<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12
THE VIALINK COMPANY
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(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[VIALINK LETTERHEAD]
13800 Benson Road
Edmond, Oklahoma 73013
April 19, 1999
Dear Shareholder:
You are cordially invited to attend the 1999 Annual Meeting of Shareholders
of The viaLink Company, which will be held at the Harvey Business Center, Room
104, on the campus of Oklahoma Christian University of Science & Arts, 2501 East
Memorial Road, Oklahoma City, Oklahoma, on Friday, May 21, 1999 at 10:00 a.m.
(Central Daylight Saving Time).
Details of the business to be conducted at the 1999 Annual Meeting are
given in the attached Notice of Annual Meeting of Shareholders and Proxy
Statement.
After careful consideration, the Company's Board of Directors has
unanimously approved the proposals set forth in the Proxy Statement and
recommends that you vote in favor of each such proposal and for each of the
directors nominated for election to the Company's Board of Directors.
In order for us to have an efficient meeting, please sign, date and return
the enclosed proxy promptly in the accompanying reply envelope. If you are able
to attend the annual meeting and wish to change your proxy vote, you may do so
simply by voting in person at the annual meeting.
We look forward to seeing you at the meeting.
Sincerely,
/s/ Lewis B. Kilbourne
LEWIS B. KILBOURNE
CHIEF EXECUTIVE OFFICER
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YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE AND RETURN IT
IN THE ENCLOSED ENVELOPE. NO POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED
STATES.
- -------------------------------------------------------------------------------
<PAGE>
THE VIALINK COMPANY
13800 Benson Road
Edmond, Oklahoma 73013
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 21, 1999
TO THE SHAREHOLDERS OF THE VIALINK COMPANY:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of The
viaLink Company, an Oklahoma corporation (the "Company"), will be held on
Friday, May 21, 1999, at 10:00 a.m. (Central Daylight Time) at the Harvey
Business Center, Room 104, on the campus of Oklahoma Christian University of
Science & Arts, 2501 East Memorial Road, Oklahoma City, Oklahoma, for the
following purposes, as more fully described in the Proxy Statement accompanying
this Notice:
1. To elect one (1) Class III director to the Company's Board of Directors
to serve a three-year term ending in the year 2002 or until his
successor is duly elected and qualified;
2. To approve the adoption of The viaLink Company 1999 Stock Option/Stock
Issuance Plan;
3. To approve the adoption of The viaLink Company 1999 Employee Stock
Purchase Plan;
4. To approve the issuance to Hewlett-Packard Company of a $6.0 million
Convertible Subordinated Secured Promissory Note, convertible into
Common Stock at $7.00 per share beginning August 2000, to replace a
$6.0 million Subordinated Secured Promissory Note originally issued to
Hewlett-Packard on February 4, 1999;
5. To approve the Company's reincorporation from an Oklahoma corporation
to a Delaware corporation; and
6. To transact such other business as may properly come before the Annual
Meeting or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on April 9, 1999 are
entitled to notice of and to vote at the Annual Meeting. A list of shareholders
entitled to vote at the Annual Meeting will be available for inspection at the
executive offices of the Company.
All shareholders are cordially invited to attend the meeting in person.
Whether or not you plan to attend, please sign and return the enclosed proxy as
promptly as possible in the envelope enclosed for your convenience. The prompt
return of your proxy card will assist us in preparing for the meeting. Should
you receive more than one proxy because your shares are registered in different
names and addresses, each proxy should be signed and returned to assure that all
your shares will be voted. You may revoke your proxy at any time prior to the
meeting. If you attend the meeting and vote by ballot, your proxy will be
revoked automatically and only your vote at the meeting will be counted.
BY ORDER OF THE BOARD OF DIRECTORS,
LEWIS B. KILBOURNE
Chief Executive Officer
Oklahoma City, Oklahoma
April 19, 1999
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE
READ THE ATTACHED PROXY STATEMENT CAREFULLY, COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE, AND RETURN IT IN THE ENCLOSED
ENVELOPE.
<PAGE>
THE VIALINK COMPANY
13800 Benson Road
Edmond, Oklahoma 73013
------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 21, 1999
------------------------
General
These proxy solicitation materials (the "Proxy Statement") and the enclosed
proxy cards (the "Proxy") are being mailed in connection with the solicitation
of proxies by the Board of Directors of The viaLink Company, an Oklahoma
corporation (the "Company"), for the 1999 Annual Meeting of Shareholders to be
held on Friday, May 21, 1999 at 10:00 a.m. Central Daylight Time, and at any
adjournment or postponement thereof (the "Annual Meeting"), at the Harvey
Business Center, Room 104, on the campus of Oklahoma Christian University of
Science & Arts, 2501 East Memorial Road, Oklahoma City, Oklahoma. This Proxy
Statement was first mailed on or about April 19, 1998, to all shareholders
entitled to vote at the Annual Meeting.
The Company's annual report to shareholders for the fiscal year ended
December 31, 1998 (the "Annual Report") has been mailed currently with the
mailing of the notice of the Annual Meeting and this Proxy Statement to all
shareholders entitled to notice of, and to vote at, the Annual Meeting. The
Annual Report is not incorporated into this Proxy Statement and is not
considered proxy soliciting material.
Voting
The specific proposals to be considered and acted upon at the Annual
Meeting are summarized in the accompanying Notice of Annual Meeting of
Shareholders (the "Notice of Annual Meeting"). Each proposal is described in
more detail in this Proxy Statement. On April 9, 1999, the record date for
determination of shareholders entitled to notice of and to vote at the Annual
Meeting (the "Record Date"), 2,874,342 shares of the Company's Common Stock, par
value $0.001 per share, were issued and outstanding, and no shares of the
Company's preferred stock, par value $0.001 per share, were outstanding. Each
shareholder is entitled to one vote for each shares of Common Stock held by such
shareholder on the Record Date. Shareholders may not cumulate votes in the
election of directors.
As of the Record Date, directors and officers of the Company may be deemed
to be beneficial owners of an aggregate of 1,165,725 shares of Common Stock (not
including shares of Common Stock issuable upon exercise of outstanding options
and warrants), constituting approximately 41% of the shares of Common Stock
outstanding and entitled to vote at the Annual Meeting. Such directors and
executive officers have indicated to the Company that each person intends to
vote or direct the vote of all shares of Common Stock held or owned by such
person, or over which such person has voting control, in favor of all of the
proposals described herein. Nonetheless, the approval of the proposals is not
assured. See "Principal Shareholders."
The following outlines the vote required to approve each proposal set forth
in this Proxy Statement:
. Proposal One, to elect a director, requires approval by a plurality of
the shares of Common Stock present in person or by Proxy at the Annual
Meeting.
<PAGE>
. Proposal Two, to adopt The viaLink Company 1999 Stock Option/Stock
Issuance Plan, requires approval by at least a majority of the shares of
Common Stock present in person or by Proxy at the Annual Meeting.
. Proposal Three, to adopt The viaLink Company 1999 Employee Stock
Purchase Plan, requires approval by at least a majority of the shares of
Common Stock present in person or by Proxy at the Annual Meeting.
. Proposal Four, to approve the issuance of a Convertible Subordinated
Secured Promissory Note to Hewlett-Packard, requires approval by at
least a majority of the shares of Common Stock present in person or by
Proxy at the Annual Meeting.
. Proposal Five, to approve the Company's reincorporation in Delaware,
requires approval by at least a majority of the shares of Common Stock
present in person or by Proxy at the Annual Meeting.
The Board of Directors recommends a vote "FOR" each proposal.
Revocability of Proxies
Any shareholder executing a proxy pursuant to this solicitation may
revoke it at any time prior to its exercise by delivering written notice of such
revocation to the Secretary of the Company before the Annual Meeting or by
properly executing and delivering a proxy bearing a later date. Proxies may
also be revoked by any shareholder present at the Annual Meeting who elects to
vote his, her or its shares in person.
If a choice as to the matters coming before the Annual Meeting has been
specified by a shareholder on the proxy, the shares will be voted accordingly.
If no choice is specified on the return proxy, the shares will be voted in favor
of the approval of the proposals described in the Notice of Annual Meeting and
in this Proxy Statement. All votes will be tabulated by the inspector of
election appointed for the meeting, who will separately tabulate affirmative and
negative votes, abstentions and broker non-votes. Under Oklahoma law,
abstentions and broker non-votes (i.e., the submission of a proxy by a broker or
nominee specifically indicating the lack of discretionary authority to vote on
the matter) are counted for purposes of determining the presence or absence of a
quorum for the transaction of business. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the shareholders and will
have the same effect as negative votes, whereas broker non-votes will not be
counted for purposes of determining whether or not a proposal has been approved.
Solicitation
The cost of soliciting proxies will be paid entirely by the Company and may
include reimbursement paid to brokerage firms and others for their expense in
forwarding solicitation materials as well as the expense of preparing,
assembling, photocopying and mailing this Proxy Statement. Solicitation will be
made primarily through the use of the mail; however, regular employees of the
Company may, without additional remuneration, solicit proxies personally by
telephone or telegram or other means. Except as described above, the Company
does not presently intend to solicit proxies other than by mail.
Deadline for Receipt of Shareholder Proposals
Proposals of shareholders of the Company that are intended to be presented
by such shareholders at the Company's 2000 Annual Meeting must be received no
later than December 3, 1999, in order that they may be included in the proxy
statement and form of proxy relating to the 2000 Annual Meeting. In addition,
the proxy solicited by the Board of Directors for the 2000 Annual Meeting will
confer discretionary authority to vote on any shareholder proposal presented at
that meeting, unless the Company receives notice of such proposal not later than
March 3, 2000.
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MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL ONE
ELECTION OF DIRECTORS
General
The Company's Certificate of Incorporation provides for a classified Board
of Directors consisting of three classes of directors with staggered three-year
terms, with each class consisting, as nearly as possible, of one-third of the
total number of directors and designated Class I, Class II and Class III. The
Company currently has the following five directors serving on its Board: Robert
L. Barcum, Robert N. Baker, Lewis B. Kilbourne, Ph.D., Jimmy M. Wright and Sue
Hale. The term of office of the Class III director (Jimmy M. Wright) expires at
this Annual Meeting, the term of office of the Class I directors (Lewis B.
Kilbourne and Sue Hale) expires at the 2000 Annual Meeting of shareholders, and
the term of office of the Class II directors (Robert L. Barcum and Robert N.
Baker) expires at the 2001 Annual Meeting of shareholders, or in each case until
their successors have been elected and qualified. Directors to replace those of
a class whose term expires at a given annual meeting of shareholders shall be
elected to hold office until the third succeeding annual meeting of shareholders
or until their respective successors have been elected and qualified.
Nominee for Class III Director with Term Ending Upon the 2002 Annual Meeting of
Shareholders
The nominee for director has agreed to serve if elected, and management has
no reason to believe that such nominee will be unavailable to serve. In the
event the nominee is unable or declines to serve as a director at the time of
the Annual Meeting, the proxies will be voted for any nominee who may be
designated by the present Board of Directors to fill the vacancy. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
FOR the nominee named below.
One Class III director is to be elected at the Annual Meeting to hold
office until the 2002 Annual Meeting, or until his successor is duly elected of
qualified. The nominee receiving the affirmative vote of a plurality of shares
present in person or represented by proxy at the Annual Meeting and entitled to
vote on the election of directors shall be elected to the Board of Directors.
<TABLE>
<CAPTION>
Class III Nominee
Name Director Since Age Position
---- -------------- --- --------
<S> <C> <C> <C>
Jimmy M. Wright 1998 45 Director (Class III)
</TABLE>
Jimmy M. Wright has served as a director of the Company since February
1998. Mr. Wright serves as the Chief Logistics Officer of Amazon.com, a
publicly-traded Web-based retailer, since July 1998. Mr. Wright is also
currently the Managing Partner with Diversified Retail Solutions, L.L.C., a
supply chain consulting business, where he has served since February 1998. In
January 1998, Mr. Wright retired as Vice President of Distribution for Wal-Mart
Stores, Inc. During his 12 year tenure at Wal-Mart, he was involved in all
facets of strategic planning, including supply chain management, personnel, site
selection and building design. Mr. Wright has served as an invited advisor to
the Defense Logistics Agency and has been a multi-year participant in the U.S.
Army's Wise Person summits, which advise the Deputy Chief of Staff Logistics on
strategic logistics issues and trends. Mr. Wright received his B.B.A. in
Management from The University of Texas, Permian Basin.
3
<PAGE>
Continuing Class I Directors for Term Ending Upon the 2000 Annual Meeting of
Shareholders
Lewis B. "Bucky" Kilbourne, Ph.D. has served as a director of the Company
since December 1997 and was elected as the Chief Executive Officer on October 1,
1998. Dr. Kilbourne has 20 years of financial experience in the retail,
restaurant and banking business. Dr. Kilbourne is a Professor of Finance and
Economics at Oklahoma City University. Dr. Kilbourne also has also served as
President of Kilbourne and Associates, Inc., a management consulting firm
located in Oklahoma City that works with regional firms experiencing earnings
and cash flow problems in the retail and restaurant industry, since May 1997.
From January 1994 to May 1997, Dr. Kilbourne served as Chief Financial Officer
of Sonic Corporation, a national restaurant chain. Dr. Kilbourne has a B.A. in
Political Science and Economics from Louisiana State University and a M.A. and
Ph.D., both in Economics, from the University of Pennsylvania.
Sue Hale has served as a director of the Company since March 1999. Since
January 1996, Ms. Hale has served as the General Manager of Connect Oklahoma, a
statewide news and information services company. From 1989 to 1996, she served
as the Assistant Managing Editor at The Daily Oklahoman, a daily newspaper. Ms.
Hale also serves as the Chairman of the Central Oklahoma chapter of the American
Red Cross. Ms. Hale received a B.A. in English and Music from Southwestern
College.
Continuing Class II Directors for Term Ending Upon the 2001 Annual Meeting of
Shareholders
Robert L. Barcum is one of the Company's co-founders and has served as a
director since the Company's formation in 1985 and as an executive officer from
1985 to 1998. Mr. Barcum currently serves as Chairman of the Board. In
connection with the sale of our consulting business to The Netplex Group, Inc.
("Netplex"), Mr. Barcum resigned as our President and Chief Executive Officer
and accepted a position with Netplex. Since 1991, he has served as an outside
director of Duckwall-ALCO Stores, Inc., a publicly-held retailer. Since 1993,
he has served as an outside director of Commercial Distributing Inc., a private
distributor of automotive products in the automobile after-market. Since 1995,
he has served on the Business Advisory Council of Oklahoma Christian University
of Science and Arts, and since 1996 he has served as a member of the Advisory
Board of Kent State University. Mr. Barcum has more than 25 years of experience
in management information systems for retail organizations.
Robert N. Baker is one of the Company's co-founders and has served as a
director since the Company's formation in 1985 and as a Vice President until
November 1998. Mr. Baker has served as the President and Chief Operating
Officer of the Company, since November 1998 and is responsible for developing
the viaLink services. Mr. Baker has over 20 years of experience in management,
technical support and systems development within the retail industry. He
graduated magna cum laude from Oklahoma Christian University of Science and Arts
with a B.S. in Mathematics.
Board Committees and Meetings
Meetings
The Board of Directors met 15 times in 1998, and acted a number of times by
written consent. The Board of Directors has a Compensation Committee and an
Audit Committee, but does not have a standing Nominating Committee. Mr. Wright
attended 9 of the 13 meetings of the Board of Directors and each of the meetings
of the compensation and audit committees which were held while he was a director
in 1998, for an attendance rate of 73% of the total meetings of the Board and
committees of the Board of which he is a member held during the period which he
was a director in 1998. Each of the remaining directors attended or
participated in 75% or more of the aggregate of (i) the total number of meetings
of the Board of Directors and (ii) the total number of meetings held by all
committees of the Board of Directors in which such director served during 1998.
Compensation Committee
The Company has a standing Compensation Committee which is currently
composed of Mr. Wright and Ms. Hale. The Compensation Committee met one time in
1998. The Compensation Committee administers The viaLink Company (formerly
Applied Intelligence Group, Inc.) 1995 Stock Option Plan (the "1995 Plan"), The
viaLink Company 1998 Non-Qualified Stock Option Plan (the "Non-Qualified Plan")
and other employee incentive plans, and will administer The viaLink Company 1999
Stock Option/Stock Issuance Plan if it is approved at this Annual Meeting. The
Compensation Committee has the responsibility for establishing the compensation
payable to the officers and other
4
<PAGE>
employees of the Company based on recommendations made by the Chief Executive
Officer. On October 1, 1998, Dr. Kilbourne became the Chief Executive Officer of
the Company and was no longer eligible to serve as a member of the Compensation
Committee. At that time, the full Board of Directors functioned as the
Compensation Committee until the election of the Company's new independent
director, Sue Hale, on March 26, 1999.
Audit Committee
The Company has a standing Audit Committee composed of Dr. Kilbourne, Mr.
Wright and Ms. Hale. The Audit Committee met one time in 1998. The Audit
Committee assists in the selection of the Company's independent auditors and is
responsible for designating those services to be performed by and maintaining
effective communication with the auditors.
Director Compensation and Indemnification Agreements
We currently pay our non-employee directors other than the Chairman of the
Board $10,000 annually for their services as members of the Board of Directors
and we pay our Chairman of the Board, Mr. Barcum, an annual stipend of $25,000.
We also reimburse our directors for any out-of-pocket expenses and additional
fees incurred in attending meetings of the Board of Directors and committees
thereof on which such directors serve. Under our 1998 Non-Qualified Stock
Option Plan, non-employee directors are eligible to receive stock option grants
at the discretion of the Board of Directors. Employee directors are eligible to
receive stock option grants at the discretion of the Compensation Committee of
the Board of Directors under our 1995 Stock Option Plan.
The Certificate of Incorporation and Bylaws provide that we shall indemnify
our directors and officers to the fullest extent permitted by Oklahoma law. The
Company also maintains directors and officers liability insurance. Oklahoma law
and the Company's Certificate of Incorporation and Bylaws limit the liability of
each of our directors to us or our shareholders for monetary damages for a
breach of their fiduciary duty as directors. These provisions do not eliminate
the liability of a director for (i) breach of the director's duty of loyalty to
us or our shareholders; (ii) acts or omissions by a director not in good faith
or which involve intentional misconduct or a knowing violation of law; (iii)
unlawful payments of dividends or unlawful stock repurchases or knowing
violation of the law; or (iv) any transaction from which the director derived an
improper personal benefit. In addition, these provisions do not eliminate
liability of a director for violations of federal securities laws, nor do they
limit our rights or those of our shareholders, in appropriate circumstances, to
seek equitable remedies such as injunctive or other forms of non-monetary
relief. Additionally, we are also a party to indemnification agreements with
each of our directors.
Executive Compensation
For a discussion of executive compensation, related party transactions
and principal shareholders, please see the information following Proposal Five.
Vote Required for Approval of Proposal One
The affrmative vote of a plurality of the outstanding voting shares of
the Company present or represented and entitled to vote at the 1999 Annual
Meeting is required for election of the Class III Director nominee.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS DEEMS PROPOSAL ONE TO BE IN THE BEST INTERESTS
OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL
THEREOF. UNLESS AUTHORITY TO DO SO IS WITHHELD, THE PERSON(S) NAMED IN EACH
PROXY WILL VOTE THE SHARES REPRESENTED THEREBY "FOR" THE ELECTION OF THE NOMINEE
LISTED ABOVE.
5
<PAGE>
13
PROPOSAL TWO
APPROVAL OF 1999 STOCK OPTION/STOCK ISSUANCE PLAN
The Company's shareholders are being asked to approve The viaLink
Company 1999 Stock Option/Stock Issuance Plan (the "1999 Plan"), as the
successor to the Company's existing 1995 Stock Option Plan, 1998 Non-Qualified
Stock Option Plan and 1998 Stock Grant Plan (collectively, the "Predecessor
Plans"). The 1999 Plan will become effective immediately upon such shareholder
approval, and all outstanding options under the Predecessor Plans will be
incorporated into the 1999 Plan at that time. The Predecessor Plans will
terminate, and no further option grants or share issuances will be made under
the Predecessor Plans. However, all outstanding options under the Predecessor
Plans will continue to be governed by the terms and conditions of the existing
option agreements for those grants except to the extent the Plan Administrator
elects to extend one or more features of the 1999 Plan to these options.
The 1999 Plan was adopted by the Board on April 9, 1999 and is
designed to serve as a comprehensive equity incentive program to attract and
retain the services of individuals essential to the Company's long-term growth
and financial success. Accordingly, officers and other key employees, non-
employee Board members and consultants and other advisors in the service of the
Company or any subsidiary corporation will have the opportunity to acquire a
meaningful equity interest in the Company through their participation in the
1999 Plan.
The following is a summary of the principal features of the 1999 Plan.
The summary, however, does not purport to be a complete description of all the
provisions of the 1999 Plan. Any shareholder of the Company who wishes to
obtain a copy of the actual plan document may do so upon written request to the
Corporate Secretary at the Company's principal executive offices in Edmond,
Oklahoma.
Equity Incentive Programs
The 1999 Plan contains three separate equity incentive programs: (i)
a Discretionary Option Grant Program, (ii) an Automatic Option Grant Program and
(iii) a Stock Issuance Program. The principal features of these programs are
described below. The 1999 Plan (other than the Automatic Option Grant Program)
will be administered by the Compensation Committee of the Board. This committee
(the "Plan Administrator") will have complete discretion (subject to the
provisions of the 1999 Plan) to authorize option grants and direct stock
issuances under the 1999 Plan. However, all grants under the Automatic Option
Grant Program will be made in strict compliance with the provisions of that
program, and no administrative discretion will be exercised by the Plan
Administrator with respect to the grants made thereunder. Stockholder approval
of the 1999 Plan under this Proposal will constitute pre-approval of all option
grants subsequently made under that program and the subsequent exercise and
cancellation of those options in accordance with those terms.
Share Reserve
3,608,280 shares of Common Stock has been reserved for issuance over
the ten year term of the 1999 Plan. The reserve is comprised of the number of
shares of Common Stock available for issuance under the Predecessor Plans as of
the date of this meeting and to be transferred to the 1999 Plan plus an increase
of 2,000,000 shares authorized by the Board. The share reserve will
automatically be increased on the first trading day of each calendar year,
beginning with the 2000 calendar year, by and amount equal to one percent (1%)
of the shares of Common Stock Outstanding on the last trading day of the
immediately preceding calendar year, but in no event will such annual increase
exceed 50,000 shares.
In no event may any one participant in the 1999 Plan be granted stock
options, separately exercisable stock appreciation rights and direct stock
issuances for more than 300,000 shares in the aggregate per calendar year,
beginning with the 1999 calendar year.
As of March 31, 1999, options for 1,259,956 shares of Common Stock
were outstanding under the Predecessor Plans and 443,291 shares of Common Stock
remained available for future option grants.
6
<PAGE>
In the event any change is made to the outstanding shares of Common
Stock by reason of any recapitalization, stock dividend, stock split,
combination of shares, exchange of shares or other change in corporate structure
effected without the Company's receipt of consideration, appropriate adjustments
will be made to the securities issuable (in the aggregate and to each
participant) under the 1999 Plan and to the securities and exercise price under
each outstanding option.
Eligibility
Officers and other employees of the Company and its parent or subsidiaries
(whether now existing or subsequently established), non-employee members of the
Board and the board of directors of its parent or subsidiaries and consultants
and independent advisors of the Company and its parent and subsidiaries will be
eligible to participate in the Discretionary Option Grant and Stock Issuance
Programs. Non-employee members of the Board will also be eligible to
participate in the Automatic Option Grant Program.
As of April 9, 1999, approximately 7 executive officers, 40 other employees
and 3 non-employee Board members were eligible to participate in the 1999 Plan,
and 3 non-employee Board members were eligible to participate in the Automatic
Option Grant Program.
Valuation
The fair market value per share of Common Stock on any relevant date under
the 1999 Plan will be the average of the highest bid and lowest asked prices per
share on that date on the Nasdaq SmallCap Market. On March 31, 1999, the closing
selling price per share was $15.125.
Discretionary Option Grant Program
Options may be granted under the Discretionary Option Grant Program at an
exercise price per share not less than the fair market value per share of Common
Stock on the option grant date. No granted option will have a term in excess of
ten years.
Upon cessation of service, the optionee will have a limited period of time
in which to exercise any outstanding option to the extent such option is
exercisable for vested shares. The Plan Administrator will have complete
discretion to extend the period following the optionee's cessation of service
during which his or her outstanding options may be exercised and/or to
accelerate the exercisability or vesting of such options in whole or in part.
Such discretion may be exercised at any time while the options remain
outstanding, whether before or after the optionee's actual cessation of service.
The Plan Administrator is authorized to issue stock appreciation rights in
connection with option grants made under the Discretionary Option Grant Program
which provide the holders with the right to surrender their options for an
appreciation distribution from the Company equal in amount to the excess of (a)
the fair market value of the vested shares of Common Stock subject to the
surrendered option over (b) the aggregate exercise price payable for such
shares. Such appreciation distribution may, at the discretion of the Plan
Administrator, be made in cash or in shares of Common Stock.
The Plan Administrator will have the authority to effect the cancellation
of outstanding options under the Discretionary Option Grant Program which have
exercise prices in excess of the then current market price of Common Stock and
to issue replacement options with an exercise price based on the market price of
Common Stock at the time of the new grant.
7
<PAGE>
Automatic Option Grant Program
Under the Automatic Option Grant Program, each individual who first becomes
a non-employee Board member on or after the date of this Annual Meeting, will
automatically be granted at that time an option grant for 12,000 shares of
Common Stock, provided such individual has not previously been in the Company's
employ. In addition, on the date of each Annual Shareholders Meeting, beginning
with this Meeting, each individual who is to continue to serve as a non-employee
Board member after such meeting will automatically be granted an option to
purchase 12,000 shares of Common Stock, provided such individual has served as a
non-employee Board member for at least six months. There will be no limit on the
number of such annual 12,000 share options which any one non-employee Board
member may receive over the period of Board service, and non-employee Board
members who have previously served in the Company's employ will be eligible for
one or more annual 12,000 share option grants.
Each option will have an exercise price per share equal to 100% of the fair
market value per share of Common Stock on the option grant date and a maximum
term of ten years measured from the option grant date.
Each option will be immediately exercisable for all the option shares, but
any purchased shares will be subject to repurchase by the Company, at the
exercise price paid per share, upon the optionee's cessation of Board service.
Each option grant will vest (and the Company's repurchase rights will lapse)
upon the completion of one year of Board service measured from the option grant
date.
The shares subject to each automatic option grant will immediately vest
upon the optionee's death or permanent disability or an acquisition of the
Company (whether by merger, asset sale or sale of stock by the shareholders) or
a hostile change in control of the Company (whether by successful tender offer
for more than 50% of the outstanding voting stock or by proxy contest for the
election of Board members). In addition, upon the successful completion of a
hostile take-over, each automatic option grant which has been outstanding for at
least six months may be surrendered to the Company for a cash distribution per
surrendered option share in an amount equal to the excess of (a) the take-over
price per share over (b) the exercise price payable for such share.
Stock Issuance Program
Shares may be sold under the Stock Issuance Program at a price per share
not less than the fair market value per share of Common Stock, payable in cash
or through a promissory note payable to the Company. Shares may also be issued
solely as a bonus for past services or upon attainment of specified performance
goals.
The issued shares may either be immediately vested upon issuance or subject
to a vesting schedule tied to the performance of service or the attainment of
performance goals. The Plan Administrator will, however, have the discretionary
authority at any time to accelerate the vesting of any unvested shares.
General Provisions
Acceleration
In the event of an acquisition of the Company, whether by merger or asset
sale or a sale by the shareholders of more than 50% of the total combined voting
power of the Company recommended by the Board, each outstanding option under the
Discretionary Option Grant Program which is not to be assumed by the successor
corporation or otherwise continued will automatically accelerate in full, and
all unvested shares under the Discretionary Option Grant and Stock Issuance
Programs will immediately vest, except to the extent the Company's repurchase
rights with respect to those shares are to be assigned to the successor
corporation or otherwise continued in effect. The Plan Administrator will have
the authority under the Discretionary Option Grant Program to provide that the
shares subject to options granted under that program will automatically vest (i)
upon an acquisition of the Company, whether or not those options are assumed or
continued, (ii) a hostile change in control of the Company effected through a
successful tender offer for more than 50% of the Company's outstanding voting
stock or by proxy contest for the election of Board members or (iii) in the
event the individual's service is terminated, whether involuntarily or through a
resignation for good reason, within a designated period (not to exceed eighteen
(18) months) following an acquisition in which those options are assumed or
otherwise continued in effect or a hostile change in control. The vesting of
outstanding shares under the Stock Issuance Program may be accelerated upon
similar terms and conditions.
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<PAGE>
The acceleration of vesting in the event of a change in the ownership or
control of the Company may be seen as an anti-takeover provision and may have
the effect of discouraging a merger proposal, a takeover attempt or other
efforts to gain control of the Company.
Financial Assistance
The Plan Administrator may permit one or more participants to pay the
exercise price of outstanding options or the purchase price of shares under the
1999 Plan by delivering a promissory note payable in installments. The Plan
Administrator will determine the terms of any such promissory note. However, the
maximum amount of financing provided any participant may not exceed the cash
consideration payable for the issued shares plus all applicable taxes incurred
in connection with the acquisition of the shares.
Special Tax Election
The Plan Administrator may provide one or more holders of options or
unvested shares with the right to have the Company withhold a portion of the
shares otherwise issuable to such individuals in satisfaction of the withholding
tax liability incurred by such individuals in connection with the exercise of
those options or the vesting of those shares. Alternatively, the Plan
Administrator may allow such individuals to deliver previously acquired shares
of Common Stock in payment of such tax liability.
Amendment and Termination
The Board may amend or modify the 1999 Plan in any or all respects
whatsoever subject to any required shareholder approval. The Board may terminate
the 1999 Plan at any time, and the 1999 Plan will in all events terminate on May
20, 2009.
9
<PAGE>
Stock Awards
No options have been granted under the 1999 Plan. The table below shows, as
to each of the Company's executive officers named in the Summary Compensation
Table and the various other indicated individuals and groups, the number of
shares of Common Stock subject to options granted between January 1, 1998 and
March 31, 1999 under the Predecessor Plans, together with the weighted average
exercise price payable per shares.
Option Transactions
<TABLE>
<CAPTION>
Name Number of Option Shares Weighted Average Exercise Price
<S> <C> <C>
Robert L. Barcum 15,000 $9.00
Chairman of the Board and Former Chief
Executive Officer
Lewis B. Kilbourne, Ph.D. 200,000 3.03
Chief Executive Officer
Robert N. Baker 150,000 3.10
President and Chief Operating Officer
Russell L. Reinhardt __ __
Former Vice President
All Current executive officers as a 513,576 3.05
group (5 persons)
Jimmy M. Wright 42,500 5.20
Director
Sue Hale __ __
Director
All non-employee directors as a group 57,500 6.19
(3 persons)
All employees, including current 567,058 3.00
officers who are not executive
officers as a group (28 persons)
</TABLE>
Federal Income Tax Consequences
Option Grants
Options granted under the 1999 Plan may be either incentive stock options
which satisfy the requirements of Section 422 of the Internal Revenue Code or
non-statutory options which are not intended to meet such requirements. The
Federal income tax treatment for the two types of options differs as follows:
Incentive Options
No taxable income is recognized by the optionee at the time of the option
grant, and no taxable income is generally recognized at the time the option is
exercised. The optionee will, however, recognize taxable income in the year in
which the purchased shares are sold or otherwise disposed of. For Federal tax
purposes, dispositions are divided into two categories: (i) qualifying and (ii)
disqualifying. A qualifying disposition occurs if the sale or other
10
<PAGE>
disposition is made after the optionee has held the shares for more than two
years after the option grant date and more than one year after the exercise
date. If either of these two holding periods is not satisfied, then a
disqualifying disposition will result.
If the optionee makes a disqualifying disposition of the purchased shares,
then the Company will be entitled to an income tax deduction, for the taxable
year in which such disposition occurs, equal to the excess of (i) the fair
market value of such shares on the option exercise date over (ii) the exercise
price paid for the shares. In no other instance will the Company be allowed a
deduction with respect to the optionee's disposition of the purchased shares.
Non-Statutory Options
No taxable income is recognized by an optionee upon the grant of a non-
statutory option. The optionee will in general recognize ordinary income, in
the year in which the option is exercised, equal to the excess of the fair
market value of the purchased shares on the exercise date over the exercise
price paid for the shares, and the optionee will be required to satisfy the tax
withholding requirements applicable to such income.
If the shares acquired upon exercise of the non-statutory option are
unvested and subject to repurchase by the Company in the event of the optionee's
termination of service prior to vesting in those shares, then the optionee will
not recognize any taxable income at the time of exercise but will have to report
as ordinary income, as and when the Company's repurchase right lapses, an amount
equal to the excess of (i) the fair market value of the shares on the date the
repurchase right lapses over (ii) the exercise price paid for the shares. The
optionee may, however, elect under Section 83(b) of the Internal Revenue Code to
include as ordinary income in the year of exercise of the option an amount equal
to the excess of (i) the fair market value of the purchased shares on the
exercise date over (ii) the exercise price paid for such shares. If the Section
83(b) election is made, the optionee will not recognize any additional income as
and when the repurchase right lapses.
