SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 5, 1999
World CallNet, Inc.
(Exact name of registrant as specified in its charter)
Delaware 333-35753 75-2468002
- ---------------- --------------------------- -----------------
(state of (Commission File Number) (IRS Employer
incorporation) I.D. Number)
731 Meadows Building, 5646 Milton Street
Dallas, TX 75206
214-361-8535
(Address and telephone number of registrant's principal
executive offices and principal place of business)
General American Royalty, Inc.
(Former name or address, if changed since last report)
<PAGE>
Item 5. Other Events
On January 5, 1999, the shareholders of the Company, at a Special
Meeting of Shareholders, approved the following proposals of the Company's Board
of Directors:
1. To amend the Certificate of Incorporation of the Company to
change the name of the corporation to "World CallNet, Inc."
2. To amend the Certificate of Incorporation of the Company to
increase its authorized capital (i) from 20 million shares of
Common Stock (par value $0.001) to 30 million shares of Common
Stock (par value $0.001) and (ii) from 5 million shares of
Preferred Stock (par value $0.001) to 10 million shares of
Preferred Stock (par value $0.001).
3. To approve the Company's 1998 Stock Option Plan.
The amendments to the Company's Certificate of Incorporation were filed
with the Secretary of State of Delaware on January 6, 1999, and became effective
that day.
Item 7. Exhibits
The following exhibits are filed as a part of this report.
Exhibit Item
------- ----
3.1 - Certificate of Amendment to the Certificate of
Incorporation of the Company, filed on January 6, 1999
with the Secretary of State of Delaware
99 - Copy of the Company's 1998 Stock Option Plan
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 8, 1999 World CallNet, Inc.
/s/ Paul Goodman-Simpson
---------------------------------
By/s/Paul Goodman-Simpson
Paul Goodman-Simpson, President
2
<PAGE>
World CallNet, Inc.
EXHIBIT INDEX (FORM 8-K)
January 5, 1999
Exhibit Item
------- ----
3.1 - Certificate of Amendment to the Certificate of
Incorporation of the Company, filed on January 6, 1999
with the Secretary of State of Delaware
99 - Copy of the Company's 1998 Stock Option Plan
State of Delaware
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "GENERAL AMERICAN ROYALTY, INC.", CHANGING ITS NAME FROM "GENERAL
AMERICAN ROYALTY, INC." TO "WORLD CALLNET, INC.", FILED IN THIS OFFICE ON THE
SIXTH DAY OF JANUARY, A.D., 1999, AT 10 O'CLOCK A.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
[Seal] /s/ Edward J. Freel
-------------------------
Edward J. Freel, Secretary of State
2320431 8100 AUTHENTICATION: 9505491
991004261 DATE: 01-06-99
Exhibit 3.1
Page 1 of 3 Pages
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
GENERAL AMERICAN ROYALTY, INC.
General American Royalty, Inc., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of General American
Royalty, Inc. resolutions were adopted setting forth proposed amendments to the
Certificate of Incorporation of said corporation, declaring said amendments to
be advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendments is
as follows:
RESOLVED, that the Certificate of Incorporation of the
Corporation be amended by changing Articles One and Four thereof so
that, as amended, said Articles shall be and read as follows:
ARTICLE ONE
The name of the corporation is: "World CallNet, Inc."
ARTICLE FOUR
Capital Stock. The Corporation is authorized to issue two
classes of stock, both of which shall be voting. One class of stock
shall be Common Stock, par value $0.001. The second class of stock
shall be Preferred Stock, par value $0.001. The Preferred Stock, or any
series thereof, shall have such designations, preferences and relative,
participating, optional or other special rights and qualifications,
limitations or restrictions thereof as shall be expressed in the
resolution or resolutions providing for the issue of such stock adopted
by the board of directors and may be made
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:00 AM 01/06/1999
991004261 - 2320431
Exhibit 3.1
Page 2 of 3 Pages
<PAGE>
dependent upon facts ascertainable outside such resolution or
resolutions of the board of directors, provided that the manner in
which such facts shall operate upon such designations, preferences,
rights and qualifications, limitations or restrictions of such class or
series of stock is clearly and expressly set forth in the resolution or
resolutions providing for the issuance of such stock by the board of
directors.
