<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SPLIT SECOND TRADING, INC.
(Exact Name of Registrant as Specified in its Charter)
FLORIDA 6799 59-3615724
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
100 S. ASHLEY DRIVE
SUITE 2050
TAMPA, FLORIDA 33602
TELEPHONE: (813) 505-8222 - FAX: (813) 227-9490
(Principal Executive Offices)
GEORGE CARAPELLA
CHIEF EXECUTIVE OFFICER AND
ACTING CHIEF OPERATING OFFICER
(Address and Telephone Number of Principal Executive Offices)
COPIES TO:
DAVID M. JEFFRIES, ESQUIRE
BUSH ROSS GARDNER WARREN & RUDY, P. A.
220 S. FRANKLIN STREET
TAMPA, FLORIDA 33602
TELEPHONE: (813) 224-9255 FAX: (813) 223-9620
(Name, Address and Telephone Number of Agent for Service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of the Registration Statement, as determined
(by market conditions and other factors. If the only securities being
registered on this Form are being offered pursuant to dividend or interest
reinvestment plans, check the following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
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. [X]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================================
Proposed Proposed
Dollar maximum Maximum Amount of
Title of each class of securities Amount to be offering price Aggregate Registration
to be registered registered per Unit Offering Price Fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.001 per share................... 2,000,000 $.50 $1,000,000 $264.00
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated for the sole purpose of computing the registration fee pursuant
to Rule 457(o) under the Securities Act of 1933.
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 will thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 2
SPLIT SECOND TRADING, INC.
CROSS REFERENCE SHEET
Showing Location in Prospectus of Part I Items of Form SB-2
<TABLE>
<CAPTION>
Item Number and Heading
in Form SB-2 Registration Statement Location In Prospectus
- ----------------------------------- ----------------------
<S> <C>
1. Front of Registration Statement and
Outside Front Cover Page of Prospectus.....................Outside Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus........................................Inside Front Cover Page;
Outside Back Cover
3. Summary Information and Risk Factors.......................Prospectus Summary; Risk Factors
4. Use of Proceeds............................................Prospectus Summary; Use of Proceeds.
5. Determination of Offering Price............................Outside Front Cover Page; Risk Factors
6. Dilution...................................................Risk Factors; Dilution
7. Selling Security Holders...................................Selling Security Holders
8. Plan of Distribution.......................................Outside Front Cover Page
9. Legal Proceedings..........................................Not Applicable.
10. Directors, Executive Officers, Promoters
and Control Person.........................................Management; Principal Shareholders
11. Security Ownership of Certain Beneficial
Owners and Management......................................Management; Principal Shareholders
12. Description of Securities..................................Risk Factors; Capitalization; Securities;
Shares Eligible for Future Sale
13. Interest of Names Experts and Counsel......................Legal Matters
14. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities.............Management
15. Organization within Last Five Years........................Management; Principal Shareholders
16. Description of Business....................................Prospectus Summary; Business
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
17. Management's Discussion and Analysis or
Plan of Operation..........................................Management's Discussion and Analysis
18. Description of Property....................................Not Applicable
19. Certain Relationships and Related Transaction..............Certain Transactions
20. Market for Common Equity and Related
Stockholder Matters........................................Outside Front Cover Page; Risk Factors;
Description of the Securities
21. Executive Compensation.....................................Management; Executive Compensation
22. Financial Statements.......................................Financial Statements
23. Change in and Disagreements with Accountants
On Accounting and Financial Disclosure.....................Not Applicable
</TABLE>
<PAGE> 4
PROSPECTUS
SPLIT SECOND TRADING, INC.
2,000,000 SHARES OF COMMON STOCK,
OFFERING PRICE: $.50 PER SHARE
THIS PROSPECTUS relates to 2,000,000 shares of common stock $.001 par value
(the "Shares") of Split Second Trading, Inc. (the "Company"), a development
stage, Florida corporation. Of this amount 1,000,000 Shares are being offered
by the Company and 1,000,000 Shares are being offered by the Company's founder
and sole shareholder (the "Selling Shareholder"). The Selling Shareholder has
agreed with the Company to not sell any of his Shares prior to the sale of all
Shares being offered by the Company.
Prior to this offering (the "Offering"), there has been no public market for
the Company's common stock and there is no assurance that such a public market
will develop or continue after the completion of this Offering. The initial
public offering prices of the Shares will be determined solely by the Company
and bears no relation to the Company's earnings, assets, book value, net worth,
or any other recognized criteria of value. Application will be made for
quotation of the Company's common stock on the OTC Bulletin Board ("OTCBB").
The Shares will be offered on a "best efforts" basis by the Company through its
officers and directors. There is no minimum amount of Shares that must be sold,
and Offering proceeds will not be placed in any escrow account. This means that
the Company will have the ability to use the Offering proceeds as they are
received, regardless of how many Shares are sold. The Offering will continue
for 180 days following the date of this Prospectus.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS TO
BE CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Total
Total Proceeds to the
Underwriting Proceeds to the Selling
Price to Public Discounts Company Shareholder
<S> <C> <C> <C> <C>
Per Share $.50 $-0- $500,000 $500,000
</TABLE>
THE DATE OF THIS PROSPECTUS IS April 19, 2000
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE NUMBER
- ------- -----------
<S> <C>
GENERAL INFORMATION.............................................................................4
PROSPECTUS SUMMARY..............................................................................5
The Company............................................................................5
The Offering...........................................................................5
RISK FACTORS....................................................................................6
No Operating History...................................................................6
Government Regulation..................................................................6
Competition............................................................................7
Dependence on Key Personnel; Need for Additional Executive Officers....................7
Continued Control By Management........................................................7
Shares Eligible for Future Sale........................................................8
Dilution...............................................................................8
Additional Financing...................................................................8
Absence of Dividends...................................................................9
Forward Looking Statements.............................................................9
Offering Price Arbitrarily Determined..................................................9
Absence of Public Market; Determination of Offering Price; Volatility..................9
Penney Stock Regulation...............................................................10
USE OF PROCEEDS................................................................................11
DETERMINATION OF OFFERING PRICE................................................................12
Dividend Policy.......................................................................12
Dilution..............................................................................12
CAPITALIZATION.................................................................................14
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION....................................................15
BUSINESS.......................................................................................15
The Company...........................................................................15
Online Trading Products and Services..................................................16
The Online Trading Industry...........................................................16
Growth Strategies for Expansion.......................................................16
Trading System........................................................................17
Quality & Customer Support............................................................17
Industry Overview.....................................................................17
</TABLE>
-2-
<PAGE> 6
<TABLE>
<S> <C>
Trends Within the Industry............................................................18
Trend Toward Discount Brokers.........................................................18
Trend Toward More Sophisticated Traders/Investors.....................................18
Discount Brokers......................................................................18
Online Brokers........................................................................19
Marketing Strategy....................................................................19
Employees.............................................................................19
Legal Proceedings.....................................................................19
MANAGEMENT.....................................................................................20
Directors and Executive Officers......................................................20
Executive Compensation................................................................20
Executive Officer, Chief Operating Officer, Secretary.................................21
Director Compensation.................................................................21
Employment Agreements.................................................................21
Limitations on Personal Liability of Directors and Officers...........................21
PRINCIPAL SHAREHOLDERS.........................................................................22
SELLING SHAREHOLDERS...........................................................................23
DESCRIPTION OF SECURITIES......................................................................23
Common Stock..........................................................................23
SHARES ELIGIBLE FOR FUTURE SALE................................................................23
TRANSFER AND WARRANT AGENT.....................................................................24
LEGAL MATTERS..................................................................................24
EXPERTS........................................................................................24
ADDITIONAL INFORMATION.........................................................................25
</TABLE>
-3-
<PAGE> 7
GENERAL INFORMATION
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY
SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO ANY
PERSON IN ANY JURISDICTION WHERE SUCH OFFER WOULD BE UNLAWFUL. THE DELIVERY OF
THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION SET FORTH
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE MARKET PRICE OF THE SHARES AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE AFFECTED ON THE OVER-THE-COUNTER ELECTRONIC BULLETIN BOARD
OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
As of the date of this Prospectus, the Company will become subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") , and in connection therewith will file all reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). The Company intends to furnish its shareholders with annual
reports containing audited financial statements after the end of each fiscal
year, and make available such other periodic reports as the Company may deem to
be appropriate or as may be required by law. The Company's fiscal year ends on
December 31 of each year.
-4-
<PAGE> 8
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information, including the financial
statements and notes thereto, appearing elsewhere in this Prospectus. Each
prospective investor is therefore urged to read this Prospectus in its
entirety. Unless the context otherwise requires, the term "the Company" refers
to Split Second Trading, Inc., a Florida corporation. This Prospectus contains
forward looking statements that involve risks and uncertainties. The Company's
actual results could differ materially from those anticipated in these forward
looking statements as a result of certain factors discussed in "Risk Factors."
THE COMPANY
Split Second Trading, Inc.(the "Company","we" or "us") is headquartered in
Tampa, Florida and was formed for the purpose of providing online brokerage and
financial services. The Company intends to offer a comprehensive range of
services designed to attract a diverse range of investors, from the average
investor to the sophisticated or retail and/or institutional stock trader. The
Company plans to enter into agreement with third party service providers in
order to offer an electronic trading system which will provide real time market
data and process customer orders. The Company intends to offer its online
trading system under the name "Split Second Trader." The Company intends to
actively market and brand the name to attract stock traders with an interest in
online securities trading.
The Company was incorporated in Florida in January 1999 and maintains its
executive offices at 100 S. Ashley Drive, Suite 2050, Tampa Florida 33502. The
Company's telephone number is (813) 505-8222.
THE OFFERING
<TABLE>
<S> <C>
Securities Offered 2,000,000 shares of common stock, 1,000,000 of which are
being offered by the Company and 1,000,000 by the
Company's founder and sole shareholder. See "Description of
Securities" and "Underwriting."
Maximum Offering Price $.50 per share.
Use of Proceeds General corporate purposes including, but not limited to,
organizing and registering as a broker/dealer with the National
Association of Securities Dealers, Inc. ("NASD"), marketing
and working capital.
Risk Factors An investment in the Shares offered hereby involves a high
degree of risk and therefore the Shares should not be
purchased by anyone who cannot afford the loss of their entire
investment. Prospective purchasers of the Shares should
carefully review and consider the factors set forth under "Risk
Factors" as well as other information contained herein, before
purchasing any of the Shares. See "Risk Factors."
</TABLE>
-5-
<PAGE> 9
RISK FACTORS
An investment in the Shares being offered hereby involves a high degree of
risk. Prior to making any investment decision, prospective investors should
carefully consider the following risk factors together with the other
information presented in this Prospectus including the financial statements and
notes thereto.
NO OPERATING HISTORY
The Company was recently reorganized in January 1999 and has had no operations
to date. Accordingly, the Company has no record of an operating history upon
which investors may base an evaluation of its performance or any assumption as
to the likelihood that the Company will be profitable. For at least the current
fiscal year, the Company is likely to incur losses from startup operations as a
result of, among other things, organization expenses, registration expenses,
marketing and expansion costs. There can be no assurance that the Company will
achieve profitability at any time in the future or, if achieved, sustain such
profitability. Therefore, the Company's prospects must be considered in light
of the risks, expenses and difficulties frequently encountered by a new small
business in a highly competitive industry. See "Business."
GOVERNMENT REGULATION
In order to offer online trading and other investment services, the Company
will be required to become licensed with the NASD as a broker/dealer. The
Company's business will be subject to extensive regulation at both the federal
and state level, as well as by industry self-regulatory organizations ("SROs").
