U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form SB-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
EMPS Corporation
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(Name of small business issuer in its charter)
Nevada 87-0617371
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(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
136 E. South Temple, Suite 1700A, Salt Lake City, Utah 84111
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(Address and telephone number of principal executive offices)
136 E. South Temple, Suite 1700A, Salt Lake City, Utah 84111
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(Address of principal place of business or intended
principal place of business)
Ronald L. Poulton, 136 E. South Temple, Suite 1700A,
Salt Lake City, Utah 84111 (801) 355-1341
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(Name, address and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as practicable from
time to time after this registration statement becomes effective.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
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If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------------
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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<C> <C> <C> <C> <C>
Title of each Dollar Proposed Proposed Amount of
class of Amount to be maximum maximum registration
Securities registered offering aggregate fee
being Registered price per offering
share price
Common $ 200,000 $ 1.00 $ 200,000 $ 55.60
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</TABLE>
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Disclosure alternative used (check one): Alternative 1; Alternative 2; X
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EMPS Corporation
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
<C> <C>
Item Number and Heading Heading in Prospectus
1. Front of the Registration Statement and
Outside Front Cover Page of Prospectus Facing pages; Front Cover Page
2. Inside Front and Outside Back Cover Pages
of Prospectus Inside Front and Outside Back
Cover Pages of Prospectus
3. Summary Information and Risk Factors Prospectus Summary; Risk Factors
4. Use of Proceeds Prospectus Summary; Use of Proceeds; Description of
Business
5. Determination of Offering Price Cover Page; Prospectus Summary; Risk
Factors; Determination of Offering
Price
6. Dilution Dilution; Comparative Data
7. Selling Security Holders Not applicable
8. Plan of Distribution Front Cover Page; Plan of
Distribution
9. Legal Proceedings Legal Matters
10. Directors, Executive Officers,
Promoters and Control Persons Directors, Executive Officers,
Promoters and Control Persons
11. Security Ownership of Certain
Beneficial Owners and Management Security Ownership of Certain
Beneficial Owners and Management
12. Description of the Securities Description of Securities
13. Interest of Named Experts and Counsel Not applicable
14. Disclosure of Commission Position on
Indemnification for
Securities Act Liabilities Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities
15. Organization Within Last Five Years Organization Within Last Five Years
16. Description of Business Description of Business
17. Management's Discussion and Analysis or
Plan of Operation Plan of Operations
18. Description of Property Description of Property
19. Certain Relationships and
Related Transactions Not applicable
20. Market for Common Equity and Related
Stockholder Matters Front Cover Page; Risk Factors;
Shares Eligible for Future Sale;
Market for Common Equity and Related
Stockholder Matters
21. Executive Compensation Executive Compensation
22. Financial Statements Financial Statements
23. Changes In and Disagreements with
Accountants on Accounting and
Financial Disclosure Not Applicable
</TABLE>
EMPS CORPORATION
200,000 shares of $.001 par value Common Stock
$1.00 per share
EMPS Corporation We intend to market and license our
136 E. South Temple, Suite 1700-A patented technology for use in
Salt Lake City, UT 84111 commercially separating nonmagnetic
particulate material with
The Offering application in mining,
- ------------ environmental clean up and other
industry requiring particle
separation methods.
<TABLE>
<CAPTION>
Per Share Total
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<S> <C> <C>
Public Price $1.00 $200,000 This is our initial public offering
and no public market currently
Underwriting exists for our shares. The
Discounts -0- -0- offering price may no reflect
market price of our shares after
Proceeds to EMPS $1.00 $200,000 the offering.
</TABLE>
These shares involve a high degree of risk. Investors should expect
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immediate substantial dilution. Even if we succeed in raising the maximum
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amount in the offering, the amount of capital available to us will be
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extremely limited and may not be sufficient to enable us to fully commence our
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proposed business operations without additional fund raising. (See "risk
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factors" page 6). The shares offered should not be purchased by any investor
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who cannot afford to sustain the total loss of their investment.
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These shares have not been approved or disapproved by the Securities and
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Exchange Commission or any state securities agency nor has the Commission or
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any agency passed upon the accuracy or adequacy of this prospectus. Any
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representation to the contrary is a criminal offense.
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The offering will be managed by EMPS and the shares will be offered and
sold by officers of EMPS, without any discounts or other commissions. See "Plan
of Distribution."
Proceeds to EMPS are shown before deducting offering expenses payable by
EMPS estimated at $20,000 including legal and accounting fees and printing
costs.
The Offering is being conducted by EMPS on a "best efforts" basis.
The Shares are being offered by EMPS subject to prior sale, receipt and
acceptance by EMPS, approval of certain matters by counsel, and certain other
conditions. We reserve the right to withdraw or cancel such offers and reject
any order, in whole or in part.
The date of this Prospectus is September 7, 1999.
AVAILABLE INFORMATION
EMPS has filed with the United States Securities and Exchange Commission
(the "Commission") a Registration Statement on Form SB-1, under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to the shares
offered hereby. As permitted by the rules and regulations of the Commission,
this Prospectus does not contain all of the information contained in the
Registration Statement. For further information regarding both EMPS and the
shares offered, reference is made to the Registration Statement, including all
exhibits and schedules thereto, which may be inspected without charge at the
public reference facilities of the Commission's Washington, D.C. office, 450
Fifth Street, N.W., Washington, D.C. 20549. Copies may be obtained from the
Washington, D.C. office upon request and payment of the prescribed fee.
We will not file a Form 8-A or other Registration Statement under the
Securities Exchange Act and will only be subject to Section 15(d) following the
effective date, therefore the proxy rules, short-swing profits regulations,
beneficial ownership reporting regulations and the bulk of the tender offer
regulations will not apply to us.
We intend to furnish our stockholders with annual reports containing
consolidated financial statements audited and reported upon by our independent
accounting firm and such other periodic reports as we may determine to be
appropriate or as may be required by law.
We are an electronic filer. The Commission maintains a Web site that
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission. The
Commission's Web site address is (http://www.sec.gov).
As of the date of this Prospectus, we became subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and, in accordance therewith, will file reports and other information with
the Commission. Reports and other information filed by us with the Commission
pursuant to the informational requirements of the Exchange Act will be available
for inspection and copying at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the following regional offices of the Commission: New York regional Office,
Seven World Trade Center, 13th Floor, New York, New York 10048; Chicago Regional
Office, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material may be obtained from the public reference section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
REPORTS TO SECURITY HOLDERS
Copies of our Annual, Quarterly and other Reports which will be filed by us
with the Commission commencing with the Quarterly Report for the first quarter
ended after the date of this Prospectus (due 45 days after the end of such
quarter) will also be available upon request, without charge, by writing EMPS
Corporation, 136 E. South Temple, Suite 1700-A, Salt Lake City, Utah 84111.
2
DELIVERY OF PROSPECTUS BY DEALERS
UNTIL 90 DAYS AFTER THE EFFECTIVE DATE OF THIS PROSPECTUS, ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SHARES, WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION
TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
THESE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY ANY STATE SECURITIES
COMMISSION OR OTHER STATE REGULATORY AUTHORITY, AND NO SUCH REGULATORY AUTHORITY
HAS PASSED UPON THE TERMS OF THIS OFFERING OR APPROVED THE MERITS THEREOF.
INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF EMPS AND THE TERMS OF THIS
OFFERING IN EVALUATING THE MERITS AND RISKS OF THE OFFERING AND MAKING AN
INVESTMENT DECISION.
THIS PROSPECTUS SHOULD BE READ IN ITS ENTIRETY BY ANY PROSPECTIVE INVESTOR
PRIOR TO HIS OR HER INVESTMENT.
3
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
detailed information and consolidated financial statements, including the notes
thereto, appearing elsewhere in this Prospectus. Each prospective investor is
urged to read this Prospectus in its entirety, and particularly the information
set forth in "RISK FACTORS."
The Company
EMPS Corporation intends to engage in the business of marketing and
licensing the technology rights for a nonmagnetic particulate material
separation unit. We initially intend to design and construct a prototype
capable of separating one ton per hour of particles. This will enable us to
contract with numerous entities for either licensing EMPS technology for third
party use, participating in some form of joint venture activity with outside
companies or actual involvement of EMPS on an upscale basis in the particle
separation business of various precious metals or assisting in environmental
clean-up operations through existing companies involved in governmental
projects.
To date, we have not received any revenues from our intended operations nor
have we otherwise engaged in any business. Further, we do not currently have
any customers for our technology.
The Offering
Securities Offered: 200,000 shares, consisting of common stock, $.001
par value. See "Description of Securities."
Offering Price: $1.00 per share
Plan of Distribution: The offering will be managed by EMPS and the shares
will be offered and sold by officers of EMPS,
without any discounts or other commissions. Because
there is no escrow of the proceeds, money will be
available for use by EMPS as soon as it is received.
See "Plan of Distribution."
Use of Proceeds: We intend to use the net proceeds from this offering
primarily for the purpose of the design and
construction of a prototype unit capable of
separating one ton per hour of particles.
Transfer Agent: Interwest Transfer Company, Inc., 1981 East Murray-
Holladay Road, Salt Lake City, Utah 84117, Telephone
(801) 272-9294, has agreed to serve as transfer
agent upon completion of this offering.
Securities Outstanding: We currently have 800,000 shares issued and
outstanding. Upon completion of this offering, up
to 1,000,000 shares will be issued and outstanding.
We are also authorized to issue up to 400,000 shares
pursuant to the EMPS 1998 Stock Option Plan. To
date, no options have been granted under the plan.
4
Risk Factors: We are a start up company with no operating history;
consequently, an investment in EMPS is highly
speculative. Investors will suffer substantial
dilution in the book value per share compared to the
purchase price. In seeking to implement our
proposed business, we could incur substantial losses
during the development stage, and require additional
funding for which we have no commitments.
Management has other interests which may conflict
with our interests. Until such time, if ever, that
we generate sufficient revenue to pay management
salaries, members of management will not be employed
full time and will only devote a minimal amount of
time to our affairs. No person should invest in
EMPS who cannot afford to risk loss of the entire
investment. See "Risk Factors."
Summary Selected
Financial Data: We are a development stage company and have no
revenues or earnings from operations. As of May 31,
1999, our financial data is as follows:
Total Assets $9,182
Total Liabilities $7,120
Shareholder Equity $2,062
Net Tangible Book Value $2,062
Net Tangible Book Value
per Share $.00258
5
Special Note Regarding Forward-looking Statements
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Some of the statements contained in this prospectus discuss future
expectations, contain projections of results of operation or financial condition
or state other "forward-looking" information. Those statements are subject to
known and unknown risks, uncertainties and other factors that could cause the
actual results to differ materially from those contemplated by the statements.
The forward-looking information is based on various factors and was derived
using numerous assumptions.
Important factors that may cause actual results to differ from projections
include, for example,
the success of failure of our efforts to implement our business strategy;
our ability to raise sufficient capital to proceed with our prototype and
the subsequent testing;
our ability to negotiate and maintain favorable licensing arrangements;
the effect of changing economic conditions;
the effect of rapidly changing technology;
other risks which may be described in our future filings wit the SEC.
We do not promise to update forward-looking information to reflect actual
results or changes in assumptions or other factors that could affect those
statements.
RISK FACTORS
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An investment in the shares offered hereby involves a high degree of
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risk. Prospective investors should carefully consider the following risk
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factors, in addition to the other information set forth elsewhere in this
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Prospectus, including the Consolidated Financial Statements and Notes, prior
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to making an investment in EMPS.
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We have no operating history which raises doubts as to our ability to
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continue as a going concern.
- ----------------------------
We will not commence operations until the proceeds of this Offering are
available, therefore, we have no operating history. Because we are just
starting up and in our initial stage of development there are substantial
business and financial risks and we may suffer significant losses from which we
cannot recover. We will face all of the challenges of a new business
enterprise, including but not limited to, locating suitable office space,
engaging the services of qualified support personnel and consultants,
establishing budgets, implementing appropriate financial controls and internal
operating policies and procedures. We do not have any significant cash and have
had no significant operations since our inception. As noted in the Independent
Accountants opinion, there is substantial doubt about our ability to continue as
a going concern without the realization of additional adequate financing.
We need additional capital to commence our planned operations.
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We presently have no significant operating capital and are totally
dependent upon receipt of the proceeds of the Offering to continue development
and marketing of our technology. Start-up costs include design and construction
of a power supply amplifier, an inductor-capacitor-resistor circuit, and a
toroid. We also intend to continue research on the effects of our technology.
Should we raise the maximum offering, we will recognize a gross amount of
$200,000 and believe this amount will enable us to design and construct needed
equipment and cover the costs of research. The full Offering amount will enable
us to continue operations for three years and allow for the purchase of
equipment that would enable us to set up an up-scale commercial operation. If
we raise less than the full Offering amount, we will scale back our research
efforts. We believe that we can build our prototype and perform testing for a
period of one year with as little as $50,000. However, upon completion of the
Offering, even if the entire Offering amount is raised, the amount of capital
available to us will be extremely limited, and may not be sufficient to enable
us to fully commence our proposed business operations without additional fund
raising. We have no commitments for additional cash funding beyond the proceeds
expected to be received from this Offering.
Our success is totally dependent upon the efforts of our management.
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Our success depends on the efforts and assistance of our management. The
officers and directors have experience in management, which are critical to our
success. However, as compared to many other public companies, we lacks a depth
of managerial and technical personnel. Accordingly, there is a greater
likelihood that should our management leave EMPS, we may be impaired in our
ability to effectively carry out our operations. We have no plans to obtain Key
Man insurance for any of our officers and directors. In view of the fact that
our technology is patented, we do not believe Key Man insurance is required.
Our focus is on licensing and marketing the patented technology. It is our
belief that a person experienced in technology sales would be able to carry on
our business should any of the current officers or directors resign or terminate
their relationship with us. Further, the directors and officers will maintain
part to full time employment outside EMPS and may not be able to devote
sufficient attention to us to ensure our success until earnings justify
additional time be devoted to us. Such outside employment may also create
conflicts of interest. There is no assurance such conflicts could be resolved
favorably for EMPS. However, Nevada corporate law requires all officers and
directors to act according to their fiduciary duties to the stockholders.
We have never paid any dividends on our shares.
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We have not paid dividends on our shares and do not anticipate paying
dividends in the foreseeable future. There is no assurance that our operations
will generate net profits from which to pay cash dividends. Investors who
anticipate the need of immediate income from an investment should not purchase
the shares being offered by us.
Our Officers and Directors have limited liability.
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Section 78.751 of the Nevada Revised Statutes and Article VII of our
Articles of Incorporation filed as an exhibit to this Registration Statement,
contain certain provisions authorizing indemnification by EMPS of directors,
officers, employees or agents against certain liabilities and expenses which
they may incur as directors, officers, employees or agents of EMPS or of certain
other entities. Section 78.751 also provides that such indemnification may
include payment by us of expenses incurred in defending a civil or criminal
action or proceeding in advance of the final disposition of such action or
proceeding, upon receipt of an undertaking by the person
indemnified to repay such payment if he shall be adjudicated to be entitled to
indemnification under Section 78.751. Any indemnification may be provided
although the person to be indemnified is no longer a director, officer, employee
or agent of EMPS or such other entities. Section 78.752 also contains
provisions authorizing us to obtain insurance on behalf of any such director,
officer, employee or agent against liabilities, whether or not we would have the
power to indemnify against such liabilities.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of EMPS
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by us of expenses incurred or paid by a director, officer or
controlling person of EMPS in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, we will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
We are not certain our technology will be accepted or that a market will
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develop for our technology.
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Our proposed business is based on our belief of the need for a method of
commercially separating nonmagnetic particulate material from other materials
without chemical, pyrotechnical, or hydro-mechanical methods. Acceptance of our
technology represents a response not only from industry, but also to the level
of advertising and promotion by us, the availability of competing products and
technologies, pricing factors and other intangible factors, all of which change
rapidly and cannot be predicted with certainty. There is no assurance of market
acceptance of this new technology, and our business will be subject to all the
risks associated with introducing a new technology. There is substantial risk
that our technology may not be commercially successful, resulting in costs not
being recouped or anticipated profits not being realized. We have not
undertaken any independent market studies to determine the feasibility of our
technology.
We will operate in a highly competitive environment.
----------------------------------------------------
Competition ranges from the traditional methods of separating materials
currently employed in the industry, to various companies which have patented
alternative methods of separation methods. Many of our competitors are larger
and have significantly greater financial resources, operating experience,
management experience, and other capabilities than we do.
Our technology is in the early stages of development and there is no
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assurance the technology will prove successful.
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Our technology is in an early stage of development, and no revenues have
been generated from the sale of the technology. The development of new
technology is highly uncertain and subject to a number of significant risks.
Technology that appears to be promising at early stages of development may not
reach the market for a number of reasons. Such technology may be found to be
ineffective, may be uneconomical, may fail to achieve market acceptance or may
be precluded from commercialization by proprietary rights of third parties.
Our technology is patented and parties may make claims against us.
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Our success will depend in large part on our ability to obtain patents,
maintain trade secrets and operate without infringing on the proprietary rights
of others, both in the United States and in other countries. The patent
positions of high technology companies can be highly uncertain and involve
complex legal and factual questions, and therefore the breadth of claims allowed
in high technology patents or their enforceability cannot be predicted. There
can be no assurance that any of our patents will not be challenged, invalidated
or circumvented, or that the rights granted thereunder will provide proprietary
protection or competitive advantages to EMPS.
Our commercial success also will depend, in part, on our not infringing
patents issued to others. Our competitors may file for patents similar to those
of EMPS. Some of these applications or patents may limit or preclude our
applications, or conflict in certain respects with claims made under our
patents. Furthermore, we may from time to time in the future, be notified of
claims that we may be infringing patents or other intellectual property rights
owned by third parties. Litigation, which could result in substantial costs to
EMPS, also may be necessary to enforce any patents issued to us or to determine
the scope and validity of third-party proprietary rights. If our competitors
prepare and file patent applications in the United States that claim technology
also claimed by us, we may have to participate in interference proceedings
declared by the Patent and Trademark Office to determine priority of invention,
which could result in substantial cost to us, even if the eventual outcome is
favorable to us. An adverse outcome could subject us to significant liabilities
to third parties.
We also rely on trade secrets to protect our technology, especially where
patent protection is not believed to be appropriate or obtainable. We protect
our proprietary technology and processes, in part, by confidentiality agreements
with our employees, consultants and certain contractors. There can be no
assurance that these agreements will not be breached, that we would have
adequate remedies for any breach, or that our trade secrets will not otherwise
become known or be independently discovered by competitors.
We lack extensive marketing experience and rely heavily on third parties
We currently have no sales, marketing or distribution capability. We will
rely, in part, on collaborative relationships, such as licensing agreements, to
market our technology. To market our technology directly, we must develop a
marketing and sales force with technical expertise. There can be no assurance
that we will be able to establish in-house sales and marketing capabilities or
relationships with third parties, or that we will be successful in gaining
market acceptance for our technology. To the extent we enter into co-promotion
or other licensing arrangements, any revenues received by us under those
collaborations will depend upon the efforts of third parties, and there can be
no assurance that such efforts will be successful.
