<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
Registration Statement on Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
PROCESS TECHNOLOGY SYSTEMS, INC.
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(Name of Small Business Issuer as specified in its charter)
NEVADA Applied For
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(State or other jurisdiction of (I.R.S. incorporation or
organization) Employer I.D. No.)
6371 Richmond, #200
Houston, Texas 77057
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(Address of Principal Executive Office)
Issuer's Telephone Number, including Area Code: (713) 266-8005
Securities registered pursuant to Section 12(b) of the Exchange Act:
None
Securities registered pursuant to Section 12(g) of the Exchange Act:
$0.002 par value common stock
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Title of Class
DOCUMENTS INCORPORATED BY REFERENCE: None. See the Exhibit Index herein.
<PAGE>
PART I
Item 1. Description of Business.
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Business Development.
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Organization and Charter Amendments.
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Process Technology Systems, Inc. ("Process Technology") was
organized under the laws of the State of Nevada on May 12, 1987, under the
name "Process Technology, Inc." It was formed to engage in any lawful
activity.
Process Technology's initial authorized capital consisted of
25,000,000 shares of $0.002 par value common voting stock, and 12,500,000
shares of $0.25 par value preferred stock.
On November 11, 1998, Process Technology was revived under the name
"Process Technology Systems, Inc." because the name "Process Technology, Inc."
was not available.
In February, 2000, a Certificate of Amendment was filed with the
State of Nevada regarding the preferred stock of Process Technology which is
presently issued and outstanding. The rights, privileges and preferences of
this class of preferred stock were not previously set forth in the original
Articles of Incorporation or an amendment.
Copies of the Initial Articles of Incorporation, as amended, and By-
Laws are attached hereto and incorporated by reference. See Part III, Item 1.
Public Offering.
----------------
Pursuant to a prospectus dated September 9, 1987, Process Technology
conducted a public offering of certain units comprised of common stock and
warrants at one $1.00 per unit within the State of Nevada. The offer and sale
of these securities were registered with the Nevada Securities Division
pursuant to Section 90.150 of the Nevada Revised Statutes, as amended ("NRS"),
for the purpose of selling its securities in a "public" intrastate offering
exclusively in the State of Nevada, pursuant to Section 90.140 of the NRS,
and pursuant to Rule 504 of Regulation D promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "1933
Act").
Sales of "unregistered" and "restricted" securities during the past three
years.
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See the caption "Recent Sales of Unregistered Securities, "Part II,
Item 4.
Business.
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The only present material operations of Process Technology involve
the seeking and investigating of potential assets, property or businesses to
acquire; it is seeking a "reverse" acquisition, reorganization or merger
transaction, whereby the acquired entity will control Process Technology,
thereby becoming a publicly-held company.
Process Technology has limited assets and conducts no material other
business; therefore, management anticipates that any such venture would
require Process Technology to issue shares of its "restricted securities"
(common stock) as the sole consideration for the venture. This may result in
substantial dilution of the percentage of share ownership of current
stockholders. Process Technology's Board of Directors shall make the final
determination whether to complete any such venture; and the approval of
stockholders will not be sought unless required by applicable laws, rules and
regulations, its Articles of Incorporation, By-Laws or contract. Neither
Process Technology's Articles of Incorporation require stockholder approval
for any such acquisition or reorganization; however, transactions whereby the
acquired entity is merged into Process Technology may require approval by
stockholders owning a majority of the outstanding voting securities, following
adoption by the Board of Directors, in accordance with the NRS. There is no
assurance that any future enterprise will be profitable or successful. If the
vote or consent of stockholders is required, Process Technology would be
required to file with the Securities and Exchange Commission and provide to
its stockholders a proxy or information statement in compliance with
Regulation 14A or C promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended (the "1934 Act").
No disclosure documentation will be provided to stockholders prior
to any acquisition or reorganization transaction not requiring stockholder
approval. Process Technology will be required to disclose any such
transaction in an 8-K Current Report to be filed with the Securities and
Exchange Commission within 15 days of the occurrence of the event, and as soon
as available or not later than 75 days, to file an amendment to the 8-K
Current Report containing audited financial statements of the business
acquired, as well as pro forma financial information consisting of a pro forma
condensed balance sheet, pro forma statements of income and accompanying
explanatory notes. The audited financial statements must be for the most
recent fiscal or calendar year, with a two year audited statement of income,
if applicable; quarterly periods subsequent to the audited year end may be
presented in unaudited form.
Process Technology recognizes that the number of suitable potential
business ventures that may be available to it may be extremely limited, and
may be restricted to entities who desire to avoid what these entities may deem
to be the adverse factors related to an initial public offering ("IPO"). The
most prevalent of these factors include the substantial time requirements for
filing and completing an IPO, legal and accounting costs, the inability to
obtain an underwriter who is willing to publicly offer and sell the shares,
the lack of or the inability to obtain the required financial statements for
such an undertaking, state limitations on the amount of dilution to public
investors in comparison to the stockholders of any such entities, along with
other conditions or requirements imposed by various federal and state agencies
or applicable securities laws, rules and regulations. Any of these types of
entities, regardless of their prospects, would require Process Technology to
issue a substantial number of shares of its common stock to complete any such
acquisition, reorganization or merger, usually amounting to between 80% and
95% of the outstanding shares of Process Technology following the completion
of any such transaction; accordingly, investments in any such private entity,
if available, would be much more favorable than any investment in Process
Technology.
Process Technology does not intend to restrict its search to any
particular business or industry, and the areas in which it will seek out
acquisitions, reorganizations or mergers may include, but will not be limited
to, the fields of high technology and the Internet, manufacturing, natural
resources, service, research and development, communications, transportation,
insurance, brokerage, finance and all medically related fields, among others.
Management intends to consider a number of factors prior to making
any decision as to whether to participate in any specific business endeavor,
none of which may be determinative or provide any assurance of success. These
may include, but will not be limited to an analysis of the quality of the
entity's management personnel; the anticipated acceptability of any new
products or marketing concepts; the merit of technological changes; the
candidate's present financial condition, projected growth potential and
available technical, financial and managerial resources; its working capital,
history of operations and future prospects; the nature of its present and
expected competition; the quality and experience of the candidate's management
services and the depth of its management; its potential for further research,
development or exploration; risk factors specifically related to its business
operations; its potential for growth, expansion and profit; the perceived
public recognition or acceptance of the candidate's products, services,
trademarks and name identification; and numerous other factors which are
difficult, if not impossible, to properly or accurately analyze, let alone
describe or identify, without referring to specific objective criteria.
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of
changing market strategies, plant or product expansion, changes in product
emphasis, future management personnel and changes in innumerable other
factors. Further, in the case of a new business venture or one that is in the
research and development mode, the risks will be substantial, and there will
be no objective criteria to examine the effectiveness or the abilities of its
management or its business objectives. Further, a firm market for its products
or services may yet need to be established, and with no past track record, the
profitability of any such enterprise will be unproven and cannot be predicted
with any certainty.
Management will attempt to meet personally with management and key
personnel of the acquisition, reorganization or merger candidate, and to visit
and inspect material facilities, obtain independent analysis or verification
of information provided and gathered, check references of management and key
personnel and conduct other reasonably prudent measures calculated to ensure a
reasonably thorough review of any particular business opportunity; however,
due to time constraints of management and their present involvement with
EuroTrade Financial, Inc. ("EuroTrade"), these activities may be limited. See
the heading "Business Experience," Part I, Item 5.
EuroTrade was incorporated under the laws of the State of Texas in
approximately March, 1994. EuroTrade is owned by the Thompson Family 1993
Trust, of which the children of W. Scott Thompson, a director and executive
officer of Process Technology, are the sole beneficiaries. Mr. Thompson is
the President and a director of EuroTrade. William A. Silvey, Jr., the other
director and executive officer of Process Technology, is not an affiliate of
EuroTrade. EuroTrade facilitates reorganizations, workouts and turnarounds of
financially distressed companies.
Process Technology is unable to predict the time as to when and if it
may actually participate in any specific business endeavor. Management
anticipates that proposed business ventures will be made available to it
through personal contacts of directors, executive officers and principal
stockholders, professional advisors, broker/dealers in securities, venture
capital personnel, members of the financial community and others who may
present unsolicited proposals. In certain cases, Process Technology may agree
to pay a finder's fee or to otherwise compensate the persons who submit a
potential business endeavor in which it eventually participates. Such persons
may include its directors, executive officers, beneficial owners of securities
of Process Technology or their affiliates. In this event, such fees may become
a factor in negotiations regarding a potential acquisition and, accordingly,
may present a conflict of interest for such individuals. Management will not
acquire or merge with any business in which it has an ownership interest.
Process Technology's past and present directors and executive
officers have not used any particular consultants, advisors or finders on a
regular basis.
Process Technology may compensate members of management in the
future for services that they may perform. Because Process Technology
currently has extremely limited resources, and is unlikely to have any
significant resources until it has completed an acquisition, reorganization or
merger, management expects that any such compensation would take the form of
an issuance of Process Technology's "restricted securities" (common stock)to
these persons; this would have the effect of further diluting the holdings of
its other stockholders. There are no present arrangements or plans to pay any
such compensation; however, see the caption "Recent Sales of Unregistered
Securities," Part II, Item 4.
Further, substantial fees are often paid in connection with the
completion of these types of acquisitions, reorganizations or mergers, ranging
from a small amount to as much as $350,000. These fees are usually divided
among promoters or founders, after deduction of legal, accounting and other
related expenses, and it is not unusual for a portion of these fees to be paid
to members of management or to principal stockholders as consideration for
their agreement to retire a portion of the shares of common stock owned by
them. Members of management may actively negotiate or otherwise consent to the
purchase of all or any portion of their common stock as a condition to, or in
connection with, a proposed acquisition, reorganization or merger. It is not
anticipated that any such opportunity will be afforded to other stockholders
or that other stockholders will be afforded the opportunity to approve or
consent to any particular stock buy-out transactions. In the event that such
fees are paid, they may become a factor in negotiations regarding any
potential acquisition by Process Technology and, accordingly, may present a
conflict of interest for such individuals.
None of Process Technology's directors, executive officers or
promoters, or their affiliates or associates, has had any negotiations with
any representatives of the owners of any business or enterprise regarding the
possibility of an acquisition, reorganization or merger transaction with
Process Technology. Nor are there any present plans, proposals, arrangements
or understandings with anyone regarding the possibility of any acquisition,
reorganization or merger involving Process Technology.
Risk Factors.
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In any business venture, there are substantial risks specific to the
particular enterprise which cannot be ascertained until a potential
acquisition, reorganization or merger candidate has been identified; however,
at a minimum, Process Technology's present and proposed business operations
will be highly speculative and will be subject to the same types of risks
inherent in any new or unproven venture, and will include those types of risk
factors which are outlined below.
Extremely Limited Assets; No Source of Revenue.
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Process Technology has virtually no assets and has had no revenue
for over five years or to the date hereof. Nor will Process Technology
receive any revenues until it completes an acquisition, reorganization or
merger, at the earliest. Process Technology can provide no assurance that any
acquired business will produce any material revenues for it or its
stockholders or that any such business will operate on a profitable basis.
Absence of Substantive Disclosure Relating to Prospective
Acquisitions.
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Process Technology has not yet identified any assets, property or
business that it may acquire, so potential investors will have virtually no
substantive information upon which to base a decision whether to invest in
Process Technology. Potential investors would have access to significantly
more information if Process Technology had already identified a potential
acquisition, reorganization or merger candidate or if the candidate had made
an offering of its securities directly to the public in an IPO. Process
Technology can provide no assurance that any investment in it will not
ultimately prove to be less favorable than such a direct investment.
Unspecified Industry and Acquired Business; Unascertainable Risks.
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To date, Process Technology has not identified any particular
industry or business in which to concentrate its acquisition efforts.
Accordingly, prospective investors currently have no basis to evaluate the
comparative risks and merits of investing in the industry or business in
which Process Technology may acquire. To the extent that Process Technology
may acquire a business in a high risk industry, it will become subject to
those risks. Similarly, if it acquires a financially unstable business or a
business that is in the early stages of development, it will become subject to
the numerous risks to which such businesses are subject. Although management
intends to consider the risks inherent in any industry and business in which
it may become involved, there can be no assurance that it will correctly
assess such risks.
Uncertain Structure of Acquisition.
