officers
The Company's By-Laws states that no compensation shall be paid to
directors, as such, for their services, but by resolution of the board a
fixed sum and expenses for actual attendance at each regular or special
meeting of the board my be authorized. Nothing herein contained shall
be construed to preclude any director from serving the corporation in any
other capacity and receiving compensation therefore.
PART F/S
The following financial statements of Engenyous Technologies Inc are
included in this Part F/S.
The audited financial statements include the accounts of the
Registrant and include all adjustments (consisting of normal recurring
items) which are, in the opinion of management, necessary to present
fairly the financial position as of July 31, 1999.
1. Independent Auditors Report
2. Balance Sheet at July 31, 1999 (audited)
3. Statement of Income and Retained Earnings July 31,
1999(audited)
4. Cash flow Statement at July 31, 1999 (audited)
5. Notes to Financial Statements
6. Revised Balance Sheet at July 31, 1999 (unaudited)
7. Revised Statement of Income and Retained Earnings July 31,
1999 (unaudited).
8. Balance Sheet at July 31, 1998 (unaudited)
9. Statement of Income and Retained Earnings July 31,
1998 (unaudited)
10. Notes to unaudited financial statements
PART F/S
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Shareholders
ENGENYOUS Technologies Inc,
Hallandale Beach, Florida
We have audited the balance sheet of ENGENYOUS Technologies
Inc as of July 31, 1999, and the related statements of operations,
shareholders' equity and cash flows for the year ended July 31, 1999.
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 audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards required 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 ENGENYOUS Technologies Inc as of July 31, 1999,
and the results of operations and its cash flows for the year ended July 31,
1999, in conformity with generally accepted accounting principles
/S/
Pat Rogers
Certified Public Accountant
Hollywood, Florida
September 25, 1999
ENGENYOUS Technologies, Inc.
Balance Sheet (Audited)
July 31 1999
<TABLE>
<C>
ASSETS <C>
Current Assets
Cash 4.275
Trade Receivable 37.005
Inventory (Note 2) 110.650
------------
TOTAL Current Assets 151.975
Property & Equipment (Net)
(Note 2) 77.546
Research & Development
(Note 2) 301.809
------------
TOTAL Assets $ 531.330
=========
Liabilities & Stockholders' Equity
--------------------------------------------
Current Liabilities
Trade Acct. Payable 36.267
Current Potion L/T Debt
(Note 3) 41.750
------------
TOTAL Current Liabilities 78.017
Long Term Liabilities
(Note 4) 0
TOTAL Long Term Liabilities 0
Stockholders' Equity
Common Stock $.001 par value 5.000
Authorized - 20.000.000 Shares
Issued and Outstanding -
3.433.500 Shares
Share Premium 236.350
Additional paid in Capital 64.600
Retained Earnings 147.363
----------
Total Stockholders" Equity $ 362.428
-----------
Total Liabilities & Stockholders'
Equity $ 531.330
===========
</TABLE>
See accompanying notes to financial statements.
ENGENYOUS Technologies Inc
Statement of Income & Retained Earnings (Audited)
Supplementary Information (Audited) Schedule
For twelve months ended July 31, 1999
<TABLE>
<C> <C>
(Audited)
07/31/1999
Revenue
Sales $ 402.500
* TOTAL $ 402.500
===========
Cost of Sales
Purchase $ 199.640
* TOTAL $ 199.640
===========
*NET SALES $ 202.860
===========
Selling Expenses
Advertising 23.095
Advertising Printing 39.683
Travel & Entertainment19.700
* TOTAL $ 82.478
===========
General Expenses
Accounting 7.500
Payroll 7.000
Depreciation 4.602
Legal Fee 8.750
Offices 4.275
Bank 3.072
Postage 5.585
Telephone 6.346
Rent 12.406
Electric 605
Misc 3.763
*TOTAL $ 63.904
===========
*TOTAL EXPENSES $146.382
*NET $ 56.478
</TABLE>
See accompanying notes to financial statements.
ENGENYOUS Technologies Inc
Statement of Cash Flows (Audited)
As of July 31 1999
<TABLE>
<C> <C>
For 12 months
ended 07/31/1999
Cash Flows from operating 56.478
activities: Net profit (loss)
Adjustments to Reconcile Net Loss
to Net Cash Used in Operating
Activities:
Changes in Assets and Liabilities 0
Increase/(Decrease) in
Accounts Payable and Accrued
Expenses 36.267
Additional Paid in Capital
Contributed by Shareholders 64.600
Total Adjustments 121.078
Net Cash Used in
Operating Activities 146.382
Cash Flows from financing
Activities:
Increase in Loan Payable 0
Net Cash Provided by
Financing Activities 0
Net Change in Cash 52.203
Cash at Beginning of Period 4.275
Cash at End of Period 56.478
Supplemental Disclosure of
Cash Flow Information
Cash Paid During the period for
Interest Expense 3.072
Corporate Tax 0
</TABLE>
NOTES TO FINANCIAL STATEMENTS
Note 1 Business Overview
ENGENYOUS technologies Inc ("The Company") develops and
markets encryption software and language software. At the
inception of the Company the technology related to the
encryption software and language software was developed by
the Company's founder, Clyde Smyth. Other individuals services
was prepaid with shares of common stock for the value of their
services. The Company markets its products to Distributors,
Resellers, Government Agencies, Individual Users and on
the Internet. The Company has developed a new technology
for the delivery of encoded electronic documents with evidence
tracking over the Internet and has two patents pending
for this technology. The Company also, has become a provider
of e-commerce web sites. The sites create new business in
cyberspace in eleven languages. The Company is structured as
a "C" corporation, incorporated in Delaware in April 1998.
Note 2 Summary of Significant Accounting Policies
The accompanying financial information as of July 31, 1999
which are, in the opinion of management, fairly present such
information in accordance with generally accepted accounting
principles.
Property and Equipment
Property and Equipment are stated at cost. Depreciation on the
property and equipment is computed using the straight-line method
over seven years.
Research and Development
Research and development will be amortized over seven years
in accordance with generally accepted accounting principles
for the cost of R/D for UEL/2001 Encryption Product that is
currently being marketed.
Product Inventory
Product Inventory is stated at actual cost and has not
assigned any sales cost in accordance to the generally
accounting principles.
(Note 3)Line of Credit
The Company has a revolving line of credit with Regent Bank that
provides maximum borrowing of $40,000 with interest payable
at prime plus 1% (10,25% at July 31,1999). The line is renewable
on an annual basis and guaranteed by the primary stockholder.
The company has borrowed against the line of credit.
Note 4 Long Term Liabilities
The Company has no long term liabilities
Note 5 Employee Compensation
$ 90.885 is for services rendered by the Company's officer for development
of electradoc technology during the period of August 1997 to April 1998 and
will be recorded as additional paid in capital when the shares of common
stock has been issued.
ENGENYOUS Technologies, Inc.
Revised Balance Sheet (UnAudited)
July 31 1999
<TABLE>
<C>
ASSETS <C>
Current Assets
Cash 4.275
Trade Receivable 37.005
Inventory (Note 2) 110.650
------------
TOTAL Current Assets 151.975
Property & Equipment (Net)
(Note 2) 77.546
Research & Development
(Note 2) 301.809
------------
TOTAL Assets $ 531.330
=========
Liabilities & Stockholders' Equity
--------------------------------------------
Current Liabilities
Trade Acct. Payable 36.267
Current Potion L/T Debt
(Note 3) 41.750
Employee Services (Note 5) 90.885
rendered
------------
TOTAL Current Liabilities 168.902
Long Term Liabilities
(Note 4) 0
TOTAL Long Term Liabilities 0
Stockholders' Equity
Common Stock $.001 par value 5.000
Authorized - 20.000.000 Shares
Issued and Outstanding -
3.433.500 Shares
Share Premium 236.350
Additional paid in Capital 64.600
Retained Earnings 56.478
----------
Total Stockholders" Equity$ 362.428
----------
Total Liabilities & Stockholders'
Equity $ 531.330
===========
</TABLE>
See accompanying notes to financial statements.
ENGENYOUS Technologies, Inc.
Statement of Income & Retained Earnings (UnAudited)
Supplementary Information (UnAudited) Schedule
<TABLE>
<C> <C>
07/31/1999
Revenue
Sales $ 402.500
* TOTAL $ 402.500
===========
Cost of Sales
Purchase $ 199.640
* TOTAL $ 199.640
===========
*NET SALES $ 202.860
===========
Selling Expenses
Advertising 23.095
Advertising Printing 39.683
Travel & Entertainment19.700
* TOTAL $ 82.478
===========
General Expenses
Accounting $ 7.500
Payroll 7.000
Depreciation 4.602
Legal Fee 8.750
Offices 4.275
Bank 3.072
Postage 5.585
Telephone 6.346
Rent 12.406
Electric 605
Misc 3.763
Corporate Tax 0
*TOTAL $ 63.904
==========
*TOTAL EXPENSES $146.382
*NET $ 56.478
</TABLE>
See accompanying notes to financial statements.
NOTES TO FINANCIAL STATEMENTS
Note 1 Business Overview
ENGENYOUS technologies Inc ("The Company") develops and
markets encryption software and language software. At the
inception of the Company the technology related to the
encryption software and language software was developed by
the Company's founder, Clyde Smyth. Other individuals services
was prepaid with shares of common stock for the value of their
services. The Company markets its products to Distributors,
Resellers, Government Agencies, Individual Users and on
the Internet. The Company has developed a new technology
for the delivery of encoded electronic documents with evidence
tracking over the Internet and has two patents pending
for this technology. The Company also, has become a provider
of e-commerce web sites. The sites create new business in
cyberspace in eleven languages. The Company is structured as
a "C" corporation, incorporated in Delaware in April 1998.
Note 2 Summary of Significant Accounting Policies
The accompanying financial information as of July 31, 1999
which are, in the opinion of management, fairly present such
information in accordance with generally accepted accounting
principles.
Property and Equipment
Property and Equipment are stated at cost. Depreciation on the
property and equipment is computed using the straight-line method
over seven years.
Research and Development
Research and development will be amortized over seven years
in accordance with generally accepted accounting principles
for the cost of R/D for UEL/2001 Encryption Product that is
currently being marketed.The total amount amortized is $ 301.809.
The increase of $ 100.642 in 1999 was for electronic workbooks and
electronic manuals for the language products and Spanish user manual
for UEL/2001 Encryption product the Spanish version.
Product Inventory
Product Inventory is stated at actual cost and has not
assigned any sales cost in accordance to the generally
accounting principles.
(Note 3)Line of Credit
The Company has a revolving line of credit with Regent Bank that
provides maximum borrowing of $40,000 with interest payable
at prime plus 1% (10,25% at July 31,1999). The line is renewable
on an annual basis and guaranteed by the primary stockholder.
The company has borrowed against the line of credit.
Note 4 Long Term Liabilities
The Company has no long term liabilities
Note 5 Employee Compensation
$ 90.885 is for services rendered by the Company's officer
for development of electradoc technology during the period of
August 1997 to April 1998 and will be recorded as additional
paid in capital when the shares of common stock has been
issued for the services.
Note 6 Tax provision.
Income Taxes - The Company uses the asset and liability method as
identified in SFAS 109, Accounting for Income Taxes. The Company has not
calculated the tax on the current fiscal year. We have a carry forward of
$201.167 from 1998.