The Company will be entitled to an income tax deduction equal to the amount
of ordinary income recognized by the optionee with respect to the exercised non-
statutory option. The deduction will in general be allowed for the taxable year
of the Company in which such ordinary income is recognized by the optionee.
Stock Appreciation Rights
An optionee who is granted a stock appreciation right will recognize
ordinary income in the year of exercise equal to the amount of the appreciation
distribution. The Company will be entitled to an income tax deduction equal to
the appreciation distribution for the taxable year in which the ordinary income
is recognized by the optionee.
Direct Stock Issuance
The tax principles applicable to direct stock issuances under the 1999 Plan
will be substantially the same as those summarized above for the exercise of
non-statutory option grants.
Deductibility of Executive Compensation
The Company anticipates that any compensation deemed paid by it in
connection with disqualifying dispositions of incentive stock option shares or
exercises of non-statutory options granted under the 1999 Plan with exercise
prices equal to the fair market value of the option shares on the grant date
will qualify as performance-based compensation for purposes of Code Section
162(m) and will not have to be taken into account for purposes of the $1 million
limitation per covered individual on the deductibility of the compensation paid
to certain executive officers of the Company. Accordingly, all compensation
deemed paid with respect to those options is expected to remain deductible by
the Company without limitation under Code Section 162(m).
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<PAGE>
Accounting Treatment
Option grants or stock issuances with exercise or issue prices less than
the fair market value of the shares on the grant or issue date will result in a
compensation expense to the Company's earnings equal to the difference between
the exercise or issue price and the fair market value of the shares on the grant
or issue date. Such expense will be accruable by the Company over the period
that the option shares or issued shares are to vest. Option grants or stock
issuances at 100% of fair market value will not result in any charge to the
Company's earnings. However, the Company must disclose in footnotes and pro-
forma statements to the Company's financial statements, the impact those options
would have upon the Company's reported earnings were the value of those options
at the time of grant treated as a compensation expense. Whether or not granted
at a discount, the number of outstanding options may be a factor in determining
the Company's earnings per share on a fully-diluted basis.
Under a recently-proposed amendment to the current accounting principles,
option grants made to non-employee Board members or consultants after December
15, 1998 will result in a direct charge to the Company's reported earnings based
upon the fair value of the option measured on the vesting date of each
installment of the underlying option shares. Such charge will accordingly
include the appreciation in the value of the option shares over the period
between the grant date of the option (or, if later, the effective date of the
final amendment) and the vesting date of each installment of the option shares.
In addition, if the proposed amendment is adopted, any options which are
repriced after December 15, 1998 will also trigger a direct charge to Company's
reported earnings measured by the appreciation in the value of the underlying
shares over the period between the grant date of the option (or, if later, the
effective date of the final amendment) and the date the option is exercised for
those shares.
Should one or more optionees be granted stock appreciation rights which
have no conditions upon exercisability other than a service or employment
requirement, then such rights will result in a compensation expense to the
Company's earnings.
Vote Required for Approval of Proposal Two
The affirmative vote of a majority of the outstanding voting shares of the
Company present or represented and entitled to vote at the 1999 Annual Meeting
is required for approval of the 1999 Plan. Should such shareholder approval not
be obtained, then the 1999 Plan will terminate. The Company's 1995 Stock Option
Plan, 1998 Non-Qualified Stock Option Plan and 1998 Stock Grant Plan will,
however, continue to remain in effect, and option grants may be made pursuant to
the provisions of those plans until the available reserve of Common Stock under
each such plan is issued.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
THE APPROVAL OF THE 1999 PLAN. THE BOARD BELIEVES THAT IT IS IN THE BEST
INTERESTS OF THE COMPANY TO IMPLEMENT A COMPREHENSIVE EQUITY INCENTIVE PROGRAM
FOR THE COMPANY WHICH WILL PROVIDE A MEANINGFUL OPPORTUNITY FOR OFFICERS,
EMPLOYEES AND NON-EMPLOYEE BOARD MEMBERS TO ACQUIRE A SUBSTANTIAL PROPRIETARY
INTEREST IN THE ENTERPRISE AND THEREBY ENCOURAGE SUCH INDIVIDUALS TO REMAIN IN
THE COMPANY'S SERVICE AND MORE CLOSELY ALIGN THEIR INTERESTS WITH THOSE OF THE
SHAREHOLDERS.
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<PAGE>
PROPOSAL THREE
APPROVAL OF 1999 EMPLOYEE STOCK PURCHASE PLAN
The Company's stockholders are also being asked to approve the 1999
Employee Stock Purchase Plan (the "1999 Purchase Plan") as the successor to the
Company's existing Employee Stock Purchase Plan (the "Predecessor Plan"). If the
stockholders approve the 1999 Purchase Plan, the Predecessor Plan will terminate
with the purchase period ending on June 30, 1999, and no further shares of
Common Stock will be issued under the Predecessor Plan after that date. However,
the share reserve remaining under the Predecessor Plan after the June 30, 1999
purchase date will be transferred to the 1999 Purchase Plan and will form part
of the initial reserve available for issuance thereunder.
The 1999 Purchase Plan is intended to provide eligible employees of the
Company and its participating affiliates with the opportunity to acquire a
propriety interest in the Company through participation in a payroll-deduction
based employee stock purchase plan designed to operate in compliance with
Section 423 of the Internal Revenue Code. The 1999 Purchase Plan was adopted by
the Board of Directors on April 9, 1999 and will become effective on July 1,
1999 (the "Effective Date"), provided the 1999 Purchase Plan is approved by the
stockholders at the Annual Meeting.
The following is a summary of the principal features of the 1999 Purchase
Plan. The summary, however, does not purport to be a complete description of
all the provisions of the 1999 Purchase Plan. Any stockholder of the Company
who wishes to obtain a copy of the actual plan document may do so upon written
request to the Company's Secretary at the Company's principal executive offices
in Edmond, Oklahoma.
Share Reserve
200,000 shares of Common Stock have been reserved for issuance under the
1999 Purchase Plan. This reserve is comprised of the number of shares of Common
Stock available for issuance under the Predecessor Plan as of the Effective Date
(estimated to be 93,818 shares) and an increase of 106,182 shares approved by
the Board.
In the event any change is made to the outstanding shares of common stock
by reason of any recapitalization, stock dividend, stock split, combination of
shares, exchange of shares or other change in corporate structure effected
without the Company's receipt of consideration, appropriate adjustments will be
made to (i) the maximum number and class of securities issuable in the aggregate
under the 1999 Purchase Plan, (ii) the maximum number and class of securities
purchasable per participant on any one purchase date, (iii) the maximum
aggregate number and class of securities purchasable by all participants on any
one purchase date and (iv) the maximum number and class of securities subject to
each outstanding purchase right and the purchase price payable per share
thereunder.
Administration
The 1999 Purchase Plan will be administered by the Compensation Committee
of the Board of Directors. Such committee, as Plan Administrator, will have full
authority to adopt such rules and procedures as it may deem necessary for proper
plan administration and to interpret the provisions of the 1999 Purchase Plan.
All costs and expenses incurred in plan administration will be paid by the
Company without charge to participants.
Purchase Periods
Under the 1999 Purchase Plan, shares will be issued through a series of
successive offering periods, each of a duration of twenty-four (24) months. The
first offering period will run from July 1, 1999 to the last business day in
July 2001. The next offering period is scheduled to commence on August 1, 2001.
Each offering period will be comprised of up to four (4) six (6)-month
purchase periods. Purchase periods will run from the first business day in
February to the last business day in July each year and from the first business
day in August each year to the last business day in January of the following
year. However, the first purchase period will run from July 1, 1999 to the last
business day in January 2000.
13
<PAGE>
If the fair market value per share of the Common Stock on the last day of
any purchase period is less than the fair market value per share of Common Stock
on the start date of the offering period during which such purchase period
occurs, then that offering period will automatically terminate and a new
offering period will commence on the next business day.
Each participant will be granted a separate right to purchase shares of
common Stock for each offering period in which he or she participates. The
purchase right will be granted on the date the participant joins an offering
period and will be automatically exercised on the last business day of each
purchase period in that offering period. Each purchase right entitles the
participant to purchase the whole number of shares of Common Stock obtained by
dividing the participant's payroll deductions for the purchase period by the
purchase price in effect for such period.
Eligibility
Any individual who customarily works for more than twenty (20) hours per
week for more than five (5) months per calendar year in the employ of the
company or any participating affiliate will be eligible to participate in the
1999 Purchase Plan. An individual who is an eligible employee at the start of
any offering period may join that offering period at that time or on the start
date of any purchase period within that offering period on which he or she is an
eligible employee. An individual who first becomes an eligible employee after
such start date may join the offering period on the start date of any subsequent
purchase period within that offering period on which he or she is an eligible
employee.
Participating affiliates include any parent or subsidiary corporations of
the Company, whether now existing or hereafter organized, which elect, with the
approval of the Plan Administrator, to extend the benefits of the 1999 Purchase
Plan to their eligible employees.
As of March 31, 1999, approximately 45 employees, including 5 executive
officers, were eligible to participate in the 1999 Purchase Plan.
Payroll Deductions
Each participant may authorize period payroll deductions in any multiple of
1% of his or her cash earnings, up to a maximum of 10%.
Purchase Price
The purchase price per share at which common stock will be purchased on the
participant's behalf on each purchase date will be equal to 85% of the lower of
-----
(i) the fair market value per share of common stock on the participant's entry
date for the offering period during which the purchase date occurs or (ii) the
fair market value per share of common stock on that purchase date.
Purchase Provisions
On the last business day of each purchase period, the accumulated payroll
deductions of each participant will automatically be applied to the purchase of
whole shares of common stock at the purchase price in effect for the participant
for that purchase period. However, no participant may, on any one purchase date,
purchase more than 750 shares of Common Stock, subject to periodic adjustments
in the event of certain changes in the company's capitalization. In addition, no
more than an aggregate of 50,000 shares of Common Stock may be purchased on
behalf of all participants on any one purchase date.
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<PAGE>
Valuation
The fair market value per share of common stock on any relevant date will
be the average of the highest bid and lowest asked prices per share on such date
on the Nasdaq SmallCap Market. On March 31, 1999, the fair market value per
share of Common Stock was $15.125 per share.
Special Limitations
The 1999 Purchase Plan imposes certain limitations upon a participant's
rights to acquire common stock, including the following limitations:
(i) No purchase right may be granted to any individual who owns stock
(including stock purchasable under any outstanding purchase rights) possessing
5% or more of the total combined voting power or value of all classes of stock
of the Company of any of its affiliates.
(ii) No purchase right granted to a participant may permit such
individual to purchase common stock at a rate greater than $25,000 worth of such
common stock (valued at the time such purchase right is granted) for each
calendar year the purchase right remains outstanding at any time.
(iii) No participant may purchase more than 750 shares of Common Stock on
any one purchase date.
(iv) No more than 50,000 shares of Common Stock may be purchased on
behalf of all participants on any one purchase date.
Termination of Purchase Rights
The purchase right will immediately terminate upon the participant's loss
of eligible employee status or upon his or her affirmative withdrawal from the
purchase period. The payroll deductions collected for the purchase period in
which the purchase right terminates may, at the participant's election, be
immediately refunded or applied to the purchase of Common Stock at the end of
that purchase period.
Stockholder Rights
No participant will have any stockholder rights with respect to the shares
of common stock covered by his or her purchase right until the shares are
actually purchased on the participant's behalf. No adjustment will be made for
dividends, distributions or other rights for which the record date is prior to
the date of such purchase.
Assignability
No purchase right will be assignable or transferable other than in
connection with the participant's death and will be exercisable only by the
participant during his or her lifetime.
Acquisition
Should the Company be acquired by merger or asset sale during an offering
period, all outstanding purchase rights will automatically be exercised
immediately prior to the effective date of such acquisition. The purchase price
will be 85% of the lower of (i) the fair market value per share of common
-----
stock on the participant's entry date into the offering period during which
the acquisition occurs or (ii) the fair market value per share of common stock
immediately prior to such acquisition.
Amendment and Termination
The 1999 Purchase Plan will terminate upon the earliest to occur of (i)
July 31, 2009, (ii) the date on which all available shares are issued or (iii)
the date on which all outstanding purchase rights are exercised in connection
with an acquisition of the Company.
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<PAGE>
The Board of Directors may at any time alter, suspend or discontinue the
1999 Purchase Plan. However, the Board of Directors may not, without stockholder
approval, (i) increase the number of shares issuable under the 1999 Purchase
Plan or the maximum number of purchasable shares by any participant on any one
purchase date except in connection with certain changes in the Company's capital
structure, (ii) alter the purchase price formula so as to reduce the purchase
price or (iii) modify the requirements for eligibility to participate in the
1999 Purchase Plan.
Plan Benefits
No purchase rights have been granted and no shares have been purchased
under the 1999 Purchase Plan. The table below shows, as to each of the Named
Executive officers in the Summary Compensation Table and the various indicated
groups, the following information with respect to transactions under the
Predecessor Plan effected during the period from January 1, 1998 to March 31,
1999: (i) the number of shares of Common Stock purchased under the Predecessor
Plan during that period and (ii) the weighted average purchase price paid per
share of Common Stock in connection with such purchases.
<TABLE>
<CAPTION>
Name Number of Option Shares Weighted Average Purchase Price
<S> <C> <C>
Robert L. Barcum 15,000 $9.00
Chairman of the Board and Former Chief
Executive Officer
Lewis B. Kilbourne 200,000 3.03
Chief Executive Officer
Robert N. Baker 150,000 3.10
President and Chief Operating Officer
Russell L. Reinhardt ___ ___
Vice President
All current executive officers as a 513,576 3.05
group (5 persons)
Jimmy M. Wright 42,500 5.20
Director
Sue Hale ___ ___
Director
All non-employee directors as a group 57,500 6.19
(3 persons)
All employees, including current 567,058 3.00
officers who are not executive
officers as a group (28 persons)
</TABLE>
Federal Income Tax Consequences
The 1999 Purchase Plan is intended to be an employee stock purchase plan
within the meaning of Section 423 of the Internal Revenue Code. Under a plan
which so qualifies, no taxable income will be recognized by a participant, and
no deductions will be allowable to the Company, in connection with the grant or
the exercise of an outstanding purchase right. Taxable income will not be
recognized until there is a sale or other disposition of the shares acquired
under the 1999 Purchase Plan or in the event the participant should die while
still owning the purchased shares.
If the participant sells or otherwise disposes of the purchased shares
within two (2) years after the start date of the offering period in which such
shares were acquired or within one (1) year after the actual purchase date of
those shares, then the participant will recognize ordinary income in the year of
sale or disposition equal to the amount by which the fair market value of the
shares on the purchase date exceeded the purchase price paid for those shares,
and
16
<PAGE>
the Company will be entitled to an income tax deduction, for the taxable
year in which such sale or disposition occurs, equal in amount to such excess.
If the participant sells or disposes of the purchased shares more than two
(2) years after the start date of the offering period in which such shares were
acquired and more than one (1) year after the actual purchase date of those
shares, then the participant will recognize ordinary income in the year of sale
or disposition equal to the lesser of (i) the amount by which the fair market
value of the shares on the sale or disposition date exceeded the purchase price
paid for those shares or (ii) 15% of the fair market value of the shares on the
start date of that offering period, and any additional gain upon the disposition
will be taxed as a long-term capital gain. The Company will not be entitled to
any income tax deduction with respect to such sale or disposition.
If the participant still owns the purchased shares at the time of death,
the lesser of (i) the amount by which the fair market value of the shares on the
date of death exceeds the purchase price or (ii) 15% of the fair market value of
the shares on the start date of the offering period in which those shares were
acquired will constitute ordinary income in the year of death.
Accounting Treatment
Under current accounting rules, the issuance of Common Stock under the 1999
Purchase Plan will not result in a compensation expense chargeable against the
Company's reported earnings. However, the Company must disclose, in pro-forma
statements to the Company's financial statements, the impact the purchase rights
granted under the 1999 Purchase Plan would have upon the Company's reported
earnings were the value of those purchase rights treated as compensation
expense.
Vote Required for Approval of Proposal Three
The affirmative vote of a majority of the outstanding voting shares of the
Company present or represented and entitled to vote at the Annual Meeting is
required for approval of the 1999 Purchase Plan. Should such stockholder
approval not be obtained, then the 1999 Purchase Plan will not be implemented,
and no purchase rights will be granted and no stock issuances will be made under
the 1999 Purchase Plan. However, the Company's existing Employee Stock Purchase
Plan will continue to remain in effect and stock purchases may continue to be
made pursuant to the provisions of that plan until the available reserve of
Common Stock under that plan has been issued.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE 1999 PURCHASE PLAN. THE BOARD BELIEVES THAT IT IS IN THE BEST
INTERESTS OF THE COMPANY TO IMPLEMENT A PROGRAM OF STOCK OWNERSHIP FOR THE
COMPANY'S EMPLOYEES IN ORDER TO PROVIDE THEM WITH A MEANINGFUL OPPORTUNITY TO
ACQUIRE A SUBSTANTIAL PROPRIETARY INTEREST IN THE COMPANY AND THEREBY ENCOURAGE
SUCH INDIVIDUALS TO REMAIN IN THE COMPANY'S SERVICE AND MORE CLOSELY ALIGN THEIR
INTERESTS WITH THOSE OF THE STOCKHOLDERS.
17
<PAGE>
PROPOSAL FOUR
AUTHORIZATION AND APPROVAL OF THE ISSUANCE OF COMMON STOCK UNDERLYING
CONVERTIBLE NOTE TO BE ISSUED TO HEWLETT-PACKARD COMPANY
REPRESENTING 20% OR MORE OF THE OUTSTANDING SHARES OF
COMMON STOCK OF THE COMPANY
The following contains a summary of the material information relating to
certain transactions involving the Company's issuance of a $6.0 million Secured
Subordinated Promissory Note (the "Initial Note") to Hewlett-Packard Company
("HP") and the proposed exchange of such note for a Secured Subordinated
Convertible Promissory Note. Copies of the Note Purchase Agreement, the Secured
Subordinated Promissory Note, the Security Agreement and the Shareholder
Agreement, each dated February 4, 1999 by and between the Company and HP,
previously were filed as exhibits to the Company's Current Report on Form 8-K
dated February 4, 1999. The form of Subordinated Secured Convertible Promissory
Note (the "Convertible Note") for which approval is being sought hereby is
attached as Appendix C to this Proxy Statement. The Initial Note and the
----------
Convertible Note are sometimes collectively referred to in this discussion as
the "Notes" or individually as a "Note".
General
On February 4, 1999, the Company entered into a Note Purchase Agreement
with HP, pursuant to which HP loaned the Company $6.0 million pursuant to the
Initial Note which bears interest at a rate of 11.5% per annum. No principal or
interest payments are due on the Initial Note until February 28, 2004. However,
the Company may prepay the Note, in whole or in part, beginning on September 1,
2000. The Company also will be required to repay the Note if HP demands such
repayment within 90 days after receipt of notice that: (1) the Company has sold
all or substantially all of its assets or intellectual property or is acquired
by another entity; or (2) Lewis B. Kilbourne, Ph.D., ceases for any reason to be
either a regular, full-time employee of the Company or a voting member of the
Board of Directors.
The Notes are secured by a lien on the Company's intellectual property,
including the source code underlying the Company's proprietary software which
comprises the viaLink service. Pursuant to the Note Purchase Agreement, the
Company and HP have agreed that approximately 50% of the principal amount of the
Note is intended to be used by the Company for the purchase, whether directly or
indirectly, of HP products and/or services. The remaining amount may be used
for general corporate and working capital purposes and potential acquisitions of
companies and technologies which are complementary to the Company's viaLink
service.
Under the Note Purchase Agreement, the Company has agreed to include in
this proxy statement a proposal to approve the issuance of additional shares of
its Common Stock pursuant to the Convertible Note for the purpose of complying
with the Nasdaq Stock Market rule requiring approval of issuances of shares
which would constitute in excess of 20% of a company's currently outstanding
Common Stock for a price less than the greater of book value or market value per
share closing. Upon receipt of such shareholder approval, the Company has
agreed to exchange the Convertible Note for the Initial Note for no additional
consideration. The Convertible Note is identical to the Initial Note, except
that all principal and interest due under the Convertible Note would be
convertible into Common Stock of the Company at $7.00 per share, at the option
of the holder, at any time after 18 months from the issuance of the Initial
Note, or August 5, 2000. The Company also shall have the option to require
mandatory conversion of the note immediately prior to February 28, 2004, the
maturity date of the Note.
For a discussion of certain additional agreements entered into between the
Company and HP, including the financial and operating restrictions placed on
viaLink under the Notes, please see "--Additional Agreements Between viaLink and
Hewlett-Packard" below.
18
<PAGE>
Shares Issuable Upon Conversion
Assuming $6.0 million principal amount and accrued interest of $1,035,000
outstanding on August 5, 2000, the initial conversion date, the Convertible Note
would be convertible into 1,005,000 shares of Common Stock. Based on 2,874,342
shares of Common Stock outstanding as of March 31, 1999, and excluding exercises
of options and warrants and any additional issuances of shares of Common Stock
subsequent to such date, the shares issuable upon conversion of the Convertible
Note (the "Conversion Shares") would represent approximately 34.9% of the
Company's outstanding Common Stock.
The table below sets forth the approximate number of Conversion Shares
issuable at various times during the term of the Convertible Note, assuming no
repayments of principal or interest by the Company and conversion in full:
<TABLE>
<CAPTION>
Principal and Conversion Shares
Date Interest Due ($) (@$7.00 share)
------------ ----------------- -----------------
<S> <C> <C>
August 5, 2000 $7,035,000 1,005,000
(18 months)
(initial conversion date)
August 5, 2001 7,725,000 1,103,571
(30 months)
August 5, 2002 8,415,000 1,202,143
(42 months)
August 5, 2003 9,105,000 1,300,714
(54 months)
February 28, 2004 9,493,475 1,356,211
(60 months)
(maturity date)
</TABLE>
Additional Agreements Between viaLink and Hewlett-Packard
viaLink Note Covenants
For so long as any amounts are outstanding under the Notes, the Company had
agreed with HP that it will not:
. create or incur any debt in excess of (i) 80% of the Company's then
outstanding accounts receivable plus (ii) amounts used by the Company
to finance the purchase of any equipment acquired by the Company
(including through capitalized leases);
. create or incur any security interest or lien on any asset now owned
or acquired, except certain permitted liens, including liens granted
to any senior lender;
. without prior notice to HP, consolidate or merge with any other
entity or person, provided that such consolidation or merger could
not reasonably be expected to have a material adverse effect upon
HP's right under this Note;
. without the prior consent of HP, acquire all or substantially all of
the capital stock or assets of, or make any investment in or loan to,
any other entity or person for an
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<PAGE>
aggregate amount in excess of 15% of the Company's asset at the end
of the quarter immediately prior to such consolidation, merger,
acquisition, investment or loan; or
. declare or pay any dividends on any class or classes of stock (other
than stock dividends to effectuate a "stock split"). Shareholder
Agreement
Shareholder Agreement
In connection with the funding of the Initial Note and in contemplation of
the possible issuance of the Convertible Note, the Company and HP entered into a
Shareholder Agreement providing HP with, among other things, certain demand and
piggyback registration rights with respect to the Conversion Shares. The
Company has agreed to pay all expenses associated with such registrations, other
than HP's underwriters commissions and discounts and expenses of any counsel
retained by it.
Under the Shareholder Agreement, the Company also has granted to HP the
right to designate one observer to attend the Company's board meetings. HP
shall have this board observer right for so long as any amount remains due under
the Notes and, following conversion of the Convertible Note, until such time as
HP owns less than 5% of the Company's outstanding Common Stock.
Under the Shareholder Agreement, HP also has agreed to certain restrictions
on its ability to resell the Conversion Shares and purchase additional shares of
the Company's equity securities. In particular, HP may not transfer the
beneficial ownership of the Notes or the Conversion Shares except as follows:
. pursuant to a registered public offering;
. to any person or group of persons that, after giving effect of such
transfer, will beneficially own less than 9.9% of the shares of
Common Stock then outstanding;
. upon the approval of the Board of Directors of the Company;
. in connection with any business combination, transaction or tender or
exchange offer approved or supported by the Board of Directors; and
. pursuant to a bona fide pledge of, or the granting of a security
interest or other lien in, the Notes or Conversion Shares.
HP also has agreed that it will not, without the approval of the Company's
Board of Directors, acquire any additional beneficial ownership in the Company's
Common Stock or any other equity security convertible into or exercisable for
Common Stock in excess of the total percentage of the Company which HP held as
of the time of full conversion of the Convertible Note.
Hosting and Co-Marketing Arrangements
The Note Purchase Agreement also provides for a possible expansion of a
strategic partnership between the Company and HP. In particular, the Company
has agreed to prominently display HP trademarks and logos in the user interface
to the viaLink service. In addition, the Company and HP have begun to undertake
certain co-marketing activities, although no formal agreement exists with
respect to such activity. In addition, the Company anticipates that HP will
serve as the database host for the viaLink service by providing the
technological platform and mission critical technological support for the
viaLink service. In anticipation of this hosting relationship, the Company has
migrated its technology to the HP 9000 platform.
Certain Considerations and Risks
While the Board of Directors is of the opinion that the issuance of the
Convertible Note and the resulting issuance of Common Stock upon conversion
thereof is advisable and in the best interests of the Company and its
shareholders, shareholders should consider the following possible factors, as
well as the other information contained in this Proxy Statement in evaluating
this Proposal Four. In addition, you should review the Risk Factors that are
contained in the Company's Annual Report on Form 10-KSB delivered with this
Proxy Statement.
20
<PAGE>
. Dilution. The conversion of the Convertible Note could result in
---------
substantial dilution to current shareholders. As of April 14, 1999,
the Common Stock was trading at $18.75 per share, and the
Convertible Note is convertible at a rate of $7.00 per share.
. Possible Effect on Market Price. The issuance of the Conversion
--------------------------------
Shares may depress the market price of the Common Stock by increasing
the amount of shares of Common Stock outstanding. Resales of the
Conversion Shares also could have the effect of creating downward
pressure on the market price of the Common Stock. Such downward
pressure could encourage short sales by HP or others which could
place further downward pressure on the price of the Common Stock.
In connection with the execution of the Note Purchase Agreement, the
Company has granted HP certain demand and piggyback registration
rights in connection with the resale of the Conversion Shares. These
registration rights would facilitate resales of the Conversion Shares
into the public market and would increase the number of shares of
Common Stock available for public trading.
. HP Will be a Significant Shareholder. If HP chooses to convert the
------------------------------------
Convertible Note into shares of Common Stock it will become a
significant shareholder of the Company and may be able to control
matters submitted to the shareholders for a vote, including the
election of directors and the approval of mergers and other business
combination transactions. If HP converted the Convertible Note today
it would become the Company's largest shareholder.
Nasdaq Voting Requirements
The Common Stock is listed on the Nasdaq SmallCap Market. Nasdaq rules
require shareholder approval if the Company issues Common Stock or securities
convertible for 20% or more of the Company's outstanding shares of Common Stock
or voting power at a price that is below the greater of book value or market
value per share. The Convertible Note is convertible at a rate of $7.00 per
share. At all times since the issuance of the Initial Note, the Company's stock
has had a closing price of more than $7.00 per share as reported on the Nasdaq
SmallCap Market. Under Nasdaq rules, unless shareholder approval is obtained,
the Company would be prohibited from issuing Conversion Shares accounting for
more than 19.99% of the then outstanding Common Stock. Therefore, the Company's
shareholders must vote in favor of this Proposal Four in order for HP to be able
to convert the Convertible Note without restriction based on the current number
of shares of Common Stock outstanding and the Company's current stock price.
Although there can be no assurance that the Conversion Shares will equal
more than 20% of the outstanding Common Stock at the time of conversion, your
vote is being sought prospectively pursuant to the agreement of the Company
contained in the Note Purchase Agreement. In the event that the market value of
the Common Stock drops below $7.00 or the number of shares of Common Stock
outstanding increases such that the Note is convertible for less than 20% of the
Company's Common Stock, the Company intends to exchange the Initial Note for the
Convertible Note regardless of whether shareholder approval is granted under
this Proposal Four.
Reasons for the Hewlett-Packard Transactions
Proceeds from the issuance of the Note are being used to fund expenditures
incurred in the continuing expansion of the Company's business, including the
promotion and commercialization of the viaLink service, the hiring of additional
personnel, sales and marketing efforts and for general corporate purposes. In
addition, the Note Purchase Agreement provides that the parties intend that at
least 50% of the proceeds of the Note are to be used to purchase, whether
directly or indirectly, HP products and/or services.
The Board of Directors and management of the Company reviewed and
considered numerous financing and strategic alternatives prior to entering into
the Note Purchase Agreement and Related Transactions with HP. The Board of
Directors unanimously approved the Note Purchase Agreement and related matters.
In so doing, the Board of Directors considered a number factors, including:
21
<PAGE>
. the substantial increase in the Company's working capital supplied by
the Notes and the prospect that, as a result of the increase in
working capital from the Notes, the Company will be able to expand
its operations and improve its access to capital markets;
. the terms of the transactions pursuant to which the Initial Note and,
if approved, the Convertible Note will be issued, including the lack
of any payments required under the Notes until February 2004, which
allows the Company to conserve its operating cash;
. as discussed in more detail below, the strategic benefits of forging
a relationship with Hewlett-Packard and upon issuance of the
Convertible Note, if approved, providing HP with an equity stake in
the Company; and
. alternatives to the HP transactions, including alternative public or
private financing, which either were unavailable or were available on
terms the Board or Directors considered less favorable in light of
all the circumstances.
In addition to the financing provided by the Note, the Company regards HP
as an important long-term strategic partner. The Company is currently preparing
to locate the viaLink service on an HP host database platform. The Company
believes that the HP database platform will allow the Company to more quickly
increase the number of subscribers it can reliably and securely support and
service. The Company also believes that HP's leadership position in the
technology industry provides critical market validation for viaLink's technology
and services. By exchanging the Initial Note for the Convertible Note, the
Company can retain all of the advantages of the HP strategic relationship while
also providing HP with a security which it can convert into shares of the
Company's Common Stock beginning in August 2000. If HP chooses to convert the
Convertible Note into shares of Common Stock, HP will become a significant
shareholder of the Company with economic interests which correspond to those of
the Company's current shareholders. Specifically, the Board of Directors
believes that providing HP with the opportunity to hold a significant equity
stake in the Company will provide an even greater incentive for HP to actively
promote the Company in order to increase the value of the Company and, in turn,
the shares of Common Stock which HP holds or has the right to acquire.
Consequences If This Proposal is Not Approved
If shareholder approval is not obtained for this Proposal Four, the Company
may suffer numerous adverse consequences, including:
. The Company will be required to repay the Note when due. At the time
of such payment, the Company may not have sufficient funds available
for repayment, or may have allocated such funds for other capital
purposes which it has determined are in the best interests of the
Company and its shareholders.
. The Notes are secured by a lien on all of the Company's intellectual
property, including the source code underlying the proprietary
software, which forms the viaLink service. In the event the Company
is unable to repay the Note, and such Note is not convertible, then
HP may elect to exercise its lien on the Company's assets, including
the source code underling the viaLink service.
. The Company's important strategic relationship with HP may be
adversely affected. Moreover, HP would not be able to convert the
Note, which would deprive the Company of the potential benefit of
aligning HP's interests more closely with that of the Company's
shareholders.
Vote Required to Approve Proposal Four
The affirmative vote on this Proposal Four by the holders of a majority of
shares of Common Stock present in person or by proxy at the Annual Meeting is
required to approve the issuance of the Common Stock underlying the Convertible
Note. For purposes of calculating votes cast, abstentions are included as votes
cast while broker non-votes are not included as votes cast.
22
<PAGE>
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS BELIEVES THAT THE ISSUANCE OF COMMON STOCK UPON
CONVERSION OF THE CONVERTIBLE NOTE PROPOSED TO BE ISSUED TO HEWLETT-PACKARD IS
FAIR TO, AND IS ADVISABLE IN THE BEST INTEREST OF, THE COMPANY AND ITS
SHAREHOLDERS, HAS UNANIMOUSLY APPROVED THE TRANSACTIONS BETWEEN THE COMPANY AND
HP, INCLUDING, IF APPROVED HEREBY, THE ISSUANCE OF THE SHARES UPON CONVERSION OF
THE CONVERTIBLE NOTE, AND UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" APPROVAL OF THIS PROPOSAL FOUR.
23
<PAGE>
37
PROPOSAL FIVE
REINCORPORATION IN DELAWARE
General
On April 9, 1999, the Board of Directors adopted a plan, subject to
approval by the shareholders, to reincorporate the Company under the laws of the
State of Delaware (the "Reincorporation"). The Company was incorporated under
the laws of the State of Oklahoma in 1985 under the name Applied Intelligence
Group, Inc. The Board of Directors believes Delaware corporate law will better
serve the shareholders' interests and provide the Company with advantages not
available under Oklahoma corporate law. Therefore, the Board of Directors
recommends the shareholders approve the form of Agreement and Plan of Merger
that appears as Appendix D at the end of this Proxy Statement (the "Merger
----------
Agreement") to effect a transaction commonly called a "reincorporation."
