<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14A-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
NetLive Communications, Inc.
(Name of Registrant as Specified In Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
...............................................................
2) Aggregate number of securities to which transaction applies:
...............................................................
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
..............................................................
4) Proposed maximum aggregate value of transaction:
..............................................................
5) Total fee paid:
..............................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid: ................................
2) Form, Schedule or Registration Statement No.: ..........
3) Filing Party: ..........................................
4) Date Filed: ............................................
<PAGE>
NetLive Communications, Inc.
584 Broadway
New York, New York 10012
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 8, 1997
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders
(the "Annual Meeting") of NetLive Communications, Inc., a Delaware corporation
(the "Company"), will be held at the offices of Goldstein, Golub, Kessler &
Company, P.C., 1185 Avenue of the Americas, New York, New York 10036, on
October 8, 1997, at 2:00 p.m., local time, for the purpose of considering and
acting upon the following matters:
(1) The approval of amendments to the Company's Certificate of
Incorporation and By-Laws which, among other things,
designates a classified Board of Directors and increases
the number of directors to seven;
(2) The election of seven directors, two of which will serve
for a term ending in 1998, two of which will serve for a
term ending in 1999, and three of which will serve for a
term ending in 2000;
(3) The ratification of the selection of Goldstein, Golub,
Kessler & Company, P.C. as the Company's independent
certified public accountants for the year ending
March 31, 1998;
(4) The approval of the 1997 Stock Option Plan; and
(5) The transaction of such other business as may properly
come before the Annual Meeting.
The Board of Directors of the Company has fixed the close of business
on August 14, 1997 as the record date (the "Record Date") for the determination
of stockholders entitled to notice of and to vote at the Annual Meeting. A list
of stockholders eligible to vote at the Annual Meeting will be available for
inspection during normal business hours for purposes germane to the meeting
during the ten days prior to the meeting at the office of the Secretary of the
Company at the above address.
The enclosed Proxy Statement contains information pertaining to the
matters to be voted on at the Annual Meeting. A copy of the Company's
Annual Report to Stockholders for 1997 is being mailed with this Proxy
Statement.
By order of the Board of Directors
Andrew J. Schwartz, Secretary
New York, New York
September 23, 1997
THE MATTERS BEING VOTED ON AT THE ANNUAL MEETING ARE IMPORTANT TO THE COMPANY,
AND CERTAIN OF THE MATTERS REQUIRE THE APPROVAL OF THE HOLDERS OF A MAJORITY OF
THE OUTSTANDING SHARES OF COMMON STOCK. IN ORDER THAT YOUR VOTE IS COUNTED AT
THE ANNUAL MEETING, PLEASE EXECUTE, DATE AND PROMPTLY MAIL THE ENCLOSED PROXY
CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN
PERSON AT THE ANNUAL MEETING IF THE PROXY IS REVOKED IN THE MANNER SET FORTH IN
THE PROXY STATEMENT.
<PAGE>
NETLIVE COMMUNICATIONS, INC.
584 BROADWAY
NEW YORK, NEW YORK 10012
------------------
PROXY STATEMENT
TO BE HELD ON OCTOBER 8, 1997
------------------
GENERAL INFORMATION
The accompanying proxy and this Proxy Statement are furnished to the
stockholders of NetLive Communications, Inc., a Delaware corporation (the
"Company"), in connection with the solicitation of proxies for use at the 1997
Annual Meeting of Stockholders (the "Annual Meeting") of holders of its common
stock, par value $.0001 per share (the "Common Stock"), to be held at the
offices of Goldstein, Golub, Kessler & Company, P.C., 1185 Avenue of the
Americas, New York, New York 10036 at 2:00 p.m., local time, on October 8,
1997, and at any adjournments or postponements thereof. The enclosed proxy is
being solicited by the Board of Directors of the Company.
At the Annual Meeting, stockholders will be asked to vote on the
following matters: (1) the approval of amendments to the Company's Certificate
of Incorporation and By-Laws which, among other things, designate a classified
Board of Directors and increase the number of directors to seven; (2) the
election of seven directors, two of whom will serve for a term ending in 1998,
two of whom will serve for a term ending in 1999, and three of whom will serve
for a term ending in 2000; (3) the ratification of the selection of Goldstein,
Golub, Kessler & Company, P.C. as the Company's independent certified public
accountants for the year ending March 31, 1998; (4) the approval of the 1997
Stock Option Plan; and (5) the transaction of such other business as may
properly come before the Annual Meeting.
The Board of Directors of the Company has fixed the close of business
on August 14, 1997 as the record date (the "Record Date") for the determination
of stockholders entitled to notice of and to vote at the Annual Meeting. A list
of stockholders eligible to vote at the Annual Meeting will be available for
inspection during normal business hours for purposes germane to the meeting
during the ten days prior to the meeting at the office of the Secretary of the
Company at the above address.
If a proxy in the accompanying form is duly executed and returned, the
shares represented by the proxy will be voted in accordance with the
instructions indicated thereon. If no instructions are given, proxies will be
voted in accordance with the recommendations of the Company's Board of
Directors. Any stockholder giving a proxy has the power to revoke it at any
time before it is exercised. A proxy may be revoked by written notice to the
Company bearing a later date than the proxy or by the execution and delivery to
the Company of a subsequently dated proxy. Any stockholder attending the Annual
Meeting may vote in person if the stockholder desires to do so, whether or not
that stockholder has previously given a proxy.
The Company's Annual Report for 1997, including financial statements,
the Notice of Annual Meeting of Stockholders, this Proxy Statement and the
enclosed proxy are first being mailed to stockholders on or about
September 26, 1997.
-2-
<PAGE>
VOTING SECURITIES
The close of business on August 14, 1997 has been fixed as the record
date (the "Record Date") for the determination of stockholders entitled to
notice of and to vote at the Annual Meeting. Only holders of record of Common
Stock at the close of business on the Record Date will be entitled to notice of
and to vote at the Annual Meeting. Each stockholder is entitled to one vote for
each share of Common Stock held on the Record Date. The Company had 2,950,000
shares of Common Stock outstanding and entitled to vote on the Record Date. The
presence in person or by proxy of a majority of the shares of Common Stock
outstanding and entitled to vote on the Record Date is necessary to constitute
a quorum. Abstentions and broker non-votes will be counted as present at the
Annual Meeting for purposes of determining whether there is a quorum. The vote
required for each proposal is set forth in the discussion of each proposal.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Based on information filed on Schedule 13D with the Commission,
relating to a March 11, 1997 reporting date, a "group" consisting of Laurence
Rosen, Jeffrey Wolf, Michael Kharitonov, Andrew Schwartz and Scott Wolf
(individually a "Founder," and collectively the "Founders" or the "Founders
Group") entered into a certain "Stockholders Agreement"dated March 8, 1997 (the
"Stockholders Agreement") that provides, among other things, that each of the
Founders will vote all of the Company's securities then owned in the manner
approved in writing by a majority of such securities then owned by all of the
Founders in the aggregate. Founders owning a majority of the securities owned
by all of the Founders have informally advised the Company that they intend to
vote all of their shares of Common Stock at the Annual Meeting in favor of all
of the proposals described herein. The Stockholders Agreement further provides
that no transfer of the Company's securities by any of the Founders shall be
effective, and no transferee will be entitled to vote such securities or any
other indices of ownership, unless and until such transferee agrees in writing
to be bound by the terms and conditions of the Stockholders Agreement. The
Stockholders Agreement terminates upon a merger, the dissolution of the
Company, the written agreement of any subset of Founders owning 51.0% of the
securities owned by the Founders in the aggregate or August 12, 1998, whichever
occurs earliest. In such Schedule 13D, the Founders disclaimed beneficial
ownership of the securities owned by other Founders and disclaimed that they
were a single reporting entity for any other purpose. The Company believes that
the Founders, as of August 1, 1997, beneficially own an aggregate of 49.6% of
Common Stock outstanding as calculated for purposes of Section 13(d)(3) of the
Exchange Act, which includes options either currently exercisable or
exercisable in the next 60 days for 512,085 shares of Common Stock.
As of July 1, 1997, R. Andrew Lee, 2100 Connecticut Avenue, N.W,
Suite 705, Washington, D.C. 20008, held as trustee of the NetLive
Communications, Inc. Performance Share Trust (the "Trust") established under
the NetLive Communications, Inc. Performance Share Program Plan (the "Plan")
300,000 shares of Common Stock. Mr. Lee exercises sole voting and
dispositive power over such shares.
Based on information filed on Schedule 13D with the Commission, a
"group" consisting of May Davis Group, Inc., Owen May, Dibo Attar and Dennis E.
Sal (the "May Davis Group") beneficially own an aggregate of 19.0% of the
shares of Common Stock outstanding (which includes 500,000 shares subject to
warrants) for purposes of Section 13(d)(3) of the Exchange Act. Mr. Attar, who
reported ownership of no shares personally, reported shared ownership of
555,000 shares beneficially owned by certain funds. The disclosure required
pursuant to Schedule 13D describes voting power and Mr. Attar has disclaimed
beneficial ownership of such shares for other purposes.
In addition to those set forth above, the table below lists any person
who is known to the Company as of the Record Date (i) to be the beneficial
owner of more than five percent of the Company's outstanding Common Stock, (ii)
the number of shares owned beneficially by each director and named executive
officer of the Company and (iii) the number of shares owned beneficially by all
directors and executive officers as a group. Except as otherwise stated, all
persons named are believed to have sole voting and investment power over the
shares reported as owned.