ENGENYOUS Technologies, Inc. Balance Sheet
(UnAudited)
01/ 01/98 -07/31/98
<TABLE>
<C>
ASSETS <C>
Current Assets
Cash 6.280
Trade Receivable 0
Inventory (Note 2) 95.290
------------
TOTAL Current Assets 101.570
Property & Equipment (Net)
(Note 2) 77.546
TOTAL Assets $ 179.116
=========
Liabilities & Stockholders' Equity
--------------------------------------------
Current Liabilities
Trade Acct. Payable 48.048
Employee services rendered
(Note 3) 90.885
------------
TOTAL Current Liabilities 138.933
Long Term Liabilities
TOTAL Long Term Liabilities 0
Stockholders' Equity
Common Stock $.001 par value 5.000
Authorized - 20.000.000 Shares
Issued and Outstanding -
3.433.500 Shares
Share Premium 236.350
Retained Earnings(Note 4) (201.167)
----------
Total Stockholders" Equity $ 40.183
-----------
Total Liabilities & Stockholders'
Equity $ 179.116
===========
</TABLE>
See accompanying notes to financial statements.
ENGENYOUS Technologies Inc
Statement of Income & Retained Earnings (UnAudited)
Supplementary Information (UnAudited) Schedule
For Six months ended July 31, 1998
<TABLE>
<C> <C>
07/31/1998
Revenue
* TOTAL $ 0
===========
* TOTAL $ 0
===========
*NET SALES $ 0
===========
Selling Expenses
Advertising 0
Advertising Printing 0
Travel & Entertainment 0
* TOTAL $ 0
===========
R & D 201.167
*TOTAL $201.167
===========
*TOTAL EXPENSES $201.167
*NET (Loss) $(201.167)
</TABLE>
See accompanying notes to financial statements.
NOTES TO FINANCIAL STATEMENTS
Note 1 Business Overview
ENGENYOUS technologies Inc ("The Company") develops and
markets encryption software and language software. At the
inception of the Company the technology related to the
encryption software and language software was developed by
the Company's founder, Clyde Smyth. Other individuals services
was prepaid with shares of common stock for the value of their
services. The Company markets its products to Distributors,
Resellers, Government Agencies, Individual Users and on
the Internet. The Company has developed a new technology
for the delivery of encoded electronic documents with evidence
tracking over the Internet and has two patents pending
for this technology. The Company also, has become a provider
of e-commerce web sites. The sites create new business in
cyberspace in eleven languages. The Company is structured as
a "C" corporation, incorporated in Delaware in April 1998.
Note 2 Summary of Significant Accounting Policies
The accompanying financial information as of July 31, 1998
which are, in the opinion of management, fairly present such
information in accordance with generally accepted accounting
principles.
Property and Equipment
Property and Equipment are stated at cost. Depreciation on the
property and equipment is computed using the straight-line method
over seven years.
Product Inventory
Product Inventory is stated at actual cost and has not
assigned any sales cost in accordance to the generally
accounting principles.
Note 3 Employee Compensation
$ 90.885 is for services rendered by the Company's officer
for development of electradoc technology during the period
of August 1997 to April 1998 and will be recorded as additional
paid in capital when the shares of common stock has been issued
for the services.
Note 4 Retained Earnings
R and D has been an operation expenditure.
ENGENYOUS Technologies Inc
Statement of Cash Flows (UnAudited)
As of July 31 1998
<TABLE>
<C> <C>
For 6 months
ended 07/31/1998
Cash Flows from operating
activities: Net profit (loss) (201.167)
Adjustments to Reconcile Net Loss
to Net Cash Used in Operating
Activities:
Changes in Assets and Liabilities
Increase/(Decrease) in
Accounts Payable and Accrued 48.048
Expenses
Additional Paid in Capital
Contributed by Shareholders 0
Total Adjustments (201.167)
Net Cash Used in
Operating Activities
Cash Flows from financing
Activities:
Increase in Loan Payable 0
Net Cash Provided by
Financing Activities 0
Net Change in Cash (194.887)
Cash at Beginning of Period 6.280
Cash at End of Period (201.167)
Supplemental Disclosure of
Cash Flow Information
$ 201.167 is expenses for our Research and
Development of Encryption Technology and
Language Technology. These products will be
available inthe market in 1999.
Cash Paid During the period for 0
Interest Expense
Corporate Tax 0
</TABLE>
PART 3
Item 1. Index to Exhibits
Exhibit Number Description of Exhibit
3.1 Certificate of Incorporation
3.2 Registrant's By-Laws
3.3. Employment Agreements
27.1 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized.
/ S /
Clyde Smyth
(Registrant)
Date: May 10, 2000
State of Delaware
Office of the Secretary of State
I, Edward J Freel, Secretary of State of the State of Delaware, do Hereby
certify the attached is a true and correct copy of the Certificate of
Incorporation of "Engenyous Technologies Inc", filed in this office on the
seventh day of April A.jD. 1998, at 9 o'clock a.m.
Stamp Edward J. Freel, Secretary of State
2881376 8100 Authentication: 9210250
981280438 Date: 07-22-98
State of Delaware
Secretary of State
Division of Corporations
Filed 09:00 AM 04/07/1998
981170482-2881376
STATE OF DELAWARE
CERTIFICATE OF INCORPORATION
A STOCK CORPORATION
FIRST: The name of this corporation is ENGENYOUS TECHNOLOGIES
INC
SECOND: Its Registered Office in the State of Delaware is to be located
at 1012 Center Road, in the city of Wilmington, County of New Castle
Delaware. Zip Code 19805. The Registered Agent in chare thereof is
Corporation Service Company.
THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The amount of the total authorized capital stock of this
corporation is
Twenty Thousand Dollars ($ 20.000) divided into 20.000.000 shares of
Dollars .001 each.
FIFTH: The name and mailing address of the incorporator are as follows:
Name: Larry Reaves
Mailing address: 1250 E Hallandale Beach Bld, Hallandale, Zip
Code 33009
I, THE UNDERSIGNED, for the purpose of forming a corporation under
the laws of the State of Delaware, do make, file and record this
Certificate, and do certify that the facts herien stated are true,
and I have accordingly hereunto set my hand this 2nd day of
April A.D. 1998.
/S/
Larry Reaves
Incorporator
BY - LAWS
OF
ENGENYOUS TECHNOLOGIES INC
ARTICLE I - OFFICES
The principle office of the corporation in the State of Delaware shall
be located in the 1013 Center Road of Wilmington in County of New Castle
Delaware. The Corporation may have such other offices, either within or
without the State of incorporation as the board of directors may
designate or as the business of the corporation may from time to time
require.
ARTICLE II - STOCKHOLDERS
1. ANNUAL MEETING
The annual meeting of the stockholders shall be held on the 15 day of
May in each year, beginning with the year 1999 at the hour 11.00 o'clock
a.m. for the purpose of electing directors and for the transaction of such
other business as may come before the meeting. if the day fixed for the
annual meting shall be a legal holiday such meeting shall be held on the
next succeeding business day.
2. SPECIAL MEETINGS.
Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute, may be called by the president or
by the directors, and shall be called by the president at the request of
the holders of not less than 10 per cent of all the outstanding shares
of the corporation entitled to vote at the meeting.
3. PLACE OF MEETING.
The directors may designate any place, either within or without the State
unless otherwise prescribe by statute, as the place of meeting for any
annual meeting or for any special meeting called by the directors. A
waiver of notice signed by all stockholders entitled to vote at a meeting
may designate any place, either within or without the state unless
otherwise prescribed by statue, as the place for holding such meeting, if
no designation is made, or if a special meeting be otherwise called, the
place of meeting shall be the principal office of the corporation.
4. NOTICE OF MEETING.
Written or printed notice stating the place, day and hour of the meeting
and, in case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than 30 nor more than 30
days before the date of the meeting, either personally or by mail, by or at
the direction of the president, or the secretary, or the officer or persons
calling the meeting, to each stockholder of record entitled to vote at such
meeting. If mailed,
Such notice shall be deemed to be delivered when deposited in the
United States mail, addressed to the stockholder t his address as it
appears on the stock transfer books of the corporation, with postage
thereon prepaid
5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE.
For the purpose of determining stockholders entitled to notice of or to
vote any meeting of stockholders or any adjournment thereof, or
stockholders entitled to receive payment of any dividend, or in order to
make a determination of the corporation may provide that the stock
transfer books shall be closed for a stated period but not to exceed, in
any case, 15 days. If the stock transfer books shall be closed for the
purpose of determining stockholders entitled to notice of or to vote at a
meeting of stockholders such books shall be closed for at least 30 days
immediately preceding such meeting. In lieu of closing the sock transfer
books, the directors may fix in advance a date as the record date for any
such determination of stockholders, such date in any case to be not
more than 30 days and, in case of a meeting of stockholders, not less
than 30 days prior to the date on which the particular action requiring
such determination of stockholder is to be taken. if the stock transfer
books are not closed and no record date is fixed for the determination of
stockholders entitled to notice of or to vote at a meeting stockholders, or
stockholders entitled to receive payment of a dividend, the date on
which notice of the meeting is mailed or the date on which the resolution
of the directors declaring such dividend is adopted as the case may be,
shall be the record date for such determination of stockholders. When a
determination of stockholders entitled to vote at any meting of
stockholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
6. VOTING LISTS.
The officer or agent having charge of the stock transfer books for shares
of the corporation shall make, at least 15 days before each meeting of
stockholders a complete list of the entitled to vote at such meeting, or
any adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares hold by each, which list, for a
period of 30 days prior to such meeting, shall be kept on file at the
principal office of the corporation and shall be subject to inspection by
any stockholder at any time during usual business hours. Such list shall
also be produced an kept open at the time and place of the meeting and
shall be subject to the inspection of any stockholder during the whole
time of the meeting. the original stock transfer book shall be prima facie
evidence as to who are the stockholders entitled to examine such list or
transfer books or to vote at the meeting of stockholders.
7. QUORUM.
At any meeting of stockholders all of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders. If less than said
number of the outstanding shares are represented at a meeting, a
majority of the shares so represented 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 stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
8. PROXIES.
At all meeting of stockholders, a stockholder may vote by proxy executed
in wiring by the stockholder or by his duly authorized attorney in fact.
Such proxy shall be filed with the secretary of the corporation before or
at the time of the meeting.
9. VOTING.
Each stockholder entitled to vote in accordance with the terms and
provisions of the certificate of incorporation and these by-laws shall be
entitled to one vote, in person or by proxy, for each share of stock
entitled to vote held by such stockholders. Upon the demand of any
stockholder, the vote for directors and upon any question before the
meeting shall be by ballot. all elections for directors shall be decide by
plurality vote; all other questions shall be decided y majority vote except
as otherwise provided by the Certificate of Incorporation or the laws of
this State.
10. ORDER OF BUSINESS
The order of business at all meeting of the stockholders, shall be as
follows:
1. Roll Call
2. Proof of notice of meeting or waiver of notice.
3. Reading of minutes of preceding meting.
4. Reports of Officers.
5. Reports of Committees.
6. Election of Directors.
7. Unfinished Business.
8. New Business.
11. INFORMAL ACTION BY STOCKHOLDERS
Unless otherwise provided by law, any action required to be taken at a
meeting of the shareholders, or any other action which may be taken at a
meeting of the shareholders, may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all
of the shareholders entitled to vote with respect to the subject matter
thereof.