The Company will continue to be called "The viaLink Company" after the
Reincorporation. To explain the proposal, however, this Proxy Statement will
call the Company that exists today as an Oklahoma corporation either "the
Company" or "viaLink Oklahoma," while "viaLink Delaware" will refer to the new
Delaware corporation that will initially be organized as a wholly-owned
subsidiary of viaLink Oklahoma. If the holders of at least two-thirds of all
outstanding shares of the Common Stock of viaLink Oklahoma approve the Merger
Agreement, viaLink Oklahoma will be merged into viaLink Delaware. The
"Effective Date" will be when the necessary documents have been filed in both
Oklahoma and Delaware. viaLink Delaware will be the surviving corporation, and
the charter and Bylaws of the new corporation will be substantially the same as
those of viaLink Oklahoma today, except as otherwise discussed below. The
Certificate of Incorporation and Bylaws of viaLink Delaware are attached to this
Proxy Statement as Appendix E and Appendix F, respectively.
---------- ----------
Reincorporation in Delaware will not change the business plan, management,
assets, liabilities, net worth, capitalization or employee benefit plans of the
Company. Each outstanding share of viaLink Oklahoma's common stock and
preferred stock (hereinafter referred to within this Proposal as the "viaLink
Oklahoma Common Stock" and "viaLink Oklahoma Preferred Stock," respectively)
will automatically become one share of the common stock or preferred stock,
respectively, of viaLink Delaware (hereinafter referred to in this Proposal as
the "viaLink Delaware Common Stock" and "viaLink Delaware Preferred Stock,"
respectively). Furthermore, each stock option, warrant or convertible security
that would be, or later becomes, exercisable for, or convertible into, shares of
the viaLink Oklahoma Common Stock will automatically be, or later become,
exercisable for, or convertible into, the same number of shares of viaLink
Delaware Common Stock on the same terms and conditions.
Reasons for the Change
For many years, Delaware has encouraged incorporation in their state by
adopting modern, comprehensive and flexible corporate laws that it periodically
updates and revises to meet changing business needs. The Delaware General
Corporation Law (the "DGCL") is considered a sophisticated statute that is
highly conducive to business. For this reason, many corporations initially
choose Delaware as their place of incorporation and many other corporations not
initially choosing Delaware as their place of incorporation subsequently
reincorporate in Delaware by means of transactions like the one now proposed.
Because of Delaware's policy of encouraging incorporation in their state and its
preeminence as the most popular state of incorporation for major corporations,
the courts of Delaware have developed considerable expertise in dealing with
corporate issues. As a result, Delaware's case law (judicial interpretations of
statutory corporate laws) is more developed than that of any other state. This
provides the corporate law of Delaware an extra measure of predictability that
is useful and often crucial in our precedent-based judicial system. For the
Board of Directors and the management of a Delaware corporation, these features
of Delaware law allow greater certainty in managing the corporation.
The state's court system also provides relatively prompt resolution of most
corporate disputes. For example, Delaware has a specialized Court of Chancery
that hears cases involving corporate law. The Court of Chancery has no
jurisdiction over most other kinds of cases and therefore its dockets are not as
backlogged as many other states. In addition, the Supreme Court of Delaware
hears and decides important corporate appeals rapidly.
The Board of Directors considered the flexibility and predictability of
Delaware law and the efficiency of its judicial process when it approved the
present proposal. The Board of Directors also recognized the possibility
24
<PAGE>
that choosing to be governed by the corporate law of Delaware, as so many other
corporations have done, may further enhance the reputation of the Company.
Authorized Shares of Capital Stock
After the reincorporation, the authorized capital stock of viaLink Delaware
will consist of 50,000,000 shares of common stock, par value $0.001 per share,
and 10,000,000 shares of preferred stock, par value $0.001 per share. viaLink
Delaware will not issue any shares of stock in connection with the
Reincorporation other than the shares into which the outstanding shares of
viaLink Oklahoma will convert.
Conversion of Shares
As soon as the Reincorporation becomes effective, viaLink Delaware will
issue a press release announcing that the transaction has occurred. At the same
time, the holders of the old shares of viaLink Oklahoma will become holders of
the new shares of viaLink Delaware. Shares of viaLink Oklahoma will
automatically convert into shares of viaLink Delaware, on these terms:
. The conversion will be on a one-for-one basis.
. Each share of viaLink Oklahoma Common Stock outstanding at the
Effective Date will become one share of viaLink Delaware Common
Stock.
. Each share of viaLink Oklahoma Preferred Stock outstanding at the
Effective Date will become one share of viaLink Delaware Preferred
Stock.
. Each share of viaLink Oklahoma Common Stock and viaLink Oklahoma
Preferred Stock held in the treasury of viaLink Oklahoma will become
a share held in the treasury of viaLink Delaware.
This means that, beginning on the Effective Date, each viaLink Oklahoma
stock certificate which was outstanding just before the Reincorporation will
automatically represent the same number of viaLink Delaware shares. Therefore,
shareholders of viaLink Oklahoma need not exchange their stock certificates for
new viaLink Delaware stock certificates. Likewise, shareholders should not
destroy their old certificates and should not send their old certificates to the
Company, either before or after the Effective Date.
Conversion of Options and Warrants
Each stock option, warrant or convertible security that would be, or later
becomes, exercisable for, or convertible into, shares of the viaLink Oklahoma
Common Stock will automatically be, or later become, exercisable for, or
convertible into, the same number of shares of viaLink Delaware Common Stock on
the same terms and conditions.
Trading of the Stock
After the Reincorporation, those who were formerly stockholders of viaLink
Oklahoma may continue to make sales or transfers using their viaLink Oklahoma
stock certificates. viaLink Delaware will issue new certificates representing
shares of viaLink Delaware Common Stock for transfers occurring after the
Effective Date. On request, viaLink Delaware will issue new certificates to
anyone who holds viaLink Oklahoma stock certificates. Any request for new
certificates will be subject to normal stock transfer requirements including
proper endorsement, signature guarantee, if required, and payment of applicable
taxes.
Shareholders whose shares of viaLink Oklahoma were freely tradable before
the Reincorporation will own shares of viaLink Delaware that are freely tradable
after the Reincorporation. Similarly, any shareholders holding shares of
viaLink Oklahoma with transfer restrictions before the Reincorporation will hold
shares of viaLink Delaware which have the same transfer restrictions after the
Reincorporation. For purposes of computing the holding period under Rule 144 of
the Securities Act of 1933, as amended, those who hold viaLink Delaware stock
certificates will be deemed to have acquired their shares on the date they
originally acquired their shares in viaLink Oklahoma.
25
<PAGE>
After the Reincorporation, viaLink Delaware will continue to be a publicly
held company, with its Common Stock tradable on the Nasdaq SmallCap Market.
viaLink Delaware will also file with the Securities and Exchange Commission (the
"Commission") and provide to its stockholders (the Delaware term for
shareholders) the same types of information that viaLink Oklahoma has previously
filed and provided.
Certain Federal Income Tax Consequences
The following is a brief summary of the principal federal income tax
consequences of the Reincorporation under current law to holders of the viaLink
Oklahoma Common Stock. This summary is for general information only. It does
not address potential legislative changes that may affect these consequences,
and it does not address any state, local or foreign tax consequences of the
Reincorporation. The Company has not obtained, and does not intend to obtain, a
ruling from the Internal Revenue Service to the effect that the Reincorporation
is nontaxable.
In general, neither the Company nor its shareholders will recognize any
gain or loss by reason of the Reincorporation. The tax basis of the shares of
viaLink Delaware Common Stock received by a shareholder of viaLink Oklahoma
through the Reincorporation will be the same as the tax basis of viaLink
Oklahoma Common Stock prior to the Reincorporation. A shareholder of viaLink
Oklahoma who holds the stock as a capital asset should include the period he,
she or it has held the viaLink Oklahoma Common Stock in determining the holding
period for his, her or its viaLink Delaware shares.
Shareholders should consult their personal tax advisers to discuss their
own tax situations and any potential changes in federal, state and local laws
and other applicable tax matters relating to the Reincorporation.
Abandonment
The Board of Directors will have the right to abandon the Merger Agreement
and take no further action towards reincorporating the Company in Delaware at
any time before the Reincorporation becomes effective, even after shareholder
approval, if for any reason the Board of Directors determines that it is not
advisable to proceed with the Reincorporation. Factors that the Board of
Directors may consider include the number of shares for which appraisal rights
have been exercised and the cost to the Company of the Reincorporation.
Comparison of Oklahoma and Delaware Corporate Laws
If this Proposal Five is approved by the holders of at least two-thirds of
the Company's outstanding common stock, and if the Company reincorporates in
Delaware as described above, then the shareholders of the Company will become
stockholders of the new Delaware corporation, viaLink Delaware. There are
certain differences between the Oklahoma General Corporation Act (the "OGCA")
and the DGCL that will affect the rights of shareholders in certain respects.
Some of these differences define the particular provisions a corporation may
choose to put into its certificate of incorporation, commonly called its
"charter," and other differences may not affect the Company in a material way.
The primary difference in the rights of shareholders under the OGCA and
DGCL relates to corporate action by written consent in lieu of a shareholders'
meeting. Under both the OGCA and DGCL, shareholders are permitted to take
action by the written consent of at least the minimum number of votes required
to act at a shareholders' meeting, unless the charter forbids it. However, the
OGCA also provides that, with respect to a corporation (1) with a class of
voting stock listed or traded on a national securities exchange or registered
under Section 12(g) of the Securities Exchange Act of 1934, as amended, and (2)
which has 1,000 or more shareholders of record, shareholders taking action by
written consent must obtain unanimous approval for such written consent to be
valid, unless otherwise provided in the corporation's charter. The charter of
viaLink Oklahoma has a provision in its charter limiting the applicability of
this requirement of unanimous approval, and permitting actions by written
consent of a majority of the shares of common stock outstanding.
26
<PAGE>
Material Changes in viaLink Delaware Charter and Bylaws from viaLink Oklahoma
Charter and Bylaws
The viaLink Delaware charter and Bylaws will be in effect and will govern
the rights of stockholders in the event this Proposal Five is approved and the
merger of viaLink Oklahoma into viaLink Delaware takes place. The viaLink
Delaware charter is substantially similar to the viaLink Oklahoma charter.
Except for the provisions relating to authorized stock, stockholders' ability to
present proposals at stockholder meetings and nominate directors, stockholders'
ability to call special meetings and the ability to remove directors, the
differences between the two primarily result from differences between the OGCA
and the DGCL as discussed above. Set forth below is a summary of the material
changes in the viaLink Delaware charter and Bylaws from the current viaLink
Oklahoma charter and Bylaws. The Bylaws of viaLink Delaware and viaLink
Oklahoma are substantially similar except that the Bylaws of viaLink Delaware
reflect the DGCL and the provisions of the viaLink Delaware charter, as well as
certain administrative differences described below. Copies of the charter and
Bylaws of viaLink Oklahoma are available for inspection at the principal office
of viaLink Oklahoma and copies will be sent to stockholders upon request.
Copies of the charter and Bylaws of viaLink Delaware are attached to this Proxy
Statement as Appendix E and Appendix F, respectively.
---------- ----------
Changes in Authorized Capital Stock
The viaLink Oklahoma charter now provides that the Company has the
authority to issue two classes of stock, consisting of 30,000,000 shares of
Common Stock, par value $0.001 per share, and 10,000,000 shares of Preferred
Stock, par value $0.001 per share. Subject to approval of this Proposal Five by
the shareholders, the viaLink Delaware charter will authorize 50,000,000 shares
of Common Stock, par value $0.001 per share, and 10,000,000 shares of Preferred
Stock, with no change in the voting powers, qualifications, rights and
privileges of such shares. The increase in the number of shares of authorized
Common Stock will give the Company better flexibility to engage in certain
future transactions, including capital raising and acquisitions, although it
currently has no definitive plans with respect to such matters.
Stockholder Proposals and Nominating Directors
The viaLink Delaware Bylaws require stockholders to provide to the Company
written nominations of directors and proposals to be considered at meetings of
stockholders at least 120 days in advance of the proposed record date of such
meeting. Each stockholder proposal must state (i) a brief description of the
business desired to be brought, (ii) the name and address of the stockholder
proposing such business, (iii) the class and number of shares of the Company
which are beneficially owned by the stockholder, (iv) any material interest of
the stockholder in such business and (v) any other information that is required
to be provided by the stockholder pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended, in such stockholder's capacity as a
proponent of a stockholder proposal. Neither the viaLink Oklahoma charter nor
Bylaws contain any provisions regarding such notice requirements for shareholder
proposals and director nominations.
Stockholder Ability to Call Special Meetings
The viaLink Oklahoma Bylaws permit the Board of Directors or the President
to call special meetings of shareholders. In addition, the viaLink Oklahoma
Bylaws require the President, or in his absence, the Secretary, to call a
special meeting of shareholders upon a written request setting forth the purpose
of such meeting of not less than a majority of the entire capital stock of the
Company issued and outstanding and entitled to vote.
The viaLink Delaware Bylaws state that special meetings of the stockholders
of the Company may only be called, for any purpose or purposes, by (i) the
Chairman of the Board of Directors, (ii) the President or (iii) the Board of
Directors pursuant to a resolution adopted by a majority of the total number of
authorized directors. The viaLink Delaware Bylaws also allow a special meeting
to be called by any permitted person or persons other than the Board of
Directors if the request is in writing, specifies the general nature of the
business proposed to be transacted and is delivered personally or sent by
registered mail or by telegraphic or other facsimile transmission to the
Chairman of the Board of Directors, the President or the Secretary of the
corporation.
27
<PAGE>
Ability to Remove Directors
The viaLink Oklahoma charter permits removal of directors by shareholders
only for cause with the affirmative vote of the holders of not less than a
majority of the total voting power of all outstanding shares of capital stock of
the Company then entitled to vote generally in the elections of directors. The
viaLink Delaware charter also will contain such a provision.
Rights of Dissenting Shareholders
Under the OGCA, notwithstanding the approval of this Proposal Five by the
requisite number of shares of the Company, shareholders on the Record Date are
entitled to assert dissenters' rights in connection with the Reincorporation and
obtain payment of the "fair value" of their shares, provided that such
shareholders comply with the requirements of Section 1091 of the OGCA. If a
shareholder votes for or consents to this Proposal Five, however, he or she is
precluded from invoking such dissenters' rights.
The following is a summary of the statutory procedures to be followed by
shareholders electing to exercise their dissenters' rights and is qualified in
its entirety by reference to Section 1091, the full text of which is attached
hereto as Appendix G. Section 1091 should be carefully reviewed by shareholders
----------
who wish to assert their dissenters' rights or who wish to preserve the right to
do so, since failure to strictly comply with those procedures may result in the
loss of such dissenters' rights. Any shareholder who is interested in
perfecting his, her or its dissenters' rights should consult legal counsel as to
the procedures that must be followed.
A shareholder electing to exercise dissenters' rights must satisfy each of
the following conditions:
(1) such holder must deliver to the Company, within 20 days prior
to the Annual Meeting, a written notice of such holder's demand
of payment of the fair value of such holder's shares; and
(2) such holder shall not have consented to the adoption of this
Proposal Five.
A shareholder who fails to comply with either of these conditions will have
no dissenters' rights with respect to such holder's shares.
All written notices should be addressed to: The viaLink Company, 13800
Benson Road, Edmond, Oklahoma 73013, Attention: John M. Duck. All written
notices must be executed by, or with the consent of, the holder of record. The
notice must identify the shareholder and indicate the intention of such
shareholder to demand payment of the fair value of such shareholder's shares.
In the notice, the shareholder's name should be stated as it appears on such
shareholder's stock certificate(s). If the shares are owned of record in a
fiduciary capacity, such as by a trustee, guardian or custodian, such demand
must be executed by or for the fiduciary. If the shares are owned of record by
or for more than one person, as in a joint tenancy or tenancy in common, such
demand must be executed by or for all joint owners. An authorized agent,
including an agent for two or more joint owners, may execute the demand for
appraisal for a shareholder of record; however, the agent must identify the
record owner(s) and expressly disclose the fact that, in exercising the demand,
he or she is acting as agent for the record owners.
Shareholders considering seeking appraisal for their shares should note
that the fair value of their shares determined under Section 1091 could be more,
the same or less than the consideration they would receive pursuant to the
Reincorporation if they did not seek appraisal of their shares. The costs of
the appraisal proceeding may be determined by an Oklahoma district court (the
"Court") and allocated among the parties as the Court deems equitable under the
circumstances. Upon application of a shareholder, the Court may order all or a
portion of the expenses incurred by any stockholder in connection with the
appraisal proceeding, including, without limitation, reasonable attorney's fees
and the fees and expenses of experts, to be charged pro rata against the value
of all shares entitled to appraisal. In the absence of such a determination or
assessment, each shareholder bears his or her own expenses.
Any shareholder contemplating the exercise of the rights summarized above
in connection with the Reincorporation is urged to consult his or her own
counsel. The description of OGCA Section 1091 contained herein is qualified in
its entirety by reference to Appendix G attached hereto and the OGCA. The
----------
failure by a shareholder to follow precisely all of the steps required by
Section 1091, of the OGCA will result in the loss of those rights.
28
<PAGE>
Vote Required for Approval of Proposal Five
Approval of this Proposal Five will require the affirmative vote of at
least two-thirds of the outstanding shares of viaLink Oklahoma Common Stock
entitled to vote thereon at the Annual Meeting. As of the Record Date, the
current directors and officers of the Company have the right to vote 1,165,725
shares, representing approximately 40.6% of the outstanding viaLink Oklahoma
Common Stock, and have advised the Company that their present intent is to vote
in favor of this proposal to reincorporate in Delaware. Proxies solicited by
the Board of Directors will be voted FOR this Proposal Four, unless a
shareholder specifies otherwise.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS HAS REVIEWED AND CONSIDERED THE MATTERS ADDRESSED IN
PROPOSAL FIVE, HAS DETERMINED THE REINCORPORATION TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
UNLESS AUTHORITY TO DO SO IS WITHHELD, THE PERSON(S) NAMED IN EACH PROXY WILL
VOTE THE SHARES REPRESENTED THEREBY "FOR" THE APPROVAL OF THE MERGER AGREEMENT
TO EFFECT THE REINCORPORATION IN DELAWARE.
29
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table presents certain information regarding the beneficial
ownership of the Company's Common Stock as of March 31, 1999, by:
. Each person who is known by the Company to own beneficially more than
five percent of outstanding Common Stock;
. Each of the Company's directors and executive officers named in the
Summary Compensation Table below; and
. All of the Company's executive officers and directors as a group.
The percentage of outstanding shares is based on 2,874,342 shares of Common
Stock outstanding as of March 31, 1999.
The SEC deems a security holder the beneficial owner of a security when
that person maintains voting or investment power with respect to security,
subject to community property laws, where applicable. If stock options are
presently exercisable or exercisable within 60 days of March 31, 1999, the SEC
will deem the shares underlying those options to be outstanding and beneficially
owned by their holder when computing the percentage of common stock held by that
person. However, the SEC will not deem shares underlying these options to be
outstanding when computing the percentage of common stock held by others.
Unless otherwise noted, all shareholders listed have sole voting and
investment power with respect to their shares and the address for each
shareholder listed below is: c/o The viaLink Company, 13800 Benson Road, Edmond,
Oklahoma 73013-6417. There are no family relationships between our executive
officers and directors.
<TABLE>
<CAPTION>
Shares Percent of
Beneficially Outstanding
Name and Address of Beneficial Owner Owned Shares
------------------------------------ ----- ------
<S> <C> <C>
Robert L. Barcum...................... 559,816 19.5%
Robert N. Baker....................... 554,529 19.3%
Russell L. Reinhardt(1)............... 316,081 11.0%
Lewis B. Kilbourne, Ph.D.(2).......... 21,002 *
Jimmy M. Wright(3).................... 20,000 *
John M. Duck(4)(5).................... 10,378 *
Sue Hale.............................. --- ---
Craig Smith........................... --- ---
Steven Conover........................ --- ---
Executive Officers and Directors 1,165,725 40.6%
As a group (8 persons)(6).........
</TABLE>
_____________________
* Less than 1%
(1) Mr. Reinhardt's address is 3417 Barberry Ct., Edmond, Oklahoma 73013.
(2) Includes 20,000 shares underlying options that are currently exercisable or
will become exercisable within 60 days after March 31, 1999.
(3) Includes 20,000 shares underlying options that are currently exercisable or
will become exercisable within 60 days after March 31, 1999. Mr. Wright's
address is c/o DRS, 1913 North Walton Blvd., Suite 1, Bentonville, Arkansas
72712.
(4) Includes 10,056 shares underlying options that are currently exercisable or
will become exercisable within 60 days after March 31, 1999 and 322 shares
purchased pursuant to The viaLink Company Employee Stock Purchase Plan.
(5) Mr. Duck served as the Chief Financial Officer of the Company until April 4,
1999. He now serves as Vice President, Secretary and Treasurer.
(6) Includes 50,056 shares underlying options that are currently exercisable or
will become exercisable within 60 days after March 31, 1999.
30
<PAGE>
EXECUTIVE COMPENSATION
Executive Officers and Directors
Set forth below is certain information with respect to each of the
Company's executive officers and directors as of April 7, 1999
<TABLE>
<CAPTION>
Name Age Position
- ---------------------------------- ----- -----------------------------------------------------------
<S> <C> <C>
Robert L. Barcum.................. 49 Chairman of the Board of Directors, Director (Class II)
Lewis B. Kilbourne, Ph.D.......... 52 Chief Executive Officer and Director (Class I)
Robert N. Baker................... 47 President, Chief Operating Officer and Director (Class II)
Andrew Kerner..................... 39 Vice President of Finance and Chief Financial Officer
Steven G. Conover................. 48 Vice President of Strategic Projects
John Duck......................... 56 Vice President, Secretary and Treasurer
David Lloyd....................... 48 Vice President of Human Resources
Craig Smith....................... 37 Vice President of Operations
Sue Hale.......................... 54 Director (Class I)
Jimmy M. Wright................... 45 Director (Class III)
</TABLE>
Andrew Kerner joined the Company in April 1999 as Vice President of Finance
and Chief Financial Officer. Mr. Kerner previously served as Executive Vice
President and Chief Financial Officer of Cameron Ashley Building Products, a
publicly-traded building products distributor from April 1998 to April 1999. Mr.
Kerner also served in several senior financial management positions with
PepsiCo's Frito-Lay division in the United States and Europe from November 1987
to April 1998. Mr. Kerner received a B.A. in Economics and an M.B.A. in Finance
from The University of Texas at Austin.
Steven Conover joined the Company in March 1999 as Vice President of
Strategic Projects, and is currently in charge of the Scan Based Trading project
for viaLink. Mr. Conover has over 25 years experience in retail and supply chain
management. Prior to joining viaLink, Mr. Conover served as Senior Group Manager
of Supply Chain Innovation for Frito-Lay from March 1996 to March 1999. He also
served as Senior Group Manager of Finance and Marketing for Frito-Lay from March
1994 to March 1996. Mr. Conover received his B.S. from Purdue University in
Industrial Engineering and his M.B.A. in Finance from the University of West
Florida.
John M. Duck joined the Company as Director of Finance and
Administration in 1991 and currently serves as Vice President, Treasurer and
Secretary. From April 1996 to April 1999 Mr. Duck also served as the Chief
Financial Officer of the Company. From January 1990 to July 1991, Mr. Duck
served as Chief Financial Officer of Griffin Entities, Inc., a private food
manufacturer and processor. From 1986 to 1990, Mr. Duck served as Chief
Financial Officer of Mr. Rooter Corporation, a public franchise sewer and drain
manufacturing and cleaning company. Mr. Duck currently serves on the Board of
Directors of the Edmond Chamber of Commerce and is a member of the Oklahoma
County Workforce Development Board. Mr. Duck is a certified public accountant
and holds a B.A. in Economics from Oklahoma City University.
David Lloyd joined the Company in April 1999 as Vice President of Human
Resources. Mr. Lloyd previously served as Senior Vice President of Human
Resources and Administration for Fujitsu ICL Retail Systems, Inc., from April
1997 to April 1999. In that capacity, he handled all human resource and
administration responsibilities for United States and Europe operations,
including facilities management for all 44 Fujitsu locations in the United
States. Mr. Lloyd also served as Vice President of Human Resources for Station
Casinos from June 1994 to April 1997, and Vice President of Human Resources and
Administration of Nikko Hotels International from April 1985 to June 1994. Mr.
Lloyd earned his B.A. in Economics from Upsala College in New Jersey, and his
MBA from New York Institute of Technology.
31
<PAGE>
Craig Smith is currently the Vice President of Operations of the
Company and is responsible for brand management and customer service. Mr. Smith
joined the Company in February 1995 as a consultant and was promoted to Vice
President in February 1999. Prior to joining viaLink, Mr. Smith was with Star
Enterprise, a joint venture of Texaco and Aramco, as part of the information
technology services team. Mr. Smith has been involved in selecting,
implementing, building and marketing information systems in the retail and
related industries for over 15 years. He received his B.S. in computer science
from the University of Missouri at Rolla, and his M.B.A. with a concentration in
Marketing and Finance from the University of Houston.
For biographical information on the Company's director candidate and
continuing directors, please see the information contained in "Nominee for Class
III Director with Term Ending Upon the 2002 Annual Meeting of Shareholders",
"Continuing Class I Directors for Term Ending Upon the 2000 Annual Meeting of
Shareholders" and "Continuing Class II Directors for Term Ending Upon the 2001
Annual Meeting of Shareholders" under "Proposal One."
Directors' Compensation
The Company currently pay its non-employee directors other than the
Chairman of the Board $10,000 annually for their services as members of the
Board of Directors. The Company also pays its Chairman of the Board, Mr. Barcum,
an annual stipend of $25,000. Under the Non-Qualified Plan, non-employee
directors are eligible to receive stock option grants at the discretion of the
Board of Directors. Employee directors are eligible to receive stock option
grants at the discretion of the Compensation Committee of the Board of Directors
under the 1995 Plan.
In 1998, the Company granted options to purchase 15,000 shares of viaLink
Common Stock at an exercise price of $9.00 to its non-employee directors,
Messrs. Barcum and Wright. The Company also granted options to purchase 200,000
shares of Common Stock to Dr. Kilbourne, 100,000 of which were granted pursuant
to the Non-Qualified Plan at an exercise price of $3.00 per share, 50,000 of
which were granted pursuant to the 1995 Plan at an exercise price of $3.00 per
share and 50,000 of which were granted pursuant to the Non-Qualified Plan at an
exercise price of $3.125 per share. The Company also granted options to
purchase 150,000 shares of Common Stock to Mr. Baker, 100,000 of which were
granted pursuant to the Non-Qualified Plan at an exercise price of $3.00 per
share and 50,000 of which were granted pursuant to the 1995 Plan at an exercise
price of $3.30 per share. No option grants or awards were made to any director
in 1997.
Executive Compensation
The following table sets forth the compensation earned by the Company's
Chief Executive Officer, former Chief Executive Officer and other executive
officers whose salary and bonus exceeded $100,000 for services rendered in all
capacities to the Company during 1998 (collectively, the "Named Officers").
During 1998, these Named Officers received additional non-cash compensation,
perquisites and other personal benefits. However, the aggregate amount and
value thereof did not exceed the lesser of $50,000 or 10% of the total annual
salary and bonus paid to and accrued for the individual during the year.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
------------------- ----------------------
Name and Principal Securities Underlying
Position Year Salary Bonus Options
- ----------------------------------------------- ---- ------ ----- ---------------------
<S> <C> <C> <C> <C>
Robert L. Barcum (1)........................... 1998 $122,321 -- 15,000
Chief Executive Officer 1997 169,716 -- --
1996 169,150 -- --
Lewis B. Kilbourne, Ph.D. (2).................. 1998 20,769 -- 200,000
Chief Executive Officer 1997 -- -- --
1996 -- -- --
Robert N. Baker................................ 1998 120,713 -- 150,000
President, Chief Operating Officer, Secretary 1997 169,940 -- --
1996 169,159 -- --
Russell L. Reinhardt (3)....................... 1998 114,655 -- --
Vice President 1997 171,774 -- --
1996 171,840 -- --
</TABLE>
__________________
(1) Resigned as Chief Executive Officer on September 30, 1998
(2) Elected Chief Executive Officer on October 1, 1998
(3) Resigned as executive officer and director on September 30, 1998
32
<PAGE>
Option Grants in 1998
The following table sets forth information concerning stock options granted
to each of the Named Officers during 1998:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees Price Per Expiration
Date Granted in 1998(1) Share(2) Date
---- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Robert L. Barcum................. 15,000(3) 1.3% $ 9.00 10/31/2007
Lewis B. Kilbourne, Ph.D......... 100,000(3) 8.5 3.00 10/31/2007
50,000(4) 4.3 3.00 02/28/2005
50,000(3) 4.3 3.125 10/31/2007
Robert N. Baker.................. 100,000(3) 8.5 3.00 09/30/2003
50,000(4) 4.3 3.30 09/29/2003
Russell L. Reinhardt............. --- -- --- ---
</TABLE>
__________________
(1) The total number of options granted to employees in 1998 was 1,172,607.
(2) This exercise price can be paid in cash or in shares of Common Stock valued
at fair market value on the exercise date. Alternatively, the option may be
exercised through a cashless exercise procedure pursuant to which the optionee
provides irrevocable instructions to the Company to deliver the stock
certificate to a brokerage firm to sell the purchased shares and remit to the
Company, out of the sale proceeds, an amount equal to the exercise price plus
all applicable withholding taxes.
(3) Granted under the Non-Qualified Plan. Options vest over a three year
period. Each option expires ten years after the date of grant or within an
earlier period following termination of the optionee as a director, employee,
independent contractor or a consultant of the Company.
(4) Granted under the 1995 Plan. Options vest over a three year period. Each
option expires ten years after the date of grant or within an earlier period
following termination of optionee's employment with the Company.
33
<PAGE>
Year-End Option Exercises in 1998 and December 31, 1998 Option Values
The following table sets forth, for each of the Named Officers, information
concerning option exercises for 1998 and the number and value of securities
underlying unexercised options held on December 31, 1998. None of the Named
Officers exercised any stock options during 1998. The value of the unexercised
in-the-money options was determined by subtracting the exercise price from the
fair market value of the Common Stock at December 31, 1998 ($10.125 per share),
and multiplying that number by the number of shares underlying the options.
<TABLE>
<CAPTION>
AGGREGATED OPTIONS EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Securities Value of Unexercised
Shares Acquired on Value Underlying Unexercised Options In-the-Money Options at
on Exercise (#) Realized ($) at December 31, 1998 December 31, 1998
------------------ ------------ ------------------------------- -------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Barcum -- -- -- $ 15,000 -- $ 16,875
Lewis B. Kilbourne -- -- 20,000 180,000 140,000 1,278,750
Robert N. Baker -- -- -- 150,000 -- 1,053,750
Russell L. Reinhardt -- -- -- -- -- --
</TABLE>
Profit Sharing Plan
In 1985, the Company adopted The viaLink Company (formerly Applied
Intelligence Group, Inc.) Profit Sharing Plan (the "Profit Sharing Plan"). All
of the Company's employees who have completed at least one year of service may
enroll in the Profit Sharing Plan. The Company may, at its discretion, make an
annual contribution to the Profit Sharing Plan on behalf of its employees. If
made, the contribution begins to vest for each employee's account after the
employee has completed two years of service. Thereafter, each employee's
account vests ratably as to 20% of the employee's account following each
subsequent year of completed service with the Company. The Company will
distribute vested contributions to an employee upon the employee's retirement,
death or disability, the termination of employment, or the termination of the
Profit Sharing Plan. The Company did not make any contributions to the Profit
Sharing Plan for the fiscal years ended December 31, 1995, 1996, 1997 and 1998.
In 1993, the Company amended the Profit Sharing Plan to include a 401(k)
deferred compensation feature. Under the 401(k) feature, eligible participants
may elect to defer up to 15% of their salaries, not to exceed the annual
statutory limits, pursuant to a voluntary salary reduction agreement. The
Company may determine matching levels of contributions from time to time, at the
discretion of the administrative committee. The Company did not make any
matching contributions during 1995, 1996, 1997 or 1998. All 401(k) employee
contributions are fully vested.
Compliance with the Internal Revenue Code
Section 162(m) of the Code imposes a limit on tax deductions for annual
compensation (other than performance based compensation) in excess of one
million dollars paid by a corporation to its chief executive officer and the
other four moist highly compensated executive officers of a corporation. The
Company has not established a policy with regard to Section 162(m) of the Code,
since the Company has not and does not currently anticipate paying cash
compensation in excess of one million dollars per annum to any employee. None
of the compensation paid by the Company in 1998 was subject to the limitation on
deductibility. The Board of Directors will continue to assess the impact of
Section 162(m) of the Code on its compensation practices and determine what
further action, if any, is appropriate.