-3-
<PAGE>
<TABLE>
<CAPTION>
NAME & ADDRESS OF BENEFICIAL OWNER AMOUNT AND NATURE PERCENT OF CLASS
OF BENEFICIAL OWNER
(SHARES)
- ----------------------------------- ------------------- ----------------
<S> <C> <C>
Laurence Rosen, 567,319 (1) 17.9%
94 Hudson St.,
Hoboken, NJ 07030
Jeffrey Wolf, 443,705 (2) 14.4%
230 Central Park West New York,
NY 10024
Michael Kharitonov, 393,477 (3) 12.8%
145 West 71st St., Apt. 4F, New
York, NY 10023
Scott Wolf, 196,071 (4) 6.6%
2501 Irving Av. South
Minneapolis, MN 55405
Andrew J. Schwartz, 115,412 (5) 3.9%
444 East 86th St., Apt. 27E
New York, NY 10028
Vladislav Rysin,
240 Prospect, #L-89, 33,334 (6) 1.1%
Hackensack, NJ 07601
John E. Meier, 10,000 (7) 0.3%
1915 Brandywine Dr.,
Columbus, OH 43220
Adam L. Goldberg, 5,000 (8) 0.2%
330 16th Street
Brooklyn, NY 11215
Michael E. Wolf,
135 Wooster Street, #6 5,000 (8) 0.2%
New York, NY 10012
Marcel M. Yung,
605 West 112th Street 5,000 (8) 0.2%
New York, NY 10025
Directors and Officers
as a Group (8 persons) 1,010,928 (9) 30.8%
</TABLE>
-4-
<PAGE>
- -------------------------------
(1) Includes options either currently exercisable or exercisable in the
next 60 days for 219,069 shares of Common Stock. These shares are also included
within, and constitute a portion of, the Founder Group shares described above.
(2) Includes options either currently exercisable or exercisable in the
next 60 days for 122,152 shares of Common Stock. These shares are also included
within, and constitute a portion of, the Founder Group shares described above.
(3) Includes options either currently exercisable or exercisable in the
next 60 days for 127,267 shares of Common Stock. These shares are also included
within, and constitute a portion of, the Founder Group shares described above.
(4) Includes options either currently exercisable or exercisable in the
next 60 days for 18,597 shares of Common Stock. These shares are also included
within, and constitute a portion of, the Founder Group shares described above.
(5) Includes options either currently exercisable or exercisable in the
next 60 days for 25,000 shares of Common Stock. These shares are also included
within, and constitute a portion of, the Founder Group shares described above.
(6) Includes options either currently exercisable or exercisable in the
next 60 days for 33,334 shares of Common Stock.
(7) Includes options either currently exercisable or exercisable in the
next 60 days for 10,000 shares of Common Stock.
(8) Includes options either currently exercisable or exercisable in the
next 60 days for 5,000 shares of Common Stock.
(9) Includes options either currently exercisable or exercisable in the
next 60 days for 332,753 shares of Common Stock.
1. APPROVAL OF AMENDMENTS TO COMPANY'S BY-LAWS AND
--------------------------------------------------
CERTIFICATE OF INCORPORATION
----------------------------
(Proxy Item 1)
On August 11, 1997, the Board of Directors adopted a resolution
approving amendments, subject to stockholder ratification, to the Company's
By-Laws and Certificate of Incorporation to, among other things, increase the
number of directors of the Company to seven and to institute a classified Board
of Directors. To effect these amendments, Sections 1(a) and 1(c) of Article III
of the By-laws will be deleted in their entirety, certain additions to Articles
III and IV will be incorporated, and Articles IX, X and XI will be added to the
Company's Certificate of Incorporation. This summary is qualified by reference
to the full text of the amendments to the Company's Certificate of
Incorporation and By-laws which is set forth as Exhibit A to this Proxy
Statement. The classified Board of Directors divides the Company's Board of
Directors into three classes of directors. Pursuant to these amendments, the
terms of the directors will be as follows: (i) Class I Directors shall serve
for a term expiring at the Company's 1998 Annual Meeting of Stockholders; (ii)
Class II Directors shall serve for a term expiring at the Company's 1999 Annual
Meeting of Stockholders; and (iii) Class III Directors shall serve for a term
expiring at the Company's 2000 Annual Meeting of Stockholders. Each director in
each such class shall hold office until his or her successor is duly elected
and qualified or until his earlier death, disability, resignation or removal.
If any seat on the Company's Board of Directors becomes vacant during its
initial term following this Annual Meeting, such vacancy shall be filled
pursuant to Article XI of the Company's amended Certificate of Incorporation
and shall continue to be filled as such for the remainder of the full term. In
addition, the Chairman of the Board will be elected directly by the Company's
stockholders. The Company is proposing these amendments to comply with its
obligations under the Voting Agreement described below under Proxy Item 2.
-5-
<PAGE>
The amendments to the Company's By-Laws and Certificate of
Incorporation require the affirmative vote of a majority of the shares of
Common Stock outstanding and entitled to vote on the Record Date.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE APPROVAL OF THE AMENDMENTS TO THE
COMPANY'S BY-LAWS AND CERTIFICATE OF INCORPORATION.
2. ELECTION OF DIRECTORS
------------------------
(Proxy Item 2)
Seven directors, constituting the entire board, are to be elected at
the Annual Meeting to serve until their respective successors are elected and
qualified. Two directors are to be elected as Class I Directors and shall serve
for a term of one year expiring at the Company's 1998 Annual Meeting of
Stockholders. Two directors are to be elected as Class II Directors and shall
serve for a term of two years expiring at the Company's 1999 Annual Meeting of
Stockholders. Three directors are to be elected as Class III Directors and
shall serve for a term of three years expiring at the Company's 2000 Annual
Meeting of Stockholders. Provided that a quorum is present at the Annual
Meeting, the seven directors receiving the most votes will be elected as
directors for their respective terms. Each director will continue in office
until such director's term expires or until his successor is elected and
qualified or until his earlier death, resignation or removal. The nominees are
as follows: Class I -- Adam L. Goldberg and Marcel M. Yung; Class II - John E.
Meier and Michael Wolf, and Class III - Michael Kharitonov, Andrew J. Schwartz
and Jeffrey Wolf. All of such nominees are currently directors of the Company.
All seven nominees have advised the Company that they will serve if elected.
If any of the persons described in this Proxy Statement who have been nominated
by the Board of Directors of the Company is unable to accept election, it is
intended that the proxies solicited hereby will be voted for the balance of
those named and for a substitute nominee or nominees designated in accordance
with the Voting Agreement described below.
Unless authority to do so is expressly withheld on the proxy
card, proxies received in response to this solicitation will be voted in favor
of the election as directors of the Company of the persons listed below.
The proposal to elect the nominees listed above requires the approval of a
majority of the shares of Common Stock present and voting, provided that a
quorum is present.
Biographical information concerning the candidates is set forth below.
NOMINEES FOR ELECTION AS CLASS I DIRECTORS:
- ------------------------------------------
<TABLE>
<CAPTION>
Name and Age Business Experience and Other Affiliations or Significant Activities
- ------------ ---------------------------------------------------------------------
<S> <C>
Adam L. Goldberg, 38 ADAM L.GOLDBERG has been a director of the Company since September 15, 1997. He is
an attorney, who has been a sole practitioner since 1993. From 1989 to 1993, Mr. Goldberg
was a staff attorney for the New York City Department of Housing Preservation and Development.
From 1987 to 1989, he was employed as an attorney with the law firm Harold, Salant, Comer,
Strassfield & Spielberg.
Marcel M. Yung, 44 MARCEL M. YUNG, PH. D. has been a director of the Company since August 11, 1997. He is
currently a Cryptographer and holds the position of Vice President at CertCo LLC and has held
such positions there, and at its predecessor, since September 1996. From 1988 to 1996,
Dr. Yung was a research staff member at IBM/T.J. Watson Research Center where he
worked on IBM systems and products in the areas of cryptography, security and network
applications.
-6-
<PAGE>
NOMINEES FOR ELECTION AS CLASS II DIRECTORS:
- -------------------------------------------
Name and Age Business Experience and Other Affiliations or Significant Activities
- ------------ --------------------------------------------------------------------
John E. Meier, 51 JOHN E. MEIER has been a director of the Company since July 1996. Mr. Meier became Executive
Vice President and Chief Operating Officer of the Company effective in July 1997. From July
1996 to July 1997, Mr. Meier served as a Vice President of Subscriber Marketing of AirMedia,
a division of Ex Machina, Inc., an Internet broadcast network. From 1976 to 1996, Mr. Meier
was employed by CompuServe, Incorporated, a leading consumer on-line service, having held the
positions of Senior Vice President of Market Planning and Development, and Senior Vice
President of Membership Support and Retention.
Michael E. Wolf, 35 MICHAEL E. WOLF has been a director of the Company since August 11, 1997. Mr. Wolf has been
a quantative analyst at J.P. Morgan & Co. since February 1997 and held similar positions at
Hong Kong and Shanghai Bank from July 1996 through February 1997 and at D.E. Shaw & Co. from
September 1992 through May 1994. From July 1994 through June 1996, he was a computer
programmer at Silicon Graphics, Inc.
NOMINEES FOR ELECTION AS CLASS III DIRECTORS:
- --------------------------------------------
Name and Age Business Experience and Other Affiliations or Significant Activities
- ------------ --------------------------------------------------------------------
Michael Kharitonov, MICHAEL KHARITONOV, PH.D. is a co-founder of the Company. He has been the Chairman
34 of the Board and Director of Technology of the Company since April 1996, and President and
Chief Executive Officer since June 1997. Dr. Kharitonov served as Secretary of the Company
from April 1996 through October 1996. From November 1992 to April 1996, Dr. Kharitonov
was employed by D.E. Shaw & Co., an investment management firm, most recently having held
the position of vice president.