The total number of shares of stock of each class which the
Corporation shall have authority to issue and the par value of each
share of each class of stock are as follows:
<TABLE>
<CAPTION>
No. of
Par Authorized
Class Value Shares Total
----- ----- ------ -----
<S> <C> <C> <C>
Common $0.001 30,000,000 $30,000
Preferred $0.001 10,000,000 10,000
---------- -------
Totals: 40,000,000 $40,000
</TABLE>
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, a special meeting of the stockholders of said corporation was duly
called and held upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware at which meeting the necessary number
of shares as required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance
with the provisions of Section 242 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, said General American Royalty, Inc. has caused this
certificate to be signed by Paul Goodman-Simpson, its President, who was
authorized to make this certificate, this 5th day of January, 1999.
/s/ Paul Goodman-Simpson
-------------------------------
Paul Goodman-Simpson, President
Exhibit 3.1
Page 3 of 3 Pages
GENERAL AMERICAN ROYALTY, INC.
1998 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this 1998 Stock Option Plan
are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees and
Consultants of the Company and its Subsidiaries and to promote the success of
the Company's business. Options granted under this Plan may be incentive stock
options (as defined under Section 422 of the Code) or nonqualified stock
options, as determined by the Option Committee at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code, as amended,
and the regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions shall apply:
2.1 "Option Committee" means the Board or any of its
committees, as applicable, that is administering the Plan pursuant to Section 4
of the Plan.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Code" means the Internal Revenue Code of 1986, as
amended.
2.4 "Company" means GENERAL AMERICAN ROYALTY, INC., a Delaware
corporation.
2.5 "Consultant" means any consultant or advisor to the
Company or any Parent or Subsidiary and any director of the Company whether
compensated for such services or not, but not including any Employee.
2.6 "Continuous Status as an Employee" means the absence of
any interruption or termination of the employment relationship by the Company or
any Subsidiary. Continuous Status as an Employee shall not be considered
interrupted in the case of: (i) any leave of absence approved by the Board,
including sick leave, military leave, or any other personal leave; provided,
however, that for purposes of Incentive Stock Options, such leave is for a
period of not more than 90 days, unless reemployment upon the expiration of such
leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or
Exhibit 99
Page 1 of 14 Pages
<PAGE>
(ii) in the case of transfers between locations of the Company or between the
Company, its Subsidiaries or its successors.
2.7 "Employee" means any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
2.8 "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
2.9 "Fair Market Value" means, as of any date, the value of
Stock determined as follows:
2.9.1 If the Stock is listed on any established
stock exchange or a national market system including without limitation the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("Nasdaq") System, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported, as quoted on such system or exchange or the exchange with the greatest
volume of trading in Stock for the last market trading day prior to the time of
determination) as reported in the Wall Street Journal or such other source as
the Option Committee deems reliable;
2.9.2 If the Stock is quoted on Nasdaq SmallCap
(but not on the National Market System) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high and low asked prices for the Stock; or
2.9.3 In the absence of an established market for
the Stock, the Fair Market Value thereof shall be determined in good faith by
the Option Committee.
2.10 "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
2.11 "Nonqualified Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.
2.12 "Option" means a stock option granted pursuant to the
Plan.
2.13 "Optioned Stock" means the Stock subject to an Option.
Exhibit 99
Page 2 of 14 Pages
<PAGE>
2.14 Optionee" means an Employee or Consultant who receives an
Option.
2.15 "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
2.16 "Plan" means this 1998 Stock Option Plan.
2.17 "Share" means a share of the Stock, as adjusted in
accordance with Section 13 of the Plan.
2.18 "Stock" means the Common Stock, par value $.001 per
share, of the Company.
2.19 "Subsidiary" means a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of
Section 13 of the Plan, the maximum number of shares of Stock which may be
optioned and sold under the Plan is 500,000 shares. The shares may be
authorized, but unissued, or reacquired Stock. If an Option should expire or
become unexercisable for any reason without having been exercised in full, the
unpurchased Shares which were subject thereto shall, unless the Plan shall have
been terminated, become available for future grant under the Plan.