-----------------------------------
Management has had no preliminary contact or discussions regarding,
and there are no present plans, proposals or arrangements to acquire any
specific assets, property or business. Accordingly, it is unclear whether
such an acquisition would take the form of an exchange of capital stock, a
merger or an asset acquisition. However, because Process Technology has
virtually no resources as of the date of this Registration Statement,
management expects that any such acquisition would take the form of an
exchange of capital stock. See Part I, Item 2.
State Restrictions on "Blank Check" Companies.
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A total of 36 states prohibit or substantially restrict the
registration and sale of "blank check" companies within their borders.
Additionally, 36 states use "merit review powers" to exclude securities
offerings from their borders in an effort to screen out offerings of highly
dubious quality. See paragraph 8221, NASAA Reports, CCH Topical Law Reports,
1990. Process Technology intends to comply fully with all state securities
laws, and plans to take the steps necessary to ensure that any future offering
of its securities is limited to those states in which such offerings are
allowed. However, while Process Technology has no substantive business
operations and may be deemed to a "blank check" Company, these legal
restrictions may have a material adverse impact on Process Technology's
ability to raise capital because potential purchasers of Process Technology's
securities must be residents of states that permit the purchase of such
securities. These restrictions may also limit or prohibit stockholders from
reselling shares of Process Technology's common stock within the borders of
regulating states.
By regulation or policy statement, eight states (Idaho, Maryland,
Missouri, Nevada, New Mexico, Pennsylvania, Utah and Washington), some of
which are included in the group of 36 states mentioned above, place various
restrictions on the sale or resale of equity securities of "blank check" or
"blind pool" companies. These restrictions include, but are not limited to,
heightened disclosure requirements, exclusion from "manual listing"
registration exemptions for secondary trading privileges and outright
prohibition of public offerings of such companies. Because Process Technology
does not intend to make any offering of its securities in the foreseeable
future, management does not believe that any state restriction on "blank
check" offerings will have any material effect on Process Technology.
In most jurisdictions, "blank check" and "blind pool" companies are
not eligible for participation in the Small Corporate Offering Registration
("SCOR") program, which permits an issuer to notify the Securities and
Exchange Commission of certain offerings registered in such states by filing
a Form D under Regulation D of the Securities and Exchange Commission. All
states (with the exception of Alabama, Hawaii, Nebraska and New York) have
adopted some form of SCOR. States participating in the SCOR program also allow
applications for registration of securities by qualification by filing a Form
U-7 with the states' securities commissions. Nevertheless, Process Technology
does not anticipate making any SCOR offering or other public offering in the
foreseeable future, even in any jurisdiction where it may be eligible for
participation in SCOR.
The net effect of these laws, rules and regulations will be to place
significant restrictions on Process Technology's ability to register, offer
and sell and/or to develop a secondary market for shares of Process
Technology's common stock in virtually every jurisdiction in the United
States. These restrictions should cease once and if Process Technology
acquires a venture by purchase, reorganization or merger, so long as the
business operations succeeded to involve sufficient activities of a specific
nature.
Further, Section 18(b)(4)(a) of the 1933 Act defines a "covered
security" in connection with certain exempt offerings. "A security is a
covered security with respect to a transaction that is exempt from
registration under this Title pursuant to--(A) paragraph (1) or (2) of Section
4, and the issuer of such security files reports with the Commission under
section 13 or 15(d) of the Securities Exchange Act of 1934; (B) section 4(4)."
No new laws could be adopted by any state following the enactment of
the National Securities Markets Improvement Act of 1996, which would require
other than notice of the transaction and the collection of fees respecting a
"covered security" transaction. All state laws in existence prior to the
enactment of this Act would have no force and effect after three years from
the adoption of the Act. Section 18(c)(2)(A) and (C), respectively.
Section 4(1) of the 1933 Act exempts transactions by persons other
than an issuer, underwriter or a dealer; and Section 4(4) exempts broker's
transactions on unsolicited customer orders. Section 2(11) of the 1933 Act
provides that any person directly or indirectly controlling, controlled by or
under common control of an issuer is an "issuer" for the purposes of Section
4(1).
Accordingly, non-controlling persons of Process Technology could
presently sell their securities of Process Technology within the borders of
any state, subject to and in compliance with that state's "notice"
requirements, if any, on the effectiveness of this Registration Statement and
the passage of 90 days or an aggregate total of five months from the filing of
this Registration Statement.
Management to Devote Insignificant Time to Activities of the
Company.
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Members of Process Technology's management are not required to
devote their full time to the affairs of Process Technology. Because of their
time commitments, as well as the fact that Process Technology has no business
operations, the members of management currently devote approximately one hour
per week to the activities of Process Technology, until such time as it has
identified a suitable acquisition, reorganization or merger candidate.
No Market for Common Stock; No Market for Shares.
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Although the Company may submit for quotations of its common stock on
the OTC Bulletin Board of the NASD before any merger or acquisition
transaction, and to seek a broker/dealer to act as "market maker" for its
securities (without the use of any consultant), there is currently no market
for such shares; there have been no discussions with any broker/dealer or any
other person in this regard; and no market maker has been identified. There
can be no assurance that such a market will ever develop or be maintained or
that quotations will be granted on the OTC Bulletin Board. Any market price
for shares of common stock of Process Technology is likely to be very
volatile, and numerous factors beyond the control of Process Technology may
have a significant effect. In addition, the stock markets generally have
experienced, and continue to experience, extreme price and volume fluctuations
which have affected the market price of many small capital companies and which
have often been unrelated to the operating performance of these companies.
These broad market fluctuations, as well as general economic and political
conditions, may adversely affect the market price of Process Technology's
common stock in any market that may develop. Sales of "restricted securities"
under Rule 144 may also have an adverse effect on any market that may develop.
Of the 13,305,240 outstanding shares of Process Technology's common stock,
12,722,000 are designated as "restricted securities," and 6,562,000 have
satisfied the one year "holding period" requirements of Rule 144, while the
shares that were recently issued under Rule 701 of the Securities and Exchange
Commission may be publicly saleable under Rule 144 following the expiration of
90 days from the effective date of this Registration Statement or five months
from the filing date hereof. See the caption "Recent Sales of Restricted
Securities," Part II, Item 4, for information on the issuance dates of these
and other "restricted securities" of Process Technology. The filing and
effectiveness of this Registration Statement, along with the continued filing
of all required reports with the Securities and Exchange Commission by Process
Technology, will make Rule 144 available to the holders of these "restricted
securities." See Part II, Item 4, and Part III, Item 1.
Risks of "Penny Stock."
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Process Technology's common stock may be deemed to be "penny stock"
as that term is defined in Rule 3a51-1 of the Securities and Exchange
Commission. Penny stocks are securities (i) with a price of less than $5.00
per share; (ii) that are not traded on a "recognized" national exchange; (iii)
whose prices are not quoted on the NASDAQ automated quotation system
(NASDAQ-listed stocks must still meet requirement (i) above); or (iv) in
issuers with net tangible assets less than $2,000,000 (if the issuer has been
in continuous operation for at least three years) or $5,000,000 (if in
continuous operation for less than three years), or with average revenues of
less than $6,000,000 for the last three years.
There has been no "established public market" for Process
Technology's common stock during the last five years. At such time as Process
Technology completes a merger or acquisition transaction, if at all, it may
attempt to qualify for quotation on either NASDAQ or a national securities
exchange. However, at least initially, any trading in its common stock will
most likely be conducted in the over-the-counter market in the "Pink Sheets"
of the National Quotations Bureau LLC ("NQB")or the OTC Bulletin Board of the
NASD.
Section 15(g) of the 1934 Act and Rule 15g-2 of the Securities and
Exchange Commission require broker/dealers dealing in penny stocks to provide
potential investors with a document disclosing the risks of penny stocks and
to obtain a manually signed and dated written receipt of the document before
effecting any transaction in a penny stock for the investor's account.
Potential investors in the Process Technology's common stock are urged to
obtain and read such disclosure carefully before purchasing any shares that
are deemed to be "penny stock."
Moreover, Rule 15g-9 of the Securities and Exchange Commission
requires broker/dealers in penny stocks to approve the account of any investor
for transactions in such stocks before selling any penny stock to that
investor. This procedure requires the broker/dealer to (i) obtain from the
investor information concerning his or her financial situation, investment
experience and investment objectives; (ii) reasonably determine, based upon
that information, that transactions in penny stocks are suitable for the
investor and that the investor has sufficient knowledge and experience as to
be reasonably capable of evaluating the risks of penny stock transactions;
(iii) provide the investor with a written statement setting forth the basis on
which the broker/dealer made the determination in (ii) above; and (iv) receive
a signed and dated copy of such statement from the investor, confirming that
it accurately reflects the investor's financial situation, investment
experience and investment objectives. Compliance with these requirements may
make it more difficult for investors in Process Technology's common stock to
resell their shares to third parties or to otherwise dispose of them.
Process Technology May Be Deemed to Be a "Blank Check" Company.
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The limited business operations of Process Technology, as now
contemplated, may be deemed to involve those of a "blank check" company. The
only activities to be conducted by Process Technology are to manage its
current limited assets and to seek out and investigate the acquisition of any
viable business opportunity by purchase or exchange for securities of Process
Technology or pursuant to a reorganization or merger through which securities
of Process Technology will be issued or exchanged.
Process Technology Will Seek Out Business Opportunities.
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Management will seek out and investigate business opportunities
through every reasonably available fashion, including personal contacts,
professionals, securities broker/dealers, venture capital personnel, members
of the financial community and others who may present unsolicited proposals;
Process Technology may also advertise its availability as a vehicle to bring a
company to the public market through a "reverse" reorganization or merger in
financial publications, in a very limited fashion.
Competitive Business Conditions.
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Management believes that there are literally thousands of "blank
check" or "shells" companies engaged in endeavors similar to those engaged in
by the Process Technology; many of these companies have substantial current
assets and cash reserves. Competitors also include thousands of other
publicly-held companies whose business operations have proven unsuccessful,
and whose only viable business opportunity is that of providing a
publicly-held vehicle through which a private entity may have access to the
public capital markets. There is no reasonable way to predict the competitive
position of Process Technology or any other entity in the strata of these
endeavors; however, Process Technology, having limited assets and cash
reserves, will no doubt be at a competitive disadvantage in competing with
entities which have recently completed IPO's, have significant cash resources
and have recent operating histories when compared with the complete lack of
any substantive operations by Process Technology for the past several years.
Need for any Governmental Approval of Principal Products or Services.
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Because Process Technology currently produces no products or
services, it is not presently subject to any governmental regulation in this
regard. However, in the event that Process Technology engages an acquisition,
reorganization or merger transaction with an entity that engages in such
activities, it will become subject to all governmental approval requirements
to which the merged or acquired entity is subject.
Effect of Existing or Probable Governmental Regulations.
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The integrated disclosure system for small business issuers adopted
by the Securities and Exchange Commission in Release No. 34-30968 and
effective as of August 13, 1992, substantially modified the information and
financial requirements of a "Small Business Issuer," defined to be an issuer
that has revenues of less than $25,000,000; is a U.S. or Canadian issuer; is
not an investment company; and if a majority-owned subsidiary, the parent is
also a small business issuer; provided, however, an entity is not a small
business issuer if it has a public float (the aggregate market value of the
issuer's outstanding securities held by non-affiliates) of $25,000,000 or
more. Based upon this criteria, Process Technology is a "Small Business
Issuer."
The Securities and Exchange Commission, state securities commissions
and the North American Securities Administrators Association, Inc. ("NASAA")
have expressed an interest in adopting policies that will streamline the
registration process and make it easier for a small business issuer to have
access to the public capital markets. The present laws, rules and regulations
designed to promote availability to the small business issuer of these capital
markets and similar laws, rules and regulations that may be adopted in the
future will substantially limit the demand for "blank check" companies like
Process Technology, and may make the use of these companies obsolete.
Effective January 4, 1999, the NASD adopted rules and regulations
requiring that prior to any issuer having its securities quoted on the OTC
Bulletin Board of the NASD that such issuer must be a "reporting issuer" which
is required to file reports under Section 13 or 15(d) of the 1934 Act. The
Company is not currently a "reporting issuer," and this Registration Statement
should allow the Company's common stock to be quoted on the OTC Bulletin
Board, but no assurance of this can be given; however, management does not
expect any public market to develop in Process Technology's common stock
unless and until it completes an acquisition, reorganization or merger. See
Part II, Item 1.