Andrew J. Schwartz, ANDREW J. SCHWARTZ is a co-founder of the Company. He has been a director of the
33 Company since June 1997. He has been General Counsel of the Company since March 1996,
Vice President of Business Development since October 1996, Secretary since October 1996
and Treasurer and Chief Financial Officer since June 1997. From September 1991 through March
1996, Mr. Schwartz was employed as an attorney at McCarter & English, a New Jersey based law
firm.
Jeffrey Wolf, 34 JEFFREY WOLF is a co-founder of the Company. He has been a director of the Company since
September 1995. From September 1995 through December 1995, Mr. Wolf served as the President
of the Company, and from September 1995 through April 1996, Mr. Wolf served as
the Treasurer of the Company. Mr. Wolf has been a managing director of Athena Ventures,
LLC, a New York City based venture capital firm, since January 1996. From November 1994
through December 1995, Mr. Wolf was the head of Berenson Minella Ventures, the venture
capital division of Berenson Minella and Company, a New York City based merchant bank.
</TABLE>
-7-
<PAGE>
The Company is not aware of any family relationships among directors
or executive officers. Company is not aware of any events during the past
five years relating to the ability or integrity of any director, person
nominated to become a director, executive officer, promoter or control
person of the Company that are required to be disclosed herein.
On June 12, 1997, the Company, May Davis Group, Inc. ("May Davis"), Owen
May, Dibo Attar, Dennis E. Sal and seven investment funds as to which Mr. Attar
acts as advisors (the "Funds", and together with May Davis and Messrs. May,
Attar and Sal, collectively, the "Subscribing Parties") entered into a certain
Settlement and Voting Agreement (the "Voting Agreement") to, among other
things, resolve certain corporate governance issues relating to the Company.
The Voting Agreement was amended on September 23, 1997.
Pursuant to the Voting Agreement, as amended, the Subscribing Parties
agreed to certain voting and other provisions for the three year term thereof
(the "Term") relating to the 315,000 shares of the Company's Common Stock
currently held, and the voting securities of the Company owned from time to
time, by the Subscribing Parties for their own accounts, by their immediate
families, by entities they control and certain others (collectively, the
"Subscribing Party Voting Securities").
The parties agreed to promptly increase the size of the Company's Board
of Directors to seven, and to fill the two vacancies thereby created with a
designee of the Subscribing Parties (Designee "B") and a designee ( Designee
"A") selected by the three Class III Directors, namely, Michael Kharitonov,
Andrew J. Schwartz and Jeffrey Wolf, and that such individuals will be
nominated by the Board for election to the Board at the Annual Meeting. They
also agreed that thereafter, for the balance of the Term, the Board will
include as a nominee for election to the Board as a Class I director a designee
of the Subscribing Parties reasonably acceptable to the Board and an
independent designee of the Class III Directors reasonably acceptable to the
Board and to May Davis. Thereafter, at a meeting held on August 11, 1997, the
Board was increased, and Mr. Yung was elected as Designee "A". On September 15,
1997, Mr. Goldberg was elected as Designee "B". Each of them is proposed as a
nominee to the Board pursuant to the Voting Agreement.
The Subscribing Parties also agreed to vote, or cause to be voted, the
Subscribing Party Voting Securities at the Annual Meeting to amend the
Company's By-laws and the Company's Certificate of Incorporation as set forth
in Proxy Item 1; and subject to certain contingencies, to vote in favor of (i)
all of the Board's nominees to the Board to the classes proposed by the Board
as set forth in Proxy Item 2 and to continue to vote in favor of all of the
Board's nominees at each successive annual meeting of stockholders during the
Term, and (ii) Michael Kharitonov as Chairman of the Board.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
NOMINEES LISTED ABOVE.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended March 31, 1997, the Board held nine
meetings and took action by unanimous written consents on two occasions.
During the fiscal year ended March 31, 1997, Messrs. Ross S. Glatzer,
Michael Kharitonov and John E. Meier were members of the Performance Share
Program Committee, which held one meeting. The responsibilities of this
committee include considering grants of awards to the Company's employees. On
August 11, 1997, the Performance Share Program Committee was re-designated the
Compensation Committee and its authority was expanded to include considering
the grants of stock option awards under the Company's stock option plans. The
current members of the Compensation Committee are Messrs. Yung, Kharitonov and
Michael Wolf.
-8-
<PAGE>
During the fiscal year ended March 31, 1997, each director attended at
least 75% of the total number of meetings of the Company's Board of Directors
and the committee on which he served during the period that he served.
EXECUTIVE OFFICERS
Set forth below are the current executive officers of the Company and
information concerning those officers who are not also directors of the
Company.
<TABLE>
<CAPTION>
NAME POSITION
---- ---------
<S> <C>
Michael Kharitonov Chairman, President, Chief Executive Officer
and Director of Technology
John E. Meier Executive Vice President and
Chief Operating Officer
Vladislav Rysin Vice President of Technology
Andrew J. Schwartz Vice President of Business Development, Secretary,
Treasurer, Chief Financial Officer and General
Counsel
</TABLE>
VLADISLAV RYSIN, PH.D. has been the Vice President of Technology of the
Company since October 1996 and Senior Software Developer and Project Manager
since May 1996. From May 1993 to May 1996, Dr. Rysin served as a Vice President
of Accomet Corporation, a company engaged in the manufacturing and trading of
metals. From May 1992 to May 1993, Dr. Rysin served as a systems manager for
Consist International, Inc., a software development company. From February 1990
to May 1992, Dr. Rysin served as a project manager for Atedeca Corporation,
C.A., a software development company.
EXECUTIVE COMPENSATION
The following table sets forth certain summary information with respect to the
compensation paid to the Company's Chief Executive Officer for services
rendered in all capacities to the Company for each of the last two fiscal years
since the Company's incorporation on August 23, 1995 and for any other
Executive Officer whose total annual salary and bonus exceeded $100,000 for the
fiscal year ending March 31, 1997. The Company has not issued or created any
stock appreciation rights ("SAR"), restricted stock awards, pension plans,
retirement plans or long-term incentive plan awards.
-9-
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
FISCAL ---------------------- ----------------------
NAME AND YEAR SALARY ($) BONUS ($) OTHER ANNUAL SECURITIES UNDERLYING
PRINCIPAL ENDING COMPENSATION OPTIONS (#)
POSITION MARCH 31, $
- -------- -------- ----------- --------- ----------- ---------------------
<S> <C> <C> <C> <C> <C>
Laurence Rosen, 1997 110,833 -- -- 107,490
President and
Chief Executive 1996 61,250 29,167 -- 223,158
Officer
Vladislav Rysin, 1997 90,769 68,467 1 87,500 2 100,000
Vice President of
Technology
Michael 1997 70,544 30,000 -- 64,372
Kharitonov,
Director of
Technology
</TABLE>
- ----------------------
1 This amount constitutes a pro-rated portion accrued during fiscal 1997 of a
$79,000 bonus paid to Mr. Rysin on May 18, 1997.
2 This amount represents amortization of deferred compensation during fiscal
1997 in connection with the issuance of 100,000 options under the 1996 Stock
Option Plan based on the difference between the fair market value of the Common
Stock underlying the stock options at the time of issuance and the exercise
price of such options.
1996 STOCK OPTION PLAN
Effective as of February 1996, the Board of Directors and stockholders
of the Company adopted the Company's 1996 Stock Option Plan (the "Option
Plan"). The Option Plan is intended to recognize the contributions made to the
Company by key employees, officers and directors of the Company and to provide
such persons with additional incentive to devote themselves to the future
success of the Company. Furthermore, the Option Plan improves the ability of
the Company to attract, retain, and motivate individuals upon whom the
Company's sustained growth and financial success depend, by providing such
persons with an opportunity to acquire or increase their proprietary interest
in the Company through receipt of rights to acquire the Company's Common Stock.
The Company has reserved 800,000 shares of Common Stock for issuance
upon the exercise of options available for future grant under the Option Plan
designated as either (i) incentive stock options ("ISO's") under the Internal
Revenue Code of 1986, as amended (the "Code"), or (ii) non-qualified stock
options ("NQSO's"). ISO's may be granted under the Option Plan to employees
(including directors) and officers of the Company. NQSO's may be granted to
non-employee directors, and officers of the Company.
-10-
<PAGE>
NON-PLAN STOCK OPTIONS
The Company has issued options to purchase an aggregate of 260,000
shares of Common Stock (the "Non-Plan Options") outside of the Option Plan to
certain executive officers, non-employee directors and consultants. All of such
Non-Plan Options have vested. Fifty percent of such options became exercisable
on February 28, 1997 and the remaining 50% of such Non-Plan Options become
exercisable on the earlier of (i) the Company achieving an after-tax net income
of at least $1,250,000 for a full fiscal year or (ii) five years following
their date of grant.