The shares are offered by EMPS on a "best efforts" basis.
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There is no underwriter and no firm commitment from anyone to purchase all
or any of the shares. No assurance can be given that all or any of the shares
will be sold. If we are unable to sell the shares we will have no funds
available for operations and if we sell less than the full 200,000 shares, the
funds available to us will be significantly reduced and we will have to scale
back and revise our plan of operations or seek other means of financing. We
have no commitments for any financing and are dependent upon this offering to
implement our operation.
There is no public market for our shares.
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At present, our shares are not traded publicly. There is no assurance that
a trading market will develop or, if developed, that it will be sustained. We
will not list the securities on any exchange or NASDAQ because we will not be
able to meet the financial criteria for any such listing. Therefore, any
investment in the shares will be very non-liquid. However, we do intend to
apply for listing on the Over-the-Counter Bulletin Board ("OTCBB"). A purchaser
of shares may, therefore, find it difficult to resell the shares should he
desire to do so. Furthermore, the shares are not marginable and it is unlikely
that a lending institution would accept the shares as collateral for a loan.
The price for the shares was arbitrarily determined by our management.
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There is no relationship between the offering price of the shares and our
assets, earnings, book value, net worth or other economic or recognized criteria
or future value of our shares.
If a public market develops for the shares, many factors will influence
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the market prices.
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The shares will be subject to significant fluctuation in response to
variations in operating results of EMPS, investor perceptions of us, supply and
demand, interest rates, general economic conditions and those specific to the
industry, developments with regard to our activities, future financial condition
and management.
We are not certain we can implement our operations if less than the full
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offering amount is realized.
- ----------------------------
We believe that the net proceeds from the sale of the shares (assuming that
all shares are sold) will provide us with sufficient capital to fund the initial
marketing and operating costs of EMPS. If we receive less than the full
offering amount, we will limit our initial operations to designing and
constructing basic equipment and research of the effects of the technology
rather than the purchase of equipment which would enable the setup and up-scaled
commercial operation anticipated should the full offering amount be raised.
Many factors may, however, affect our cash needs, including our possible failure
to generate revenues from the sale of our technology.
Our management shall have wide discretion as to the exact allocation,
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priority and timing of the allocation of funds raised from the offering.
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The allocation of the proceeds of the offering may vary significantly
depending upon numerous factors, including the success that we have marketing
our technology. Accordingly, management will have broad discretion with respect
to the expenditure of the net proceeds of the offering. Investors purchasing
the shares will be entrusting their funds to our management, upon whose
judgement the investors must depend. See "Use of Proceeds."
Our management will continue to control EMPS.
---------------------------------------------
Our present officers, directors and principal shareholders own a majority
of our outstanding common stock and they may purchase shares in the offering.
However, even if the officers, directors and principal shareholders do not
purchase any of the shares, such persons will still own a majority of the
outstanding voting stock. Therefore, our present management and principal
stockholders will continue to be able to elect all the directors and otherwise
absolutely control EMPS and investors in the offering will have no ability to
remove, control or direct such management. See "Principal Stockholders."
Our shares are subject to the risks of low-priced shares.
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Currently the shares are subject to Rule 15g-9, which provides, generally,
that for as long as the bid price for the shares is less than $5.00, they will
be considered low-priced securities under rules promulgated under the Exchange
Act. Under these rules, broker-dealers participating in transactions in low
priced shares must first deliver a risk disclosure document which describes the
risks associated with such stocks, the broker-dealer's duties, the customer's
rights and remedies, and certain market and other information, and make a
suitability determination approving the customer for low-priced stock
transactions based on the customer's financial situation, investment experience
and objectives.
Broker-dealers must also disclose these restrictions in writing to the
customer and obtain specific written consent of the customer, and provide
monthly account statements to the customer. The likely effect of these
restrictions will be a decrease in the willingness of broker-dealers to make a
market in the stock, decreased liquidity of the stock and increased transaction
costs for sales and purchases of the stock as compared to other securities.
We have only limited SEC reporting requirements.
-------------------------------------------------
Because we are only subject to Section 15(d) of the Exchange Act, we will
not be subject to the proxy rules, short-swing profits regulations, beneficial
ownership report regulations and the bulk of the tender offer regulations.
Therefore, we may only be required to file periodic reports for a limited period
of time. We do intend to provide our shareholders with annual reports
containing audited financial statements from our independent accountants and
other periodic reports as we feel necessary. However, in view of the fact that
we may have limited reporting requirements, the investor will have less
information available with which to assess the status of EMPS.
There are disproportionate risks to new investors.
--------------------------------------------------
Collectively the existing shareholders own 800,000 shares of our presently
outstanding shares, for which they paid $9,182 cash. If the maximum number of
shares offered hereby are sold, upon completion of the offering present
stockholders will own 80% of the then outstanding shares, and investors in the
offering will own the other 20%, for which they will have paid $200,000 cash.
Thus, investors in the offering will contribute to the capital of EMPS a
disproportionately greater percentage than the ownership they receive. Present
stockholders will benefit from a greater share of EMPS if successful, while
investors in the offering risk a greater loss of cash invested if we are not
successful. See "Comparative Date."
Investors who purchase the shares will experience immediate dilution in
-------------------------------------------------------------------------
the book value of the shares which they acquire.
- ------------------------------------------------
Our present shareholders acquired their shares at an average cost of
$0.00258 per share, substantially less than the $1.00 per share to be paid by
investors in this offering. Dilution may also occur if we issue additional
shares at a price lower than the current offering price. A substantial portion
of our 50,000,000 authorized shares will remain unissued if all shares are sold.
The Board of Directors has, however, the power to issue such shares without
shareholder approval. Following the offering, any additional issuances of
shares by us from our authorized but unissued shares would have the effect of
further diluting the book value of shares and the percentage ownership interest
of investors in this offering.
We could issue additional stock without shareholder approval.
-------------------------------------------------------------
We are authorized to issue up to 50,000,000 shares, of which no more than
1,000,000 shares will be issued and outstanding upon completion of the offering.
To the extent of such authorization, our Board of Directors will have the
ability, without seeking shareholder approval, to issue additional shares in the
future for such consideration as the Board of Directors may consider sufficient.
The issuance of additional shares in the future will reduce the proportionate
ownership and voting power of the shares offered hereby.
Some of our shares may be eligible for future sale.
---------------------------------------------------
Of the 800,000 shares presently outstanding, all were issued to Particle
Separation Technologies, LC. in exchange for the patents held by us. These
shares are subject to the resale limitations imposed by Rule 144. While these
shares are not being offered for sale presently, they may at some time in the
future be sold, pursuant to Rule 144, into any public market that may develop
for the shares. Future sales by current shareholders could depress the market
prices of the shares in any such market.
The shares have no cumulative voting or pre-emptive rights.
-----------------------------------------------------------
There are no preemptive rights in connection with the shares. Cumulative
voting in the election of directors is not permitted. Accordingly, the holders
of a majority of the shares, present in person or by proxy, will be able to
elect all of our Board of Directors. Even if all the shares are sold, the
current shareholders will own a majority interest in us. Accordingly, the
present shareholders will continue to elect all of our directors and generally
control our affairs.
USE OF PROCEEDS
----------------
The following table sets forth management's present estimate of the
allocation of net proceeds expected to be received from this offering. Actual
expenditures may vary from these estimates. Pending such uses, we may invest
the net proceeds in investment-grade, short-term, interest-bearing securities.
<TABLE>
<S> <C>
If Maximum
Amount Sold
------------
Total Proceeds $200,000
Less:
Offering Expenses $20,000
Filing Fees
Net Proceeds from Offering Available $180,000
Use of Net Proceeds
Prototype
Power supply amplifier $8,500
Inductor-capacitor-resistor $8,500
circuit
High-frequency toroid $12,750
Research on Effects of technology $15,100
Administrative Costs $45,900
Legal fees $42,500
Material Handling and Separation $46,750
Equipment
- ------------------------------------------------------------------------------
Total Use of Net Proceeds $180,000
- ------------------------------------------------------------------------------
</TABLE>
Administrative costs include continued accounting, telecommunications,
travel, etc. We anticipate incurring legals fees for the preparation of patent
applications and filings in the United States and certain foreign countries
party to the Paris Convention Treaty.
The funds designated for Material for Handling and Separation Equipment
will allow us to purchase a laminar flow, high velocity material handling
separation system which will pre-concentrate aerodynamically (according to
surface area) and by specific gravity any particles of heavier metals contained
in any bulk material targeted for further separation by our technology. This
will allow us to set up an up-scale commercial operation.
Should we realize less than the full offering, we intend to scale back our
initial operations and concentrate of building and testing a prototype unit
rather than pursue a full scale operation.
DILUTION
---------
As of the date of this offering, we had 800,000 shares issued and
outstanding and a net tangible book value of $2,062 or $0.00258 per share.
The proceeds from the sale of shares will vary depending on the total
number of shares sold.
If all 200,000 shares are sold, there would be a total of 1,000,000 shares
issued and outstanding. If the maximum 200,000 shares are sold, the net
proceeds to us after deducting offering costs of $20,000 would be $180,000.
Adding the net proceeds to the net tangible book value, the total net tangible
book value of EMPS would be $182,062. Dividing the net worth of EMPS by the
number of shares outstanding discloses a per share book value of approximately
$0.182 per share. Therefore, the shareholders who purchased pursuant to the
offering will suffer an immediate dilution in the book value of their shares of
approximately $0.818 or approximately 82% and the present shareholders will
receive an immediate book value increase of approximately $0.815 per share.
"Dilution" means the difference between the price of the shares purchased
by purchasers in the offering from the pro forma net tangible value per share
after giving effect to the offering.
"Net tangible book value" is obtained by subtracting the total liabilities
from the total tangible assets (total assets less intangible assets and offering
expenses). Net tangible book value per share is determined by dividing the
number of shares outstanding into the net tangible book value of shares
immediately after the offering.
COMPARATIVE DATA
-----------------
The following chart illustrates the pro forma proportionate ownership in
EMPS, upon completion of the offering, of present stockholders and of investors
in the offering, compared to the relative amounts paid and contributed to the
capital of EMPS by present stockholders and by investors in this offering,
assuming no changes in net tangible book value other than those resulting from
the offering.
<TABLE>
<CAPTION>
Shares Percent Cash Paid Percent Average
Owned Price/share
------- ------- --------- ------- -----------
<S> <C> <C> <C> <C> <C>
Present Shareholders 800,000 80% $9,182 4.3% $0.00258
New Investors 200,000 20.0% $200,000 95.7% $1.00
</TABLE>
PLAN OF DISTRIBUTION
--------------------
The offering will not be sold through selling agents. Our officers and
directors will sell the shares on a "best efforts" basis.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS
-----------------------------------------
The following table sets forth our directors, executive officers, promoters
and control persons, their ages, and all offices and positions held within
EMPS. Directors are elected for a period of one year and thereafter serve until
their successor is duly elected by the stockholders and qualified. Officers and
other employees serve at the will of the Board of Directors.
<TABLE>
<CAPTION>
Name of Director Age Term Served as Positions with EMPS
- ---------------- ---- -------------- ---------------------
<S> <C> <C> <C>
Louis Naegle 34 Since August 26, 1998 President, Treasurer,
and Director
Timothy L. Adair 34 Since May 18, 1999 Director & Secretary
</TABLE>
The above individuals will serve as our officers and/or directors. A brief
description of their positions, proposed duties and their background and
business experience follows:
Louis Naegle, President, Treasurer and Director. Age 34.
----------------------------------------------------------
Mr. Naegle graduated from the University of Utah in 1991 with a Bachelor of
Arts degree in Political Science. Mr. Naegle brings over 13 years experience in
marketing and sales. He earned top sales awards while working for a large
international home builder and has previously owned a successful sales
consulting business. Mr. Naegle was employed as a sales agent for Equimark
Properties, Inc., and he is currently a licensed real estate broker. Mr. Naegle
owns LISN Investments, LC. and brings experience from the international arena
where he served as liaison in the former Soviet Union for SATCO International.
Timothy L. Adair, Secretary and Director. Age 34.
--------------------------------------------------
Mr. Adair graduated from Brigham Young University in 1988 with a Bachelor
of Arts degree in Mechanical Engineering and received a Masters of Business
Administration from Brigham Young University in 1990. Mr. Adair currently acts
as a HR Analysis Manager at Intermountain Health Care in Salt Lake City where he
works specifically with Information Systems/Processes and Financial Analysis.
Prior to his current position, Mr. Adair has six years previous experience as a
Financial Analyst and a Compensation Analyst. Mr. Adair has had nearly ten
years of real estate investment and management experience. He is a Partner of
Adlaw, and a member of both Forest Property Management LLC, and Olympus Property
Management LLC.
Key Consultants
- ---------------
Raj K. Rajamani.
----------------
Mr. Rajamani is currently the Acting Chair of the Metallurgical Engineering
Faculty at the University of Utah. Mr. Rajamani received his Bachelor of
Science in Chemical Engineering at the Annamalai University in Madras, India and
received his M. Tech. in Chemical Engineering from the Indian Institute of
Technology in Kanpur, India. He later received both an M.E. in Chemical
Engineering and a Ph.D. in Metallurgy from the University of Utah. Mr. Rajamani
has done research and published extensively on ultra fine grinding,
computational fluid dynamics applications, electrodynamic separation of
particles and has done modeling of grinding kinetics and charge motion in
comminution machines. Mr. Rajamani supports the Company as a consultant on an as
needed basis.
Vladimir Leonidovich Saveliev, Ph.D.
-------------------------------------
Dr. Saveliev has over thirty years of fundamental and applied research
experience at the Institute of Ionosphere and Institute of Higher Energy Physics
in the fields of plasma physics, electrodynamics, propagation of radio waves,
kinetic theory, applied mathematics, Monte-Carlo method and numerical
simulation. His extensive education includes a 1966 Specialized Physics,
Mathematics and Chemistry certificate, a 1971 Master of Science degree from
Novosibirsk State University in Physics, 1982 Degree, Candidate of Physical and
Mathematical Sciences (equivalent to Ph.D.) Defended at the Institute of Theory
and Applied Mechanics, Novosibirsk Scientific Center and a 1990 Academic Rank of
Senior Researcher, certified by the High Certification Committee at Ministry
Council of USSR. Dr. Saveliev began his professional career at the Institute of
High Energy Physics, Academy of Sciences of SazSSR in 1971. He has been advisor
to the Ph.D. Thesis of several scientists and a Senior Researcher, Scientific
Consultant, Leading Researcher and is currently at the Institute of Ionosphere,
Academy of Sciences of the Republic of Kazakhstan. He is a member of the
American Mathematic Society, Referee of European Physics Letters and other
journals, Expert of Ministry of Science - Academy of Sciences Republic of
Kazakhstan. Dr. Saveliev is widely published in the areas of electromagnetics,
plasma dynamics and ionosphere excitation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
-----------------------------------------
The term "beneficial owner" refers to both the power of investment (the
right to buy and sell) and rights of ownership (the right to receive
distributions from the Company and proceeds from the sale of shares). Inasmuch
as these rights may be held or shared by more than one person, each person who
has a beneficial ownership interest in shares is deemed to be the beneficial
owners of the same shares because there is shared power of investment or shared
rights of ownership.
Mr. Naegle and Mr. Adair are officers and directors of EMPS.
<TABLE>
<CAPTION>
Type of Amount & Nature of % of Class
Security Name and Address Beneficial Ownership After Offering
- --------- ----------------- -------------------- ---------------
<S> <C> <C> <C>
Common Louis Naegle -0- -0-
1745 S. 2600 East
Salt Lake City
Utah 84108
Common Timothy L. Adair -0- -0-
2143 S. 900 E.
Bountiful, UT 84010
Common Particle Separation 800,000 80%
Technologies, LC.
3500 Pine Valley Road
Woodland, Utah 84036
- ------------------------------------------------------------------------------------
All officers and directors -0- -0-
as a group (2 persons)
- ------------------------------------------------------------------------------------
TOTAL 800,000 80%
- ------------------------------------------------------------------------------------
</TABLE>
COUNSEL TO THE ISSUER WITH RESPECT
TO THE PROPOSED OFFERING
-----------------------------------
Poulton & Yordan, 136 E. South Temple Suite 1700A, Salt Lake City, Utah 84111.
RELATIONSHIP WITH ISSUER OF EXPERTS NAMED
IN REGISTRATION STATEMENT
------------------------------------------
None of the experts named herein was or is a promoter, underwriter, voting
trustee, director, officer or employee of EMPS. Further, none of the experts
was hired on a contingent basis and none of the experts named herein will
receive a direct or indirect interest in EMPS.
LEGAL PROCEEDINGS
-----------------
To the knowledge of management, there is no material litigation pending or
threatened against EMPS or our management. Further, we are not aware of any
material pending or threatened litigation to which we or any of our directors,
officers or affiliates are or would be a party.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
---------------------------------------------
None.
DISCLOSURE OF COMMISSION POSITION
ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
--------------------------------------------------
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to our directors, officers and controlling persons
pursuant to the following provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by us of expenses incurred or paid by a director, officer or
controlling person of EMPS in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the shares being registered, we will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
DESCRIPTION OF THE SECURITIES
------------------------------
The following summary describes the material provisions of our Articles of
Incorporation and Bylaws relating to the securities, copies of which will be
furnished to an investor upon written request therefor.
Pursuant to Article VII of our Articles of Incorporation, no director or
officer shall be personally liable to the Corporation or its stockholders for
monetary damages for any breach of fiduciary duty by such person as a director
or officer. Notwithstanding the foregoing sentence, a director or officer shall
be liable to the extent provided by applicable law, (i) for acts or omissions
which involve intentional misconduct, fraud or a knowing violation of law, or
(ii) for the payment of dividends in violation of NRS 78.300.
The foregoing limitations do not affect the standards to which directors
must conform in discharging their duties to stockholders or modify the
availability of equitable relief for breach of duty. Further, the foregoing
limitations do not affect the availability of relief under causes of action
based on Federal law, including the Federal securities laws.
The shares being registered pursuant to the registration statement of which
this prospectus is a part are shares of common stock, all of the same class and
entitled to the same rights and privileges as all other shares of common stock.
Description of Common Stock.
----------------------------
Our authorized capital stock consists of 50,000,000 shares of common stock
with a $.001 par value. As of the date of this Registration Statement, we had
outstanding 800,000 shares, all of which is validly issued, fully paid and non-
assessable. Holders of our shares are entitled to receive dividends when
declared by the Board of Directors out of funds legally available therefore.
Any such dividends may be paid in cash, property or shares. We have not paid
any dividends since our inception. All dividends will be subject to the
discretion of our Board of Directors, and will depend upon, among other things,
our operating and financial conditions, our capital requirements and general
business conditions. Therefore, there can be no assurance that any dividends on
the shares will be paid in the future.