Employment Arrangements
On October 1, 1998, the Company entered into employment agreements with
Lewis B. Kilbourne and Robert N. Baker. Under the agreements, the Company will
pay an annual base salary of $150,000 to Dr. Kilbourne and $175,127 to Mr.
Baker. Dr. Kilbourne and Mr. Baker are each also eligible to receive an annual
bonus equal to
34
<PAGE>
50% of his then current annual salary if they achieve certain
criteria which are to be set each fiscal quarter by the Board of Directors.
Under these agreements, the Company granted to each of Dr. Kilbourne and
Mr. Baker incentive stock options for the purchase of 50,000 shares of Common
Stock under the 1995 Plan and non-qualified stock options for the purchase of
100,000 shares of Common Stock under the Non-Qualified Plan. Both the incentive
stock options and non-qualified stock options vest and become exercisable over a
three year period. The options granted to Dr. Kilbourne have an exercise price
of $3.00 per share. The incentive stock options granted to Mr. Baker are
exercisable for $3.30 per share and the non-qualified stock options are
exercisable for $3.00 per share. Dr. Kilbourne's incentive stock options expire
on February 28, 2005 and his non-qualified stock options expire on October 31,
2007. Mr. Baker's incentive stock options expire on September 29, 2007 and his
non-qualified stock options expire September 30, 2003.
Each employment agreement has a term of three years and is subject to
automatic renewal on a year-to-year basis, unless either party provides six-
months prior written notice of termination. If the Company terminates the
agreements for any reason ,other than for "cause" (as defined in the agreement),
or if Dr. Kilbourne or Mr. Baker terminate their agreement for any reason other
than an uncured breach, Dr. Kilbourne or Mr. Baker will be entitled to the
continuation of his then current salary and the benefits provided pursuant to
the agreement, a one time payment in the amount of the greater of the bonus due
or 15% of the salary payable for such quarter, and a lump sum payment of
$400,000.
35
<PAGE>
CERTAIN TRANSACTIONS
Notes Payable to Shareholders and Officers
On October 15, 1996, the Company redeemed 22,500 shares of its Common Stock
from David B. North, a shareholder and formerly one of its executive officers.
The Company issued Mr. North a promissory note for $39,375, bearing interest at
the rate of 10% per annum, with a maturity date of November 15, 1997. The
Company later extended maturity of the note to November 15, 2000.
As of September 30, 1998, Robert L. Barcum, Robert N. Baker and Russell L.
Reinhardt had loaned viaLink, in the aggregate, $443,055. In return, the
Company issued these individuals promissory notes, bearing interest at rates of
8.5% to 11.5% per annum, with maturity dates commencing March 8, 1999 through
December 21, 2001. The Company believes that the terms of these loans were at
least as favorable as it could have obtained from unaffiliated third-party
lenders.
On October 16, 1998, the Company repaid the promissory notes to Messrs.
North, Barcum, Baker and Reinhardt from proceeds of the sale of the Company's
consulting assets to Netplex.
Payments and Option Grants to Officers
On October 1, 1998, the Board of Directors elected Dr. Kilbourne as the
Chief Executive Officer of viaLink, and he entered into an employment agreement
with the Company. On October 16, 1998, the Company paid Dr. Kilbourne $30,000
for his services in connection with the sale of our consulting assets to
Netplex. In 1998, the Company paid Dr. Kilbourne $20,769 in salary for his
services as Chief Executive Officer, $10,000 in director fees and granted him
options to purchase 150,000 shares of Common Stock at an exercise price of $3.00
per share pursuant to his employment agreement and options to purchase 50,000
shares of Common Stock at an exercise price of $3.125 per share as compensation
for his service as a director. For details regarding his employment agreement,
please see "Executive Compensation--Employment Agreements."
During 1998, the Company granted Mr. Baker options to acquire 150,000
shares of its Common Stock at a weighted average exercise price of $3.10
pursuant to his employment agreement. For details regarding Mr. Baker's
employment agreement, please see "Executive Compensation--Employment
Arrangements."
All future transactions between the Company and its officers, directors and
five percent or greater shareholders will be subject to approval by a majority
of its disinterested and independent directors and will be on terms no less
favorable than it could obtain from a unaffiliated third parties.
36
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers, and persons who own more than 10 percent of a registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and the Nasdaq
Stock Market. Officers, directors and greater than 10 percent shareholders are
required by Securities and Exchange Commission regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on the Company's review of the copies of such forms received
by it during the year ended December 31, 1998, and written representations that
no other reports were required, the Company believes that each person who, at
any time during such year, was a director, officer or beneficial owner of more
than 10 percent of the Company's Common Stock complied with all Section 16(a)
filing requirements during such fiscal year.
FORM 10-KSB
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1998 (INCLUDING FINANCIAL STATEMENTS AND SCHEDULES THERETO),
WHICH WAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 4, 1999,
WILL BE PROVIDED WITHOUT CHARGE TO ANY PERSON TO WHOM THIS PROXY STATEMENT IS
MAILED UPON THE WRITTEN REQUEST OF ANY SUCH PERSON TO JOHN M. DUCK, SECRETARY,
THE VIALINK COMPANY, 13800 BENSON ROAD, EDMOND, OKLAHOMA 73013.
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented for
action at the Annual Meeting other than the matters set forth in this Proxy
Statement. Should any other matter requiring a vote of the shareholders arise,
the persons named as proxies on the enclosed proxy card will vote the shares
represented thereby in accordance with their best judgment in the interest of
the Company. Discretionary authority with respect to such other matters is
granted by the execution of the enclosed proxy card.
THE BOARD OF DIRECTORS OF THE VIALINK COMPANY
Dated: April 19, 1999
37
<PAGE>
APPENDIX A
THE VIALINK COMPANY
1999 STOCK OPTION/STOCK ISSUANCE PLAN
-------------------------------------
ARTICLE ONE
GENERAL PROVISIONS
------------------
I. PURPOSE OF THE PLAN
This 1999 Stock Option/Stock Issuance Plan is intended to promote the
interests of The viaLink Company, by providing eligible persons with the
opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in
the service of the Corporation.
Capitalized terms shall have the meanings assigned to such terms in
the attached Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into three separate equity programs:
(i) the Discretionary Option Grant Program under which
eligible persons may, at the discretion of the Plan Administrator, be
granted options to purchase shares of Common Stock,
(ii) the Stock Issuance Program under which eligible
persons may, at the discretion of the Plan Administrator, be issued shares
of Common Stock directly, either through the immediate purchase of such
shares or as a bonus for services rendered the Corporation (or any Parent
or Subsidiary), and
(iii) the Automatic Option Grant Program under which
eligible non-employee Board members shall automatically receive options at
periodic intervals to purchase shares of Common Stock.
B. The provisions of Articles One and Five shall apply to all equity
programs under the Plan and shall govern the interests of all persons under the
Plan.
III. ADMINISTRATION OF THE PLAN
A. The following provisions shall govern the administration of the
Plan:
(i) The Board shall have the authority to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to
Section 16 Insiders but may delegate such authority in whole or in part to
the Primary Committee.
1.
<PAGE>
(ii) Administration of the Discretionary Option Grant and
Stock Issuance Programs with respect to all other persons eligible to
participate in those programs may, at the Board's discretion, be vested in
the Primary Committee or a Secondary Committee, or the Board may retain the
power to administer those programs with respect to all such persons.
(iii) Administration of the Automatic Option Grant Program
shall be self-executing in accordance with the terms of that program.
B. Each Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full power and authority
subject to the provisions of the Plan:
(i) to establish such rules as it may deem appropriate
for proper administration of the Plan, to make all factual determinations,
to construe and interpret the provisions of the Plan and the awards
thereunder and to resolve any and all ambiguities thereunder;
(ii) to determine, with respect to awards made under the
Discretionary Option Grant and Stock Issuance Programs, which eligible
persons are to receive such awards, the time or times when such awards are
to be made, the number of shares to be covered by each such award, the
vesting schedule (if any) applicable to the award, the status of a granted
option as either an Incentive Option or a Non-Statutory Option and the
maximum term for which the option is to remain outstanding;
(iii) to amend, modify or cancel any outstanding award with
the consent of the holder or accelerate the vesting of such award; and
(iv) to take such other discretionary actions as permitted
pursuant to the terms of the applicable program.
Decisions of each Plan Administrator within the scope of its administrative
functions under the Plan shall be final and binding on all parties.
C. Members of the Primary Committee or any Secondary Committee shall
serve for such period of time as the Board may determine and may be removed by
the Board at any time. The Board may also at any time terminate the functions of
any Secondary Committee and reassume all powers and authority previously
delegated to such committee.
D. Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any options or stock issuances under the Plan.
2.
<PAGE>
IV. ELIGIBILITY
A. The persons eligible to participate in the Discretionary Option
Grant and Stock Issuance Programs are as follows:
(i) Employees,
(ii) non-employee members of the Board or the board of
directors of any Parent or Subsidiary, and
(iii) consultants and other independent advisors who
provide services to the Corporation (or any Parent or Subsidiary).
B. Only non-employee Board members shall be eligible to participate
in the Automatic Option Grant Program.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market. The maximum number of shares of Common Stock
initially reserved for issuance over the term of the Plan shall not exceed Three
Million Six Hundred Eight Thousand Two Hundred Eighty (3,608,280) shares. Such
authorized share reserve consists of (i) the number of shares which remain
available for issuance, as of the Plan Effective Date, under the Predecessor
Plans as last approved by the Corporation's stockholders, including the shares
subject to the outstanding options to be incorporated into the Plan and the
additional shares which would otherwise be available for future grant, plus (ii)
an increase of Two Million (2,000,000) shares authorized by the Board but
subject to stockholder approval at the 1999 Annual Stockholders Meeting.
B. The number of shares of Common Stock available for issuance under
the Plan shall automatically increase on the first trading day of each calendar
year during the term of the Plan, beginning with the 2000 calendar year, by an
amount equal to one percent (1%) of the shares of Common Stock outstanding on
the last trading day of the immediately preceding calendar year, but in no event
shall such annual increase exceed Fifty Thousand (50,000) shares.
C. No one person participating in the Plan may receive options,
separately exercisable stock appreciation rights and direct stock issuances for
more than Three Hundred Thousand (300,000) shares of Common Stock in the
aggregate per calendar year, beginning with the 1999 calendar year.
D. Shares of Common Stock subject to outstanding options (including
options incorporated into this Plan from the Predecessor Plans) shall be
available for subsequent issuance under the Plan to the extent those options
expire, terminate or are cancelled for any reason prior to exercise in full.
Unvested shares issued under the Plan and subsequently repurchased by the
Corporation, at the original exercise or issue price paid per share, pursuant to
the Corporation's repurchase rights under the Plan shall be added back to the
number of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through
3.
<PAGE>
one or more subsequent options or direct stock issuances under the Plan.
However, should the exercise price of an option under the Plan be paid with
shares of Common Stock or should shares of Common Stock otherwise issuable under
the Plan be withheld by the Corporation in satisfaction of the withholding taxes
incurred in connection with the exercise of an option or the vesting of a stock
issuance under the Plan, then the number of shares of Common Stock available for
issuance under the Plan shall be reduced by the gross number of shares for which
the option is exercised or which vest under the stock issuance, and not by the
net number of shares of Common Stock issued to the holder of such option or
stock issuance. Shares of Common Stock underlying one or more stock appreciation
rights exercised under the Plan shall NOT be available for subsequent issuance.
E. If any change is made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and/or class of securities issuable under the
Plan, (ii) the maximum number of securities by which the share reserve is to
increase each calendar year pursuant to the automatic share increase provisions
of the Plan, (iii) the number and/or class of securities for which any one
person may be granted options, separately exercisable stock appreciation rights
and direct stock issuances under this Plan per calendar year, (iv) the number
and/or class of securities for which grants are subsequently to be made under
the Automatic Option Grant Program to new and continuing non-employee Board
members, (v) the number and/or class of securities and the exercise price per
share in effect under each outstanding option under the Plan and (vi) the number
and/or class of securities and price per share in effect under each outstanding
option incorporated into this Plan from the Predecessor Plans. Such adjustments
to the outstanding options are to be effected in a manner which shall preclude
the enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.
4.
<PAGE>
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
----------------------------------
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
--------
shall comply with the terms specified below. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. EXERCISE PRICE.
--------------
1. The exercise price per share shall be fixed by the Plan
Administrator at the time of the option grant.
2. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section II of
Article Five and the documents evidencing the option, be payable in one or more
of the forms specified below:
(i) cash or check made payable to the Corporation,
(ii) shares of Common Stock held for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date, or
(iii) to the extent the option is exercised for vested
shares, through a special sale and remittance procedure pursuant to which
the Optionee shall concurrently provide irrevocable instructions to (a) a
Corporation-approved brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and (b) the
Corporation to deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable at
----------------------------
such time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option. However, no option shall have a term in excess of ten (10) years
measured from the option grant date.
5.
<PAGE>
C. CESSATION OF SERVICE.
--------------------
1. The following provisions shall govern the exercise of
any options outstanding at the time of the Optionee's cessation of Service or
death:
(i) Any option outstanding at the time of the
Optionee's cessation of Service for any reason shall remain exercisable for
such period of time thereafter as shall be determined by the Plan
Administrator and set forth in the documents evidencing the option, but no
such option shall be exercisable after the expiration of the option term.
(ii) Any option exercisable in whole or in part by
the Optionee at the time of death may be subsequently exercised by his or
her Beneficiary.
(iii) During the applicable post-Service exercise
period, the option may not be exercised in the aggregate for more than the
number of vested shares for which the option is exercisable on the date of
the Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares
for which the option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Service, terminate and cease
to be outstanding to the extent the option is not otherwise at that time
exercisable for vested shares.
(iv) Should the Optionee's Service be terminated for
Misconduct or should the Optionee engage in Misconduct while his or her
options are outstanding, then all such options shall terminate immediately
and cease to be outstanding.
2. The Plan Administrator shall have complete discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding:
(i) to extend the period of time for which the
option is to remain exercisable following the Optionee's cessation of
Service to such period of time as the Plan Administrator shall deem
appropriate, but in no event beyond the expiration of the option term,
and/or
(ii) to permit the option to be exercised, during the
applicable post-Service exercise period, for one or more additional
installments in which the Optionee would have vested had the Optionee
continued in Service.
D. STOCKHOLDER RIGHTS. The holder of an option shall have no
-------------------
stockholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
E. REPURCHASE RIGHTS. The Plan Administrator shall have the
-----------------
discretion to grant options which are exercisable for unvested shares of Common
Stock. Should the Optionee
6.
<PAGE>
cease Service while holding such unvested shares, the Corporation shall have the
right to repurchase, at the exercise price paid per share, any or all of those
unvested shares. The terms upon which such repurchase right shall be exercisable
(including the period and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the document evidencing such repurchase right.
F. LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of the
----------------------------------
Optionee, Incentive Options shall be exercisable only by the Optionee and shall
not be assignable or transferable other than by will or by the laws of descent
and distribution following the Optionee's death. Non-Statutory Options shall be
subject to the same restrictions, except that a Non-Statutory Option may, to the
extent permitted by the Plan Administrator, be assigned in whole or in part
during the Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust in which the Optionee and/or one or more such
family members have more than a fifty percent (50%) of the beneficial interest
or to any other entity in which the Optionee and/or one or more such family
members own more than fifty percent (50%) of the vesting interests. The terms
applicable to the assigned portion shall be the same as those in effect for the
option immediately prior to such assignment and shall be set forth in such
documents issued to the assignee as the Plan Administrator may deem appropriate.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Seven shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options when
issued under the Plan shall not be subject to the terms of this Section II.
---
A. ELIGIBILITY. Incentive Options may only be granted to Employees.
-----------
B. EXERCISE PRICE. The exercise price per share shall not be less
--------------
than one hundred percent (100%) of the Fair Market Value per share of Common
Stock on the option grant date.
C. DOLLAR LIMITATION. The aggregate Fair Market Value of the shares
-----------------
of Common Stock (determined as of the respective date or dates of grant) for
which one or more options granted to any Employee under the Plan (or any other
option plan of the Corporation or any Parent or Subsidiary) may for the first
time become exercisable as Incentive Options during any one calendar year shall
not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two (2) or more such options which become exercisable for the
first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.
D. 10% STOCKHOLDER. If any Employee to whom an Incentive Option is
---------------
granted is a 10% Stockholder, then the exercise price per share shall not be
less than one hundred ten percent (110%) of the Fair Market Value per share of
Common Stock on the option grant date, and the option term shall not exceed five
(5) years measured from the option grant date.
7.
<PAGE>
III. CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. Each option outstanding at the time of a Change in Control but
not otherwise fully-vested shall automatically accelerate so that each such
option shall, immediately prior to the effective date of the Change in Control,
become exercisable for all of the shares of Common Stock at the time subject to
that option and may be exercised for any or all of those shares as fully-vested
shares of Common Stock. However, an outstanding option shall not so accelerate
if and to the extent: (i) such option is, in connection with the Change in
Control, assumed or otherwise continued in full force and effect by the
successor corporation (or parent thereof) pursuant to the terms of the Change in
Control, (ii) such option is replaced with a cash incentive program of the
successor corporation which preserves the spread existing at the time of the
Change in Control on the shares of Common Stock for which the option is not
otherwise at that time exercisable and provides for subsequent payout in
accordance with the same vesting schedule applicable to those option shares or
(iii) the acceleration of such option is subject to other limitations imposed by
the Plan Administrator at the time of the option grant.
B. All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those terminated rights
shall immediately vest in full, in the event of any Change in Control, except to
the extent: (i) those repurchase rights are assigned to the successor
corporation (or parent thereof) or otherwise continue in full force and effect
pursuant to the terms of the Change in Control or (ii) such accelerated vesting
is precluded by other limitations imposed by the Plan Administrator at the time
the repurchase right is issued.
C. Immediately following the consummation of the Change in Control,
all outstanding options shall terminate and cease to be outstanding, except to
the extent assumed by the successor corporation (or parent thereof) or otherwise
expressly continued in full force and effect pursuant to the terms of the Change
in Control.
D. Each option which is assumed in connection with a Change in
Control shall be appropriately adjusted, immediately after such Change in
Control, to apply to the number and class of securities which would have been
issuable to the Optionee in consummation of such Change in Control had the
option been exercised immediately prior to such Change in Control. Appropriate
adjustments to reflect such Change in Control shall also be made to (i) the
exercise price payable per share under each outstanding option, provided the
--------
aggregate exercise price payable for such securities shall remain the same, (ii)
the maximum number and/or class of securities available for issuance over the
remaining term of the Plan and (iii) the maximum number and/or class of
securities for which any one person may be granted options, separately
exercisable stock appreciation rights and direct stock issuances under the Plan
per calendar year.
E. The Plan Administrator may at any time provide that one or more
options will automatically accelerate in connection with a Change in Control,
whether or not those options are assumed or otherwise continued in full force
and effect pursuant to the terms of the Change in Control. Any such option shall
accordingly become exercisable, immediately prior to the effective date of such
Change in Control, for all of the shares of Common Stock at the time subject to
that option and may be exercised for any or all of those shares as fully-vested
shares of Common Stock. In addition, the Plan Administrator may at any time
provide that one or more of
8.
<PAGE>
the Corporation's repurchase rights shall not be assignable in connection with
such Change in Control and shall terminate upon the consummation of such Change
in Control.
F. The Plan Administrator may at any time provide that one or more
options will automatically accelerate upon an Involuntary Termination of the
Optionee's Service within a designated period (not to exceed eighteen (18)
months) following the effective date of any Change in Control in which those
options do not otherwise accelerate. Any options so accelerated shall remain
exercisable for fully-vested shares until the earlier of (i) the expiration of
-------
the option term or (ii) the expiration of the one (1) year period measured from
the effective date of the Involuntary Termination. In addition, the Plan
Administrator may at any time provide that one or more of the Corporation's
repurchase rights shall immediately terminate upon such Involuntary Termination.
G. The Plan Administrator may at any time provide that one or more
options will automatically accelerate in connection with a Hostile Take-Over.
Any such option shall become exercisable, immediately prior to the effective
date of such Hostile Take-Over, for all of the shares of Common Stock at the
time subject to that option and may be exercised for any or all of those shares
as fully-vested shares of Common Stock. In addition, the Plan Administrator may
at any time provide that one or more of the Corporation's repurchase rights
shall terminate automatically upon the consummation of such Hostile Take-Over.
Alternatively, the Plan Administrator may condition such automatic acceleration
and termination upon an Involuntary Termination of the Optionee's Service within
a designated period (not to exceed eighteen (18) months) following the effective
date of such Hostile Take-Over. Each option so accelerated shall remain
exercisable for fully-vested shares until the expiration or sooner termination
of the option term.
H. The portion of any Incentive Option accelerated in connection
with a Change in Control or Hostile Take Over shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand Dollars
($100,000) limitation is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated portion of such option shall be exercisable as a Non-
Statutory Option under the Federal tax laws.
IV. STOCK APPRECIATION RIGHTS
The Plan Administrator may, subject to such conditions as it may
determine, grant to selected Optionees stock appreciation rights which will
allow the holders of those rights to elect between the exercise of the
underlying option for shares of Common Stock and the surrender of that option in
exchange for a distribution from the Corporation in an amount equal to the
excess of (a) the Option Surrender Value of the number of shares for which the
option is surrendered over (b) the aggregate exercise price payable for such
shares. The distribution may be made in shares of Common Stock valued at Fair
Market Value on the option surrender date, in cash, or partly in shares and
partly in cash, as the Plan Administrator shall in its sole discretion deem
appropriate.
9.
<PAGE>
ARTICLE THREE
STOCK ISSUANCE PROGRAM
----------------------
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening options. Shares
of Common Stock may also be issued under the Stock Issuance Program pursuant to
share right awards which entitle the recipients to receive those shares upon the
attainment of designated performance goals or Service requirements. Each such
award shall be evidenced by one or more documents which comply with the terms
specified below.
A. PURCHASE PRICE.
--------------
1. The purchase price per share of Common Stock subject to
direct issuance shall be fixed by the Plan Administrator.
2. Subject to the provisions of Section II of Article
Five, Shares of Common Stock may be issued under the Stock Issuance Program for
any of the following items of consideration which the Plan Administrator may
deem appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any
Parent or Subsidiary).
B. VESTING/ISSUANCE PROVISIONS.
---------------------------
1. The Plan Administrator may issue shares of Common Stock
which are fully and immediately vested upon issuance or which are to vest in one
or more installments over the Participant's period of Service or upon attainment
of specified performance objectives. Alternatively, the Plan Administrator may
issue share right awards which shall entitle the recipient to receive a
specified number of vested shares of Common Stock upon the attainment of one or
more performance goals or Service requirements established by the Plan
Administrator.
2. Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to his or her unvested
shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant's unvested shares of Common Stock and
(ii) such escrow arrangements as the Plan Administrator shall deem appropriate.
10.
<PAGE>
3. The Participant shall have full stockholder rights with
respect to the issued shares of Common Stock, whether or not the Participant's
interest in those shares is vested. Accordingly, the Participant shall have the
right to vote such shares and to receive any regular cash dividends paid on such
shares.
4. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock, or should the performance
objectives not be attained with respect to one or more such unvested shares of
Common Stock, then those shares shall be immediately surrendered to the
Corporation for cancellation, and the Participant shall have no further
stockholder rights with respect to those shares. To the extent the surrendered
shares were previously issued to the Participant for consideration paid in cash
or cash equivalent (including the Participant's purchase-money indebtedness),
the Corporation shall repay to the Participant the cash consideration paid for
the surrendered shares and shall cancel the unpaid principal balance of any
outstanding purchase-money note of the Participant attributable to the
surrendered shares.
5. The Plan Administrator may waive the surrender and
cancellation of one or more unvested shares of Common Stock (or other assets
attributable thereto) which would otherwise occur upon the cessation of the
Participant's Service or the non-attainment of the performance objectives
applicable to those shares. Such waiver shall result in the immediate vesting of
the Participant's interest in the shares of Common Stock as to which the waiver
applies. Such waiver may be effected at any time, whether before or after the
Participant's cessation of Service or the attainment or non-attainment of the
applicable performance objectives.
6. Outstanding share right awards shall automatically
terminate, and no shares of Common Stock shall actually be issued in
satisfaction of those awards, if the performance goals or Service requirements
established for such awards are not attained. The Plan Administrator, however,
shall have the authority to issue shares of Common Stock in satisfaction of one
or more outstanding share right awards as to which the designated performance
goals or Service requirements are not attained.
II. CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. All of the Corporation's outstanding repurchase rights shall
terminate automatically, and all the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event of any Change in
Control, except to the extent (i) those repurchase rights are assigned to the
successor corporation (or parent thereof) or otherwise continue in full force
and effect pursuant to the terms of the Change in Control or (ii) such
accelerated vesting is precluded by other limitations imposed by the Plan
Administrator at the time the repurchase right is issued.
B. The Plan Administrator may at any time provide for the automatic
termination of one or more of those outstanding repurchase rights and the
immediate vesting of the shares of Common Stock subject to those terminated
rights upon (i) a Change in Control or Hostile Take-Over or (ii) an Involuntary
Termination of the Participant's Service within a designated period (not to
exceed eighteen (18) months) following the effective date of any
11.
<PAGE>
Change in Control or Hostile Take-Over in which those repurchase rights are
assigned to the successor corporation (or parent thereof) or otherwise continue
in full force and effect.
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be held
in escrow by the Corporation until the Participant's interest in such shares
vests or may be issued directly to the Participant with restrictive legends on
the certificates evidencing those unvested shares.
12.
<PAGE>
ARTICLE FOUR
AUTOMATIC OPTION GRANT PROGRAM
I. OPTION TERMS
A. GRANT DATES. Options shall be made on the dates specified below:
-----------
1. Each individual who is first elected or appointed as a non-
employee Board member at any time after the Plan Effective Date shall
automatically be granted, on the date of such initial election or appointment, a
Non-Statutory Option to purchase Twelve Thousand (12,000) shares of Common
Stock, provided that individual has not previously been in the employ of the
Corporation or any Parent or Subsidiary.
2. On the date of each Annual Stockholders Meeting beginning with
the 1999 Annual Stockholders Meeting, each individual who is to continue to
serve as a non-employee Board member, whether or not that individual is standing
for re-election to the Board, shall automatically be granted a Non-Statutory
Option to purchase Twelve Thousand (12,000) shares of Common Stock, provided
such individual has served as a non-employee Board member for at least six (6)
months.
B. EXERCISE PRICE.
--------------
1. The exercise price per share shall be equal to one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date.
2. The exercise price shall be payable in one or more of the
alternative forms authorized under the Discretionary Option Grant Program.
Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.
C. OPTION TERM. Each option shall have a term of ten (10) years
-----------
measured from the option grant date.
D. EXERCISE AND VESTING OF OPTIONS. Each option shall be immediately
-------------------------------
exercisable for any or all of the option shares. However, any shares purchased
under the option shall be subject to repurchase by the Corporation, at the
exercise price paid per share, upon the Optionee's cessation of Board service
prior to vesting in those shares. Each option shall vest, and the Corporation's
repurchase right shall lapse, upon the Optionee's completion of one (1) year of
Board service measured from the grant date.
E. CESSATION OF BOARD SERVICE. The following provisions shall govern
--------------------------
the exercise of any options outstanding at the time of the Optionee's cessation
of Board service:
13.
<PAGE>
(i) Any option outstanding at the time of the Optionee's
cessation of Board service for any reason shall remain exercisable for a
twelve (12)-month period following the date of such cessation of Board
service, but in no event shall such option be exercisable after the
expiration of the option term.
(ii) Any option exercisable in whole or in part by the
Optionee at the time of death may be subsequently exercised by his or her
Beneficiary.
(iii) Following the Optionee's cessation of Board service, the
option may not be exercised in the aggregate for more than the number of
shares in which the Optionee was vested on the date of such cessation of
Board service. Upon the expiration of the applicable exercise period or (if
earlier) upon the expiration of the option term, the option shall terminate
and cease to be outstanding for any vested shares for which the option has
not been exercised. However, the option shall, immediately upon the
Optionee's cessation of Board service, terminate and cease to be
outstanding for any and all shares in which the Optionee is not otherwise
at that time vested.
(iv) However, should the Optionee cease to serve as a Board
member by reason of death or Permanent Disability, then all shares at the
time subject to the option shall immediately vest so that such option may,
during the twelve (12)-month exercise period following such cessation of
Board service, be exercised for all or any portion of those shares as
fully-vested shares of Common Stock.
II. CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Change in Control or Hostile Take-Over, the
shares of Common Stock at the time subject to each outstanding option but not
otherwise vested shall automatically vest in full so that each such option may,
immediately prior to the effective date of such Change in Control the Hostile
Take-Over, be exercised for all or any portion of those shares as fully-vested
shares of Common Stock. Each such option accelerated in connection with a Change
in Control shall terminate upon the Change in Control, except to the extent
assumed by the successor corporation (or parent thereof) or otherwise continued
in full force and effect pursuant to the terms of the Change in Control. Each
such option accelerated in connection with a Hostile Take-Over shall remain
exercisable until the expiration or sooner termination of the option term.
B. All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those terminated rights
shall immediately vest in full, in the event of any Change in Control or Hostile
Take-Over.
C. Upon the occurrence of a Hostile Take-Over, the Optionee shall have
a thirty (30)-day period in which to surrender to the Corporation each of his or
her outstanding options. The Optionee shall in return be entitled to a cash
distribution from the Corporation in an
14.
<PAGE>
amount equal to the excess of (i) the Option Surrender Value of the shares of
Common Stock at the time subject to each surrendered option (whether or not the
Optionee is otherwise at the time vested in those shares) over (ii) the
aggregate exercise price payable for such shares. Such cash distribution shall
be paid within five (5) days following the surrender of the option to the
Corporation.
D. Each option which is assumed in connection with a Change in
Control shall be appropriately adjusted to apply to the number and class of
securities which would have been issuable to the Optionee in consummation of
such Change in Control had the option been exercised immediately prior to such
Change in Control. Appropriate adjustments shall also be made to the exercise
price payable per share under each outstanding option, provided the aggregate
--------
exercise price payable for such securities shall remain the same.
III. REMAINING TERMS
The remaining terms of each option granted under the Automatic Option
Grant Program shall be the same as the terms in effect for options made under
the Discretionary Option Grant Program.
15.
<PAGE>
ARTICLE FIVE
MISCELLANEOUS
-------------
I. NO IMPAIRMENT OF AUTHORITY
Outstanding awards shall in no way affect the right of the Corporation
to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
II. FINANCING
The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price under the Discretionary Option Grant Program or the
purchase price of shares issued under the Stock Issuance Program by delivering a
full-recourse, interest bearing promissory note payable in one or more
installments. The terms of any such promissory note (including the interest rate
and the terms of repayment) shall be established by the Plan Administrator in
its sole discretion. In no event may the maximum credit available to the
Optionee or Participant exceed the sum of (i) the aggregate option exercise
price or purchase price payable for the purchased shares plus (ii) any Federal,
state and local income and employment tax liability incurred by the Optionee or
the Participant in connection with the option exercise or share purchase.
III. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock upon
the exercise of options or the issuance or vesting of such shares under the Plan
shall be subject to the satisfaction of all applicable Federal, state and local
income and employment tax withholding requirements.
B. The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options or unvested shares of Common Stock under the
Plan with the right to use shares of Common Stock in satisfaction of all or part
of the Taxes incurred by such holders in connection with the exercise of their
options or the vesting of their shares. Such right may be provided to any such
holder in either or both of the following formats:
(i) Stock Withholding: The election to have the Corporation
-----------------
withhold, from the shares of Common Stock otherwise issuable upon the
exercise of such Non-Statutory Option or the vesting of such shares, a
portion of those shares with an aggregate Fair Market Value equal to the
percentage of the Taxes (not to exceed one hundred percent (100%))
designated by the holder.
(ii) Stock Delivery: The election to deliver to the Corporation,
--------------
at the time the Non-Statutory Option is exercised or the shares vest, one
or more shares of Common Stock previously acquired by such holder (other
than in connection with the option exercise or share vesting triggering the
Taxes) with an aggregate Fair Market Value equal to the percentage of the
Taxes (not to exceed one hundred percent (100%)) designated by the holder.
16.
<PAGE>
IV. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan shall become effective upon approval at the 1999 Annual
Stockholders Meeting.
B. The Plan shall serve as the successor to the Predecessor Plans, and
no further options or direct stock issuances shall be made under the Predecessor
Plan after the Plan Effective Date. All options outstanding under the
Predecessor Plans on the Plan Effective Date shall be incorporated into the Plan
at that time and shall be treated as outstanding options under the Plan.
However, each outstanding option so incorporated shall continue to be governed
solely by the terms of the documents evidencing such option, and no provision of
the Plan shall be deemed to affect or otherwise modify the rights or obligations
of the holders of such incorporated options with respect to their acquisition of
shares of Common Stock.