EMPLOYEE PERFORMANCE SHARE PROGRAM
On February 27, 1997, the Company's Board of Directors adopted
the NetLive Communications, Inc. Performance Share Program, an employee
deferred compensation plan (the "Performance Plan"). The purpose of the
Performance Plan is to provide an incentive for, and to help retain, the
Company's employees and to facilitate hiring new employees. The Company also
entered into a Trust Agreement whereby the Performance Share Program Trust (the
"Trust") was created and issued 300,000 shares of the Company's Common Stock to
the Trust. Prior to vesting and distribution to the applicable employee(s), the
shares will be voted by the independent trustee of the Trust, Mr. R. Andrew
Lee. Upon the end of the fiscal year ended March 31, 1997, the Performance Plan
Committee of the Company's Board of Directors had made awards to 12 employees
(none of whom is an officer or director of the Company) constituting an
aggregate of 106,000 shares of Common Stock. Awards relating to 28,000 shares
were subsequently canceled because of employee departures. Accordingly, awards
relating to an aggregate of 78,000 shares of Common Stock were outstanding as
of August 15, 1997.
The Company intends to file a Form S-8 registration statement between
May 14, 1998 and August 12, 1998 to register some or all of 300,000 shares of
Common Stock reserved for issuance under the Company's Employee Performance
Share Program. The Company is also considering registering after May 14, 1998,
in the same or a separate Form S-8 registration statement, some or all of
1,060,000 shares of Common Stock subject to outstanding options under the
Company's 1996 Employee Stock Option or otherwise.
The following table sets forth the information with respect to options
issued to the Company's Executive Officers about whom disclosure is required
during the fiscal year ended March 31, 1997:
OPTION GRANTS DURING FISCAL YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
NAME NUMBER OF % OF TOTAL EXERCISE MARKET EXPIRATION DATE
SECURITIES OPTIONS/SARS PRICE ($) PRICE ON
UNDERLYING GRANTED TO DATE OF
OPTIONS/SARS DIRECTORS AND GRANT ($)
GRANTED (#) EMPLOYEES IN
FISCAL YEAR (%)
- --------------- ----------- --------------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Vladislav Rysin 100,000 1 46.5 2.50 5.50 May 19, 2001
All Directors and 215,000 100.0
Employees as a
Group (5
persons)
</TABLE>
- -------------
-11-
<PAGE>
1 All of such options are NQSO's granted under the Option Plan.
The following table sets forth the information with respect to
options held by the Company's Executive Officers about whom disclosure
is required at the end of the fiscal year ending March 31, 1997. The
share closing price on March 31, 1997 for the Company's Common Stock
was $6.875.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
NAME NUMBER OF VALUE OF NUMBER OF VALUE OF
SECURITIES UNEXERCISED SECURITIES UNEXERCISED IN-
UNDERLYING IN-THE-MONEY UNDERLYING THE-MONEY
UNEXERCISED, EXERCISABLE UNEXERCISED, UNEXERCISABLE
EXERCISABLE OPTIONS AT UNEXERCISABLE OPTIONS AT FY
OPTIONS AT FY END ($) OPTIONS AT FY END ($)
FY END (#) END (#)
- --------------- -------------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Laurence Rosen 46,579 203,783 284,069 856,637
Michael Kharitonov 27,895 122,040 162,266 563,360
Vladislav Rysin -- -- 100,000 437,500
</TABLE>
DIRECTOR COMPENSATION
Directors who are employed by or serve as consultants to the Company do not
currently receive fees for their services as Directors. Outside Directors
currently receive $1,500 for each Board meeting they attend. All Directors are
reimbursed for travel and other necessary business expenses incurred in such
capacity in the performance of their services for the Company.
EMPLOYMENT AGREEMENTS
Effective as of September 1, 1995, the Company entered into a
consulting agreement with Jeffrey Wolf. In addition, effective as of April 5,
1996, the Company entered into an employment agreement with Michael Kharitonov,
and, effective as of May 19, 1996, the Company entered into an employment
agreement with Vladislav Rysin. The consulting agreement with Jeffrey Wolf was
amended effective May 1, 1996. In addition, the Company's employment agreement
with Michael Kharitonov was amended effective July 1, 1996. Effective as of
September 1, 1995, the Company entered into an employment agreement with
Laurence Rosen. Effective as of June 12, 1997, the Company entered into a
severance agreement and related agreements with Laurence Rosen.
Pursuant to the consulting agreement with Jeffrey Wolf, which was
amended effective as of May 1, 1996, Mr. Wolf received a consulting fee of
$50,000 per year through August 31, 1996 and a consulting fee of $55,000 per
year for the year commencing September 1, 1996. Mr. Wolf will receive $60,000
per year for the year commencing September 1, 1997. In addition, Mr. Wolf
received 73,860 options, 50% of which are exercisable upon the earlier of (i)
the Company achieving certain earnings standards or (ii) five years from the
date of grant. The consulting agreement will be renewed for successive one year
terms unless the Company gives 30 days prior written notice of its intention
not to renew the agreement. The consulting agreement may be terminated by the
Company upon the
-12-
<PAGE>
death of Mr. Wolf or by either party for just cause (as
defined in the consulting agreement). The consulting agreement also provides
for payments to Mr. Wolf for a nine month period following termination equal to
his base salary and a pro-rata portion of any bonus to which he would have been
entitled in the event that the consulting agreement is terminated other than as
a result of the death of Mr. Wolf, for cause or for lack of renewal thereof.
The agreement does not require Mr. Wolf to devote his time exclusively to the
Company and also subjects Mr. Wolf to certain confidentiality and
non-competitive provisions.
Pursuant to the employment agreement with Dr. Kharitonov, which was
amended effective July 1, 1996, Dr. Kharitonov received a base annual salary of
$100,000 per year through August 31, 1996, a salary of $110,000 per year for
the year commencing September 1, 1996 and will receive $120,000 per year for
the year commencing September 1, 1997. However, Dr. Kharitonov has the option
to perform work for the Company on a reduced hour basis. In the event that Dr.
Kharitonov elects to perform his duties on a reduced hour basis, his salary
shall be adjusted so that the Company shall pay him a base salary after such
election at the rate of $50,000 per annum through August 31, 1996, $55,000 from
September 1, 1996 through August 31, 1997, $60,000 per annum from September 1,
1997 through August 31, 1998 and such equal or greater amount in each
subsequent year of the term of the employment agreement as may be determined by
the Board of Directors, payable in equal installments on a semi-monthly basis
in arrears. This reduced hour option was exercised by Dr. Kharitonov from
August 16, 1996 to February 28, 1997. Further, Dr. Kharitonov was paid a bonus
of $30,000 on January 1, 1997. In addition, Dr. Kharitonov received 55,789
options, 50% of which are exercisable upon the earlier of (i) the Company
achieving certain earnings standards or (ii) five years from the date of grant.
The employment agreement will be renewed for successive one year terms unless
the Company gives 30 days prior written notice of its intention not to renew
the agreement. The employment agreement may be terminated by the Company upon
the death of Dr. Kharitonov and by either party or for just cause (as defined
in the employment agreement). The employment agreement also provides for
payments to Dr. Kharitonov following termination as follows: (i) so long as Dr.
Kharitonov performs his duties as a full-time employee of the Company, upon
termination Dr. Kharitonov shall receive payments equal to his base salary and
a pro-rata portion of any bonus to which he would have been entitled for a nine
month period after termination in the event that the employment agreement is
terminated other than as a result of the death of Dr. Kharitonov, for just
cause (as defined in the employment agreement) or for lack of renewal thereof,
or (ii) in the event that Dr. Kharitonov elects to perform his duties on a
reduced hour basis, upon termination Dr. Kharitonov shall receive payments
equal to the amount described above but for the entire remaining term of the
employment agreement. The agreement with Dr. Kharitonov includes certain
confidentiality and noncompetitive provisions. Upon Dr. Kharitonov's promotion
to President and CEO on June 12, 1997, the Board of Directors increased his
salary to $115,000 per annum.
Pursuant to the agreement with Dr. Rysin, the Company's Vice President
of Technology and Senior Software Developer and Project Manager, Dr. Rysin
received a base salary of $98,000 per year through May 18, 1997, receives
$108,000 per year for the year commencing May 19, 1997 and will receive
$118,000 per year for the year commencing May 19, 1998. In addition, Dr. Rysin
received 100,000 vested options, one-third of which became exercisable one (1)
year from the date of his employment agreement, and an additional one-sixth of
which shall become exercisable every six months thereafter. The employment
agreement will be renewed for successive one year terms unless the Company
gives 30 days prior written notice of its intention not to renew the agreement.
The employment agreement may be terminated by the Company upon the death of Dr.
Rysin or for just cause (as defined above). Further, Dr. Rysin may also
terminate the employment agreement for just cause (as defined above). The
employment agreement also provides for payments to Dr. Rysin for a nine month
period following termination equal to his base salary and a pro-rata portion of
any bonus to which he would have been entitled in the event that the employment
agreement is terminated other than as a result of the death of Dr. Rysin, for
cause (as defined above) or for lack of renewal thereof. Further, Dr. Rysin
shall be paid a bonus of $79,000 on the last day of the month on each of the
twelfth, twenty-fourth and thirty-sixth months of the employment agreement. The
agreement with Dr. Rysin includes certain confidentiality and non-competitive
provisions. Upon his promotion to Vice President of Technology on October 7,
1996, the Company increased Mr. Rysin's salary to $110,000 per year through May
19, 1997, $120,000 per year through May 19, 1998 and $130,000 per year through
May 19, 1999.
-13-
<PAGE>
Pursuant to the agreement with Mr. Rosen, the Company's President,
Chief Executive Officer, and Director, Mr. Rosen received a base salary of
$105,000 per year through August 31, 1996, and a salary of $115,000 per year
for the year commencing September 1, 1996 and $125,000 per year for the year
commencing September 1, 1997. In addition, Mr. Rosen received 93,158 options,
50% of which are exercisable upon the earlier of (i) the Company achieving
certain earnings standards or (ii) five years from the date of grant. On June
12, 1997, a certain Severance Agreement (the "Severance Agreement") and various
related documents including a certain Consulting Agreement (the "Consulting
Agreement") between the Company and Laurence Rosen became effective. Mr. Rosen
resigned as President, Chief Executive Officer, as a member of the Board of
Directors and all other positions with the Company. Concurrently, the Company
paid Mr. Rosen $147,500. Under the Severance Agreement, the Company and Mr.