4. Administration of the Plan.
4.1 Administration By Board or Committee. The Plan shall be
administered by (a) the Board or (b) a committee designated by the Board to
administer the Plan, which committee shall be constituted in such a manner as to
permit the Plan to comply with Rule 16b-3 promulgated under the Exchange Act or
any successor thereto ("Rule 16b-3") with respect to a plan intended to qualify
thereunder as a discretionary plan. Once appointed, such committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of the committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however caused,
and remove all members of the committee and thereafter directly administer the
Plan, all to the extent permitted by Rule 16b-3 with respect to a plan intended
to qualify thereunder as a discretionary plan.
4.2 Limitation on Administration by Board.
Notwithstanding the foregoing, the Plan shall not be administered
Exhibit 99
Page 3 of 14 Pages
<PAGE>
by the Board if (a) the Company and its officers and directors are then subject
to the requirements of Section 16 of the Exchange Act and (b) the Board's
administration of the Plan would prevent the Plan from complying with Rule
16b-3.
4.3 Multiple Administrative Bodies. If permitted by Rule
16b-3, the Plan may be administered by different bodies with respect to
directors, non-director officers and Employees who are neither directors nor
officers.
4.4 Powers of the Option Committee. Subject to the provisions
of the Plan and in, the case of a committee, the specific duties delegated by
the Board to such committee, the Option Committee shall have the authority, in
its discretion:
4.4.1 to determine whether and to what extent
Options shall be granted hereunder;
4.4.2 to select the officers, Consultants and
Employees to whom Options may from time to time be granted
hereunder;
4.4.3 to determine the number of shares of Stock to
be covered by each such award granted hereunder;
4.4.4 to determine the Fair Market Value of the
Stock, in accordance with Section 2.9 of the Plan;
4.4.5 to approve forms of agreement for use under
the Plan;
4.4.6 to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder
(including, but not limited to, the per share exercise price for the Shares to
be issued pursuant to the exercise of an Option and any restriction or
limitation, or any vesting, acceleration or waiver of forfeiture restrictions
regarding any Option or other award and/or the shares of Stock relating thereto,
based in each case on such factors as the Option Committee shall determine, in
its sole discretion);
4.4.7 to determine whether and under what
circumstances an Option may be bought-out for cash under subsection
10.4;
4.4.8 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
Exhibit 99
Page 4 of 14 Pages
<PAGE>
automatically or at the election of the participant (including providing for and
determining the amount, if any, of any deemed earnings on any deferred amount
during any deferral period); and
4.4.9 to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of the Stock covered
by such Option shall have declined since the date the Option was granted.
4.5 Effect of Option Committee's Decision. All decisions,
determinations and interpretations of the Option Committee shall be final and
binding on all Optionees and any other holders of any Options. Neither the
Board, the Committee, nor any member thereof shall be liable for any act,
omission, interpretation, construction or determination made in connection with
the Plan in good faith, and the members of the Board and of the Committee shall
be entitled to indemnification and reimbursement by the Company in respect of
any claim, loss, damage or expense (including counsel fees) arising therefrom to
the full extent permitted by law.
5. Eligibility.
5.1 Nonqualified Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if he is otherwise
eligible, be granted an additional Option or Options.
5.2 Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonqualified Stock Option.
However, notwithstanding such designations to the extent that the aggregate Fair
Market Value of the Shares, with respect to which Options designated as
Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary), exceeds $100,000, such excess Options shall be treated as
Nonqualified Stock Options. For this purpose, Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.
5.3 The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his right or the Company's right
to terminate his employment or consulting relationship at any time, with or
without cause,
Exhibit 99
Page 5 of 14 Pages
<PAGE>
unless otherwise agreed in writing by the Company and such Optionee.
6. Term of Plan. The Plan shall become effective upon its adoption by
the Board of Directors subject only to approval by the holders of a majority of
the outstanding Shares within 12 months after such date. Should the Plan not be
approved by a vote of shareholders as specified above, the Plan shall terminate
12 months after the effective date, all options issued prior to that termination
date shall continue in effect but without the benefits that would accrue under
the Code or the Act from such shareholder approval. Otherwise, it shall continue
in effect until ten years from the effective date, unless extended by the Board
or sooner terminated under Section 15 of the Plan. No grants of Options will be
made pursuant to the Plan after termination of the Plan.