C. One or more provisions of the Plan, including (without limitation)
the option/vesting acceleration provisions of Article Two relating to Changes in
Control, may, in the Plan Administrator's discretion, be extended to one or more
options incorporated from the Predecessor Plan which do not otherwise contain
such provisions.
D. The Plan shall terminate upon the earliest of (i) May 20, 2009,
--------
(ii) the date on which all shares available for issuance under the Plan shall
have been issued as fully-vested shares or (iii) the termination of all
outstanding options in connection with a Change in Control. Upon such plan
termination, all outstanding options and unvested stock issuances shall
thereafter continue to have force and effect in accordance with the provisions
of the documents evidencing such grants or issuances.
V. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
stock options or unvested stock issuances at the time outstanding under the Plan
unless the Optionee or the Participant consents to such amendment or
modification. In addition, certain amendments may require stockholder approval
pursuant to applicable laws or regulations.
B. Options to purchase shares of Common Stock may be granted under the
Discretionary Option Grant Program and shares of Common Stock may be issued
under the Stock Issuance Program that are in each instance in excess of the
number of shares then available for issuance under the Plan, provided any excess
shares actually issued under those programs shall be held in escrow until there
is obtained stockholder approval of an amendment sufficiently increasing the
number of shares of Common Stock available for issuance under the Plan. If such
stockholder approval is not obtained within twelve (12) months after the date
the first such excess issuances are made, then (i) any unexercised options
granted on the basis of such excess shares shall terminate and cease to be
outstanding and (ii) the Corporation shall promptly refund to the Optionees and
the Participants the exercise or purchase price paid for any excess shares
issued under the Plan and held in escrow, together with interest (at the
applicable Short Term
17.
<PAGE>
Federal Rate) for the period the shares were held in escrow, and such shares
shall thereupon be automatically cancelled and cease to be outstanding.
VI. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate purposes.
VII. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any stock option
under the Plan and the issuance of any shares of Common Stock (i) upon the
exercise of any granted option or (ii) under the Stock Issuance Program shall be
subject to the Corporation's procurement of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the stock options
granted under it and the shares of Common Stock issued pursuant to it.
B. No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading.
VIII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant
any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by each,
to terminate such person's Service at any time for any reason, with or without
cause.
18.
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic option
------------------------------
grant program in effect under the Plan.
B. BENEFICIARY shall mean, in the event the Plan Administrator
-----------
implements a beneficiary designation procedure, the person designated by an
Optionee or Participant, pursuant to such procedure, to succeed to such person's
rights under any outstanding awards held by him or her at the time of death. In
the absence of such designation or procedure, the Beneficiary shall be the
personal representative of the estate of the Optionee or Participant or the
person or persons to whom the award is transferred by will or the laws of
descent and distribution.
C. BOARD shall mean the Corporation's Board of Directors.
-----
D. CHANGE IN CONTROL shall mean a change in ownership or control of
-----------------
the Corporation effected through any of the following transactions:
(i) a merger, consolidation or reorganization approved by the
Corporation's stockholders, unless securities representing more than fifty
------
percent (50%) of the total combined voting power of the voting securities
of the successor corporation are immediately thereafter beneficially owned,
directly or indirectly and in substantially the same proportion, by the
persons who beneficially owned the Corporation's outstanding voting
securities immediately prior to such transaction,
(ii) any stockholder-approved transfer or other disposition of all
or substantially all of the Corporation's assets, or
(iii) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation), of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's stockholders which the Board recommends such
stockholders to accept.
E. CODE shall mean the Internal Revenue Code of 1986, as amended.
----
F. COMMON STOCK shall mean the Corporation's common stock.
------------
G. CORPORATION shall mean The viaLink Company and its successors.
-----------
A-1.
<PAGE>
H. DISCRETIONARY OPTION GRANT PROGRAM shall mean the discretionary
----------------------------------
option grant program in effect under the Plan.
I. EMPLOYEE shall mean an individual who is in the employ of the
--------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
J. EXERCISE DATE shall mean the date on which the Corporation shall
-------------
have received written notice of the option exercise.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as such price is
reported on the Nasdaq National Market or any successor system. If there is
no closing selling price for the Common Stock on the date in question, then
the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(ii) If the Common Stock is at the time traded on the Nasdaq
SmallCap Market, then the Fair Market Value shall be the average of the
highest bid and lowest asked prices per share of Common Stock on the date
in question, as such prices are reported on the Nasdaq SmallCap Market or
on any successor system. If there are no such bid and asked prices for the
Common Stock on the date in question, then the Fair Market Value shall be
the average of the highest bid and lowest asked prices on the last
preceding date for which such quotation exists.
(iii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be
the closing selling price on the last preceding date for which such
quotation exists.
L. HOSTILE TAKE-OVER shall mean:
-----------------
(i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's stockholders which the Board does not recommend such
stockholders to accept, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least
A-2.
<PAGE>
a majority of the Board members described in clause (A) who were still in
office at the time the Board approved such election or nomination.
M. INCENTIVE OPTION shall mean an option which satisfies the
----------------
requirements of Code Section 422.
N. INVOLUNTARY TERMINATION shall mean the termination of the Service
-----------------------
of any individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A) a change
in his or her position with the Corporation or Parent or Subsidiary
employing the individual which materially reduces his or her duties and
responsibilities or the level of management to which he or she reports, (B)
a reduction in his or her level of compensation (including base salary,
fringe benefits and target bonus under any performance based bonus or
incentive programs) by more than fifteen percent (15%) or (C) a relocation
of such individual's place of employment by more than fifty (50) miles,
provided and only if such change, reduction or relocation is effected by
the Corporation without the individual's consent.
O. MISCONDUCT shall mean the commission of any act of fraud,
----------
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any intentional wrongdoing by such
person, whether by omission or commission, which adversely affects the business
or affairs of the Corporation (or any Parent or Subsidiary) in a material
manner. This shall not limit the grounds for the dismissal or discharge of any
person in the Service of the Corporation (or any Parent or Subsidiary).
P. 1934 ACT shall mean the Securities Exchange Act of 1934, as
--------
amended.
Q. NON-STATUTORY OPTION shall mean an option not intended to satisfy
--------------------
the requirements of Code Section 422.
R. OPTION SURRENDER VALUE shall mean the Fair Market Value per share
----------------------
of Common Stock on the date the option is surrendered to the Corporation or, in
the event of a Hostile Take-Over, effected through a tender offer, the highest
reported price per share of Common Stock paid by the tender offeror in effecting
such Hostile Take-Over, if greater. However, if the surrendered option is an
Incentive Option, the Option Surrender Value shall not exceed the Fair Market
Value per share.
S. OPTIONEE shall mean any person to whom an option is granted under
--------
the Discretionary Option Grant or Automatic Option Grant Program.
T. PARENT shall mean any corporation (other than the Corporation) in
------
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the
A-3.
<PAGE>
unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
U. PARTICIPANT shall mean any person who is issued shares of Common
-----------
Stock under the Stock Issuance Program.
V. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the
--------------------------------------------
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more. However, solely for purposes of the Automatic Option Grant
Program, Permanent Disability or Permanently Disabled shall mean the inability
of the non-employee Board member to perform his or her usual duties as a Board
member by reason of any medically determinable physical or mental impairment
expected to result in death or to be of continuous duration of twelve (12)
months or more.
W. PLAN shall mean the Corporation's 1999 Stock Option/Stock Issuance
----
Plan, as set forth in this document.
X. PLAN ADMINISTRATOR shall mean the particular entity, whether the
------------------
Primary Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to one or more classes of eligible persons, to the extent such entity is
carrying out its administrative functions under those programs with respect to
the persons under its jurisdiction. However, the Primary Committee shall have
the plenary authority to make all factual determinations and to construe and
interpret any and all ambiguities under the Plan to the extent such authority is
not otherwise expressly delegated to any other Plan Administrator.
Y. PLAN EFFECTIVE DATE shall mean May 21, 1999, the date of the 1999
-------------------
Annual Stockholders Meeting.
Z. PREDECESSOR PLANS shall mean the Corporation's pre-existing 1995
-----------------
Stock Option Plan, 1998 Non-Qualified Stock Option Plan and 1998 Stock Grant
Plan in effect immediately prior to the Plan Effective Date hereunder.
AA. PRIMARY COMMITTEE shall mean the committee of two (2) or more
-----------------
non-employee Board members appointed by the Board to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section
16 Insiders.
BB. SECONDARY COMMITTEE shall mean a committee of one (1) or more Board
-------------------
members appointed by the Board to administer the Discretionary Option Grant and
Stock Issuance Programs with respect to eligible persons other than Section 16
Insiders.
CC. SECTION 16 INSIDER shall mean an officer or director of the
------------------
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.
DD. SERVICE shall mean the performance of services for the Corporation
-------
(or any Parent or Subsidiary) by a person in the capacity of an Employee, a non-
employee member
A-4.
<PAGE>
of the board of directors or a consultant or independent advisor, except to the
extent otherwise specifically provided in the documents evidencing the option
grant or stock issuance.
EE. STOCK EXCHANGE shall mean either the American Stock Exchange or the
--------------
New York Stock Exchange.
FF. STOCK ISSUANCE PROGRAM shall mean the stock issuance program in
----------------------
effect under the Plan.
GG. SUBSIDIARY shall mean any corporation (other than the Corporation)
----------
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
HH. TAXES shall mean the Federal, state and local income and employment
-----
withholding tax liabilities incurred by the holder of Non-Statutory Options or
unvested shares of Common Stock in connection with the exercise of those options
or the vesting of those shares.
II. 10% STOCKHOLDER shall mean the owner of stock (as determined under
---------------
Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).
A-5.
<PAGE>
APPENDIX B
THE VIALINK COMPANY
1999 EMPLOYEE STOCK PURCHASE PLAN
---------------------------------
I. PURPOSE OF THE PLAN
This 1999 Employee Stock Purchase Plan is intended to promote the
interests of The viaLink Company, by providing eligible employees with the
opportunity to acquire a proprietary interest in the Corporation through
participation in a payroll-deduction based employee stock purchase plan designed
to qualify under Section 423 of the Code.
This Plan shall serve as the successor to the Corporation's existing
Employee Stock Purchase Plan (the "Predecessor Plan"), and no further shares of
Common Stock will be issued under the Predecessor Plan from and after the
Effective Date.
Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.
II. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority to interpret and
construe any provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary in order to comply with the
requirements of Section 423 of the Code. Decisions of the Plan Administrator
shall be final and binding on all parties having an interest in the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares of Common Stock
purchased on the open market. The maximum number of shares of Common Stock which
may be issued over the term of the Plan shall not exceed Two Hundred Thousand
(200,000) shares and shall be comprised of the following components: (i) the
actual number of shares of Common Stock remaining for issuance under the
Predecessor Plan on the Effective Date (estimated to be Ninety Three Thousand
Eight Hundred Eighteen (93,818) shares), plus (ii) an additional One Hundred Six
Thousand One Hundred Eighty Two (106,182) shares of Common Stock.
B. Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, appropriate adjustments
shall be made to (i) the maximum number and class of securities issuable under
the Plan, (ii) the maximum number and class of securities purchasable per
Participant on any one Purchase Date and (iii) the number and class of
securities and the price per share in effect under each outstanding purchase
right in order to prevent the dilution or enlargement of benefits thereunder.
<PAGE>
IV. OFFERING PERIODS
A. Shares of Common Stock shall be offered for purchase under the
Plan through a series of successive offering periods until such time as (i) the
maximum number of shares of Common Stock available for issuance under the Plan
shall have been purchased or (ii) the Plan shall have been sooner terminated.
B. Each offering period shall be of such duration (not to exceed
twenty-four (24) months) as determined by the Plan Administrator prior to the
start date of such offering period. However, the initial offering period shall
commence on the Effective Date and terminate on the last business day in July
2001. Subsequent offering periods shall commence as designated by the Plan
Administrator.
C. Each offering period shall be comprised of a series of one or more
successive Purchase Intervals. Purchase Intervals shall run from the first
business day in February each year to the last business day in July of the same
year and from the first business day in August each year to the last business
day in January of the following year. However, the first Purchase Interval in
effect under the initial offering period shall commence on the Effective Date
and terminate on the last business day in January 2000.
D. Should the Fair Market Value per share of Common Stock on any
Purchase Date within an offering period be less than the Fair Market Value per
share of Common Stock on the start date of that offering period, then that
offering period shall automatically terminate immediately after the purchase of
shares of Common Stock on such Purchase Date, and a new offering period shall
commence on the next business day following such Purchase Date. The new
offering period shall have a duration of twenty-four (24) months, unless a
shorter duration is established by the Plan Administrator within five (5)
business days following the start date of that offering period.
E. Notwithstanding anything to the contrary herein, should the total
number of shares of Common Stock to be purchased on any particular date exceed
the number of shares then available for issuance under the Plan, then the Plan
Administrator shall have the right to terminate the offering period during which
such purchase occurs and to determine when a new offering period shall commence.
V. ELIGIBILITY
A. Each individual who is an Eligible Employee on the start date of
an offering period under the Plan may enter that offering period on such start
date or on any subsequent Semi-Annual Entry Date within that offering period.
C. Each individual who first becomes an Eligible Employee after the
start date of an offering period may enter that offering period on any
subsequent Semi-Annual Entry Date within that offering period on which he or she
is an Eligible Employee.
2
<PAGE>
D. The date an individual enters an offering period shall be
designated his or her Entry Date for purposes of that offering period.
E. To participate in the Plan for a particular offering period, the
Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator (including a stock purchase agreement and a payroll deduction
authorization) and file such forms with the Plan Administrator (or its
designate) on or before his or her scheduled Entry Date.
VI. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for purposes
of acquiring shares of Common Stock during an offering period may be any
multiple of one percent (1%) of the Cash Earnings paid to the Participant during
each Purchase Interval within that offering period, up to a maximum of ten
percent (10%). The deduction rate so authorized shall continue in effect
throughout the offering period, except to the extent such rate is changed in
accordance with the following guidelines:
(i) The Participant may, at any time during the offering period,
reduce his or her rate of payroll deduction to become effective as soon as
possible after filing the appropriate form with the Plan Administrator.
The Participant may not, however, effect more than one (1) such reduction
per Purchase Interval.
(ii) The Participant may, prior to the commencement of any new
Purchase Interval within the offering period, increase the rate of his or
her payroll deduction by filing the appropriate form with the Plan
Administrator. The new rate (which may not exceed the ten percent (10%)
maximum) shall become effective on the start date of the first Purchase
Interval following the filing of such form.
B. Payroll deductions shall begin on the first pay day following the
Participant's Entry Date into the offering period and shall (unless sooner
terminated by the Participant) continue through the pay day ending with or
immediately prior to the last day of that offering period. The amounts so
collected shall be credited to the Participant's book account under the Plan,
but no interest shall be paid on the balance from time to time outstanding in
such account. The amounts collected from the Participant shall not be required
to be held in any segregated account or trust fund and may be commingled with
the general assets of the Corporation and used for general corporate purposes.
C. Payroll deductions shall automatically cease upon the termination
of the Participant's purchase right in accordance with the provisions of the
Plan.
D. The Participant's acquisition of Common Stock under the Plan on
any Purchase Date shall neither limit nor require the Participant's acquisition
of Common Stock on any subsequent Purchase Date, whether within the same or a
different offering period.
3
<PAGE>
VII. PURCHASE RIGHTS
A. GRANT OF PURCHASE RIGHT. A Participant shall be granted a
-----------------------
separate purchase right for each offering period in which he or she
participates. The purchase right shall be granted on the Participant's Entry
Date into the offering period and shall provide the Participant with the right
to purchase shares of Common Stock, in a series of successive installments over
the remainder of such offering period, upon the terms set forth below. The
Participant shall execute a stock purchase agreement embodying such terms and
such other provisions (not inconsistent with the Plan) as the Plan Administrator
may deem advisable.
Under no circumstances shall purchase rights be granted under the Plan
to any Eligible Employee if such individual would, immediately after the grant,
own (within the meaning of Code Section 424(d)) or hold outstanding options or
other rights to purchase, stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Corporation
or any Corporate Affiliate.
B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be
------------------------------
automatically exercised in installments on each successive Purchase Date within
the offering period, and shares of Common Stock shall accordingly be purchased
on behalf of each Participant (other than Participants whose payroll deductions
have previously been refunded pursuant to the Termination of Purchase Right
provisions below) on each such Purchase Date. The purchase shall be effected by
applying the Participant's payroll deductions for the Purchase Interval ending
on such Purchase Date to the purchase of whole shares of Common Stock at the
purchase price in effect for the Participant for that Purchase Date.
C. PURCHASE PRICE. The purchase price per share at which Common
--------------
Stock will be purchased on the Participant's behalf on each Purchase Date within
the offering period shall be equal to eighty-five percent (85%) of the lower of
-----
(i) the Fair Market Value per share of Common Stock on the Participant's Entry
Date into that offering period or (ii) the Fair Market Value per share of Common
Stock on that Purchase Date.
D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common
----------------------------
Stock purchasable by a Participant on each Purchase Date during the offering
period shall be the number of whole shares obtained by dividing the amount
collected from the Participant through payroll deductions during the Purchase
Interval ending with that Purchase Date by the purchase price in effect for the
Participant for that Purchase Date. However, the maximum number of shares of
Common Stock purchasable per Participant on any one Purchase Date shall not
exceed One Thousand (1,000) shares, subject to periodic adjustments in the
event of certain changes in the Corporation's capitalization. In addition, the
maximum number of shares of Common Stock purchasable by all Participants in the
aggregate on any one Purchase Date shall not exceed Fifty Thousand (50,000)
shares, subject to periodic adjustments in the event of certain changes in the
Corporation's capitalization.
E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied to
-------------------------
the purchase of shares of Common Stock on any Purchase Date because they are
not sufficient to purchase a whole share of Common Stock shall be held for the
purchase of Common Stock on the next Purchase Date. However, any payroll
deductions not applied to the purchase of
4
<PAGE>
Common Stock by reason of the limitation on the maximum number of shares
purchasable on the Purchase Date shall be promptly refunded.
F. TERMINATION OF PURCHASE RIGHT. The following provisions shall
-----------------------------
govern the termination of outstanding purchase rights:
(i) A Participant may, at any time prior to the next
scheduled Purchase Date in the offering period, terminate his or her
outstanding purchase right by filing the appropriate form with the Plan
Administrator (or its designate), and no further payroll deductions shall
be collected from the Participant with respect to the terminated purchase
right. Any payroll deductions collected during the Purchase Interval in
which such termination occurs shall, at the Participant's election, be
immediately refunded or held for the purchase of shares on the next
Purchase Date. If no such election is made at the time such purchase right
is terminated, then the payroll deductions collected with respect to the
terminated right shall be refunded as soon as possible.
(ii) The termination of such purchase right shall be
irrevocable, and the Participant may not subsequently rejoin the offering
period for which the terminated purchase right was granted. In order to
resume participation in any subsequent offering period, such individual
must re-enroll in the Plan (by making a timely filing of the prescribed
enrollment forms) on or before his or her scheduled Entry Date into that
offering period.
(iii) Should the Participant cease to remain an Eligible
Employee for any reason (including death, disability or change in status)
while his or her purchase right remains outstanding, then that purchase
right shall immediately terminate, and all of the Participant's payroll
deductions for the Purchase Interval in which the purchase right so
terminates shall be immediately refunded. However, should the Participant
cease to remain in active service by reason of an approved unpaid leave of
absence, then the Participant shall have the right, exercisable up until
the last business day of the Purchase Interval in which such leave
commences, to (a) withdraw all the payroll deductions collected to date on
his or her behalf for that Purchase Interval or (b) have such funds held
for the purchase of shares on his or her behalf on the next scheduled
Purchase Date. In no event, however, shall any further payroll deductions
be collected on the Participant's behalf during such leave. Upon the
Participant's return to active service (i) within ninety (90) days
following the commencement of such leave or, (ii) prior to the expiration
of any longer period for which such Participant's right to reemployment
with the Corporation is guaranteed by either statute or contract, his or
her payroll deductions under the Plan shall automatically resume at the
rate in effect at the time the leave began. However, should the
Participant's leave of absence exceed ninety (90) days and his or her re-
employment rights not be guaranteed by either statute or contract, then the
Participant's status as an Eligible Employee will be deemed to terminate on
the ninety-first (91st) day of that leave, and such Participant's purchase
right for the offering period in which that leave began shall thereupon
terminate. An individual who returns to active employment
5
<PAGE>
following such a leave shall be treated as a new Employee for purposes of
the Plan and must, in order to resume participation in the Plan, re-enroll
in the Plan (by making a timely filing of the prescribed enrollment forms)
on or before his or her scheduled Entry Date into the offering period.
G. CORPORATE TRANSACTION. Each outstanding purchase right shall
---------------------
automatically be exercised, immediately prior to the effective date of any
Corporate Transaction, by applying the payroll deductions of each Participant
for the Purchase Interval in which such Corporate Transaction occurs to the
purchase of whole shares of Common Stock at a purchase price per share equal to
eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of
-----
Common Stock on the Participant's Entry Date into the offering period in which
such Corporate Transaction occurs or (ii) the Fair Market Value per share of
Common Stock immediately prior to the effective date of such Corporate
Transaction. However, the applicable limitations on the number of shares of
Common Stock purchasable per Participant and in the aggregate shall continue to
apply to any such purchase.
The Corporation shall use its best efforts to provide at least ten
(10)-days prior written notice of the occurrence of any Corporate Transaction,
and Participants shall, following the receipt of such notice, have the right to
terminate their outstanding purchase rights prior to the effective date of the
Corporate Transaction.
H. PRORATION OF PURCHASE RIGHTS. Should the total number of shares
----------------------------
of Common Stock to be purchased pursuant to outstanding purchase rights on any
particular date exceed the number of shares then available for issuance under
the Plan, the Plan Administrator shall make a pro-rata allocation of the
available shares on a uniform and nondiscriminatory basis, and the payroll
deductions of each Participant, to the extent in excess of the aggregate
purchase price payable for the Common Stock pro-rated to such individual, shall
be refunded.
I. ASSIGNABILITY. The purchase right shall be exercisable only by
-------------
the Participant and shall not be assignable or transferable by the Participant.
J. STOCKHOLDER RIGHTS. A Participant shall have no stockholder
------------------
rights with respect to the shares subject to his or her outstanding purchase
right until the shares are purchased on the Participant's behalf in accordance
with the provisions of the Plan and the Participant has become a holder of
record of the purchased shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire
Common Stock pursuant to any purchase right outstanding under this Plan if and
to the extent such accrual, when aggregated with (i) rights to purchase Common
Stock accrued under any other purchase right granted under this Plan and (ii)
similar rights accrued under other employee stock purchase plans (within the
meaning of Code Section 423) of the Corporation or any Corporate Affiliate,
would otherwise permit such Participant to purchase more than Twenty-Five
Thousand Dollars ($25,000) worth of stock of the Corporation or any Corporate
Affiliate (determined on the basis of the Fair Market Value per share on the
date or dates such rights are granted) for each calendar year such rights are at
any time outstanding.
6
<PAGE>
B. For purposes of applying such accrual limitations to the purchase
rights granted under the Plan, the following provisions shall be in effect:
(i) The right to acquire Common Stock under each
outstanding purchase right shall accrue in a series of installments on each
successive Purchase Date during the offering period on which such right
remains outstanding.
(ii) No right to acquire Common Stock under any outstanding
purchase right shall accrue to the extent the Participant has already
accrued in the same calendar year the right to acquire Common Stock under
one (1) or more other purchase rights at a rate equal to Twenty-Five
Thousand Dollars ($25,000) worth of Common Stock (determined on the basis
of the Fair Market Value per share on the date or dates of grant) for each
calendar year such rights were at any time outstanding.
C. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular Purchase Interval, then the payroll
deductions which the Participant made during that Purchase Interval with respect
to such purchase right shall be promptly refunded.
D. In the event there is any conflict between the provisions of this
Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board on April 9 1999 and shall become
effective at the Effective Date, provided no purchase rights granted under the
--------
Plan shall be exercised, and no shares of Common Stock shall be issued
hereunder, until (i) the Plan shall have been approved by the stockholders of
the Corporation and (ii) the Corporation shall have complied with all applicable
requirements of the 1933 Act (including the registration of the shares of Common
Stock issuable under the Plan on a Form S-8 registration statement filed with
the Securities and Exchange Commission), all applicable listing requirements of
any stock exchange (or the Nasdaq National Market, if applicable) on which the
Common Stock is listed for trading and all other applicable requirements
established by law or regulation. In the event such stockholder approval is not
obtained, or such compliance is not effected, within twelve (12) months after
the date on which the Plan is adopted by the Board, the Plan shall terminate and
have no further force or effect, and all sums collected from Participants during
the initial offering period hereunder shall be refunded.
B. Unless sooner terminated by the Board, the Plan shall terminate
upon the earliest of (i) the last business day in July 2009, (ii) the date on
--------
which all shares available for issuance under the Plan shall have been sold
pursuant to purchase rights exercised under the Plan or (iii) the date on which
all purchase rights are exercised in connection with a Corporate Transaction.
No further purchase rights shall be granted or exercised, and no further payroll
deductions shall be collected, under the Plan following such termination.
7
<PAGE>
X. AMENDMENT/TERMINATION OF THE PLAN
A. The Board may alter, amend, suspend or terminate the Plan at any
time to become effective immediately following the close of any Purchase
Interval. However, the Plan may be amended or terminated immediately upon Board
action, if and to the extent necessary to assure that the Corporation will not
recognize, for financial reporting purposes, any compensation expense in
connection with the shares of Common Stock offered for purchase under the Plan,
should the financial accounting rules applicable to the Plan at the Effective
Date be subsequently revised so as to require the recognition of compensation
expense in the absence of such amendment or termination.
B. In no event may the Board effect any of the following amendments
or revisions to the Plan without the approval of the Corporation's stockholders:
(i) increase the number of shares of Common Stock issuable under the Plan or the
maximum number of shares purchasable per Participant on any one Purchase Date,
except for permissible adjustments in the event of certain changes in the
Corporation's capitalization, (ii) alter the purchase price formula so as to
reduce the purchase price payable for the shares of Common Stock purchasable
under the Plan or (iii) modify eligibility requirements for participation in the
Plan.
XI. GENERAL PROVISIONS
A. Nothing in the Plan shall confer upon the Participant any right to
continue in the employ of the Corporation or any Corporate Affiliate for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Corporate Affiliate employing such person)
or of the Participant, which rights are hereby expressly reserved by each, to
terminate such person's employment at any time for any reason, with or without
cause.
B. All costs and expenses incurred in the administration of the Plan
shall be paid by the Corporation; however, each Plan Participant shall bear all
costs and expenses incurred by such individual in the sale or other disposition
of any shares purchased under the Plan.
C. The provisions of the Plan shall be governed by the laws of the
State of Oklahoma without regard to that State's conflict-of-laws rules.
8
<PAGE>
SCHEDULE A
----------
CORPORATIONS PARTICIPATING IN
EMPLOYEE STOCK PURCHASE PLAN
AS OF THE EFFECTIVE DATE
------------------------
The viaLink Company
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. BOARD shall mean the Corporation's Board of Directors.
-----
B. CASH EARNINGS shall mean the (i) base salary payable to a
-------------
Participant by one or more Participating Corporations during such individual's
period of participation in one or more offering periods under the Plan plus (ii)
all overtime payments, bonuses, commissions, current profit-sharing
distributions and other incentive-type payments. Such Cash Earnings shall be
calculated before deduction of (A) any income or employment tax withholdings or
(B) any pre-tax contributions made by the Participant to any Code Section 401(k)
salary deferral plan or any Code Section 125 cafeteria benefit program now or
hereafter established by the Corporation or any Corporate Affiliate. However,
Cash Earnings shall NOT include any contributions (other than Code Section
401(k) or Code Section 125 contributions) made on the Participant's behalf by
the Corporation or any Corporate Affiliate to any employee benefit or welfare
plan now or hereafter established.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
----
D. COMMON STOCK shall mean the Corporation's common stock.
------------
E. CORPORATE AFFILIATE shall mean any parent or subsidiary
-------------------
corporation of the Corporation (as determined in accordance with Code Section
424), whether now existing or subsequently established.
F. CORPORATE TRANSACTION shall mean either of the following
---------------------
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to
such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation
or dissolution of the Corporation.
G. CORPORATION shall mean The viaLink Company and any corporate
-----------
successor to all or substantially all of the assets or voting stock of The
viaLink Company which shall by appropriate action adopt the Plan .
H. EFFECTIVE DATE shall mean July 1, 1999. Any Corporate Affiliate
--------------
which becomes a Participating Corporation after such Effective Date shall
designate a subsequent Effective Date with respect to its employee-Participants.
A-1
<PAGE>
I. ELIGIBLE EMPLOYEE shall mean any person who is employed by a
-----------------
Participating Corporation on a basis under which he or she is regularly expected
to render more than twenty (20) hours of service per week for more than five (5)
months per calendar year for earnings considered wages under Code Section
3401(a).
J. ENTRY DATE shall mean the date an Eligible Employee first
----------
commences participation in the offering period in effect under the Plan. The
earliest Entry Date under the Plan shall be the Effective Date.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as such price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market or any successor system. If there is no closing selling
price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for
which such quotation exists.
(ii) If the Common Stock is at the time traded on the Nasdaq
Smallcap Market, then the Fair Market Value shall be the average of the
highest bid and lowest asked prices per share of Common Stock on the date
in question, as such prices are reported by the National Association of
Securities Dealers on the Nasdaq Smallcap Market or on any successor
system. If there are no such bid and asked prices for the Common Stock on
the date in question, then the Fair Market Value shall be the average of
the highest bid and lowest asked prices on the last preceding date for
which such quotation exists.
(iii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
L. 1933 ACT shall mean the Securities Act of 1933, as amended.
--------
M. PARTICIPANT shall mean any Eligible Employee of a Participating
-----------
Corporation who is actively participating in the Plan.
N. PARTICIPATING CORPORATION shall mean the Corporation and such
-------------------------
Corporate Affiliate or Affiliates as may be authorized from time to time by the
Board to extend the benefits of the Plan to their Eligible Employees. The
Participating Corporations in the Plan are listed in attached Schedule A.
O. PLAN shall mean the Corporation's 1999 Employee Stock Purchase
----
Plan, as set forth in this document.
P. PLAN ADMINISTRATOR shall mean the committee of two (2) or more
------------------
Board members appointed by the Board to administer the Plan.
Q. PURCHASE DATE shall mean the last business day of each Purchase
-------------
Interval. The initial Purchase Date shall be January 31, 2000.
A-2
<PAGE>
R. PURCHASE INTERVAL shall mean each successive six (6)-month period
-----------------
within the offering period at the end of which there shall be purchased shares
of Common Stock on behalf of each Participant.
S. SEMI-ANNUAL ENTRY DATE shall mean the first business day in
----------------------
February and August each year on which an Eligible Employee may first enter an
offering period.
T. STOCK EXCHANGE shall mean either the American Stock Exchange or
--------------
the New York Stock Exchange.
A-3
<PAGE>
APPENDIX C
THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR AN OPINION OF COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE
144 UNDER THE SECURITIES ACT.
SUBORDINATED SECURED CONVERTIBLE PROMISSORY NOTE
------------------------------------------------
February 4, 1999 $6,000,000 Menlo Park, California
FOR VALUE RECEIVED, The viaLink Company, an Oklahoma corporation (the
"Company"), promises to pay to Hewlett-Packard Company, a Delaware corporation
-------
(the "Holder"), or its assign, the principal sum of Six Million United States
------
Dollars (U.S.$6,000,000), or a lesser amount equal to the outstanding principal
amount, together with interest from the date of this Note on the unpaid
principal balance at a rate per annum equal to eleven and one half percent
(11.5%) computed on the basis of the actual number of days elapsed and a year of
365 days. Subject to the provisions of Section 3 below, all outstanding
principal and interest shall be due and payable on the Maturity Date (as defined
below). THIS NOTE IS SECURED AND IS ENTITLED TO THE BENEFIT OF THE SECURITY
AGREEMENT (AS DEFINED BELOW). The Note has been issued pursuant to the terms of
a Note Purchase Agreement (as defined below).
The following is a statement of the rights of the Holder and the
conditions to which this Note is subject, and to which the Holder agrees:
1. DEFINITIONS. As used in this Note, the following capitalized terms
-----------
have the following meanings:
"Effective Date" shall mean February 5, 1999.
--------------
"Holder" shall mean the person specified in the introductory paragraph
------
together with its permitted successors and assignees.
"Maturity Date" shall mean February 28, 2004.
-------------
"Note" shall mean this Convertible Secured Subordinated U.S.
----
$6,000,000 Promissory Note.
"Note Purchase Agreement" shall mean that Note Purchase Agreement,
-----------------------
dated as of this date, between the Company and the Holder.
<PAGE>
"Other Transaction Documents" shall mean the Note Purchase Agreement,
---------------------------
the Registration Rights Agreement, and the Security Agreement.
"Registration Rights Agreement" shall mean the Registration Agreement,
-----------------------------
dated as of this date, by the Company and the Holder.
"Security Agreement" shall mean the Security Agreement, dated as of
------------------
this date by the Company and the Holder.