All shares have equal voting rights and, when validly issued and
outstanding, will have one vote per share on all matters to be voted upon by the
shareholders. Cumulative voting in the election of directors is not allowed,
and a quorum for shareholder meetings shall result from a majority of the issued
and outstanding shares present in person or by proxy. Accordingly, the holders
of a majority of the shares present, in person or by proxy at any legally
convened shareholders' meeting at which the Board of Directors is to be elected,
will be able to elect all directors and the minority shareholders will not be
able to elect a representative to the Board of Directors.
Shares have no preemptive or conversion rights, no redemption or sinking
fund provisions, and are not liable for further call or assessment. Each share
is entitled to share pro rata any assets available for distribution to holders
of its equity securities upon our liquidation.
During the pendency of the offering, subscribers will have no rights as
stockholders until the offering has been completed and the shares have been
issued to them.
Description of Stock Options.
-----------------------------
The Board of Directors has adopted the EMPS Corporation 1998 Stock Option
Plan (the "Plan") allowing us to offer our key employees, officers, directors,
consultants and sales representatives, an opportunity to acquire a proprietary
interest in us. The various types of incentive awards which may be provided
under the Stock Option Plan will enable us to respond to changes in compensation
practices, tax laws, accounting regulations and the size and diversity of its
business. To date we have not issued any options pursuant to the Plan. No
option shares are being registered under this registration statement.
The total number of shares reserved and available for distribution under
the Plan shall be 400,000 shares. These shares will underlie the options issued
by us pursuant to the Plan. The option holders will not be protected against
dilution if we should issue additional shares in the future. Neither the
options, nor the shares underlying the option have preemptive rights.
In the case of any reclassification, change, consolidation, merger, sale or
conveyance of our shares to another corporation, we will make adequate
provision whereby the registered holder of any outstanding option will have the
right thereafter to receive an exercise of the options immediately prior to the
reclassification, change, consolidation, merger, sale or conveyance of our
shares.
Other provisions of the options are set forth below. This information is
subject to the provisions of the Plan and the Stock Option Certificates
representing the options. The following information is a summary of the EMPS
Corporation 1998 Stock Option Plan and is qualified by reference to the plan.
(See the "EMPS Corporation 1998 Stock Option Plan" attached hereto as Exhibit
29).
1. The shares underlying the Options offered pursuant to the Plan are
subject to the same rights and restrictions as other shares. (See "Description
of Common Stock").
2. Once an option is granted, it may not be called by us.
3. The options may not be sold prior to six months from the date of the
grant of the related award without our prior approval.
4. Unless exercised within the time provided for exercise, the options
will automatically expire.
5. The exercise price per share purchasable under a stock option shall be
determined by the Committee at the time of grant and may not be less that 100%
of Fair Market Value of the shares, provided however, that the exercise price of
an Incentive Stock Option granted to a 10% Stockholder shall not be less than
110% of the Fair Market Value of the shares.
6. There is no minimum number of shares which must be purchased upon
exercise of the option.
7. The option holders, in certain instances, are protected against
dilution of their interest represented by the underlying shares upon the
occurrence of stock dividends, stock splits, reclassifications and mergers.
Transfer Agent.
---------------
Interwest Transfer Company, Inc., 1981 East 4800 South, Suite 100, Salt
Lake City, Utah 84117, Telephone (801) 272-9294, has agreed to serve as our
transfer agent and registrar.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
-----------------------------------------
The statements under the heading "Certain Federal Income Tax
Considerations,' to the extent such statements refer to matters of tax law, are
solely the opinions of management. Management has not sought or obtained any
formal legal opinion as to such matters, and no conclusion of counsel is binding
on the Internal Revenue Service or the courts in any event. There can be no
assurance that the Internal Revenue Service or the courts will not reach
different conclusions regarding the transactions contemplated hereby. This
discussion does not address certain Federal income tax consequences that are the
result of special rules, such as those that apply to life insurance companies,
tax exempt entities, foreign corporations, and nonresident alien individuals.
In addition, the discussion does not address alternative minimum tax
considerations and is limited to investors who will hold shares as "capital
assets" (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986, as amended (the "Code"). This
discussion also assumes that the shares will be traded on an established
securities market. This discussion is based on relevant provisions of the Code,
the Treasury Regulations promulgated thereunder (the "Regulation), revenue
rulings published in the Internal Revenue Bulletin and judicial decisions in
effect at the date of this Prospectus. There can be no assurance that future
changes in applicable law or administrative and judicial interpretations thereof
will not adversely affect the tax consequences discussed herein.
The tax treatment to a holder of shares may vary depending on such holder's
particular situation. Potential investors should consult their own tax advisors
as to the tax treatment that may be anticipated to result from the ownership or
disposition of common stock in their particular circumstances, including the
application of foreign, state or local tax laws or estate and gift tax
considerations.
State and Local Income Taxes.
-----------------------------
A holder of shares may be liable for state and local income taxes with
respect to dividends paid or gain from the sale, exchange or redemption of
shares. Many states and localities do not allow corporations a deduction
analogous to the Federal dividends received deduction. Prospective investors
are advised to consult their own tax advisors as to the state, local and other
tax consequences of acquiring, holding and disposing of shares.
ORGANIZATION WITHIN THE LAST FIVE YEARS
-----------------------------------------
We are a start-up company and have no operating history. As soon as the
money from this offering is made available, we expect to make all arrangements
necessary so that we can commence operations immediately.
DESCRIPTION OF BUSINESS
------------------------
Company History
- ---------------
We incorporated under the laws of the state of Nevada on July 14, 1998 as
EMPS Corporation. We were formed to further develop and market patented
technology for commercially separating nonmagnetic particulate material from
other materials without chemical, pyrotechnical or hydro-mechanical methods.
Our management believes this new technology is less expensive and
environmentally safer than current particulate material separation methods.
We have not commenced any business operations other than organizational and
administrative functions.
Business of the Company
- -----------------------
We intend to engage in the business of marketing and licensing our patented
technology for use in commercially separating nonmagnetic particulate material.
No known system or method exists in industry for commercially separating
nonmagnetic particulate material, such as gold, from other materials without
chemical, pyrotechnical or hydro-mechanical methods. These current methods are
expensive and can be environmentally unsafe.
In the case of hydro-mechanical separation, water is used as a medium to
carry particles through machinery (trammels and jigs), over vibrating tables or
centrifugal apparatuses which utilize specific gravity in the separation
process. When water is available, its usage often requires significant capital
expenditures for pumping systems, infrastructure and continual pump maintenance.
Water separation systems can be seasonally restrictive due to weather
considerations. After separation, additional energy is needed for the drying
processes to remove the moisture from the separated material.
Chemical methods require great planning and care. Without proper handling
and disposal of the caustic chemicals used in these processes, environmental
disasters can occur. The long-term environmental effects of chemical separation
are only now beginning to be understood. Usually, drying processes are needed
to remove the moisture from the separated material.
Pyrotechnical methods require strict attention to the toxic gases created
in the energy intensive burn process. Scrubbers and other apparatuses are
needed to capture furnace emissions.
Our invention, uses heretofore unrecognized principles that allow
separation of electrically conductive, nonmagnetic particles more efficiently
and safely than before. Electrodynamic separation of nonmagnetic free-flowing
materials is accomplished by introducing the material into a region of magnetic
field gradient that fluctuates with time. The variable field induces magnetic
dipoles in the conducting particles of the material, producing electrodynamic
forces that deflect the electrically conducting particles from the imposed
magnetic field. Therefore, the conducting particles are separated from the feed
material. Research derived from mathematical and actual working models indicate
that the invention should specifically address this problem in industry.
EMPS employs the use of an alternating magnetic field in, among other
possible configurations, the gap of a torroidal-like shape ferromagnetic core to
produce an electromagnetic force with frequencies set according to the specific
resistivity and size of the particulate material which is to be separated from
other material.
Independent tests were performed on our technology by the Department of
Metallurgical Engineering at the University of Utah. After careful
consideration by the faculty, it was determined that these experiments warranted
special Departmental attention due to the unique nature of the heretofore
unrecognized principles involved. Independent test results with supporting
calculations, data and experiments were implemented by a special team, including
two faculty members, and are described by graduate student, Dongman Kim, in a
recent Master's Thesis entitled "Electrodynamic Separation of Conducting
Particles in an Alternating Magnetic Field". The Thesis concludes:
"In this study, separation of conductive materials from mixed
particles has been proved to be successful. Based on what is reported here, a
pilot-scale unit can be built for further scale-up to a larger industrial-size
unit."
It is this "pilot-scale" unit that will be the focus of our financial and
technical resources.
There are many occasions in scientific and industrial applications where
materials must be separated from one another. Particularly in the mining
industry, valuable metals must be efficiently separated from other materials
which are found in the ore. In many industrial applications, separation of
particles having different sizes and densities relies on the earth's gravity as
well as some additional process such as filtration. All such arrangements which
have been devised utilizing gravity to separate particles of different densities
include one or more drawbacks as are recognized in the art. For example, such
arrangements may require water as a carrier for the particles to be separated.
Disadvantageously, the water must be removed from the particles after
separation. Moreover, in some mining locations, water is not readily available.
In order to provide efficient separation without water, various apparatus
and techniques have been proposed which also utilize some electromagnetic
properties of materials, rather than density alone, to separate materials.
While the task of separating magnetic materials from non magnetic materials is a
relatively easy one, the task of separating a nonmagnetic material from other
nonmagnetic materials utilizing the magnetic properties of the materials has
been the subject of research in the industry. Still, many problems and
drawbacks exist with the proposed schemes. Particularly in the mining industry,
there have been numerous attempts to separate materials from one another, for
example gold from other materials, based on the differing magnetic properties of
the materials.
One example of a previous scheme is represented by U.S. Pat. No. 5,057,210
to Julius. The Julius reference recognizes that the creation of eddy currents
in conductive materials allows a magnetic field to move a nonmagnetic material.
The Julius reference, however, utilizes a rotating permanent magnet to generate
a changing magnetic field and thus does not recognize critical aspects of the
use of induced eddy currents in electrically conductive, nonmagnetic materials.
Another example of a previous scheme is represented by U.S. Pat. No.
5,161,695 to Roos. The Roos reference also recognizes that the creation of eddy
currents in conductive materials allows a changing magnetic field to move
particles of a nonmagnetic material. The Roos reference, however, utilizes
permanent magnets, as does the Julius reference, and thus does not recognize
critical aspects of utilizing induced eddy currents to cause movement of
nonmagnetic particles. The scheme of the Roos reference is ineffective.
In view of the shortcomings inherent in the previously proposed schemes to
separate nonmagnetic materials using magnetic force, it is a significant advance
in the art to provide a more efficient system and method of separating
electrically conductive nonmagnetic materials.
The primary object of our invention is to provide a practical system and
method for separating electrically conductive nonmagnetic materials. It is
also an object of our invention to provide a system and method for separating
electrically conductive nonmagnetic materials which does not rely on moving
mechanical parts to achieve separation of the materials. It is further the
object of our invention to provide a system and method for separating
electrically conductive nonmagnetic materials from each other which does not
require any liquid.
Our present invention provides a system and method for separating
electrically conductive, nonmagnetic particles which could not otherwise be
separated using flotation or filtration schemes. Further, our invention
provides a system and method for separating electrically conductive, nonmagnetic
particles wherein characteristics such as the specific resistivity and the size
of the particle determine the separation of one material from other materials.
Our invention provides a system for separating first electrically
conductive particulate material from one or more other materials. The invention
is particularly intended for use with materials in particulate form but can also
be used with materials in other forms. Our invention can also be used in
conjunction with other separation technologies, such as flotation and
filtration, which are known in the art. For example, the separation techniques
of the present invention can be used before or after materials have been
subjected to other separation techniques known in the art.
Our invention includes means for localizing a magnetic field at a first
location. The magnetic field is an alternating or oscillating field. It is
preferred that the magnetic field have a strength of at least 1 kilogauss (kGs)
and have a frequency of, for example, at least 10 kilohertz (kHz). In contrast
with the prior art, the present invention considers the size of the particle
when selecting the frequency. As the size of the particle to be separated
decreases, the frequency preferably increases. For example, a frequency of 10
kHz may be used for the largest particles needing separation, a frequency of 20
kHz if medium size particles are to be separated, and a frequency of 40 kHz or
higher for the smallest particles which are to be separated.
The means for localizing a magnetic field can desirably include a core of
ferromagnetic material formed in a torroidal-like shape, at least one gap formed
in the core, and an electrical conductor wound around the core, the conductor
being capable of carrying electrical current and inducing a magnetic flux in the
gap. Alternatively, other structures which can be devised by those skilled in
the art can function as the means for localizing. For example, a coil with a
plurality of gaps and without a core can function as the means for localizing.
A means for directing a material stream to the gap is also provided. The
material stream comprises both the desirable first particles which consist of an
electrically conductive, nonmagnetic material and a second material which can
consist of one or a plurality of other materials. A means for setting the
velocity of the material stream is preferably provided.
Our invention may also include means for sorting the particulate material
according to size and conveying the first electrically conductive particulate
material to the means for directing a material stream to the first location.
Our invention utilizes heretofore unrecognized principles that allow separation
of electrically conductive, nonmagnetic particles more efficiently than before.
Our invention exploits the characteristics of particle electrical specific
resistivity and particle size. Thus, in contrast to the previously proposed
schemes, the present invention considers the size of the particles in the
separation process. For example, some embodiments of the present invention
preferably include means for sorting particles having a diameter not larger than
about five millimeters and more preferably not larger than about two
millimeters. Embodiments of the present invention may also comprise means for
measuring the size of the particles of the electrically conductive particulate
material so that the operation of the system can be adjusted for best
efficiency. Moreover, in contrast to the previously proposed schemes, the
present invention considers the specific resistivity of the particles in the
separation process.
Included in our invention is a means for generating an alternating current
and for applying it to the means for localizing a magnetic field. The frequency
of the alternating current is set according to the specific resistivity (or
conductivity) of the desired material and the size of the particles comprising
the desired material. Selected embodiments of the present invention preferably
include means for increasing the frequency of the alternating current as the
size of the first particles decreases.
The means for localizing a magnetic field and the means for generating an
alternating current cooperate together to induce an alternating magnetic field
at a location, for example the gap, where separation occurs. Separation occurs
as a result of the alternating magnetic field deflecting the path of the desired
material in a different amount than the other material present in the stream is
deflected. Structures are also included to function as a means for gathering
the first particles as they are separated from the material stream.
The method of our invention preferably includes the steps of generating an
alternating magnetic field, introducing a stream of particles into the magnetic
field, the stream of particles including both the desired first particles and
undesired second particles. The step of adjusting the frequency of the
alternating magnetic field is carried out in accordance with the specific
resistivity and the size of the first particles. By properly adjusting or
choosing the frequency of the alternating magnetic field, the first particles
are imparted a trajectory which is different than the trajectory of the other
particles in the particle stream. In order to adjust for the size of the
particles, the EMPS invention increases the frequency of the alternating
magnetic field as the size of the first particles decreases.
Since the size of the particles greatly influences the separation process,
it may be desirable to pre-sort the particles according to size or adjust the
size of the particles before being subjected to the alternating magnetic field.
Moreover, it is desirable to adjust the velocity of the particles in the
particle stream as they enter the magnetic field.
The particle stream is subjected to the magnetic field for a period of time
while the first particles are gathered into one location and the remaining
material gathered into another location. Our invention has particular
application for separating particles of gold from other materials.
Our invention efficiently separates electrically conductive, nonmagnetic
particles based upon the particle's size and the particle's specific electrical
resistivity. Thus, one type of desired electrically conductive, nonmagnetic
particle can be readily separated from other undesired electrically conductive,
nonmagnetic particles in accordance with the present invention. Even if the
desired and undesired particles are of substantially the same particle size, but
the particles have different specific electrical resistivities, the particles
can be separated from one another using our invention. The desired particle is
pushed out from the oscillating magnetic field, i.e., its trajectory is altered,
and the undesired particles are substantially unaffected by the oscillating
magnetic field and thus pass through without substantial alteration of their
trajectories.
Our invention can be carried out so that particles can be separated from
each other in a batch-by-batch fashion or in a continuous flow process. The
continuous flow process is presently preferred and more efficient.
Further, our invention provides a system and method for separating
electrically conductive nonmagnetic materials which does not rely on moving
mechanical parts to achieve a separation of the particles. Our invention also
provides a system and method for separating electrically conductive, nonmagnetic
particles wherein the magnetic field which induces eddy currents in the
particles also causes movement of the particles which are to be separated and
wherein both the electrical conductivity and the size of the particle determine
the separation of one type of particle from other types of particles.
Competition
- -----------
We will operate in a highly competitive environment. Current competition
consists of companies employing hydro-mechanical, chemical and pyro-technical
methods of particle separation. While these companies have greater resources
than we do, we believe that our method of separation gives us a competitive
edge. Once developed, our process has the potential of separating a large
amount of raw material in a short time (one ton per hour), efficiently and
without harming the environment.
Advertising and Marketing Strategy
- ----------------------------------
We plan on focusing its operations on developing a functional prototype.
After which we will either seek a contract with entities for licensing our
technology for third party use, participating in some form of joint venture
activity with outside companies or our actual involvement on an upscale basis in
the application of particle separation business of various precious metals or
assisting in environmental clean-up operations through existing companies
involved in governmental projects. Until the time a functional prototype is
constructed, our advertising and marketing will be limited.
We may seek limited advertizing and marketing through interaction with the
target industry and direct contact sales. Additionally, we may seek further
exposure through trade journals and symposia.
Employees
- ---------
We currently have no employees aside from officers and directors who work
on a part time, as needed basis with no commitment for full time employment.
Raj Rajamani and Vladimir Leonidovich Saveliev both support EMPS on a consultant
basis. We do not foresee hiring any further employees until revenues and
operations warrant the addition of employees.
PLAN OF OPERATIONS
------------------
The Company's purpose is to engage in the business of marketing and
licensing the technology rights for a nonmagnetic particulate material
separation. We initially intend to design and construct a prototype capable of
separating one ton per hour of particles . This will enable us to contract with
numerous entities for either licensing EMPS technology for third party use,
participating in some form of joint venture activity with outside companies or
our actual involvement on an upscale basis in the application of particle
separation business of various precious metals or assisting in environmental
clean-up operations through existing companies involved in governmental
projects.
Our plan of operation for the next twelve months is to raise funds through
the offering, develop a prototype device employing the patented technology,
market our technology and commence active business operations. In addition to
providing capital to help defray various start up expenditures, management
believes that a principal use of the offering proceeds will be to provide
initial working capital necessary upon commencement of operations until
sufficient revenues are generated to cover such operating expenditures. In
order to commence active business operations management is engaging in a number
of planning stage and preliminary activities. These activities include the
following:
Establish agreements on an Independent Contractor basis with outside
labs and shops to use third party equipment to design and construct the
prototype
Arrange prototype development and testing;
Initial development of marketing literature for use in our marketing
efforts;
Negotiate and enter into licensing agreements with third parties to
market our technology.
To date, we have not printed any marketing literature, arranged for
prototype development and testing or entered any licensing agreements.