ARTICLE III - BOARD OF DIRECTORS
1. GENERAL POWERS.
The business and affairs of the corporation shall be managed by its
board of directors. the directors shall in all cases act as a board, and
they may adopt such rules and regulations for the conduct of their
meetings and the management of the corporation, as they may deem
proper, not inconsistent with these by-laws and the laws of this State.
2. NUMBER, TENURE AND QUALIFICATIONS.
The number of directors of the corporation shall be 4. Each director shall
hold office until the next annual meting of stockholders and until his
successor shall have been elected and qualified.
3. REGULAR MEETINGS.
A regular meeting of the directors, shall be held without other notice than
this by-law immediately after, and at the same place as, the annual
meeting of stockholders. The directors may provide, by resolution, the
time and place for the holding of additional regular meetings without
other notice than such resolution.
4. SPECIAL MEETINGS.
Special meetings of the directors may be called by or at the request of
the president or any two directors. The person or persons authorized to
call special meetings of the directors may fix the place for holding any
special meeting of the directors called by them.
5. NOTICE.
Notice of any special meeting shall be given at least 30 days previously
thereto by written notice delivered personally, or by telegram or mailed to
each director at his business address. If mailed, such notice shall be
deemed to be delivered wherein deposited in the United States mail so
addressed, with postage thereon prepaid. If notice be given by telegram,
such notice shall be deemed to e delivered when the telegram is
delivered to the telegraph company. The attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where
a director attends a meeting for the express purpose of objecting to the
transaction of any business because the meting is not lawfully called on
convened.
6. QUORUM.
At any meeting of the directors 3 shall constitute a quorum for the
transaction of business, but if less than said number is present at a
meeting, a majority of the directors present may adjourn the meting from
time to time without further notice.
7. MANNER OF ACTING.
The act of the majority of the directors present at a meeting at which a
quorum is present shall be the act of the directors.
8. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the board for any reason except the
removal of directors without cause may be filed by a vote of a majority of
the directors then in office, although less than a quorum exists.
Vacancies occurring by reason of the removal of directors without cause
shall be filed by vote of the stockholders. A director elected to fill a
vacancy caused by resignation, death or removal shall be elected to hold
office for the
unexpired term of his predecessor.
9.REMOVAL OF DIRECTORS.
Any or all of the directors may be removed for cause by vote of the
stockholders or by action of the board directors may be removed without
cause only by vote of the stockholders.
10. RESIGNATION.
A director may resign at any time by giving written notice to the board,
the president or the secretary of the corporation. Unless otherwise
specified in the notice, the resignation shall take effect upon receipt
thereof by the board or such officer, and the acceptance of the
resignation shall not be necessary to make if effective.
11. COMPENSATION.
No compensation shall be paid to directors, as such, for their services,
but by resolution of the board a fixed sum and expenses for actual
attendance at each regular or special meeting of the board may be
authorized. Nothing herein contained shall be construed to preclude any
director from servicing the corporation in any other capacity and
receiving compensation therefore.
12. PRESUMPTION OF ASSENT.
A director of the corporation who is present at a meeting of the directors
at which action on any corporate matter is taken shall be presumed to
have assented to the action taken unless his dissent shall be entered in
the minutes of the meeting or unless he shall file his 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.
13. EXECUTIVE AND OTHER COMMITTEES.
The board, by resolution, may designate from among its members an
executive committee and other committees, each consisting of three or
more directors. Each such committee shall serve at the pleasure of the
board.
ARTICLE IV - OFFICERS
1. NUMBER.
The officers of the corporation shall be a president, a vice-president,
a secretary and a treasurer, each of whom shall be elected by the
directors. Such other officers and assistant officers as may be deemed
necessary may be elected or appointed by the directors.
2.ELECTION AND TERM OF OFFICE.
the officers of the corporation to be elected by the directors shall be
elected annually at the first meeting of the directors held after each
annual meeting of the stockholders. Each officers shall hold office until
his successor shall have been duly elected and shall have qualified or
until his death or until he shall resign or shall have been removed in the
manner hereinafter provided.
3. REMOVAL.
Any officer or agent elected or appointed by the directors may be
removed by the directors whenever in their judgment the best interests
of the corporation would be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
4. VACANCIES.
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filed by the directors for the
unexpired portion of the term.
5. PRESIDENT.
the president shall be the principal executive office of the corporation
and, subject to the control of the directors, shall in g general supervise
and control all of the business and affairs of the corporation. he shall,
when present, preside at all meetings of the stockholders and of the
directors. he may sign, with the secretary or any other proper officer of
the corporation thereunto authorized by the directors, certificates for
shares of the corporation, any deeds, mortgages, bonds, contracts, or
other instruments which the directors have authorized to be executed,
except in cases where the signing and execution thereof shall be
expressly delegated by the directors or by these by-laws to some other
officer or agent of the corporation, or shall be required by lay to be
otherwise signed or executed; and in general shall reform all duties
incident to the office of president and such other duties as may be
prescribed by the directors from time to time.
6. VICE-PRESIDENT.
In the absence of the president or in event of his death, inability or
refusal to act, the vice-president shall perform the duties of the president,
and when so acting, shall have all the powers of and be subject to all the
restrictions upon the president. The vice-president shall perform such
other duties as from tine to time may be assigned to him by the president
or by the directors.
7. SECRETARY.
The secretary shall keep the minutes of the stockholders' and of the
directors' meetings in one or more books provided for that purposes, see
that all notices are duly given in accordance with the provisions of these
by-laws or as required, be custodian of the corporate records and of the
seal of the corporation and keep a register of the post office address of
each stockholder which shall be furnished to the secretary by such
stockholder, have general charge of the stock transfer books of the
corporation and 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 by the president or by the directors.
8. TREASURER.
If required by the directors, the treasurer shall give a bond for the faithful
discharge of his duties in such sum and with such surety or sureties as
the directors shall determine, He shall have and custody of and be
responsible for all funds and securities of the corporation; receive and
give receipts for moneys due and payable to the corporation from any
source whatsoever, and deposit all such moneys in the name of the
corporation in such banks, trust companies or other depositories as shall
be selected in accordance with these by-laws and in general perform all
of the duties incident to the office of treasurer and such other duties as
from time to time may be assigned to him by the president or by the
directors.
9. SALARIES.
The salaries of the officers shall be fixed from time to time by the
directors and no officer shall be prevented from receiving such salary by
reason of the fact that he is also a director of the corporation.
ARTICE V - CONTRACTS, LOANS, CHECKS AND DEPOSITS
1. CONTRACTS.
The directors may authorize any officer or officers agent or agents, to
enter into any contract or execute and deliver any instrument in the name
of and on behalf of the corporation, and such authority may be general
or confined to specific instances.
2. LOANS.
No loans shall be contracted on behalf of the corporation and no
evidences of indebtedness shall be issued in its name unless authorized
by a resolution of the directors. Such authority may be general or
confined to specific instances.
3. CHECKS, DRAFTS, ETC.
all checks, drafts or other orders for the payment of money, notes or
other evidence of indebtedness issued in the name of the corporation,
shall be signed by such officer or officers, a gent or agents of the
corporation and in such manner as shall from time to time be terminated
by resolution of the directors.
4. DEPOSITS.
All funds of the corporation not otherwise employed shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies or other depositaries as the directors may select.
ARTICLE VI - CERTIFICATES FOR SHARES AND THEIR TRANSER
1. CERTIFICATES FOR SHARES.
Certificates representing shares of the corporation shall be in such form
as shall be determined by the directors, such certificates shall be signed
by the president and by the secretary or by such other officers authorized
by law and by the directors. All certificates for shares shall be
consecutively numbered or otherwise identified. The name and address
of the stockholders, the number of shares and date of issues, shall be
entered on the stock transfer books of the corporation. All certificates
surrendered to the corporation for transfer shall be canceled and no new
certificate shall be issued until the former certificate for a like number of
shares shall have been surrendered and canceled, except that in case of
a lost, destroyed or mutilated certificate a new one may be issued
therefore upon such terms and indemnity to the corporation as the
directors may prescribe.
2. TRANSFERS OF SHARES.
a) Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it
shall be the duty of the corporation to issue a new certificate to the
person entitled thereto, and cancel the old certificate; every such transfer
shall be entered on the transfer book of the corporation which shall be
kept at its principal office.
b) The corporation shall be entitled to treat the holder of record of any
share as the holder in fact thereof, and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share on
the part of any other person whether or not it shall have express or other
notice thereof, except as expressly provided by the laws of this state.
ARTICLE VII - FISCAL YEAR
The fiscal year of the corporation shall begin on the 1st day of August in
each year.
ARTICLE VIII - DIVIDENDS
The directors may from time to time declare, and the corporation may
pay, dividends on its outstanding shares in the manner and upon the
terms and conditions provided by law.
ARTICLE IX - SEAL
The directors shall provide a corporate seal which shall be circular in
form and shall have inscribed thereon the name of the corporation, the
state of incorporation, year of incorporation and the words, "Corporate
Seal".
ARTICLE X - WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to
be given to any stockholder or director of the corporation under the
provisions of these by-laws or under the provisions of the articles of
incorporation, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.
ARTICLE XI - AMENDMENTS
These by-laws may be altered, amended or repealed and new by-laws
may be adopted by a vote of the stockholders representing a majority of
all the shares issued and outstanding, at any annual stockholders'
meeting or at any special stockholders' meeting when the proposed
amendment has been set out in the notice of such meeting.
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered
into as of January 1, 2000 (the "Hire Date") by and between ENGENYOUS
Technologies, INC. (the "Company"), a Delaware corporation, and Clyde
Smyth ("Executive"). The Company and Executive are hereinafter
collectively referred to as the "Parties," and individually referred
to as a "Party."
RECITALS
The Company desires assurance of the association and services of
Executive in order to retain Executive's experience, skills, abilities,
background and knowledge, and is willing to engage Executive's services
on the terms and conditions set forth in this Agreement.
Executive desires to be in the employ of the Company, and is willing to
accept such employment on the terms and conditions set forth in this
Agreement.
AGREEMENT
In consideration of the foregoing Recitals and the mutual promises and
covenants herein contained, and for other good and valuable consideration,
the Parties, intending to be legally bound, agree as follows:
1. EMPLOYMENT.
1.1 The Company hereby employs Executive, and Executive hereby accepts
employment by the Company, upon the terms and conditions set forth in this
Agreement, for the period commencing on the Hire Date and ending as
provided in paragraph 4 hereof (the "Employment Period").
1.2 Executive shall serve as President, Chief Executive Officer ("CEO") and
as chairman on the Company's Board of Directors (the "Board") Executive
shall report to the Board.
1.3 Executive shall do and perform all services, acts or things necessary or
advisable to manage and conduct the business of the Company and which
are normally associated with the position of President and CEO consistent
with the bylaws of the Company and as required by the Company's Board.
1.4 Unless the Parties otherwise agree in writing, during the term of this
Agreement, Executive shall perform the services he is required to perform
pursuant to this Agreement at the Company's offices, located in Hallandale,
Florida, or at any other place at which the Company maintains an office;
provided, however, that the Company may from time to time require
Executive to travel temporarily to other locations in connection with the
Company's business.
2. LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.
2.1 During the Employment Period, Executive shall devote his full business
energies, interest, abilities and productive time to the proper and efficient
performance of his duties under this Agreement. The foregoing shall not
preclude Executive from engaging in civic, charitable or religious activities,
or from serving on boards of directors of companies or organizations which
will not present any direct conflict with the interest of the Company or
affect the performance of Executive's duties hereunder.