"Transaction Documents" shall mean the Note Purchase Agreement, this
---------------------
Note, the Security Agreement, and the Registration rights Agreement.
2. PAYMENTS: PREPAYMENT; AND STATUS OF OBLIGATIONS.
-------------------------------------------------
(a) Principal and Interest Payments. All principal, interest and
-------------------------------
other amounts due shall be payable on the Maturity Date.
(b) Payments. The Company will make all cash payments due under
--------
this Note in immediately available funds by 11:00 a.m. Palo Alto, California
time on the date such payment is due in a manner that the Holder or other
registered holder of this Note may from time to time direct.
(c) Prepayment. Beginning on September 1, 2000, the Company may
----------
prepay this Note, in whole or in part in increments of at least $500,000 upon
sixty (60) days prior written notice to the Holder. Prepayments in part shall be
applied first to outstanding interest and second to principal.
(d) Right to Convert. At any time after month 18, the Holder shall
----------------
have the right to convert the outstanding principal and unpaid accrued interest
under this Note into shares of the Company's Common Stock pursuant to Section
5(a).
(e) Prepayment at the Option of the Holder. In the event that:
--------------------------------------
(i) The Company (A) sells all or substantially all of its assets
or intellectual property; or (B) is acquired by another entity or entities
in which fifty (50%) or more of the Company's voting shares are no longer
controlled after such acquisition by the shareholders of record entitled to
vote.
(ii) Lewis B. Kilbourne ceases for any reason to be either (i) a
regular, full-time employee of the Company, or (ii) a voting member of the
Board of Directors of the Company.
then the Company shall give the Holder written notice of such event within two
(2) business days and all amounts due and owing under this Note shall become
immediately due and payable upon written notice of demand for prepayment given
by the Holder to the Company within ninety (90) days after the date of notice.
2
<PAGE>
3. EVENTS OF DEFAULT. The occurrence of any of the following shall
-----------------
constitute an "Event of Default" under this Note as well as under the Security
----------------
Agreement:
(a) Failure to Pay. The Company fails to pay any principal,
--------------
interest or any fees when due under this Note or the Other Transaction
Documents, and such failure shall continue for a period of five (5) business
days after written notice to the Company by the Holder; or
(b) Covenant Default. The Company shall default in the performance
----------------
of any of material obligations hereunder or under any of the Other Transactions
Documents and such default shall continue unremedied for a period of fifteen
(15) business days after written notice to the Company by the Holder; or
(c) Representations and Warranties. Any representation, warranty or
------------------------------
certification made herein or in the Other Transaction Documents shall prove to
have been false or misleading in any material respect; or
(d) Voluntary Bankruptcy or Insolvency Proceedings. The Company
----------------------------------------------
shall (i) apply for or consent to the appointment of a receiver, trustee,
liquidator or custodian of itself or of a substantial part of its property, (ii)
be unable, or admit in writing its inability, to pay its debts generally as they
mature, (iii) make a general assignment for the benefit of its or any of its
creditors, (iv) be dissolved or liquidated in full or in part, (v) commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or consent to any relief or to the
appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or (vi) take any
action for the purpose of effecting any of the foregoing; or
(e) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings
------------------------------------------------
for the appointment of a receiver, trustee, liquidator or custodian of the
Company or of all or a substantial part of its property, or an involuntary case
or other proceedings seeking liquidation, reorganization or other relief with
respect to the Company or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within
sixty (60) days of commencement; or
(f) Cross-Default. The Company shall default under any other
-------------
material agreement, note, indenture, instrument or other contract pursuant to
which the Company has borrowed money and such default shall result in the holder
having accelerated the maturity of the outstanding indebtedness under such other
agreements, or the Company shall default under any material equipment lease
agreement, which shall result in the lessor having terminated the lease
arrangement.
4. NOTICE TO HOLDER; RIGHTS OF HOLDER UPON DEFAULT.
-------------------------------------------------
(a) The Company shall notify the Holder within one (1) business day
of the occurrence of any Event of Default.
3
<PAGE>
(b) Upon the occurrence and during the continuance of any Event of
Default under Sections 3(a), (b), (c) or (f) above, the Holder, by written
notice to the Company, may declare all principal and accrued and unpaid interest
outstanding to be immediately due and payable without presentment, demand,
protest or any other of any kind, all of which are waived by Company. Upon the
occurrence and during the continuance of any Event of Default described in
Sections 3(d) or (e), immediately and without notice, all outstanding amounts
payable by the Company shall automatically become immediately due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are waived by Company.
5. CONVERSION.
-----------
(a) Optional Conversion by the Holder. The Holder shall have the
----------------------------------
right after month 18 from the Effective Date but prior to the Maturity Date, by
providing written notice to the Company, to convert all but not less than all of
the outstanding principal and unpaid accrued interest under this Note into
shares of the company's common stock (the "Common Stock") at a conversion price
------------
equal to US $7.00 per share (the "Conversion Price").
----------------
(b) Mandatory Conversion by the Company. Immediately prior to the
------------------------------------
Maturity Date, the Company shall have the right, by providing written notice to
the Holder, to require conversion all but not less than all of the outstanding
principal and unpaid accrued interest under this Note into shares of the
Company's Common Stock at the Conversion Price.
(c) Mechanics and Effect of Conversion. Promptly after the
-----------------------------------
conversion of this Note, the Holder shall surrender this Note, endorsed, at the
principal office of the Company. As soon as possible (or as otherwise noted in
the provisions above) and after the Holder has executed documentation necessary
to perfect all applicable federal and state securities laws exemptions, the
Company shall issue and deliver to the Holder at its principal office a
certificate or, if the Holder so requests, certificates for the number of shares
of Common Stock to which the Holder shall be entitled upon conversion (bearing
such legends as are required by applicable federal and state securities laws in
the opinion of counsel to the Company). All such shares shall be issued and
fully assessable, free and clear of all liens.
(d) Shareholder Proxy. Company agrees to put to shareholders for
------------------
approval and vote the necessary motions to effectuate the obligations and
commitments made by Company hereunder.
6. CONVERSION ADJUSTMENTS.
-----------------------
(a) Adjustments for Stock Splits and Subdivisions. In the event the
----------------------------------------------
Company at any time from time to time after the date of issuance hereof while
this Note is outstanding fixes a record date to effect a split or subdivision of
the Company's Common Stock or other class or series of shares into which this
Note is then convertible, or the determination of holders of such class or
series of shares entitled to receive a dividend or other distribution payable in
additional shares of such class or series or other securities or rights
convertible into, or entitling the holder to receive directly or indirectly,
additional shares of such class or series other than
4
<PAGE>
options to purchase the Company's Common Stock ("Common Stock Equivalents")
------------------------
without payment of any consideration by such holder for the additional shares of
such class or series or the Common Stock Equivalents (including, if convertible
preferred stock or other convertible securities have been issued, the additional
shares of the Company's Common Stock issuable upon conversion thereof), then, as
of such record date (or the date of such dividend distribution, split or
subdivision if no record date is fixed), the Conversion Price shall be
appropriately decreased so that the number of shares of Company's Common Stock
issuable upon conversion of this Note shall be increased in proportion to such
increase of outstanding shares.
(b) Adjustments for Reverse Stock Splits. If the number of shares
-------------------------------------
of the Company's Common Stock or such other class or series of shares into which
this note is then convertible which are outstanding at any time after the
Effective Date is decreased by a combination of the outstanding shares of such
class or series, then, following the record date of such combination, the
Conversion Price shall be appropriately increased so that the number of shares
of the company's Common Stock issuable on conversion shall be appropriately
decreased in proportion to such decrease in outstanding shares.
(c) Notices of Record Date, etc. In the event of:
----------------------------
(i) Any taking by the Company of a record of the holders of any
class of securities of the Company for the purpose of determining the
holders who are entitled to receive any dividend (other than a cash
dividend payable out of earned surplus at the same rate as that of the last
such cash dividend paid) or other distribution, or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right; or
(ii) Any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or
any transfer of all or substantially all of the assets of the Company to
any other Person, or any consolidation or merger in which the Company is
not the surviving entity (except for any transaction done solely for the
purpose of changing the Company's state of incorporation); or
(iii) Any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
The Company will mail to the Holder of this Note at least ten (10)
days prior to the earliest date specified therein, a notice with (a) the date on
which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right; and (b) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up is expected to become effective and the
record date for determining shareholders entitled to vote thereon.
(d) Reservation of Stock Issuable Upon Conversion At all times the
---------------------------------------------
Company shall reserve and keep available out of its authorized but unissued
shares of capital stock such number of shares as shall from time to time be
sufficient to effect the conversion of this Note; and, if at any time the number
of authorized but unissued shares of its capital stock
5
<PAGE>
shall not be sufficient to effect the conversion of the entire outstanding
principal amount of this Note, without limitation of such other remedies as
shall be available to the holder of this Note, the Company will use its best
efforts to take such corporate action as, in the opinion of counsel, may be
necessary to increase its authorized but unissued shares of capital stock to
such number of shares as shall be sufficient for such purposes.
7. SUBORDINATION.
--------------
(a) The liens and security interest in the Company's assets that
secure payment and performance of the Company's obligations to the Holder as of
the Effective Date will be junior and subordinate to the liens and security
interests of all Senior Creditors (as defined below) which are perfected as of
the Effective Date or hereafter in the Company's assets, notwithstanding any
other priority under applicable law.
(b) As used herein, "Senior Creditors" shall mean all banks,
----------------
commercial finance lenders, insurance companies and other financial institutions
regularly engaged in the business of lending money; any equipment lessors or
financiers; and the successors and assigns of the foregoing, including without
limitation.
8. NEGATIVE COVENANTS. For so long as any amounts are outstanding under
------------------
this Note the Company shall not:
(i) Create or incur any debt in excess of (i) 80% of the
Company's then outstanding accounts receivable plus (ii) amounts used by
the Company to finance the purchase of any equipment acquired by the
Company (including without limitation through capitalized leases); and
shall not create or incur any security interest or lien on any asset now
owned or acquired except Permitted Liens (as defined in the Security
Agreement);
(ii) Without prior notice to Holder, consolidate or merge with
any other entity or person, provided that such consolidation or merger
could not reasonably be expected to have a material adverse effect upon
Holder's rights under this Note;
(iii) Without the prior consent of Holder, acquire all or
substantially all of the capital stock or assets of, or make any investment
in or loan to, any other entity or person for an aggregate amount in excess
of 15% of the Company's assets at the end of the quarter immediately prior
to such consolidation, merger, acquisition, investment or loan (excluding
from such calculation expense advances to employees in the ordinary course
of business); or
(iv) Declare or pay any dividends on any class or classes of
stock (other than stock dividends to effectuate a "stock split").
9. SUCCESSORS AND ASSIGNS. The rights and obligations of the Company and
----------------------
the Holder shall be binding upon and benefit the successors, assigns, heirs,
administrators and
6
<PAGE>
transferees of the parties. Neither the Company nor the Holder shall be entitled
to assign, transfer or delegate any of its rights, obligations or liabilities
hereunder without the prior written consent of the other party.
10. NOTICES. Any notice, request, or other communication required or
-------
permitted hereunder shall be in writing and shall be deemed to have been duly
given on the date of delivery if personally delivered, on the date of being
faxed if sent by confirmed fax, on the first business day after being sent if
sent by recognized overnight courier, and on the third business day after being
mailed if sent by registered or certified mail, postage prepaid, addressed (i)
if to the Holder to: Hewlett-Packard Company, 333 Logue Avenue, MS32, Mountain
View, CA 94043, Attention: General Manager, fax number, (650)919-8013; with a
copy to Hewlett-Packard Company, 3000 Hanover Street, MS20BQ, Palo Alto, CA
94304, Attention General Counsel, fax number (650)857-4392; or (ii) if to the
Company to: The viaLink Company, 13800 Benson Road, Suite 100, Edmond, OK 73013-
6417, Fax (405)236-2599; with a copy to Brobeck, Phleger & Harrison LLP, 301
Congress Avenue, Suite 1200, Austin, TX 78701, Attention: Matthew Lyons, Fax:
(512) 477-5813.
11. WIRE TRANSFERS. Payments made under this Note shall be made by wire
--------------
transfer to Holder to an account specified by Holder in advance.
12. USURY. In the event any interest is paid on this Note which is deemed
-----
to be in excess of the then legal maximum rate, then that portion of the
interest payment representing an amount in excess of the then legal maximum rate
shall be deemed a payment of principal and applied against the principal of this
Note.
13. GOVERNING LAW. This Note and all actions arising out of or in
-------------
connection with this Note shall be governed by and construed in accordance with
the laws of the State of California, with regard to the conflicts of law
provisions of the State of California or of any other state.
14. WAIVERS. The Company hereby waives presentment, demand, protest,
-------
notice of dishonor, diligence and all other notices, any release or discharge
arising from any extension of time, discharge of a prior party, release of any
or all of any security given from time to time for this Note, or other cause of
release or discharge other than actual payment in full hereof.
15. WAIVERS AND AMENDMENTS. No provision of this Note may be amended or
----------------------
modified without the written consent of the Company and the Holder. The Holder
shall not be deemed, by any act or omission, to have waived any of its rights or
remedies unless it is in writing and signed by the Holder and then only to the
extent specifically set forth in such writing. A waiver with reference to one
event shall not be construed as continuing or as a bar to or waiver of any right
or remedy as to a subsequent event. No delay or omission of the Holder to
exercise any right, whether before or after a default, shall impair any such
right or shall be construed to be
7
<PAGE>
a waiver of any right or default, and the acceptance at any time by Holder of
any past-due amount shall not be deemed to be a waiver of the right to require
prompt payment of any other amounts due and payable.
16. REMEDIES CUMULATIVE. The remedies of the Holder as provided herein,
-------------------
or any one or more of the, or in law or equity, shall be cumulative and
concurrent, and may be pursued singularly, successively or together in the
Holder's sole discretion, and may be exercised as often as occasion therefor
shall occur.
17. ATTORNEY'S FEES. It is expressly agreed that, if this Note is
---------------
referred to an attorney or if suit is brought to collect this Note or any part
hereof or to enforce or protect any rights conferred upon the Holder by this
Note or any other document evidencing or securing this Note (including without
limitation the Security Agreement), then the Company promises and agrees to pay
all costs, including without limitation reasonable attorney's fees, incurred by
the Holder.
[SIGNATURE PAGE FOLLOWS]
8
<PAGE>
ACCEPTED AND AGREED as of February 4, 1999:
THE VIALINK COMPANY
By:___________________________________
Name:_________________________________
Title:________________________________
HEWLETT-PACKARD COMPANY
By:___________________________________
Name:_________________________________
Title:________________________________
<PAGE>
APPENDIX D
AGREEMENT AND PLAN OF MERGER
OF
THE VIALINK COMPANY
(an OKLAHOMA CORPORATION)
AND
THE VIALINK COMPANY
(A DELAWARE CORPORATION)
This Agreement and Plan of Merger ("Agreement") is entered into on
this _____ day of _______, 1999 by and between THE VIALINK COMPANY, an Oklahoma
corporation ("viaLink Oklahoma"), and THE VIALINK COMPANY, a Delaware
----------------
corporation ("viaLink Delaware").
----------------
RECITALS:
--------
A. The Board of Directors of viaLink Oklahoma and the Board of
Directors of viaLink Delaware believe it is in the best interests of their
respective companies and the shareholders and stockholders of their respective
companies that viaLink Oklahoma and viaLink Delaware combine into a single
company through the statutory merger of viaLink Oklahoma with and into viaLink
Delaware (the "Merger") and, in furtherance thereof, have approved the Merger.
------
B. Pursuant to the Merger, among other things, each outstanding share
of the Common Stock of viaLink Oklahoma, $0.001 par value ("viaLink Oklahoma
----------------
Common Stock"), shall be converted into the right to receive one (1) share of
- ------------
viaLink Delaware's Common Stock, par value $0.001 per share ("viaLink Delaware
----------------
Common Stock").
- ------------
C. viaLink Delaware and viaLink Oklahoma desire to make certain
representations and warranties and other agreements in connection with the
Merger.
D. The parties intend, by executing this Agreement, to cause the
Merger to qualify as an exchange described in Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code").
----
NOW, THEREFORE, in consideration of the covenants and representations
set forth herein, and for other good and valuable consideration, the parties
agree as follows:
ARTICLE I.
THE MERGER
----------
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
----------
subject to and upon the terms and conditions of this Agreement, the Certificate
of Merger attached hereto as Exhibit A (the "Certificate of Merger") and the
--------- ---------------------
applicable provisions of the Delaware General Corporation Law (the "DGCL"),
----
viaLink Oklahoma shall be merged with and into viaLink Delaware, the separate
existence of viaLink Oklahoma shall cease and viaLink Delaware shall
<PAGE>
continue as the surviving entity. viaLink Delaware, as the surviving corporation
in the Merger, is hereinafter sometimes referred to as the "Surviving
---------
Corporation".
- -----------
1.2 Effective Time. The parties hereto shall cause the Merger to be
--------------
consummated by filing the Certificate of Merger with the Secretary of State of
the State of Delaware, in accordance with the relevant provisions of the DGCL
(the time of such filing being the "Effective Time").
--------------
1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
--------------------
shall be as provided in this Agreement, the Certificate of Merger to be filed
with the Secretary of State of Delaware, the Certificate of Merger to be filed
with the Secretary of State of Oklahoma, and attached as Exhibit B, and the
---------
applicable provisions of the DGCL and Oklahoma General Corporation Act. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the properties, rights, privileges, powers and franchises of viaLink
Delaware and viaLink Oklahoma shall vest in the Surviving Corporation, and all
debts, liabilities and duties of viaLink Delaware and viaLink Oklahoma shall
become the debts, liabilities and duties of the Surviving Corporation.
1.4 Certificate of Incorporation; Bylaws.
------------------------------------
(a) At the Effective Time, the Certificate of Incorporation of
viaLink Delaware, as in effect immediately prior to the Effective Time (the
"Certificate of Incorporation"), shall be the Certificate of Incorporation
of the Surviving Corporation until thereafter amended as provided by the
DGCL and such Certificate of Incorporation.
(b) The Bylaws of viaLink Delaware, as in effect immediately prior to
the Effective Time, shall be the Bylaws of the Surviving Corporation until
thereafter amended.
1.5 Directors and Officers. At the Effective Time, the directors of
----------------------
viaLink Oklahoma, as in effect immediately prior to the Effective Time, shall be
the directors of the Surviving Corporation, until their respective successors
are duly elected or appointed and qualified. The officers of viaLink Oklahoma,
as in effect immediately prior to the Effective Time, shall be the officers of
the Surviving Corporation, until their respective successors are duly elected or
appointed and qualified.
1.6 Effect on viaLink Oklahoma Common Stock and Capital Stock.
---------------------------------------------------------
(a) At the Effective Time, by virtue of the Merger and without any
action on the part of viaLink Delaware, each issued and outstanding share
of viaLink Oklahoma Common Stock shall be converted into the right to
receive, automatically and without any further action on the part of
viaLink Delaware, or their respective shareholders or stockholders, one
share of viaLink Delaware Common Stock. Promptly following the Effective
Time, viaLink Delaware shall deliver to the holders of the shares of
viaLink Oklahoma Common Stock outstanding immediately prior to the
Effective Time certificates evidencing the shares of viaLink Delaware
Common Stock issuable pursuant to this Section 1.6 in exchange for the
viaLink Oklahoma Common Stock outstanding immediately prior to the
Effective Time.
2
<PAGE>
(b) At the Effective Time, each share of viaLink Oklahoma Common
Stock issued and outstanding immediately prior to the Effective Time shall,
by virtue of the Merger and without any action on the part of the holder
thereof, automatically be canceled.
1.7 No Further Ownership Rights in viaLink Oklahoma Common Stock. All
------------------------------------------------------------
shares of viaLink Delaware Common Stock issued upon the conversion of viaLink
Oklahoma Common Stock in accordance with the terms hereof shall be deemed to
have been issued in full satisfaction of all rights pertaining to such shares of
viaLink Oklahoma Common Stock, and there shall be no further registration of
transfers on the records of the Surviving Corporation of viaLink Oklahoma Common
Stock which were outstanding immediately prior to the Effective Time.
1.8 viaLink Oklahoma Stock Options. At or prior to the Effective Time,
------------------------------
viaLink Oklahoma and viaLink Delaware shall take all action necessary to cause
the assumption by viaLink Delaware as of the Effective Time of the options to
purchase viaLink Oklahoma Common Stock outstanding as of the Effective Time (the
"Outstanding viaLink Oklahoma Options"). Each of the Outstanding viaLink
------------------------------------
Oklahoma Options shall be converted without any action on the part of the holder
thereof into an option to purchase shares of viaLink Delaware Common Stock as of
the Effective Time. The holder of an Outstanding viaLink Oklahoma Option shall
be entitled to receive upon the exercise thereof one (1) share of viaLink
Delaware Common Stock for each share of viaLink Oklahoma Common Stock subject to
such option, determined immediately before the Effective Time. The exercise
price of each share of viaLink Delaware Common Stock subject to an Outstanding
viaLink Oklahoma Option shall be equal to the exercise price per share of
viaLink Oklahoma Common Stock at which such option is exercisable immediately
before the Effective Time. The assumption and substitution of the Outstanding
viaLink Oklahoma Options as provided herein shall not give the holders of such
options additional benefits which they did not have immediately prior to the
Effective Time or relieve the holders of any obligations or restrictions
applicable to their options or the shares obtainable upon exercise of the
options. viaLink Delaware shall reserve out of its authorized but unissued
shares of viaLink Delaware Common Stock sufficient shares to provide for the
exercise of the Outstanding viaLink Oklahoma Options.
1.9 Abandonment. If, at any time up until the Effective Time, viaLink
-----------
Delaware or viaLink Oklahoma determines that it is not advisable, for any
reason, to proceed with the Merger, either party has the right to abandon this
Agreement and take no further action in connection with the Merger.
1.10 Taking of Necessary Action; Further Action. If, at any time after the
------------------------------------------
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, properties, rights, privileges,
powers and franchises of viaLink Oklahoma and viaLink Delaware, the officers and
directors of viaLink Delaware are fully authorized in the name and on behalf of
viaLink Oklahoma and viaLink Delaware to take, and will take, all such lawful
and necessary action, so long as such action is not inconsistent with this
Agreement.
[Signature Page Follows]
3
<PAGE>
IN WITNESS WHEREOF, viaLink Oklahoma and viaLink Delaware have caused this
Agreement and Plan of Merger to be executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.
THE VIALINK COMPANY, an Oklahoma corporation
By:__________________________________________
Name:________________________________________
Title:_______________________________________
THE VIALINK COMPANY, a Delaware corporation
By:__________________________________________
Name:________________________________________
Title:_______________________________________
[Signature Page to Agreement and Plan of Merger]
<PAGE>
APPENDIX E
CERTIFICATE OF INCORPORATION
OF
THE VIALINK COMPANY
ARTICLE I.
The name of this Corporation shall be The viaLink Company.
ARTICLE II.
The address of the registered office of the Corporation in the State
of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle,
State of Delaware. The name of the registered agent at that address is The
Corporation Trust Company.
ARTICLE III.
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
ARTICLE IV.
The name and mailing address of the incorporator of the Corporation is:
John M. Duck
13800 Benson Road
Edmond, Oklahoma 73013-6417.
ARTICLE V.
A. Authorized Shares. The aggregate number of shares that the
-----------------
Corporation shall have authority to issue is 60,000,000, (i) 50,000,000 shares
of which shall be Common Stock, par value $0.001 per share, and 10,000,000 of
which shall be Preferred Stock, par value $0.001 per share.
B. Common Stock. Each share of Common Stock shall have one vote on
------------
each matter submitted to a vote of the stockholders of the Corporation. Subject
to the provisions of applicable law and the rights of the holders of the
outstanding shares of Preferred Stock, the holders of shares of Common Stock
shall be entitled to receive, when and as declared by the Board of Directors of
the Corporation, out of the assets of the Corporation legally available
therefor, dividends or other distributions, whether payable in cash, property or
securities of the Corporation. The holders of shares of Common Stock shall be
entitled to receive, in proportion to the number of shares of Common Stock held,
the net assets of the Corporation upon
<PAGE>
dissolution after any preferential amounts required to be paid or distributed to
holders of outstanding shares of Preferred Stock, if any, are so paid or
distributed.
C. Preferred Stock. The Preferred Stock may be issued from time to
---------------
time by the Board of Directors as shares of one or more series. The description
of shares of each additional series of Preferred Stock, including any
designations, preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption shall be as set forth in resolutions adopted by the
Board of Directors.
The Board of Directors is expressly authorized, at any time, by
adopting resolutions providing for the issuance of, or providing for a change in
the number of, shares of any particular series of Preferred Stock and, if and to
the extent from time to time required by law, by filing certificates of
amendment or designation which are effective without stockholder action, to
increase or decrease the number of shares included in each series of Preferred
Stock, but not below the number of shares then issued, and to set in any one or
more respects the designations, preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications, or terms and
conditions of redemption relating to the shares of each such series. The
authority of the Board of Directors with respect to each series of Preferred
Stock shall include, but not be limited to, setting or changing the following:
a. the dividend rate, if any, on shares of such series, the times of
payment and the date from which dividends shall be accumulated, if
dividends are to be cumulative;
b. whether the shares of such series shall be redeemable and, if so,
the redemption price and the terms and conditions of such redemption;
c. the obligation, if any, of the Corporation to redeem shares of
such series pursuant to a sinking fund;
d. whether shares of such series shall be convertible into, or
exchangeable for, shares of stock of any other class of classes and,
if so, the terms and conditions of such conversion or exchange,
including the price or prices or the rate or rates of conversion or
exchange and the terms of adjustment, if any;
e. whether the shares of such series shall have voting rights, in
addition to the voting rights provided by law, and, if so, the extent
of such voting rights;
f. the rights of the shares of such series in the event of voluntary
or involuntary liquidation, dissolution or winding-up of the
Corporation; and
g. any other relative rights, powers, preferences, qualifications,
limitations or restrictions thereof relating to such series.
ARTICLE VI.
The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors. The number of directors
which shall constitute the
<PAGE>
whole Board of Directors shall be fixed by, or in the manner provided in, the
Bylaws of the Corporation.
ARTICLE VII.
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any improper
personal benefit. If the Delaware General Corporation Law is amended after
approval by the stockholders of this Article to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law as so amended.
ARTICLE VIII.
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.
ARTICLE IX.
Election of directors at an annual or special meeting of stockholders
need not be by written ballot unless the Bylaws of the Corporation shall so
provide.
ARTICLE X.
A. At each annual meeting of stockholders, directors of the
Corporation shall be elected to hold office until the expiration of the term for
which they are elected, and until their successors have been duly elected and
qualified; except that if any such election shall not be so held, such election
shall take place at a stockholders' meeting called and held in accordance with
the Delaware General Corporation Law. At such time as the Company becomes
subject to the reporting requirements of Sections 12(g) and 15(d) of the
Securities Exchange Act of 1934, the directors of the Corporation shall be
divided into three classes as nearly equal in size as is practicable, hereby
designated as Class I, Class II and Class III. The term of office of the initial
Class I directors shall expire at the 2000 annual meeting of stockholders, the
term of office of the initial Class II directors shall expire at the second
succeeding annual meeting of stockholders and the term of office of the initial
Class III directors shall expire at the third succeeding annual meeting of
stockholders. For the purposes hereof, the initial Class I, Class II and Class
III directors shall be designated by the Board of Directors or in the Bylaws of
the Corporation. At each annual meeting directors to replace those of a Class
whose terms expire at such annual meeting shall be elected to hold office until
the third succeeding annual meeting and until their respective successors shall
have been duly elected and qualified. If the number of directors is hereafter
changed, any newly created directorships or decrease in directorships shall be
so apportioned among the classes as to make all classes as nearly equal in
number as is practicable.
<PAGE>
B. Vacancies occurring on the Board of Directors for any reason may
be filled by vote of a majority of the remaining members of the Board of
Directors, although less than a quorum, at a meeting of the Board of Directors.
A person so elected by the Board of Directors to fill a vacancy shall hold
office until the next succeeding annual meeting of stockholders of the
Corporation and until his or her successor shall have been duly elected and
qualified.
ARTICLE XI.
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend or
repeal the Bylaws of the Corporation.
ARTICLE XII.
Stockholders of the Corporation may not take action by written consent
in lieu of a meeting but must take any actions at a duly called annual or
special meeting.
ARTICLE XIII.
Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of the
capital stock required by law or this Certificate of Incorporation, the
affirmative vote of the holders of at least two-thirds (2/3) of the combined
voting power of all of the then-outstanding shares of the Corporation entitled
to vote shall be required to alter, amend or repeal Articles X, XII or XIII or
any provisions thereof.
ARTICLE XIV.
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred on stockholders
herein are granted subject to this reservation.
[Signature page follows]
<PAGE>
THE UNDERSIGNED, being the incorporator named herein, for the purpose
of forming a corporation to do business both within and without the State of
Delaware and pursuant to the General Corporation Law of the State of Delaware,
does make and file this Certificate of Incorporation of The viaLink Company,
hereby declaring and certifying that the facts herein stated are true, and
accordingly has hereunto set his hand this ___ day of ______, 1999.
___________________________________
John M. Duck
Incorporator
[SIGNATURE PAGE TO CERTIFICATE OF INCORPORATION]
<PAGE>
APPENDIX F
BYLAWS
OF
THE VIALINK COMPANY,
a Delaware corporation
_______________, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I OFFICES................................................................................... 1
Section 1.1 Registered Office......................................................... 1
Section 1.2 Other Offices............................................................. 1
ARTICLE II CORPORATE SEAL............................................................................ 1
ARTICLE III STOCKHOLDERS' MEETINGS.................................................................... 1
Section 3.1 Place of Meetings......................................................... 1
Section 3.2 Annual Meeting............................................................ 2
Section 3.3 Special Meetings.......................................................... 3
Section 3.4 Notice of Meetings........................................................ 3
Section 3.5 Quorum.................................................................... 4
Section 3.6 Adjournment and Notice of Adjourned Meetings.............................. 4
Section 3.7 Voting Rights............................................................. 4
Section 3.8 Joint Owners of Stock..................................................... 5
Section 3.9 List of Stockholders...................................................... 5
Section 3.10 No Action Without Meeting................................................. 5
Section 3.11 Organization.............................................................. 5
ARTICLE IV DIRECTORS................................................................................. 6
Section 4.1 Number and Term of Office; Classification................................. 6
Section 4.2 Powers.................................................................... 7
Section 4.3 Vacancies................................................................. 7
Section 4.4 Resignation............................................................... 7
Section 4.5 Removal................................................................... 7
Section 4.6 Meetings.................................................................. 8
(a) Annual Meetings................................................... 8
--- ---------------
(b) Regular Meetings.................................................. 8
--- ----------------
(c) Special Meetings.................................................. 8
--- ----------------
(d) Telephone Meetings................................................ 8
--- ------------------
(e) Notice of Meetings................................................ 8
--- ------------------
(f) Waiver of Notice.................................................. 8
--- ----------------
Section 4.7 Quorum and Voting......................................................... 9
Section 4.8 Action Without Meeting.................................................... 9
Section 4.9 Fees and Compensation..................................................... 9
Section 4.10 Committees................................................................ 9
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
(a) Executive Committee............................................ 9
--- -------------------
(b) Other Committees............................................... 10
--- ----------------
(c) Term........................................................... 10
--- ----
(d) Meetings....................................................... 10
--- --------
Section 4.11 Organization........................................................... 11
ARTICLE V OFFICERS............................................................................. 11
Section 5.1 Officers Designated.................................................... 11
Section 5.2 Tenure and Duties of Officers.......................................... 11
(a) General........................................................ 11
--- -------
(b) Duties of Chairman of the Board of Directors................... 11
--- --------------------------------------------
(c) Powers and Duties of the Vice Chairman of the Board............ 12
--- ---------------------------------------------------
(d) Duties of the Chief Executive and Chief Operating Officers..... 12
--- ----------------------------------------------------------
(e) Duties of President............................................ 12
--- -------------------
(f) Duties of Vice Presidents...................................... 13
--- -------------------------
(g) Duties of Secretary............................................ 13
--- -------------------
(h) Assistant Secretaries.......................................... 13
--- ---------------------
(i) Duties of Treasurer............................................ 13
--- -------------------
(j) Assistant Treasurers........................................... 14
--- --------------------
Section 5.3 Delegation of Authority................................................ 14
Section 5.4 Resignations........................................................... 14
Section 5.5 Removal................................................................ 14
ARTICLE VI EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF
SECURITIES OWNED BY THE CORPORATION.................................................. 15
Section 6.1 Execution of Corporate Instruments..................................... 15
Section 6.2 Voting of Securities Owned by the Corporation.......................... 15
ARTICLE VII SHARES OF STOCK...................................................................... 16
Section 7.1 Form and Execution of Certificates..................................... 16
Section 7.2 Lost Certificates...................................................... 16
Section 7.3 Transfers.............................................................. 16
Section 7.4 Fixing Record Dates.................................................... 17
Section 7.5 Registered Stockholders................................................ 17
ARTICLE VIII OTHER SECURITIES OF THE CORPORATION.................................................. 17
Section 8.1 Execution of Other Securities.......................................... 17
ARTICLE IX DIVIDENDS............................................................................ 18
Section 9.1 Declaration of Dividends............................................... 18
Section 9.2 Dividend Reserve....................................................... 18
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ARTICLE X FISCAL YEAR.............................................................................. 18
ARTICLE XI INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENTS...................... 19
Section 11.1 Directors and Executive Officers.......................................... 19
Section 11.2 Other Officers, Employees and Other Agents................................ 19
Section 11.3 Good Faith................................................................ 19
Section 11.4 Expenses.................................................................. 20
Section 11.5 Enforcement............................................................... 20
Section 11.6 Non-Exclusivity of Rights................................................. 21
Section 11.7 Survival of Rights........................................................ 21
Section 11.8 Insurance................................................................. 21
Section 11.9 Amendments................................................................ 21
Section 11.10 Savings Clause............................................................ 21
Section 11.11 Certain Definitions....................................................... 21
ARTICLE XII NOTICES.................................................................................. 22
Section 12.1 Notice to Stockholders.................................................... 22
Section 12.2 Notice to Directors....................................................... 22
Section 12.3 Address Unknown........................................................... 23
Section 12.4 Affidavit of Mailing...................................................... 23
Section 12.5 Time Notices Deemed Given................................................. 23
Section 12.6 Failure to Receive Notice................................................. 23
Section 12.7 Notice to Person with Whom Communication Is Unlawful...................... 23
Section 12.8 Notice to Person with Undeliverable Address............................... 24
ARTICLE XIII AMENDMENTS............................................................................... 24
Section 13.1 Amendments................................................................ 24
Section 13.2 Application of Bylaws..................................................... 24
ARTICLE XIV LOANS TO OFFICERS........................................................................ 24
ARTICLE XV ANNUAL REPORT............................................................................ 25
</TABLE>
iii
<PAGE>
BYLAWS
OF
THE VIALINK COMPANY,
A DELAWARE CORPORATION
- --------------------------------------------------------------------------------
ARTICLE I
OFFICES
-------
SECTION 1.1 REGISTERED OFFICE. The registered office of the corporation
-----------------
shall be the registered office named in the certificate of incorporation of the
corporation, or such other office as may be designated from time to time by the
Board of Directors in the manner provided by law.