The SEC is the agency primarily responsible or administration of
federal securities laws. Much of the regulation of broker/dealers, however, has
been delegated by the SEC to SROs, primarily the NASD. The NASD has the
authority to adopt rules (which are subject to approval by the SEC) for
governing the industry and the NASD conducts periodic examinations to ensure
compliance. In the event that the Company violates the NASD rules, its NASD
membership can be suspended or revoked and the NASD may impose fines upon it or
censure it. Broker/dealers are also subject to regulation by state securities
commissions in the states in which they are registered. The Company will be
subject to the SEC's net capital rules, which will require it to maintain
prescribed levels of capital in order to conduct business. The Company will use
a portion of the proceeds from this Offering to meet the required minimums.
The SEC, other governmental authorities and SROs have the authority to
institute administrative or judicial proceedings against any entity subject to
their jurisdiction, and the officers and employees of any such entity. These
proceedings may result in censure, fine, civil penalties (including treble
damages in the case of insider trading violations), the issuance of
cease-and-desist orders, the de-registration or suspension of a broker/dealer,
the statutory disqualification of its officers or employees or other adverse
consequences, and, even if none of such actions is taken, could have a material
adverse effect on the Company's perceived creditworthiness, reputation and
-6-
<PAGE> 10
competitiveness. Customers of the Company or others who allege that they have
been damaged by the Company's violation of applicable regulations also
may seek to obtain compensation from the Company, including the unwinding of
any transactions with the Company.
In addition to the existing laws and regulations affecting the
Company, additional legislation and regulations, amendments to existing laws
and regulations may be adopted in the future, or changes in interpretations or
enforcement of existing laws and regulations may be adopted in the future. Any
such event could directly affect the manner and operation and profitability of
the Company.
COMPETITION
The online financial services industry is highly competitive. The Company will
compete with numerous companies such as E*Trade Group, Inc., AmeriTrade Holding
Corp., Charles Schwab & Co., Inc., Discover Brokerage Direct, PC Financial
Network, Datek Securities Corp. Most of the Company's competition are larger
and have greater financial and other resources than the Company. Increased
competition could result in price reductions which could materially adversely
affect the Company's business prospects. Further, there can be no assurance
that the Company will be able to compete successfully against current and
future competitors or that competitive pressures faced by the Company will not
have a material adverse effect on its business, prospects, financial condition
and results of operations. See "Business - Competition."
DEPENDENCE ON KEY PERSONNEL; NEED FOR ADDITIONAL EXECUTIVE OFFICERS
The Company is dependent to a great extent upon the experience, abilities and
continued services of George Carapella, its Chief Executive Officer, acting
Chief Operating Officer, Secretary and Director. The loss of services of Mr.
Carapella would have a material adverse effect on the Company's business,
financial condition or results of operation. The Company has entered into a
three (3) year employment agreement with Mr. Carapella. In order to implement
the Company's expansion strategy, the Company will need to hire additional
executive officers, including an experienced chief financial officer and chief
operating officer. There can be no assurance that the Company will be able to
identify the proper individuals or that such individuals would be willing to be
employed by the Company on terms acceptable to the Company. See "Management."
CONTINUED CONTROL BY MANAGEMENT
Upon the sale of all 1,000,000 Shares offered by the Company, management of the
Company will beneficially own 80% of the Company's outstanding common stock. If
all the Shares offered by the Selling Shareholder are sold, management will
still own 60% of the Company's outstanding common stock. The Company's
stockholders do not have the right to cumulative voting in the election of
directors. Accordingly, management will be in a position to exert control over
the business and operations of the Company, including the election of all
directors of the Company and approval of all corporate transactions. See
"Principal Stockholders."
-7-
<PAGE> 11
SHARES ELIGIBLE FOR FUTURE SALE
The Company has issued and outstanding 4,000,000 shares of common stock which
were issued to Mr. Carapella by the Company in a private transaction in
reliance upon exemptions from registration under the Securities Act. Such
shares may be sold only pursuant to an effective registration statement or an
applicable exemption, including the exemption contained in Rule 144 promulgated
under the Securities Act. In general, under Rule 144 as currently in effect, a
shareholder, including an affiliate of the Company, may sell shares of common
stock after at least one year has elapsed since such shares were acquired from
the Company or an affiliate of the Company. The number of shares of common
stock which may be sold within any three-month period is limited to the greater
of one percent of the then outstanding common stock or the average weekly
trading volume in the common stock during the four calendar weeks preceding the
date on which notice of such sale was filed under Rule 144. Certain other
requirements of Rule 144 concerning availability of public information, manner
of sale and notice of sale must also be satisfied. In addition, a shareholder
who is not an affiliate of the Company, and who has not been an affiliate of
the Company for 90 days prior to the sale and who has beneficially owned shares
acquired from the Company or an affiliate of the Company for over two years may
resell the shares without compliance with the foregoing requirements under Rule
144.
No predictions can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price of the Company's common stock prevailing from time to time. Nevertheless,
sales of substantial amounts of common stock, or the perception that such sales
may occur, could have a material adverse effect on prevailing market prices.
See "Description of Securities - Shares Eligible for Future Sale."
DILUTION
The investors in this Offering will suffer immediate dilution of $.41 per
Share. See "Dilution."
ADDITIONAL FINANCING
The Company anticipates that the proceeds from the Offering will be sufficient
to fund the initial formation of a broker/dealer and implement the company's
marketing program. Thereafter, the Company may need to raise additional funds
to continue to implement its expansion strategy. There can be no assurance that
additional financing will be available or if available will be on favorable
terms.
-8-
<PAGE> 12
ABSENCE OF DIVIDENDS
The Company is a development stage company and has never declared or paid any
cash dividends on its common stock. The Company intends to retain its earnings,
if any, to finance the growth and development of its business and therefore
does not anticipate paying any cash dividends on its common stock in the
foreseeable future. Although dividends are not limited currently by any
agreements, it is anticipated that future agreements, if any, with
institutional lenders or others may limit the Company's ability to pay
dividends on the common stock. Any future determination to pay cash dividends
will be at the discretion of the Board of Directors and will be dependent upon
the Company's financial condition, results of operations, capital and legal
requirements and such other factors as the Board of Directors deems relevant.
See "Dividend Policy."
FORWARD LOOKING STATEMENTS
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act, and Section 21E of the Exchange Act. The
actual results of the Company may differ significantly from the results
discussed in such forward-looking statements. Certain factors which may cause
such differences include, but are not limited to, the factors discussed in this
"Risk Factors" section. The safe harbors contained in Section 27A of the
Securities Act and Section 21E of the Exchange Act, which apply to certain
forward-looking statements, are not applicable to this Offering.
OFFERING PRICE ARBITRARILY DETERMINED
The Offering price of the Shares has been determined solely by the Company and
is not necessarily related to the Company's assets, earnings, book value or any
other objective standard of value.
ABSENCE OF PUBLIC MARKET; DETERMINATION OF OFFERING PRICE; VOLATILITY
Prior to this Offering, there has been no public market for the Shares, and
there can be no assurance that any active trading market therefor will develop
or, if any such market develops, that it will continue. Accordingly, unless and
until a public market develops, purchasers of the Shares may experience
difficulty selling or otherwise disposing of their Shares.
From time to time after this Offering, there may be significant volatility in
the market price of the common shares. Quarterly operating results of the
Company or other developments affecting the Company, such as announcements by
the Company or its competitors regarding acquisitions or dispositions, new
procedures or technology, changes in general conditions in the economy, and
general market conditions could cause the market price of the Company's common
stock to fluctuate substantially. The equity markets have, on occasion,
experienced significant price and volume fluctuations that have affected the
market prices for many companies' securities and have often been unrelated to
the operating performance of these companies.
-9-
<PAGE> 13
PENNY STOCK REGULATION
The Company intends to seek quotations of the Company's securities on the
NASDAQ's OTC Electronic Bulletin Board. In the absence of the common stock
being quoted at a market price of at least $5.00 per share or certain other
exemptions, trading of the common stock would be covered by Rule 15g-9
promulgated under the Exchange Act for non-NASDAQ and non-exchange listed
securities. Under this rule, broker-dealers who recommend such securities to
persons other than established customers and accredited investors must make a
special written suitability determination for the purchaser and receive the
purchaser's written agreement to a transaction prior to sale. Furthermore,
broker/dealer's must disclose the compensation of the broker/dealer and its
sales person in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account.
The SEC has adopted regulations that generally define a "penny stock" to be an
equity security that has a market price of less than $5.00 per share or an
exercise price of less than $5.00 per share subject to certain exceptions. Such
exceptions include equity securities listed on NASDAQ and equity securities
issued by an issuer that has (i) net tangible assets in excess of $2,000,000,
if such issuer has been in continuous operation for at least three years, or
(ii) net tangible assets of at least $5,000,000, if such issuer has been in
continuous operation for less than three years, or (iii) average revenue of at
least $6,000,000 for the preceding three years. Unless an exception is
available, the regulations require the delivery, prior to any transaction
involving a penny stock, of a risk disclosure schedule explaining the penny
stock market and the risks associated therewith.
The Company will initially be subject to the regulations applicable to penny
stocks. Accordingly, the market liquidity for the Company's common stock will
be affected, limiting the ability of broker/dealers to sell the securities and
the ability of purchasers in this Offering to sell their Shares in the
secondary market.
-10-
<PAGE> 14
USE OF PROCEEDS
Assuming the sale of the securities offered hereby, the net proceeds to the
Company, after deducting estimated expenses payable by the Company in
connection with the Offering are estimated to be approximately $475,000. The
Company expects to use the net proceeds as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
PURPOSE AMOUNT NET PROCEEDS
- ------- ------ -------------
<S> <C> <C>
Organizational and Broker
Registration Expenses $375,000 79%
Working Capital $100,000 21%
-------- ---
Total $475,000 100%
</TABLE>
- ---------------
Pending application of the proceeds of this Offering, the Company intends to
invest the net proceeds in certificates of deposit, money market accounts,
United States government obligations or other short-term interest bearing
obligations of investment grade.
The foregoing represents the Company's best estimate of its allocation of the
net proceeds of the sale of the Shares based upon the Company's business plan
and current economic and industry conditions and is subject to reapportionment
among the categories listed above in response to, among other things, changes
in its plans, regulations, industry conditions and future revenues and
expenditures. The amount and timing of expenditures will vary depending on a
number of factors, including changes in the Company's contemplated operations
or business plan and changes in economic and industry conditions.
The Company believes that the net proceeds of this Offering will be sufficient
to organize a broker/dealer and to satisfy its capital needs for at least the
next six months. This belief is based upon assumptions and there can be no
assurance that the assumptions underlying the Company's plans will prove to be
correct. After this six-month period, or sooner if the Company's assumptions
prove to be incorrect, the Company may require additional capital in order to
meet its then current plans for expansion and capital requirements. Such
financing may take the form of common or preferred stock or debt securities, or
may involve bank financing. There can be no assurance that the Company will be
able to obtain additional capital on a timely basis, on favorable terms, or at
all. In any of such events, the Company may be unable to implement its current
plans for expansion. See "Capitalization" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
-11-
<PAGE> 15
DETERMINATION OF OFFERING PRICE
There is currently no public market for the Company's common stock. The Company
plans to offer the Shares at prices determined from time to time by the
Company, up to a maximum of $.50 per Share. The actual price at which Shares
will be sold will be determined by various factors, including without
limitation, general market conditions, the number of shares being purchased and
the amount of funding required by the Company to implement its business plan.
DIVIDEND POLICY
The Company has never paid dividends on its common stock and does not
anticipate paying such dividends in the foreseeable future. The payment of
future cash dividends by the Company on its common stock will be at the
discretion of the Board of Directors and will depend on its earnings, financial
condition, cash flows, capital requirements and other considerations as the
Board of Directors may consider relevant. Although dividends are not limited
currently by any agreements, it is anticipated that future agreements, if any,
with institutional lenders or others may limit the Company's ability to pay
dividends on its common stock.
DILUTION(1)
As of January 6, 2000, the net tangible book value of the Company's common
stock was $ (13.065) or $(.0033) per share of the common stock. The net
tangible book value of the Company's common stock is the tangible assets less
total liabilities. Dilution per share represents the difference between the
amount paid per share by purchasers in this Offering and the net tangible book
value per share after the Offering.