Start-up costs include purchase of equipment to design and construct a
prototype, costs for research of the effects of EMPS technology, and
administrative fees. We anticipate that we will be able to design and construct
needed equipment and conduct research on the effects of the technology with less
than the full offering amount being raised. However, we anticipate that
additional equipment, which will allow us to set up an up-scale commercial
operation, can be purchased if the maximum offering is raised. Further, we
anticipate that the maximum offering will allow us to continue operations for
three years as opposed to the one year of operations that we anticipate less
than the full offering will allow.
Inasmuch as there is no assurance that the offering will be successful or
that we will receive any net proceeds therefrom, to date, we have not entered
into any contracts or commitments for purchasing of equipment or proceeding with
prototype development. Therefore, there is no assurance we will be able, with
the proceeds of this offering, to acquire sufficient equipment, contract for
laboratory space and services or to perform prototype development. There is
also no assurance that we will be able to market and license our technology
sufficiently and generate enough business to operate profitably.
We have received indications of interest from outside sources to license
our technology for use in commercial applications once the prototype testing has
proven successful. It is our intent to pursue outside sources to market and
exploit the technology.
DESCRIPTION OF PROPERTY
-------------------------
We currently own U.S. Patent 5,772,043, "System and Method for Separating
Electrically Conductive Particles" issued on June 30, 1998 and U.S. Patent
5,439,117, ""System and Method for Separating Electrically Conductive Particles"
issued on August 8, 1995.
The patents describe the use of an alternating magnetic field in, among
other possible configurations, the gap of a torroidal-like shape ferromagnetic
core to produce an electromagnetic force with frequencies set according to the
specific resistivity and size of the particulate material which is to be
separated from other material. It is these patents upon which we rely for our
technology.
MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
-----------------------------
At present, our shares are not traded publicly. There is no assurance that
a trading market will develop, or, if developed, that it will be sustained. A
purchaser of shares may, therefore, find it difficult to resell the securities
offered herein should he or she desire to do so when eligible for public
resales. Furthermore, the shares are not marginable and it is unlikely that a
lending institution would accept the shares as collateral for a loan.
Pursuant to this Registration Statement, we propose to publicly offer a
maximum of 200,000 shares. To date, no shares are subject to outstanding
options, warrants to purchase or securities convertible into common stock. No
shares have been sold pursuant to Rule 144 of the Securities Act. We have
agreed to register no shares held by existing security holders for resale.
REMUNERATION OF DIRECTORS AND OFFICERS
---------------------------------------
To date, no compensation has been paid to any person associated with us and
we presently have no formal employment agreements or other contractual
arrangements with the officers, directors or anyone else regarding the
commitment of time or the payment of salaries or other compensation. We plan
that compensation will be based on profit sharing of ten percent of the pre-tax
profit of EMPS to the officers and directors, to be divided equally amongst
them.
INTEREST OF MANAGEMENT AND OTHERS
IN CERTAIN TRANSACTIONS
-----------------------------------
On July 21, 1998 we issued Particle Separation Technologies, L.C., the
majority shareholder of the Company, 800,000 shares in exchange for assignments
of patent.
FINANCIAL STATEMENTS
--------------------
Our audited financial statements appearing in this Registration Statement
have been examined by David C. Thomson, P.C., Certified Public Accountant, as
indicated in its report contained herein. The financial statements are included
in this Registration Statement in reliance upon the report of that firm as an
expert in auditing and accounting.
EMPS CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
FOR THE FIVE MONTHS ENDED MAY 31, 1999
(Unaudited)
AND
FROM INCEPTION (July 14, 1998) TO DECEMBER 31, 1998
WITH
INDEPENDENT AUDITOR'S REPORT
<PAGE>
EMPS CORPORATION
(A Development Stage Company)
CONTENTS
PAGE
Independent Auditor's Report 1
Balance Sheets 2
Statements of Operations 3
Statement of Stockholders' Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6
/Letterhead/
DAVID T. THOMSON, P.C.========================== Certified Public Accountant
Independent Auditor's Report
- ----------------------------
Board of Directors
EMPS CORPORATION
- ----------------
I have audited the accompanying balance sheets of EMPS Corporation (A
development stage company) as of December 31, 1999 and the related statements of
operations, stockholders' equity and cash flows from inception (July 14, 1998)
to December 31, 1998. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on the
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of EMPS Corporation (A development
stage company) as of December 31, 1998, and the results of its operations and
its cash flows from Inception (July 14, 1998) to December 31, 1998 in conformity
with generally accepted accounting principles.
As discussed on Note 1, the Company has been in the development stage since its
inception on July 14, 1998. The Company has no operating capital with current
assets exceeding current liabilities by $5,212, and has no operations.
Realization of a major portion of the assets is dependent upon the Company's
ability to meet its future financing requirements, and the success of future
operations. These factors raise substantial doubt about the Company's ability to
continue as a going concern.
/S/ David T. Thomson, P.C.
Salt Lake City, Utah
June 16, 1999
/Letterhead/
P.O. Box 571605 - Murray, Utah 84157 - (801) 966-9481
EMPS CORPORATION
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
May 31, December 31,
1999 1998
------------ ------------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash on Hand $ - $ -
------------ ------------
Total Current Assets - -
------------ ------------
OTHER ASSETS
Deferred offering costs 7,411 5,003
Patents, net of amortization of $38 and $20 762 780
Organization costs net amortization of $200 and $100 1,009 1,109
------------ ------------
Total Other Assets 9,182 6,892
TOTAL ASSETS $ 9,182 $ 6,892
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 7,120 $ 5,212
------------ ------------
Total Current Liabilities 7,120 5,212
------------ ------------
STOCKHOLDERS' EQUITY
Common Stock; $.001 par value, 50,000,000
shares authorized, 800,000 and 800,000 shares
issued and outstanding respectively 800 800
Additional paid-in capital 1,855 1,000
Deficit accumulated during the development stage (593) (120)
------------ ------------
Total Stockholders' Equity 2,062 1,680
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,182 $ 6,892
============ ============
The accompanying notes are an integral part of these financial statements.
2
EMPS CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
</TABLE>
<TABLE>
<CAPTION>
For The From
Five Inception
Months (July 14, Cumulative
Ended 1998) to During the
May December Development
31, 1999 31, 1998 Stage
----------- ----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
REVENUE $ - $ - $ -
----------- ----------- -----------
EXPENSES
Amortization expense 118 120 238
Professional fees 355 - 355
----------- ----------- -----------
473 120 593
----------- ----------- -----------
NET INCOME (LOSS) $ (473) $ (120) $ (593)
=========== =========== ===========
EARNINGS (LOSS) PER SHARE $ (0.00) $ (0.00) $ (0.00)
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
3
EMPS CORPORATION
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE, July 14, 1998
(inception) - $ - $ - $ -
Shares issued to parent in
exchange for assignment of
patents at par value of $.001
per share, July 14, 1998 800,000 800 - -
Capital contributed to the
Company to pay costs - - 1,000 -
Net income (loss) from
inception (July 14,1998) to
December 31, 1998 - - - (120)
----------- ----------- ----------- -----------
BALANCE, December 31, 1998 800,000 800 1,000 (120)
Capital contributed to the
Company to pay costs
and expenses (UNAUDITED) - - 855 -
Net income (loss) for the
five months ended
May 31, 1999 (UNAUDITED) - - - (473)
----------- ----------- ----------- -----------
BALANCE, May 31, 1999 (UNAUDITED) 800,000 $ 800 $ 1,855 $ (593)
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
EMPS CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the From
Five Inception Cumulative
Months (July 14, During
Ended 1998) to the
May December Development
31, 1999 31, 1998 Stage
------------ ------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash paid for expenses $ (355) $ - $ (355)
------------ ------------ ------------
Total cash used in operating activities (355) - (355)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Organization costs - ( 1,000) ( 1,000)
------------ ------------ ------------
Total cash used in investing activities - ( 1,000) ( 1,000)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributed to the Company 855 1,000 1,855
Deferred offering costs (500) - (500)
------------ ------------ ------------
Total cash provided by financing
activities 355 1,000 1,355
NET INCREASE (DECREASE) IN CASH - - -
CASH - BEGINNING OF PERIOD - - -
------------ ------------ ------------
CASH - END OF PERIOD $ - $ - $ -
============ ============ ============
RECONCILIATION OF NET INCOME (LOSS) TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
NET INCOME (LOSS) $ (473) $ (120) $ (593)
------------ ------------ ------------
Adjustment to reconcile net income (loss)
to net cash provided (used) by operating
activities
Amortization of organization
and patent costs 118 120 238
------------ ------------ ------------
Total Adjustments 118 120 238
------------ ------------ ------------
NET CASH PROVIDED (USED BY) OPERATING
ACTIVITIES $ (355) $ - $ (355)
============ ============ ============
NONCASH TRANSACTIONS
Accounts payable for organization costs $ - $ 209 $ 209
Accounts Payable for deferred offering costs $ 1,908 $ 5,003 $ 6,911
Commons stock issued for assignment of
patents $ - $ 800 $ 800
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
EMPS CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - EMPS Corporation (The Company) was organized under the
laws of the State of Nevada on July 14, 1998 and has elected a fiscal year end
of December 31st . The Company was formed for the purpose of furthering
development and marketing of patented technology for commercially separating
nonmagnetic particulate material from other materials without pyrotechnical or
hydro-mechanical methods. The Company has not commenced planned principle
operations and is considered a development stage company as defined in SFAS No.
7. The Company has acquired two patents having to do with the business purpose
outlined above.
Financial statements - The accompanying financial statements include only
the accounts of EMPS Corporation and are not presented on a consolidated basis
with Particle Separation Technologies, L.C., (Parent) which is its Parent
Company. The Parent owns 100% of the common stock of EMPS Corporation.
Net Earnings Per Share - The computation of net income (loss) per share
of common stock is based on the weighted average number of shares outstanding
during the period presented.
Organization Costs - The Company is amortizing its organization costs,
which reflect amounts expended to organize the Company, over sixty (60) months
using the straight-line method.
Assignment of Patent Rights - The Company is amortizing its cost
associated with the acquisition of its patents over 18 years using the
straight-line method.
Income Taxes - Due to no operations or net income at May 31, 1999 and
December 31, 1998, no provisions for income taxes has been made. There are no
deferred income taxes resulting from income and expense items being reported for
financial accounting and tax reporting purposes in different periods. The
operating loss carryover (NOL) of $120 for 1998 expires in the year 2019. An
allowance for the NOL tax benefit of $18 has been recorded in these financial
statements.
Cash and Cash Equivalents - For purposes of the statement of cash flows,
the Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Unaudited Interim Information - In the opinion of management, the
unaudited financial statements reflect all adjustments, consisting only of
normal adjustments, necessary to present fairly, the financial position of the
Company at May 31, 1999 and the results of operations and cash flows for the
five months then ended. The results of operations and cash flows for the five
months ended May 31, 1999 should not necessarily be taken as indicative of the
results of operations and cash flows for the entire year ended December 31,
1999.
6
EMPS CORPORATION USA, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - EQUITY TRANSACTIONS
The Company on July 14, 1998 issued 800,000 of $.001 par value common
stock to its Parent Company to acquire Patents to technology explained above in
the organization footnote. The stock was valued at par value for a total
acquisition cost of $800. At December 31, 1998 $1,000 was contributed to the
Company to pay certain cost to organize the Company. After December 31, 1998
through May 31, 1999 an additional $855 was contributed to the Company to pay
expenses and offering costs of the Company. The Company has recorded the
contributed capital as additional paid-in capital in its financial statements.
NOTE 3 - RELATED PARTY TRANSACTIONS
The Parent is providing free office space to the Company, the free rent
has been determined to have only nominal value.
The Company has no employees. As of May 31, 1999 and December 31, 1998 no
compensation has been paid or accrued to any officers or directors of the
Corporation.
NOTE 4 - ASSIGNMENTS OF PATENTS TO THE COMPANY
As outlined above, the Parent has assigned patents for its technology to
the Company in exchange for common stock of the Company. The term of the
assignment is for the length of time covered under the letters of Patent.
NOTE 5 - PROPOSED PUBLIC OFFERING OF THE COMPANY'S COMMON STOCK
The Company is in the process of preparing a Registration Statement on Form
SB-1, under the Securities Act of 1933. The offering to the public will be for
50,000 minimum and 200,000 maximum of its shares of common stock at an offering
cost of $1.00 per share. The offering will be managed by the Company and the
shares of common stock will be offered and sold by officers of the Company
without any discounts or other commissions. The offering terminates 120 days
from the effective date unless extended 30 days by management. Direct costs of
the offering are estimated to be $10,000.
NOTE 6 - STOCK OPTION PLAN
The Company has adopted a stock option plan. The total number of shares of
common stock reserved and available for distribution under the Plan shall be
400,000 shares. At May 31, 1999 and December 31, 1998 no options have been
granted. The Company can grant incentive stock options or Non-qualified stock
options. The grant holding period, the term of the grant, the grant exercise
price, when the grant can be exercisable, and the method of exercise are
detailed in the stock option plan.
7
No dealer, salesman or other person is
authorized to give any information or to
make any representations other than those
contained in this Prospectus in connection EMPS CORPORATION
with the offer made hereby. If given or
made, such information or representations 200,000 Shares
must not be relied upon as having been
authorized by the Company. This Common Stock,
Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any Par Value
of the securities covered hereby in any
jurisdiction or to any person to whom it is $0.001 at $1.00
unlawful to make such offer or solicitation
in such jurisdiction. Neither the delivery of Per Share
this Prospectus nor any sale made
hereunder shall, in any circumstances, ------------------------------
create any implication that there has been
no change in the affairs of the Company
since the date hereof. PROSPECTUS
------------------------------
- ---------------------------------------------
September 7, 1999
------------------------------
TABLE OF CONTENTS Page
AVAILABLE INFORMATION. . . . . . . . . . . . .2
PROSPECTUS SUMMARY . . . . . . . . . . . . . .4
RISK FACTORS . . . . . . . . . . . . . . . . .6
SHARES ELIGIBLE FOR FUTURE SALE. . . . . . . 11
USE OF PROCEEDS. . . . . . . . . . . . . . . 12
DILUTION . . . . . . . . . . . . . . . . . . 13
COMPARATIVE DATA . . . . . . . . . . . . . . 13
PLAN OF DISTRIBUTION . . . . . . . . . . . . 13
MANAGEMENT . . . . . . . . . . . . . . . . . 14
PRINCIPAL SHAREHOLDERS . . . . . . . . . . . 15
EXPERTS. . . . . . . . . . . . . . . . . . . 16
LEGAL MATTERS. . . . . . . . . . . . . . . . 16
DESCRIPTION OF SECURITIES. . . . . . . . . . 17
CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS . . . . . . . . . . . . . . 19
DESCRIPTION OF BUSINESS. . . . . . . . . . . 20
MANAGEMENT'S PLAN OF OPERATION . . . . . . . 25
FINANCIAL STATEMENTS . . . . . . . . . . . . 28
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
- --------------------------------------------------------------------------------
ITEM 1 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
The statutes, charter provisions, bylaws, contracts or other arrangements
under which controlling persons, directors or officers of the registrant are
insured or indemnified in any manner against any liability which they may incur
in such capacity are as follows:
(a) Section 78.751 of the Nevada Business Corporation Act provides that
each corporation shall have the following powers:
1. A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interest of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, does not, of
itself create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction, determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
i
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, he must be indemnified by the corporation
against expenses, including attorneys' fees, actually and reasonably incurred by
him in connection with the defense.
4. Any indemnification under subsections 1 and 2, unless ordered by
a court or advanced pursuant to subsection 5, must be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances. The determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum
consisting of directors who were not parties to the act, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who
were not parties to the act, suit or proceeding so orders, by independent legal
counsel, in a written opinion; or
(d) If a quorum consisting of directors who were not parties to
the act, suit or proceeding cannot be obtained, by independent legal counsel in
a written opinion.
5. The certificate or articles of incorporation, the bylaws or an
agreement made by the corporation may provide that the expenses of officers and
directors incurred in defending a civil or criminal action, suit or proceeding
must be paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by
or on behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not entitled to be
indemnified by the corporation. The provisions of this subsection do not affect
any rights to advancement of expenses to which corporate personnel other than
directors or officers may be entitled under any contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the certificate
or articles of incorporation or any bylaw, agreement, vote of stockholders of
disinterested directors or otherwise, for either an action in his official
capacity or an action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to subsection 2 or for the
advancement of expenses made pursuant to subsection 5, may not be made to or on
behalf of any director or officer if a final adjudication establishes that his
acts or omissions involved intentional misconduct, fraud or a knowing violation
of the law and was material to the cause of action.
ii
(b) Continues for a person who has ceased to be a director,
officer, employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
7. The registrant's Articles of Incorporation limit liability of its
Officers and Directors to the full extent permitted by the Nevada Business
Corporation Act.
ITEM 2 - OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All expenses are estimates
<TABLE>
<CAPTION>
Amount
Expense Maximum
------------------------- ------------
<C> <C>
SEC Registration Fees $56.00
Blue Sky fees and expenses $20,000.00
Printing and shipping expenses $3,500.00
Legal fees and expenses $10,000.00
Accounting fees and expenses $2,000.00
Transfer and miscellaneous expenses $1,944.00
Total $20,000.00
</TABLE>
ITEM 3 - UNDERTAKINGS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, EMPS hereby undertakes to file with the Securities and
Exchange Commission such supplementary and periodic information, documents, and
reports as may be prescribed by any rule or regulation of the Commission
heretofore or hereafter duly adopted pursuant to authority conferred to that
section.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of EMPS
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by us of expenses incurred or paid by a director, officer or
controlling person of EMPS in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, we will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
iii
EMPS hereby undertakes to:
(1) File, during any period in which it offers or sells securities, a post-
effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the Securities
Act;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 242(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act treat each post-
effective amendment as a new registration statement of the securities offered,
and the offering of the securities at that time to be the initial bona fide
offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
ITEM 4 - UNREGISTERED SECURITIES ISSUED
OR SOLD WITHIN ONE YEAR
The following unregistered securities were issued by EMPS:
On July 14, 1998, we issued 800,000 shares to Particle Separation
Technologies, L.C. to acquire Patents to technology. The transaction was
effected pursuant to Section 4(2) of the Securities Act of 1933, as amended.
iv
ITEM 5 - INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Document
----------- --------
<S> <C>
2.1 Articles of Incorporation
2.2 Bylaws
4 Subscription Agreement
6.1 Assignment of Patents
10.1 Consent of Independent Auditor
10.2 Consent of Legal Counsel (included Exhibit in 11)
11 Opinion re legality
12.1 EMPS Corporation 1998 Stock Option Plan
27 Financial Data Schedule
</TABLE>
ITEM 6 - DESCRIPTION OF EXHIBITS
See Item 5.
v
<PAGE>
SIGNATURES
The issuer has duly caused this offering statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Salt Lake City,
State of Utah, on August 30, 1999.
EMPS Corporation
By: /s/ Louis Naegle
Its: President and Treasurer
This offering statement has been signed by the following persons in the
capacities and on the dates indicated.