Cost and Effects of Compliance with Environmental Laws.
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None; not applicable. However, environmental laws, rules and
regulations may have an adverse effect on any business venture viewed by
Process Technology as an attractive acquisition, reorganization or merger
candidate, and these factors may further limit the number of potential
candidates available to Process Technology for acquisition, reorganization or
merger.
Number of Employees.
- --------------------
None.
Item 2. Management's Discussion and Analysis or Plan of Operation.
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Plan of Operation.
- ------------------
Process Technology has not engaged in any material operations or had
any revenues from operations during the last two fiscal years. Its plan of
operation for the next 12 months is to continue to seek the acquisition of
assets, property or business that may benefit Process Technology and its
stockholders. Because it has virtually no resources, management anticipates
that to achieve any such transaction, that Process Technology will be required
to issue shares of its common stock as the sole consideration for such
venture.
During the next 12 months, Process Technology's only foreseeable
cash requirements will relate to maintaining its good standing in its state of
incorporation or the payment of expenses associated with reviewing or
investigating any potential business venture, which may be advanced by
management or principal stockholders as loans. Because Process Technology has
not identified any such venture as of the date of this Registration Statement,
it is impossible to predict the amount of any such loan. However, the amount
should not exceed $25,000 and will be on terms no less favorable than would be
available from a commercial lender in an arm's length transaction. As of
the date of this Registration Statement, Process Technology has not actively
begun to seek any such venture.
Results of Operations.
- ----------------------
Process Technology has had no material operations for over five
years. It incurred losses of ($16,298), for the year ended November 30, 1999;
($2,363) for the year ended November 30, 1998; and ($281,483) from inception
on May 12, 1987 through November 30, 1999. Primarily all of these expenses
during fiscal 1999 and 1998 were utilized for attorney's fees, accounting fees
and filing fees to maintain it in good standing.
Liquidity.
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Process Technology has no cash resources, and expense during fiscal
1999 were advanced by members of management, in the amount of $6,806.
Subsequent to the fiscal year end, 1999, Process Technology issued an
aggregate total of 2,000,000 shares of common stock ("restricted securities")
for services rendered valued at $0.02 per share or an aggregate total of
$4,000, pursuant to Rule 701 of the Securities and Exchange Commission. In
the same month, an aggregate total of 4,200,000 shares ("restricted
securities) was issued to officers and its counsel to reduce accounts payable
by $6,806.
Item 3. Description of Property.
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Process Technology has no assets, property or business; its
principal executive office address and telephone number are the office address
and telephone number of its Secretary, W. Scott Thompson, and are provided at
no cost. Because Process Technology has no current business operations, its
activities have been limited to keeping itself in good standing in the State
of Nevada, and with preparing this Registration Statement and the accompanying
financial statements. These activities have consumed an insignificant amount
of management's time; accordingly, the costs to Mr. Thompson of providing the
use of his office and telephone have been minimal.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
- ------------------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
- ------------------------------------------------
The following table sets forth the share holdings of those persons
who own more than five percent of Process Technology's common stock as of the
date hereof, to wit:
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class
- ---------------- ------------------ --------
<S> <C> <C>
Santa Cruz Trust 1,000,000 7.5%
7250 Wynwood
Houston, Texas 77008
Clarence J. Von Drehle 2,885,000 21.6%
7250 Wynwood
Houston, Texas 77008
Joseph L. Schwepee 1,077,600 8.0%
7250 Dumfries Dr.
Houston, Texas 77008
William A. Silvey, Jr.(1) 2,485,000(1) 18.7%
5227 Cripple Creek Court
Houston, Texas 77017
W. Scott Thompson(2) 2,785,000(2) 20.9%
6371 Richmond, #200
Houston, Texas 77057
Leonard W. Burningham, Esq 1,200,000 9.0%
455 East 500 South,
Suite 205
Salt Lake City, Utah
84111
TOTALS: 11,432,600 85.7%
(1) 4,000 of these shares are held of record in the name of the
Silvey Children's Trust, and 1,000 shares are owned by Tracy
Silvey, a daughter of William A, Silvey, Jr.
(2) 250,000 of these shares are held of record in the name of the
Thompson Family Trust, and 5,000 shares are owned by W.L.
Thompson, Jr., W. Scott Thompson's son.
</TABLE>
Security Ownership of Management.
- ---------------------------------
The following table sets forth the share holdings of Process
Technology common stock by directors and executive officers as of the date
hereof, to wit:
Number of Shares
Beneficially Owned Percentage of
Name and Address as of 10/10/99 of Class
- ---------------- ------------------ -------------
[S] [C] [C]
William A. Silvey, Jr.(1) 2,485,000 18.7%
5227 Cripple Creek Court
Houston, Texas 77017
W. Scott Thompson(2) 2,785,000 20.9%
6371 Richmond, #200
Houston, Texas 77057
TOTALS 5,270,000 39.6%
(1) 4,000 of these shares are held of record in the name of the
Silvey Children's Trust, and 1,000 shares are owned by Tracy
Silvey, a daughter of William A, Silvey, Jr.
(2) 250,000 of these shares are held of record in the name of the
Thompson Family Trust, and 5,000 shares are owned by W.L.
Thompson, Jr., W. Scott Thompson's son.
Changes in Control.
- -------------------
There are no present arrangements or pledges of Process Technology's
securities which may result in a change in control.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
- -------- -------------------------------------------------------------
Identification of Directors and Executive Officers.
- ---------------------------------------------------
The following table sets forth the names of all current directors
and executive officers of Process Technology. These persons will serve until
the next annual meeting of the stockholders or until their successors are
elected or appointed and qualified, or their prior resignation or termination.
<TABLE>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
- ---- ---- ----------- --------------
<S> <C> <C> <C>
William A. Silvey, Jr. President, 10/98 *
Director
W. Scott Thompson Sec/Tres, 10/98 *
Director
</TABLE>
* These persons presently serve in the capacities indicated.
Business Experience.
- --------------------
William A. Silvey, Jr. Mr. Silvey is 63 years of age and has over
35 years experience as an officer and director of operating companies, and as
a venture capitalist, financial consultant and business consultant. He was
one of the founders of Intermedics, Inc. which grew to be one of the largest
medical products companies in the world. Mr. Silvey has founded and operated
more than fifteen companies during his business career. Since April 1993, he
has been an associate of Eurotrade Financial, Inc., a Houston based financial
consulting firm. Mr. Silvey is a graduate of California Institute of
Technology with a Bachelors Degree in Mechanical Engineering. He also holds a
Masters in Business Administration from Stanford University.
W. Scott Thompson. Mr. Thompson is 50 years of age and has over 20
years experience as a venture capitalist and financial consultant. Since
April 1993, Mr. Thompson has served as the President of Eurotrade Financial,
Inc., a Houston based financial consulting firm. Prior to his tenure with
Eurotrade, Mr. Thompson was employed by Harris-Forbes, Inc. (a Houston based
financial and venture capital firm), from October 1983 to March 1993. Mr.
Thompson still serves as an officer, director and consultant to Harris-Forbes.
He is a graduate from the University of Texas with a Bachelors Degree in
Business Administration and attended two years of graduate school of business
working toward a double masters in business and accounting.
Other "Public Shell" Activities.
- --------------------------------
W. Scott Thompson and William A. Silvey, Jr. have been involved as
directors and executive officers of other companies that may be deemed to have
been "blank check" companies and future involvement in other entities that may
be deemed to be "blank check" companies is likely, but presently unplanned.
The following table summarizes the companies for which Mr. Thompson
and Mr. Silvey have served as directors, executive officers or consultants and
which have completed a reorganization or merger, and the consideration
received by Messrs. Thompson and Silvey in connection with each
reorganization.
<TABLE> OTC
<CAPTION> Bulletin
Board Reorg.
Original Company Name New Company Name Symbol Date Consideration
- --------------------- ---------------- ------ ------ -------------
<S> <C> <C> <C> <C>
Environmental Pyrogenics, Northport Industries, PESO 12/24/97 135,000
shares*
Inc. Inc. $25,000*
Information Technology International IHHC 6/98 140,000
shares*
Systems, Inc. Healthcare Holdings $18,000*
* Messrs. Thompson and Silvey each received the number of
"restricted securities" and amount of money indicated as compensation for
services rendered; all shares were issued under Rule 701 of the Securities and
Exchange Commission as consideration for services rendered in connection with
the structuring and closing of a reorganization agreement's with each of these
companies.
Significant Employees.
- ----------------------
Process Technology has no employees who are not executive officers.
Family Relationships.
- ---------------------
There are no family relationships between any director or executive
officer.
Involvement in Certain Legal Proceedings.
- -----------------------------------------
During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer of
Process Technology:
(1) was a general partner or executive officer of any business
against which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) was found by a court of competent jurisdiction (in a civil
action), the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or vacated.
Item 6. Executive Compensation.
- --------------------------------
The following table sets forth the aggregate compensation paid by
Process Technology for services rendered during the periods indicated:
</TABLE>
<TABLE>
<CAPTION
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual rictedlying Pay- Comp-
Position Ended ($) ($) Compen-Stock Optionsouts ensat'n
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William A.
Silvey, Jr. 11/30/99 0 0 0 0 0 0 0
President, 11/30/98 0 0 0 0 0 0 0
Director
W. Scott
Thompson, 11/30/99 0 0 0 0 0 0 0
Secretary, 11/30/98 0 0 0 0 0 0 0
Director
</TABLE>
* Immediately prior to the filing of this Registration
Statement, Messrs. Silvey and Thompson were each issued
1,680,000 shares of "restricted securities" of Process
Technology valued at an aggregate total of $3,200 or $0.02
per share, for non-capital raising services rendered. See
Part II, Item 4, and Part III, Item 1.
No cash compensation, deferred compensation or long-term incentive
plan awards were issued or granted to the Company's management during the
fiscal years ended November 30, 1999 or 1998. Further, no member of Process
Technology's management has been granted any option or stock appreciation
rights; accordingly, no tables relating to such items have been included
within this Item.
Compensation of Directors.
- --------------------------
There are no standard arrangements pursuant to which Process
Technology's directors are compensated for any services provided as director.
No additional amounts are payable to Process Technology's directors for
committee participation or special assignments.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.
- -------------
There are no employment contracts, compensatory plans or
arrangements, including payments to be received from Process Technology, with
respect to any director or executive officer of Process Technology which would
in any way result in payments to any such person because of his or her
resignation, retirement or other termination of employment with Process
Technology, any change in control of Process Technology, or a change in the
person's responsibilities following a change in control of Process Technology.
Item 7. Certain Relationships and Related Transactions.
- --------------------------------------------------------
There have been no material transactions, series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which Process Technology and any director, executive officer,
five percent stockholder or associate of any of these persons except the
following: immediately prior to the filing of this Registration Statement,
Process Technology issued an aggregate total of 1,600,000 shares of common
stock ("restricted securities")to Messrs. Silvey and Thompson (800,000 each)
pursuant to Rule 701 of the Securities and Exchange Commission for
compensation for non-capital raising services valued at an aggregate total of
$3,200 or $0.02 per share; and an aggregate total of 3,360,000 shares of
common stock ("restricted securities), 1,680,000 to each, were issued to
reduce accounts payable by $6,806, representing advances by these persons.
840,000 shares were also issued to Leonard W. Burningham, Esq., counsel, as
partial consideration of this amount. The non-capital raising services
rendered included, but were not limited to bringing Process Technology current
in its filings with the State of Nevada; various meetings and conferences in
respect thereof; review of related correspondence and pleadings; discussions
with Process Technology's accounting firm and review of drafts and final
copies of audited financial statements; and various conference calls and
discussions with legal counsel regarding same. See Part II, Item 4, and Part
III, Item 1.
Item 8. Description of Securities.
- -----------------------------------
Common Stock.
- -------------
Process Technology has 25,000,000 shares of $0.002 par value common
voting stock authorized; 13,305,240 shares of common stock are presently
outstanding. The holders of Process Technology's common stock are entitled to
one vote per share on each matter submitted to a vote at a meeting of
stockholders. The shares of common stock do not carry cumulative voting
rights in the election of directors.
Stockholders have no pre-emptive rights to acquire additional shares
of common stock or other securities. The common stock is not subject to
redemption rights and carries no subscription or conversion rights. In the
event of liquidation, the shares of common stock are entitled to share equally
in corporate assets after satisfaction of all liabilities. All shares of the
common stock now outstanding are fully paid and non-assessable.