After giving effect to the sale by the Company of 1,000,000 shares of common
stock offered hereby and the application of the net proceeds thereof, the net
tangible book value of the Company's Common Stock as of January 6, 2000 would
have been approximately $461,935 or $.092 per share. This represents an
increase in the net tangible book value per share of $.0957 to the Company's
existing shareholders and an immediate dilution of $.41 per share to new
stockholders purchasing common stock in this Offering.
The following table illustrates this dilution on a per share basis:
<TABLE>
<S> <C>
Assumed public offering price per share ............................................. $ .50
Net tangible book value per share before Offering ................................... $ (.0033)
Increase per share attributable to payments by new stockholders ..................... $ .0957
--------
</TABLE>
- -------------------------
(1) Assumes that the Company sells the Shares for $.50 per Share
maximum offering price.
-12-
<PAGE> 16
<TABLE>
<S> <C>
Dilution per share .................................................................. $ .41
========
</TABLE>
The following table summarizes the differences between the existing
stockholders and new investors with respect to the number of shares of common
stock purchased from the Company, and the total consideration and the average
price per share paid:
<TABLE>
<CAPTION>
PERCENTAGE
OF
OUTSTANDING PERCENT OF AVERAGE
SHARES OF SHARES OF TOTAL TOTAL PRICE
COMMON COMMON CONSIDERATION CONSIDERATION PER
STOCK STOCK PAID(1) PAID SHARE
---------- ----------- ------------- ------------- ---------
<S> <C> <C> <C> <C> <C>
Existing Stockholder ......... 4,000,000 80% $ 9,000 1.8% $ .0023
New Investors ................ 1,000,000 20% $ 500,000 98.2% $ .50
TOTAL ........................ 5,000,000 100.0% $ 509,000 100% $ .10
</TABLE>
- --------------------
(1) Consisting of $5,000 in cash and $4,000 in services.
-13-
<PAGE> 17
CAPITALIZATION
The following table sets forth the capitalization of the Company as of January
6, 2000, and as adjusted to give effect to the sale by the Company of 1,000,000
Shares. The table should be read in conjunction with the financial statements
and notes thereto appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
JANUARY 6, 2000 JANUARY 6, 2000
ACTUAL AS ADJUSTED(1)
--------------- ---------------
<S> <C> <C>
Total current liabilities: 13,085 13,085
Long-term debt:
Stockholder's equity: Common stock $.001 par 4,000 5,000
value, 50,000,000 shares authorized; 4,000,000
shares outstanding; 5,000,000 shares outstanding
as adjusted
Additional paid-in capital 5,020 500,020
Total Stockholders Equity (4,861) 495,159
Total Liability and Stockholders Equity $ 8,224 $508,244
</TABLE>
- -------------------------
(1) Assumes sale of 1,000,000 shares of Common Stock at $.50 per
Share, less expenses estimated to aggregate $25,000.
-14-
<PAGE> 18
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company was organized as a Florida corporation on January 6, 1999 and since
its inception has been devoting most of its efforts developing its business
plan, issuing common stock, raising capital, establishing its accounting
systems, and other administrative functions, therefore the Company is in the
development stage.
In October 1999, Mr. George Carapella paid a $5,000 retainer to a company
attorney on behalf of the Company, in connection with the Company's efforts to
register its securities with the SEC. Mr. Carapella considers this payment an
additional capital contribution to the Company.
On January 6, 1999, the Company issued 4,000,000 shares of its $.001 par value
respectively to George Carapella, its chief executive officer, and acting chief
operating officer in exchange for organization efforts of the Company.
COMPARISONS OF OPERATIONS SINCE INCEPTION TO JANUARY 6, 2000
For the period ended January 6, 2000, the Company did not have any revenues as
it is in the development stage. For the period ended January 6, 2000 salaries
were $10,000 reflecting one month expense under the employment agreement to its
Chief Executive Officer. During the same period, legal expenses were $2,830
reflecting normal legal expenses in connection with the Company's efforts to
raise capital. Additionally, for the same period, amortization expenses were
$1,061, as a result of amortization of its organization costs.
LIQUIDITY AND CAPITAL RESOURCES
The Company is in the development stage and its operations to date have been
funded by its founder, George Carapella. Without the funding provided by the
Offering, the Company will not have sufficient capital to implement its
business plan to become a registered broker/dealer. (See "Risk Factors").
As of the date of this Prospectus, the Company had no material commitments for
capital expenditures.
BUSINESS
THE COMPANY
Headquartered in Tampa, Florida, The Company plans to seek registration as a
Securities Broker/Dealer with the National Association of Securities Dealers,
Inc. The Company plans to offer
-15-
<PAGE> 19
comprehensive range of services but will focus on on-line trading. The Company
will contract with existing service providers to offer its financial products
for the trading community. The Company's executive offices are located at 100
S. Ashley Drive, Suite 2050, Tampa, Florida 33602 and its telephone number is
(813) 505-8222.
ONLINE TRADING PRODUCTS AND SERVICES
The Company plans to contract with third party service providers to offer an
electronic trading system which will employ cutting edge computer hardware and
software to instantly deliver real-time market data and process customer
orders. The system will be named and branded by the Company as the "Split
Second Trader". As a supplement to electronic trading, the Company intends to
offer quality quote, trading and research services, which we will provide by
contracting with a clearing house that provides these services to broker dealer
operating companies.
THE ONLINE TRADING INDUSTRY
The online trading sector is the fastest growing segment in the brokerage
industry, growing at an average annual rate of 76% per year, as reported by
Forrester Research, Inc. The growth in this sector has been fueled by the
following trends:
The explosion of personal computers and use of the Internet;
Low cost, widespread Internet access;
Free or low cost, high quality market related information online;
Lower transaction costs online; and
Market reform on NASDAQ, resulting in full disclosure of bid prices
and market makers to the general public.
These factors have combined to create greater access to market information and
the ability to offer faster execution of trades, further stimulating demand in
the online arena. In December 1996, there were an estimated 1.5 million online
brokerage accounts. Online investing accounts grew to 3.0 million by year end
1997, and are expected to increase to 14.4 million by the year 2002, carrying
an estimated $688.0 billion of assets, up from $120.0 billion of assets in
1997. It is also estimated that more than 20% of online households will invest
electronically by 2002.
GROWTH STRATEGIES FOR EXPANSION
The Company's goal is to become a technological, service oriented leader in the
securities trading field, with operating systems and concepts to empower
clients with real time information flow and quality execution systems, all
provided by third party service providers. The Company will initially focus its
efforts on marketing the Company's services, and will provide those services
using third parties.
-16-
<PAGE> 20
TRADING SYSTEM
To insure that users of Split Second Trader receive the quickest and most
economical executions available, the Split Second Trader system will allow
users to send NASDAQ orders directly to SelectNet. SelectNet is an electronic
order posting and execution system which is only available to market makers and
broker-dealers to trade with each other. Today, SelectNet is also used to
direct a bid or offer to a specific market maker or to third market exchanges
referred to as ECN's or Electronic Communication Networks. ECN's are a set of
separate order posting and execution networks that provide participating firms
and their clients' additional liquidity by opening other avenues for executing
NASDAQ transactions.
QUALITY & CUSTOMER SUPPORT
Management realizes that quality customer support is paramount to building a
good reputation and to establishing satisfied customers over the long term.
Management also believes that given the generally poor level of customer
support provided by other online brokerage services, developing an excellent
customer support team is vital to the Company's efforts to differentiate itself
from the competition. As such, customer support (trading, administrative, and
technical) for all levels of service will be among the Company's highest
priorities. The Company intends to develop a strong reputation for truly
superior customer support at all levels. The Company will strive to hire
individuals with experience in retail and discount brokerage to add value to
its customer support team.
INDUSTRY OVERVIEW
The retail brokerage industry provides an array of financial services,
including the trading of stocks and bonds; investing in mutual funds, IRAs and
money market accounts and providing investment research. The industry is
currently divided into three different segments: full service brokers, discount
brokers and online brokers. Full service brokers command the highest commission
rates typically between 3% and 10%, and provide advice on which stocks, bonds,
commodities and mutual funds to buy or sell. A full-service broker may also
offer an asset management account and advise of financial planning, tax
shelters, income limited partnerships and new issues of stock.
In contrast, discount brokers and online brokers, charge commissions that range
anywhere between 10% and 90% lower than full service brokers for similar
services. Discount brokers emerged in the mid 1970's with the advent of
negotiated commissions and the unbundling of investment services. These brokers
did not provide advice, but rather executed orders to buy and sell securities
at discounted commission rates. Since the 1970's, there has been an explosion
of over 100 discount brokers nationwide to fill the increasing demand for low
cost trading. By the 1990's, with the blossoming of the Internet, discount
brokers began offering their customers an alternative way trading online to buy
and sell securities.
Evolving from the discount brokerage segment of the retail brokerage industry,
online brokers most of whom were discount brokers began offering online trading
over the Internet during this period. Online trading further reduces the cost
involved in executing a trade by elimination the human
-17-
<PAGE> 21
interaction required by traditional discount brokers. In return, online brokers
pass those savings through to their customers, making these brokers the least
expensive way to trade securities. Source: Forrester Research.
TRENDS WITHIN THE INDUSTRY
With the information age upon us, the retail brokerage industry has been
undergoing dynamic changes. These have been primarily driven by the changing
demographics of traders/investors and the methods by which to access
information. As individuals become more sophisticated, they are demanding
faster execution of trades and lower commission rates on transactions. Further,
with advanced trading technologies, individuals are now able to obtain
immediate access to real time information. As a result of these trends,
discount and online brokers have flourished in recent years.
TREND TOWARD DISCOUNT BROKERS
In recent years, individuals have become much more pro-active in managing their
own investments. In addition, since the deregulation of brokerage commissions
in 1975 and the resulting unbundling of brokerage services, investors have been
moving toward discount brokers for their trading activities.
TREND TOWARD MORE SOPHISTICATED TRADERS/INVESTORS
With the explosion of the Internet over the last few years, individual traders
and investors now have access to volumes of market information (such as
research reports, new releases and earnings releases). This has enabled
individuals to bypass the traditional stockbroker and make more informed
decisions on their own. As individuals become more sophisticated, the methods
by which they are trading are also changing. Increasingly, individuals are
placing orders via the Internet and trading online, versus directly placing an
order with their broker via the telephone. These factors, in turn, have caused
an increased demand for online brokerage services.
DISCOUNT BROKERS
With the trend in the industry moving towards providing discount and online
brokerage services, competition between discount brokers will increase over the
next few years. To offer a greater range of services, many discount brokers are
now offering online trading to their customers. As online brokers continue to
enjoy the fastest growth rates in the industry, more discount brokers will
offer online services to accommodate their customers and capture a greater
market share. This facet of discount brokers represents the biggest competition
to the online category. Charles Schwab & Co., Inc. ("Schwab') is the leader in
this segment. In addition, there are about 100 other national firms that
compete with Schwab for discount broker clients, including E-Trade, AmeriTrade,
Quick & Reily, Datek and most recently, Merrill Lynch & Co.
-18-
<PAGE> 22
ONLINE BROKERS
There are approximately 30 online brokerage firms nationwide and this number is
growing quickly. As this segment further matures, the companies that provide
the highest quality customer service, the most state-of-the-art technology and
the most competitive fee structures will be the leaders in the market.
MARKETING STRATEGY
The Company's management understands that targeted advertising will play a
critical role in gaining market share and a strong presence in the Company
online industry. With this in mind, the Company intends to develop an
aggressive, comprehensive marketing plan to build its market and educate
customers as well as developing brand name recognition and loyalty. The
Company's advertising programs will be designed to capture market shares and
provide "brand name" recognition.
EMPLOYEES
As of February 1, 2000, the Company had one full-time employee.
LEGAL PROCEEDINGS
The Company is not currently subject to any legal proceedings.