Name and Title Date: August 30, 1999
/s/ Louis Naegle August 30, 1999
Louis Naegle,
President, Treasurer, & Director
/s/ Timothy L. Adiar August 30, 1999
Timothy L. Adair,
Secretary & Director
EXHIBIT 2.1
ARTICLES OF INCORPORATION
OF
EMPS CORPORATION
ARTICLES OF INCORPORATION
OF
EMPS CORPORATION
THE UNDERSIGNED, having associated ourselves together for the purpose of
forming a corporation for the transaction of business and the promotion and
conduct of the objects and purposes hereinafter stated, under the provisions of
and subject to the requirements of the laws of the State of Nevada, do make,
record and file these Articles of Incorporation, in writing, and we do hereby
certify:
ARTICLE I
NAME
The name of this Corporation shall be: EMPS Corporation
ARTICLE II
PURPOSE
The purpose for which said Corporation is formed and the nature of the
objects proposed to be transacted and carried on by it is to engage in any and
all other lawful activity, as provided by the laws of the State of Nevada.
ARTICLE III
CAPITAL STOCK
The authorized amount of Capital Stock of the Corporation shall be Fifty
Million (50,000,000) shares of Common Stock at $.001 par value per share, but
said Capital Stock may be increased or decreased from time to time in accordance
with the provisions of the laws of the State of Nevada.
ARTICLE IV
GOVERNING BOARD
The members of the Governing Board of the Corporation are styled Directors.
The initial board of directors shall consist of two members. The names and post
office addresses of the First Board of Directors signing these Articles of
Incorporation are as follows:
FIRST BOARD OF DIRECTORS
Name Address
------------------------ ----------------------------------------
Sherman Isaac Smoot 3300 Pine Valley Road
Woodland, Utah 84036
Vladimir Leonidovich Saveliev Amangeldi 55, Apt. 22
480012 Almaty, Republic of Kazakhstan
ARTICLE V
INCORPORATOR
The name and address of the incorporator, who is above the age of eighteen
(18) years, is as follows:
Name Address
-------------------- ---------------------------
Cletha A. Walstrand 4 Triad Center, Suite 500-A
Salt Lake City, Utah 84180
<PAGE>
ARTICLE VI
RESIDENT AGENT
The name and address of the Resident Agent is as follows:
Name Address
---------------------- -----------------------------------
Gateway Enterprises, Inc. 3230 East Flamingo Road, Suite 156
Las Vegas, Nevada 89121
and Shirrell A. Hughes, does hereby certify that on the7th day of July, 1998,
they accepted the appointment as Resident Agent of the Corporation in accordance
with Section 78.090, N.R.S.
By: /s/ Shirrell A. Hughes
----------------------------
ARTICLE VII
INDEMNIFICATION
No director or officer of the Corporation shall be personally liable to the
Corporation or any of its stockholders for damages for breach of fiduciary duty
as a director or officer; provided, however, that the foregoing provision shall
not eliminate or limit the liability of a director or officer (i) for acts or
omissions which involve intentional misconduct, fraud or knowing violation of
law, or (ii) the payment of dividends in violation of Section 78.300 of the
Nevada Revised Statutes. Any repeal or modification of Article by the
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation the personal liability of a director or officer
of the Corporation for acts or omissions prior to such repeal or modification.
ARTICLE VIII
CONTROLLING INTEREST
The provisions of NRS 78.378 to 78.3793, inclusive shall not be applicable
to any acquisition of a controlling interest in the Corporation.
IN WITNESS WHEREOF, I have hereunto subscribed my name this 7th day of
July, 1998.
By: /s/ Cletha A. Walstrand
--------------------------
Cletha A. Walstrand
State of Utah )
:ss.
County of Salt Lake )
On the 7th day of July, 1998, personally appeared before me, a notary
public (or judge or other authorized person, as the case may be), duly
commissioned and sworn, Cletha A. Walstrand, personally known or proven to me on
the basis of satisfactory evidence to be the person whose name is subscribed to
the foregoing instrument and who acknowledged that she executed the instrument.
IN WITNESS WHEREOF, I have executed this notary and affixed my official
seal.
NOTARY SEAL
By: /s/ Ronald L. Poulton
- ------------------------------
NOTARY PUBLIC
My Commission Expires: 3-20-99
EXHIBIT 2.2
BYLAWS
OF
EMPS CORPORATION
BYLAWS
OF
EMPS Corporation
TABLE OF CONTENTS
------------------
ARTICLE I OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II SHAREHOLDERS' MEETING. . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.1 Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.2 Special Meetings.. . . . . . . . . . . . . . . . . . . . . . 2
Section 2.3 Notice of Shareholders' Meetings.. . . . . . . . . . . . . . 2
Section 2.4 Waiver of Notice.. . . . . . . . . . . . . . . . . . . . . . 3
Section 2.5 Place of Meeting.. . . . . . . . . . . . . . . . . . . . . . 3
Section 2.6 Closing of Transfer Books or Fixing Records Date.. . . . . . 3
Section 2.7 Quorum of Shareholders.. . . . . . . . . . . . . . . . . . . 4
Section 2.8 Voting Lists.. . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.9 Voting.. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.10 Proxies.. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.11 Informal Action by Shareholders.. . . . . . . . . . . . . . 6
ARTICLE III BOARD OF DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.1 General Powers.. . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.2 Number, Tenure and Qualifications. . . . . . . . . . . . . . 6
Section 3.3 Election of the Board of Directors.. . . . . . . . . . . . . 6
Section 3.4 Regular Meetings.. . . . . . . . . . . . . . . . . . . . . . 6
Section 3.5 Special Meeting. . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.6 Waiver of Notice.. . . . . . . . . . . . . . . . . . . . . . 7
Section 3.7 Quorum.. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.8 Manner of Acting.. . . . . . . . . . . . . . . . . . . . . . 8
Section 3.9 Powers of Directors. . . . . . . . . . . . . . . . . . . . . 8
Section 3.10 Specific Powers of Directors. . . . . . . . . . . . . . . . 8
Section 3.11 Vacancies.. . . . . . . . . . . . . . . . . . . . . . . . .10
Section 3.12 Removals. . . . . . . . . . . . . . . . . . . . . . . . . .10
Section 3.13 Resignations. . . . . . . . . . . . . . . . . . . . . . . .11
Section 3.14 Presumption of Assent.. . . . . . . . . . . . . . . . . . .11
Section 3.15 Compensation. . . . . . . . . . . . . . . . . . . . . . . .11
Section 3.16 Emergency Power.. . . . . . . . . . . . . . . . . . . . . .12
Section 3.17 Chairman. . . . . . . . . . . . . . . . . . . . . . . . . .12
ARTICLE IV OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Section 4.1 Number.. . . . . . . . . . . . . . . . . . . . . . . . . . .12
Section 4.2 Election and Term of Office. . . . . . . . . . . . . . . . .12
Section 4.3 Resignation. . . . . . . . . . . . . . . . . . . . . . . . .13
Section 4.4 Removal. . . . . . . . . . . . . . . . . . . . . . . . . . .13
Section 4.5 Vacancies.. . . . . . . . . . . . . . . . . . . . . . . . . .13
Section 4.6 President. . . . . . . . . . . . . . . . . . . . . . . . . .13
Section 4.7 Vice President.. . . . . . . . . . . . . . . . . . . . . . .14
Section 4.8 Secretary. . . . . . . . . . . . . . . . . . . . . . . . . .14
Section 4.9 Treasurer. . . . . . . . . . . . . . . . . . . . . . . . . .15
Section 4.10 General Manager.. . . . . . . . . . . . . . . . . . . . . .15
Section 4.11 Other Officers. . . . . . . . . . . . . . . . . . . . . . .16
Section 4.12 Salaries. . . . . . . . . . . . . . . . . . . . . . . . . .16
Section 4.13 Surety Bonds. . . . . . . . . . . . . . . . . . . . . . . .16
ARTICLE V COMMITTEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Section 5.1 Executive Committee. . . . . . . . . . . . . . . . . . . . .16
Section 5.2 Other Committees.. . . . . . . . . . . . . . . . . . . . . .17
ARTICLE VI CONTRACTS, LOANS, DEPOSITS AND CHECKS. . . . . . . . . . . . . . .17
Section 6.1 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . .17
Section 6.2 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Section 6.3 Deposits.. . . . . . . . . . . . . . . . . . . . . . . . . .18
Section 6.4 Checks and Drafts. . . . . . . . . . . . . . . . . . . . . .18
Section 6.5 Bonds and Debentures.. . . . . . . . . . . . . . . . . . . .18
ARTICLE VII CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . . .19
Section 7.1 Certificate of Shares. . . . . . . . . . . . . . . . . . . .19
Section 7.2 Transfer of Shares.. . . . . . . . . . . . . . . . . . . . .19
Section 7.3 Transfer Agent and Registrar.. . . . . . . . . . . . . . . .20
Section 7.4 Lost or Destroyed Certificates.. . . . . . . . . . . . . . .20
Section 7.5 Consideration for Shares.. . . . . . . . . . . . . . . . . .20
Section 7.6 Registered Shareholders. . . . . . . . . . . . . . . . . . .20
ARTICLE VIII INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . .21
Section 8.1 Indemnification. . . . . . . . . . . . . . . . . . . . . . .21
Section 8.2 Other Indemnification. . . . . . . . . . . . . . . . . . . .21
Section 8.3 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . .22
Section 8.4 Settlement by Corporation. . . . . . . . . . . . . . . . . .22
ARTICLE IX AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
ARTICLE X FISCAL YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
ARTICLE XI DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
ARTICLE XII CORPORATE SEAL. . . . . . . . . . . . . . . . . . . . . . . . . .23
BYLAWS
OF
EMPS CORPORATION
ARTICLE I
OFFICE
--------
Section 1.1 Office The principal office of the Corporation outside the
State of Nevada shall be located at 4 Triad Center, Suite 500-A, Salt Lake City,
Utah 84180. The Corporation may maintain such other offices, within or without
the State of Nevada, as the Board of Directors may from time to time designate.
The location of the principal office may be changed by the Board of Directors.
ARTICLE II
SHAREHOLDERS' MEETING
---------------------
Section 2.1 Annual Meetings The annual meeting of the shareholders of the
Corporation shall be held at such place within or without the State of Nevada as
shall be set forth in compliance with these Bylaws. The meeting shall be held
on the 1st day of June of each year beginning with the year 1999 at 10:00 a.m.
If such day is a legal holiday, the meeting shall be on the next business day.
This meeting shall be for the election of directors and for the transaction of
such other business as may properly come before it.
No change of the time or place of a meeting for the election of directors,
as fixed by the Bylaws, shall be made within sixty (60) days before the election
is to be held. In case of any change in such time or place for such election of
directors, notice thereof shall be given to each stockholder entitled to vote,
in person, or by letter mailed to his last known post office address as shown on
the Corporate books, twenty (20) days before the election is held.
In the event that such annual meeting is omitted by oversight or otherwise
on the date herein provided for, the directors shall cause a meeting in lieu
thereof to be held as soon thereafter as conveniently may be called, and any
business transacted or elections held at such meeting shall be as valid as if
transacted or held at the annual meeting. If the election of directors shall
not be held on the date designated herein for an annual meeting of shareholders,
or at any adjournment thereof, the Board of Directors shall cause the election
to be held at a special meeting of shareholders as soon thereafter as may
conveniently be called. Such subsequent meetings shall be called in the same
manner as is provided for the annual meeting of shareholders.
Section 2.2 Special Meetings. Special meetings of shareholders, other
than those regulated by statute, may be called at any time by the President, or
by a majority of the directors, and must be called by the President upon written
request of the holders of not less than 10% of the issued and outstanding shares
entitled to vote at such special meeting.
Section 2.3 Notice of Shareholders' Meetings. The President, Vice
President and Secretary shall give written notice stating the place, day and
hour of the meeting, and in the case of a special meeting the purpose or
purposes for which the meeting is called, which shall be delivered not less then
ten nor more than sixty days before the day of the meeting, either personally or
by mail to each shareholder 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 shareholder at his address as it appears on the
books of the Corporation, with postage thereon prepaid.
Any meeting of which all shareholders shall at any time waive or have
waived notice in writing shall be a legal meeting for the transaction of
business notwithstanding that notice has not been given as hereinbefore
provided.
Section 2.4 Waiver of Notice. Whenever any notice is required to be given
by these Bylaws, or the Articles of Incorporation, or by any of the Corporation
Laws of the State of Nevada, a shareholder may waive the notice of meeting by
attendance, either in person or by proxy, at the meeting, or by so stating in
writing, either before or after such meeting. Attendance at a meeting for the
express purpose of objecting that the meeting was not lawfully called or
convened shall not, however, constitute a waiver of notice.
Section 2.5 Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Nevada, as the place of meeting for
any annual meeting or for any special meeting called by the Board of Directors.
If no designation is made, or if a special meeting be otherwise called, the
place of meeting shall be the office of the Corporation, in the City of Salt
Lake City, in the State of Utah.
Section 2.6 Closing of Transfer Books or Fixing Records Date. For the
purpose of determining shareholders entitled to notice or to vote at any meeting
of shareholders or any adjournment thereof, or shareholder entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors of the Corporation may provide
that the stock transfer books be closed for a period not to exceed in any case
fifty (50) days. If the stock transfer books shall be closed for the purpose of
determining shareholders, such books shall be closed for at least ten (10) days
immediately preceding the date determined to be the date of record. In lieu of
closing the stock transfer books, the Board of Directors may fix in advance a
date as the record date for any such determination of shareholders, such date in
any case to be not more than sixty (60) days and in case of a meeting of
shareholders not less than ten (10) days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
If the stock transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice or to vote at a meeting of
shareholders or shareholders entitled to receive payment of a dividend, the date
on which the resolution of the Board of Directors declaring such dividend is
adopted, as the case may be, shall be deemed the record for such determination
of shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
Section 2.7 Quorum of Shareholders. Except as herein provided and as
otherwise provided by law, at any meeting of shareholders a majority in interest
of all the shares issued and outstanding represented by shareholders of record
in person or by proxy shall constitute a quorum, but a less interest may adjourn
any meeting and the meeting may be held as adjourned without further notice;
provided, however, that directors shall not be elected at the meeting so
adjourned.
If notice of such adjourned meeting is sent to the stockholders entitled to
receive the same, such notice also containing a statement for the purpose of the
meeting and that the previous meeting failed for lack of a quorum, and that
under the provisions of this Section it is proposed to hold the adjourned
meeting with a quorum of those present, then any number of stockholders, in
person or by proxy, shall constitute a quorum at such meeting unless otherwise
provided by statute. When a quorum is present at any meeting, a majority in
interest of the shares represented thereat shall decide any question brought
before such meeting, unless the question is one upon which the express provision
of law or of the Articles of Incorporation or of these Bylaws a larger or
different vote is required, in which case such express provision shall govern
and control the decision of such question.
Section 2.8 Voting Lists. The officer or agent having charge of the stock
transfer books for shares of the Corporation shall make a complete list of the
shareholders entitled to vote at such meeting or any adjournment thereof,
arranged in alphabetical order, with the address of and the number of shares
held by each, which list shall be produced and kept open at the time and place
of the meeting and shall be subject to the inspection of any shareholder, for
any purpose germane to the meeting, during the whole time of the meeting. The
original stock transfer books shall be prima-facie evidence as to which
shareholders are entitled to examine such list or transfer books or to vote at
any meeting of shareholders.
Failure to comply with the requirements of this section shall not affect
the validity of any action taken at such meeting of the shareholders.
Section 2.9 Voting. A holder of an outstanding share entitled to vote at
a meeting may vote at such meeting in person or by proxy. Except as may
otherwise be provided in the Articles of Incorporation, every shareholder shall
be entitled to one vote for each share outstanding in his name on the record of
shareholders. Except as herein or in the Articles of Incorporation otherwise
provided, all corporate action shall be determined by a majority of the votes
cast at a meeting of shareholders by the holders of shares entitled to vote
thereon.
Section 2.10 Proxies. At all meetings of shareholders, a shareholder may
vote in person or by proxy executed in writing by the shareholder 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. No proxy shall be valid
after eleven months from the date of its execution, unless otherwise provided in
the proxy.
Section 2.11 Informal Action by Shareholders. Any action required to be
taken at a meeting of the shareholders, or any action which may be taken at a
meeting of the shareholders, may be taken without a meeting of the shareholders,
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
-------------------
Section 3.1 General Powers. The business and affairs of the Corporation
shall be managed by its Board of Directors. The Board of Directors may adopt
such rules and regulations for the conduct of their meetings and the management
of the Corporation as they deem proper.
Section 3.2 Number, Tenure and Qualifications. The number of directors
for the Board of Directors of the Corporation shall be not less than one (1) nor
more than five (5). Each director shall hold office until the next annual
meeting of the shareholders and until his successor shall have been elected and
qualified. Directors need not be residents of the State of Nevada or
shareholders of the Corporation.
Section 3.3 Election of the Board of Directors. The Board of Directors
shall be chosen by ballot at the annual meeting of shareholders or at any
meeting held in place thereof as provided by law.
Section 3.4 Regular Meetings. A regular meeting of the Board of Directors
shall be held without other notice than by this Bylaw, immediately following and
at the same place as the annual meeting of the shareholders. The Directors may
hold their meetings and have one or more offices, and keep the books of the
corporation outside the State of Nevada, at any office or offices of the
Corporation or at any other place as they may from time to time by resolution
determine.
Members of the Board of Directors may participate in a meeting of the Board
by means of conference telephone or similar communications equipment by which
all persons participating in the meeting can hear each other and participation
in a meeting under this subsection shall constitute presence in person at the
meeting, pursuant to Nevada Revised Statute, Section 78.315.
Section 3.5 Special Meeting. Special meetings of the Board of Directors
may be called by order of the Chairman of the Board, the President or by one-
third of the directors. The Secretary shall give notice of the time, place and
purpose or purposes of each special meeting by mailing the same at least two
days before the meeting or by telephoning or telegraphing the same at least one
day before the meeting to each director.
Section 3.6 Waiver of Notice. Whenever any notice whatsoever is required
to be given by these Bylaws, or the Articles of Incorporation of the
Corporation, or by any of the Corporation Laws of the State of Nevada, a
director may waive the notice of meeting by attendance in person at the meeting,
or by so stating in writing, either before or after such meeting. Attendance at
a meeting for the express purpose of objecting that the meeting was not lawfully
called or convened shall not, however, constitute a waiver of notice.
Section 3.7 Quorum. A majority of the members of the Board of Directors
shall constitute a quorum for the transaction of business, but less than a
quorum may adjourn any meeting from time to time until a quorum shall be
present, whereupon the meeting may be held, as adjourned, without further
notice. At any meeting at which every director shall be present, even though
without any notice, any business may be transacted.
Section 3.8 Manner of Acting. At all meetings of the Board of Directors,
each director shall have one vote. The act of a majority present at a meeting
shall be the act of the Board of Directors, provided a quorum is present. Any
action required to be taken or which may be taken at a meeting of the Board of
Directors, may be taken without a meeting of the Directors, if a consent in
writing setting forth the action so taken shall be signed by all the directors.