2.2 Except with the prior written consent of the Company's Board, Executive
will not, during the Employment Period, or any period during which
Executive is receiving compensation or any other consideration from the
Company, including severance pay pursuant to Section 4 herein, engage in
competition with the Company, either directly or indirectly, in any manner
or capacity, as adviser, principal, agent, partner, officer, director,
employee, member of any association or otherwise, in any phase of the business
of developing, manufacturing and marketing of products which are in the same
field of use or which otherwise compete with the products or products
actively under development by the Company.
2.3 Except as permitted herein, Executive agrees not to acquire, assume or
participate in, directly or indirectly, any position, investment or interest
known by him to be adverse or antagonistic to the Company, its business or
prospects, financial or otherwise. Ownership by Executive, as a passive
investment, of less than five percent (5%) of the outstanding shares of
capital stock of any corporation with one or more classes of its capital
stock listed on a national securities exchange or publicly traded in the
over-the-counter market shall not constitute a breach of this paragraph.
3. COMPENSATION OF EXECUTIVE.
3.1 The Company shall pay Executive an initial base salary of $125.000
(hundred and twenty five thousand) per year (the "Base Salary"), payable
in regular periodic payments in accordance with Company policy. Such
salary shall be prorated for any partial year of employment on the basis
of a 365 day fiscal year.
3.2 Executive's compensation may be changed from time to time by mutual
agreement of Executive and the Board. Executive's Base Salary shall be
reviewed annually by the Board and increased (but not decreased) based
upon Executive's performance in the sole discretion of the Board.
3.3 All of Executive's compensation shall be subject to customary
withholding taxes and any other employment taxes as are commonly
required to be collected or withheld by the Company.
3.4 During the Employment Period, the Company agrees to reimburse
Executive for all reasonable and necessary business expenses subject to
the Company's standard requirements with respect to reporting and
documentation of such expenses.
3.5 Executive shall, in accordance with Company policy and the terms of
the applicable plan documents, be eligible to participate in benefits
under any Executive benefit plan or arrangement which may be in effect
from time to time and made available to its executive or key management
employees. The Company may modify or cancel its benefit plan(s) as it
deems necessary.
3.6 Executive shall be eligible for a performance bonus in 2000 to be
awarded by the Board based upon Executive's attainment of certain sales
goals. If the Company's sales for the period of January through December,
2000, are between Two Million Six Hundred Thousand Dollars
($2.600.000.00) and Four Million Seven Hundred Thousand Dollars
($4.700.000.00), Executive shall earn a bonus equal to the formula of
Actual $ Sales / $4.700,000. x $50.000.00. As a stretch bonus, if the
Company's sales for the period of January through December, 2000, are
between Four Million Seven Hundred Thousand Dollars ($4.700.000.00)
and Six Million Dollars($6.000.000.00), Executive will earn an additional
bonus equal to the formula of Actual $ Sales / $6.000,000.00 x $50.000.00
In the event Executive attains sales goals in excess of Six Million Dollars
($6.000.000.00), his total bonus paid shall be limited to One Hundred
Thousand Dollars ($100,000.00) in 2000. If Executive earns a bonus,
hereunder, it shall be paid within sixty (60) days of December 31, 2000.
For each year following 2000, Executive shall be eligible for an annual
bonus which shall be awarded at the sole discretion of the Board pursuant
to the terms of any bonus formula or plan which the Board may approve in
the future.
(d) Upon any acquisition of the Company (through acquisition of shares,
merger, sale of assets or otherwise) in which shares of the Company's
common stock are converted into or exchanged for shares of another
corporation, provision shall be made by the Company for the assumption of
the Options by such other corporation and the Options shall be appropriately
adjusted to apply and pertain to the number and class of securities which
would have been issued to Executive upon consummation of such
acquisition had the Options been exercised immediately prior thereto.
Appropriate adjustments shall also be made to the exercise price applicable
to the Options shall remain the same; provided, that in the event any
surviving corporation or acquiring corporation refuses to assume such
Options or to substitute similar stock awards for such Options, the vesting
of such Options (and, if applicable, the time during which such Options may
be exercised) shall be accelerated prior to such event and the Options
terminated if not exercised after such acceleration and at or prior to such
event.
4. TERM.
The Employment Period shall end on the tenth anniversary of the Hire
Date; provided, that the Employment Period terminate earlier as provided in
this Section 4. The ten (10) year Employment Period shall be extended at
the end of each year during the Employment Period for an additional one (1)
year period unless the Company notifies Executive in writing by March 31 of
any year of the Company's election not to extend the Employment Period.
Notwithstanding the foregoing,
(i) the Employment Period shall terminate upon Executive's
resignation, death or permanent Disability (as defined in Section
4(j));
(ii) the Employment Period may be terminated by Executive at any
time if the Company fails to comply with any material provision
of this Agreement, which failure has not been cured within ten
(10) business days after notice of such noncompliance has
been given by the Executive to the Company;
(iii) the Employment Period may be terminated for Good Reason by
Executive at any time during the period ten (10) years after the
date of a Change in Control (as defined below);
iv) the Employment Period may be terminated without Cause by
the Company upon thirty (30) days prior written notice to
Executive; and
(iv) the Employment Period may be terminated by the Company at
any time for Cause.
a) If the Employment Period is terminated by the Company for Cause or by
Executive's resignation, Executive shall be entitled to receive all
amounts due to him through the date of termination, including any Bonus
earned.
b) If the Employment Period is terminated as a result of Executive's death
or permanent Disability, the Company shall pay any amounts due to Executive
through the date of termination and a pro-rated Bonus in an amount equal to
the Bonus which would have otherwise been payable to Executive pursuant
to paragraph 3.6, if any, with respect to the fiscal year in which such
termination occurs.
c) If the Employment Period is terminated by the Company pursuant to
paragraph 4(iv) or by Executive pursuant to paragraphs 4(ii) above then,
upon Executive's furnishing to the Company an executed waiver and
release of claims form of which is attached hereto as Exhibit A),
Executive shall be entitled to receive
(i) a lump sum payment equal to 50% of his current Base Salary
in effect as of the date of termination, subject to standard
deductions and withholdings payable within ten (10) days after the
date of termination,
(ii) a Bonus equal to 50% of the average of the annual Bonuses
earned by Executive during the Employment Period subject to
standard deductions and withholdings. Executive shall also be
eligible to receive continued medical benefits to the extent
permitted under COBRA for a period of six (6) months from the
date of termination.
d) If, within ten (10) years after a Change in Control, the Employment
Period is terminated by the Company other than for Cause, or if
Executive terminates the Employment Period for Good Reason (as
hereinafter defined), then upon Executive's furnishing to the Company
an executed waiver and release of claims form of which is attached
hereto as Exhibit A), Executive shall be entitled to the following:
i) Executive's Base Salary and accrued and unused vacation
earned through the date of termination;
ii) a lump sum payment equal to one and one-half times the sum
of Executive's current Base Salary in effect as of the date of
termination, subject to standard deductions and withholdings, to
be paid within (10) days after the date of termination;
(iii) a lump sum payment equal to one and one-half times the
average of the Bonuses earned by Executive during the
Employment Period, subject to standard deductions and
withholdings, to be paid within ten (10) days after the date of
termination;
(iv) continued medical benefits, to the extent permitted under
COBRA, for a period of eighteen (18) months.
e) If the Employment Period is terminated prior to December 1, 1999,
there shall be no Bonus earned by Executive for the fiscal year ending
December 31, 1999. If the Employment Period is terminated between December
1 and December 31, 1999, the Bonus earned by Executive for the fiscal year
ending December 31, 1999 shall be 50% of Executive's Base Salary in
effect as of such termination for purposes of calculating average Bonuses
in paragraphs 4(c) and (d) above; provided, however, that Executive is not
terminated for Cause.
f) For purposes of this Agreement, a "Change in Control" of the Company
shall be deemed to have occurred if
(i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the
Exchange Act")), other than a trustee or other fiduciary holding
securities of the Company under an employee benefit plan of the
Company, becomes the "beneficial owner" (as defined in Rule
13d-3 promulgated under the Exchange Act), directly or indirectly,
of securities of the Company representing 50% or more of (A) the
outstanding shares of Common Stock of the Company or (B) the
combined voting power of the Company's then-outstanding
securities entitled to vote generally in the election of directors;
(ii) during any period of not more than two consecutive years, not
including any period prior to the date of this Agreement,
individuals who at the beginning of such period constitute the
Board, and any new director (other than a director designed by a
person who has entered into an agreement with the Company to
effect a transaction described in clause (i) or
(iii) of this paragraph (f)) whose election by the Board or
nomination by the Company's shareholders was approved by a
vote by at least a majority of the directors still in office who either
were in office at the beginning of such period or whose election or
nomination for election was previously so approved, ceases for
any reason to constitute a majority of the Board;
(iii) the Company is party to a merger or consolidation which
results in the holders of voting securities of the Company
outstanding immediately prior thereto failing to continue to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 50% of the
combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger
or consolidation, or the Company sells or disposes of all or
substantially all of the Company's assets or any transaction
having a similar effect is consummated.
g) "Good Reason" as used in this Agreement shall mean
(i) without Executive's express written consent, any failure by the
Company to comply with any material provision of this Agreement,
which failure has not been cured within ten (10) business days
after notice of such noncompliance has been given by Executive
to the Company, or
ii) the occurrence (without Executive's express written consent),
within ten (10) years after a Change in Control, of any one of the
following acts by the Company, or failures by the Company to act,
unless, in the case of any act or failure to act described below,
such act or failure to act is corrected prior to the date of
termination specified in any notice of termination given by
Executive to the Company in respect thereof:
(h) Any change in Executive's title, authorities, responsibilities
(including reporting responsibilities) which represents an adverse
change from his status, title, position or responsibilities (including
reporting responsibilities) which were in effect immediately prior to
the Change in Control; the assignment to Executive of any material
duties or work responsibilities which are inconsistent with such status,
title, position or work responsibilities; or any removal of Executive
from, or failure to appoint or reelect him to, any such positions, except
if such changes are because of Disability, retirement, death or for Cause;
(ii) The relocation of Executive's office to a location outside of
Hallandale, Florida;
(iii) The failure by the Company to continue in effect any annual or
long-term incentive compensation plan in which Executive
participated immediately prior to the Change in Control, unless
Executive participates after the Change in Control in another
comparable plan generally available to senior executives of the
Company and senior executives of any person in control of the
Company; or
(iv) The failure by the Company to continue to provide the
Executive with benefits substantially similar in value in the
aggregate to those enjoyed by Executive immediately prior to the
Change in Control.
i) Except as otherwise set forth above, all of Executive's rights to
fringe benefits and bonuses hereunder (if any) accruing after the
termination of the Employment Period shall cease upon such termination.
j) For purposes of this Agreement, "Cause" shall mean
(i) the willful failure or refusal by Executive to perform his
duties hereunder (other than any such failure resulting from
Executive's incapacity due to physical or mental illness),
which has not ceased within ten (10) business days after
written demand for substantial performance is delivered to
Executive by the Company, which demand identifies the
manner in which Company believes that the Executive has
not performed such duties and the steps required to cure
such failure to perform;
(ii) Executive shall intentionally and willfully engage in
misconduct which is materially injurious to the Company,
monetarily or otherwise; or the conviction of Executive of or
the entering of a plea of nolo contenders by Executive with
respect to, a felony.