7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that in the case of an Incentive Stock
Option, the terms shall be no more than 10 years from the date of grant thereof
or such shorter term as may be provided in the Option Agreement. However, in the
case of an Option granted to an Optionee who, at the time the Option is granted,
owns Stock representing more than 10% of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement.
8. Option Exercise Price and Consideration.
8.1 The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Option Committee; provided, however, that as to an Incentive Option:
8.1.1 granted to an Employee who, at the time of the
grant of such Incentive Stock Option, owns stock representing more than 10% of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
8.1.2 granted to any other Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
8.2 The consideration to be paid for the Shares to be
issued upon exercise of an Option may be paid by certified or
Exhibit 99
Page 6 of 14 Pages
<PAGE>
cashier's check. In the discretion of the Option Committee as set forth in the
Option Agreement or, except for Incentive Options, determined at the time of
exercise, payment may also be made by any or all of the following:
8.2.1 check,
8.2.2 promissory note,
8.2.3 other shares of the Company's capital stock
which (a) in the case of shares of the Company's capital stock acquired upon
exercise of an Option either have been owned by the Optionee for more than six
months on the date of surrender or were not acquired, directly or indirectly,
from the Company, and (b) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares to which said Option shall
be exercised,
8.2.4 authorization for the Company to retain from
the total number of Shares as to which the Option is exercised that number of
Shares having a Fair Market Value on the date of exercise equal to the exercise
price for the total number of Shares as to which the Option is exercised,
8.2.5 delivery of a properly executed exercise
notice together with irrevocable instructions to a broker to promptly deliver to
the Company the amount of sale or loan proceeds required to pay the exercise
price, or
8.2.6 such other consideration and method of
payment for the issuance of Shares to the extent permitted under
applicable laws.
9. Limitation on Exercise. The following limitations on exercise of
Options shall apply to all Incentive Options and, except to the extent waived by
the Option Committee and stated in the Option Agreement, to all other Options.
9.1 Termination of Employment. In the event of termination of
an Optionee's relationship as a Consultant (unless such termination is for
purposes of becoming an Employee of the Company) or on termination of an
Optionee's Continuous Status as an Employee with the Company (as the case may
be), such Optionee may, but only within 90 days (or, as to Options other than
Incentive Options, such longer period of time as is determined by the Option
Committee) after the date of such termination, but in no event later than the
expiration date of the term of such Option as set forth in the Option Agreement,
exercise his Option to the extent
Exhibit 99
Page 7 of 14 Pages
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that Optionee was entitled to exercise it at the date of such termination. To
the extent that Optionee was not entitled to exercise the Option at the date of
such termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
9.2 Disability of Optionee. Notwithstanding the provisions of
Section 9.1 above, in the event of termination of an Optionee's relationship as
a Consultant or Continuous Status as an Employee as a result of his total and
permanent disability (as defined in Section 22(e)(3) of the Code), Optionee may,
but only within 12 months from the date of such termination and in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement, exercise the Option to the extent otherwise entitled to
exercise it at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if Optionee does
not exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.
9.3 Death of Optionee. In the event of the death of an
Optionee, the Option may be exercised, at any time within 12 months following
the date of death (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), by the Optionee's estate or
by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent the Optionee was entitled to exercise the
Option at the date of death. To the extent that the Optionee was not entitled to
exercise the Option at the date of termination, or if the Optionee's estate (or
such other person who acquired the right to exercise the Option) does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.
10. Exercise of Option.
10.1 Procedure for Exercise; Rights as a Stockholder. An
Option shall be deemed to be exercised, and the Optionee deemed to be a
stockholder of the Shares being purchased upon exercise, when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8.2 of the Plan. An
Option may not be exercised for a fraction of a Share.
Exhibit 99
Page 8 of 14 Pages
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10.2 Effect on Number of Shares. Exercise of an Option in any
manner shall result in a decrease in the number of shares which thereafter may
be available, both for purposes of the Plan and for sale under the Option, by
the number of Shares as to which the Option is exercised.
10.3 Rule 16b-3. Options granted to persons subject to Section
16(b) of the Exchange Act must comply with the Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
10.4 Buyout Provisions. The Option Committee may at any time
offer to buy out for a payment in cash or Shares, an Option previously granted,
based on such terms and conditions as the Option Committee shall establish and
communicate to the Optionee at the time that such offer is made.