Preferred Stocks.
- -----------------
Process Technology has 12,500,000 shares of $0.25 par value preferred
voting stock authorized; 291,620 shares of which are presently outstanding,
and designated as:
Series A Non-Voting Preferred Stock with the following rights,
privileges and preferences set forth in the Articles of Incorporation, as
amended, with the class amounting to 291,620 shares: (i), non-voting; (ii),
non-convertible; (iii) preference to dividends if any are declared; (iv), any
dividends shall be non-cumulative; and (v), the preferred stock shall be
entitled to an annual dividend of $0.10 per share, payable quarterly,
commencing on or before 24 months from the date of issuance of certificates
therefor, in the sole discretion of the board of directors (no dividends have
been declared).
Miscellaneous.
- --------------
PART II
Item 1. Market Price of and Dividends on Process Technology's Common Equity
and Other Stockholder Matters.
- ------------------------------
Market Information.
- -------------------
There has never been any established "public market" for shares of
common stock of Process Technology. Process Technology intends to submit it
common stock for quotations on the OTC Bulletin Board of the National
Association of Securities Dealers ("NASD"); however, management does not
expect any public market to develop unless and until Process Technology
completes an acquisition, reorganization or merger. In any event, no
assurance can be given that any market for Process Technology's common stock
will develop or be maintained. If a public market ever develops in the
future, the sale of "unregistered" and "restricted" shares of common stock
pursuant to Rule 144 of the Securities and Exchange Commission by members of
management and others may have a substantial adverse impact on any such public
market, and, with the exception of the "restricted securities" issued to
Messrs. Silvey, Thompson and Leonard W. Burningham, Esq. pursuant to Rule 701
of the Securities and Exchange Commission and for cash immediately prior to
the filing of this Registration Statement, all other outstanding "restricted
securities" of Process Technology, amounting to 6,562,000 shares, have already
satisfied the "holding period" requirements of Rule 144. The 701 shares
issued to members of management and Process Technology's counsel, amounting to
an aggregate total of 2,000,000 shares, will become tradable under Rule 144 90
days after the effective date of this Registration Statement or approximately
five months from the filing of hereof. See Part II, Item 4, and Part III,
Item 1.
Holders.
- --------
The number of record holders of Process Technology's securities as
of the date of this Registration Statement is approximately 102.
Dividends.
- ----------
Process Technology has not declared any cash dividends with respect
to its common stock, and does not intend to declare dividends in the
foreseeable future. The future dividend policy of Process Technology cannot
be ascertained with any certainty, and if and until Process Technology
completes any acquisition, reorganization or merger, no such policy will be
formulated. There are no material restrictions limiting, or that are likely
to limit, Process Technology's ability to pay dividends on its securities.
Item 2. Legal Proceedings.
- ---------------------------
Process Technology is not a party to any pending legal proceeding
and, to the knowledge of management, no federal, state or local governmental
agency is presently contemplating any proceeding against Process Technology.
No director, executive officer or affiliate of Process Technology or owner of
record or beneficially of more than five percent of Process Technology's
common stock is a party adverse to Process Technology or has a material
interest adverse to Process Technology in any proceeding.
Item 3. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ---------------------
There have been no changes in Process Technology's principal
independent accountant in the past two fiscal years or as of the date of this
Registration Statement.
Item 4. Recent Sales of Unregistered Securities.
- -------------------------------------------------
Name Date Shares Compensation
- ---- ---- ------ ------------
William A. Silvey, Jr. 01/11/00 800,000 Services*
W. Scott Thompson 01/11/00 800,000 Services*
Leonard W. Burningham, Esq. 01/11/00 400,000 Services*
* All services were "non-capital raising" and valued at $0.02 per
share or an aggregate total of $4,200; these securities were
issued pursuant to Rule 701 of the Securities and Exchange
Commission. These non-capital raising services included, but
were not limited to bringing Process Technology current in its
filings with the State of Nevada; various meetings and
conferences in respect thereof; review of related
correspondence and pleadings; discussions with Process
Technology's accounting firm and review of drafts and final
copies of audited financial statements; and
various conference calls and discussions with legal counsel
respecting same.
W. A. Silvey, Jr. 01/11/00 1,680,000 Cash*
W. Scott Thompson 01/11/00 1,680,000 Cash*
Leonard W. Burningham, Esq. 01/11/00 840,000 Cash*
* These shares were issued in consideration of an aggregate total
of $6,806, which has been previously advanced by Messrs. Silvey
and Thompson to Process Technology, and which was carried on
its balance sheet as a liability.
Item 5. Indemnification of Directors and Officers.
- ---------------------------------------------------
Article XI of Process Technology's Articles of Incorporation
provides that no director or officer shall be personally liable to Process
Technology or its stockholders for monetary damages for any breach of
fiduciary duty by such person as a director or officer, except for certain
misconduct prohibited by the NRS.
Section 78.751(1) of NRS authorizes a Nevada corporation to
indemnify any director, officer, employee, or corporate agent "who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, except an action by or in the right of the corporation" due
to his or her corporate role. Section 78.751(1) extends this protection
"against expenses, including attorneys' fees, judgments, fines and amounts
paid in settlement actually and reasonably incurred by him or her in
connection with the action, suit or proceeding if he or she acted in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful."
Section 78.751(2) of the NRS also authorizes indemnification of
the reasonable defense or settlement expenses of a corporate director,
officer, employee or agent who is sued, or is threatened with a suit, by or in
the right of the corporation. The party must have been acting in good faith
and with the reasonable belief that his or her actions were not opposed to the
corporation's best interests. Unless the court rules that the party is
reasonably entitled to indemnification, the party seeking indemnification must
not have been found liable to the corporation.
To the extent that a corporate director, officer, employee, or
agent is successful on the merits or otherwise in defending any action or
proceeding referred to in Section 78.751(1) or 78.751(2), Section 78.751(3) of
the NRS requires that he be indemnified "against expenses, including
attorneys' fees, actually and reasonably incurred by him or her in connection
with the defense."
Section 78.751 (4) of the NRS limits indemnification under
Sections 78.751 (1) and 78.751(2) to situations in which either (1) the
stockholders, (2)the majority of a disinterested quorum of directors, or (3)
independent legal counsel determine that indemnification is proper under the
circumstances.
Pursuant to Section 78.751(5) of the NRS, the corporation may
advance an officer's or director's expenses incurred in defending any action
or proceeding upon receipt of an undertaking. Section 78.751(6)(a) provides
that the rights to indemnification and advancement of expenses shall not be
deemed exclusive of any other rights under any bylaw, agreement, stockholder
vote or vote of disinterested directors. Section 78.751(6)(b) extends the
rights to indemnification and advancement of expenses to former directors,
officers, employees and agents, as well as their heirs, executors, and
administrators.
Regardless of whether a director, officer, employee or agent has
the right to indemnity, Section 78.752 allows the corporation to purchase and
maintain insurance on his behalf against liability resulting from his or her
corporate role.
PART F/S
Index to Financial Statements
Report of Certified Public Accountants
Financial Statements.
- ---------------------
For the year ended November 30, 1999:
Independent Auditors' Report
Balance Sheet for the year ended November 30, 1999
Statements of Operations for the years ended November 30, 1999 and 1998,
and for the period from inception (May 12, 1987) through November 30,
1999
Statements of Stockholders' Equity (Deficit) for the period from
inception (May 12, 1987) through November 30, 1999
Statements of Cash Flows for the years ended November 30, 1999 and 1998,
and for the period from inception (May 12, 1987) through November 30,
1999
Notes to the Financial Statements
<PAGE>
PROCESS TECHNOLOGY SYSTEMS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
November 30, 1999
<PAGE>
C O N T E N T S
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . 3
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . 5
Statements of Stockholders' Equity (Deficit) . . . . . . . . . . . . . . . 6
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . 7
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . 8
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Process Technology Systems, Inc.
(A Development Stage Company)
Houston, Texas
We have audited the accompanying balance sheet of Process Technology Systems,
Inc. (a development stage company) as of November 30, 1999 and the related
statements of operations, stockholders' equity (deficit) and cash flows for
the years ended November 30, 1999 and 1998 and from the beginning of the
development stage on May 12, 1987 through November 30, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Process Technology Systems,
Inc. (a development stage company) as of November 30, 1999, and the results of
its operations and its cash flows for the years ended November 30, 1999 and
1998, and from the beginning of the development stage of May 12, 1987 through
November 30, 1999, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company is a development stage company with no
significant operating results to date, which raises substantial doubt about
its ability to continue as a going concern. Management's plans with regard to
these matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/ Jones, Jensen & Company
- ----------------------------
Jones, Jensen & Company
Salt Lake City, Utah
January 28, 2000
<TABLE>
PROCESS TECHNOLOGY SYSTEMS, INC.
(A Development Stage Company)
Balance Sheet
<CAPTION>
ASSETS
November 30,
1999
<S> <C>
CURRENT ASSETS $ -
Total Current Assets -
TOTAL ASSETS $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 18,661
Total Liabilities 18,661
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock authorized 12,500,000 preferred shares,
at $0.25 par value: 291,620 shares issued and
outstanding 72,905
Common stock authorized 25,000,000 common shares
at $0.002 par value: 7,145,240 shares issued and
outstanding 14,290
Capital in excess of par value 175,627
Deficit accumulated during the development stage (281,483)
Total Stockholders' Equity (Deficit) (18,661)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ -
</TABLE>
<TABLE>
PROCESS TECHNOLOGY SYSTEMS, INC.
(A Development Stage Company)
Statements of Operations
From
Inception on
May 12, 1987
For the Years Ended Through
November 30, November 30,
1999 1998 1999
<S> <C> <C> <C>
REVENUES $ - $ - $ -
EXPENSES
General and administrative 16,298 2,363 281,483
Total Expenses 16,298 2,363 281,483
NET LOSS $ (16,298) $ (2,363) $ (281,483)
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
WEIGHTED AVERAGE
NUMBER OF SHARES 7,145,240 7,145,240
</TABLE>
PROCESS TECHNOLOGY SYSTEMS, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
Common Stock Preferred Stock
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Balance, May 12, 1987 6,500,000 $ 13,000 - $ -
February 18, 1988, common
stock issued for services
at $0.002 per share 583,240 1,166 - -
February 18, 1988, preferred
stock issued for services at
$0.25 per share - - 291,620 72,905
June 9, 1988, common stock
issued for services valued
at $0.002 per share 50,000 100 - -
March 30, 1990, common stock
issued for services, valued
at $0.002 per share 12,000 24 - -
Net loss from inception on
May 12, 1987 through
November 30, 1996 - - - -
Balance, November 30, 1996 7,145,240 14,290 291,620 72,905
Net loss for the year ended
November 30, 1997 - - - -
Balance, November 30, 1997 7,145,240 14,290 291,620 72,905
Net loss for the year ended
November 30, 1998 - - - -
Balance, November 30, 1998 7,145,240 14,290 291,620 72,905
Net loss for the year ended
November 30, 1999 - - - -
Balance, November 30, 1999 7,145,240 $ 14,290 291,620 $ 72,905
</TABLE>
<TABLE>
Deficit
Accumulated
Additional During the
Paid-in Developmental
Capitol Stage
<CAPTION>
<S> <C> <C>
Balance, May 12, 1987 $ 175,627 $ -
February 18, 1988, common
stock issued for services
at $0.002 per share - -
February 18, 1988, preferred
stock issued for services at
$0.25 per share - -
June 9, 1988, common stock
issued for services valued
at $0.002 per share - -
March 30, 1990, common stock
issued for services, valued
at $0.002 per share - -
Net loss from inception on
May 12, 1987 through
November 30, 1996 - (262,822)
Balance, November 30, 1996 175,627 (262,822)
Net loss for the year ended
November 30, 1997 - -
Balance, November 30, 1997 175,627 (262,822)
Net loss for the year ended
November 30, 1998 - (2,363)
Balance, November 30, 1998 175,627 (265,185)
Net loss for the year ended
November 30, 1999 - (16,298)
Balance, November 30, 1999 175,627 (281,483)
</TABLE>
<TABLE>
PROCESS TECHNOLOGY SYSTEMS, INC.