-19-
<PAGE> 23
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
directors and executive officers of the company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------- --- --------
<S> <C> <C>
George Carapella 49 Chief Executive Officer and Chief
Operating Officer, Secretary and
Director
</TABLE>
A director is elected for a period of one year at the Company's annual meeting
of shareholders and serves until the next such meeting and until his or her
successor is duly elected and qualified. Directors may be re-elected annually
without limitation. Officers are appointed by, and serve at the discretion of,
the Board of Directors. The Company's director does not presently receive any
compensation his services as director.
Set forth below is a biographical description of the Company's director and
executive officer.
GEORGE CARAPELLA has served as Chief Executive Officer, Chief Operating Officer
and director of the Company since its formation in January 1999. Mr. Carapella
is presently also the Chief Executive Officer, President and Director of
TravelLink Services, Inc., a Tampa, Florida based company formed in April 1999
that provides a travel referral program for the benefit of travel agents. His
responsibilities at such company include marketing, development and strategic
planning. Prior to undertaking such position, from 1995 to 1998, Mr. Carapella
was the Director of Footcare Centers of America, Inc, a Florida corporation
developed to consolidate the podiatric industry. He assisted the company in
developing its marketing program and choosing strategic management partners to
evolve the company to the point where underwriters and investment bankers would
consider financing the company. From 1990 to 1995, Mr. Carapella founded and
served as the Chief Executive Officer and a Director of 1-800-Low Airfare. Such
company was formed to provide air travel programs for the consumers benefit at
cost effective rates by implementing a marketing program through the use of a
vanity numbers, which are used to market travel such as 1800-fly-wings and #
Fly, and then negotiating rates with the airlines to provide the most cost
effective fares available in the market.
EXECUTIVE COMPENSATION
The following table sets forth the compensation payable to the Company's
management:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION YEAR SALARY OTHER COMPENSATION
- --------------------------- ---- ------ -------------------------
<S> <C> <C> <C>
GEORGE CARAPELLA 2000 $120,000 $400/MONTH CAR ALLOWANCE
EXECUTIVE OFFICER,
</TABLE>
-20-
<PAGE> 24
CHIEF OPERATING OFFICER, SECRETARY
The Company has no retirement, pension or profit sharing program for the
benefit of its directors, officers or other employees but the Board of
Directors may recommend one or more such programs for adoption in the future.
DIRECTOR COMPENSATION
Directors of the Company who are not salaried officers will receive no fee for
attending each Board meeting or meeting of a committee of the Board. All
directors will be reimbursed for their reasonable out-of-pocket expenses
incurred in connection with attending Board and committee meetings. In the
future, the Company reserves the right to issue shares of the Company's common
stock to non-officer Board members for their agreement to become a Board
member.
EMPLOYMENT AGREEMENTS
Mr. Carapella has entered into a three year Employment Agreement at a base
salary of $120,000 per annum with cost of living increases for years 2 and 3.
Mr. Carapella also received an auto allowance, of $400 per month, medical
insurance coverage and inclusion in a 401K plan if the Company implements such
a program.
LIMITATIONS ON PERSONAL LIABILITY OF DIRECTORS AND OFFICERS
In general, our articles of incorporation and bylaws provide the
following:
- That the board of directors fix the number of directors within a
specified range. At present we have one director;
- The existing directors will fill any vacancy or newly created
directorship with any new director; and
- Only the chairman of the board, the board of directors or the
president can call a board of directors meetings.
We are a Florida corporation and we are subject to the Florida
Business Corporation Act. Under the laws of Florida, the articles of
incorporation can be amended only with the approval of our board of
directors and our shareholders. Our bylaws provide that they cannot be
amended without the approval of a majority of our board of directors.
Provisions of the Florida Business Combination Law, of our articles of
incorporation and bylaws may discourage or make more difficult the acquisition
of control of Split Second through a tender offer, open market purchase, proxy
contest or otherwise. These provisions are intended to discourage or may have
the effect of discouraging certain types of coercive takeover practices and
inadequate takeover bids and to encourage persons seeking to acquire control of
Split second first to negotiate
-21-
<PAGE> 25
with us. Our management believes that the foregoing measures, many of which are
substantially similar to the takeover-related measures in effect for many other
publicly-held companies, provide benefits by enhancing our ability to negotiate
with a person making an unfriendly or unsolicited proposal to take over or
restructure Split Second. We believe that these benefits outweigh the
disadvantages of discouraging such proposals because, among other things,
negotiation of such proposals could result in an improvement of their terms.
Provisions of the Florida Business Combination Law, in addition to provisions
of our articles of Incorporation and bylaws, address corporate governance
issues, including the rights of shareholders. Some of these provisions could
hinder management changes while others could have anti-takeover effect.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's common stock as of the date of this Prospectus by
(i) each person known by the Company to be the beneficial owner of more than 5%
of the outstanding Common Stock, (ii) by each officer and director of the
Company, and (iii) by all officers and directors of the Company as a group.
Unless otherwise indicated, each of the following persons has sole voting and
investment power with respect to the shares of common stock set forth opposite
his, her or its name.
<TABLE>
<CAPTION>
Percent of Percent of
Amount and Nature of Class Before Class After
Name of Beneficial Owner Beneficial Ownership(1) Offering Offering
- ------------------------ ----------------------- ------------ -----------
<S> <C> <C> <C>
George Carapella 4,000,000 100% 80%
3818 S. Nine Drive,
Valrico, Florida 33594.
All Officers and
Directors as a Group (one person) 4,000,000 100% 80%
</TABLE>
- ----------------------
The persons named in the table have sole voting and investment power with
respect to all shares of common stock.
-22-
<PAGE> 26
SELLING SHAREHOLDERS
Mr. Carapella, the Company's founder, sole Board member and Chief Executive
Officer, is registering for sale 1,000,000 of his 4,000,000 Shares. Mr.
Carapella has agreed with the Company that he will not sell any of his Shares
until the Company has sold all 1,000,000 Shares offered by the Company.
Assuming the Company sells all 1,000,000 Shares and Mr. Carapella sells all
1,000,000 Shares he is registering, Mr. Carapella will still own 60% of the
Company's then issued and outstanding common stock. The Company is paying all
costs and expenses associated with registering for sale Mr. Carapella's Shares.
DESCRIPTION OF SECURITIES
The following summary description of the Securities is qualified in its
entirety by reference to the Company's Certificate of Incorporation, as
amended, and its By-laws, copies of which have been filed as Exhibits to the
Registration Statement of which this Prospectus is a part.
The Company is authorized to issue 50,000,000 shares of common stock, $.001 par
value per share. As of the date of this Prospectus, prior to giving effect to
the securities to be issued in the Offering, there are 4,000,000 shares of
Common Stock outstanding and held by one stockholder of record.
COMMON STOCK
Holders of shares of common stock are entitled to one vote per share of common
stock on all matters submitted to a vote of stockholders of the Company and to
receive dividends when declared by the Board of Directors from funds legally
available therefor. Upon the liquidation, dissolution or winding up of the
Company, holders of shares of common stock are entitled to share ratably in any
assets available for distribution to stockholders after payment of all
obligations of the Company and after provision has been made with respect to
each class of stock, if any, having preference over the common stock. Holders
of shares of common stock do not have cumulative voting rights or preemptive,
subscription or conversion rights. See "Risk Factors" and "Dividend Policy."
SHARES ELIGIBLE FOR FUTURE SALE
All Shares of common stock being offered hereby will be immediately tradable
without restriction or further registration under the Securities Act. The
outstanding shares of common stock include 4,000,000 Shares of common stock
outstanding deemed to be "restricted securities," as that term is defined under
Rule 144 promulgated under the Securities Act, in that such shares were
purchased or acquired by such stockholders of the Company in transactions not
involving a public offering, and, as such, may only be sold pursuant to a
registration statement under the Securities Act, in compliance with the
exemption provisions of Rule 144, or pursuant to another exemption under the
Securities Act. All of such restricted Shares of common stock are eligible for
sale under Rule 144, subject to the volume limitations prescribed by the Rule.
-23-
<PAGE> 27
In general, under Rule 144 as currently in effect, a shareholder, including an
affiliate of the Company, may sell shares of Common Stock after at least one
year has elapsed since such shares were acquired from the Company or an
affiliate of the Company. The number of shares of common stock which may be
sold within any three-month period is limited to the greater of one percent of
the then outstanding common stock or the average weekly trading volume in the
common stock during the four calendar weeks preceding the date on which notice
of such sale was filed under Rule 144. Certain other requirements of Rule 144
concerning availability of public information, manner of sale and notice of
sale must also be satisfied. In addition, a shareholder who is not an affiliate
of the Company (and who has not been an affiliate of the Company for 90 days
prior to the sale) and who has beneficially owned shares acquired from the
Company or an affiliate of the Company for over two years may resell the shares
of common stock without compliance with the foregoing requirements under Rule
144.
No predictions can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price of the Company's common stock prevailing from time to time. Nevertheless,
sales of substantial amounts of common stock, or the perception that such sales
may occur, could have a material adverse effect on prevailing market prices and
could impair the Company's ability to raise capital through the sale of its
equity securities.
TRANSFER AND WARRANT AGENT
Corporate Stock Transfer, Inc. a Colorado based transfer agent will provide
services to the Company. Corporate Stock Transfer is located at 3200 Cherry
creek Drive South, Suite 430, Denver, Colorado 80209 and their telephone number
is (303) 282-4800 with a contact person of Carylyn Bell or Sally Rogers.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the Company
by David M. Jeffries, an attorney with the law firm of Bush Ross Gardner Warren
& Rudy, P.A., 220 S. Franklin Street, Tampa, Florida 33602
EXPERTS
The audited balance sheets of the Company were prepared by Baumann Stahl &
Raymond & Company, P.A., 11210 N. Dale Mabry, Tampa, Florida 33618 and the
related Statements of Operations, Statements of Stockholders' Equity and
Statements of Cash Flows have been included herein and in the Registration
Statement in reliance upon the report, appearing elsewhere herein, of
independent certified public accountants, and upon the authority of said firm
as experts in accounting and auditing.
-24-
<PAGE> 28
ADDITIONAL INFORMATION
The Company has filed with the SEC a Registration Statement under the
Securities Act with respect to the Shares offered hereby. This Prospectus omits
certain information contained in the Registration Statement and the exhibits
thereto, and references are made to the Registration Statement and the exhibits
thereto for further information with respect to the Company and the Shares
offered hereby. Statements contained herein concerning the provisions of any
documents are not necessarily complete, and in each instance reference is made
to the copy of such document filed as an exhibit to the Registration Statement.
Each such statement is qualified in its entirety by such reference. The
Registration Statement, including exhibits and schedules filed therewith, may
be inspected without charge at the public reference facilities maintained by
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and at the regional offices of the Commission located at
7 World Trade Center, Suite 1300, New York, New York 10048, and Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials may be obtained from the Public Reference Section of
the Commission, Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and its public reference facilities in New York, New York and
Chicago, Illinois upon payment of the prescribed fees. Electronic registration
statements (as well as proxy reports and other information when filed) filed
through the Electronic Data Gathering, Analysis, and Retrieval System are
publicly available through the SEC's Website (http://www.sec.gov). At the date
hereof, the Company was not a reporting company under the Exchange Act.
-25-
<PAGE> 29
CONTENTS
PAGE
----
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 27
FINANCIAL STATEMENTS -
BALANCE SHEET 28
STATEMENT OF OPERATIONS 29
STATEMENT OF CASH FLOWS 30
STATEMENT OF STOCKHOLDERS' EQUITY 31
NOTES TO FINANCIAL STATEMENTS 32
-26-
<PAGE> 30
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
Split Second Trading, Inc.
Tampa, Florida
We have audited the accompanying balance sheet of Split Second Trading, Inc. (a
development stage company) as of January 6, 2000, and the related statements of
operations, cash flows and stockholders' equity for the period from January 6,
1999 (inception) to January 6, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Split Second Trading, Inc. at
January 6, 2000 and the result of its operations, its cash flows in conformity
with generally accepted accounting principles.