SECTION 1.2 OTHER OFFICES. The corporation may have offices at such other
-------------
places both within and without the State of Delaware as the Board of Directors
may from time to time determine or the business of the corporation may require.
The books of the corporation may be kept (subject to any provision contained in
the Delaware General Corporation Law) outside the State of Delaware at such
place or places as may be designated from time to time by the Board of Directors
or in these Bylaws.
ARTICLE II
CORPORATE SEAL
--------------
The corporate seal shall consist of a die bearing the name of the
corporation. Said seal may be used by causing it, or a facsimile thereof, to be
impressed or affixed or reproduced or otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
----------------------
SECTION 3.1 PLACE OF MEETINGS. Meetings of the stockholders of the
-----------------
corporation shall be held at such place, either within or without the State of
Delaware, as may be designated from time to time by the Board of Directors, or,
if not so designated, then at the principal executive offices of the
corporation.
<PAGE>
SECTION 3.2 ANNUAL MEETING.
--------------
(a) The annual meeting of the stockholders of the corporation, for
the purpose of election of Directors and for such other business as may lawfully
come before it, shall be held on such date and at such time as may be designated
from time to time by the Board of Directors.
(b) At an annual meeting of the stockholders, only such business
shall be conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be: (A) specified in
the notice of meeting (or any supplement thereto) given by or at the direction
of the Board of Directors; (B) otherwise properly brought before the meeting by
or at the direction of the Board of Directors; or (C) otherwise properly brought
before the meeting by a stockholder. For business to be properly brought before
an annual meeting by a stockholder, the stockholder must have given timely
notice thereof in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation not less than one hundred twenty
(120) calendar days in advance of the date of the Notice of Annual Meeting
released to stockholders in connection with the previous year's annual meeting
of stockholders; provided, however, that in the event that no annual meeting was
held in the previous year or the date of the annual meeting has been changed by
more than thirty (30) days from the date contemplated at the time of the
previous year's Notice of Annual Meeting, notice by the stockholder to be timely
must be so received a reasonable time before the Notice of Annual Meeting is
released to stockholders. A stockholder's notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting: (i) a brief description of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting; (ii) the name and address, as they appear on the corporation's books,
of the stockholder proposing such business; (iii) the class and number of shares
of the corporation which are beneficially owned by the stockholder; (iv) any
material interest of the stockholder in such business; and (v) any other
information that is required to be provided by the stockholder pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the "1934
----
Act"), in such stockholder's capacity as a proponent of a stockholder proposal.
- ---
Notwithstanding anything in these Bylaws to the contrary, no business shall be
conducted at any annual meeting except in accordance with the procedures set
forth in this paragraph. The chairman of the annual meeting shall, if the facts
warrant, determine and declare at the meeting that business was not properly
brought before the meeting and in accordance with the provisions of this
paragraph, and, if the chairman should so determine, the chairman shall so
declare at the meeting that any such business not properly brought before the
meeting shall not be transacted.
(c) Only persons who are nominated in accordance with the
procedures set forth in this paragraph shall be eligible for election as
Directors. Nominations of persons for election to the Board of Directors of the
corporation may be made at a meeting of stockholders by or at the direction of
the Board of Directors or by any stockholder of the corporation entitled to vote
in the election of Directors at the meeting who complies with the notice
procedures set forth in this paragraph. Such nominations, other than those made
by or at the direction of the Board of Directors, shall be made pursuant to
timely notice in writing to the Secretary of the corporation in accordance with
the provisions of paragraph (b) of this Section 3.2. Such stockholder's notice
shall set forth (i) as to each person, if any, whom the stockholder proposes
2
<PAGE>
to nominate for election or re-election as a Director: (A) the name, age,
business address and residence address of such person; (B) the principal
occupation or employment of such person; (C) the class and number of shares of
the corporation which are beneficially owned by such person; (D) a description
of all arrangements or understandings between the stockholder and each nominee
and any other person or persons (naming such person or persons) pursuant to
which the nominations are to be made by the stockholder; and (E) any other
information relating to such person that is required to be disclosed in
solicitations of proxies for election of Directors, or is otherwise required in
each case pursuant to Regulation 14A under the 1934 Act (including without
limitation such person's written consent to being named in the proxy statement,
if any, as a nominee and to serving as a Director if elected); and (ii) as to
such stockholder giving notice, the information required to be provided pursuant
to paragraph (b) of this Section 3.2. At the request of the Board of Directors,
any person nominated by a stockholder for election as a Director shall furnish
to the Secretary of the corporation that information required to be set forth in
the stockholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a Director of the corporation unless nominated
in accordance with the procedures set forth in this paragraph. The chairman of
the meeting shall, if the facts warrant, determine and declare at the meeting
that a nomination was not made in accordance with the procedures prescribed by
these Bylaws, and if the chairman should so determine, the chairman shall so
declare at the meeting, and the defective nomination shall be disregarded.
SECTION 3.3 SPECIAL MEETINGS.
----------------
(a) Special meetings of the stockholders of the corporation may
only be called, for any purpose or purposes, by (i) the Chairman of the Board of
Directors, (ii) the President or (iii) the Board of Directors pursuant to a
resolution adopted by a majority of the total number of authorized directors
(whether or not there exist any vacancies in previously authorized directorships
at the time any such resolution is presented to the Board of Directors for
adoption).
(b) If a special meeting is called pursuant to paragraph (a) above
by any person or persons other than the Board of Directors, the request shall be
in writing, specifying the general nature of the business proposed to be
transacted, and shall be delivered personally or sent by registered mail or by
telegraphic or other facsimile transmission to the Chairman of the Board of
Directors, the President, or the Secretary of the corporation. No business may
be transacted at such special meeting otherwise than specified in such notice.
The Board of Directors shall determine the time and place of such special
meeting, which shall be held not less than thirty-five (35) nor more than one
hundred twenty (120) days after the date of the receipt of the request. Upon
determination of the time and place of the meeting, the officer receiving the
request shall cause notice to be given to the stockholders entitled to vote, in
accordance with the provisions of Section 3.4 of these Bylaws. If the notice is
not given within sixty (60) days after the receipt of the request, the person or
persons requesting the meeting may set the time and place of the meeting and
give the notice. Nothing contained in this paragraph (b) shall be construed as
limiting, fixing or affecting the time when a meeting of stockholders called by
action of the Board of Directors may be held.
SECTION 3.4 NOTICE OF MEETINGS. Except as otherwise provided by law or
------------------
the certificate of incorporation of the corporation, as the same may be amended
or restated from time
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to time and including any certificates of designation thereunder (hereinafter,
the "Certificate of Incorporation"), written notice of each meeting of
----------------------------
stockholders shall be given not less than ten (10) nor more than sixty (60) days
before the date of the meeting to each stockholder entitled to vote at such
meeting, such notice to specify the place, date, time and purpose or purposes of
the meeting. Notice of any meeting of stockholders may be waived in writing,
signed by the person entitled to notice thereof, either before or after such
meeting, and will be waived by any stockholder by his attendance thereat in
person or by proxy, except when the stockholder attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Any stockholder so waiving notice of such meeting shall be bound by
the proceedings of any such meeting in all respects as if due notice thereof had
been given.
SECTION 3.5 QUORUM. At all meetings of stockholders, except where
------
otherwise provided by statute or by the Certificate of Incorporation, or by
these Bylaws, the presence, in person or by proxy duly authorized, of the
holders of a majority of the outstanding shares of stock entitled to vote shall
constitute a quorum for the transaction of business. In the absence of a quorum,
any meeting of stockholders may be adjourned, from time to time, either by the
chairman of the meeting or by vote of the holders of a majority of the shares
represented thereat, but no other business shall be transacted at such meeting.
The stockholders present at a duly called or convened meeting, at which a quorum
is present, may continue to transact business until adjournment, notwithstanding
the withdrawal of enough stockholders to leave less than a quorum. Except as
otherwise provided by law, the Certificate of Incorporation or these Bylaws, all
action taken by the holders of a majority of the votes cast, excluding
abstentions, at any meeting at which a quorum is present shall be valid and
binding upon the corporation; provided, however, that Directors shall be elected
by a plurality of the votes of the shares present in person or represented by
proxy at the meeting and entitled to vote on the election of Directors. Where a
separate vote by a class or classes is required, a majority of the outstanding
shares of such class or classes, present in person or represented by proxy,
shall constitute a quorum entitled to take action with respect to that vote on
that matter and the affirmative vote of the majority (plurality, in the case of
the election of Directors) of shares of such class or classes present in person
or represented by proxy at the meeting shall be the act of such class.
SECTION 3.6 ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS. Any meeting of
--------------------------------------------
stockholders, whether annual or special, may be adjourned from time to time
either by the chairman of the meeting or by the vote of a majority of the shares
casting votes, excluding abstentions. When a meeting is adjourned to another
time or place, notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken. At
the adjourned meeting, the corporation may transact any business which might
have been transacted at the original meeting. If the adjournment is for more
than thirty (30) days or if after the adjournment a new record date is fixed for
the adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
SECTION 3.7 VOTING RIGHTS. For the purpose of determining those
-------------
stockholders entitled to vote at any meeting of the stockholders, except as
otherwise provided by law, only persons in whose names shares stand on the stock
records of the corporation on the record date, as provided in Section 3.9 of
these Bylaws, shall be entitled to vote at any meeting of
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stockholders. Every person entitled to vote or execute consents shall have the
right to do so either in person or by an agent or agents authorized by a written
proxy executed by such person or his duly authorized agent, which proxy shall be
filed with the Secretary at or before the meeting at which it is to be used. An
agent so appointed need not be a stockholder. No proxy shall be voted after
three (3) years from its date of creation unless the proxy provides for a longer
period. Elections of Directors need not be by written ballot, unless otherwise
provided in the Certificate of Incorporation.
SECTION 3.8 JOINT OWNERS OF STOCK. If shares or other securities having
---------------------
voting power stand of record in the names of two (2) or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in common, tenants
by the entirety, or otherwise, or if two (2) or more persons have the same
fiduciary relationship respecting the same shares, unless the Secretary is given
written notice to the contrary and is furnished with a copy of the instrument or
order appointing them or creating the relationship wherein it is so provided,
their acts with respect to voting shall have the following effect: (a) if only
one (1) votes, his act binds all; (b) if more than one (1) votes, the act of the
majority so voting binds all; or (c) if more than one (1) votes, but the vote is
evenly split on any particular matter, each faction may vote the securities in
question proportionally, or may apply to the Delaware Court of Chancery for
relief as provided in the General Corporation Law of Delaware, Section 217(b).
If the instrument filed with the Secretary shows that any such tenancy is held
in unequal interests, a majority or even-split for the purpose of clause (c)
shall be a majority or even-split in interest.
SECTION 3.9 LIST OF STOCKHOLDERS. The Secretary shall prepare and make,
--------------------
at least ten (10) days before every meeting of stockholders, a complete list of
the stockholders entitled to vote at said meeting, arranged in alphabetical
order, showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not
specified, at the place where the meeting is to be held. The list shall be
produced and kept at the time and place of meeting during the whole time thereof
and may be inspected by any stockholder who is present.
SECTION 3.10 NO ACTION WITHOUT MEETING. The stockholders of the
-------------------------
corporation may not take action by written consent without a meeting and must
take any actions at a duly called annual or special meeting.
SECTION 3.11 ORGANIZATION.
------------
(a) At every meeting of stockholders, unless another officer of
the corporation has been appointed by the Board of Directors, the Chairman of
the Board of Directors, or, if a Chairman has not been appointed, is absent, or
designates the next senior officer present to so act, the President, or, if the
President is absent, the most senior Vice President present, or, in the absence
of any such officer, a chairman of the meeting chosen by a majority in interest
of the stockholders entitled to vote, present in person or by proxy, shall act
as chairman. The Secretary,
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or, in his absence, an Assistant Secretary directed to do so by the President,
shall act as secretary of the meeting.
(b) The Board of Directors of the corporation shall be entitled to
make such rules or regulations for the conduct of meetings of stockholders as it
shall deem necessary, appropriate or convenient. Subject to such rules and
regulations of the Board of Directors, if any, the chairman of the meeting shall
have the right and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are necessary,
appropriate or convenient for the proper conduct of the meeting, including,
without limitation, establishing an agenda or order of business for the meeting,
rules and procedures for maintaining order at the meeting and the safety of
those present, limitations on participation in such meeting to stockholders of
record of the corporation and their duly authorized and constituted proxies and
such other persons as the chairman shall permit, restrictions on entry to the
meeting after the time fixed for the commencement thereof, limitations on the
time allotted to questions or comments by participants and regulation of the
opening and closing of the polls for balloting on matters which are to be voted
on by ballot. Unless and to the extent determined by the Board of Directors or
the chairman of the meeting, meetings of stockholders shall not be required to
be held in accordance with rules of parliamentary procedure.
ARTICLE IV
DIRECTORS
---------
SECTION 4.1 NUMBER AND TERM OF OFFICE; CLASSIFICATION.
-----------------------------------------
(a) The number of directors which shall constitute the whole Board
of Directors shall be determined from time to time by the Board of Directors
(provided that no decrease in the number of directors which would have the
effect of shortening the term of an incumbent director may be made by the Board
of Directors), provided that the number of directors shall be not less than one
(1). At each annual meeting of stockholders, Directors of the corporation shall
be elected to hold office until the expiration of the term for which they are
elected, and until their successors have been duly elected and qualified or
until such Director's earlier death, resignation or due removal; except that if
any such election shall not be so held, such election shall take place at a
stockholders' meeting called and held in accordance with the Delaware General
Corporation Law. Directors need not be stockholders unless so required by the
Certificate of Incorporation. If, for any reason, the Directors shall not have
been elected at an annual meeting, they may be elected as soon thereafter as
convenient at a special meeting of the stockholders called for that purpose in
the manner provided in these Bylaws.
(b) Effective as of the date on which the corporation becomes
subject to the reporting requirements of Sections 12(g) and 15(d) of the
Securities Exchange Act of 1934, the Directors of the corporation shall be
divided into three classes as nearly equal in size as is practicable, hereby
designated Class I, Class II and Class III. The initial Class I, Class II and
Class III directors shall be those directors designated and elected by the Board
of Directors. The term of office of the initial Class I directors shall expire
at the 2000 annual meeting of stockholders, the term of office of the initial
Class II directors shall expire at the second
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succeeding annual meeting of stockholders, and the term of office of the initial
Class III directors shall expire at the third succeeding annual meeting of
stockholders. At each annual meeting of stockholders directors to replace those
of the Class whose terms expire at such annual meeting shall be elected to hold
office until the third succeeding annual meeting and until their respective
successors shall have been duly elected and qualified. If the number of
directors is hereafter changed, any newly created directorships or decrease in
directorships shall be so apportioned among the classes as to make all classes
as nearly equal in number as is practicable.
SECTION 4.2 POWERS. The powers of the corporation shall be exercised, its
------
business conducted and its property controlled by the Board of Directors, except
as may be otherwise provided by statute or by the Certificate of Incorporation.
SECTION 4.3 VACANCIES. Vacancies occurring on the Board of Directors for
---------
any reason may be filled by vote of a majority of the remaining members of the
Board of Directors, although less than a quorum, at any meeting of the Board of
Directors, or by a sole remaining Director. Each Director so elected shall hold
office for the unexpired portion of the term of the Director whose place shall
be vacant and until his or her successor shall have been duly elected and
qualified or until such Director's earlier death, resignation or due removal. A
vacancy in the Board of Directors shall be deemed to exist under this Section
4.3 in the case of the death, removal or resignation of any Director, or if the
stockholders fail at any meeting of stockholders at which Directors are to be
elected (including any meeting referred to in Section 4.6 below) to elect the
number of Directors then constituting the whole Board of Directors.
SECTION 4.4 RESIGNATION. Any Director may resign at any time by
-----------
delivering his or her written resignation to the Secretary, such resignation to
specify whether it will be effective at a particular time, upon receipt by the
Secretary or at the pleasure of the Board of Directors. If no such specification
is made, it shall be deemed effective at the pleasure of the Board of Directors.
When one or more Directors shall resign from the Board of Directors, effective
at a future date, a majority of the Directors then in office, including those
who have so resigned, shall have power to fill such vacancy or vacancies, the
vote thereon to take effect when such resignation or resignations shall become
effective, and each Director so chosen shall hold office for the unexpired
portion of the term of the Director whose place shall be vacated and until his
successor shall have been duly elected and qualified.
SECTION 4.5 REMOVAL. At a special meeting of stockholders called for such
-------
purpose and in the manner provided herein, subject to any limitations imposed by
law or the Certificate of Incorporation, the Board of Directors, or any
individual Director, may only be removed from office for cause, and a new
Director or Directors shall be elected by a vote of stockholders holding a
majority of the outstanding shares entitled to vote at an election of Directors.
SECTION 4.6 MEETINGS.
--------
(a) Annual Meetings. Unless the Board shall determine otherwise,
---------------
the annual meeting of the Board of Directors shall be held immediately before or
after the annual meeting of stockholders and at the place where such meeting is
held. No notice of an annual meeting of the
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Board of Directors shall be necessary and such meeting shall be held for the
purpose of electing officers and transacting such other business as may lawfully
come before it.
(b) Regular Meetings. Except as hereinafter otherwise provided,
----------------
regular meetings of the Board of Directors shall be held in the principal
executive offices of the corporation. Unless otherwise restricted by the
Certificate of Incorporation, regular meetings of the Board of Directors may
also be held at any place within or without the State of Delaware which has been
designated by resolution of the Board of Directors or the written consent of all
directors.
(c) Special Meetings. Unless otherwise restricted by the
----------------
Certificate of Incorporation, and subject to the notice requirements contained
herein, special meetings of the Board of Directors may be held at any time and
place within or without the State of Delaware whenever called by the Chairman of
the Board, the President or any two of the Directors.
(d) Telephone Meetings. Any member of the Board of Directors, or
------------------
of any committee thereof, may participate in a meeting by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
by such means shall constitute presence in person at such meeting.
(e) Notice of Meetings. Written notice of the time and place of
------------------
all special meetings of the Board of Directors shall be given at least one (1)
day before the date of the meeting. Such notice need not state the purpose or
purposes of such meeting, except as may otherwise be required by law or provided
for in the Certificate of Incorporation or these Bylaws. Notice of any meeting
may be waived in writing at any time before or after the meeting and will be
deemed waived by any Director by attendance thereat, except when the Director
attends the meeting solely for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened.
(f) Waiver of Notice. The transaction of all business at any
----------------
meeting of the Board of Directors, or any committee thereof, however called or
noticed, or wherever held, shall be as valid as though had at a meeting duly
held after regular call and notice, if a quorum be present and if, either before
or after meeting, each of the Directors not present shall sign a written waiver
of notice, or a consent to holding such meeting, or an approval of the minutes
thereof. All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
SECTION 4.7 QUORUM AND VOTING.
-----------------
(a) Unless the Certificate of Incorporation requires a greater
number and except with respect to indemnification questions arising under
Article XI hereof, for which a quorum shall be one-third of the exact number of
Directors fixed from time to time in accordance with Section 4.1 hereof, but not
less than one (1), a quorum of the Board of Directors shall consist of a
majority of the exact number of directors fixed from time to time in accordance
with Section 4.1 of these Bylaws, but not less than one (1); provided, however,
at any meeting whether a quorum be present or otherwise, a majority of the
Directors present may adjourn from
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time to time until the time fixed for the next regular meeting of the Board of
Directors, without notice other than by announcement at the meeting.
(b) At each meeting of the Board of Directors at which a quorum is
present, all questions and business shall be determined by a vote of the
majority of the Directors present, unless a different vote is required by law,
the Certificate of Incorporation or these Bylaws.
SECTION 4.8 ACTION WITHOUT MEETING. Unless otherwise restricted by the
----------------------
Certificate of Incorporation or these Bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and such writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee.
SECTION 4.9 FEES AND COMPENSATION. Directors shall be entitled to such
---------------------
compensation for their services as may be approved by the Board of Directors,
including, if so approved, by resolution of the Board of Directors, a fixed sum
and expenses of attendance, if any, for attendance at each regular or special
meeting of the Board of Directors and at any meeting of a committee of the Board
of Directors. Nothing herein contained shall be construed to preclude any
Director from serving the corporation in any other capacity as an officer,
agent, employee, or otherwise and receiving compensation therefor.
SECTION 4.10 COMMITTEES.
----------
(a) Executive Committee. The Board of Directors may by resolution
-------------------
passed by a majority of the whole Board of Directors appoint an Executive
Committee to consist of one (1) or more members of the Board of Directors. The
Executive Committee, to the extent permitted by law and specifically granted by
the Board of Directors, shall have, and may exercise when the Board of Directors
is not in session, all powers of the Board of Directors in the management of the
business and affairs of the corporation except such committee shall not have the
power or authority to amend the Certificate of Incorporation, to adopt an
agreement of merger or consolidation, to recommend to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, to recommend to the stockholders of the corporation a dissolution of the
corporation or a revocation of a dissolution, or to amend these Bylaws.
(b) Other Committees. The Board of Directors may, by resolution
----------------
passed by a majority of the whole Board of Directors, from time to time appoint
such other committees as may be permitted by law. Such other committees
appointed by the Board of Directors shall consist of one (1) or more members of
the Board of Directors and shall have such powers and perform such duties as may
be prescribed by the resolution or resolutions creating such committees, but in
no event shall such committee have the powers denied to the Executive Committee
in these Bylaws.
(c) Term. Each member of a committee of the Board of Directors
----
shall serve a term on the committee coexistent with such member's term on the
Board of Directors. The Board of Directors, subject to the provisions of
paragraphs (a) and (b) of this Section 4.10 may at
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any time increase or decrease the number of members of a committee or terminate
the existence of a committee. The membership of a committee member shall
terminate on the date of his or her death or voluntary resignation from the
committee or from the Board of Directors. The Board of Directors may at any time
for any reason remove any individual committee member and the Board of Directors
may fill any committee vacancy created by death, resignation, removal or
increase in the number of members of the committee. The Board of Directors may
designate one or more Directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee, and,
in addition, in the absence or disqualification of any member of a committee,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member.
(d) Meetings. Unless the Board of Directors shall otherwise
--------
provide, regular meetings of the Executive Committee or any other committee
appointed pursuant to this Section 4.10 shall be held at such times and places
as are determined by the Board of Directors, or by any such committee, and when
notice thereof has been given to each member of such committee, no further
notice of such regular meetings need be given thereafter. Special meetings of
any such committee may be held at any place which has been determined from time
to time by such committee, and may be called by any Director who is a member of
such committee, upon written notice to the members of such committee of the time
and place of such special meeting given in the manner provided for the giving of
written notice to members of the Board of Directors of the time and place of
special meetings of the Board of Directors. Notice of any special meeting of any
committee may be waived in writing at any time before or after the meeting and
will be waived by any Director by attendance thereat, except when the Director
attends such special meeting solely for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. A majority of the authorized number of
members of any such committee shall constitute a quorum for the transaction of
business, and the act of a majority of those present at any meeting at which a
quorum is present shall be the act of such committee.
SECTION 4.11 ORGANIZATION. The Chairman of the Board shall preside at
------------
every meeting of the Board of Directors, if present. In the case of any meeting,
if there is no Chairman of the Board or if the Chairman is not present, the Vice
Chairman (if there be one) shall preside, or if there be no Vice Chairman or if
the Vice Chairman is not present, a chairman chosen by a majority of the
directors present shall act as chairman of such meeting. The Secretary of the
corporation or, in the absence of the Secretary, any person appointed by the
Chairman shall act as secretary of the meeting.
ARTICLE V
OFFICERS
--------
SECTION 5.1 OFFICERS DESIGNATED. The officers of the corporation shall
-------------------
include, if and when designated by the Board of Directors, a Chairman of the
Board of Directors, a President, one or more executive and non-executive Vice
Presidents (any one or more of which executive
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Vice Presidents may be designated as Executive Vice President or Senior Vice
President or a similar title), a Secretary and a Treasurer. The Board of
Directors may, at its discretion, create additional officers and assign such
duties to those offices as it may deem appropriate from time to time, which
offices may include a Vice Chairman of the Board of Directors, a Chief Executive
Officer, a Chief Operating Officer, a Chief Financial Officer one or more
Assistant Secretaries and Assistant Treasurers, and one or more other officers
which may be created at the discretion of the Board of Directors. Any one person
may hold any number of offices of the corporation at any one time unless
specifically prohibited therefrom by law. The salaries and other compensation of
the officers of the corporation shall be fixed by or in the manner designated by
the Board of Directors.
SECTION 5.2 TENURE AND DUTIES OF OFFICERS.
-----------------------------
(a) General. All officers shall hold office at the pleasure of
-------
the Board of Directors and until their successors shall have been duly elected
and qualified, unless sooner removed. Any officer elected or appointed by the
Board of Directors may be removed at any time by the Board of Directors. If the
office of any officer becomes vacant for any reason, the vacancy may be filled
by the Board of Directors. Except for the Chairman of the Board and the Vice
Chairman of the Board, no officer need be a director.
(b) Duties of Chairman of the Board of Directors. The Chairman of
--------------------------------------------
the Board of Directors, when present, shall preside at all meetings of the Board
of Directors and, unless the Chairman has designated the next senior officer to
so preside, at all meetings of the stockholders. The Chairman of the Board of
Directors shall perform other duties commonly incident to such office and shall
also perform such other duties and have such other powers as the Board of
Directors shall designate from time to time.
(c) Powers and Duties of the Vice Chairman of the Board. The Board
---------------------------------------------------
of Directors may but is not required to assign areas of responsibility to a Vice
Chairman of the Board, and, in such event, and subject to the overall direction
of the Chairman of the Board and the Board of Directors, the Vice Chairman of
the Board shall be responsible for supervising the management of the affairs of
the corporation and its subsidiaries within the area or areas assigned and shall
monitor and review on behalf of the Board of Directors all functions within such
corresponding area or areas of the corporation and each such subsidiary of the
corporation. In the absence of the President, or in the event of the President's
inability or refusal to act, the Vice Chairman of the Board shall perform the
duties of the President, and when so acting shall have all the powers of and be
subject to all the restrictions upon the President. Further, the Vice Chairman
of the Board shall have such other powers and duties as designated in accordance
with these Bylaws and as from time to time may be assigned to the Vice Chairman
of the Board by the Board of Directors or the Chairman of the Board.
(d) Duties of the Chief Executive and Chief Operating Officers.
----------------------------------------------------------
Subject to the control of the Board of Directors, the chief executive officer
shall have general executive charge, management and control, of the properties,
business and operations of the corporation with all such powers as may be
reasonably incident to such responsibilities; and subject to the control of the
chief executive officer, the chief operating officer shall have general
operating charge, management and control, of the properties, business and
operations of the corporation
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with all such powers as may be reasonably incident to such responsibilities. The
chief executive officer and, if and to the extent designated by the chief
executive officer or the Board, the chief operating officer, may agree upon and
execute all leases, contracts, evidences of indebtedness and other obligations
in the name of the corporation and may sign all certificates for shares of
capital stock of the corporation, and each shall have such other powers and
duties as are designated in accordance with these Bylaws and as from time to
time may be assigned to each by the Board of Directors.
(e) Duties of President. Unless the Board of Directors otherwise
-------------------
determines and subject to the provisions of paragraph (d) below, the President
shall be the chief operating officer of the corporation. Unless the Board of
Directors otherwise determines, he shall, in the absence of the Chairman of the
Board, or Vice Chairman of the Board, or if there be no Chairman of the Board or
Vice Chairman of the Board, preside at all meetings of the stockholders and
(should he be a director) of the Board of Directors. The President shall have
such other powers and duties as designated in accordance with these Bylaws and
as from time to time may be assigned to him by the Board of Directors.
(f) Duties of Vice Presidents. Vice Presidents, by virtue of their
-------------------------
appointment as such, shall not necessarily be deemed to be executive officers of
the corporation, such status as an executive officer only being conferred if and
to the extent such Vice President is placed in charge of a principal business
unit, division or function (e.g., sales, administration or finance) or performs
a policy-making function for the corporation (within the meaning of Section 16
of the 1934 Act and the rules and regulations promulgated thereunder). Each
executive Vice President shall at all times possess, and upon the authority of
the President or the chief executive officer any non-executive Vice President
shall from time to time possess, power to sign all certificates, contracts and
other instruments of the corporation, except as otherwise limited pursuant to
Article VI hereof or by the Chairman of the Board, the President, chief
executive officer or the Vice Chairman of the Board. The Vice Presidents shall
perform other duties commonly incident to their office and shall also perform
such other duties and have such other powers as the Board of Directors or the
President shall designate from time to time.
(g) Duties of Secretary. The Secretary shall keep the minutes of all
-------------------
meetings of the Board of Directors, committees of the Board of Directors and the
stockholders, in books provided for that purpose; shall attend to the giving and
serving of all notices; may in the name of the corporation affix the seal of the
corporation to all contracts and attest the affixation of the seal of the
corporation thereto; may sign with the other appointed officers all certificates
for shares of capital stock of the corporation; and shall have charge of the
certificate books, transfer books and stock ledgers, and such other books and
papers as the Board of Directors may direct, all of which shall at all
reasonable times be open to inspection of any director upon application at the
office of the corporation during business hours. The Secretary shall perform all
other duties given in these Bylaws and other duties commonly incident to such
office and shall also perform such other duties and have such other powers as
the Board of Directors shall designate from time to time. The President may
direct any Assistant Secretary to assume and perform the duties of the Secretary
in the absence or disability of the Secretary, and each Assistant Secretary
shall perform other duties commonly incident to such office and shall also
perform such other duties and have such other powers as the Board of Directors
or the President, shall designate from time to time.
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(h) Assistant Secretaries. Each Assistant Secretary shall have the
---------------------
usual powers and duties pertaining to such offices, together with such other
powers and duties as designated in these Bylaws and as from time to time may be
assigned to an Assistant Secretary by the Board of Directors, the Chairman of
the Board, the President, the Vice Chairman of the Board, or the Secretary. The
Assistant Secretaries shall exercise the powers of the Secretary during that
officer's absence or inability or refusal to act.
(i) Duties of Treasurer. The Treasurer shall keep or cause to be
-------------------
kept the books of account of the corporation in a thorough and proper manner and
shall render statements of the financial affairs of the corporation in such form
and as often as required by the Board of Directors, the Chairman of the Board,
the Vice President of the Board or the President. The Treasurer, subject to the
order of the Board of Directors, shall have the custody of all funds and
securities of the corporation. The Treasurer shall perform other duties commonly
incident to such office and shall also perform such other duties and have such
other powers as the Board of Directors, the Chairman of the Board, the Vice
Chairman of the Board or the President shall designate from time to time. The
Chief Financial Officer of the corporation may, but need not, serve as the
Treasurer.