The directors may conduct a meeting by means of a conference telephone or any
similar communication equipment by which all persons participating in the
meeting can hear each other.
Section 3.9 Powers of Directors. The Board of Directors shall have the
responsibility for the entire management of the business of the Corporation. In
the management and control of the property, business and affairs of the
Corporation, the Board of Directors is hereby vested with all of the powers
possessed by the Corporation itself so far as this delegation of authority is
not inconsistent with the laws of the State of Nevada and with the Articles of
Incorporation or with these Bylaws. The Board of Directors shall have the power
to determine what constitutes net earnings, profits and surplus, respectively,
and what amounts shall be reserved for working capital and for any other purpose
and what amounts shall be declared as dividends, and such determination by the
Board of Directors shall be final and conclusive.
Section 3.10 Specific Powers of Directors. Without prejudice to such
general powers, it is hereby expressly declared that the directors shall have
the following powers to-wit:
(1) To adopt and alter a common seal of the corporation.
(2) To make and change regulations, not inconsistent with these By-Laws,
for the management of the corporation's affairs and business.
(3) To purchase or otherwise acquire for the corporation any property,
rights or privileges which the corporation is authorized to acquire.
(4) To pay for any property purchased for the corporation either wholly or
partly in money, stock, bonds, debentures or other securities of the
corporation.
(5) To borrow money and to make and issue notes, bonds, and other
negotiable and transferable instruments, mortgages, deeds of trust and
trust agreements, and to do every act and thing necessary to
effectuate the same.
(6) To remove any officer for cause, or any officer other than the
President summarily without cause, and in their discretion, from time
to time, to develop the powers and duties of any officer upon any
other person for the time being.
(7) To appoint and remove or suspend such subordinate officers, agents or
factors as they may deem necessary and to determine their duties and
fix, and from time to time change their salaries or remuneration, and
to require security as and when they think fit.
(8) To confer upon any officer of the corporation the power to appoint,
remove and suspend subordinate officers, agents and factors.
(9) To determine who shall be authorized on the corporation's behalf to
make and sign bills, notes, acceptances, endorsements, checks,
releases, receipts, contracts and other instruments.
(10) To determine who shall be entitled to vote in the name and behalf of
the corporation, or to assign and transfer, any shares of stock,
bonds, or other securities of other corporations held by this
corporation.
(11) To delegate any of the powers of the Board in relation to the ordinary
business of the corporation to any standing or special committee, or
to any officer or agent (with power to sub-delegate), upon such terms
as they think fit.
(12) To call special meetings of the stockholders for any purpose or
purposes.
(13) The directors shall have the right and the power to propose any
amendment to the By-Laws of this corporation at any meeting whether
called for that purpose or not and to submit to the next regular
meeting of directors said proposal or amendment to the By-Laws of
this corporation.
Section 3.11 Vacancies. A vacancy in the Board of Directors shall be
deemed to exist in case of death, resignation or removal of any director, or if
the authorized number of directors be increased, or if the shareholders fail at
any meeting of shareholders at which any director is to be elected, to elect the
full authorized number to be elected at that meeting.
Any vacancy occurring in the Board of Directors may be filled by an
affirmative vote of the majority of the remaining directors though less than a
quorum of the Board of Directors, unless otherwise provided by law or the
Articles of Incorporation. A director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office. Any directorship
to be filled by reason of an increase in the number of directors shall be filled
by election at the annual meeting or at a special meeting of shareholders called
for that purpose.
Section 3.12 Removals. Directors may be removed at any time, at a meeting
called expressly for that purpose by a vote of the shareholders holding a
majority of the shares issued and outstanding and entitled to vote. Such
vacancy shall be filled by the directors then in office, though less than a
quorum, to hold office until the next annual meeting or until his successor is
duly elected and qualified, except that any directorship to be filled by reason
of removal by the shareholders may be filled by election, by the shareholders,
at the meeting at which the director is removed. No reduction of the authorized
number of directors shall have the effect of removing any director prior to the
expiration of his term of office.
Section 3.13 Resignations. A director may resign at any time by
delivering written notification thereof to the President or Secretary of the
Corporation. Such resignation shall become effective upon its acceptance by the
Board of Directors; provided, however, that if the Board of Directors has not
acted thereon within ten days from the date of its delivery, the resignation
shall upon the tenth day be deemed accepted.
Section 3.14 Presumption of Assent. A director of the Corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his 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.
Section 3.15 Compensation. By resolution of the Board of Directors, the
directors shall be paid their expenses, if any, of attendance at each meeting of
the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
Section 3.16 Emergency Power. When, due to a national disaster or death,
a majority of the directors are incapacitated or otherwise unable to attend the
meetings and function as directors, the remaining members of the Board of
Directors shall have all the powers necessary to function as a complete Board
and, for the purpose of doing business and filling vacancies, shall constitute a
quorum until such time as all directors can attend or vacancies can be filled
pursuant to these Bylaws.
Section 3.17 Chairman. The Board of Directors may elect from its own
number a Chairman of the Board, who shall preside at all meetings of the Board
of Directors, and shall perform such other duties as may be prescribed from time
to time by the Board of Directors.
ARTICLE IV
OFFICERS
--------
Section 4.1 Number. The officers of the Corporation shall be a President,
one or more Vice Presidents, a Secretary and a Treasurer, each of whom shall be
elected by a majority of the Board of Directors. Such other officers and
assistant officers as may be deemed necessary may be elected or appointed by the
Board of Directors. In its discretion, the Board of Directors may leave
unfilled for any such period as it may determine any office except those of
President and Secretary. Pursuant to Nevada Revised Statute, Section 78.130 any
two or more offices may be held by the same person, including the offices of the
President and Secretary. Officers may or may not be directors or shareholders
of the Corporation.
Section 4.2 Election and Term of Office. The officers of the Corporation
are to be elected by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the shareholders. If the election
of officers shall not be held at such meeting, such election shall be held as
soon thereafter as convenient. Each officer 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.
Section 4.3 Resignation. Any officer may resign at any time by delivering
a written resignation either to the President or to the Secretary. Unless
otherwise specified therein, such resignation shall take effect upon delivery.
Section 4.4 Removal. Any officer or agent may be removed by the Board of
Directors whenever in its judgment the best interests of the Corporation will be
served thereby but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment of an officer
or agent shall not of itself create contract rights. Any such removal shall
require a majority vote of the Board of Directors, exclusive of the officer in
question if he is also a director.
Section 4.5 Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, or if a new office shall be
created, may be filled by the Board of Directors for the unexpired portion of
the term.
Section 4.6 President. The President shall be the chief executive and
administrative officer of the Corporation. He shall preside at all meetings of
the shareholders and, in the absence of the Chairman of the Board, at meetings
of the Board of Directors. He shall exercise such duties as customarily pertain
to the office of President and shall have general and active supervision over
the property, business and affairs of the Corporation and over its several
officers. He may appoint officers, agents or employees other than those
appointed by the Board of Directors. He may sign, execute and deliver in the
name of the Corporation, powers of attorney, certificates of stock, contracts,
bonds, deeds, mortgages and other obligations and shall perform such other
duties as may be prescribed from time to time by the Board of Directors or by
the Bylaws.
Section 4.7 Vice President. The Vice President shall have such powers and
perform such duties as may be assigned to him by the Board of Directors or the
President. In the absence or disability of the President, the Vice President
designated by the board or the President shall perform the duties and exercise
the powers of the President. In the event there is more than one Vice President
and the Board of Directors has not designated which Vice President is to act as
President, then the Vice President who was elected first shall act as President.
A Vice President may sign and execute contracts and other obligations pertaining
to the regular course of his duties.
Section 4.8 Secretary. The Secretary shall keep the minutes of all
meetings of the shareholders and of the Board of Directors and to the extent
ordered by the Board of Directors or the President, the minutes of meetings of
all committees. He shall cause notice to be given of the meetings of
shareholders, of the Board of Directors and any committee appointed by the
Board. He shall have custody of the corporate seal and general charge of the
records, documents and papers of the Corporation not pertaining to the
performance of the duties vested in other officers, which shall at all
reasonable times be open to the examination of any director. He may sign or
execute contracts with the President or Vice President thereunto authorized in
the name of the Corporation and affix the seal of the Corporation thereto. He
shall perform such other duties as may be prescribed from time to time by the
Board of Directors or by the Bylaws. He shall be sworn to the faithful
discharge of his duties. Assistant Secretaries shall assist the Secretary and
shall keep and record such minutes of meetings as shall be directed by the Board
of Directors.
Section 4.9 Treasurer. The Treasurer shall have general custody of the
collection and disbursement of funds of the Corporation for collection checks,
notes, and other obligations, and shall deposit the same to the credit of the
Corporation in such bank or banks or depositories as the Board of Directors may
designate. He may sign, with the President, or such other persons as may be
designated for the purpose by the Board of Directors, all bills of exchange or
promissory notes of the Corporation. He shall enter or cause to be entered
regularly in the books of the Corporation full and accurate accounts of all
monies received and paid by him on account of the Corporation; shall at all
reasonable times exhibit his books and accounts to any director of the
Corporation upon application at the office of the Corporation during business
hours; and, whenever required by the Board of Directors or the President, shall
render a statement of his accounts. Upon request by the Board of Directors, he
shall give the corporation a bond for the faithful discharge of his duties in
such amount and with such surety as the Board shall prescribe. He shall perform
such other duties as may be prescribed from time to time by the Board of
Directors or by the Bylaws.
Section 4.10 General Manager. The Board of Directors may employ and
appoint a General Manager who may, or may not, be one of the officers or
directors of the Corporation. If employed by the Board of Directors he shall be
the chief operating officer of the Corporation and, subject to the directions of
the Board of Direction, shall have general charge of the business operations of
the Corporation and general supervision over its employees and agents. He shall
have the exclusive management of the business of the Corporation and of all of
its dealings, but at all times subject to the control of the Board of Directors.
Subject to the approval of the Board of Directors or the executive committee, he
shall employ all employees of the Corporation, or delegate such employment to
subordinate officers, or such division officers, or such division chiefs, and
shall have authority to discharge any person so employed. He shall make a
quarterly report to the President and directors, or more often if required to do
so, setting forth the result of the operations under his charge, together with
suggestions looking to the improvement and betterment of the condition of the
Corporation, and to perform such other duties as the Board of Directors shall
require.
Section 4.11 Other Officers. Other officers shall perform such duties and
have such powers as may be assigned to them by the Board of Directors.
Section 4.12 Salaries. The salaries or other compensation of the officers
of the Corporation shall be fixed from time to time by the Board of Directors
except that the Board of Directors may delegate to any person or group of
persons the power to fix the salaries or other compensation of any subordinate
officers or agents. No officer shall be prevented from receiving any such
salary or compensation by reason of the fact that he is also a director of the
Corporation.
Section 4.13 Surety Bonds. In case the Board of Directors shall so
require, any officer or agent of the Corporation shall execute to the
Corporation a bond in such sums and with sureties as the Board of Directors may
direct, conditioned upon the faithful performance of his duties to the
Corporation, including responsibility for negligence and for the accounting for
all property, monies or securities of the Corporation which may come into his
hands.
ARTICLE V
COMMITTEES
-----------
Section 5.1 Executive Committee. The Board of Directors may appoint from
among its members an Executive Committee of not less than two (2) nor more than
seven (7) members, one of whom shall be the President, and shall designate one
or more of its members as alternates to serve as a member or members of the
Executive Committee in the absence of a regular member or members. The Board of
Directors reserves to itself alone the power to declare dividends, issue stock,
recommend to shareholders any action requiring their approval, change the
membership of any committee at any time, fill vacancies therein, and discharge
any committee either with or without cause at any time. Subject to the
foregoing limitations, the Executive Committee shall possess and exercise all
other powers of the Board of Directors during the intervals between meetings.
Section 5.2 Other Committees. The Board of Directors may also appoint
from among its own members such other committees as the Board may determine,
which shall in each case consist of not less than two directors, and which shall
have such powers and duties as shall from time to time be prescribed by the
Board. The President shall be a member ex officio of each committee appointed
by the Board of Directors. A majority of the members of any committee may fix
its rules of procedure.
ARTICLE VI
CONTRACTS, LOANS, DEPOSITS AND CHECKS
--------------------------------------
Section 6.1 Contracts. The Board of 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.
Section 6.2 Loans. No loan or advances shall be contracted on behalf of
the Corporation, no negotiable paper or other evidence of its obligations under
any loan or advance shall be issued in its name, and no property of the
Corporation shall be mortgaged, pledged, hypothecated or transferred as security
for the payment of any loan, advance, indebtedness or liability of the
Corporation unless and except as authorized by the Board of Directors. Any such
authorization may be general or confined to specific instances.
Section 6.3 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 depositories as the Board of Directors may
select, or as may be selected by any officer or agent authorized to do so by the
Board of Directors.
Section 6.4 Checks and Drafts. All notes, drafts, acceptances, checks,
endorsements and evidences of indebtedness of the Corporation shall be signed by
such officer or officers of such agent or agents of the Corporation and in such
manner as the Board of Directors from time to time may determine. Endorsements
for deposit to the credit of the Corporation in any of its duly authorized
depositories shall be made in such manner as the Board of Directors from time to
time may determine.
Section 6.5 Bonds and Debentures. Every bond or debenture issued by the
Corporation shall be evidenced by an appropriate instrument which shall be
signed by the President or a Vice President and by the Treasurer or by the
Secretary, and sealed with the seal of the Corporation. The seal may be
facsimile, engraved or printed. Where such bond or debenture is authenticated
with the manual signature of an authorized officer of the Corporation or other
trustee designated by the indenture of trust or other agreement under which such
security is issued, the signature of any of the Corporation's officers named
thereon may be facsimile. In case of any officer who signed, or whose facsimile
signature has been used on any such bond or debenture, shall cease to be an
officer of the Corporation for any reason before the same has been delivered by
the Corporation, such bond or debenture may nevertheless be adopted by the
Corporation and issued and delivered as though the person who signed it or whose
facsimile signature has been used thereon had not ceased to be such officer.
ARTICLE VII
CAPITAL STOCK
--------------
Section 7.1 Certificate of Shares. The shares of the Corporation shall be
represented by certificates prepared by the Board of Directors and signed by the
President or the Vice President, and by the Secretary, or an Assistant
Secretary, or the Treasurer, and sealed with the seal of the Corporation or a
facsimile. The signatures of such officers upon a certificate may be facsimiles
if the certificate is countersigned by a transfer agent or registered by a
registrar other than the Corporation itself or one of its employees. All
certificates for shares shall be consecutively numbered or otherwise identified.
The name and address of the person to whom the shares represented thereby are
issued, with the number of shares and date of issue, shall be entered on the
stock transfer books of the Corporation. All certificates surrendered to the
Corporation for transfer shall be cancelled and no new certificate shall be
issued until the former certificate for a like number of shares shall have been
surrendered and cancelled, except that in case of a lost, destroyed or mutilated
certificate a new one may be issued therefor upon such terms and indemnity to
the Corporation as the Board of Directors may prescribe.
Section 7.2 Transfer of Shares. Transfer of shares of the Corporation
shall be made only on the stock transfer books of the Corporation by the holder
of record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the Corporation,
and on surrender for cancellation of the certificate for such shares. The
person in whose name shares stand on the books of the Corporation shall be
deemed by the Corporation to be the owner thereof for all purposes.
Section 7.3 Transfer Agent and Registrar. The Board of Directors shall
have power to appoint one or more transfer agents and registrars for the
transfer and registration of certificates of stock of any class, and may require
that stock certificates shall be countersigned and registered by one or more of
such transfer agents and registrars.
Section 7.4 Lost or Destroyed Certificates. The Corporation may issue a
new certificate to replace any certificate theretofore issued by it alleged to
have been lost or destroyed. The Board of Directors may require the owner of
such a certificate or his legal representatives to give the Corporation a bond
in such sum and with such sureties as the Board of Directors may direct to
indemnify the Corporation and its transfer agents and registrars, if any,
against claims that may be made on account of the issuance of such new
certificates. A new certificate may be issued without requiring any bond.
Section 7.5 Consideration for Shares. The capital stock of the
Corporation shall be issued for such consideration, but not less than the par
value thereof, as shall be fixed from time to time by the Board of Directors.
In the absence of fraud, the determination of the Board of Directors as to the
value of any property or services received in full or partial payment of shares
shall be conclusive.
Section 7.6 Registered Shareholders. The Corporation shall be entitled to
treat the holder of record of any share or shares of stock as the holder thereof
in fact, and shall not be bound to recognize any equitable or other claim to or
on behalf of the Corporation, any and all of the rights and powers incident to
the ownership of such stock at any such meeting, and shall have power and
authority to execute and deliver proxies and consents on behalf of the
Corporation in connection with the exercise by the Corporation of the rights and
powers incident to the ownership of such stock. The Board of Directors, from
time to time may confer like powers upon any other person or persons.
ARTICLE VIII
INDEMNIFICATION
----------------
Section 8.1 Indemnification. No officer or director shall be personally
liable for any obligations arising out of any acts or conduct of said officer or
director performed for or on behalf of the Corporation. The Corporation shall
and does hereby indemnify and hold harmless each person and his heirs and
administrators who shall serve at any time hereafter as a director or officer of
the Corporation from and against any and all claims, judgments and liabilities
to which such persons shall become subject by reason of any action alleged to
have been heretofore or hereafter taken or omitted to have been taken by him as
such director or officer, and shall reimburse each such person for all legal and
other expenses reasonably incurred by him in connection with any such claim or
liability; including power to defend such person from all suits as provided,
however, that no such person shall be indemnified against, or be reimbursed for,
any expense incurred in connection with any claim or liability arising out of
his own negligence or willful misconduct. The rights accruing to any person
under the foregoing provisions of this section shall not exclude any other
rights to which he may lawfully be entitled, nor shall anything herein contained
restrict the right of the Corporation to indemnify or reimburse such person in
any proper case, even though not specifically herein provided for. The
Corporation, its directors, officers, employees and agents shall be fully
protected in taking any action or making any payment or in refusing so to do in
reliance upon the advice of counsel.
Section 8.2 Other Indemnification. The indemnification herein provided
shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of shareholders
or disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer or
employee and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 8.3 Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer or employee
of the Corporation, or is or was serving at the request of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any liability in any capacity, or
arising out of his status as such, whether or not the Corporation would have the
power to indemnify him against liability under the provisions of this Article 8
or the laws of the State of Nevada.
Section 8.4 Settlement by Corporation. The right of any person to be
indemnified shall be subject always to the right of the Corporation by its Board
of Directors, in lieu of such indemnity, to settle any such claim, action, suit
or proceeding at the expense of the Corporation by the payment of the amount of
such settlement and the costs and expenses incurred in connection therewith.