Notwithstanding the foregoing, Executive's Employment hereunder shall
not be deemed to be terminated for Cause and no other action shall be
taken by the Company which is adverse to Executive unless and until
there shall have been delivered to Executive a copy of a resolution
duly adopted by a unanimous vote of the Board (excluding Executive)
at a meeting of the Board (after written notice to Executive and a
reasonable opportunity for Executive to be heard before the Board)
authorizing and approving such termination or other action.
j) For purposes of this Agreement, permanent "Disability" shall mean the
expiration of a continuous period of one hundred and eighty (180) days
during which Executive is unable to perform his assigned duties due to
physical or mental incapacity. In the event of any dispute regarding the
existence of Executive's Disability hereunder, the matter will be resolved
by the determination of a majority of three physicians qualified to practice
medicine in Florida, one to be selected by each of Executive and the Board
and the third to be selected by the two designated physicians. For this
purpose, Executive will submit to appropriate medical examinations.
k) Executive shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise,
and the amount of any payment or benefit provided for in this Section 4
shall not be reduced by any compensation earned by Executive as a result
of employment by another employer or by any other benefits.
5. CHOICE OF LAW.
5.1 This Agreement will be governed by the internal law, and not the
laws of conflicts, of the State of Florida.
6. AMENDMENT AND WAIVER.
6.1 The provisions of this Agreement may be amended or waived only with
the prior written consent of the Company and Executive, and no course of
conduct or failure or delay in enforcing the provisions of this Agreement
shall affect the validity, binding effect or enforceability of this Agreement.
7. CONFIDENTIAL AND PROPRIETARY INFORMATION;
NONSOLICITATION.
7.1 Executive agrees to execute and abide by the Proprietary Information
and Inventions Agreement attached and amended hereto as Exhibit B.
7.2 Executive recognizes that his employment with the Company will involve
contact with information of substantial value to the Company, which is not
old and generally known in the trade, and which gives the Company an
advantage over its competitors who do not know or use it, including but not
limited to, techniques, designs, drawings, processes, inventions,
developments, equipment, prototypes, sales and customer information, and
business and financial information relating to the business, products,
practices and techniques of the Company, (hereinafter referred to as
"Confidential and Proprietary Information"). Executive will at all times
regard and preserve as confidential such Confidential and Proprietary
Information obtained by Executive from whatever source and will not, either
during his employment with the Company or thereafter, publish or disclose
any part of such Confidential and Proprietary Information in any manner at
any time, or use the same except on behalf of the Company, without the
prior written consent of the Company.
7.3 While employed by the Company and for one (1) year thereafter, the
Executive agrees that in order to protect the Company's Confidential and
Proprietary Information from unauthorized use, that Executive will not,
either directly or through others, solicit or attempt to solicit any
employee, consultant or independent contractor of the Company to terminate
his or her relationship with the Company in order to become an employee,
consultant or independent contractor to or for any other person or business
entity; or the business of any customer, vendor or distributor of the
Company which, at the time of termination or one (1) year immediately prior
thereto, was doing business with the Company or listed on Company's customer,
vendor or distributor list.
8. ASSIGNMENT AND BINDING EFFECT.
8.1 This Agreement shall be binding upon and inure to the benefit of
Executive and Executive's heirs, executors, personal representatives,
assigns, administrators and legal representatives. Due to the unique and
personal nature of Executive's duties under this Agreement, neither this
Agreement nor any rights or obligations under this Agreement shall be
assignable by Executive. This Agreement shall be binding upon and inure to
the benefit of the Company and its successors, assigns and legal
representatives. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, to expressly
assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.
9. NOTICES.
9.1 All notices or demands of any kind required or permitted to be given by
the Company or Executive under this Agreement shall be given in writing
and shall be personally delivered (and receipted for) or mailed by certified
mail, return receipt requested, postage prepaid, addressed as follows:
9.1.1 If to the Company: ENGENYOUS Technologies Inc
400 s Dixie Highway
Hallandale, FL 33009
9.1.2 If to Executive: Clyde Smyth
3401 N Country Club Drive # 717
Aventura, FL 33180
Any such written notice shall be deemed received when personally delivered
or three (3) days after its deposit in the United States mail as specified
above. Either Party may change its address for notices by giving notice to
the other Party in the manner specified in this section.
10. INTEGRATION.
10.1 This Agreement contains the complete, final and exclusive agreement
of the Parties relating to the subject matter of this Agreement, and
supersedes all prior oral and written employment agreements or
arrangements between the Parties.
11. AMENDMENT.
11.1 This Agreement cannot be amended or modified except by a written
agreement signed by Executive and the Company.
12. WAIVER.
12.1 No term, covenant or condition of this Agreement or any breach thereof
shall be deemed waived, except with the written consent of the Party
against whom the wavier in claimed, and any waiver or any such term,
covenant, condition or breach shall not be deemed to be a waiver of any
preceding or succeeding breach of the same or any other term, covenant,
condition or breach.
13. SEVERABILITY.
13.1 The finding by a court of competent jurisdiction of the unenforceability,
invalidity or illegality of any provision of this Agreement shall not render
any
other provision of this Agreement unenforceable, invalid or illegal. Such
court shall have the authority to modify or replace the invalid or
unenforceable term or provision with a valid and enforceable term or
provision which most accurately represents the parties' intention with
respect to the invalid or unenforceable term or provision.
14. INTERPRETATION; CONSTRUCTION.
14.1 The headings set forth in this Agreement are for convenience of
reference only and shall not be used in interpreting this Agreement. This
Agreement has been drafted by legal counsel representing the Company,
but Executive has been encouraged, and has consulted with, his own
independent counsel and tax advisors with respect to the terms of this
Agreement. The Parties acknowledge that each Party and its counsel has
reviewed and revised, or had an opportunity to review and revise, this
Agreement, and the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement.
15. REPRESENTATIONS AND WARRANTIES.
15.1 Executive represents and warrants that he is not restricted or
prohibited, contractually or otherwise, from entering into and performing
each of the terms and covenants contained in this Agreement, and that his
execution and performance of this Agreement will not violate or breach any
other agreements between Executive and any other person or entity.
16. LITIGATION COSTS.
16.1 Should any litigation, arbitration, or administrative action be
commenced between the parties or their personal representatives
concerning any provision of this agreement or the rights and duties of any
person in relation to this agreement, the party or parties prevailing such
action shall be entitled, in addition to such other relief as may be granted
to a reasonable sum as and for that party's attorney's fees in such
litigation which shall be determined by the court, arbitrator, or
administrative agency, in such action or in a separate action brought
for that purpose.
17. TRADE SECRETS OF OTHERS.
17.1 It is the understanding of both the Company and Executive that
Executive shall not divulge to the Company and/or its subsidiaries any
confidential information or trade secrets belonging to others, including
Executive's former employers, nor shall the Company and/or its affiliates
seek to elicit from Executive any such information. Consistent with the
foregoing, Executive shall not provide to the Company and/or its affiliates,
and the Company and/or its affiliates shall not request, any documents or
copies of documents containing such information.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date first above written.
ENGENYOUS Technologies Inc
By: /S/ Clyde Smyth
Its: CEO
Dated: 01/01/2000
EXECUTIVE: /S/ Clyde Smyth
Dated: 01/01/2000
EXHIBIT A
RELEASE AND WAIVER OF CLAIMS
In consideration of the payments and other benefits set forth in
Section 4 of the Employment Agreement dated April 01, 1998 to which
this form is attached, I, Clyde Smyth, hereby furnish ENGENYOUS
Technologies Inc (the "Company"), with the following release and
waiver ("Release and Waiver").
I hereby release, and forever discharge the Company, its officers, directors,
agents, employees, stockholders, successors, assigns affiliates and Benefit
Plans, of and from any and all claims, liabilities, demands, causes of action,
costs, expenses, attorneys' fees, damages, indemnities and obligations of
every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed, arising at any time
prior to and including my employment termination date with respect to any
claims relating to my employment and the termination of my employment,
including but not limited to, claims pursuant to any federal, state or local
law relating to employment, including, but not limited to, discrimination
claims, claims under the Florida Fair Employment and Housing Act, and the
Federal Age Discrimination in Employment Act of 1967, as amended ("ADEA"), or
claims for wrongful termination, breach of the covenant of good faith,
contract claims, tort claims, and wage or benefit claims, including but not
limited to, claims for salary, bonuses, commissions, stock, stock options,
vacation pay, fringe benefits, severance pay or any form of compensation.
In releasing claims unknown to me at present, I am waiving all rights and
benefits under Section 1542 of the Florida Civil Code, and any law or legal
principle of similar effect in any jurisdiction: "A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
I acknowledge that, among other rights, I am waiving and releasing any
rights I may have under ADEA, that this release and waiver is knowing and
voluntary, and that the consideration given for this release and waiver is in
addition to anything of value to which I was already entitled as an Executive
of the Company. I further acknowledge that I have been advised, as
required by the Older Workers Benefit Protection Act, that: (a) the release
and waiver granted herein does not relate to claims which may arise after
this release and waiver is executed; (b) I have the right to consult with an
attorney prior to executing this release and waiver (although I may choose
voluntarily not to do so); and if I am over 40 years old upon execution of this
(c) I have twenty-one (21) days from the date of termination of my
employment with the Company in which to consider this release and waiver
(although I may choose voluntarily to execute this release and waiver
earlier); (d) I have seven (7) days following the execution of this release and
waiver to revoke my consent to this release and waiver; and (e) this release
and waiver shall not be effective until the seven (7) day revocation period
has expired.
Date: January 1, 2000 /S/ Clyde Smyth
---------------------- ------------------------------
Clyde Smyth
EXHIBIT B
EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
In consideration of my employment or continued employment by
ENGENYOUS Technologies Inc (the "COMPANY"), and the compensation
now and hereafter paid to me, I, Clyde Smyth, hereby agree as follows:
1. NONDISCLOSURE
1.1 RECOGNITION OF COMPANY'S RIGHTS; NONDISCLOSURE. At all
times during my employment and thereafter, I will hold in strictest
confidence and will not disclose, use, lecture upon or publish any of
the Company's Proprietary Information (defined below), except as such
disclosure, use or publication may be required in connection with my work
for the Company, or unless an officer of the Company expressly authority
such in writing. I will obtain Company's written approval before publishing
or submitting for publication any material (written, verbal, or otherwise)
that relates to my work at Company and/or incorporates any Proprietary
Information. I hereby assign to the Company any rights I may have or
acquire in such Proprietary information and recognize that all Proprietary
Information shall be the sole property of the Company and its assigns.
1.2 PROPRIETARY INFORMATION. The term "PROPRIETARY
INFORMATION" shall mean any and all confidential and/or proprietary
knowledge, data or information of the Company. By way of illustration but
not limitation, "PROPRIETARY INFORMATION" includes (a) trade secrets,
inventions, mask works, ideas, processes, formulas, source and object
codes, data, programs, other works of authorship, know-how,
improvements, discoveries developments, designs and techniques
(hereinafter collectively referred to as "INVENTIONS"); and (b)
information regarding plans for research, development, new products,
marketing and selling, business plans, budgets and unpublished financial
statements, licenses, prices and costs, suppliers and customers; and (c)
information regarding the skills and compensation of other employees of
the Company. Notwithstanding the foregoing, it is understood that, at all
such times, I am free to use information which is generally known in the
trade or industry, which is not gained as result of a breach of this
Agreement, and my own, skill, knowledge, know-how and experience to whatever
extent and in whichever way I wish.