(A Development Stage Company)
Statements of Cash Flows
<CAPTION>
From
Inception on
May 12, 1987
For the Years Ended Through
November 30, November 30,
1999 1998 1999
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $(16,298) $(2,363) $(281,483)
Issuance of stock for services - 262,822
Changes in operating asset and
liability accounts:
Increase (decrease) in accounts
payable 16,298 2,363 18,661
Net Cash (Used) by Operating
Activities - - -
CASH FLOWS FROM INVESTING ACTIVITIES - - -
CASH FLOWS FROM FINANCING ACTIVITIES - - -
NET INCREASE (DECREASE)IN CASH - - -
CASH AT BEGINNING OF PERIOD - - -
CASH AT END OF PERIOD $ - $ - $ -
Cash Payments For:
Income taxes $ - $ - $ -
Interest $ - $ - $ -
</TABLE>
PROCESS TECHNOLOGY SYSTEMS, INC
(A Development Stage Company)
Notes to the Financial Statements
November 30, 1999 and 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The Company was organized under the laws of the State of Nevada on
May 12, 1987. In June 1987, the Company issued 200,000 shares of its
common stock to acquire all of the outstanding stock of Houston
Engineering Research Corporation (HERCO), a Texas corporation which
were subsequently written off as a loss. Currently, the Company is
seeking new business opportunities believed to hold a potential
profit or to merge with an existing company.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has adopted a November 30 year
end.
c. Basic Loss Per Share
The computations of basic loss per share of common stock are based on
the weighted average number of shares outstanding during the period
of the financial statements as follows:
Loss Shares Per Share
(Numerator) (Denominator) Amount
For the year ended
November 30, 1998 $ (2,363) 7,145,240 $ (0.00)
For the year ended
November 30, 1999 $ (16,298) $ 7,145,240 $ (0.00)
d. 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 statement and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
e. Cash Equivalents
The Company considers all highly liquid investments with a maturity
of three months or less when purchased to be cash equivalents.
<PAGE>
PROCESS TECHNOLOGY SYSTEMS, INC
(A Development Stage Company)
Notes to the Financial Statements
November 30, 1999 and 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
f. Provision for Taxes
At November 30, 1999, the Company had net operating loss
carryforwards of approximately $20,000 that may be offset against
future taxable income through 2014. No tax benefit has been reported
in the financial statements, because the potential tax benefits of
the net operating loss carryforwards are offset by a valuation
allowance of the same amount.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company does not have
significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating
costs and to allow it to continue as a going concern. It is the
intent of the Company to seek a merger with an existing, operating
company. In the interim, shareholders of the Company have committed
to meeting its minimal operating expenses.
NOTE 3 - SUBSEQUENT EVENTS
In January the Company issued 1,600,000 shares to its officers and
400,000 shares to a shareholder for services rendered, valued at
$3,200. In the same month 4,200,000 shares were issued to officers
and shareholders to reduce accounts payable by $6,806.
NOTE 4 - PREFERRED STOCK
Process Technology Systems, Inc. is authorized to issue 12,500,000
shares of preferred stock by action of the Company's Board of
Directors. The Board of Directors is authorized, without further
action by stockholders, to determine the voting rights, dividend
right, dividend rates, liquidation preferences, redemption
provisions, conversion or exchange rights and other rights,
preferences, privileges and restriction of any unissued series of
preferred stock and the number of shares constituting such series.
The Company has issued and outstanding 291,620 shares of preferred
stock. The preferred stock has preference in liquidation and to
dividends. The preferred stock is entitled to a $0.10 per share
dividend if dividends are declared by the Board of Directors.
Through November 30, 1999, no dividends have been declared.
<PAGE>
PART III
Item 1. Index to Exhibits.
- ---------------------------
The following exhibits are filed as a part of this Registration
Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description*
- ------ ------------
<S> <C>
3.1 Initial Articles of Incorporation
3.2 Certificate of Amendment Respecting Rights, Privileges and
Preferences of a Class of Preferred Stock
3.3 By-Laws
27 Financial Data Schedule
99 Written Compensation Agreement
</TABLE>
* Summaries of all exhibits contained within this
Registration Statement are modified in their
entirety by reference to these Exhibits.
SIGNATURES
In accordance with Section 12 of the Securities
Exchange Act of 1934, the Registrant has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto
duly authorized.
Process Technologies, INC.
Date: 2/15/2000 By /s/William A. Silvey
------------ --------------------------
William A. Silvey, Jr., Director
and President
Date: 2/15/2000 By /s/W. Scott Thompson
------------ ------------------------
W. Scott Thompson, Director
Secretary
ARTICLES OF INCORPORATION
OF
PROCESS TECHNOLOGIES, INC.
The undersigned, to form a Nevada corporation, CERTIFIES THAT:
I. NAME: The name of the corporation is:
PROCESS TECHNOLOGIES, INC.
II. PRINCIPAL OFFICE: The location of the principal office of
this corporation within the State of Nevada is 6l21 Lakeside Drive, Suite 250,
Reno, Nevada 89511; this corporation may maintain an office or offices in such
other place within or without the State of Nevada as may be from time to time
designed by the Board of Directors or by the By-Laws of the corporation; and
this corporation may conduct all corporation business of every kind or nature,
including the holding of any meetings of directors or shareholders, within the
State of Nevada, as well as without the State of Nevada.
III. PURPOSE: The purpose for which this corporation is formed
is:
To engage in any lawful activity.
IV. AUTHORIZATION OF CAPITOL STOCK: The amount of the total
authorized capitol stock of the corporation shall be TWENTY-FIVE MILLION
(25,000) shares of common stock, par value $.002 per share, and TWELVE MILLION
FIVE HUNDRED THOUSAND (12,500,000) shares of preferred stock, par value $.25
per share.
<PAGE>
V. INCORPORATOR: The name and post office address of the
incorporator signing Articles of Incorporation is as follows:
NAME POST OFFICE ADDRESS
Rita S. Dickson 6121 Lakeside Drive,
Suite 250
Reno, Nevada 89511
VI. DIRECTORS: The governing board of this corporation shall
be known as directors, and the first board shall consist of three (3)
directors.
So long as all of the shares of this corporation are owned
beneficially and of record by either one or two shareholders, the number of
directors may be fewer than three, but not fewer than the number of
shareholders.
The number of directors may, at any time or times, be increased or
decreased by a duly adopted amendment to these Articles of Incorporation, or
in such manner as provided in the By-Laws of this corporation.
The name and post office address of the directors constituting the
first Board of Directors is as follows:
NAME POST OFFICE ADDRESS
C. J. Von Drehel 144465 Bowden Court
Morgan Hill, California 95037
Joseph L. Schweppe 7250 Wynnwood
Houston, Texas 77008
Joseph E. Dryer 3711 Village Manor
Kingwood, Texas 77339
<PAGE>
VII. STOCK NON-ASSESSABLE: The capitol stock, or the holders
therof, after the amount of the subscription price has been paid in, shall not
be subject to any assessment whatsoever to pay the debts of the corporation.
VIII. TERM OF EXISTENCE: This corporation shall have perpetual
existence.
IX. CUMULATIVE VOTING: No cumulative voting shall be permitted
in
the election of directors.
X. PREEMPTIVE RIGHTS: Shareholders shall not be entitled to
preemptive rights.
THE UNDERSIGNED, being the incorporator hereinbefore named for the
purpose of forming a corporation pursuant to the General Corporation Law of
the
State of Nevada, does make and file these Articles of Incorporation, hereby
declaring and certifying the facts herein stated are true, and, accordingly,
has hereunto set her hand this 8th day of May, 1987.
/s/ Rita S. Dickson
---------------------
Rita S. Dickson
STATE OF NEVADA )
) ss.
COUNTY OF WASHOE )
On this 8 day of May, 1987, before me, a Notary Public, personally
appeared Rita S. Dickson, who acknowledged she executed the above instrument.
/s/Michael J. Morrison
- -----------------------
Notary Public
CERTIFICATE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
PROCESS TECHNOLOGY SYSTEMS, INC.
We, the undersigned, William A. Silvey, Jr. President, and W.
Scott Thompson, Secretary/Treasurer, of Process Technology Systems, Inc., a
Nevada corporation (the "Corporation"), do hereby certify:
I
Pursuant to Section 78.1955 of the Nevada Revised Statutes, the
Articles of Incorporation of the Corporation shall be amended as follows:
IV. AUTHORIZATION OF CAPITAL STOCK: The amount of the total
authorized capital stock of the Corporation shall be:
A. Twenty-Five Million (25,000,00) shares of common stock with
a par value of $0.002 per share;
B. Twelve Million Five Hundred Thousand shares of preferred
stock with a par value of $0.25 per share. The Board of
Directors has the right to set the series, classes, rights,
privileges and preferences of the preferred stock or any
class or series thereof, by amendment hereto, without
shareholder approval.
Series A Non-Voting Preferred Stock
Series A Non-Voting Preferred Stock with the following
rights, privileges and preferences set by the Board of
Directors, 291,620 shares: (i), non-voting; (ii), non-
convertible; (iii) preference to dividends if any are
declared; (iv), any dividends shall be non-cumulative; and
(v), the preferred stock shall be entitled to an annual
dividend of $0.10 per share, payable quarterly, commencing
on or before 24 months from the date of issuance of
certificates therefor, in the sole discretion of the board
of directors.
II
The amendment was adopted by unanimous vote of the Board of
Directors and the Majority Stockholders of the Corporation pursuant to Section
78.1955 of the Nevada Revised Statutes.
IN WITNESS THEREOF, the undersigned officers of the Corporation,
certifying that the foregoing is true and correct under penalty of perjury,
have set their hands this 14TH day of February, 2000.
/s/ William A. Silvey, Jr. President
---------------------------------------
William A. Silvey, Jr. President
/s/ Scott Thompson, Secretary/Treasurer
---------------------------------------
W. Scott Thompson, Secretary/Treasurer
BYLAWS
OF
PROCESS TECHNOLOGY SYSTEMS, INC.
ARTICLE I
OFFICES
Section 1.01 Location of Offices. The corporation may maintain such
offices within or without the State of Nevada as the Board of Directors may
from time to time designate or require.
Section 1.02 Principal Office. The address of the principal office of
the corporation shall be at the address of the registered office of the
corporation as so designated in the office of the Lieutenant
Governor/Secretary of State of the state of incorporation, or at such other
address as the Board of Directors shall from time to time determine.
ARTICLE II
SHAREHOLDERS
Section 2.01 Annual Meeting. The annual meeting of the shareholders
shall be held in May of each year or at such other time designated by the
Board of Directors and as is provided for in the notice of the meeting, for
the purpose of electing directors and for the transaction of such other
business as may come before the meeting. If the election of directors shall
not be held on the day designated for the annual meeting of the shareholders,
or at any adjournment thereof, the Board of Directors shall cause the election
to be held at a special meeting of the shareholders as soon thereafter as may
be convenient.
Section 2.02 Special Meetings. Special meetings of the shareholders
may be called at any time by the chairman of the board, the president, or by
the Board of Directors, or in their absence or disability, by any vice
president, and shall be called by the president or, in his or her absence or
disability, by a vice president or by the secretary on the written request of
the holders of not less than one-tenth of all the shares entitled to vote at
the meeting, such written request to state the purpose or purposes of the
meeting and to be delivered to the president, each vice-president, or
secretary. In case of failure to call such meeting within 60 days after such
request, such shareholder or shareholders may call the same.
Section 2.03 Place of Meetings. The Board of Directors may designate
any place, either within or without the state of incorporation, as the place
of meeting for any annual meeting or for any special meeting called by the
Board of Directors. A waiver of notice signed by all shareholders entitled to
vote at a meeting may designate any place, either within or without the state
of incorporation, as the place for the holding of such meeting. If no
designation is made, or if a special meeting be otherwise called, the place of
meeting shall be at the principal office of the corporation.
Section 2.04 Notice of Meetings. The secretary or assistant secretary,
if any, shall cause notice of the time, place, and purpose or purposes of all
meetings of the shareholders (whether annual or special), to be mailed at
least ten days, but not more than 50 days, prior to the meeting, to each
shareholder of record entitled to vote.
Section 2.05 Waiver of Notice. Any shareholder may waive notice of any
meeting of shareholders (however called or noticed, whether or not called or
noticed and whether before, during, or after the meeting), by signing a
written waiver of notice or a consent to the holding of such meeting, or an
approval of the minutes thereof. Attendance at a meeting, in person or by
proxy, shall constitute waiver of all defects of call or notice regardless of
whether waiver, consent, or approval is signed or any objections are made.