BAUMANN, STAHL, RAYMONDO & COMPANY, P.A.
Tampa, Florida
January 6, 2000
-27-
<PAGE> 31
SPLIT SECOND TRADING, INC.
(A Development Stage Company)
BALANCE SHEET
JANUARY 6, 2000
ASSETS
CURRENT ASSETS
Cash $ 20
Deferred offering costs 5,000
-------
Total current assets 5,020
OTHER ASSETS
Organization costs, net of amortization of $1,051 3,204
-------
TOTAL ASSETS $ 8,224
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 3,085
Accrued salaries 10,000
-------
Total current liabilities 13,085
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 50,000,000 shares
authorized, 4,000,000 shares issued and outstanding 4,000
Additional paid-in capital 5,020
Accumulated deficit during development stage (13,881)
-------
Total stockholders' equity (4,861)
-------
LIABILITIES AND STOCKHOLDER'S EQUITY $ 8,224
=======
Read report of independent certified public accountants.
The accompanying notes are an integral part
of this financial statement.
-28-
<PAGE> 32
SPLIT SECOND TRADING, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
JANUARY 6, 1999 (Inception) TO JANUARY 6, 2000
REVENUE $ --
OPERATING EXPENSES
Salaries and benefits 10,000
Legal and professional fees 2,830
Amortization 1,051
-----------
TOTAL OPERATING EXPENSES 13,881
-----------
NET LOSS DURING DEVELOPMENT STAGE $ (13,881)
===========
EARNINGS PER COMMON SHARE $ NIL
===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 4,000,000
===========
Read report of independent certified public accountants.
The accompanying notes are an integral part
of this financial statement.
-29-
<PAGE> 33
SPLIT SECOND TRADING, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
JANUARY 6, 1999 (Inception) TO JANUARY 6, 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(13,881)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Amortization 1,051
(Increase) decrease in current assets:
Prepaid expenses (5,000)
Increase (decrease) in current liabilities
Accounts payable 3,085
Accrued salaries 10,000
--------
Total adjustments 9,136
--------
Net cash flows (used) by operating activities (4,745)
--------
CASH FLOWS FROM INVESTING ACTIVITIES
Insuance of common stock 5,020
Increase in organization costs (5,255)
--------
Net cash flows from investing activities (235)
--------
CASH FLOWS FROM FINANCING ACTIVITIES --
--------
NET INCREASE IN CASH $ 20
========
Read report of independent certified public accountants.
The accompanying notes are an integral part
of this financial statement.
-30-
<PAGE> 34
SPLIT SECOND TRADING, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FROM JANUARY 6, 1999 (Inception) TO JANUARY 6, 2000
<TABLE>
<CAPTION>
ACCUMULATED
LOSS
DURING
COMMON PAID-IN DEVELOPMENT
SHARES CAPITAL CAPITAL STAGE
------ ------- ------- ------------
<S> <C> <C> <C> <C>
STOCK ISSUANCES:
Issuance of common stock to
George Carapella in exchange
for organization efforts 4,000,000 $ 4,000 $ -- $ --
Cash payment for expenses paid
to George Carapella -- -- 5,020 --
Loss during development stage -- -- -- (13,881)
--------- --------- --------- ---------
TOTAL 4,000,000 $ 4,000 $ 5,020 $ (13,881)
========= ========= ========= =========
</TABLE>
Read report of independent certified public accountants.
The accompanying notes are an intergral part
of these financial statements.
-31-
<PAGE> 35
SPLIT SECOND TRADING, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
JANUARY 6, 2000
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Split Second Trading, Inc. (a Florida corporation organized January 6, 1999) is
a development stage company, and as such has devoted most of its efforts since
its inception in developing its business plan, issuing common stock, raising
capital and obtaining financing, establishing its accounting systems, and other
administrative functions.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers amounts held
by financial institutions and short term investments with an original maturity
of 90 days or less to be cash and 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.
INCOME TAXES
The Company records its federal and state tax liability in accordance with
Financial Accounting Standards Board Statement No. 109 "ACCOUNTING FOR INCOME
TAXES". The deferred taxes payable are recorded for temporary differences
between the recognition of income and expenses for tax and financial reporting
purposes, using current tax rates. Deferred assets and liabilities represent the
future tax consequences of those differences, which will either be taxable or
deductible when the assets and liabilities are recovered or settled.
As of January 6, 2000 deferred taxes were recorded in the accompanying financial
statements.
NOTE C - RELATED PARTY TRANSACTIONS
On January 6, 1999, the Company issued 4,000,000 shares of its $.001 par value
respectively to George Carapella, its chief executive officer, and acting chief
operating officer in exchange for organization efforts of the Company.
In October 1999, Mr. Carapella paid a $5,000 retainer to one of the Company's
attorneys in behalf of the Company, which Mr. Carapella considers an additional
capital contribution to the Company.
Read report of independent certified public accountants.
-32-
<PAGE> 36
SPLIT SECOND TRADING, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
JANUARY 6, 2000
NOTE C - RELATED PARTY TRANSACTIONS (CONTINUED)
In December 1999, the Company has established a 3-year employment agreement with
Mr. Carapella with a base salary of $120,000 respectively, which includes cost
of living increases, auto allowance, medical insurance coverage and inclusion in
a future 401K plan.
NOTE D - STOCK OPTION PLAN
In December 1999, the Company established a 10-year stock option plan, whereby
up to 1,000,000 shares of the Company's $.001 par value common stock may be
granted to officers, directors, consultants, key employees, advisors and similar
parties who provide their skills and expertise to the Company. No options have
been granted under this plan.
Read report of independent certified public accountants.
-33-
<PAGE> 37
PART II
ITEM 24. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 607.0850(1) of the Florida Business Corporation Act (the
"Corporation Act") provides that a Florida 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 (other than 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 or
enterprise, against expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably incurred by
him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no cause to believe his conduct was unlawful.
Section 607.0850(2) provides that a Delaware 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 such
person acted in any of the capacities set forth above, against expenses
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted under similar
-34-
<PAGE> 38
standards, except that no indemnification may be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable
to the corporation unless and only to the extent that the court in which such
action or suit was brought shall determine that despite the adjudication of
liability, such person is fairly and reasonably entitled to be indemnified for
such expenses which the court shall deem proper.
Section 607.085 further provides that to the extent a director or
officer of a corporation has been successful in the defense of any action, suit
or proceeding referred to in subsections (a) and (b) or in the defense of any
claim, issue or matter therein, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith; that
indemnification provided for by Section 607.085 shall not be deemed exclusive
of any other rights to which the indemnified party may be entitled.
The Company's Certificate of Incorporation and By-laws provide that
the Company shall indemnify certain persons, including officers, directors,
employees and agents, to the fullest extent permitted by Section 607.085 of the
Corporation Act. Reference is made to the Certificate of Incorporation and
By-laws filed as Exhibits 3.1 and 3.2, respectively.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses to be borne by the Company in
connection with the issuance and distribution of the Shares pursuant to the
Offering. The Company will pay all costs and expenses associated with
registering Mr. Carapella's shares.
<TABLE>
<S> <C>
SEC registration fee $ 264.00
NASD filing fee $
NASDAQ SmallCap Market fee $
Estimated Legal fees and expenses $ 15,000
Estimated Accounting fees $ 2,000
Estimated Blue Sky fees and expenses $ 1,000
Estimated Printing and engraving expenses $ 2,000
Estimated Miscellaneous $ 4,736
Total fees and expenses $ 25,000
</TABLE>
-35-
<PAGE> 39
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
On January 6, 1999, the Company issued 4,000,000 Shares of its Common Stock to
George Carapella in exchange for services to be rendered to the Company.
ITEM 27. EXHIBITS
3(i) Article of Incorporation
(ii) By-Laws
10 Employment Agreement with George Carapella
23 Accountant's Consent
27 Financial Data Schedule (for SEC use only)
ITEM 28. UNDERTAKINGS
1. The Registrant will, 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
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) Include any additional or changed material
information on the plan of distribution.
2. The Registrant will, 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. The Registrant will file a post-effective amendment to remove
from registration any of the securities that remain unsold at the end of the
offering.
4. The Registrant will provide to the Underwriter at the closing
certificates in such denominations and registered in such names as required by
the Underwriter to permit prompt delivery to each purchaser.
-36-
<PAGE> 40
5. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has 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.
6. For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant under Rule 424(b)(1) or (4) or 497(h) under
the Act shall be deemed to be part of this registration statement as of the
time the Commission declared it effective.
SIGNATURES
Pursuant to the requirements of the Act of 1933, the Registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements of
filing on Form SB-2 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, there unto duly authorized, in the
City of Tampa, State of Florida on the 5th day of April, 2000.
SPLIT SECOND TRADING, INC.
By: /s/ George Carapella
-------------------------------------
George Carapella, Chief Executive Officer
Chief Operating Officer,
Secretary and Director
-37-
<PAGE> 1
EXHIBIT 3(i)
ARTICLES OF INCORPORATION
OF
SPLIT SECOND TRADING, INC.
The undersigned, acting as incorporator of the captioned corporation
under the Florida Business Corporation Act, adopts the following Articles of
Incorporation:
ARTICLE I
Corporate Name and Principal Office
The name of this corporation is SPLIT SECOND TRADING, INC. and its
principal office and mailing address is 10008 North Dale Mabry Highway, #113,
Tampa, Florida 33618.
ARTICLE II
Commencement of Corporate Existence
The corporation shall come into existence on January 6, 1999.
ARTICLE III
General Nature of Business
The corporation may transact any lawful business for which corporations
may be incorporated under Florida law.
<PAGE> 2
ARTICLE IV
Capital Stock
The aggregate number of shares of stock authorized to be issued by
this corporation shall be 50,000,000 shares of common stock, each with a par
value of $.001. Each share of issued and outstanding common stock shall entitle
the holder thereof to fully participate in all shareholder meetings, to cast
one vote on each matter with respect to which shareholders have the right to
vote, and to share ratably in all dividends and other distributions declared
and paid with respect to the common stock, as well as in the net assets of the
corporation upon liquidation or dissolution.
ARTICLE V
Initial Registered Office and Agent
The street address of the initial registered office of the corporation
shall be 220 South Franklin Street, Tampa, Florida 33602, and the initial
registered agent of the corporation at such address is John N. Giordano.
ARTICLE VI
Incorporator
The name and address of the corporation's incorporator is:
Name Address
---- -------
Jennifer Riddle 220 South Franklin Street
Tampa, Florida 33602
-2-
<PAGE> 3
ARTICLE VII
By-Laws
The power to adopt, alter, amend or repeal by-laws of this corporation
shall be vested in its shareholders and separately in its Board of Directors,
as prescribed by the by-laws of the corporation.
ARTICLE VIII
Indemnification
If the criteria set forth in ss.607.0850(1) or (2), Florida Statutes,
as then in effect, have been met, then the corporation shall indemnify any
director, officer, employee or agent thereof, whether current or former,
together with his or her personal representatives, devisees or heirs, in the
manner and to the extent contemplated by ss.607.0850, as then in effect, or by
any successor law thereto.
IN WITNESS WHEREOF, the undersigned has executed these Articles this
4th day of January 1999.
/s/ Jennifer Riddle
----------------------
Jennifer Riddle
166998.1
-3-
<PAGE> 4
CERTIFICATE DESIGNATING
REGISTERED AGENT
Pursuant to the provisions of ss.ss.48.091 and 607.0501, Florida
Statutes, SPLIT SECOND TRADING, INC., desiring to organize under the laws of
the State of Florida, hereby designates John N. Giordano, an individual
resident of the State of Florida, as its Registered Agent for the purpose of
accepting service of process within such State and designates 220 South
Franklin Street, Tampa, Florida 33602, the business office of its Registered
Agent, as its Registered Office.