1.3 THIRD PARTY INFORMATION. I understand, in addition, that the
Company has received and in the future will receive from third parties
confidential or proprietary information ("THIRD PARTY INFORMATION")
subject to a duty on the Company's part to maintain the confidentiality of
such information and to use it only for certain limited purposes. During the
term of my employment and thereafter, I will hold Third Party Information in
the strictest confidence and will not disclose to anyone (other than Company
personnel who need to know such information in connection with their work
for the Company) or use, except in connection with my work for the
Company, Third Party Information unless expressly authorized by an officer
of the Company in writing.
1.4 NO IMPROPER USE OF INFORMATION OF PRIOR EMPLOYERS
AND OTHERS. During my employment by the Company I will not improperly
use or disclose any confidential information or trade secrets, if any, of any
former employer or any other person to whom I have an obligation of
confidentiality, and I will not bring onto the promises of the Company any
unpublished documents or any property belonging to any former employer
or any other person to whom I have an obligation of confidentiality unless
consented to in writing by that former employer or person. I will use in the
performance of my duties only information which is generally known and
used by persons with training and experience comparable to my own, which
is common knowledge in the industry or otherwise legally in the public
domain, or which is otherwise provided or developed by the Company.
2. ASSIGNMENT OF INVENTIONS
2.1 PROPRIETARY RIGHTS. The term "PROPRIETARY RIGHTS" shall
mean all trade secret, patent, copyright, mask work and other intellectual
property rights throughout the world.
2.2 PRIOR INVENTIONS. Inventions, if any, patented or unpatented, which
I made prior to the commencement of my employment with the Company
are excluded from the scope of this Agreement. To preclude any possible
uncertainty, I have set forth on Exhibit B (Previous Inventions) attached
hereto a complete list of all Inventions that I have, alone or jointly with
others, conceived, developed or reduced to practice or caused to be
conceived, developed or reduced to practice prior to the commencement of
my employment with the Company, that I consider to be my property or the
property of third parties and that I wish to have excluded from the scope of
this Agreement (collectively referred to as "PRIOR INVENTIONS"). If
disclosure of any such Prior Invention would cause me to violate any prior
confidentiality agreement, I understand that I am not to list such Prior
Inventions in Exhibit B but am only to disclose a cursory name for each such
invention, a listing of the party(ies) to whom it belongs and the fact that
full disclosure as to such inventions has not been made for that reason. A
space is provided on Exhibit B for such purpose. If no such disclosure is
attached, I represent that there are no Prior Inventions. If, in the course of
my employment with the Company, I incorporate a Prior Invention into a
Company product, process or machine, the Company is hereby granted and
shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide
license (with rights to sublicense through multiple tiers of sub licensees) to
make, have made, modify, use and sell such Prior Invention.
Notwithstanding the foregoing, I agree that I will not incorporate, or permit
to be incorporated, Prior Inventions in any Company Inventions without the
Company's prior written consent.
2.3 ASSIGNMENT OF INVENTIONS. Subject to Sections 2.4, and 2.6, I
hereby assign and agree to assign in the future (when any such Inventions
or Proprietary Rights are first reduced to practice or first fixed in a
tangible medium, as applicable) to the Company all my right, title and interest
in and to any and all Inventions (and all Proprietary Rights with respect
thereto) whether or not patentable or registrable under copyright or similar
statutes, made or conceived or reduced to practice or learned by me, either
alone or jointly with others, during the period of my employment with the
Company. Inventions assigned to the Company, or to a third party as directed
by the Company pursuant to this Section 2, are hereinafter referred to as
"COMPANY INVENTIONS."
2.4 NONASSIGNABLE INVENTIONS. This Agreement does not apply to an
Invention which qualifies fully as a non assignable Invention.
2.5 OBLIGATION TO KEEP COMPANY INFORMED. During the period of
my employment I will promptly disclose to the Company fully and in writing
all Inventions authored, conceived or reduced to practice by me, either
alone or jointly with others. In addition, I will promptly disclose to the
Company all patent applications filed by me or on my behalf within six (6)
months after termination of employment. At the time of each such
disclosure, I will advise the Company in writing of any Inventions that I
believe fully qualify for protection under the Florida Law and I will at that
time provide to the Company in writing all evidence necessary to
substantiate that belief. The Company will keep in confidence and will not
use for any purpose or disclose to third parties without my consent any
confidential information disclosed in writing to the Company pursuant to this
Agreement relating to Inventions that qualify fully for protection under the
provisions of the Florida Law. I will preserve the confidentiality of any
Invention that does not fully qualify for protection under the Florida Law.
2.6 GOVERNMENT OR THIRD PARTY. I also agree to assign all my right,
title and interest in and to any particular Company Invention to a third party,
including without limitation the United States, as directed by the Company.
2.7 WORKS FOR HIRE. I acknowledge that all original works of authorship
which am made by me (solely or jointly with others) within the scope of my
employment and which are protectable by copyright are "works made for
hire," pursuant to United States Copyright Act (17 U.S.C., Section 101).
2.8 ENFORCEMENT OF PROPRIETARY RIGHTS. I will assist the
Company in every proper way to obtain, and from time to time enforce,
United States and foreign Proprietary Rights relating to Company Inventions
in any and all countries. To that end I will execute, verify and deliver such
documents and perform such other acts (including appearances as a
witness) as the Company may reasonably request for use in applying for,
obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary
Rights and the assignment thereof. In addition, I will execute, verify and
deliver assignments of such Proprietary Rights to the Company or its
designee.
My obligation to assist the Company with respect to Proprietary Rights
relating to such Company Inventions in any and all countries shall continue
beyond the termination of my employment, but the Company shall
compensate me at reasonable rate after my termination for the time actually
spent by me at the Company's request on such assistance.
In the event the Company is unable for any reason, after reasonable effort,
to secure my signature on any document needed in connection with the
actions specified in this Section 2.8, I hereby irrevocably designate and
appoint the Company and its duly authorized officers and agents as my
agent and attorney in fact, which appointment is coupled with an interest, to
act for and in my behalf to execute, verify and file any such documents and
to do all other lawfully permitted acts to further the purposes of the
preceding paragraph with the same legal force and effect as if executed by
me. I hereby waive and quitclaim to the Company any and all claims, of any
nature whatsoever, which I now or may hereafter have for infringement of
any Proprietary Rights assigned hereunder to the Company.
3. RECORDS. I agree to keep and maintain adequate and current records
(in the form of notes, sketches, drawings and in any other form that may be
required by the Company) of all Proprietary information developed by me
and all Inventions made by me during the period of my employment at the
Company, which records shall be available to and remain the sole property
of the Company at all times.
4. ADDITIONAL ACTIVITIES. I agree that during the period of my
employment by the Company I will not without the Company's express
written consent, engage in any employment or business activity which is
competitive with, or would otherwise conflict with, my employment by the
Company. I agree further that for the period of my employment by the
Company and for six (6) months after the date of termination of my
employment by the Company I will not induce any employee of the
Company to leave the employ of the Company.
5. NO CONFLICTING OBLIGATION. I represent that my performance of all
the terms of this Agreement and as an employee of the Company does not
and will not breech any agreement to keep in confidence information
acquired by me in confidence or in trust prior to my employment by the
Company. I have not entered into, and I agree I will not enter into, any
agreement either written or oral in conflict herewith.
6. RETURN OF COMPANY DOCUMENTS. When I leave the employ of the
Company, I will deliver to the Company any and all drawings, notes,
memoranda, specifications, devices, formulas, and documents, together
with all copies thereof, and any other material containing or disclosing
any Company Inventions, Third Party Information or Proprietary Information
of the Company. I further agree that any property situated on the Company's
premises and owned by the Company, including disks and other storage
media, filing cabinets or other work areas, is subject to inspection by
Company personnel at any time with or without notice. Prior to leaving, I
will cooperate with the Company in completing and signing a mutually agreed
termination statement.
7. LEGAL AND EQUITABLE REMEDIES. Because my services are
personal and unique and because I may have access to and become
acquainted with the Proprietary Information of the Company, the Company
shall have the right to enforce this Agreement and any of its provisions by
injunction, specific performance or other equitable relief, without bond and
without prejudice to any other rights and remedies that the Company may
have for a breach of this Agreement
8. NOTICES. Any notices required or permitted hereunder shall be given to
the appropriate party at the address specified below or at such other
address as the party shall specify in writing. Such notice shall be deemed
given upon personal delivery to the appropriate address or if sent by
certified or registered mail, three (3) days after the date of mailing.
9. NOTIFICATION OF NEW EMPLOYER. In the event that I leave the
employ of the Company, I hereby consent to the notification of my new
employer of my rights and obligations under this Agreement.
10. GENERAL PROVISIONS
10.1 GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This
Agreement will be governed by and construed according to the laws of the
State of Florida, as such laws are applied to agreements entered into and to
be performed entirely within Florida between Florida residents. I hereby
expressly consent to the personal jurisdiction of the state and federal courts
located in Broward County, Florida for any lawsuit filed there against me by
Company arising from or related to this Agreement
10.2 SEVERABILITY. In case any one or more of the provisions contained
in this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect such invalidity, illegality or unenforceability
shall not affect the other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
10.3 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon
my heirs, executors, administrators and other legal representatives and will
be for the benefit of the Company, its successors, and its assigns.
10.4 SURVIVAL. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the
Company to any successor in interest or other assignee.
10.5 EMPLOYMENT. I agree and understand that nothing in this Agreement
shall confer any right with respect to continuation of employment by the
Company, nor shall it interfere in any way with my right or the Company's
right to terminate my employment at any time, with or without cause.
10.6 WAIVER. No waiver by the Company of any breach of this Agreement
shall be a waiver of any preceding or succeeding breach. No waiver by the
Company of any right under this Agreement shall be construed as a waiver
of any other right. The Company shall not be required to give notice to
enforce strict adherence to all terms of this Agreement.
10.7 ENTIRE AGREEMENT. The obligations pursuant to Sections 1 and 2
of this Agreement shall apply to any time during which I was previously
employed, or am in the future employed, by the Company as a consultant if
no other agreement governs nondisclosure and assignment of inventions
during such period. Except for my Employment Agreement dated April 1st,
1998, this Agreement is the final, complete and exclusive agreement of the
parties with respect to the subject matter hereof. In the event of any conflict
between the terms of this Agreement and my Employment Agreement, my
Employment Agreement shall prevail. No modification of or amendment to
this Agreement, nor any waiver of any rights under this Agreement, will be
effective unless in writing and signed by the party to be charged.
This Agreement shall be effective as of the first day of my employment with
the Company, namely: January 1, 2000.
I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS
TERMS. I HAVE COMPLETELY FILLED OUT EXHIBIT B TO THIS
AGREEMENT.