All such waivers, consents, or approvals shall be made a part of the minutes
of the meeting.
Section 2.06 Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any annual meeting of
shareholders or any adjournment thereof, or shareholders entitled to receive
payment of any dividend or in order to make a determination of shareholders
for any other proper purpose, the Board of Directors of the corporation may
provide that the share transfer books shall be closed, for the purpose of
determining shareholders entitled to notice of or to vote at such meeting, but
not for a period exceeding fifty (50) days. If the share transfer books are
closed for the purpose of determining shareholders entitled to notice of or to
vote at such meeting, such books shall be closed for at least ten (10) days
immediately preceding such meeting.
In lieu of closing the share transfer books, the Board of Directors may
fix in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than fifty (50) and, in
case of a meeting of shareholders, not less than ten (10) days prior to the
date on which the particular action requiring such determination of
shareholders is to be taken. If the share transfer books are not closed and
no record date is fixed for the determination of shareholders entitled to
notice of or to vote at a meeting or to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as
the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this Section, such
determination shall apply to any adjournment thereof. Failure to comply with
this Section shall not affect the validity of any action taken at a meeting of
shareholders.
Section 2.07 Voting Lists. The officer or agent of the corporation
having charge of the share transfer books for shares of the corporation shall
make, at least ten (10) days before each meeting of shareholders, a complete
list of the shareholders entitled to vote at such meeting or any adjournment
thereof, arranged in alphabetical order, with the address of, and the number
of shares held by each, which list, for a period of ten (10) days prior to
such meeting, shall be kept on file at the registered office of the
corporation and shall be subject to inspection by any shareholder during the
whole time of the meeting. The original share transfer book shall be prima
facia evidence as to the shareholders who are entitled to examine such list or
transfer books, or to vote at any meeting of shareholders.
Section 2.08 Quorum. One-half of the total voting power of the
outstanding shares of the corporation entitled to vote, represented in person
or by proxy, shall constitute a quorum at a meeting of the shareholders. If a
quorum is present, the affirmative vote of the majority of the voting power
represented by shares at the meeting and entitled to vote on the subject shall
constitute action by the shareholders, unless the vote of a greater number or
voting by classes is required by the laws of the state of incorporation of the
corporation or the Articles of Incorporation. If less than one-half of the
outstanding voting power is represented at a meeting, a majority of the voting
power represented by shares so present may adjourn the meeting from time to
time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might
have been transacted at the meeting as originally noticed.
Section 2.09 Voting of Shares. Each outstanding share of the
corporation entitled to vote shall be entitled to one vote on each matter
submitted to vote at a meeting of shareholders, except to the extent that the
voting rights of the shares of any class or series of stock are determined and
specified as greater or lesser than one vote per share in the manner provided
by the Articles of Incorporation.
Section 2.10 Proxies. At each meeting of the shareholders, each
shareholder entitled to vote shall be entitled to vote in person or by proxy;
provided, however, that the right to vote by proxy shall exist only in case
the instrument authorizing such proxy to act shall have been executed in
writing by the registered holder or holders of such shares, as the case may
be, as shown on the share transfer of the corporation or by his or her or her
attorney thereunto duly authorized in writing. Such instrument authorizing a
proxy to act shall be delivered at the beginning of such meeting to the
secretary of the corporation or to such other officer or person who may, in
the absence of the secretary, be acting as secretary of the meeting. In the
event that any such instrument shall designate two or more persons to act as
proxies, a majority of such persons present at the meeting, or if only one be
present, that one shall (unless the instrument shall otherwise provide) have
all of the powers conferred by the instrument on all persons so designated.
Persons holding stock in a fiduciary capacity shall be entitled to vote the
shares so held and the persons whose shares are pledged shall be entitled to
vote, unless in the transfer by the pledge or on the books of the corporation
he or she shall have expressly empowered the pledgee to vote thereon, in which
case the pledgee, or his or her or her proxy, may represent such shares and
vote thereon.
Section 2.11 Written Consent to Action by Shareholders. Any action
required to be taken at a meeting of the shareholders, or any other action
which may be taken at a meeting of the shareholders, may be taken without a
meeting, if a consent in writing, setting forth the action so taken, shall be
signed by all of the shareholders entitled to vote with respect to the subject
matter thereof.
ARTICLE III
DIRECTORS
Section 3.01 General Powers. The property, affairs, and business of
the corporation shall be managed by its Board of Directors. The Board of
Directors may exercise all the powers of the corporation whether derived from
law or the Articles of Incorporation, except such powers as are by statute, by
the Articles of Incorporation or by these Bylaws, vested solely in the
shareholders of the corporation.
Section 3.02 Number, Term, and Qualifications. The Board of Directors
shall consist of three to nine persons. Increases or decreases to said number
may be made, within the numbers authorized by the Articles of Incorporation,
as the Board of Directors shall from time to time determine by amendment to
these Bylaws. An increase or a decrease in the number of the members of the
Board of Directors may also be had upon amendment to these Bylaws by a
majority vote of all of the shareholders, and the number of directors to be so
increased or decreased shall be fixed upon a majority vote of all of the
shareholders of the corporation. Each director shall hold office until the
next annual meeting of shareholders of the corporation and until his or her
successor shall have been elected and shall have qualified. Directors need
not be residents of the state of incorporation or shareholders of the
corporation.
Section 3.03 Classification of Directors. In lieu of electing the
entire number of directors annually, the Board of Directors may provide that
the directors be divided into either two or three classes, each class to be as
nearly equal in number as possible, the term of office of the directors of the
first class to expire at the first annual meeting of shareholders after their
election, that of the second class to expire at the second annual meeting
after their election, and that of the third class, if any, to expire at the
third annual meeting after their election. At each annual meeting after such
classification, the number of directors equal to the number of the class whose
term expires at the time of such meeting shall be elected to hold office until
the second succeeding annual meeting, if there be two classes, or until the
third succeeding annual meeting, if there be three classes.
Section 3.04 Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw immediately
following, and at the same place as, the annual meeting of shareholders. The
Board of Directors may provide by resolution the time and place, either within
or without the state of incorporation, for the holding of additional regular
meetings without other notice than such resolution.
Section 3.05 Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the president, vice president,
or any two directors. The person or persons authorized to call special
meetings of the Board of Directors may fix any place, either within or without
the state of incorporation, as the place for holding any special meeting of
the Board of Directors called by them.
Section 3.06 Meetings by Telephone Conference Call. Members of the
Board of Directors may participate in a meeting of the Board of Directors or a
committee of the Board of Directors by means of conference telephone or
similar communication equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to
this Section shall constitute presence in person at such meeting.
Section 3.07 Notice. Notice of any special meeting shall be given at
least ten (10) days prior thereto by written notice delivered personally or
mailed to each director at his or her regular business address or residence,
or by telegram. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail so addressed, with postage thereon
prepaid. If notice be given by telegram, such notice shall be deemed to be
delivered when the telegram is delivered to the telegraph company. Any
director may waive notice of any meeting. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting solely for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
Section 3.08 Quorum. A majority of the number of directors shall
constitute a quorum for the transaction of business at any meeting of the
Board of Directors, but if less than a majority is present at a meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice.
Section 3.09 Manner of Acting. The act of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the
Board of Directors, and the individual directors shall have no power as such.
Section 3.10 Vacancies and Newly Created Directorship. If any
vacancies shall occur in the Board of Directors by reason of death,
resignation or otherwise, or if the number of directors shall be increased,
the directors then in office shall continue to act and such vacancies or newly
created directorships shall be filled by a vote of the directors then in
office, though less than a quorum, in any way approved by the meeting. Any
directorship to be filled by reason of removal of one or more directors by the
shareholders may be filled by election by the shareholders at the meeting at
which the director or directors are removed.
Section 3.11 Compensation. By resolution of the Board of Directors,
the directors may be paid their expenses, if any, of attendance at each
meeting of the Board of Directors, and may be paid a fixed sum for attendance
at each meeting of the Board of Directors or a stated salary as director. No
such payment shall preclude any director from serving the corporation in any
other capacity and receiving compensation therefor.
Section 3.12 Presumption of Assent. A director of the corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless his or her or her dissent shall be entered in the minutes of the
meeting, unless he or she shall file his or her or her written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof, or shall forward such dissent by registered or certified
mail to the secretary of the corporation immediately after the adjournment of
the meeting. Such right to dissent shall not apply to a director who voted in
favor of such action.
Section 3.13 Resignations. A director may resign at any time by
delivering a written resignation to either the president, a vice president,
the secretary, or assistant secretary, if any. The resignation shall become
effective on its acceptance by the Board of Directors; provided, that if the
board has not acted thereon within ten days from the date presented, the
resignation shall be deemed accepted.
Section 3.14 Written Consent to Action by Directors. Any action
required to be taken at a meeting of the directors of the corporation or any
other action which may be taken at a meeting of the directors or of a
committee, may be taken without a meeting, if a consent in writing, setting
forth the action so taken, shall be signed by all of the directors, or all of
the members of the committee, as the case may be. Such consent shall have the
same legal effect as a unanimous vote of all the directors or members of the
committee.
Section 3.15 Removal. At a meeting expressly called for that purpose,
one or more directors may be removed by a vote of a majority of the shares of
outstanding stock of the corporation entitled to vote at an election of
directors.
ARTICLE IV
OFFICERS
Section 4.01 Number. The officers of the corporation shall be a
president, one or more vice-presidents, as shall be determined by resolution
of the Board of Directors, a secretary, a treasurer, and such other officers
as may be appointed by the Board of Directors. The Board of Directors may
elect, but shall not be required to elect, a chairman of the board and the
Board of Directors may appoint a general manager.
Section 4.02 Election, Term of Office, and Qualifications. The
officers shall be chosen by the Board of Directors annually at its annual
meeting. In the event of failure to choose officers at an annual meeting of
the Board of Directors, officers may be chosen at any regular or special
meeting of the Board of Directors. Each such officer (whether chosen at an
annual meeting of the Board of Directors to fill a vacancy or otherwise) shall
hold his or her office until the next ensuing annual meeting of the Board of
Directors and until his or her successor shall have been chosen and qualified,
or until his or her death, or until his or her resignation or removal in the
manner provided in these Bylaws. Any one person may hold any two or more of
such offices, except that the president shall not also be the secretary. No
person holding two or more offices shall act in or execute any instrument in
the capacity of more than one office. The chairman of the board, if any,
shall be and remain a director of the corporation during the term of his or
her office. No other officer need be a director.
Section 4.03 Subordinate Officers, Etc. The Board of Directors from
time to time may appoint such other officers or agents as it may deem
advisable, each of whom shall have such title, hold office for such period,
have such authority, and perform such duties as the Board of Directors from
time to time may determine. The Board of Directors from time to time may
delegate to any officer or agent the power to appoint any such subordinate
officer or agents and to prescribe their respective titles, terms of office,
authorities, and duties. Subordinate officers need not be shareholders or
directors.
Section 4.04 Resignations. Any officer may resign at any time by
delivering a written resignation to the Board of Directors, the president, or
the secretary. Unless otherwise specified therein, such resignation shall
take effect on delivery.
Section 4.05 Removal. Any officer may be removed from office at any
special meeting of the Board of Directors called for that purpose or at a
regular meeting, by vote of a majority of the directors, with or without
cause. Any officer or agent appointed in accordance with the provisions of
Section 4.03 hereof may also be removed, either with or without cause, by any
officer on whom such power of removal shall have been conferred by the Board
of Directors.
Section 4.06 Vacancies and Newly Created Offices. If any vacancy shall
occur in any office by reason of death, resignation, removal,
disqualification, or any other cause, or if a new office shall be created,
then such vacancies or new created offices may be filled by the Board of
Directors at any regular or special meeting.
Section 4.07 The Chairman of the Board. The Chairman of the Board, if
there be such an officer, shall have the following powers and duties.
(a) He or she shall preside at all shareholders' meetings;
(b) He or she shall preside at all meetings of the Board of Directors;
and
(c) He or she shall be a member of the executive committee, if any.