Rosen exchanged mutual releases and made provision for certain of Mr. Rosen's
stock options and benefits. Mr. Rosen also agreed not to hire, or be hired by,
directly or indirectly, any existing employees of the Company for one year.
Under the Consulting Agreement, Mr. Rosen is to serve as a consultant to the
Company from the Effective Date through September 1, 1997 and be compensated at
the rate of $500 per month.
Currently, all of the officers of the Company perform their
duties as full-time employees of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company was originally incorporated under the laws of the State of
Delaware under the name of NetVisions Incorporated and subsequently changed its
name to NetLive Communications, Inc. In September 1995, December 1995 and
January 1996, certain executive officers, directors and/or principal
shareholders of the Company purchased shares of Common Stock for an aggregate
consideration of $6,750, $22,890 and $1.00, respectively. The following table
indicates the number of shares of Common Stock purchased by such persons and
the date of such purchases:
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF NUMBER OF
SHARES SHARES SHARES
PURCHASED IN PURCHASED IN PURCHASED IN
NAME SEPTEMBER 1995 DECEMBER 1995 JANUARY 1996
- ---- --------------- --------------- ------------------
<S> <C> <C> <C>
Scott Wolf 132,268 45,206 --
Laurence Rosen 263,699 88,737 1,674
Jeffrey Wolf 263,699 88,737 --
Andrew J. Schwartz 45,206 45,206 --
Michael Kharitonov 132,268 132,268 1,674
</TABLE>
In February 1996, Mr. Robert Friedman purchased 41,857 shares of the Company's
Common Stock for an aggregate consideration of $50,000. In addition, in
February 1996, Mr. Robert Friedman purchased 5,860 and 10,883 shares of the
Company's Common Stock from Messrs. Laurence Rosen and Jeffrey Wolf,
respectively. In February 1996, Mr. Laurence Rosen purchased 90,412 shares of
the Company's Common Stock from Mr. Andrew Schwartz. In December 1996, Mr.
Rosen and Mr. Schwartz rescinded their February 1996 transaction.
As previously described, Messrs. Kharitonov, Rosen, Schwartz and Jeffrey Wolf
are members of the Founders Group. The nomination for election to the Board of
Directors of Messrs. Goldberg, Kharitonov, Schwartz, Jeffrey Wolf and Yung was
in accordance with the Voting Agreement.
The Company believes that all transactions with Officers, Directors
and principal shareholders and their affiliates were made on terms no less
favorable to the Company than those available from unaffiliated parties. In
-14
<PAGE>
addition, the Company has a policy that all transactions with affiliates,
including loans between the Company and its Officers, Directors, principal
stockholders and their affiliates, must be approved by a majority of the Board
of Directors, including a majority of the independent and disinterested outside
Directors on the Board of Directors, and must be on terms no less favorable to
the Company than could be obtained from unaffiliated third parties.
CERTAIN LEGAL PROCEEDINGS
None of the Company's directors, officers or affiliates, or to the
Company's knowledge, any holder of 5% or more of the Company's Common Stock is
a party adverse to the Company or any of its subsidiaries in any legal
proceeding.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's equity
securities (collectively, "Reporting Persons") to file reports and changes in
ownership of such securities with the Securities and Exchange Commission (the
"Commission") and the Company. Based solely upon a review of (i) Forms 3 and 4
and amendments thereto furnished to the Company pursuant to Rule 16a-3(e),
promulgated under the Exchange Act, during the Company' s fiscal year ended
March 31, 1997 and (ii) Forms 5 and any amendments thereto and/or written
representations furnished to the Company by any Reporting Persons stating that
such person was not required to file a Form 5 during the Company's fiscal year
ended March 31, 1997, it has been determined that the following Reporting
Persons were delinquent with respect to such person's reporting obligations set
forth in Section 16(a) of the Exchange Act: (i) Michael Kharitonov, Laurence
Rosen, John E. Meier, Ross S. Glatzer, Vladislav Rysin, Andrew J. Schwartz and
Jeffrey Wolf each filed one late report on Form 3; (ii) Laurence Rosen filed
one late report on Form 4 and (iii) Andrew Schwartz filed two late reports on
Form 4. To the Company's knowledge, none of the transactions reported therein
resulted in any short-swing profits.
3. ELECTION OF AUDITORS
(Proxy Item 3)
The Board of Directors has selected Goldstein, Golub, Kessler &
Company, P.C., independent certified public accountants, to serve as auditors
for the Company for the fiscal year ended March 31, 1998, subject to
stockholder ratification. Goldstein, Golub, Kessler & Company, P.C. has advised
the Company that neither the firm nor any of its members has any direct or
indirect financial interest in, or connection with, the Company, other than as
independent auditors. All of the professional services rendered to the Company
by Goldstein, Golub, Kessler & Company, P.C. during the year ended March 31,
1997 were furnished at customary rates and terms. A representative of
Goldstein, Golub, Kessler & Company, P.C. is expected to be present at the
Annual Meeting, with the opportunity to make a statement if he or she desires
to do so, and will be available to respond to appropriate questions. Goldstein,
Golub, Kessler & Company, P.C. has been the Company's auditors since its
inception and are considered by the Board of Directors to be well qualified to
serve as the Company's auditors and ratification by the stockholders of their
selection is therefore recommended.
The proposal to ratify the selection of Goldstein, Golub, Kessler & Company,
P.C. as the Company's independent auditors requires the approval of a majority
of the shares of Common Stock present and voting, provided that a quorum is
present. Proxies received in response to this solicitation will, in the
absence of contrary specification, be voted in favor of such ratification.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE SELECTION
OF GOLDSTEIN, GOLUB, KESSLER & COMPANY, P.C. AS INDEPENDENT AUDITORS FOR THE
COMPANY.
-15-
<PAGE>
4. APPROVAL OF THE 1997 STOCK OPTION PLAN
(PROXY ITEM 4)
The Company's Board of Directors believes that in order to attract,
retain and motivate executive and other key employees, it is necessary for the
Company to have the ability and flexibility to provide compensation packages
which compare favorably with those offered by other companies. Towards that
end, the Company adopted the Option Plan in 1996 and the Performance Plan in
1997, as previously described. However, only approximately 100,000 shares of
Common Stock remain available for issuance under the 1996 Plan, and
approximately 220,000 shares under the Performance Plan, and the Board is
concerned about the Company's ability to compete for talent in a highly
competitive job market. Accordingly, in an effort to enhance the Company's
competitive position, in August 1997, the Board of Directors adopted, subject
to stockholder approval, the 1997 Plan (the "1997 Plan"). Set forth below is a
summary of the 1997 NetLive Communications, Inc. Stock Option Plan, which is
qualified in its entirety by reference to the full text of the 1997 Plan, a
copy of which is annexed as Exhibit B to this Proxy Statement. The 1997 Plan
will not become effective without stockholder approval.
Six hundred thousand shares of Common Stock have been authorized for
issuance under the 1997 Plan. If shares subject to an option or other right
granted under the 1997 Plan cease to be subject to such option or other right,
or if shares awarded under the 1997 Plan are forfeited, or otherwise terminate
without a payment being made to the participant in the form of stock, such
shares will again be available for future distribution under the 1997 Plan.
Awards under the 1997 Plan may be made to key employees, including
officers and directors of, and consultants and independent contractors to, the
Company and its subsidiaries, except that members and any alternate members of
the administering committee are not eligible for options under the 1997 Plan.
The 1997 Plan imposes no limit on the number of officers and other key
employees to whom awards may be made.
The 1997 Plan will be administered by a committee of at least two
non-employee directors to be appointed by the Company's Board of Directors (the
"Committee"). Any member or alternate member of the Committee shall not be
eligible to receive options or stock under the 1997 Plan. The Committee has
broad discretion in determining the persons to whom stock options are to be
granted, the type and the terms and conditions of the award, the exercise price
and term and the restrictions and forfeiture conditions. If no Committee is
appointed, the functions of the committee shall be performed by the Board of
Directors. The Committee is presently comprised of Michael Kharitonov, Michael
Wolf and Marcel Yung.
The Committee has the authority to grant under the 1997 Plan both
incentive and non-qualified stock options.
Tax consequences of awards granted under the 1997 Plan are dependent upon the
type of award granted. The grant of an ISO or a NISO does not result in any
taxable income to the recipient or deduction to the Company. Upon exercise of a
NISO, the recipient recognizes income in the amount by which the fair market
value on the date of exercise exceeds the exercise price of the option, and the
Company receives a corresponding tax deduction. In the case of an ISO, no
income is recognized by the employee, and no deduction is available to the
Company, if the stock issued upon exercise of the option is not transferred
within two years from the date of grant or one year from the date of exercise,
whichever occurs later. However, the exercise of an ISO may result in
additional taxes through the application of the alternative minimum tax. In the
event of a sale or other disqualifying transfer of stock issued upon exercise
of an ISO, the employee realizes income, and the Company receives a tax
deduction, equal to the amount by which the lesser of the fair market value at
the date of exercise or the proceeds from the sale exceeds the exercise price.
The proposal to ratify the 1997 Stock Option Plan requires the
approval of a majority of the shares of Common Stock present and voting,
provided that a quorum is present.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE 1997
PLAN.