Dated: January 01, 2000
/S/ Clyde Smyth
(SIGNATURE)
Clyde Smyth
(PRINTED NAME)
ACCEPTED AND AGREED TO:
ENGENYOUS Technologies Inc
By: /S/ Clyde Smyth
Title: CEO
400 S Dixie Highway
Hallandale, Fl 33009
Dated: 01/01/2000
EXHIBIT A
LIMITED EXCLUSION NOTIFICATION
THIS IS TO NOTIFY you in accordance with the Florida Labor Code that the
foregoing Agreement between you and the Company does not require you
to assign or offer to assign to the Company any invention that you
developed entirely on your own time without using the Company's
equipment, supplies, facilities or trade secret information except for
those inventions that either:
1. Relate at the time of conception or reduction to practice of
the invention to the Company's business, or actual or demonstrably
anticipated research or development of the Company;
2. Result from any work performed by you for the Company.
To the extent a provision in the foregoing Agreement purports to require you
to assign an invention otherwise excluded from the preceding paragraph,
the provision is against the public policy of this state and is unenforceable.
This limited exclusion does not apply to any patent or invention covered by a
contract between the Company and the United States or any of its agencies
requiring full title to such patent or invention to be in the United States.
I ACKNOWLEDGE RECEIPT of a copy of this notification.
By: /S/
Clyde Smyth
Date: 01/01/2000
WITNESSED BY:
/S/
Margareta Totems
(PRINTED NAME OF REPRESENTATIVE)
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered
into as of January 1, 2000 (the "Hire Date") by and between ENGENYOUS
Technologies, INC. (the "Company"), a Delaware corporation, and
Margareta Totems ("Executive"). The Company and Executive are
hereinafter collectively referred to as the "Parties," and individually
referred to as a "Party."
RECITALS
The Company desires assurance of the association and services of
Executive in order to retain Executive's experience, skills, abilities,
background and knowledge, and is willing to engage Executive's services
on the terms and conditions set forth in this Agreement.
Executive desires to be in the employ of the Company, and is willing to
accept such employment on the terms and conditions set forth in this
Agreement.
AGREEMENT
In consideration of the foregoing Recitals and the mutual promises and
covenants herein contained, and for other good and valuable consideration,
the Parties, intending to be legally bound, agree as follows:
1. EMPLOYMENT.
1.1 The Company hereby employs Executive, and Executive hereby accepts
employment by the Company, upon the terms and conditions set forth in this
Agreement, for the period commencing on the Hire Date and ending as
provided in paragraph 4 hereof (the "Employment Period").
1.2 Executive shall serve as Vice President, Chief Financial Officer ("CFO")
and as Director on the Company's Board of Directors (the "Board")
Executive shall report to the Board.
1.3 Executive shall do and perform all services, acts or things necessary or
advisable to manage and conduct the business of the Company and which
are normally associated with the position of President and CEO consistent
with the bylaws of the Company and as required by the Company's Board.
1.4 Unless the Parties otherwise agree in writing, during the term of this
Agreement, Executive shall perform the services he is required to perform
pursuant to this Agreement at the Company's offices, located in Hallandale,
Florida, or at any other place at which the Company maintains an office;
provided, however, that the Company may from time to time require
Executive to travel temporarily to other locations in connection with the
Company's business.
2. LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.
2.1 During the Employment Period, Executive shall devote his full business
energies, interest, abilities and productive time to the proper and efficient
performance of his duties under this Agreement. The foregoing shall not
preclude Executive from engaging in civic, charitable or religious activities,
or from serving on boards of directors of companies or organizations which
will not present any direct conflict with the interest of the Company or affect
the performance of Executive's duties hereunder.
2.2 Except with the prior written consent of the Company's Board, Executive
will not, during the Employment Period, or any period during which
Executive is receiving compensation or any other consideration from the
Company, including severance pay pursuant to Section 4 herein, engage in
competition with the Company, either directly or indirectly, in any manner or
capacity, as adviser, principal, agent, partner, officer, director, employee,
member of any association or otherwise, in any phase of the business of
developing, manufacturing and marketing of products which are in the same
field of use or which otherwise compete with the products or products
actively under development by the Company.
2.3 Except as permitted herein, Executive agrees not to acquire, assume or
participate in, directly or indirectly, any position, investment or interest
known by him to be adverse or antagonistic to the Company, its business or
prospects, financial or otherwise. Ownership by Executive, as a passive
investment, of less than five percent (5%) of the outstanding shares of
capital stock of any corporation with one or more classes of its capital stock
listed on a national securities exchange or publicly traded in the over-the-
counter market shall not constitute a breach of this paragraph.
3. COMPENSATION OF EXECUTIVE.
3.1 The Company shall pay Executive an initial base salary of $100.000
(hundred thousand) per year (the "Base Salary"), payable in regular periodic
payments in accordance with Company policy. Such salary shall be prorated
for any partial year of employment on the basis of a 365 day fiscal year.
3.2 Executive's compensation may be changed from time to time by mutual
agreement of Executive and the Board. Executive's Base Salary shall be
reviewed annually by the Board and increased (but not decreased) based
upon Executive's performance in the sole discretion of the Board.
3.3 All of Executive's compensation shall be subject to customary
withholding taxes and any other employment taxes as are commonly
required to be collected or withheld by the Company.
3.4 During the Employment Period, the Company agrees to reimburse
Executive for all reasonable and necessary business expenses subject to
the Company's standard requirements with respect to reporting and
documentation of such expenses.
3.5 Executive shall, in accordance with Company policy and the terms of
the applicable plan documents, be eligible to participate in benefits under
any Executive benefit plan or arrangement which may be in effect from time
to time and made available to its executive or key management employees.
The Company may modify or cancel its benefit plan(s) as it deems
necessary.
3.6 Executive shall be eligible for a performance bonus in 2000 to be
awarded by the Board based upon Executive's attainment of certain sales
goals. If the Company's sales for the period of January through December,
2000, are between Two Million Six Hundred Thousand Dollars
($2.600.000.00) and Four Million Seven Hundred Thousand Dollars
($4.700.000.00), Executive shall earn a bonus equal to the formula of Actual
$ Sales / $4.700,000. x $25.000.00. As a stretch bonus, if the Company's
sales for the period of January through December, 2000, are between Four
Million Seven Hundred Thousand Dollars ($4.700.000.00) and Six Million
Dollars($6.000.000.00), Executive will earn an additional bonus equal to the
formula of Actual $ Sales / $6.000,000.00 x $25.000.00 In the event
Executive attains sales goals in excess of Six Million Dollars
($6.000.000.00), her total bonus paid shall be limited to One Hundred
Thousand Dollars ($100,000.00) in 2000. If Executive earns a bonus,
hereunder, it shall be paid within sixty (60) days of December 31, 2000. For
each year following 2000, Executive shall be eligible for an annual bonus
which shall be awarded at the sole discretion of the Board pursuant to the
terms of any bonus formula or plan which the Board may approve in the
future.
(d) Upon any acquisition of the Company (through acquisition of shares,
merger, sale of assets or otherwise) in which shares of the Company's
common stock are converted into or exchanged for shares of another
corporation, provision shall be made by the Company for the assumption of
the Options by such other corporation and the Options shall be appropriately
adjusted to apply and pertain to the number and class of securities which
would have been issued to Executive upon consummation of such
acquisition had the Options been exercised immediately prior thereto.
Appropriate adjustments shall also be made to the exercise price applicable
to the Options shall remain the same; provided, that in the event any
surviving corporation or acquiring corporation refuses to assume such
Options or to substitute similar stock awards for such Options, the vesting of
such Options (and, if applicable, the time during which such Options may be
exercised) shall be accelerated prior to such event and the Options
terminated if not exercised after such acceleration and at or prior to such
event.
4. TERM.
The Employment Period shall end on the fifth anniversary of the Hire Date;
provided, that the Employment Period terminate earlier as provided in this
Section 4. The five (5) year Employment Period shall be extended at the
end of each year during the Employment Period for an additional one (1)
year period unless the Company notifies Executive in writing by March 31 of
any year of the Company's election not to extend the Employment Period.
Notwithstanding the foregoing,
(v) the Employment Period shall terminate upon Executive's
resignation, death or permanent Disability (as defined in Section
4(j));
(vi) the Employment Period may be terminated by Executive at any
time if the Company fails to comply with any material provision
of this Agreement, which failure has not been cured within ten
(10) business days after notice of such noncompliance has
been given by the Executive to the Company;
(vii) the Employment Period may be terminated for Good Reason by
Executive at any time during the period five (5) years after the
date of a Change in Control (as defined below);
iv) the Employment Period may be terminated without Cause by
the Company upon thirty (30) days prior written notice to
Executive; and
(viii) the Employment Period may be terminated by the Company at
any time for Cause.
a) If the Employment Period is terminated by the Company for Cause or by
Executive's resignation, Executive shall be entitled to receive all amounts
due to him through the date of termination, including any Bonus earned.
b) If the Employment Period is terminated as a result of Executive's
death or permanent Disability, the Company shall pay any amounts due to
Executive through the date of termination and a pro-rated Bonus in an amount
equal to the Bonus which would have otherwise been payable to Executive
pursuant to paragraph 3.6, if any, with respect to the fiscal year in which
such termination occurs.
c) If the Employment Period is terminated by the Company pursuant to
paragraph 4(iv) or by Executive pursuant to paragraphs 4(ii) above then,
upon Executive's furnishing to the Company an executed waiver and
release of claims form. Executive shall be entitled to receive
(i) a lump sum payment equal to 50% of his current Base Salary
in effect as of the date of termination, subject to standard
deductions and withholdings payable within ten (10) days after the
date of termination,
(ii) a Bonus equal to 50% of the average of the annual Bonuses
earned by Executive during the Employment Period subject to
standard deductions and withholdings. Executive shall also be
eligible to receive continued medical benefits to the extent
permitted for a period of six (6) months from the date of
termination.
d) If, within five (5) years after a Change in Control, the Employment
Period is terminated by the Company other than for Cause, or if Executive
terminates the Employment Period for Good Reason (as hereinafter
defined), then upon Executive's furnishing to the Company an executed
waiver and release of claims form.