ARTICLE IX
AMENDMENTS
------------
These Bylaws may be altered, amended, repealed, or added to by the
affirmative vote of the holders of a majority of the shares entitled to vote in
the election of any director at an annual meeting or at a special meeting called
for that purpose, provided that a written notice shall have been sent to each
shareholder of record entitled to vote at such meetings at least ten (10) days
before the date of such annual or special meetings, which notice shall state the
alterations, amendments, additions, or changes which are proposed to be made in
such Bylaws. Only such changes shall be made as have been specified in the
notice. The Bylaws may also be altered, amended, repealed, or new Bylaws
adopted by a majority of the entire Board of Directors at any regular or special
meeting. Any Bylaws adopted by the Board may be altered, amended, or repealed
by a majority of the shareholders entitled to vote.
ARTICLE X
FISCAL YEAR
------------
The fiscal year of the Corporation shall be December 31 and may be varied
by resolution of the Board of Directors.
ARTICLE XI
DIVIDENDS
-----------
The Board of Directors may at any regular or special meeting, as they deem
advisable, declare dividends payable out of the unreserved and unrestricted
earned surplus of the Corporation, such declaration shall be made in accord with
Nevada Revised Statutes Section 78.288 thru 78.300.
ARTICLE XII
CORPORATE SEAL
----------------
The corporate seal may be used by causing it or a facsimile thereof to be
impressed affixed or reproduced or otherwise.
Adopted by resolution of the Board of Directors this 26th day of August,
1998.
By: /s/ Stephen H. Smoot
-----------------------------------
Secretary
SUBSCRIPTION AGREEMENT
EMPS Corporation
(A Nevada Corporation)
136 E. South Temple, Suite 1700 A
Salt Lake City, Utah 84111
The prospective purchaser who is signing below hereby tenders this Purchase
Offer and applies for the purchase of the number of shares of common stock,
$.001 par value, set forth below in EMPS Corporation, (hereinafter "EMPS"), at a
price of $1.00 per share and encloses a check payable to EMPS Corporation in the
amount set forth below for such shares. The prospective purchaser hereby
acknowledges receipt of a copy of the Prospectus dated September 8, 1999.
------------------
The prospective purchaser hereby represents and warrants as follows:
(1) He has carefully read the Prospectus and has relied solely upon the
Prospectus and investigations made by him or by his qualified representative in
making the decision to purchase the shares.
(2) The prospective purchaser is aware that the shares represent a high
risk speculation and has carefully read and considered the material set forth
and particularly the material in the "Risk Factors" of the Prospectus.
(3) He, if a person, is at least 21 years of age and, whether or not a
person, has adequate means of providing for his current needs and personal or
other contingencies and has no need for liquidity in his investments.
(4) He understands that this purchase offer does not become a purchase
agreement unless the check submitted with the purchase offer is promptly paid by
the bank upon which it is drawn and until the offer is accepted by a duly
authorized officer or agent of EMPS. EMPS may accept or reject any or all of
the offer.
(5) He hereby acknowledges and agrees that he is not entitled to cancel,
terminate or revoke this purchase offer or any agreements of the prospective
purchaser hereunder and that such purchase agreements shall survive death,
disability or transfer of control of the prospective purchaser.
Dollar Amount of Purchase Offer:
-----------------------------------
Number of Shares of Purchase Offer:
-----------------------------------
Special Instructions:____________________________________________________
____________________________________________________________________
_______________________________ _________________________________
Name of Prospective Purchaser Home Telephone Number
__________________________________
Business Telephone Number
________________________________
Residence Street Address, if a person, or
Principal Office Address if a business
__________________________________ __________________________________
City State Zip Code Mailing Address (if different)
_____________________
Country
_________________________________
Taxpayer Identification or
Social Security Number
__________________________________
Signature of Prospective Purchaser
Accepted by EMPS Corporation
___________________________________
Signature of Officer or Agent
___________________________________
Date
EXHIBIT 6.1
ASSIGNMENT OF PATENTS
<PAGE>
WHEN RECORDED RETURN TO:
EMPS Corporation
c/o Stephen H. Smoot
3500 Pine Valley Road
Woodland, Utah 84036
ASSIGNMENT OF PATENTS
WHEREAS, PARTICLE SEPARATION TECHNOLOGIES, L.C., a Limited Liability
Company organized under the laws of the State of Utah, is the owner of the
entire right, title and interest in and to the United States Letters Patents
entitled:
SYSTEM AND METHOD FOR SEPARATING ELECTRICALLY CONDUCTIVE PARTICLES
Patent No. 5,439,117 Issued: August 8,1995
SYSTEM AND METHOD FOR SEPARATING ELECTRICALLY CONDUCTIVE PARTICLES
Patent No. 5,772,043 Issued: June 30,1998
and in and to the inventions defined in said patents.
WHEREAS, EMPS Corporation, a Nevada corporation, located at 3500 Pine
Valley Road, Woodland, Utah 84036, is desirous of acquiring the entire right,
title and interest in and to the said inventions and patents within the United
States of America and its territorial possessions and within the countries
foreign to the United States and any United States or foreign Letters Patents
that may be granted therefor;
NOW, THEREFORE, in consideration of one dollar ($ 1.00) and other good and
valuable consideration, the receipt and sufficiency whereof are hereby
acknowledged, the said PARTICLE SEPARATION TECHNOLOGIES L.C. by these presents
does sell, assign and transfer unto EMPS Corporation all of its right, title and
interest to the said inventions and patents and any and all divisions and
continuations, substitutes and reissues of said patents and the entire right,
title and interest in, to and under any and all Letters Patents of the United
States and foreign countries
that may issue or be granted on said inventions.
EXECUTED this 10th day of May, 1999, at 5 South Main, Kamas, Utah 84036.
PARTICLE SEPARATION TECHNOLOGIES, L.C.
By: /s/ Stephen H. Smoot
- --------------------------------------
Stephen H. Smoot, Manager & Authorized Signature
STATE OF UTAH )
:ss
County of Summit )
On May 10, 1999, before me personally appeared STEPHEN H. SMOOT, known to
me to be the person described above and who signed the foregoing Assignment in
my presence and acknowledged under oath before me that he has read the same and
knows the contents thereof and that the same is true of his own knowledge
excepting as to matters therein alleged upon information and belief and as to
those matters he believes them to be true, and that he executed the same as his
free act and deed and for the purpose set forth therein.
By: /s/ Walter W. Ludlow
- ---------------------------------
NOTARY PUBLIC
Residing At:
Summit County
My Commission Expires:
May 31, 2000
EXHIBIT 10.1
CONSENT OF INDEPENDENT ACCOUNTANT
CONSENT OF INDEPENDENT ACCOUNTANT
To the Board of Directors
EMPS Corporation
I have issued my report dated June 16, 1999, accompanying the financial
statements of EMPS Corporation included in the Registration Statement
Form SB-1 and the related prospectus.
I consent to the use of my report, as stated above in the Registration
Statement. I also consent to the use of my name in the statement with respect
to me as appearing under the heading "Experts" in the Registration Statement.
By: /s/ David T. Thomson P.C.
- -----------------------------------
David T. Thomson P.C.
Salt Lake City, Utah
June 29, 1999
EXHIBIT 10.2
CONSENT OF LEGAL COUNSEL
(Included in Exhibit 11)
EXHIBIT 11
OPINION RE LEGALITY
June 25, 1999
Board of Directors
EMPS Corporation
136 E. South Temple
Salt Lake City, UT 84111
Re: Opinion and Consent of Counsel with respect to
Registration Statement on Form SB-1 for EMPS Corporation
Gentlemen:
You have requested the opinion and consent of this law firm, as counsel,
with respect to the proposed issuance and public distribution of certain
securities of the Company pursuant to the filing of a registration statement on
Form SB-1 with the Securities and Exchange Commission.
The proposed offering and public distribution relates to 50,000 shares
minimum-200,000 shares maximum of Common Stock, $.001 par value (the "Common
Stock"), to be offered and sold to the public at a price of $1.00 per share. It
is our opinion that the shares of Common Stock will, when issued in accordance
with the terms and conditions set forth in the registration statement, be duly
authorized, validly issued, fully paid and nonassesable shares of common stock
of the Company in accordance with the corporation laws of the State of Nevada.
We hereby consent to be named as counsel for the Company in the
registration statement and prospectus included therein.
Very truly yours,
POULTON & YORDAN
By: /s/ Cletha A. Walstrand
CAW/ln
EXHIBIT 12.1
EMPS CORPORATION
1998 STOCK OPTION PLAN
EMPS Corporation
1998 Stock Option Plan
Section 1. Purpose; Definitions.
1.1 Purpose. The purpose of the EMPS Corporation (the "Company") 1998
Stock Option Plan (the "Plan") is to enable the Company to offer to its key
employees, officers, directors, consultants and sales representatives whose
past, present and/or potential contributions to the Company and its Subsidiaries
have been, are or will be important to the success of the Company, an
opportunity to acquire a proprietary interest in the Company. The various types
of long-term incentive awards which may be provided under the Plan will enable
the Company to respond to changes in compensation practices, tax laws,
accounting regulations and the size and diversity of its business.
1.2 Definitions. For purposes of the Plan, the following terms shall be
defined as set forth below:
(a) "Agreement" means the agreement between the Company and the
Holder setting forth the terms and conditions of an award under the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto and the regulations promulgated
thereunder.
(d) "Committee" means the Stock Option Committee of the Board or any
other committee of the Board, which the Board may designate to administer the
Plan or any portion thereof. If no Committee is so designated, then all
references in this Plan to "Committee" shall mean the Board.
(e) "Common Stock" means the Common Stock of the Company, $.001 par
value per share.
(f) "Company" means EMPS Corporation, a corporation organized under
the laws of the State of Nevada.
(g) "Deferred Stock" means Stock to be received, under an award made
pursuant to Section 9, below, at the end of a specified deferral period.
(h) "Disability" means disability as determined under procedures
established by the Committee for purposes of the Plan.
(i) "Effective Date" means the date set forth in Section 13.1, below.
(j) "Fair Market Value", unless otherwise required by any applicable
provision of the Code or any regulations issued thereunder, means, as of any
given date: (i) if the Common Stock is listed on a national securities exchange
or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, the last sale
price of the Common Stock in the principal trading market for the Common Stock
on the last trading day preceding the date of grant of an award hereunder, as
reported by the exchange or Nasdaq, as the case may be; (ii) if the Common Stock
is not listed on a national securities exchange or quoted on the Nasdaq National
Market or Nasdaq SmallCap Market, but is traded in the over-the-counter market,
the closing bid price for the Common Stock on the last trading day preceding the
date of grant of an award hereunder for which such quotations are reported by
the OTC Bulletin Board or the National Quotation Bureau, Incorporated or similar
publisher of such quotations; and (iii) if the fair market value of the Common
Stock cannot be determined pursuant to clause (i) or (ii) above, such price as
the Committee shall determine, in good faith.
(k) "Holder" means a person who has received an award under the Plan.
(l) "Incentive Stock Option" means any Stock Option intended to be
and designated as an "incentive stock option" within the meaning of Section 422
of the Code.
(m) "Nonqualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(n) "Normal Retirement" means retirement from active employment with
the Company or any Subsidiary on or after age 65.
(o) "Other Stock-Based Award" means an award under Section 10, below,
that is valued in whole or in part be reference to, or is otherwise based upon,
Stock.
(p) "Parent" means any present or future parent corporation of the
Company, as such term is defined in Section 424(e) of the Code.
(q) "Plan" means the EMPS Corporation 1998 Stock Option Plan, as
hereinafter amended from time to time.
(r) "Restricted Stock"means Stock, received under an award made
pursuant to Section 8, below, that is subject to restrictions under said Section
8.
(s) "SAR Value" means the excess of the Fair Market Value (on the
exercise date) of the number of shares for which the Stock Appreciation Right is
exercised over the exercise price that the participant would have otherwise had
to pay to exercise the related Stock Option and purchase the relevant shares.
(t) "Stock" means the Common Stock of the Company, $.001 par value
per share.
(u) "Stock Appreciation Right" means the right to receive from the
Company, on surrender of all or part of the related Stock Option, without a cash
payment to the Company, a number of shares of Common Stock equal to the SAR
Value divided by the exercise price of the Stock Option.
(v) "Stock Option" or "Option" means any option to purchase shares of
Stock which is granted pursuant to the Plan.
(w) "Stock Reload Option" means any option granted under Section 6.3,
below, as a result of the payment of the exercise price of a Stock Option and/or
the withholding tax related thereto in the form of Stock owned by the Holder or
the withholding of Stock by the Company.
(x) "Subsidiary" means any present or future subsidiary corporation
of the Company, as such term is defined in Section 424(f) of the Code.
Section 2. Administration.
2.1 Committee Membership. The Plan shall be administered by the Board or
a Committee. Committee members shall serve for such terms as the Board may in
each case determine, and shall be subject to removal at any time by the Board.
2.2 Powers of Committee. The Committee shall have full authority, subject
to Section 4, below, to award, pursuant to the terms of the Plan: (i) Stock
Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv) Deferred
Stock, (v) Stock Reload Options and/or (vi) Other Stock-Based Awards. For
purposes of illustration and not of limitation, the Committee shall have the
authority (subject to the express provisions of this Plan):
(a) to select the officers, key employees, directors, consultants and
sales representatives of the Company or any Subsidiary to whom Stock Options,
Stock Appreciation Rights, Restricted Stock, Deferred Stock, Reload Stock
Options and/or Other Stock-Based Awards may from time to time be awarded
hereunder.
(b) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder (including, but not limited
to, number of shares, share price, any restrictions or limitations, and any
vesting, exchange, surrender, cancellation, acceleration, termination, exercise
or forfeiture provisions, as the Committee shall determine);
(c) to determine any specified performance goals or such other
factors or criteria which need to be attained for the vesting of an award
granted hereunder;
(d) to determine the terms and conditions under which awards granted
hereunder are to operate on a tandem basis and/or in conjunction with or apart
from other equity awarded under this Plan and cash awards made by the Company or
any Subsidiary outside of this Plan;
(e) to permit a Holder to elect to defer a payment under the Plan
under such rules and procedures as the Committee may establish, including the
crediting of interest on deferred amounts denominated is cash and of dividend
equivalents on deferred amounts denominated in Stock;
(f) to determine the extent and circumstances under which Stock and
other amounts payable with respect to an award hereunder shall be deferred which
may be either automatic or at the election of the Holder; and
(g) to substitute (i) new Stock Options for previously granted Stock
Options, which previously granted Stock Options have higher option exercise
prices and/or contain other less favorable terms, and (ii) new awards of any
other type for previously granted awards of the same type, which previously
granted awards are upon less favorable terms.
2.3 Interpretation of Plan.
(a) Committee Authority. Subject to Section 4 and 12, below, the
Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any award issued under the Plan (and to determine the form and
substance of all Agreements relating thereto), to the otherwise supervise the
administration of the Plan. Subject to Section 12, below, all decisions made by
the Committee pursuant to the provisions of the Plan shall be made in the
Committee's sole discretion and shall be final and binding upon all persons,
including the Company, its Subsidiaries and Holders.
(b) Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term or provision of the Plan relating to Incentive Stock
Options (including but limited to Stock Reload Options or Stock Appreciation
rights granted in conjunction with an Incentive Stock Option) or any Agreement
providing for Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised, so
as to disqualify the Plan under Section 422 of the Code, or, without the consent
of the Holder(s) affected, to disqualify any Incentive Stock Option under such
Section 422.
Section 3. Stock Subject to Plan.
3.1 Number of Shares. The total number of shares of Common Stock reserved
and available for distribution under the Plan shall be 400,000 shares. Share of
Stock under the Plan may consist, in whole or in part, of authorized and
unissued shares or treasury shares. If any shares of Stock that have been
granted pursuant to a Stock Option cease to be subject to a Stock Option, or if
any shares of Stock that are subject to any Stock Appreciation Right, Restricted
Stock, Deferred Stock award, Reload Stock Option or Other Stock-Based Award
granted hereunder are forfeited or any such award otherwise terminates without a
payment being made to the Holder in the form of Stock, such shares shall again
be available for distribution in connection with future grants and awards under
the Plan. Only net shares issued upon a stock-for-stock exercise (including
stock used for withholding taxes) shall be counted against the number of shares
available under the Plan.
3.2 Adjustment Upon Changes in Capitalization, Etc. In the event of any
merger, reorganization, consolidation, recapitalization, dividend (other than a
cash dividend), stock split, reverse stock split, or other change in corporate
structure affecting the Stock, such substitution or adjustment shall be made in
the aggregate number of shares reserved for issuance under the Plan, in the
number and exercise price of shares subject to outstanding Options, in the
number of shares and Stock Appreciation Right price relating to Stock
Appreciation Rights, and in the number of shares and Stock Appreciation Right
price relating to Stock Appreciation Rights, and in the number of shares subject
to, and in the related terms of, other outstanding awards (including but not
limited to awards of Restricted Stock, Deferred Stock, Reload Stock Options and
Other Stock-Based Awards) granted under the Plan as may be determined to be
appropriate by the Committee in order to prevent dilution or enlargement of
rights, provided that the number of shares subject to any award shall always be
a whole number.
Section 4. Eligibility.
Awards may be made or granted to key employees, officers, directors,
consultants and sales representatives who are deemed to have rendered or to be
able to render significant services to the Company or its Subsidiaries and who
are deemed to have contributed or to have the potential to contribute to the
success of the Company. No Incentive Stock Option shall be granted to any
person who is not an employee of the Company or a Subsidiary at the time of
grant.
Section 5. Required Six-Month Holding Period.
Any equity security issued under this Plan may not be sold prior to six
months from the date of the grant of the related award without the approval of
the Company.
Section 6. Stock Options.
6.1 Grant and Exercise. Stock Options granted under the Plan may be of
two types: (i) Incentive Stock Options and (ii) Nonqualified Stock Options. Any
Stock Option granted under the Plan shall contain such terms, not inconsistent
with this Plan, or with respect to Incentive Stock Options, not inconsistent
with the Code, as the Committee may from time to time approve. The Committee
shall have the authority to grant Incentive Stock Options, Non-Qualified Stock
Options, or both types of Stock Options and which may be granted alone or in
addition to other awards granted under the Plan. To the extent that any Stock
Option intended to qualify as an Incentive Stock Option does not so qualify, it
shall constitute a separate Nonqualified Stock Option. An Incentive Stock
Option may be granted only within the ten-year period commencing from the
Effective Date and may only be exercised within ten years of the date of grant
or five years in the case of an Incentive Stock Option granted to an optionee
("10% Stockholder") who, at the time of grant, owns Stock possessing more than
10% of the total combined voting power of all classes of stock of the Company.
6.2 Terms and Conditions. Stock Options granted under the Plan shall be
subject to the following terms and conditions:
(a) Exercise Price. The exercise price per share of Stock
purchasable under a Stock Option shall be determined by the Committee at the
time of grant and may not be less than 100% of the Fair Market Value of the
Stock as defined above; provided, however, that the exercise price of an
Incentive Stock Option granted to a 10% Stockholder shall not be less than 110%
of the Fair Market Value of the Stock.
(b) Option Term. Subject to the limitations in Section 6.1, above,
the term of each Stock Option shall be fixed by the Committee.