SPLIT SECOND TRADING, INC.
By /s/ Jennifer Riddle
-----------------------------
Jennifer Riddle, Incorporator
ACKNOWLEDGMENT
I hereby accept my appointment as Registered Agent of the above named
corporation, acknowledge that I am familiar with and accept the obligations
imposed by Florida law upon that position, and agree to act as such in
accordance with the provisions of ss.ss.48.091 and 607.0505, Florida Statutes.
/s/ John N. Giordano
-----------------------------
John N. Giordano
166998.1
<PAGE> 1
Exhibit 3 (ii)
BY-LAWS
OF
SPLIT SECOND TRADING, INC.
ARTICLE I
Share Certificates and Transfer
Section 1. Certificates:
Certificates representing the shares of capital stock of this
Corporation shall be printed or engraved in such form and contain such recitals,
signatures and seals as required by law, or to the extent not in conflict
therewith, as may be determined by the Board of Directors. Every Shareholder
shall be entitled to receive a certificate representing the number of shares
owned once such shares are fully paid.
Section 2. Transfer:
Upon surrender to the secretary or transfer agent of the Corporation of
a certificate representing a share or shares of its stock, duly endorsed or
accompanied by evidence of succession, assignment or authority to transfer
reasonably satisfactory to the Secretary or transfer agent, as well as all
necessary Florida stock transfer tax stamps or the funds therefor and evidence
of compliance with any conditions or restrictions set forth or referred to on
the certificate, the Corporation shall be required to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction on its books.
Section 3. Issuance of Substitute Certificates:
A new certificate may be issued in lieu of any certificate previously
issued which has been defaced or mutilated, upon surrender or cancellation of a
part of the old certificate sufficient, in the opinion of the Treasurer, to
protect the Corporation against loss or liability. A new certificate may also be
issued in lieu of any certificate then not in the possession of the holder of
record if such holder shall by written affirmation, under oath, state the
circumstances of its absence, and shall, if required by the Board, provide the
Corporation with an indemnity bond in form and with one or more sureties
satisfactory to the Board, in at least double the value of the shares
represented by the absent certificate and satisfy any other reasonable
requirements which it may impose.
<PAGE> 2
ARTICLE II
Corporate Records and Seal; Authority to Act
Section 1. Records:
The Corporation shall maintain at its principal place of business
accurate and complete records of its operations and properties, including a
record of its Shareholders and minutes of the proceedings of its Shareholders,
Board of Directors and Board committees. Unless modified by Shareholder
resolution adopted not later than four months following the close of each of the
Corporation's operational years, the Corporation shall prepare within a
reasonable time following the close of each such year and maintain at its
principal place of business, as well as at its registered office, financial
records which shall include a statement of financial position as of the end of
each such year and a statement of profit earned or loss incurred therein.
Section 2. Inspection:
All records required by the Florida Business Corporation Act to be
maintained by the Corporation shall be open for inspection by the individuals
and in the manner specified in such Act as the same may be in effect from time
to time.
Section 3. Closing Shareholder Record Book:
The Board may close the Shareholder record book for a period of not
more than 30 nor less than ten days preceding any Shareholder meeting or the day
fixed for the payment of a dividend, and upon its failure to do so the
Shareholder record date for either purpose shall be 14 days preceding the event.
Section 4. Seal:
The Corporation shall own a corporate seal which shall be circular in
form and have inscribed thereon its name and the date and state of its
incorporation.
Section 5. Contracts:
The Board of Directors may by resolution authorize any officer or agent
to enter into any contract or execute and deliver any instrument in the name of
or on behalf of the Corporation, and such authority may be general or confined
to specific instances; but absent the grant of such authority no individual,
other than the President, shall have power to bind the Corporation under any
contract, pledge its credit or render it liable for any purpose or in any
amount.
Section 6. Checks and Drafts:
All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the Corporation shall be
signed or endorsed by such person or persons and in such manner as shall be
determined by resolution of the Board of Directors.
<PAGE> 3
ARTICLE III
Shareholder Meetings and Voting Rights
Section 1. Annual Meeting:
The annual meeting of the Shareholders of the Corporation shall be held
on the first Tuesday of the fourth month following the close of the
Corporation's operational year. If that day is a legal holiday, the annual
meeting will be held on the first day thereafter that is not a legal holiday. At
the annual meeting the Shareholders, by vote of the holders of a majority of the
shares represented, shall elect a Board of Directors, consider reports of the
affairs of the Corporation and transact such other business as is properly
brought before the meeting.
Section 2. Special Meetings:
Special Shareholder meetings shall be held upon the direction of the
President or Board of Directors or upon the written request of the holders of
not less than ten percent of all shares entitled to vote.
Section 3. Place of Meeting:
All Shareholder meetings shall be held at the principal office of the
Corporation unless an alternate location shall be selected by the Board and
communicated to the Shareholders by written notice. The holders of a majority of
shares of the Corporation's outstanding voting stock shall have the right to
reject such alternative location by filing written notice to that effect with
the Secretary not less than two days prior to the called date of the meeting.
Section 4. Notice:
Written notice stating the place, day and hour of each Shareholder
meeting and, in the case of a special meeting, the nature of the business to be
transacted shall be delivered to each Shareholder of record entitled to vote not
less than ten days prior to the date of such meeting and otherwise in the manner
specified in the Florida Business Corporation Act. When a meeting is adjourned
for 30 days or more, notice of the adjourned meeting shall be given as in the
case of the original meeting; otherwise no notice of the adjournment or of the
business to be transacted at the adjourned meeting need be given other than by
way of an announcement made at the meeting at which such adjournment is taken.
Section 5. Voting List:
Unless the Corporation has fewer than six Shareholders, as of the date
fixed in accordance with the provisions of Article II, Section 3., the officer
or agent having charge of the Shareholder record books shall prepare a list of
the Shareholders entitled to vote at each Shareholder meeting or any adjournment
thereof, including the address of and the number and
<PAGE> 4
class and series, if any, of shares held by each. For a period of ten days prior
to the meeting, such list shall be kept at the Corporation's principal place of
business where any Shareholder shall be entitled to inspect it during usual
business hours. The list shall also be made available and subject to inspection
by any Shareholder at any time during the subject meeting.
Section 6. Substance of Meeting:
Any question may be considered and acted upon at an annual meeting, but
no question not stated in the call for a special meeting shall be acted upon
thereat unless the provisions of Article III, Section 9. or Article VI, Section
3. are complied with.
Section 7. Shareholders' Quorum and Voting Rights:
The holders of a majority of the shares entitled to vote, present in
person or represented by proxy, shall constitute a quorum at all meetings of the
Shareholders, unless otherwise provided by law, but a lesser interest may
adjourn any meeting from time to time until the requisite amount of voting
shares shall be present.
Each outstanding share of the Corporation's capital stock shall entitle
the holder of record to one vote. An affirmative vote of a majority of the
shares represented at each meeting shall decide any question brought before it,
unless the question is one upon which, by express provision of law, the
Corporation's Articles of Incorporation or these By-Laws, a larger or different
vote is required, in which case such express provision shall govern and control
the decision of such question.
Section 8. Proxies:
Every Shareholder entitled to vote, or to express consent to or dissent
from a proposed corporate action, may do so either in person or by written proxy
duly executed and filed with the Secretary of the Corporation. If a proxy is
executed, its use shall be controlled by the provisions of the Florida Business
Corporation Act.
Section 9. Action By Shareholders Without a Meeting:
Any action required or allowed to be taken at a meeting of Shareholders
may be taken without a meeting, prior notice or vote, if a written consent,
setting forth the action taken, shall be signed by the holders of outstanding
shares having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted, and the written consent specified in the
Florida Business Corporation Act shall be obtained and furnished to all
non-consenting Shareholders.
ARTICLE IV
Board of Directors
Section 1. Power and Responsibility:
<PAGE> 5
Subject to the limitations imposed by the Articles of Incorporation,
these By-Laws or the Florida Business Corporation Act, all corporate powers and
responsibilities shall be exercised by or under the authority of, and the
business and affairs of the Corporation shall be controlled by, the Board of
Directors.
Section 2. Number:
The number of directors which shall constitute the entire Board of
Directors shall be not less than one nor more than seven. Within these limits
the actual number constituting the entire Board shall be that fixed from time to
time by Board resolution, and until such time as the Board determines otherwise,
the number of directors shall be one. No reduction in the number of Directors
shall have the effect of removing any director prior to the expiration of his
term of office.
Section 3. Election and Term:
At the first annual Shareholder meeting and at each annual meeting
thereafter the Shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term for
which he is elected and until his successor shall have been elected and
qualified or until his earlier resignation, removal from office or death.
Section 4. Vacancy:
Any vacancy occurring in the Board of Directors, including any vacancy
created by reason of an increase in the number of directors, may be filled by
the affirmative vote of a majority of all remaining directors, even if less than
a quorum, and a director so chosen shall hold office only until the next
election of directors by the Shareholders. The Shareholders may at any time
elect a director to fill any vacancy not filled by the directors, and may elect
additional directors at a meeting at which an amendment of the By-Laws is voted
authorizing an increase in the number of directors.
Section 5. Removal:
At a meeting of Shareholders called expressly for that purpose, any
director or the entire Board may be removed, with or without cause, by a vote of
the holders of a majority of the shares then entitled to vote at an election of
directors.
Section 6. Presumption of Assent:
A director of the Corporation who is present at a meeting of its Board
of Directors at which action on any corporate matter is taken shall be presumed
to have assented to the action taken unless he votes against such action or
abstains from voting in respect thereto because of an asserted conflict of
interest.
Section 7. Quorum and Voting:
<PAGE> 6
A majority of the number of directors fixed in the manner prescribed in
Article IV, Section 2 of these By-Laws shall constitute a quorum for the
transaction of business. The action of a majority of the directors present at
any meeting at which there is a quorum, when legally assembled, shall be a valid
corporate action.
Section 8. Director Conflicts of Interest:
The legal effectiveness or enforceability of any contract or other
transaction authorized by the Corporation's Board, any committee thereof or its
Shareholders which may present a conflict of interest as contemplated by the
Florida Business Corporation Act shall be determined by the provisions thereof.
Directors whose relationship with another person or entity is the source of such
potential conflict of interest may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or a committee thereof which
authorizes, approves or ratifies such contract or transaction.
Section 9. Executive and Other Committees:
(a) By resolution adopted by a majority of the entire Board of
Directors, there may be designated from among its members an executive
committee and other committees each of which, to the extent provided in
such resolution, shall have and may exercise all the authority of the
Board of Directors, except with respect to those matters which by law
are precluded from being delegated to a committee.
(b) Each committee (including the members thereof) shall serve
at the pleasure of the Board and shall keep minutes and report the same
to the Board. The Board may
designate one or more directors as alternate members of any committee.
In the absence or upon the disqualification of a member of a committee,
if no alternate member has been designated by the Board, the members
present at any meeting and not disqualified from voting, whether or not
they constitute a quorum, may unanimously appoint another member of the
Board to act at the meeting in the place of the absent or disqualified
member.
(c) A majority of all members of a committee shall constitute
a quorum for the transaction of business, and the vote of a majority of
all the members of a committee present at a meeting at which a quorum
is present shall be the act of the committee. Each committee shall
adopt whatever other rules of procedure it determines appropriate for
the conduct of its activities.
Section 10. Place of Meeting:
Meetings of the Board of Directors may be held at any location
specified in the call of the meeting or as agreed to by the directors.
Section 11. Time, Notice and Call of Meetings:
<PAGE> 7
(a) Annual Meeting: Promptly following the adjournment of each
annual Shareholder meeting, the Board of Directors elected thereat
shall, without notice, convene an annual meeting and organize by the
election of a Chairman who shall preside over its further conduct.
(b) Regular Meeting: Regular meetings of the Board may be held
during each annual period in accordance with such schedule as may be
agreed to by the Board at its annual meeting. No notice need be given
of such regular meetings.