Executive shall be entitled to the following:
i) Executive's Base Salary and accrued and unused vacation
earned through the date of termination;
ii) a lump sum payment equal to one and one-half times the sum
of Executive's current Base Salary in effect as of the date of
termination, subject to standard deductions and withholdings, to
be paid within (10) days after the date of termination;
(iii) a lump sum payment equal to one and one-half times the
average of the Bonuses earned by Executive during the
Employment Period, subject to standard deductions and
withholdings, to be paid within ten (10) days after the date of
termination;
(iv) continued medical benefits, to the extent permitted, for a
period of eighteen (18) months.
e) If the Employment Period is terminated prior to December 1, 1999, there
shall be no Bonus earned by Executive for the fiscal year ending December
31, 1999. If the Employment Period is terminated between December 1 and
December 31, 1999, the Bonus earned by Executive for the fiscal year
ending December 31, 1999 shall be 50% of Executive's Base Salary in
effect as of such termination for purposes of calculating average Bonuses
in paragraphs 4(c) and (d) above; provided, however, that Executive is not
terminated for Cause.
f) For purposes of this Agreement, a "Change in Control" of the Company
shall be deemed to have occurred if
(i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the
Exchange Act")), other than a trustee or other fiduciary holding
securities of the Company under an employee benefit plan of the
Company, becomes the "beneficial owner" (as defined in Rule
13d-3 promulgated under the Exchange Act), directly or indirectly,
of securities of the Company representing 50% or more of (A) the
outstanding shares of Common Stock of the Company or (B) the
combined voting power of the Company's then-outstanding
securities entitled to vote generally in the election of directors;
(ii) during any period of not more than two consecutive years, not
including any period prior to the date of this Agreement,
individuals who at the beginning of such period constitute the
Board, and any new director (other than a director designed by a
person who has entered into an agreement with the Company to
effect a transaction described in clause (i) or
(iii) of this paragraph (f)) whose election by the Board or
nomination by the Company's shareholders was approved by a
vote by at least a majority of the directors still in office who either
were in office at the beginning of such period or whose election or
nomination for election was previously so approved, ceases for
any reason to constitute a majority of the Board;
(iii) the Company is party to a merger or consolidation which
results in the holders of voting securities of the Company
outstanding immediately prior thereto failing to continue to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 50% of the
combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger
or consolidation, or the Company sells or disposes of all or
substantially all of the Company's assets or any transaction
having a similar effect is consummated.
g) "Good Reason" as used in this Agreement shall mean
(i) without Executive's express written consent, any failure by the
Company to comply with any material provision of this Agreement,
which failure has not been cured within ten (10) business days
after notice of such noncompliance has been given by Executive
to the Company, or
ii) the occurrence (without Executive's express written consent),
within five (5) years after a Change in Control, of any one of the
following acts by the Company, or failures by the Company to act,
unless, in the case of any act or failure to act described below,
such act or failure to act is corrected prior to the date of
termination specified in any notice of termination given by
Executive to the Company in respect thereof:
(h) Any change in Executive's title, authorities, responsibilities
(including reporting responsibilities) which represents an adverse
change from his status, title, position or responsibilities (including
reporting responsibilities) which were in effect immediately prior to
the Change in Control; the assignment to Executive of any material duties
or work responsibilities which are inconsistent with such status, title,
position or work responsibilities; or any removal of Executive from, or
failure to appoint or reelect him to, any such positions, except if such
changes are because of Disability, retirement, death or for Cause;
(ii) The relocation of Executive's office to a location outside of
Hallandale, Florida;
(iii) The failure by the Company to continue in effect any annual or
long-term incentive compensation plan in which Executive
participated immediately prior to the Change in Control, unless
Executive participates after the Change in Control in another
comparable plan generally available to senior executives of the
Company and senior executives of any person in control of the
Company; or
(iv) The failure by the Company to continue to provide the
Executive with benefits substantially similar in value in the
aggregate to those enjoyed by Executive immediately prior to the
Change in Control.
i) Except as otherwise set forth above, all of Executive's rights to
fringe benefits and bonuses hereunder (if any) accruing after the
termination of the Employment Period shall cease upon such termination.
j) For purposes of this Agreement, "Cause" shall mean
(i) the willful failure or refusal by Executive to perform his
duties hereunder (other than any such failure resulting from
Executive's incapacity due to physical or mental illness),
which has not ceased within ten (10) business days after
written demand for substantial performance is delivered to
Executive by the Company, which demand identifies the
manner in which Company believes that the Executive has
not performed such duties and the steps required to cure
such failure to perform;
(ii) Executive shall intentionally and willfully engage in
misconduct which is materially injurious to the Company,
monetarily or otherwise; or the conviction of Executive of or
the entering of a plea of nolo contenders by Executive with
respect to, a felony.
Notwithstanding the foregoing, Executive's Employment hereunder shall not
be deemed to be terminated for Cause and no other action shall be taken by
the Company which is adverse to Executive unless and until there shall
have been delivered to Executive a copy of a resolution duly adopted by a
unanimous vote of the Board (excluding Executive) at a meeting of the
Board (after written notice to Executive and a reasonable opportunity for
Executive to be heard before the Board) authorizing and approving such
termination or other action.
j) For purposes of this Agreement, permanent "Disability" shall mean the
expiration of a continuous period of one hundred and eighty (180) days
during which Executive is unable to perform his assigned duties due to
physical or mental incapacity. In the event of any dispute regarding the
existence of Executive's Disability hereunder, the matter will be resolved by
the determination of a majority of three physicians qualified to practice
medicine in Florida, one to be selected by each of Executive and the Board
and the third to be selected by the two designated physicians. For this
purpose, Executive will submit to appropriate medical examinations.
k) Executive shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise,
and the amount of any payment or benefit provided for in this Section 4
shall not be reduced by any compensation earned by Executive as a result of
employment by another employer or by any other benefits.
5. CHOICE OF LAW.
5.1 This Agreement will be governed by the internal law, and not the laws of
conflicts, of the State of Florida.
6. AMENDMENT AND WAIVER.
6.1 The provisions of this Agreement may be amended or waived only with
the prior written consent of the Company and Executive, and no course of
conduct or failure or delay in enforcing the provisions of this Agreement
shall affect the validity, binding effect or enforceability of this Agreement.
7. CONFIDENTIAL AND PROPRIETARY INFORMATION;
NONSOLICITATION.
7.1 Executive recognizes that her employment with the Company will
involve contact with information of substantial value to the Company, which
is not old and generally known in the trade, and which gives the Company
an advantage over its competitors who do not know or use it, including but
not limited to, techniques, designs, drawings, processes, inventions,
developments, equipment, prototypes, sales and customer information, and
business and financial information relating to the business, products,
practices and techniques of the Company, (hereinafter referred to as
"Confidential and Proprietary Information"). Executive will at all times
regard and preserve as confidential such Confidential and Proprietary
Information obtained by Executive from whatever source and will not, either
during his employment with the Company or thereafter, publish or disclose
any part of such Confidential and Proprietary Information in any manner at
any time, or use the same except on behalf of the Company, without the prior
written consent of the Company.
7.2 While employed by the Company and for one (1) year thereafter, the
Executive agrees that in order to protect the Company's Confidential and
Proprietary Information from unauthorized use, that Executive will not, either
directly or through others, solicit or attempt to solicit any employee,
consultant or independent contractor of the Company to terminate his or her
relationship with the Company in order to become an employee, consultant
or independent contractor to or for any other person or business entity; or
the business of any customer, vendor or distributor of the Company which,
at the time of termination or one (1) year immediately prior thereto, was
doing business with the Company or listed on Company's customer, vendor
or distributor list.
8. ASSIGNMENT AND BINDING EFFECT.
8.1 This Agreement shall be binding upon and inure to the benefit of
Executive and Executive's heirs, executors, personal representatives,
assigns, administrators and legal representatives. Due to the unique and
personal nature of Executive's duties under this Agreement, neither this
Agreement nor any rights or obligations under this Agreement shall be
assignable by Executive. This Agreement shall be binding upon and inure to
the benefit of the Company and its successors, assigns and legal
representatives. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, to expressly
assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.
9. NOTICES.
9.1 All notices or demands of any kind required or permitted to be given by
the Company or Executive under this Agreement shall be given in writing
and shall be personally delivered (and receipted for) or mailed by certified
mail, return receipt requested, postage prepaid, addressed as follows:
9.1.2 If to the Company: ENGENYOUS Technologies Inc
400 s Dixie Highway
Hallandale, FL 33009
9.1.2 If to Executive: Margareta Totems
3401 N Country Club Drive # 718
Aventura, FL 33180
Any such written notice shall be deemed received when personally delivered
or three (3) days after its deposit in the United States mail as specified
above. Either Party may change its address for notices by giving notice to
the other Party in the manner specified in this section.
10. INTEGRATION.
10.1 This Agreement contains the complete, final and exclusive agreement
of the Parties relating to the subject matter of this Agreement, and
supersedes all prior oral and written employment agreements or
arrangements between the Parties.
11. AMENDMENT.
11.1 This Agreement cannot be amended or modified except by a written
agreement signed by Executive and the Company.
12. WAIVER.
12.1 No term, covenant or condition of this Agreement or any breach thereof
shall be deemed waived, except with the written consent of the Party
against whom the wavier in claimed, and any waiver or any such term,
covenant, condition or breach shall not be deemed to be a waiver of any
preceding or succeeding breach of the same or any other term, covenant,
condition or breach.
13. SEVERABILITY.
13.1 The finding by a court of competent jurisdiction of the unenforceability,
invalidity or illegality of any provision of this Agreement shall not render
any
other provision of this Agreement unenforceable, invalid or illegal. Such
court shall have the authority to modify or replace the invalid or
unenforceable term or provision with a valid and enforceable term or
provision which most accurately represents the parties' intention with
respect to the invalid or unenforceable term or provision.
14. INTERPRETATION; CONSTRUCTION.
14.1 The headings set forth in this Agreement are for convenience of
reference only and shall not be used in interpreting this Agreement. This
Agreement has been drafted by legal counsel representing the Company,
but Executive has been encouraged, and has consulted with, his own
independent counsel and tax advisors with respect to the terms of this
Agreement. The Parties acknowledge that each Party and its counsel has
reviewed and revised, or had an opportunity to review and revise, this
Agreement, and the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement.
15. REPRESENTATIONS AND WARRANTIES.
15.1 Executive represents and warrants that he is not restricted or
prohibited, contractually or otherwise, from entering into and performing
each of the terms and covenants contained in this Agreement, and that his
execution and performance of this Agreement will not violate or breach any
other agreements between Executive and any other person or entity.
16. LITIGATION COSTS.
16.1 Should any litigation, arbitration, or administrative action be
commenced between the parties or their personal representatives
concerning any provision of this agreement or the rights and duties of any
person in relation to this agreement, the party or parties prevailing such
action shall be entitled, in addition to such other relief as may be granted to
a reasonable sum as and for that party's attorney's fees in such litigation
which shall be determined by the court, arbitrator, or administrative agency,
in such action or in a separate action brought for that purpose.
17. TRADE SECRETS OF OTHERS.
17.1 It is the understanding of both the Company and Executive that
Executive shall not divulge to the Company and/or its subsidiaries any
confidential information or trade secrets belonging to others, including
Executive's former employers, nor shall the Company and/or its affiliates
seek to elicit from Executive any such information. Consistent with the
foregoing, Executive shall not provide to the Company and/or its affiliates,
and the Company and/or its affiliates shall not request, any documents or
copies of documents containing such information.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date first above written.
ENGENYOUS Technologies Inc
By: /S/ Clyde Smyth
Clyde Smyth the Company's CEO
------------------------------
Dated: January 1, 2000
EXECUTIVE: /S/ Margareta Totems
Dated: 01/01/2000
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
FORMATION EXTRACTED FROM BALANCE SHEET FROM INCEPTION
JANUARY 10, 1998 TO 073199 AND INCOME STATEMENT FROM
INCEPTION JANUARY 10, 1998 TO 073199 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
FINANCIAL DATA SCHEDULE
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<PERIOD-TYPE> 18-MOS
<FISCAL-YEAR-END> JULY-31-1999
<PERIOD-START> 01-10-1998
<PERIOD-END> JULY-31-1999
<CASH> 4.275
<SECURITIES> 0
<RECEIVABLES> 37.005
<ALLOWANCES> 0
<INVENTORY> 110.650
<CURRENT-ASSETS> 151.975
<PP&E> 0
<DEPRECIATION> 4.602
<TOTAL-ASSETS> 531.330
<CURRENT-LIABILITIES> 78.017
<BONDS> 0
0
0
<COMMON> 5.000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 531.330
<SALES> 402.500
<TOTAL-REVENUES> 402.500
<CGS> 0
<TOTAL-COSTS> 199.640
<OTHER-EXPENSE> 146.382
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
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<NET-INCOME> 56.478
<EPS-BASIC> 0
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