-16-
<PAGE>
1998 STOCKHOLDER PROPOSALS
Stockholder proposals intended to be considered for inclusion in the
Company's proxy statement for the 1998 Annual Meeting of Stockholders must be
received by the Company at its principal office in New York, New York prior to
February 28, 1998.
OTHER MATTERS
The costs of preparing, printing and mailing the Notice of Annual
Meeting of Stockholders, Proxy Material and proxy and all other expenses of
soliciting proxies will be borne by the Company. In addition to solicitation by
mail, directors, officers and regular employees of the Company may solicit
proxies in person, by telephone, by telegram, by personal interview, by e-mail,
or by telecopier and will receive no additional compensation for such
solicitations. The Company will request banks, brokerage houses and other
custodians, nominees and fiduciaries to forward its solicitation materials to
the beneficial owners of the shares of Common Stock they hold of record and
obtain authorization for, and appropriate certification in connection with, the
execution of proxy cards. The Company will reimburse these record holders for
customary mailing expenses incurred by them in forwarding these materials.
Management does not know of any other matters to be presented at the Annual
Meeting other than those described herein. However, if any such matters
properly come before the meeting, the holders of proxies solicited by the
Board of Directors of the Company intend to exercise their discretion in
voting on such other matters.
By order of the Board of Directors
ANDREW J. SCHWARTZ
Secretary
September 23, 1997
<PAGE>
EXHIBIT A
AMENDMENTS TO THE COMPANY'S CERTIFICATE OF INCORPORATION
The amendments to the Company's Certificate of Incorporation shall add new
Articles IX, X and XI as follows:
"Article IX: Number of Directors: The number of directors of the
Corporation shall be seven.
Article X: Classified Board of Directors: The directors, other than
those who may be elected by the holders of any class or series of stock having
a preference over the Common Stock as to dividends or upon liquidation pursuant
to the terms of this Certificate of Incorporation or any resolution or
resolutions providing for the issuance of any such series of stock adopted by
the Board of Directors, shall be classified with respect to the time for which
they severally hold office into three classes, as nearly equal in number as
possible. The initial Class I Directors shall serve for a term expiring at the
first annual meeting of stockholders of the Corporation following the adoption
of this amendment of this Certificate; the initial Class II Directors shall
serve for a term expiring at the second annual meeting of stockholders
following this amendment of this Certificate; and the initial Class III
Directors shall serve for a term expiring at the third annual meeting of
stockholders following the adoption of this amendment of this Certificate. Each
director in each such class shall hold office until his or her successor is
duly elected and qualified or until his earlier death, disability, resignation
or removal. At each annual meeting of stockholders beginning with the first
annual meeting of stockholders following the adoption of this amendment of this
Certificate, the successors of the class of directors whose term expires at
that meeting shall be elected to hold office for a term expiring at the annual
meeting of stockholders to be held in the third year following the year of
their election, with each director in each such class to hold office until his
or her successor is duly elected and qualified or until his earlier death,
disability, resignation or removal.
Article XI: Vacancies. If any seat on the Board becomes vacant during its
initial term following the 1997 Annual Meeting, such vacancy shall be filled
as follows: (i) in the case of Class III Directors, or their successors, by
the vote of a majority of the remaining Class III Directors, (ii) in the case
of the Class II Directors or Designee "A" of the Class I Directors, or their
successors (all such Directors being referred to as the "Independent
Directors"), by the vote of a majority of the remaining Independent Directors,
and (iii) in the case of Designee "B" of the Class I Directors, or his
successors, by May Davis Group, Inc., Owen May, Dibo Attar, Dennis E. Sal,
Davstar II Mdg. Investments Corp. N.V., Jasminville Corp., N.V., Celestial
Dreams Corp. N.V., Eaglehurst Corp. N.V., Signal Hill N.V., Wellington Corp.
N.V. and Ganaterra Corp. N.V., so long as such person is not an officer or
employee of May Davis Group, Inc. and is reasonably acceptable to the Board."
AMENDMENTS TO THE COMPANY'S BY-LAWS
Article III of the By-Laws of the Company, relating to the Board of
Directors, shall be amended as follows:
1. Sections 1(a) and 1(c) of Article III, which are set forth
below, are deleted in their entirety:
Section 1 - Number, Election and Term of Office:
"(a) The number of directors of the Corporation shall be as
determined by resolution of the Board of Directors."
"(c) Each director shall hold office until the annual meeting of the
stockholders next succeeding his election, and until his successor is elected,
and qualified, or until his prior death, resignation or removal."
A-1
<PAGE>
2. Article III, Section 6 is amended by the addition of a new
last sentence to read in its entirety as follows:
"Section 6 - Chairman:
At all meetings of the Board of Directors, the Chairman of
the Board, if any and if present, shall preside. If there
shall be no Chairman, or he shall be absent, then the
President shall preside, and in his absence, a Chairman
chosen by the directors shall preside. The Chairman of the
Board shall be elected by the stockholders of the Corporation
and he shall hold office until the expiration of his term as
director or until his death, resignation or removal for
cause."
3. Article III, Section 9 is amended by the addition of an
initial clause in the first sentence to read in its entirety as follows:
"Section 9 - Vacancies:
Except as provided in the Corporation's Certificate of
Incorporation, any vacancy in the Board of Directors
occurring by reason of an increase in the number of
directors, or by reason of the death, resignation,
disqualification, removal (unless a vacancy created by the
removal of a director by the stockholders shall be filled by
the stockholders at the meeting at which the removal was
effected) or inability to act of any director, or otherwise,
shall be filled for the unexpired portion of the term by a
majority vote of the remaining directors, though less than a
quorum, at any regular meeting or special meeting of the
Board of Directors called for that purpose."
4. At the end of Article IV, Section 1(b), Article IV,
Section 1(c) and Article IV, Section 3, commas shall be substituted for the
periods; the following language shall be added: "except as provided in
Article III, Section 6 hereof" (the text of Article III, Section 6 is set
forth above); and such provisions amended to read in their entirety as
follows:
Article IV, Section 1(b): "The officers of the Corporation
shall be elected by the Board of Directors at the regular annual meeting
of the Board following the annual meeting of stockholders, except as provided
in Article III, Section 6 hereof."
Article IV, Section 1(c): "Each officer shall hold office
until the annual meeting of the Board of Directors next succeeding his
election, and until his successor shall have been elected and qualified,
or until his death, resignation or removal, except as provided in Article
III, Section 6 hereof."
Article IV, Section 3: "Any officer may be removed, either
with or without cause, and a successor elected by a majority vote of the
Board of Directors at any time, except as provided in Article III, Section 6
hereof."
A-2
<PAGE>
EXHIBIT B
1997 STOCK OPTION PLAN
NETLIVE COMMUNICATIONS, INC.
1. PURPOSE; DEFINITIONS.
The purpose of the NetLive Communications, Inc. 1997 Stock Option Plan
(the "Plan") is to enable NetLive Communications, Inc. (the "Company") to
attract, retain and reward key employees of the Company and its Subsidiaries
and Affiliates, and others who provide services to the Company and its
Subsidiaries and Affiliates, and strengthen the mutuality of interests between
such key employees and such other persons and the Company's stockholders, by
offering such key employees and such other persons incentives and/or other
equity interests or equity-based incentives in the Company, as well as
performance-based incentives payable in cash.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Affiliate" means any corporation, partnership, joint venture or
other entity, other than the Company and its Subsidiaries, that is designated
by the Board as a participating employer under the Plan, provided that the
Company directly or indirectly owns at least 20% of the combined voting power
of all classes of stock of such entity or at least 20% of the ownership
interests in such entity.
(b) "Board" means the Board of Directors of the Company.
(c) "Book Value" means, as of any given date, on a per share basis (i)
the stockholders' equity in the Company as of the last day of the immediately
preceding fiscal year as reflected in the Company's consolidated balance sheet,
subject to such adjustments as the Committee shall specify at or after grant,
divided by (ii) the number of then outstanding shares of Stock as of such
year-end date, as adjusted by the Committee for subsequent events.
(d) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
(e) "Commission" means the Securities and Exchange Commission or
any successor thereto.
(f) "Committee" means the Committee referred to in Section 2 of the
Plan. If at any time no Committee shall be in office, then the functions
of the Committee specified in the Plan shall be exercised by the Board.
(g) "Company" means NetLive Communications, Inc., a Delaware
corporation, or any successor corporation.
(h) "Disability" means disability as determined under procedures
established by the Committee for purposes of this Plan.
(i) "Early Retirement" means retirement, with the express consent for
purposes of this Plan of the Company at or before the time of such retirement,
from active employment with the Company and any Subsidiary or Affiliate
pursuant to the early retirement provisions of the applicable pension plan of
such entity.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, from time to time, and any successor thereto.
(k) "Fair Market Value" means, as of any given date, the market price
of the Stock as determined by or in accordance with the policies established by
the Committee in good faith; provided, that, in the case of an Incentive Stock
Option, the Fair Market Value shall be determined in accordance with the Code
and the Treasury regulations under the Code.
(l) "Incentive Stock Option" means any Stock Option intended to be
and designated as an "Incentive Stock Option" within the meaning of
Section 422A of the Code.
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(m) "Non-Employee Director" means a director of the Company who is not
otherwise employed by the Company or any Subsidiary or Affiliate, provided,
however, that any person who is employed by the Company or any of its
subsidiaries and is an officer of the Company but does not receive compensation
from the Company for services as an officer shall be deemed a Non-Employee
Director.