(c) Special Meetings: Special meetings of the Board shall be
held from time to time upon call issued by the Chairman of the Board,
any two directors, or the President or Vice-President of the
Corporation. Written notice of the time and place of each special
meeting shall be delivered personally to all directors or sent to each
by telegram or letter, charges prepaid, addressed to him at his address
shown on the records of the Corporation or as otherwise actually known
by the Secretary. If notice is mailed or telegraphed, it shall
constitute sufficient notice if it is delivered to the above address
not less than 24 hours prior to the time of the holding of the meeting.
(d) Adjournment: A majority of the directors present, whether
or not a quorum exists, may adjourn any meeting of the Board to another
time and place. Notice of the time and place of holding such adjourned
meeting need not be given if they are fixed at the meeting adjourned
and while a quorum is present; otherwise, notice shall be given to all
directors in the manner directed in subsection (c) above.
Section 12. Action Without a Meeting:
Any action required or permitted to be taken by the Board or a
committee thereof may be taken without a meeting if all members shall
individually or collectively consent in writing to such action. Such written
consent shall be filed in the minutes of the proceedings of the Board or
committee and shall have the same effect as a unanimous vote in favor of the
action consented to.
ARTICLE V
Officers
Section 1. Composition and Term:
The officers of the Corporation shall consist of a President,
Vice-President, Secretary, Treasurer and such other officers with such titles,
duties and powers as may be prescribed by the Board of Directors. All officers
shall be elected by and serve at the pleasure of the Board.
Section 2. Election:
<PAGE> 8
At their annual meeting the Directors shall elect officers of the
Corporation, any of whom may but need not be members of the Board. Any two or
more of such offices may be held by the same individual.
Section 3. Resignation or Removal:
Any officer may resign by giving written notice to the Board of
Directors, the President or the Secretary. Such resignation shall take effect
upon receipt of the notice, or at any later time specified therein (subject to
the Board's right of removal), and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
Any officer may be removed, with or without cause, by action of a
majority of the entire Board taken at any regular or special meeting of the
Board, or by another officer upon whom such power of removal is expressly
conferred by the Board.
Section 4. Vacancy:
A vacancy in any office shall be filled by action of the Board, and its
appointee shall hold office for the unexpired term or until his successor is
elected and qualified.
Section 5. President:
The President shall be the principal executive officer of the
Corporation, and, subject to the control of the Board, shall generally supervise
and control all of the business and affairs of the Corporation. He shall preside
at all meetings of the Shareholders and, unless a Chairman of the Board of
Directors has been elected and is present, shall preside at meetings of the
Board of Directors. He shall be an ex-officio member of all committees appointed
by the Board, and shall have the general powers and duties customarily performed
and exercised by the chief executive officer of any Corporation for profit
organized under the laws of Florida, as well as such additional powers or duties
as may be prescribed by these By-Laws or the Board.
Section 6. Vice-President:
In the absence of the President or in the event of his death, inability
or refusal to act, the Vice-President shall be vested with the powers and duties
of the President. Any Vice-President may sign, with the Secretary, share
certificates issued by the Corporation; and shall perform such other duties as
from time to time may be assigned to him by the Board of Directors or President.
Section 7. Secretary:
The Secretary shall keep, or cause to be kept, a book of minutes at the
principal office or such other place as the Board of Directors and Shareholders
may designate, a current Shareholder record book, showing the names of all
Shareholders and their addresses; and a record of all meetings conducted by the
Shareholders, Directors or Director Committees, which latter record shall
include the time and place of holding, whether regular or special, and, if
special, how authorized, the notice thereof given, the names of those present at
directors'
<PAGE> 9
meetings, the number of shares present or represented at Shareholders' meetings,
and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office
or at the office of the Corporation's transfer agent, a Shareholder record, or a
duplicate Shareholder record, showing the names of the Shareholders and their
addresses, the number and classes of shares held by each, the number and date of
certificates issued for the same, and the number and date of cancellation of
every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the
meetings of the Shareholders and of the Board of Directors required by the
By-Laws or by law to be given, and he shall keep the seal of the Corporation and
affix said seal to all documents requiring a seal, and shall have such other
powers and perform such other duties as may be prescribed by the Board of
Directors or the By-Laws.
Section 8. Treasurer:
The Treasurer shall have custody of all corporate funds, securities,
valuable papers and financial records; shall keep full and accurate accounts of
receipts and disbursements and render accounts thereof at the annual meetings of
Shareholders and at such other times as requested by the Board or President; and
shall perform such other duties as may be prescribed by the Board or President.
Section 9. Assistant:
Any Assistant Secretary or Assistant Treasurer, respectively, may
exercise any of the powers of Secretary or Treasurer, respectively, as provided
in these By-Laws or as directed by the Board of Directors, and shall perform
such other duties as may be prescribed by the Board or President.
ARTICLE VI
Miscellaneous
Section 1. Parliamentary Procedure:
When not in conflict with these By-Laws, Roberts Rules of Parliamentary
Procedure shall establish the rules at all Shareholder and director meetings.
Section 2. Fiscal Year:
The fiscal year of the Corporation shall be fixed, and shall be subject
to change, by the Board.
Section 3. Consent to Meeting:
<PAGE> 10
The transactions approved at any meeting of Shareholders or the Board
of Directors, however called and noticed, shall be as valid as though acted upon
at a meeting duly held after regular call and notice, if a quorum is present
(either in person or by proxy in the case of a Shareholder meeting) and if,
either before or after the meeting, each of the Shareholders entitled to vote or
directors, as the case may be, not present (or represented by proxy in the case
of a Shareholder meeting) signs a written waiver of notice, or a consent to the
holding of such meeting, or an approval of the minutes thereof. All such
waivers, consents or approvals shall be filed with the corporate records or made
a part of the minutes of the meeting. Personal representatives, trustees and
other fiduciaries entitled to vote shares may sign such waivers, consents or
approvals.
Section 4. Amendment and Repeal of By-Laws:
(a) By Shareholders: New By-Laws may be adopted or these
By-Laws may be repealed or amended at the annual or any other meeting
of Shareholders called for that purpose, by a vote of Shareholders
entitled to exercise a majority of the voting power of the Corporation,
or by the written assent of such Shareholders.
(b) By Board of Directors: Subject to the right of the
Shareholders to adopt, amend or repeal By-Laws, as provided in this
section, the Board of Directors may adopt, amend or repeal any of these
By-Laws including the By-Law or amendment thereof changing the
authorized number of directors.
(c) Record of Amendments: Whenever an amendment to or repeal
of any existing By-Law is adopted, or an additional By-Law provision is
approved, a replacement page containing such new material and noting
the date and manner of its adoption shall be inserted in the original
By-Laws, in the appropriate place.
169884.1
<PAGE> 1
EXHIBIT 10
Employment Agreement
Agreement made as of January 1, 2000, by and between Split Second
Trading, Inc., a Florida corporation (the "Company") having its principal place
of business at 100 South Ashley Drive, Suite 2050, Tampa, Florida 33602 and
George Carapella (the "Employee") currently residing at 3818 South Nine Drive,
Valrico, Florida 33594.
BACKGROUND INFORMATION
The Company wishes to secure the employment services of the Employee
for a definite period of time and upon the particular terms and conditions
hereinafter set forth. The Employee is willing to be so employed. Accordingly,
the parties agree as follows:
OPERATIVE PROVISIONS
1. Employment and Term.
The Company hereby employs Employee and the latter hereby accepts
employment by the Company for the three year period commencing on January 1,
2000 (the "Commencement Date") and expiring December 31, 2002 (the "Initial
Term"), which employment shall be automatically extended for unlimited
successive one year periods (each a "Successor Term") unless it is terminated
during the pendency of any such term, whether Initial or Successor, by the
occurrence of one of the events described in Section 8. hereof, or at the end of
any such term (subject to extension by operation of the disability provisions
contained in Section 8.) by one party furnishing the other with written notice,
at least 60 days prior to the expiration of such term, of an intent to terminate
this Agreement upon the expiration of such term.
2. Duties.
During the term of this Agreement, whether Initial or Successor, the
Employee shall render to the Company services as Chief Executive Officer, and
shall perform such duties as may be designated by and subject to the supervision
of the Company's board of directors, and shall serve in such additional
capacities appropriate to his responsibilities and skills as shall be designated
by the Company, through action of its board of directors. During such period,
the Employee shall devote his full attention, time and energies to the business
and affairs of the Company (subject to the terms of Section 4. below), and will
use his best efforts to promote the interests and reputation of the Company.
Hours of service to the Company during the term of this agreement shall be a
minimum of 40 per week and otherwise as reasonably determined by the Company's
board of directors.
<PAGE> 2
3. Compensation. For the services to be rendered by the Employee under
this agreement the Company shall pay him, while he is rendering such services
and performing his duties hereunder, and the Employee shall accept as full
payment for such service, a base compensation of $120,000 per year (inclusive of
any amounts subject to federal or state employment related withholding
requirements), payable in arrears in equal installments on the last business day
of each month occurring during the period of employment or otherwise as the
parties may agree, in addition, Employee will receive an automobile allowance of
$400.00 per month.
4. Vacation; Fringe Benefits; Moving Expense; Reimbursement of
Expenses.
a. Vacation. The Employee shall be entitled to two weeks of fully paid
vacation during each year of the Initial Term and during each Successor Term of
this Agreement. He shall not be entitled to receive monetary or other valuable
consideration for vacation time to which he is entitled but does not take. The
timing of vacation periods shall be within the discretion of the Company,
reasonably exercised so as not to unnecessarily inconvenience the Employee.
b. Fringe Benefits. During his period of employment hereunder, the
Employee shall further be entitled to (i) such leave by reason of physical or
mental disability or incapacity and to such participation in medical and life
insurance, pension benefits, disability and other fringe benefit plans as the
Company may make generally available to all of its executive employees from
time to time; subject, however, as to such plans, to such budgetary constraints
or other limitations as may be imposed by the Board of Directors of the Company
from time to time; and (ii) reimbursement for all normal and reasonable
expenses necessarily incurred by him in the performance of his obligations
hereunder, subject to such reasonable substantiation requirements as may be
imposed by the Company.
5. Proprietary Interests of the Company.
a. Proprietary Interests - Company. During or after the expiration of
his term of employment with the Company, the Employee shall not communicate or
divulge to, or use for the benefit of, any individual, association,
partnership, trust, corporation or other entity except the Company, any
proprietary information of the Company received by the Employee by virtue of
his employment by the Company, without first being in receipt of the Company's
written consent to do so. The term proprietary information shall include, but
not be limited to, the Company's customer list, prospect list, and information
or research concerning the broker/dealer industry. This paragraph relates to
all written documentation related to the Employee's employment, whether
furnished to him by the Company, or compiled by him in connection with his
duties. It is expressly understood and agreed that all such information is the
property of the Company and must be immediately returned to the Company upon
notice of termination either by the Company or by the Employee. It is further
understood and agreed that non-disclosure also applies to information known to
the Employee but not reduced to written or recorded form.