11. Non-Transferability of Options. The Options may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee.
12. Stock Withholding to Satisfy Withholding Tax Obligations.
12.1 At the discretion of the Option Committee, Optionees may
satisfy withholding tax obligations as provided in this paragraph. When an
Optionee incurs tax liability in connection with an Option, which tax liability
is subject to tax withholding under applicable tax laws, and the Optionee is
obligated to pay the Company an amount required to be withheld under applicable
tax laws, the Optionee may satisfy the withholding tax obligation by electing to
have the Company withhold from the Shares to be issued upon exercise of the
Option, that number of Shares having a Fair Market Value equal to the amount
required to be withheld. The Fair Market Value of the Shares to be withheld
shall be determined on the date that the amount of tax to be withheld is to be
determined (the "Tax Date").
12.2 All elections by an Optionee to have Shares withheld for
this purpose shall be made in writing in a form acceptable to the Option
Committee and shall be subject to the following restrictions:
12.2.1 the election must be made on or prior to the
applicable Tax Date;
Exhibit 99
Page 9 of 14 Pages
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12.2.2 once made, the election shall be irrevocable
as to the particular Shares of the Option as to which the election
is made;
12.2.3 all elections shall be subject to the consent
or disapproval of the Option Committee; and
12.2.4 if the Optionee is subject to Rule 16b-3, the
election must comply with the applicable provisions of Rule 16b-3 and shall be
subject to such additional conditions or restrictions as may be required
thereunder to qualify for the maximum exemption from Section 16 of the Exchange
Act with respect to Plan transactions.
12.3 In the event the election to have Shares withheld is made by an
Optionee, the Tax Date is deferred under Section 83 of the Code and no election
is filed under Section 83(b) of the Code, the Optionee shall receive the full
number of Shares with respect to which the Option is exercised but such Optionee
shall be unconditionally obligated to tender back to the Company the proper
number of Shares on the Tax Date.
13. Changes in the Company's Capital Structure. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bond, debentures, preferred or prior preference stock ahead of or
affecting the Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise; subject to the following:
13.1 If the Company shall effect a subdivision or
consolidation of shares or other capital readjustment, the payment of a stock
dividend, or other increase or reduction of the number of shares of the Stock
outstanding, without receiving compensation therefor in money, services or
property, then (a) the number, class, and per share price of shares of Stock
subject to outstanding Options hereunder shall be appropriately adjusted in such
a manner as to entitle an Optionee to receive upon exercise of an Option, for
the same aggregate cash consideration, the same total number and class of shares
as he would have received had he exercised his Option; (b) the number and class
of shares of Stock then reserved for issuance under the Plan shall be adjusted
by substituting for the total number and class of shares of Stock then
Exhibit 99
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reserved that number and class of shares of stock that would have been received
by the owner of an equal number of outstanding shares of each class of Stock as
the result of the event requiring the adjustment.
13.2 Unless otherwise expressly provided in an Option
Agreement, upon a Corporate Change (as defined below), notwithstanding any other
term of this Plan, any and all outstanding Options not fully vested and
exercisable shall vest in full and be immediately exercisable, and any other
restrictions on such Options including, without limitation, requirements
concerning the achievement of specific goals shall terminate. The foregoing
shall apply to Incentive Options, unless stated to the contrary in the Option
Agreement, even though the effect may be to convert part of the Option to a
Nonqualified Option.