(n) "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(o) "Normal Retirement" means retirement from active employment with
the Company and any Subsidiary or Affiliate on or after age 65.
(p) "Plan" means this NetLive Communications, Inc. 1997 Stock Option
Plan, as hereinafter amended from time to time.
(q) "Retirement" means Normal Retirement or Early Retirement.
(r) "Stock" means the common stock, par value $.0001 per share,
of the Company or any class of common stock into which such common stock may
hereafter be converted or for which such common stock may be exchanged as
part of a recapitalization, reorganization or similar transaction;
(s) "Stock Option" or "Option" means any option to purchase shares
of Stock granted pursuant to Section 5 of the Plan.
(t) "Subsidiary" means any corporation or other business association,
including a partnership (other than the Company) in an unbroken chain of
corporations or other business associations beginning with the Company if each
of the corporations or other business associations (other than the last
corporation in the unbroken chain) owns equity interests (including stock or
partnership interests) possessing 50% or more of the total combined voting
power of all classes of equity in one of the other corporations or other
business associations in the chain.
2. ADMINISTRATION.
(a) The Plan shall be administered by a Committee of not less than two
Non-Employee Directors, who shall be appointed by the Board and who shall serve
at the pleasure of the Board. If and to the extent that no Committee exists
which has the authority to so administer the Plan, the functions of the
Committee specified in the Plan shall be exercised by the Board.
Notwithstanding the foregoing, in the event that the Company is not subject to
the Exchange Act or in the event that the administration of the Plan by a
Committee of Non-Employee Directors is not required in order for the Plan to
meet the test of Rule 16b-3 of the Commission under the Exchange Act, or any
subsequent rule, then the Committee need not be composed of Non-Employee
Directors. As long as said Rule 16b-3 requires, as a condition to the officers
and directors obtaining the benefit of such rule, that the Committee be
composed of Non-Employee Directors, each member or alternate member of the
Committee shall not be entitled to any grants under the Plan or under any other
plans of the Corporation or its affiliates, except to the extent that
participation in a plan would not cause such person to cease being a
Non-Employee Director for purposes of said Rule 16b-3.
(b) The Committee shall have full authority to grant Stock Options,
pursuant to the terms of the Plan, to officers and other persons eligible
under Section 4 of the Plan. In particular, the Committee shall have the
authority:
(i) to select the officers and other eligible persons to whom
Stock Options may from time to time be granted pursuant to the Plan;
(ii) to determine whether and to what extent Incentive
Stock Options and/or Non-Qualified Stock Options, or any combination thereof,
are to be granted pursuant to the Plan, to one or more eligible persons;
(iii) to determine the number of shares to be covered by
each such award granted pursuant to the Plan;
(iv) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted under the Plan, including, but
not limited to, the share price or exercise price and any restriction or
limitation, or any vesting,
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acceleration or waiver of forfeiture restrictions
regarding any Stock Option or other award and/or the shares of Stock relating
thereto, based in each case on such factors as the Committee shall, in its sole
discretion, determine;
(v) to determine whether, to what extent and under what
circumstances a Stock Option may be settled in cash or other securities of
the Company under Paragraph 5(b)(x) of the Plan instead of Stock;
(vi) to determine whether, to what extent and under what
circumstances Option grants and/or other awards under the Plan and/or other
cash awards made by the Company are to be made, and operate, on a tandem basis
with other awards under the Plan and/or cash awards made outside of the Plan in
a manner whereby the exercise of one award precludes, in whole or in part, the
exercise of another award, or on an additive basis;
(vii) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to an award under
this Plan shall be deferred either automatically or at the election of the
participant, including any provision for any determination or method of
determination of the amount (if any) deemed be earned on any deferred amount
during any deferral period; and
(viii) to determine an aggregate number of awards and the
type of awards to be granted to eligible persons employed or engaged by the
Company and/or any specific Subsidiary, Affiliate or division and grant to
management the authority to grant such awards, provided that no awards to any
person subject to the reporting and short-swing profit provisions of Section 16
of the Exchange Act may be granted awards except by the Committee.
(c) The Committee shall have the authority to adopt, alter and repeal
such rules, guidelines and practices governing the Plan as it shall, from time
to time, deem advisable; to interpret the terms and provisions of the Plan and
any award issued under the Plan and any agreements relating thereto, and
otherwise to supervise the administration of the Plan.
(d) All decisions made by the Committee pursuant to the provisions
of the Plan shall be made in the Committee's sole discretion and shall be
final and binding on all persons, including the Company and Plan participants.
3. STOCK SUBJECT TO PLAN.
(a) The total number of shares of Stock reserved and available for
distribution under the Plan shall be six hundred thousand (600,000) shares of
Common Stock. Such shares may consist, in whole or in part, of authorized and
unissued shares or treasury shares. In the event that awards are granted in
tandem such that the exercise of one award precludes the exercise of another
award then, for the purpose of determining the number of shares of Stock as to
which awards shall have been granted, the maximum number of shares of Stock
issuable pursuant to such tandem awards shall be used.
(b) If any shares of Stock that have been optioned cease to be
subject to a Stock Option, such shares shall again be available for
distribution in connection with future awards under the Plan.
(c) In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, stock distribution, reverse
split, combination of shares or other change in corporate structure affecting
the Stock, such substitution or adjustment shall be made in the aggregate
number of shares reserved for issuance under the Plan, in the number and option
price of shares subject to outstanding Options granted under the Plan, as may
be determined to be appropriate by the Committee, in its sole discretion,
provided that the number of shares subject to any award shall always be a whole
number.
4. ELIGIBILITY.
Officers and other key employees, consultants and directors of the
Company and its Subsidiaries and Affiliates who are responsible for or
contribute to the management, growth and/or profitability of the business of
the Company and/or its Subsidiaries and Affiliates are eligible to be granted
awards under the Plan.
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5. STOCK OPTIONS.
(a) Administration. Stock Options may be granted alone, in addition to
or in tandem with other awards granted under the Plan and/or cash awards made
outside of the Plan. Any Stock Option granted under the Plan shall be in such
form as the Committee may from time to time approve. Stock Options granted
under the Plan may be of two types: (i) Incentive Stock Options and (ii)
Non-Qualified Stock Options. The Committee shall have the authority to grant to
any optionee Incentive Stock Options, Non-Qualified Stock Options, or both
types of Stock Options.
(b) Option Grants. Options granted under the Plan shall be
subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of the Plan,
as the Committee, in its sole discretion, shall deem desirable:
(i) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the Committee at the
time of grant.
(ii) Option Term. The term of each Stock Option shall be
fixed by the Committee, but no Stock Option shall be exercisable more than
ten (10) years after the date the Option is granted.
(iii) Exercisability. Stock Options shall be exercisable at
such time or times and subject to such terms and conditions as shall be
determined by the Committee at or after grant. If the Committee provides, in
its sole discretion, that any Stock Option is exercisable only in installments,
the Committee may waive such installment exercise provisions at any time at or
after grant in whole or in part, based on such factors as the Committee shall,
in its sole discretion, determine.
(iv) Method of Exercise.
(A) Subject to whatever installment exercise provisions apply
under Paragraph 5(b)(iii) of the Plan, Stock Options may be exercised in whole
or in part at any time during the option period, by giving written notice of
exercise to the Company specifying the number of shares to be purchased. Such
notice shall be accompanied by payment in full of the purchase price, either
by check, note or such other instrument, securities or property as the
Committee may accept. As and to the extent determined by the Committee, in its
sole discretion, at or after grant, payments in full or in part may also be
made in the form of Stock already owned by the optionee.
(B) No shares of Stock shall be issued until full payment therefor
has been received by the Company. In the event of any exercise by note or other
instrument, the shares of Stock shall not be issued until such note or other
instrument shall have been paid in full, and the exercising optionee shall
have no rights as a stockholder until such payment is made.
(C) Subject to Paragraph 5(b)(iv)(B) of the Plan, an optionee
shall generally have the rights to dividends or other rights of a stockholder
with respect to shares subject to the Option when the optionee has given
written notice of exercise, has paid in full for such shares, and, if
requested, has given the representation described in Paragraph 9(a) of the
Plan.
(v) Non-Transferability of Options. No Stock Option shall
be transferable by the optionee otherwise than by will or by the laws of
descent and distribution, and all Stock Options shall be exercisable, during
the optionee's lifetime, only by the optionee or optionee's legal
representative.
(vi) Termination by Death. Subject to Paragraph 5(b)(ix) of
the Plan with respect to Incentive Stock Options, if an optionee's employment
by the Company and any Subsidiary or Affiliate terminates by reason of death,
any Stock Option held by such optionee may thereafter be exercised, to the
extent such option was exercisable at the time of death or on such accelerated
basis as the Committee may determine at or after grant (or as may be determined
in accordance with procedures established by the Committee), by the legal
representative of the estate or by the legatee of the optionee under the will
of the optionee, for a period of one year (or such other period as the
Committee may specify at grant) from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter.