Section 4.08 The President. The president shall have the following
powers and duties:
(a) If no general manager has been appointed, he or she shall be the
chief executive officer of the corporation, and, subject to the direction of
the Board of Directors, shall have general charge of the business, affairs,
and property of the corporation and general supervision over its officers,
employees, and agents;
(b) If no chairman of the board has been chosen, or if such officer is
absent or disabled, he or she shall preside at meetings of the shareholders
and Board of Directors;
(c) He or she shall be a member of the executive committee, if any;
(d) He or she shall be empowered to sign certificates representing
shares of the corporation, the issuance of which shall have been authorized by
the Board of Directors; and
(e) He or she shall have all power and shall perform all duties
normally incident to the office of a president of a corporation, and shall
exercise such other powers and perform such other duties as from time to time
may be assigned to him or her by the Board of Directors.
Section 4.09 The Vice Presidents. The Board of Directors may, from
time to time, designate and elect one or more vice presidents, one of whom may
be designated to serve as executive vice president. Each vice president shall
have such powers and perform such duties as from time to time may be assigned
to him or her by the Board of Directors or the president. At the request or
in the absence or disability of the president, the executive vice president
or, in the absence or disability of the executive vice president, the vice
president designated by the Board of Directors or (in the absence of such
designation by the Board of Directors) by the president, the senior vice
president, may perform all the duties of the president, and when so acting,
shall have all the powers of, and be subject to all the restrictions upon, the
president.
Section 4.10 The Secretary. The secretary shall have the following
powers and duties:
(a) He or she shall keep or cause to be kept a record of all of the
proceedings of the meetings of the shareholders and of the board or directors
in books provided for that purpose;
(b) He or she shall cause all notices to be duly given in accordance
with the provisions of these Bylaws and as required by statute;
(c) He or she shall be the custodian of the records and of the seal of
the corporation, and shall cause such seal (or a facsimile thereof) to be
affixed to all certificates representing shares of the corporation prior to
the issuance thereof and to all instruments, the execution of which on behalf
of the corporation under its seal shall have been duly authorized in
accordance with these Bylaws, and when so affixed, he or she may attest the
same;
(d) He or she shall assume that the books, reports, statements,
certificates, and other documents and records required by statute are properly
kept and filed;
(e) He or she shall have charge of the share books of the corporation
and cause the share transfer books to be kept in such manner as to show at any
time the amount of the shares of the corporation of each class issued and
outstanding, the manner in which and the time when such stock was paid for,
the names alphabetically arranged and the addresses of the holders of record
thereof, the number of shares held by each holder and time when each became
such holder or record; and he or she shall exhibit at all reasonable times to
any director, upon application, the original or duplicate share register. He
or she shall cause the share book referred to in Section 6.04 hereof to be
kept and exhibited at the principal office of the corporation, or at such
other place as the Board of Directors shall determine, in the manner and for
the purposes provided in such Section;
(f) He or she shall be empowered to sign certificates representing
shares of the corporation, the issuance of which shall have been authorized by
the Board of Directors; and
(g) He or she shall perform in general all duties incident to the
office of secretary and such other duties as are given to him or her by these
Bylaws or as from time to time may be assigned to him or her by the Board of
Directors or the president.
Section 4.11 The Treasurer. The treasurer shall have the following
powers and duties:
(a) He or she shall have charge and supervision over and be responsible
for the monies, securities, receipts, and disbursements of the corporation;
(b) He or she shall cause the monies and other valuable effects of the
corporation to be deposited in the name and to the credit of the corporation
in such banks or trust companies or with such banks or other depositories as
shall be selected in accordance with Section 5.03 hereof;
(c) He or she shall cause the monies of the corporation to be disbursed
by checks or drafts (signed as provided in Section 5.04 hereof) drawn on the
authorized depositories of the corporation, and cause to be taken and
preserved property vouchers for all monies disbursed;
(d) He or she shall render to the Board of Directors or the president,
whenever requested, a statement of the financial condition of the corporation
and of all of this transactions as treasurer, and render a full financial
report at the annual meeting of the shareholders, if called upon to do so;
(e) He or she shall cause to be kept correct books of account of all
the business and transactions of the corporation and exhibit such books to any
director on request during business hours;
(f) He or she shall be empowered from time to time to require from all
officers or agents of the corporation reports or statements given such
information as he or she may desire with respect to any and all financial
transactions of the corporation; and
(g) He or she shall perform in general all duties incident to the
office of treasurer and such other duties as are given to him or her by these
Bylaws or as from time to time may be assigned to him or her by the Board of
Directors or the president.
Section 4.12 General Manager. The Board of Directors may employ and
appoint a general manager who may, or may not, be one of the officers or
directors of the corporation. The general manager, if any shall have the
following powers and duties:
(a) He or she shall be the chief executive officer of the corporation
and, subject to the directions of the Board of Directors, shall have general
charge of the business affairs and property of the corporation and general
supervision over its officers, employees, and agents:
(b) He or she shall be charged with the exclusive management of the
business of the corporation and of all of its dealings, but at all times
subject to the control of the Board of Directors;
(c) Subject to the approval of the Board of Directors or the executive
committee, if any, he or she shall employ all employees of the corporation, or
delegate such employment to subordinate officers, and shall have authority to
discharge any person so employed; and
(d) He or she shall make a report to the president and directors as
often as required, setting forth the results of the operations under his or
her charge, together with suggestions looking toward improvement and
betterment of the condition of the corporation, and shall perform such other
duties as the Board of Directors may require.
Section 4.13 Salaries. The salaries and other compensation of the
officers of the corporation shall be fixed from time to time by the Board of
Directors, except that the Board of Directors may delegate to any person or
group of persons the power to fix the salaries or other compensation of any
subordinate officers or agents appointed in accordance with the provisions of
Section 4.03 hereof. No officer shall be prevented from receiving any such
salary or compensation by reason of the fact that he or she is also a director
of the corporation.
Section 4.14 Surety Bonds. In case the Board of Directors shall so
require, any officer or agent of the corporation shall execute to the
corporation a bond in such sums and with such surety or sureties as the Board
of Directors may direct, conditioned upon the faithful performance of his or
her duties to the corporation, including responsibility for negligence and for
the accounting of all property, monies, or securities of the corporation which
may come into his or her hands.
ARTICLE V
EXECUTION OF INSTRUMENTS, BORROWING OF MONEY,
AND DEPOSIT OF CORPORATE FUNDS
Section 5.01 Execution of Instruments. Subject to any limitation
contained in the Articles of Incorporation or these Bylaws, the president or
any vice president or the general manager, if any, may, in the name and on
behalf of the corporation, execute and deliver any contract or other
instrument authorized in writing by the Board of Directors. The Board of
Directors may, subject to any limitation contained in the Articles of
Incorporation or in these Bylaws, authorize in writing any officer or agent to
execute and delivery any contract or other instrument in the name and on
behalf of the corporation; any such authorization may be general or confined
to specific instances.
Section 5.02 Loans. No loans or advances shall be contracted on behalf
of the corporation, no negotiable paper or other evidence of its obligation
under any loan or advance shall be issued in its name, and no property of the
corporation shall be mortgaged, pledged, hypothecated, transferred, or
conveyed as security for the payment of any loan, advance, indebtedness, or
liability of the corporation, unless and except as authorized by the Board of
Directors. Any such authorization may be general or confined to specific
instances.
Section 5.03 Deposits. All monies of the corporation not otherwise
employed shall be deposited from time to time to its credit in such banks and
or trust companies or with such bankers or other depositories as the Board of
Directors may select, or as from time to time may be selected by any officer
or agent authorized to do so by the Board of Directors.
Section 5.04 Checks, Drafts, Etc. All notes, drafts, acceptances,
checks, endorsements, and, subject to the provisions of these Bylaws,
evidences of indebtedness of the corporation, shall be signed by such officer
or officers or such agent or agents of the corporation and in such manner as
the Board of Directors from time to time may determine. Endorsements for
deposit to the credit of the corporation in any of its duly authorized
depositories shall be in such manner as the Board of Directors from time to
time may determine.
Section 5.05 Bonds and Debentures. Every bond or debenture issued by
the corporation shall be evidenced by an appropriate instrument which shall be
signed by the president or a vice president and by the secretary and sealed
with the seal of the corporation. The seal may be a facsimile, engraved or
printed. Where such bond or debenture is authenticated with the manual
signature of an authorized officer of the corporation or other trustee
designated by the indenture of trust or other agreement under which such
security is issued, the signature of any of the corporation's officers named
thereon may be a facsimile. In case any officer who signed, or whose
facsimile signature has been used on any such bond or debenture, should cease
to be an officer of the corporation for any reason before the same has been
delivered by the corporation, such bond or debenture may nevertheless be
adopted by the corporation and issued and delivered as through the person who
signed it or whose facsimile signature has been used thereon had not ceased to
be such officer.
Section 5.06 Sale, Transfer, Etc. of Securities. Sales, transfers,
endorsements, and assignments of stocks, bonds, and other securities owned by
or standing in the name of the corporation, and the execution and delivery on
behalf of the corporation of any and all instruments in writing incident to
any such sale, transfer, endorsement, or assignment, shall be effected by the
president, or by any vice president, together with the secretary, or by any
officer or agent thereunto authorized by the Board of Directors.
Section 5.07 Proxies. Proxies to vote with respect to shares of other
corporations owned by or standing in the name of the corporation shall be
executed and delivered on behalf of the corporation by the president or any
vice president and the secretary or assistant secretary of the corporation, or
by any officer or agent thereunder authorized by the Board of Directors.
ARTICLE VI
CAPITAL SHARES
Section 6.01 Share Certificates. Every holder of shares in the
corporation shall be entitled to have a certificate, signed by the president
or any vice president and the secretary or assistant secretary, and sealed
with the seal (which may be a facsimile, engraved or printed) of the
corporation, certifying the number and kind, class or series of shares owned
by him or her in the corporation; provided, however, that where such a
certificate is countersigned by (a) a transfer agent or an assistant transfer
agent, or (b) registered by a registrar, the signature of any such president,
vice president, secretary, or assistant secretary may be a facsimile. In case
any officer who shall have signed, or whose facsimile signature or signatures
shall have been used on any such certificate, shall cease to be such officer
of the corporation, for any reason, before the delivery of such certificate by
the corporation, such certificate may nevertheless be adopted by the
corporation and be issued and delivered as though the person who signed it, or
whose facsimile signature or signatures shall have been used thereon, has not
ceased to be such officer. Certificates representing shares of the
corporation shall be in such form as provided by the statutes of the state of
incorporation. There shall be entered on the share books of the corporation
at the time of issuance of each share, the number of the certificate issued,
the name and address of the person owning the shares represented thereby, the
number and kind, class or series of such shares, and the date of issuance
thereof. Every certificate exchanged or returned to the corporation shall be
marked "Canceled" with the date of cancellation.
Section 6.02 Transfer of Shares. Transfers of shares of the
corporation shall be made on the books of the corporation by the holder of
record thereof, or by his or her attorney thereunto duly authorized by a power
of attorney duly executed in writing and filed with the secretary of the
corporation or any of its transfer agents, and on surrender of the certificate
or certificates, properly endorsed or accompanied by proper instruments of
transfer, representing such shares. Except as provided by law, the
corporation and transfer agents and registrars, if any, shall be entitled to
treat the holder of record of any stock as the absolute owner thereof for all
purposes, and accordingly, shall not be bound to recognize any legal,
equitable, or other claim to or interest in such shares on the part of any
other person whether or not it or they shall have express or other notice
thereof.
Section 6.03 Regulations. Subject to the provisions of this Article VI
and of the Articles of Incorporation, the Board of Directors may make such
rules and regulations as they may deem expedient concerning the issuance,
transfer, redemption, and registration of certificates for shares of the
corporation.
Section 6.04 Maintenance of Stock Ledger at Principal Place of
Business. A share book (or books where more than one kind, class, or series
of stock is outstanding) shall be kept at the principal place of business of
the corporation, or at such other place as the Board of Directors shall
determine, containing the names, alphabetically arranged, of original
shareholders of the corporation, their addresses, their interest, the amount
paid on their shares, and all transfers thereof and the number and class of
shares held by each. Such share books shall at all reasonable hours be
subject to inspection by persons entitled by law to inspect the same.
Section 6.05 Transfer Agents and Registrars. The Board of Directors
may appoint one or more transfer agents and one or more registrars with
respect to the certificates representing shares of the corporation, and may
require all such certificates to bear the signature of either or both. The
Board of Directors may from time to time define the respective duties of such
transfer agents and registrars. No certificate for shares shall be valid
until countersigned by a transfer agent, if at the date appearing thereon the
corporation had a transfer agent for such shares, and until registered by a
registrar, if at such date the corporation had a registrar for such shares.