13.3 As used in this Plan, a "Corporate Change" shall be
deemed to have occurred upon, and shall mean (a) the acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) (a "Person"), of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 80% or more of either (i)
the then outstanding shares of Stock of the Company (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however, that
the following transactions shall not constitute a Corporate Change: (u) any
acquisition by virtue of the conversion of preferred stock of the Company
outstanding on the effective date hereof; (v) customary transactions with and
between underwriters and selling group members with respect to a bona fide
public offering of securities, (w) any acquisition directly from the Company
(excluding an acquisition by virtue of the exercise of a conversion privilege),
(x) any acquisition by the Company, (y) any acquisition by any employee benefit
plan(s) (or related trust(s)) sponsored or maintained by the Company or any
corporation controlled by the Company or (z) any acquisition by any entity
pursuant to a reorganization, merger or consolidation, if, immediately following
such reorganization, merger or consolidation the conditions described in clauses
(i), (ii) and (iii) of clause (b) of this paragraph are satisfied; or (b) the
approval by the stockholders of the Company of a reorganization, merger or
consolidation, in each case, unless immediately following such reorganization,
merger or consolidation (i) more than 60% of, respectively, the then outstanding
shares of common stock (or other equivalent securities) of the entity resulting
from such reorganization, merger or consolidation and the combined voting power
of the then outstanding
Exhibit 99
Page 11 of 14 Pages
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voting securities of such entity entitled to vote generally in the election of
directors (or other similar governing body) is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Company Common Stock and
Outstanding Company Voting Securities immediately prior to such reorganization,
merger or consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger or consolidation of
the Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (ii) no Person (excluding the Company, any employee benefit
plan(s) (or related trust(s)) of the Company and/or its subsidiaries or such
entity resulting from such reorganization, merger or consolidation and any
Person beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 80% or more of the Outstanding Company
Common Stock or Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 80% or more of, respectively, the
then outstanding shares of common stock (or other equivalent securities) of the
entity resulting from such reorganization, merger or consolidation or the
combined voting power of the then outstanding voting securities of such entity
entitled to vote generally in the election of directors (or other similar
governing body) and (iii) at least a majority of the members of the board of
directors (or other similar governing body) of the entity resulting from such
reorganization, merger or consolidation were members of the Incumbent Board (as
defined below) at the time of the execution of the initial agreement providing
for such reorganization, merger on consolidation. The "Incumbent Board" shall
mean individuals who as of the effective date hereof constitute the Company's
Board of Directors; provided, however, that any individual becoming a director
subsequent to such date whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either (i) an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act), or an
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Company's Board of Directors or (ii) a plan or agreement
to replace a majority of the members of the Board of Directors then comprising
the Incumbent Board.
13.4 The Company intends that this Section shall comply with
the requirements of Rule 16b-3 and any future rules promulgated in substitution
therefor under the Exchange Act during
Exhibit 99
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the term of the Plan. Should any provision of this Section not be necessary to
comply with the requirements of Rule 16b-3 or should any additional provisions
be necessary for this Section to comply with the requirements of Rule 16b-3, the
Board of Directors may amend the Plan to add to or modify the provisions of the
Plan accordingly.
13.5 Except as hereinbefore expressly provided, the issue by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, for cash or property, or for labor or services
either upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number, class, or price of
shares of Stock then subject to outstanding Options.
14. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Option Committee makes the determination
granting such Option, or such other date as is determined by the Option
Committee. Notice of the determination shall be given to each Employee or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.
15. Amendment and Termination of the Plan.
15.1 Amendment and Termination. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would impair the rights of any
Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act or with Section 422 of the Code (or any other applicable law or
regulation, including the applicable requirements of the NASD or an established
stock exchange), the Company shall obtain stockholder approval of any Plan
amendment in such a manner and to such a degree as required.
15.2 Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
16. Conditions Upon Issuance of Shares.
Exhibit 99
Page 13 of 14 Pages
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16.1 Shares shall not be issued pursuant to the exercise of an
Option unless the exercise of such Option and the issuance and delivery of such
Shares pursuant thereto shall comply with all relevant provisions of law,
including without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.
16.2 As a condition to the exercise of an Option, the Company
may require the person exercising such Option to represent and warrant at the
time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is required
by any of the aforementioned relevant provisions of law.
17. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
18. Information to Optionees. The Company shall provide to each
Optionee, during the period for which such Optionee has one or more Options
outstanding, copies of all annual reports and other information which are
generally provided to all stockholders of the Company. The Company shall not be
required to provide such information to persons whose duties in connection with
the Company assure their access to equivalent information.
19. Governing Law; Construction. All rights and obligations under the
Plan shall be governed by, and the Plan shall be construed in accordance with,
the laws of the State of Oklahoma without regard to the principals of conflicts
of laws. Titles and headings to Sections herein are for purposes of reference
only, and shall in no way limit, define or otherwise affect the meaning or
interpretation of any provisions of the Plan.
ADOPTED by the Directors on November 16, 1998.
APPROVED by the Shareholders on January 5, 1999.
Exhibit 99
Page 14 of 14 Pages