(vii) Termination by Reason of Disability, Retirement or
Resignation. Subject to Paragraph 5(b)(ix) of the Plan with respect to
Incentive Stock Options, if an optionee's employment by the Company and any
Subsidiary or Affiliate terminates by reason of a Disability, Normal or Early
Retirement or voluntary resignation which is not preceded by delivery of notice
of the optionee's unsatisfactory performance or forthcoming termination for
Cause, as hereafter defined ("Voluntary
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<PAGE>
Resignation"), any Stock Option held by such optionee may thereafter be
exercised by the optionee, to the extent it was exercisable at the time of
termination or on such accelerated basis as the Committee may determine at or
after grant (or as may be determined in accordance with procedures established
by the Committee), for a period of two years (or such other period as the
Committee may specify at grant) from the date of such termination of
employment or until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that, if the optionee dies
within such two-year period (or such other period as the Committee shall
specify at grant), any unexercised Stock Option held by such optionee shall
thereafter be exercisable to the extent to which it was exercisable at the
time of death for a period of two years from the date of such death or until
the expiration of the stated term of such Stock Option, whichever period is
the shorter. In the event of termination of employment by reason of
Disability, Normal or Early Resignation, or Voluntary Resignation, if an
Incentive Stock Option is exercised after the expiration of the exercise
periods that apply for purposes of Section 422A of the Code, such Stock Option
will thereafter be treated as a Non-Qualified Stock Option.
(viii) Other Termination. Unless otherwise determined by the
Committee (or pursuant to procedures established by the Committee) at or after
grant, if an optionee's employment by the Company and any Subsidiary or
Affiliate terminates for any reason other than death, Disability, Normal or
Early Retirement, or Voluntary Resignation, the Stock Option shall thereupon
terminate; provided, however, that if the optionee is involuntarily terminated
by the Company or any Subsidiary or Affiliate without Cause, including a
termination resulting from the Subsidiary, Affiliate or division in which the
optionee is employed or engaged, ceasing, for any reason, to be a Subsidiary,
Affiliate or division of the Company, such Stock Option may be exercised, to
the extent otherwise exercisable on the date of termination, for a period of
twelve months from the date of such termination or until the expiration of the
stated term of such Stock Option, whichever is shorter. For purposes of this
Plan, "Cause" means a felony conviction of a participant or the failure of a
participant to contest prosecution for a felony, or a participant's willful
misconduct, dishonesty or gross negligence.
(ix) Incentive Stock Options.
(A) Anything in the Plan to the contrary notwithstanding, no term
of this Plan relating to Incentive Stock Options shall be interpreted, amended
or altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify the Plan under Section 422A of the Code, or,
without the consent of the optionee(s) affected, to disqualify any Incentive
Stock Option under such Section 422A.
(B) To the extent required for "incentive stock option" status
under Section 422A(b)(7) of the Code (taking into account applicable Treasury
regulations and pronouncements), the Plan shall be deemed to provide that the
aggregate Fair Market Value (determined as of the time of grant) of the Stock
with respect to which Incentive Stock Options are exercisable for the first
time by the optionee during any calendar year under the Plan and/or any other
stock option plan of the Company or any Subsidiary or parent corporation
(within the meaning of Section 425 of the Code) after 1986 shall not exceed
$100,000. If Section 422A is hereafter amended to delete the requirement now
in Section 422A(b)(7) that the plan text expressly provide for the $100,000
limitation set forth in Section 422A(b)(7), then this Paragraph 5(b)(ix)(B)
shall no longer be operative and the Committee may accelerate the dates on
which the incentive stock option may be exercised.
(C) To the extent permitted under Section 422A of the Code or
the applicable regulations thereunder or any applicable Internal Revenue
Service pronouncement:
(I) If (x) a participant's employment is terminated by reason
of death, Disability or Retirement and (y) the portion of any Incentive Stock
Option that is otherwise exercisable during the post-termination period
specified under Paragraphs 5(b)(vi) and (vii) of the Plan, applied without
regard to the $100,000 limitation contained in Section 422A(b)(7) of the Code,
is greater than the portion of such option that is immediately exercisable as
an "incentive stock option" during such post-termination period under
Section 422A, such excess shall be treated as a Non-Qualified Stock Option; and
(x) Buyout Provisions. The Committee may at any time
offer to buy out for a payment in cash or Stock, an option previously granted,
based on such terms and conditions as the Committee shall establish and
communicate to the optionee at the time that such offer is made.
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6. AMENDMENTS AND TERMINATION.
(a) The Board may amend, alter, or discontinue the Plan, but no
amendment, alteration, or discontinuation shall be made which would impair the
rights of an optionee or participant under a Stock Option theretofore granted,
without the optionee's or participant's consent, and no amendment will be made
without approval of the stockholders if such amendment requires stockholder
approval under state law or if stockholder approval is necessary in order that
the Plan comply with Rule 16b-3 of the Commission under the Exchange Act or any
substitute or successor rule or if stockholder approval is necessary in order
to enable the grant pursuant to the Plan of options or other awards intended to
confer tax benefits upon the recipients thereof.
(b) The Committee may amend the terms of any Stock Option
theretofore granted, prospectively or retroactively, but no such amendment
shall impair the rights or any holder without the holder's consent. The
Committee may also substitute new Stock Options for previously granted Stock
Options (on a one for one or other basis), including previously granted Stock
Options having higher option exercise prices.
(c) Subject to the provisions of Paragraphs 7(a) and (b) of the
Plan, the Board shall have broad authority to amend the Plan to take into
account changes in applicable securities and tax laws and accounting rules,
as well as other developments.
7. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive
and deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained in this Plan shall
give any such participant or optionee any rights that are greater than those of
a general creditor of the Company. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Stock or payments in lieu of or with respect
to awards under this Plan; provided, however, that, unless the Committee
otherwise determines with the consent of the affected participant, the
existence of such trusts or other arrangements shall be consistent with the
"unfunded" status of the Plan.
8. GENERAL PROVISIONS.
(a) The Committee may require each person purchasing shares pursuant
to a Stock Option or other award under the Plan to represent to and agree with
the Company in writing that the optionee or participant is acquiring the shares
without a view to distribution thereof. The certificates for such shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on transfer. All certificates or shares of Stock or other
securities delivered under the Plan shall be subject to such stock-transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations, and other requirements of the
Commission, any stock exchange upon which the Stock is then listed, and any
applicable Federal or state securities law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements
may be either generally applicable or applicable only in specific cases.
(c) Neither the adoption of the Plan nor the grant of any award
pursuant to the Plan shall confer upon any employee of the Company or any
Subsidiary or Affiliate any right to continued employment with the Company or a
Subsidiary or Affiliate, as the case may be, nor shall it interfere in any way
with the right of the Company or a Subsidiary or Affiliate to terminate the
employment of any of its employees at any time.
(d) No later than the date as of which an amount first becomes
includible in the gross income of the participant for Federal income tax
purposes with respect to any award under the Plan, the participant shall pay to
the Company, or make arrangements satisfactory to the Committee regarding the
payment of, any Federal, state, or local taxes of any kind required by law to
be withheld with respect to such amount. Unless otherwise determined by the
Committee, withholding obligations may be settled with Stock, including Stock
that is part of the award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements and the Company and its Subsidiaries or Affiliates shall, to
the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant.
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9. EFFECTIVE DATE OF PLAN.
The Plan shall be effective as of the date the Plan is approved by
the Board, subject to the approval of the Plan by a majority of the votes cast
by the holders of the Company's Common Stock at the next annual or special
meeting of stockholders. Any grants made under the Plan prior to
such approval shall be effective when made (unless otherwise specified by
the Committee at the time of grant), but shall be conditioned on, and subject
to, such approval of the Plan by such stockholders.
<PAGE>
PROXY
NETLIVE COMMUNICATIONS, INC.
1997 ANNUAL MEETING OF STOCKHOLDERS -- OCTOBER 8, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael Kharitonov and Andrew J.
Schwartz, or any one of them acting in the absence of the other, with full
power of substitution or revocation, proxies for the undersigned, to vote at
the 1997 Annual Meeting of Stockholders of NetLive Communications, Inc. (the
"Company"), to be held at 2:00 p.m., local time, on October 8, 1997, at the
offices of Goldstein, Golub, Kessler & Co., P.C., 1185 Avenue of the Americas,
New York, New York 10036, and at any adjournments or postponements thereof,
according to the number of votes the undersigned might cast and with all powers
the undersigned would possess if personally present.
(1) Proposal to approve the amendments to the Company's Charter and
By-laws which, among other things, designates a classified Board
of Directors and increases the number of directors to seven (7).
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(2) Proposal to elect seven (7) directors as follows:
Class I Directors: Adam L. Goldberg and Marcel M. Yung;
Class II Directors: John E. Meier and Michael E. Wolf; and
Class III Directors: Michael Kharitonov as Chairman of the Board,
Andrew J. Schwartz and Jeffrey Wolf.
[ ] FOR all nominees listed at right (except as marked to the
contrary below or at right).
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, PRINT THE NOMINEE
NAME(S) BELOW OR LINE THROUGH THE NOMINEE'S
NAME IN THE LIST AT RIGHT.
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(3) Proposal to ratify the selection of Goldstein, Golub,
Kessler & Company, P.C. as the independent certified public
accountants of the Company for the year ending March 31, 1998:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(4) Proposal to approve the 1997 Stock Option Plan.
<PAGE>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(5) In their discretion, upon the transaction of such other business as
may properly come before the meeting; all as set forth in the Proxy
Statement, dated September 23, 1997
The shares represented by this proxy will be voted on Items 1, 2, 3
and 4 as directed by the stockholder, but if no direction is indicated, will be
voted FOR Items 1, 2, 3 and 4.
If you plan to attend the meeting please indicate below:
I plan to attend the meeting [ ]
Dated: _______________________________, 1997
________________________________
________________________________
(Signature(s))
PLEASE SIGN EXACTLY AS
NAME(S) APPEAR HEREON.
WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE AS
SUCH.
PLEASE DATE, SIGN
AND MAIL THIS PROXY IN THE
ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF
MAILED IN THE UNITED
STATES.