Section 6.06 Closing of Transfer Books and Fixing of Record Date.
(a) The Board of Directors shall have power to close the share books of
the corporation for a period of not to exceed 50 days preceding the date of
any meeting of shareholders, or the date for payment of any dividend, or the
date for the allotment of rights, or capital shares shall go into effect, or a
date in connection with obtaining the consent of shareholders for any purpose.
(b) In lieu of closing the share transfer books as aforesaid, the Board
of Directors may fix in advance a date, not exceeding 50 days preceding the
date of any meeting of shareholders, or the date for the payment of any
dividend, or the date for the allotment of rights, or the date when any change
or conversion or exchange of capital shares shall go into effect, or a date in
connection with obtaining any such consent, as a record date for the
determination of the shareholders entitled to a notice of, and to vote at, any
such meeting and any adjournment thereof, or entitled to receive payment of
any such dividend, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of capital stock,
or to give such consent.
(c) If the share transfer books shall be closed or a record date set
for the purpose of determining shareholders entitled to notice of or to vote
at a meeting of shareholders, such books shall be closed for, or such record
date shall be, at least ten (10) days immediately preceding such meeting.
Section 6.07 Lost or Destroyed Certificates. The corporation may issue
a new certificate for shares of the corporation in place of any certificate
theretofore issued by it, alleged to have been lost or destroyed, and the
Board of Directors may, in its discretion, require the owner of the lost or
destroyed certificate or his or her legal representatives, to give the
corporation a bond in such form and amount as the Board of Directors may
direct, and with such surety or sureties as may be satisfactory to the board,
to indemnify the corporation and its transfer agents and registrars, if any,
against any claims that may be made against it or any such transfer agent or
registrar on account of the issuance of such new certificate. A new
certificate may be issued without requiring any bond when, in the judgment of
the Board of Directors, it is proper to do so.
Section 6.08 No Limitation on Voting Rights; Limitation on Dissenter's
Rights. To the extent permissible under the applicable law of any
jurisdiction to which the corporation may become subject by reason of the
conduct of business, the ownership of assets, the residence of shareholders,
the location of offices or facilities, or any other item, the corporation
elects not to be governed by the provisions of any statute that (i) limits,
restricts, modified, suspends, terminates, or otherwise affects the rights of
any shareholder to cast one vote for each share of common stock registered in
the name of such shareholder on the books of the corporation, without regard
to whether such shares were acquired directly from the corporation or from any
other person and without regard to whether such shareholder has the power to
exercise or direct the exercise of voting power over any specific fraction of
the shares of common stock of the corporation issued and outstanding or (ii)
grants to any shareholder the right to have his or her stock redeemed or
purchased by the corporation or any other shareholder on the acquisition by
any person or group of persons of shares of the corporation. In particular,
to the extent permitted under the laws of the state of incorporation, the
corporation elects not to be governed by any such provision, including the
provisions of the Nevada Control Share Acquisitions Act, Sections 78.378 to
78.3793, inclusive, of the Nevada Revised Statutes, or any statute of similar
effect or tenor.
ARTICLE VII
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 7.01 How Constituted. The Board of Directors may designate an
executive committee and such other committees as the Board of Directors may
deem appropriate, each of which committees shall consist of two or more
directors. Members of the executive committee and of any such other
committees shall be designated annually at the annual meeting of the Board of
Directors; provided, however, that at any time the Board of Directors may
abolish or reconstitute the executive committee or any other committee. Each
member of the executive committee and of any other committee shall hold office
until his or her successor shall have been designated or until his or her
resignation or removal in the manner provided in these Bylaws.
Section 7.02 Powers. During the intervals between meetings of the
Board of Directors, the executive committee shall have and may exercise all
powers of the Board of Directors in the management of the business and affairs
of the corporation, except for the power to fill vacancies in the Board of
Directors or to amend these Bylaws, and except for such powers as by law may
not be delegated by the Board of Directors to an executive committee.
Section 7.03 Proceedings. The executive committee, and such other
committees as may be designated hereunder by the Board of Directors, may fix
its own presiding and recording officer or officers, and may meet at such
place or places, at such time or times and on such notice (or without notice)
as it shall determine from time to time. It will keep a record of its
proceedings and shall report such proceedings to the Board of Directors at the
meeting of the Board of Directors next following.
Section 7.04 Quorum and Manner of Acting. At all meeting of the
executive committee, and of such other committees as may be designated
hereunder by the Board of Directors, the presence of members constituting a
majority of the total authorized membership of the committee shall be
necessary and sufficient to constitute a quorum for the transaction of
business, and the act of a majority of the members present at any meeting at
which a quorum is present shall be the act of such committee. The members of
the executive committee, and of such other committees as may be designated
hereunder by the Board of Directors, shall act only as a committee and the
individual members thereof shall have no powers as such.
Section 7.05 Resignations. Any member of the executive committee, and
of such other committees as may be designated hereunder by the Board of
Directors, may resign at any time by delivering a written resignation to
either the president, the secretary, or assistant secretary, or to the
presiding officer of the committee of which he or she is a member, if any
shall have been appointed and shall be in office. Unless otherwise specified
herein, such resignation shall take effect on delivery.
Section 7.06 Removal. The Board of Directors may at any time remove
any member of the executive committee or of any other committee designated by
it hereunder either for or without cause.
Section 7.07 Vacancies. If any vacancies shall occur in the executive
committee or of any other committee designated by the Board of Directors
hereunder, by reason of disqualification, death, resignation, removal, or
otherwise, the remaining members shall, until the filling of such vacancy,
constitute the then total authorized membership of the committee and, provided
that two or more members are remaining, continue to act. Such vacancy may be
filled at any meeting of the Board of Directors.
Section 7.08 Compensation. The Board of Directors may allow a fixed
sum and expenses of attendance to any member of the executive committee, or of
any other committee designated by it hereunder, who is not an active salaried
employee of the corporation for attendance at each meeting of said committee.
ARTICLE VIII
INDEMNIFICATION, INSURANCE, AND
OFFICER AND DIRECTOR CONTRACTS
Section 8.01 Indemnification: Third Party Actions. The corporation
shall have the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he or she is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees) judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him or her in connection with
any such action, suit or proceeding, if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action, suit, or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he or she reasonably believed to be in
or not opposed to the best interests of the corporation, and with respect to
any criminal action or proceeding, he or she had reasonable cause to believe
that his or her conduct was unlawful.
Section 8.02 Indemnification: Corporate Actions. The corporation
shall have the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he or she is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees) actually and reasonably incurred by him
or her in connection with the defense or settlement of such action or suit, if
he or she acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such a person shall have been adjudged to be liable for negligence or
misconduct in the performance of his or her duty to the corporation, unless
and only to the extent that the court in which the action or suit was brought
shall determine on application that, despite the adjudication of liability but
in view of all circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper.
Section 8.03 Determination. To the extent that a director, officer,
employee, or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to in
Sections 8.01 and 8.02 hereof, or in defense of any claim, issue, or matter
therein, he or she shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection therewith.
Any other indemnification under Sections 8.01 and 8.02 hereof, shall be made
by the corporation upon a determination that indemnification of the officer,
director, employee, or agent is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in Sections 8.01 and 8.02
hereof. Such determination shall be made either (i) by the Board of Directors
by a majority vote of a quorum consisting of directors who were not parties to
such action, suit, or proceeding; or (ii) by independent legal counsel on a
written opinion; or (iii) by the shareholders by a majority vote of a quorum
of shareholders at any meeting duly called for such purpose.
Section 8.04 General Indemnification. The indemnification provided by
this Section shall not be deemed exclusive of any other indemnification
granted under any provision of any statute, in the corporation's Articles of
Incorporation, these Bylaws, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his or her official capacity and
as to action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer, employee, or agent,
and shall inure to the benefit of the heirs and legal representatives of such
a person.
Section 8.05 Advances. Expenses incurred in defending a civil or
criminal action, suit, or proceeding as contemplated in this Section may be
paid by the corporation in advance of the final disposition of such action,
suit, or proceeding upon a majority vote of a quorum of the Board of Directors
and upon receipt of an undertaking by or on behalf of the director, officers,
employee, or agent to repay such amount or amounts unless if it is ultimately
determined that he or she is to indemnified by the corporation as authorized
by this Section.
Section 8.06 Scope of Indemnification. The indemnification authorized
by this Section shall apply to all present and future directors, officers,
employees, and agents of the corporation and shall continue as to such persons
who ceases to be directors, officers, employees, or agents of the corporation,
and shall inure to the benefit of the heirs, executors, and administrators of
all such persons and shall be in addition to all other indemnification
permitted by law.
8.07. Insurance. The corporation may purchase and maintain insurance
on behalf of any person who is or was a director, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against any liability asserted
against him or her and incurred by him or her in any such capacity, or arising
out of his or her status as such, whether or not the corporation would have
the power to indemnify him or her against any such liability and under the
laws of the state of incorporation, as the same may hereafter be amended or
modified.
ARTICLE IX
FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the
Board of Directors.
ARTICLE X
DIVIDENDS
The Board of Directors may from time to time declare, and the
corporation may pay, dividends on its outstanding shares in the manner and on
the terms and conditions provided by the Articles of Incorporation and these
Bylaws.
ARTICLE XI
AMENDMENTS
All Bylaws of the corporation, whether adopted by the Board of Directors
or the shareholders, shall be subject to amendment, alteration, or repeal, and
new Bylaws may be made, except that:
(a) No Bylaws adopted or amended by the shareholders shall be altered
or repealed by the Board of Directors.
(b) No Bylaws shall be adopted by the Board of Directors which shall
require more than a majority of the voting shares for a quorum at a meeting of
shareholders, or more than a majority of the votes cast to constitute action
by the shareholders, except where higher percentages are required by law;
provided, however that (i) if any Bylaw regulating an impending election of
directors is adopted or amended or repealed by the Board of Directors, there
shall be set forth in the notice of the next meeting of shareholders for the
election of directors, the Bylaws so adopted or amended or repealed, together
with a concise statement of the changes made; and (ii) no amendment,
alteration or repeal of this Article XI shall be made except by the
shareholders.
CERTIFICATE OF SECRETARY
The undersigned does hereby certify that he or she is the president of
PROCESS TECHNOLOGY SYSTEMS, INC., a corporation duly organized and existing
under and by virtue of the laws of the State of Nevada; that the above and
foregoing Bylaws of said corporation were duly and regularly adopted as such
by the Board of Directors of the corporation at a meeting of the Board of
Directors, which was duly and regularly held on the 16th day of February,
2000, and that the above and foregoing Bylaws are now in full force and
effect.
DATED THIS 16th day of February, 2000.
/s/William A. Silvey
_________________________________
William A. Silvey, Jr., President
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<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-END> NOV-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 18661
<BONDS> 0
0
0
<COMMON> 72905
<OTHER-SE> (91566)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 16298
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (16298)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
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WRITTEN COMPENSATION AGREEMENT
Subject to the following shares of common stock ("restricted
securities") being issued pursuant to Rule 701 of the Securities and Exchange
Commission, William A. Silvey, Jr., W. Scott Thompson and Leonard W.
Burningham, Esq., agree to respectively accept 800,000, 800,000 and 400,000
shares of the one mill ($0.001) par value common stock of Process Technology
Systems, Inc., a Nevada corporation (the "Company"), for non-capital raising
services rendered regarding the Company, including, but not limited to
bringing the Company current in its filings with the State of Nevada; various
meetings and conferences in respect thereof; review of related correspondence
and corporate records; discussions with the Company's accounting firm and
review of drafts and final copies of audited financial statements; and various
conference calls and discussions with Mr. Burningham respecting same; all of
which services are valued at $2,000 or $0.001 per share.
Date: 1/5/2000. /S/William A. Silvey, Jr.
William A. Silvey, Jr.
Date: 1/5/2000. /s/W. Scott Thompson
W. Scott Thompson
Date: January 5, 2000 /s/Leonard W. Burningham
Leonard W. Burningham, Esq.
ACCEPTED:
PROCESS TECHNOLOGY SYSTEMS, INC.
By/s/William A. Silvey, Jr. Date: 1/5/2000.
Its President