(c) Exercisability. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions as shall be determined by the
Committee and as set forth in Section 11, below. If the Committee provides, in
its discretion, that any Stock Option is exercisable only in installments, i.e.,
that it vests over time, the Committee may waive such installment exercise
provisions at any time at or after the time of grant in whole or in part, based
upon such factors as the Committee shall determine.
(d) Method of Exercise. Subject to whatever installment, exercise
and waiting period provisions are applicable in a particular case, Stock Options
may be exercised in whole or in part at any time during the term of the Option,
by giving written notice of exercise to the Company specifying the number of
shares of Stock to be purchased. Such notice shall be accompanied by payment in
full of the purchase price, which shall be in cash or, unless otherwise provided
in the Agreement, in shares of Stock (including Restricted Stock and other
contingent awards under this Plan) or, partly in cash and partly in such Stock,
or such other means which the Committee determines are consistent with the
Plan's purpose and applicable law. Cash payments shall be made by wire
transfer, certified or bank check or personal check, in each case payable to the
order of the Company; provided, however, that the Company shall not be required
to deliver certificates for shares of Stock with respect to which an Option is
exercised until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof. Payments in the form of Stock
shall be valued at the Fair Market Value of a share of Stock on the date prior
to the date of exercise. Such payments shall be made by delivery of stock
certificates in negotiable form which are effective to transfer good and valid
title thereto to the Company, free of any liens or encumbrances. Subject to the
terms of the Agreement, the Committee may, in its sole discretion, at the
request of the Holder, deliver upon the exercise of a Nonqualified Stock Option
a combination of shares of Deferred Stock and Common Stock; provided that,
notwithstanding the provision of Section 9 of the Plan, such Deferred Stock
shall be fully vested and not subject to forfeiture. A Holder shall have none
of the rights of a stockholder with respect to the shares subject to the Option
until such shares shall be transferred to the Holder upon the exercise of the
Option.
(e) Transferability. No Stock Option shall be transferable by the
Holder other than by will or by the laws of descent and distribution, and all
Stock Options shall be exercisable, during the Holder's lifetime, only by the
Holder.
(f) Termination by Reason of Death. If a Holders' employment by the
Company or a Subsidiary terminates by reason of death, any Stock Option held by
such Holder, unless otherwise determined by the Committee at the time of grant
and set forth in the Agreement, shall be fully vested and may thereafter be
exercised by the legal representative of the estate or by the legatee of the
Holder under the will of the Holder, for a period of one year (or such other
greater or lesser period as the Committee may specify at grant) from the date of
such death or until the expiration of the stated term of such Stock Option,
which ever period is the shorter.
(g) Termination by Reason of Disability. If a Holder's employment by
the Company or any Subsidiary terminates by reason of Disability, any Stock
Option held by such Holder, unless otherwise determined by the Committee at the
time of grant and set forth in the Agreement, shall be fully vested and may
thereafter be exercised by the Holder for a period of one year (or such other
greater or lesser period as the Committee may specify at the time of grant) from
the date of such termination of employment or until the expiration of the stated
term of such Stock Option, whichever period is the shorter.
(h) Other Termination. Subject to the provisions of Section 14.3,
below, and unless otherwise determined by the Committee at the time of grant and
set forth in the Agreement, if a Holder is an employee of the Company or a
Subsidiary at the time of grant and if such Holder's employment by the Company
or any Subsidiary terminates for any reason other than death or Disability, the
Stock Option shall thereupon automatically terminate, except that if the
Holder's employment is terminated by the Company or a Subsidiary without cause
or due to Normal Retirement, then the portion of such Stock Option which has
vested on the date of termination of employment may be exercised for the lesser
of three months after termination of employment or the balance of such Stock
Option's term.
(i) Additional Incentive Stock Option Limitation. In the case of an
Incentive Stock Option, the aggregate Fair Market Value of Stock (determined at
the time of grant of the Option) with respect to which Incentive Stock Options
become exercisable by a Holder during any calendar year (under all such plans of
the Company and its Parent and Subsidiary) shall not exceed $100,000.
(j) Buyout and Settlement Provisions. The Committee may at any time,
in its sole discretion, offer to buy out a Stock Option previously granted,
based upon such terms and conditions as the Committee shall establish and
communicate to the Holder at the time that such offer is made.
(k) Stock Option Agreement. Each grant of a Stock Option shall be
confirmed by and shall be subject to the terms of, the Agreement executed by the
Company and the Holder.
6.3 Stock Reload Option. The Committee may also grant to the Holder
(concurrently with the grant of an Incentive Stock Option and at or after the
time of grant in the case of a Nonqualified Stock Option) a Stock Reload Option
up to the amount of shares of Stock held by the Holder for at least six months
and used to pay all or part of the exercise price of an Option and, if any,
withheld by the Company as payment for withholding taxes. Such Stock Reload
Option shall have an exercise price equal to the Fair Market Value as of the
date of the Stock Reload Option grant. Unless the Committee determines
otherwise, a Stock Reload Option may be exercised commencing one year after it
is granted and shall expire on the date of expiration of the Option to which the
Reload Option is related.
Section 7. Stock Appreciation Rights.
7.1 Grant and Exercise. The Committee may grant Stock Appreciation Rights
to participants who have been, or are being granted, Options under the Plan as a
means of allowing such participants to exercise their Options without the need
to pay the exercise price in cash. In the case of a Nonqualified Stock Option,
a Stock Appreciation Right may be granted either at or after the time of the
grant of such Nonqualified Stock Option. In the case of an Incentive Stock
Option, a Stock Appreciation Right may be granted only at the time of the grant
of such Incentive Stock Option.
7.2 Terms and Conditions. Stock Appreciation Rights shall be subject to
the following terms and conditions:
(a) Exercisability. Stock Appreciation Rights shall be exercisable
as determined by the Committee and set forth in the Agreement, subject to the
limitations, if any, imposed by the Code, with respect to related Incentive
Stock Options.
(b) Termination. A Stock Appreciation Right shall terminate and
shall no longer be exercisable upon the termination or exercise of the related
Stock Option.
(c) Method of Exercise. Stock Appreciation Rights shall be
exercisable upon such terms and conditions as shall be determined by the
Committee and set forth in the Agreement and by surrendering the applicable
portion of the related Stock Option. Upon such exercise and surrender, the
Holder shall be entitled to receive a number of Option Shares equal to the SAR
Value divided by the exercise price of the Option.
(d) Shares Affected Upon Plan. The granting of a Stock Appreciation
Rights shall not affect the number of shares of Stock available under for awards
under the Plan. The number of shares available for awards under the Plan will,
however, be reduced by the number of shares of Stock acquirable upon exercise of
the Stock Option to which such Stock Appreciation right relates.
Section 8. Restricted Stock.
8.1 Grant. Shares of Restricted Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom, and the time or times at which, grants of
Restricted Stock will be awarded, the number of shares to be awarded, the price
(if any) to be paid by the Holder, the time or times within which such awards
may be subject to forfeiture (the "Restriction Period"), the vesting schedule
and rights to acceleration thereof, and all other terms and conditions of the
awards.
8.2 Terms and Conditions. Each Restricted Stock award shall be subject to
the following terms and conditions:
(a) Certificates. Restricted Stock, when issued, will be represented
by a stock certificate or certificates registered in the name of the Holder to
whom such Restricted Stock shall have been awarded. During the Restriction
Period, certificates representing the Restricted Stock and any securities
constituting Retained Distributions (as defined below) shall bear a legend to
the effect that ownership of the Restricted Stock (and such Retained
Distributions), and the enjoyment of all rights appurtenant thereto, are subject
to the restrictions, terms and conditions provided in the Plan and the
Agreement. Such certificates shall be deposited by the Holder with the Company,
together with stock powers or other instruments of assignment, each endorsed in
blank, which will permit transfer to the Company of all or any portion of the
Restricted Stock and any securities constituting Retained Distributions that
shall be forfeited or that shall not become vested in accordance with the Plan
and the Agreement.
(b) Rights of Holder. Restricted Stock shall constitute issued and
outstanding shares of Common Stock for all corporate purposes. The Holder will
have the right to vote such Restricted Stock, to receive and retain all regular
cash dividends and other cash equivalent distributions as the Board may in its
sole discretion designate, pay or distribute on such Restricted Stock and to
exercise all other rights, powers and privileges of a holder of Common Stock
with respect to such Restricted Stock, with the exceptions that (i) the Holder
will not be entitled to delivery of the stock certificate or certificates
representing such Restricted Stock until the Restriction Period shall have
expired and unless all other vest requirements with respect thereto shall have
been fulfilled; (ii) the Company will retain custody of the stock certificate or
certificates representing the Restricted Stock during the Restriction Period;
(iii) other than regular cash dividends and other cash equivalent distributions
as the Board may in its sole discretion designate, pay or distribute, the
Company will retain custody of all distributions ("Retained Distributions") made
or declared with respect to the Restricted Stock (and such Retained
Distributions will be subject to the same restrictions, terms and conditions as
are applicable to the restricted Stock) until such time, if ever, as the
Restricted Stock with respect to which such Retained Distributions shall have
been made, paid or declared shall have become vested and with respect to which
the Restriction Period shall have expired; (iv) a breach of any of the
restrictions, terms or conditions contained in this Plan or the Agreement or
otherwise established by the Committee with respect to any Restricted Stock or
Retained Distributions will cause a forfeiture of such Restricted Stock and any
Retained Distributions with respect thereto.
(c) Vesting; Forfeiture. Upon the expiration of the Restriction
Period with respect to each award of Restricted Stock and the satisfaction of
any other applicable restrictions, terms and conditions (i) all or part of such
Restricted Stock shall become vested in accordance with the terms of the
Agreement, subject to Section 11, below, and (ii) any Retained Distributions
with respect to such Restricted Stock shall become vested to the extent that the
Restricted Stock related thereto shall have become vested, subject to Section
11, below. Any such Restricted Stock and Retained Distributions that do not
vest shall be forfeited to the Company and the Holder shall not thereafter have
any rights with respect to such Restricted Stock and Retained Distributions that
shall have been so forfeited.
Section 9. Deferred Stock.
9.1 Grant. Shares of Deferred Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom and the time or times at which grants of Deferred
Stock shall be awarded, the number of shares of Deferred Stock to be awarded to
any person, the duration of the period (the "Deferral Period") during which, and
the conditions under which, receipt of the shares will be deferred, and all the
other terms and conditions of the awards.
9.2 Terms and Conditions. Each Deferred Stock award shall be subject to
the following terms and conditions:
(a) Certificates. At the expiration of the Deferral Period (or the
Additional Deferral Period referred to in Section 9.2 (d) below, where
applicable), shares certificates shall be issued and delivered to the Holder, or
his legal representative, representing the number equal to the shares covered by
the Deferred Stock award.
(b) Rights of Holder. A person entitled to receive Deferred stock
shall not have any rights of a stockholder by virtue of such award until the
expiration of the applicable Deferral Period and the issuance and delivery of
the certificates representing such Stock. The shares of Stock issuable upon
expiration of the Deferral Period shall not be deemed outstanding by the Company
until the expiration of such Deferral period and the issuance and delivery of
such Stock to the Holder.
(c) Vesting; Forfeiture. Upon the expiration of the Deferral Period
with respect to each award of Deferred Stock and the satisfaction of any other
applicable restrictions, terms and conditions all or part of such Deferred Stock
shall become vested in accordance with the terms of the Agreement, subject to
Section 11, below. Any such Deferred Stock that does not vest shall be
forfeited to the Company and the Holder shall not thereafter have any rights
with respect to such Deferred Stock.
(d) Additional Deferral Period. A Holder may request to, and the
Committee may at any time, defer the receipt of an award (or an installment of
an award) for an additional specified period or until a specified event (the
"Additional Deferral Period"). Subject to any exceptions adopted by the
Committee, such request must generally be made at least one year prior to
expiration of the Deferral Period for such Deferred Stock awards (or such
installment).
Section 10. Other Stock-Based Awards.
10.1 Grant and Exercise. Other Stock-Based Awards may be awarded, subject
to limitations under applicable law, that are denominated or payable, in value
in whole or in part by reference to, or otherwise based on, or related to,
shares of Common Stock, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, purchase rights, shares of
Common Stock awarded which are not subject to any restrictions or conditions,
convertible or exchangeable debentures, or other rights convertible into shares
of Common Stock and awards valued by reference to the value of securities of or
the performance of specified subsidiaries. Other Stock-Based Awards may be
awarded either alone or in addition to or in tandem with any other awards under
this Plan or any other plan of the Company.
10.2 Eligibility for Other Stock-Based Awards. The Committee shall
determine the eligible persons to whom and the time or times at which grants of
such other stock-based awards shall be made, the number of shares of Common
Stock to be awarded pursuant to such awards, and all other terms and conditions
of the awards.
10.3 Terms and Conditions. Each Other Stock-Based Award shall be subject
to such terms and conditions as may be determined by the Committee and to
Section 11, below.
Section 11. Accelerated Vesting and Exercisability.
If (i) any person or entity other than the Company and/or any stockholders
of the Company as of the Effective Date acquire securities of the Company (in
one or more transactions) having 25% or more of the total voting power of all
the Company's securities then outstanding and (ii) the Board of Directors of the
Company does not authorize or otherwise approve such acquisition, then, the
vesting periods of any and all Options and other awards granted and outstanding
under the Plan shall be accelerated and all such Options and awards will
immediately and entirely vest, and the respective holders thereof will have the
immediate right to purchase and/or receive any and all Stock subject to such
Options and awards on the terms set forth in this Plan and the respective
agreements respecting such Options and awards.
Section 12. Amendment and Termination.
Subject to Section 4 hereof, the Board may at any time, and from time to
time, amend, alter, suspend or discontinue any of the provisions of the Plan,
but no amendment, alteration, suspension or discontinuance shall be made which
would impair the rights of a Holder under any Agreement theretofore entered into
hereunder, without the Holder's consent.
Section 13. Term of Plan.
13.1 Effective Date. The Plan shall be effective as of July ________,
1998.
13.2 Termination Date. Unless terminated by the Board, this Plan shall
continue to remain effective until such time no further awards may be granted
and all awards granted under the Plan are no longer outstanding.
Notwithstanding the foregoing, grants of Incentive Stock Options may only be
made during the ten-year period following the Effective Date.
Section 14. General Provisions.
14.1 Written Agreements. Each award granted under the Plan shall be
confirmed by, and shall be subject to the terms of the Agreement executed by the
Company and the Holder. The Committee may terminate any award made under the
Plan if the Agreement relating thereto is not executed and returned to the
Company within 10 days after the Agreement has been delivered to the Holder for
his or her execution.
14.2 Unfunded Status of Plan. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Holder by the Company, nothing contained herein shall
give any such Holder any rights that are greater than those of a general
creditor of the Company.
14.3 Employees.
(a) Engaging in Competition With the Company. In the event a
Holder's employment with the Company or a Subsidiary is terminated for any
reason whatsoever, and within one year after the date thereof such Holder
accepts employment with any competitor of, or otherwise engages in competition
with, the Company, the Committee, in its sole discretion, may require such
Holder to return to the Company the economic value of any award which was
realized or obtained by such Holder at any time during the period beginning on
that date which is six months prior to the date of such Holder's termination of
employment with the Company.
(b) Termination for Cause. The Committee may, in the event a
Holder's employment with the company or a Subsidiary is terminated for cause,
annul any award granted under this Plan to return to the Company the economic
value of any award which was realized or obtained by such Holder at any time
during the period beginning on that date which is six months prior to the date
of such Holder's termination of employment with the Company.
(c) No Right of Employment. Nothing contained in the Plan or in any
award hereunder shall be deemed to confer upon any Holder who is an employee of
the Company or any Subsidiary any right to continued employment with the Company
or any Subsidiary, nor shall it interfere in any way with the right of the
Company or any Subsidiary to terminate the employment of any Holder who is an
employee at any time.
14.4 Investment Representations. The Committee may require each person
acquiring shares of Stock pursuant to a Stock Option or other award under the
Plan to represent to and agree with the Company in writing that the Holder is
acquiring the shares for investment without a view to distribution thereof.
14.5 Additional Incentive Arrangements. Nothing contained in the Plan
shall prevent the Board from adopting such other or additional incentive
arrangements as it may deem desirable, including, but not limited to, the
granting of Stock Options and the awarding of stock and cash otherwise than
under the Plan; and such arrangements may be either generally applicable or
applicable only in specific cases.
14.6 Withholding Taxes. Not later than the date as of which an amount must
first be included in the gross income of the Holder for Federal income tax
purposes with respect to any option or other award under the Plan, the Holder
shall pay to the Company, or made arrangements satisfactory to the Committee
regarding the payment of, any Federal, state and local taxes of any kind
required by law to be withheld or paid with respect to such amount. If
permitted by the Committee, tax withholding or payment obligations may be
settled with Common Stock, including Common Stock that is part of the award that
gives rise to the withholding requirement. The obligations of the Company under
the Plan shall be conditioned upon such payment or arrangements and the Company
or the Holder's employer (if not the Company) shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Holder from the Company or any Subsidiary.
14.7 Governing Law. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of Utah (without regard to choice of law provisions).
14.8 Other Benefit Plans. Any award granted under the Plan shall not be
deemed compensation for purposes of computing benefits under any retirement plan
of the Company or any Subsidiary and shall not affect any benefits under any
other benefit plan now or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation (unless required by
specific reference in any such other plan to awards under this Plan).
14.9 Non-Transferability. Except as otherwise expressly provided in the
Plan, no right or benefit under the Plan may be alienated, sold, assigned,
hypothecated, pledged, exchanged, transferred, encumbranced or charged, and any
attempt to alienate, sell, assign, hypothecate, pledge, exchange, transfer,
encumber or charge the same shall be void.
14.10 Applicable Laws. The obligations of the Company with respect to
all Stock Options and awards under the Plan shall be subject to (i) all
applicable laws, rules and regulations and such approvals by any governmental
agencies as may be required, including, without limitation, the Securities Act
of 1933, as amended, and (ii) the rules and regulations of any securities
exchange on which the Stock may be listed.
14.11 Conflicts. If any of the terms or provisions of the Plan or an
Agreement (with respect to Incentive Stock Options) conflict with the
requirements of Section 422 of the Code, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of said
Section 422 of the Code. Additionally, if this Plan or any Agreement does not
contain any provision required to be included herein under Section 422 of the
Code, such provision shall be deemed to be incorporated herein and therein with
the same force and effect as if such provision had been set out at length herein
and therein. If any of the terms or provision of any Agreement conflict with
any terms or provision of the Plan, then such terms or provision shall be deemed
inoperative to the extent they so conflict with the requirements of the Plan.
Additionally, if any Agreement does not contain any provision required to be
included therein under the Plan, such provision shall be deemed to be
incorporated therein with the same force and effect as if such provision had
been set out at length therein.
14.12 Non-Registered Stock. The shares of Stock to be distributed
under this Plan have not been, as of the Effective Date, registered under the
Securities Act of 1933, as amended, or any applicable state or foreign
securities laws and the Company has no obligation to any Holder to register the
Stock or to assist the Holder in obtaining an exemption from the various
registration requirements, or to list the Stock on a national securities
exchange.
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