-2-
<PAGE> 3
6. Restrictive Covenant.
a. Scope of Covenant. Subject to the provisions of Section 8(d) below,
the Employee shall not, within any state within which the Company is actively
engaged in the conduct of its business, during the term of this Agreement and
the two year period following termination of such employment, engage or become
interested in, directly or indirectly, as owner, shareholder, partner,
co-venturer, director, officer, employee, agent, consultant or otherwise, any
activity which is then engaged in by the Company and which activity is under the
control of the Employee, nor, during the term of this Agreement and the two year
post-termination period, employ or attempt to employ any employee or independent
contractor of the Company or otherwise encourage or attempt to encourage any
employee or independent contractor of the Company to leave the Company's employ.
b. Confidentiality; Disclosure; Proprietary Information. The Employee
acknowledges that all records with respect to customers serviced by the Company
or with respect to employees of the Company("Associated Employees") and lists of
customers or proposed customers of the Company, or of Associated Employees, and
all personal, financial or business information concerning the customers or
proposed customers of the Company, or of Associated Employees, obtained by the
Employee during the course of the Employee's employment by the Company, are
valuable and unique and are proprietary assets of the Company. During the
Employee's employment by the Company and following the termination thereof, the
Employee will not at any time disclose any of the records, lists or information
previously described in this subsection, nor utilize the same for any reason not
previously authorized in writing by the Company.
c. Divisibility of Covenant Period. If any portion of the restrictive
covenant contained herein is held to be unreasonable, arbitrary or against
public policy, each covenant shall be considered divisible both as to time and
geographic area, such that each month within the specified period shall be
deemed a separate period of time and each state shall be deemed a separate
geographical area, resulting in an intended requirement that the longest lesser
time and largest lesser geographic area determined not to be unreasonable,
arbitrary or against public policy shall remain effective and be specifically
enforceable against the Employee.
d. Covenant Independent. Each restrictive covenant on the part of the
Employee set forth in this Agreement shall be construed as a covenant
independent of any other covenant or provision of this Agreement or any other
agreement which the Employee may have, whether fully performed or executory,
and the existence of any claim or cause of action by the Employee against the
Company, whether predicated upon another covenant or provision of this
Agreement or otherwise, shall not constitute a defense to the enforcement by
the Company of any other covenant.
h. Survival of Covenants. All restrictive covenants contained in this
Agreement shall survive the termination of this Agreement.
-3-
<PAGE> 4
7. Remedies for Breach of Employee's Obligations.
The parties agree that the services of the Employee are of a personal,
specific, unique and extraordinary character and cannot be readily replaced by
the Company. They further agree that in the course of performing his services,
the Employee will have access to various types of proprietary information of
the Company, which, if released to others or used by the Employee other than
for the benefit of the Company, in either case without the Company's consent,
could cause the Company to suffer irreparable injury. Therefore, the
obligations of the Employee established under ss.ss. 5. and 6. hereof shall be
enforceable both at law and in equity, by injunction, specific performance,
damages or other remedy; and the right of the Company to obtain any such remedy
shall be cumulative and not alternative and shall not be exhausted by any one
or more uses thereof.
8. Termination of Employment.
a. Death. The Employee's employment hereunder shall terminate in the
event of the Employee's death. Except for any salary and benefits accrued,
vested and unpaid as of the date of any such termination and except for any
benefits to which the Employee or his heirs or personal representatives may be
entitled under and in accordance with the terms of any employee benefit plan,
policy or program maintained by the Company, the Company shall be under no
further obligation hereunder to the Employee or to his heirs or personal
representatives, and the Employee or his heirs or personal representatives no
longer shall be entitled to receive any payments or any other rights or
benefits under this Agreement.
b. Disability. The Company may terminate the Employee's employment
hereunder for disability if an independent physician mutually selected by the
Employee (or his legal representative) and the Board of Directors or its
designee (or, upon an inability of such parties to effect the selection within
a period of ten days, by the independent certified public accounting firm then
serving the Company) shall have determined that the Employee has been
substantially unable to render to the Company services of the character
contemplated by Section 2. of this Agreement, by reason of a physical or mental
illness or other condition, for more than 90 consecutive days or for shorter
periods aggregating more than 120 days in any period of 12 consecutive months
(excluding in each case days on which the Employee shall be on vacation). In
the event of such disability, the Employee shall be entitled to receive any
salary and benefits accrued, vested and unpaid as of the date of any such
termination and any benefits to which the Employee may be entitled under and in
accordance with the terms of any employee benefit plan, policy or program
maintained by the Company; and upon the Employee's receipt of such salary and
benefits the Company shall be under no further obligation hereunder to the
Employee and the Employee no longer shall be entitled to receive any payments
or any other rights or benefits under this Agreement.
c. Termination by the Company. The Company may, at any time after the
expiration of the first six months of this Agreement, terminate the Employee's
employment hereunder at any
-4-
<PAGE> 5
time, and such termination shall be effective immediately (the "Termination
Notice"). If the Employee is terminated pursuant to this Section 8(c), the
Company shall continue to pay the Employee the base compensation specified in
Section 3(a) above that he otherwise would have received, in monthly
installments, until the expiration of the six month period following the date
of the Termination Notice.
d. Applicability of Restrictive Covenant. If the Company terminates the
Employee's employment under the provisions of Section 8(c), and such termination
shall not be "for cause", then the Company shall not be entitled to enforce the
provisions of the restrictive covenant set forth in Section 6(a) above. For
purposes of this Agreement, "for cause" shall mean any of the following: (i) the
Employee's repeated willful misconduct or gross negligence; (ii) the Employee's
repeated conscious disregard of his obligations hereunder or of any other
written duties reasonably assigned to him by the Board of Directors; (iii) the
Employee's repeated conscious violation of any provision of the Company's
by-laws or of its other stated policies, standards or regulations; (iv) the
Employee's commission of any act involving fraud or moral turpitude; or (v) a
determination that the Employee has demonstrated a dependence upon any addictive
substance, including alcohol, controlled substances, narcotics or barbiturates.
e. Procedural Safeguards - Termination For Cause. If the Board of
Directors of the Company determines that the basis for terminating the Employee
is: (i) one of the reasons set forth in clause (i), (ii) or (iii) of Section
8(d), the Company must be able to demonstrate that, within the 60 day period
immediately following the alleged occurrence of each proscribed act or omission
preceding the act or omission upon which it is basing its right to effect a
termination "for cause", it furnished to the Employee a written description of
the allegedly proscribed act or omission and a statement advising him that the
Company views such conduct as being of the type which could lead to a
termination of the Employee "for cause"; (ii) one of the reasons set forth in
clause (ii) or (iii) of Section 8(d), the Board must be able to demonstrate that
the Employee has been furnished with a copy of the written duty, by-law
provision, policy, standard or regulation, the violation of which the Employee
is being accused, at a time prior to the alleged commission of the violation; or
(iii) one of the reasons in clause (iv) or (v) of Section 8(d), the Board shall
first be required to obtain an opinion from the Company's legal counsel to the
effect that there is an adequate basis upon which either such determination may
be made.
f. Litigation Regarding the Employee's Former Restrictive Covenant. In
the event that any former employer brings an action against the Employee, and/or
the Company, maintaining that the Employee breached the terms of any
confidentiality agreement, employment agreement or other agreement restricting
the Employee's subsequent employment, and is successful in that litigation
(either by obtaining an injunction against the Company's continued employment of
the Employee or a monetary judgment against the Company), then the Company shall
have the option, at the election of its Board of Directors, to terminate this
Agreement immediately, in which case, notwithstanding the provisions of Section
8(c) above, the Company shall have no further obligation to pay the Employee any
additional compensation under this Agreement.
-5-
<PAGE> 6
g. Costs of Litigation. In the event that the Company elects to
terminate this Agreement in accordance with the terms of Section 8(f) above, the
Company shall be responsible for all legal fees and costs associated with
defending the action brought against the Company, and/or the Employee.
Conversely, in the event that the Company is successful in defending a claim
brought against it, or, if unsuccessful in such litigation, but nevertheless
does not choose to terminate this Agreement, then the legal fees and costs
associated with defending the action shall be borne in the following
percentages: (i) 50% - the Company; and (ii) 50% - the Employee. The Company
agrees to advance the costs of defending such action, however, the Employee
shall be required to reimburse the Company in two installments, payable out of
the Employee's bonus described in Section 3 above. In no event shall the
Employee's portion of the legal fees and costs that he is to reimburse the
Company exceed $25,000.
9. Indebtedness of Employee. If, during the course of his employment,
Employee becomes indebted to the Company for any reason, the Company shall, if
it so elects, have the right to set-off and to collect any sums due it from the
Employee out of any amounts which it may owe to the Employee for unpaid
compensation. In the event that this Agreement terminates for any reason, all
sums owed by the Employee to the Company shall become immediately due and
payable.
10. Miscellaneous Provisions.
a. Nonassignability: Neither this agreement nor any right or interest
hereunder shall be assignable by the Employee.
b. Enforceability: If any term or condition or this agreement shall be
invalid or unenforceable to any extent or in any application, then the remainder
of this agreement, and such term or condition except to such extent or in such
application, shall not be affected thereby and each and every term and condition
of this agreement shall be valid and enforced to the fullest extent and in the
broadest application permitted by law.
c. Notice: All notices or other communications required or permitted to
be given pursuant to this Agreement shall be in writing and shall be made by:
(i) certified mail, return receipt requested; (ii) Federal Express, Express
Mail, or similar overnight delivery or courier service; or (iii) delivery (in
person or by facsimile or similar telecommunication transmission) to the party
to whom it is to be given, to the address appearing elsewhere in this Agreement
or to such other address as any party hereto may have designated by written
notice forwarded to the other party in accordance with the provisions of this
Section 10(c). Any notice or other communication given by certified mail shall
be deemed given at the time of certification thereof, except for a notice
changing a party's address which shall be deemed given at the time of receipt
thereof. Any notice given by other means permitted by this Section 10(c) shall
be deemed given at the time of receipt thereof.
-6-
<PAGE> 7
d. Application of Florida Law: This agreement, and the application or
interpretation thereof, shall be governed exclusively by its terms and by the
laws of the State of Florida. Venue shall be deemed located in Palm Beach
County, Florida.
e. Counterparts: This agreement may be executed by any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
f. Binding Effect: Each of the provisions and agreements herein
contained shall be binding upon and enure to the benefit of the personal
representatives, devisees, heirs, successors, transferees and assigns of the
respective parties hereto.
g. Legal Fees and Costs: If a legal action is initiated by any party to
this Agreement against another, arising out of or relating to the alleged
performance or non-performance of any right or obligation established hereunder,
or any dispute concerning the same, any and all fees, costs and expenses
reasonably incurred by each successful party or his or its legal counsel in
investigating, preparing for, prosecuting, defending against, or providing
evidence, producing documents or taking any other action in respect of, such
action shall be the joint and several obligation of and shall be paid or
reimbursed by the unsuccessful party(ies).
h. Jurisdiction: The parties agree that, irrespective of any wording
that might be construed to be in conflict with this paragraph, this agreement is
one for performance in Florida. The parties to this agreement agree that they
waive any objection, constitutional, statutory or otherwise, to a Florida
court's taking jurisdiction of any dispute between them. By entering into this
agreement, the parties, and each of them understand that they might be called
upon to answer a claim asserted in a Florida court.
In witness whereof, the parties have executed this Agreement the date
first set forth above.
Attest: Split Second Trading, Inc.
By: /s/ George Carapella
---------------------------
George Carapella, President
-7-
<PAGE> 1
Exhibit 23
[LETTERHEAD]
BAUMANN, STAHL, RAYMONDO
& COMPANY PA
11210 North Dale Mabry,
Tampa, FL 33618-3881
Securities and Exchange Commission
Washington, DC
Gentlemen:
We hereby consent to the use of our unqualified report dated January 6, 2000
covering the audit of the financial statements of Split Second Trading, Inc.
(the "Company") at January 6, 2000 and for the period from January 6, 1999
(inception) to January 6, 2000, issued in connection with the Company's
registration statement under the Securities Act of 1993 under Form SB-2.
Very truly yours,
/s/ Baumann, Stahl, Raymondo & Company, P.A.
- -------------------------------------------
Baumann, Stahl, Raymondo & Company, P.A.
Tampa, Florida
April 6, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AUDITED
FINANCIAL STATEMENTS AT JANUARY 6, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH SB-2 REGISTRATION
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-6-1999
<PERIOD-END> DEC-31-1999
<CASH> 20
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,020
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,224
<CURRENT-LIABILITIES> 0
<BONDS> 13,085
0
0
<COMMON> 4,000
<OTHER-SE> 5,020
<TOTAL-LIABILITY-AND-EQUITY> 8,224
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 13,881
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,881)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