(j) Assistant Treasurers. Each Assistant Treasurer shall have the
--------------------
usual powers and duties pertaining to such office, together with such other
powers and duties as designated in these Bylaws and as from time to time may be
assigned to each Assistant Treasurer by the Board of Directors, the Chairman of
the Board, the President, the Vice Chairman of the Board, or the Treasurer. The
Assistant Treasurers shall exercise the powers of the Treasurer during that
officer's absence or inability or refusal to act.
SECTION 5.3 DELEGATION OF AUTHORITY. For any reason that the Board of
-----------------------
Directors may deem sufficient, the Board of Directors may, except where
otherwise provided by statute, delegate the powers or duties of any officer to
any other person, and may authorize any officer to delegate specified duties of
such office to any other person. Any such delegation or authorization by the
Board shall be effected from time to time by resolution of the Board of
Directors.
SECTION 5.4 RESIGNATIONS. Any officer may resign at any time by giving
------------
written notice to the Board of Directors or to the President or to the
Secretary. Any such resignation shall be effective when received by the person
or persons to whom such notice is given, unless a later time is specified
therein, in which event the resignation shall become effective at such later
time. Unless otherwise specified in such notice, the acceptance of any such
resignation shall not be necessary to make it effective. Any resignation shall
be without prejudice to the rights, if any, of the corporation under any
contract with the resigning officer.
SECTION 5.5 REMOVAL. Any officer may be removed from office at any time,
-------
either with or without cause, by the vote or written consent of a majority of
the Directors in office at the time, or by any committee or superior officers
upon whom such power of removal may have been conferred by the Board of
Directors.
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ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND
--------------------------------------
VOTING OF SECURITIES OWNED BY THE CORPORATION
---------------------------------------------
SECTION 6.1 EXECUTION OF CORPORATE INSTRUMENTS. The Board of Directors
----------------------------------
may, in its discretion, determine the method and designate the signatory officer
or officers, or other person or persons, to execute on behalf of the corporation
any corporate instrument or document, or to sign on behalf of the corporation
the corporate name without limitation, or to enter into contracts on behalf of
the corporation, except where otherwise provided by law or these Bylaws, and
such execution or signature shall be binding upon the corporation.
Unless otherwise specifically determined by the Board of Directors or
otherwise required by law, promissory notes, deeds of trust, mortgages and other
evidences of indebtedness of the corporation, and other corporate instruments or
documents requiring the corporate seal, and certificates of shares of stock
owned by the corporation, shall be executed, signed or endorsed by the Chairman
of the Board of Directors, the President, Chief Executive Officer or any
executive Vice President, and upon the authority conferred by the President,
Chief Executive Officer, or any non-executive Vice President, and by the
Secretary or Chief Financial Officer, if any be designated, or Treasurer or any
Assistant Secretary or Assistant Treasurer. All other instruments and documents
requiring the corporate signature, but not requiring the corporate seal, may be
executed as aforesaid or in such other manner as may be directed by the Board of
Directors.
All checks and drafts drawn on banks or other depositaries on funds to the
credit of the corporation or in special accounts of the corporation shall be
signed by such person or persons as the Board of Directors shall authorize so to
do.
Unless authorized or ratified by the Board of Directors or within the
agency power of an officer, no officer, agent or employee shall have any power
or authority to bind the corporation by any contract or engagement or to pledge
its credit or to render it liable for any purpose or for any amount.
SECTION 6.2 VOTING OF SECURITIES OWNED BY THE CORPORATION. All stock and
---------------------------------------------
other securities of other corporations owned or held by the corporation for
itself, or for other parties in any capacity, shall be voted, and all proxies
with respect thereto shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such authorization,
by the Chairman or Vice Chairman of the Board of Directors, Chief Executive
Officer, the President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
---------------
SECTION 7.1 FORM AND EXECUTION OF CERTIFICATES. Certificates for the
----------------------------------
shares of stock of the corporation shall be in such form as is consistent with
the Certificate of Incorporation and applicable law. Every holder of stock in
the corporation shall be entitled to have a certificate
14
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signed by or in the name of the corporation by the Chairman or Vice Chairman of
the Board of Directors, the Chief Executive Officer, the President or any Vice
President and by the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer, certifying the number of shares and the class or series
owned by him in the corporation. Where such certificate is countersigned by a
transfer agent other than the corporation or its employee, or by a registrar
other than the corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued with the same effect as if
he were such officer, transfer agent, or registrar at the date of issue.
SECTION 7.2 LOST CERTIFICATES. A new certificate or certificates
-----------------
shall be issued in place of any certificate or certificates theretofore issued
by the corporation alleged to have been lost, stolen, or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate of
stock to be lost, stolen, or destroyed. The corporation may require, as a
condition precedent to the issuance of a new certificate or certificates, the
owner of such lost, stolen, or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
or to give the corporation a surety bond in such form and amount as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
SECTION 7.3 TRANSFERS.
---------
(a) Transfers of record of shares of stock of the corporation shall
be made only on its books by the holders thereof, in person or by attorney duly
authorized and upon the surrender of a properly endorsed certificate or
certificates for a like number of shares. Upon surrender to the corporation or a
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books. The Board of Directors shall have the power and
authority to make all such other rules and regulations as they may deem
expedient concerning the issue, transfer and registration or the replacement of
certificates for shares of capital stock of the corporation.
(b) The corporation shall have power to enter into and perform any
agreement with any number of stockholders of any one or more classes of stock of
the corporation to restrict the transfer of shares of stock of the corporation
of any one or more classes owned by such stockholders in any manner not
prohibited by the Delaware General Corporation Law.
SECTION 7.4 FIXING RECORD DATES.
-------------------
(a) In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board of Directors may fix, in advance, a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board of Directors, and which record date
shall not be more than sixty (60) nor less than ten (10) days before the date of
such meeting. If no record date is fixed by the Board of Directors, the record
date for determining
15
<PAGE>
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
(b) In order that the corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix, in advance, a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall be not more than sixty (60)
days prior to such action. If no record date is fixed by the Board of Directors,
the record date for determining stockholders for any such purpose shall be at
the close of business on the day on which the Board of Directors adopts the
resolution relating thereto.
SECTION 7.5 REGISTERED STOCKHOLDERS. The corporation shall be entitled
-----------------------
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall not
be bound to recognize any equitable or other claim to or interest in such share
or shares on the part of any other person whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
-----------------------------------
SECTION 8.1 EXECUTION OF OTHER SECURITIES. All bonds, debentures and
-----------------------------
other corporate securities of the corporation, other than stock certificates
(covered in Section 7.1), may be signed by the Chairman or Vice Chairman of the
Board of Directors, the Chief Executive Officer, the President or any Vice
President, or such other person as may be authorized by the Board of Directors,
and the corporate seal impressed thereon or a facsimile of such seal imprinted
thereon and attested by the signature of the Secretary or an Assistant
Secretary, or the Treasurer or an Assistant Treasurer; provided, however, that
where any such bond, debenture or other corporate security shall be
authenticated by the manual signature of a trustee under an indenture pursuant
to which such bond, debenture or other corporate security shall be issued, the
signatures of the persons signing and attesting the corporate seal on such bond,
debenture or other corporate security may be the imprinted facsimile of the
signatures of such persons. Interest coupons appertaining to any such bond,
debenture or other corporate security, authenticated by a trustee as aforesaid,
shall be signed by the Treasurer or an Assistant Treasurer of the corporation or
such other person as may be authorized by the Board of Directors, or bear
imprinted thereon the facsimile signature of such person. In case any officer
who shall have signed or attested any bond, debenture or other corporate
security, or whose facsimile signature shall appear thereon or on any such
interest coupon, shall have ceased to be such officer before any bond, debenture
or other corporate security so signed or attested shall have been delivered,
such bond, debenture or other corporate security nevertheless may be adopted by
the corporation
16
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and issued and delivered as though the person who signed the same or whose
facsimile signature shall have been used thereon had not ceased to be such
officer of the corporation.
ARTICLE IX
DIVIDENDS
---------
SECTION 9.1 DECLARATION OF DIVIDENDS. Dividends upon the capital
------------------------
stock of the corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board of Directors pursuant to law
at any regular or special meeting. Dividends may be paid in cash, in property,
or in shares of the capital stock, subject to the provisions of the Certificate
of Incorporation.
SECTION 9.2 DIVIDEND RESERVE. Before payment of any dividend,
----------------
there may be set aside out of any funds of the corporation available for
dividends such sum or sums as the Board of Directors from time to time, in their
absolute discretion, think proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for such other purpose as the Board of Directors
shall think conducive to the interests of the corporation, and the Board of
Directors may modify or abolish any such reserve in the manner in which it was
created.
ARTICLE X
FISCAL YEAR
-----------
The fiscal year of the corporation shall be the calendar year, unless
otherwise fixed by resolution of the Board of Directors.
ARTICLE XI
INDEMNIFICATION OF DIRECTORS,
-----------------------------
OFFICERS, EMPLOYEES AND OTHER AGENTS
------------------------------------
SECTION 11.1 DIRECTORS AND EXECUTIVE OFFICERS. The corporation shall
--------------------------------
indemnify its Directors and executive officers to the fullest extent not
prohibited by the Delaware General Corporation Law; provided, however, that the
-------- -------
corporation may limit the extent of such indemnification by individual contracts
with its Directors and executive officers; and, provided, further, that the
-------- -------
corporation shall not be required to indemnify any Director or executive officer
in connection with any proceeding (or part thereof) initiated by such person or
any proceeding by such person against the corporation or its Directors,
officers, employees or other agents unless (i) such indemnification is expressly
required to be made by law, (ii) the proceeding was authorized by the Board of
Directors of the corporation, or (iii) such indemnification is provided
17
<PAGE>
by the corporation, in its sole discretion, pursuant to the powers vested in the
corporation under the Delaware General Corporation Law.
SECTION 11.2 OTHER OFFICERS, EMPLOYEES AND OTHER AGENTS. The corporation
------------------------------------------
shall have power to indemnify its other officers, employees and other agents as
set forth in the Delaware General Corporation Law.
SECTION 11.3 GOOD FAITH.
----------
(a) For purposes of any determination under this Article XI, a
Director or executive officer shall be deemed to have acted in good faith and in
a manner such officer reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, to have had no reasonable cause to believe that such officer's
conduct was unlawful, if such officer's action is based on information,
opinions, reports and statements, including financial statements and other
financial data, in each case prepared or presented by:
(i) one or more officers or employees of the corporation whom
the Director or executive officer believed to be reliable and competent in
the matters presented;
(ii) counsel, independent accountants or other persons as to
matters which the Director or executive officer believed to be within such
person's professional competence; and
(iii) with respect to a Director, a committee of the Board upon
which such Director does not serve, as to matters within such committee's
designated authority, which committee the Director believes to merit
confidence; so long as, in each case, the Director or executive officer
acts without knowledge that would cause such reliance to be unwarranted.
(b) The termination of any proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal proceeding, that
such person had reasonable cause to believe that his conduct was unlawful.
(c) The provisions of this Section 11.3 shall not be deemed to be
exclusive or to limit in any way the circumstances in which a person may be
deemed to have met the applicable standard of conduct set forth by the Delaware
General Corporation Law.
SECTION 11.4 EXPENSES. The corporation shall advance, prior to the final
--------
disposition of any proceeding, promptly following request therefor, all expenses
incurred by any Director or executive officer in connection with such proceeding
upon receipt of an undertaking by or on behalf of such person to repay said
amounts if it should be determined ultimately that such person is not entitled
to be indemnified under this Article XI or otherwise.
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Notwithstanding the foregoing, unless otherwise determined pursuant to
Section 11.5 of this Article XI, no advance shall be made by the corporation if
a determination is reasonably and promptly made (i) by the Board of Directors by
a majority vote of a quorum consisting of Directors who were not parties to the
proceeding, or (ii) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, that the facts known to the decision-making party at the time
such determination is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the corporation.
SECTION 11.5 ENFORCEMENT. Without the necessity of entering into an
-----------
express contract, all rights to indemnification and advances to Directors and
executive officers under this Article XI shall be deemed to be contractual
rights and be effective to the same extent and as if provided for in a contract
between the corporation and the Director or executive officer. Any right to
indemnification or advances granted by this Article XI to a Director or
executive officer shall be enforceable by or on behalf of the person holding
such right in any court of competent jurisdiction if (i) the claim for
indemnification or advances is denied, in whole or in part, or (ii) no
disposition of such claim is made within ninety (90) days of request therefor.
The claimant in such enforcement action, if successful in whole or in part,
shall also be entitled to be paid the expense of prosecuting his claim. The
corporation shall be entitled to raise as a defense to any such action that the
claimant has not met the standards of conduct that make it permissible under the
Delaware General Corporation Law for the corporation to indemnify the claimant
for the amount claimed. Neither the failure of the corporation (including its
Board of Directors, independent legal counsel or its stockholders) to have made
a determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because such person has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the corporation (including its Board of
Directors, independent legal counsel or its stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that claimant has not met the applicable standard of
conduct.
SECTION 11.6 NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any
-------------------------
person by this Article XI shall not be exclusive of any other right which such
person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, Bylaws, agreement, vote of stockholders or
disinterested Directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding office. The corporation is
specifically authorized to enter into individual contracts with any or all of
its Directors, officers, employees or agents respecting indemnification and
advances, to the fullest extent not prohibited by the Delaware General
Corporation Law.
SECTION 11.7 SURVIVAL OF RIGHTS. The rights conferred on any person by
------------------
this Article XI shall continue as to a person who has ceased to be a Director,
officer, employee or other agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
SECTION 11.8 INSURANCE. To the fullest extent permitted by the Delaware
---------
General Corporation Law, the corporation, upon approval by the Board of
Directors, may purchase
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insurance on behalf of any person required or permitted to be indemnified
pursuant to this Article XI.
SECTION 11.9 AMENDMENTS. Any repeal or modification of this Article XI
----------
shall only be prospective and shall not affect the rights under this Article XI
in effect at the time of the alleged occurrence of any action or omission to act
that is the cause of any proceeding against any agent of the corporation.
SECTION 11.10 SAVINGS CLAUSE. If this Article XI or any portion hereof
--------------
shall be invalidated on any ground by any court of competent jurisdiction, then
the corporation shall nevertheless indemnify each Director and executive officer
to the full extent not prohibited by any applicable portion of this Article XI
that shall not have been invalidated, or by any other applicable law.
SECTION 11.11 CERTAIN DEFINITIONS. For the purposes of this Article XI,
-------------------
the following definitions shall apply:
(a) The term "proceeding" shall be broadly construed and shall
include, without limitation, the investigation, preparation, prosecution,
defense, settlement, arbitration and appeal of, and the giving of testimony in,
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative.
(b) The term "expenses" shall be broadly construed and shall
include, without limitation, court costs, attorneys' fees, witness fees, fines,
amounts paid in settlement or judgment and any other costs and expenses of any
nature or kind incurred in connection with any proceeding.
(c) The term the "corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this Article XI with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(d) References to a "director," "officer," "employee," or
"agent" of the corporation shall include without limitation, situations where
such person is serving at the request of the corporation as a director, officer,
employee, trustee or agent of another corporation, partnership, joint venture,
trust or other enterprise.
(e) References to "other enterprises" shall include employee
benefit plans; references to "fines" shall include any excise taxes assessed on
a person with respect to an employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent with respect to
an employee
20
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benefit plan, its participants, or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of the corporation" as
referred to in this Article XI.
ARTICLE XII
NOTICES
-------
SECTION 12.1 NOTICE TO STOCKHOLDERS. Unless the Certificate of
----------------------
Incorporation requires otherwise, whenever, under any provisions of these
Bylaws, notice is required to be given to any stockholder, it shall be given in
writing, timely and duly deposited in the United States mail, postage prepaid,
and addressed to such stockholder's last known post office address as shown by
the stock record of the corporation or its transfer agent.
SECTION 12.2 NOTICE TO DIRECTORS. Any notice required to be given to
-------------------
any Director may be given by the method stated in Section 12.1, or by facsimile,
telex or telegram, except that such notice other than one which is delivered
personally shall be sent to such address as such Director shall have filed in
writing with the Secretary, or, in the absence of such filing, to the last known
post office address of such Director. It shall not be necessary that the same
method of giving notice be employed in respect of all Directors, but one
permissible method may be employed in respect of any one or more, and any other
permissible method or methods may be employed in respect of any other or others.
SECTION 12.3 ADDRESS UNKNOWN. If no address of a stockholder or
---------------
Director be known, notice may be sent to the principal executive officer of the
corporation.
SECTION 12.4 AFFIDAVIT OF MAILING. An affidavit of mailing, executed
--------------------
by a duly authorized and competent employee of the corporation or its transfer
agent appointed with respect to the class of stock affected, specifying the name
and address or the names and addresses of the stockholder or stockholders, or
Director or Directors, to whom any such notice or notices was or were given, and
the time and method of giving the same, shall be conclusive evidence of the
statements therein contained.
SECTION 12.5 TIME NOTICES DEEMED GIVEN. All notices given by mail, as
-------------------------
above provided, shall be deemed to have been given as at the time of mailing,
and all notices given by facsimile, telex or telegram shall be deemed to have
been given as of the sending time recorded at the time of transmission.
SECTION 12.6 FAILURE TO RECEIVE NOTICE. The period or limitation of
-------------------------
time within which any stockholder may exercise any option or right, or enjoy any
privilege or benefit, or be required to act, or within which any Director may
exercise any power or right, or enjoy any privilege, pursuant to any notice sent
such person in the manner above provided, shall not be affected or extended in
any manner by the failure of such stockholder or such Director to receive such
notice.
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SECTION 12.7 NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL.
----------------------------------------------------
Whenever notice is required to be given, under any provision of law or of the
Certificate of Incorporation or Bylaws of the corporation, to any person with
whom communication is unlawful, the giving of such notice to such person shall
not be required and there shall be no duty to apply to any governmental
authority or agency for a license or permit to give such notice to such person.
Any action or meeting which shall be taken or held without notice to any such
person with whom communication is unlawful shall have the same force and effect
as if such notice had been duly given. In the event that the action taken by the
corporation is such as to require the filing of a certificate under any
provision of the Delaware General Corporation Law, the certificate shall state,
if such is the fact and if notice is required, that notice was given to all
persons entitled to receive notice except such persons with whom communication
is unlawful.
SECTION 12.8 NOTICE TO PERSON WITH UNDELIVERABLE ADDRESS. Whenever
-------------------------------------------
notice is required to be given, under any provision of law or the Certificate of
Incorporation or Bylaws of the corporation, to any stockholder to whom (i)
notice of two consecutive annual meetings, and all notices of meetings to such
person during the period between such two consecutive annual meetings, or (ii)
all, and at least two, payments (if sent by first class mail) of dividends or
interest on securities during a twelve-month period, have been mailed addressed
to such person at such person's address as shown on the records of the
corporation and have been returned undeliverable, the giving of such notice to
such person shall not be required. Any action or meeting which shall be taken or
held without notice to such person shall have the same force and effect as if
such notice had been duly given. If any such person shall deliver to the
corporation a written notice setting forth such person's then current address,
the requirement that notice be given to such person shall be reinstated. In the
event that the action taken by the corporation is such as to require the filing
of a certificate under any provision of the Delaware General Corporation Law,
the certificate need not state that notice was not given to persons to whom
notice was not required to be given pursuant to this paragraph.
ARTICLE XIII
AMENDMENTS
----------
SECTION 13.1 AMENDMENTS. Except as otherwise set forth in Section 11.9
----------
of these Bylaws, these Bylaws may be amended or repealed and new Bylaws adopted
by the Board of Directors or by the stockholders entitled to vote.
SECTION 13.2 APPLICATION OF BYLAWS. In the event that any provisions
---------------------
of these Bylaws is or may be in conflict with any law of the United States, of
the state of incorporation of the corporation or of any other governmental body
or power having jurisdiction over this corporation, or over the subject matter
to which such provision of these Bylaws applies, or may apply, such provision of
these Bylaws shall be inoperative to the extent only that the operation thereof
unavoidably conflicts with such law, and shall in all other respects be in full
force and effect.
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ARTICLE XIV
LOANS TO OFFICERS
-----------------
The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the corporation or of its
subsidiaries, including any officer or employee who is a Director of the
corporation or its subsidiaries, whenever, in the judgment of the Board of
Directors, such loan, guarantee or assistance may reasonably be expected to
benefit the corporation. The loan, guarantee or other assistance may be with or
without interest and may be unsecured, or secured in such manner as the Board of
Directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing in this Bylaw shall be deemed to deny, limit
or restrict the powers of guaranty or warranty of the corporation at common law
or under statute.
ARTICLE XV
ANNUAL REPORT
-------------
At such time as the corporation becomes subject to the reporting
requirements of Rules 12(g) and 15(d) of the Securities Exchange Act of 1934,
the Board of Directors shall cause an annual report to be sent to each
stockholder of the corporation not later than one hundred twenty (120) days
after the close of the corporation's fiscal year. Such report shall include a
balance sheet as of the end of such fiscal year and an income statement and
statement of changes in financial position for such fiscal year, accompanied by
any report thereon of independent accounts or, if there is no such report, the
certificate of an authorized officer of the corporation that such statements
were prepared without audit from the books and records of the corporation. Such
report shall be sent to stockholders at least fifteen (15) days prior to the
next annual meeting of stockholders after the end of the fiscal year to which it
relates. If and so long as there are fewer than 100 holders of record of the
corporation's shares, the requirement of sending of an annual report to the
stockholders of the corporation is hereby expressly waived.
23
<PAGE>
APPENDIX G
OKLAHOMA GENERAL CORPORATION ACT
(S) 1091. APPRAISAL RIGHTS.
A. Any shareholder of a corporation of this state who holds shares of
stock on the date of the making of a demand pursuant to the provisions of
subsection D of this section with respect to the shares, who continuously holds
the shares through the effective date of the merger or consolidation, who has
otherwise complied with the provisions of subsection D of this section and who
has neither voted in favor of the merger or consolidation nor consented thereto
in writing pursuant to the provisions of Section 1073 of this title shall be
entitled to an appraisal by the district court of the fair value of the shares
of stock under the circumstances described in subsections B and C of this
section. As used in this section, the word "shareholder" means a holder of
record of stock in a stock corporation and also a member of record of a nonstock
corporation; the words "stock" and "share" mean and include what is ordinarily
meant by those words and also membership or membership interest of a member of a
nonstock corporation; and "depository receipt" means an instrument issued by a
depository representing an interest in one or more shares, or fractions thereof,
solely of stock of a corporation, which stock is deposited with the depository.
The provisions of this subsection shall be effective only with respect to
mergers or consolidations consummated pursuant to an agreement of merger or
consolidation entered into after November 1, 1988.
B. 1. Except as otherwise provided for in this subsection, appraisal
rights shall be available for the shares of any class or series of stock of a
constituent corporation in a merger or consolidation, or of the acquired
corporation in a share acquisition, to be effected pursuant to the provisions of
Section 1081, other than a merger effected pursuant to subsection G of Section
1081, and Sections 1082, 1086, 1087, 1090.1, or 1090.2 of this title.
2. a. No appraisal rights under this section shall be available for
the shares of any class or series of stock which stock, or depository receipts
in respect thereof, at the record date fixed to determine the shareholders
entitled to receive notice of and to vote at the meeting of shareholders to act
upon the agreement of merger or consolidation, were either:
(1) listed on a national securities exchange or designated as a
national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc.;
or
(2) held of record by more than two thousand holders. No
appraisal rights shall be available for any shares of stock of
the constituent corporation surviving a merger if the merger did
not require for its approval the vote of the shareholders of the
surviving corporation as provided in subsection G of Section
1081 of this title.
b. In addition, no appraisal rights shall be available for any
shares of stock, or depository receipts in respect thereof, of the constituent
corporation surviving a merger if the merger did not require for its approval
the vote of the shareholders of the surviving corporation as provided for in
subsection F of Section 1081 of this title.
3. Notwithstanding the provisions of paragraph 2 of this subsection,
appraisal rights provided for in this section shall be available for the shares
of any class or series of stock of a constituent corporation if the holders
thereof are required by the terms of an agreement of merger or consolidation
pursuant to the provisions of Sections 1081, 1082, 1086, 1087, 1090.1 or 1090.2
of this title to accept for the stock anything except:
a. shares of stock of the corporation surviving or resulting from
the merger or consolidation or depository receipts thereof, or
b. shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock or depository receipts at the
effective date of the merger or consolidation will be either listed on a
national securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than two thousand holders, or
<PAGE>
d. any combination of the shares of stock, depository receipts,
and cash in lieu of the fractional shares or depository receipts described in
subparagraphs a, b, and c of this paragraph.
4. In the event all of the stock of a subsidiary Oklahoma corporation
party to a merger effected pursuant to the provisions of Section 1083 of this
title is not owned by the parent corporation immediately prior to the merger,
appraisal rights shall be available for the shares of the subsidiary Oklahoma
corporation.
C. Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections D and E
of this section, shall apply as nearly as is practicable.
D. Appraisal rights shall be perfected as follows:
1. If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a meeting of
shareholders, the corporation, not less than twenty (20) days prior to the
meeting, shall notify each of its shareholders entitled to the appraisal rights
that appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in the notice a copy of this
section. Each shareholder electing to demand the appraisal of the shares of the
shareholder shall deliver to the corporation, before the taking of the vote on
the merger or consolidation, a written demand for appraisal of the shares of the
shareholder. The demand will be sufficient if it reasonably informs the
corporation of the identity of the shareholder and that the shareholder intends
thereby to demand the appraisal of the shares of the shareholder. A proxy or
vote against the merger or consolidation shall not constitute such a demand. A
shareholder electing to take such action must do so by a separate written demand
as herein provided. Within ten (10) days after the effective date of the merger
or consolidation, the surviving or resulting corporation shall notify each
shareholder of each constituent corporation who has complied with the provisions
of this subsection and has not voted in favor of or consented to the merger or
consolidation as of the date that the merger or consolidation has become
effective; or
2. If the merger or consolidation is approved pursuant to the
provisions of Section 1073 or 1083 of this title, each constituent corporation,
either before the effective date of the merger or consolidation or within ten
(10) days thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights of
the approval of the merger or consolidation and that appraisal rights are
available for any or all of the shares of the class or series of stock of the
constituent corporation, and shall include in such notice a copy of this
section; provided, if the notice is given on or after the effective date of the
merger or consolidation, the notice shall be given by the surviving or resulting
corporation to all the holders of any class or series of stock of a constituent
corporation that are entitled to appraisal rights. The notice may, and, if given
on or after the effective date of the merger or consolidation, shall, also
notify the shareholders of the effective date of the merger or consolidation.
Any shareholder entitled to appraisal rights may, within twenty (20) days after
the date of mailing of the notice, demand in writing from the surviving or
resulting corporation the appraisal of the holder's shares. The demand will be
sufficient if it reasonably informs the corporation of the identity of the
shareholder and that the shareholder intends to demand the appraisal of the
holder's shares. If the notice does not notify shareholders of the effective
date of the merger or consolidation either:
a. each constituent corporation shall send a second notice before
the effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of the constituent corporation that are entitled
to appraisal rights of the effective date of the merger or consolidation, or
b. the surviving or resulting corporation shall send a second
notice to all holders on or within ten (10) days after the effective date of the
merger or consolidation; provided, however, that if the second notice is sent
more than twenty (20) days following the mailing of the first notice, the second
notice need only be sent to each shareholder who is entitled to appraisal rights
and who has demanded appraisal of the holder's shares in accordance with this
subsection. An affidavit of the secretary or assistant secretary or of the
transfer agent of the corporation that is required to give either notice that
the notice has been given shall, in the absence of fraud, be prima facie
evidence of the
<PAGE>
facts stated therein. For purposes of determining the shareholders entitled to
receive either notice, each constituent corporation may fix, in advance, a
record date that shall be not more than ten (10) days prior to the date the
notice is given; provided, if the notice is given on or after the effective date
of the merger or consolidation, the record date shall be the effective date. If
no record date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the day on
which the notice is given.
E. Within one hundred twenty (120) days after the effective date of the
merger or consolidation, the surviving or resulting corporation or any
shareholder who has complied with the provisions of subsections A and D of this
section and who is otherwise entitled to appraisal rights, may file a petition
in district court demanding a determination of the value of the stock of all
such shareholders; provided, however, at any time within sixty (60) days after
the effective date of the merger or consolidation, any shareholder shall have
the right to withdraw the demand of the shareholder for appraisal and to accept
the terms offered upon the merger or consolidation. Within one hundred twenty
(120) days after the effective date of the merger or consolidation, any
shareholder who has complied with the requirements of subsections A and D of
this section, upon written request, shall be entitled to receive from the
corporation surviving the merger or resulting from the consolidation a statement
setting forth the aggregate number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal have been received
and the aggregate number of holders of the shares. The written statement shall
be mailed to the shareholder within ten (10) days after the shareholder's
written request for a statement is received by the surviving or resulting
corporation or within ten (10) days after expiration of the period for delivery
of demands for appraisal pursuant to the provisions of subsection D of this
section, whichever is later.
F. Upon the filing of any such petition by a shareholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which,
within twenty (20) days after service, shall file, in the office of the court
clerk of the district court in which the petition was filed, a duly verified
list containing the names and addresses of all shareholders who have demanded
payment for their shares and with whom agreements regarding the value of their
shares have not been reached by the surviving or resulting corporation. If the
petition shall be filed by the surviving or resulting corporation, the petition
shall be accompanied by such duly verified list. The court clerk, if so ordered
by the court, shall give notice of the time and place fixed for the hearing on
the petition by registered or certified mail to the surviving or resulting
corporation and to the shareholders shown on the list at the addresses therein
stated. Notice shall also be given by one or more publications at least one (1)
week before the day of the hearing, in a newspaper of general circulation
published in the City of Oklahoma City, Oklahoma, or other publication as the
court deems advisable. The forms of the notices by mail and by publication shall
be approved by the court, and the costs thereof shall be borne by the surviving
or resulting corporation.
G. At the hearing on the petition, the court shall determine the
shareholders who have complied with the provisions of this section and who have
become entitled to appraisal rights. The court may require the shareholders who
have demanded an appraisal of their shares and who hold stock represented by
certificates to submit their certificates of stock to the court clerk for
notation thereon of the pendency of the appraisal proceedings; and if any
shareholder fails to comply with this direction, the court may dismiss the
proceedings as to that shareholder.
H. After determining the shareholders entitled to an appraisal, the court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining the fair value, the
court shall take into account all relevant factors. In determining the fair rate
of interest, the court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any shareholder entitled to participate
in the appraisal proceeding, the court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the shareholder entitled to an appraisal. Any
shareholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to the provisions of subsection F of this section and who
has submitted the certificates of stock of the shareholder to the court clerk,
if required, may participate fully in all proceedings until it is finally
determined that the shareholder is not entitled to appraisal rights pursuant to
the provisions of this section.
I. The court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
shareholders entitled thereto. Interest may be simple or compound, as the court
<PAGE>
may direct. Payment shall be made to each shareholder, in the case of holders of
uncertificated stock immediately, and in the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing the stock. The court's decree may be enforced as other
decrees in the district court may be enforced, whether the surviving or
resulting corporation be a corporation of this state or of any other state.
J. The costs of the proceeding may be determined by the court and taxed
upon the parties as the court deems equitable in the circumstances. Upon
application of a shareholder, the court may order all or a portion of the
expenses incurred by any shareholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all of
the shares entitled to an appraisal.
K. From and after the effective date of the merger or consolidation, no
shareholder who has demanded appraisal rights as provided for in subsection D
of this section shall be entitled to vote the stock for any purpose or to
receive payment of dividends or other distributions on the stock, except
dividends or other distributions payable to shareholders of record at a date
which is prior to the effective date of the merger or consolidation; provided,
however, that if no petition for an appraisal shall be filed within the time
provided for in subsection E of this section, or if the shareholder shall
deliver to the surviving or resulting corporation a written withdrawal of the
shareholder's demand for an appraisal and an acceptance of the merger or
consolidation, either within sixty (60) days after the effective date of the
merger or consolidation as provided for in subsection E of this section or
thereafter with the written approval of the corporation, then the right of the
shareholder to an appraisal shall cease; provided further, no appraisal
proceeding in the district court shall be dismissed as to any shareholder
without the approval of the court, and approval may be conditioned upon terms as
the court deems just.
L. The shares of the surviving or resulting corporation into which the
shares of any objecting shareholders would have been converted had they assented
to the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation.
<PAGE>
THE VIALINK COMPANY
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE VAILINK
COMPANY
The undersigned revokes all previous proxies, acknowledges receipt of the
Notice of the Annual Meeting of Shareholders to be held May 21, 1999 and the
related Proxy Statement dated April 19, 1999 and appoints Lewis B. Kilbourne and
John M. Duck, and each of them, the Proxy of the undersigned, with full power of
substitution, to vote all shares of Common Stock of The viaLink Company, an
Oklahoma corporation (the "Company"), which the undersigned is entitled to vote,
either on his or her own behalf or on behalf of any entity or entities, at the
Annual Meeting of Shareholders of the Company to be held at the Harvey Business
Center, Room 104, on the campus of Oklahoma Christian University of Science &
Arts, 2501 East Memorial Road, Oklahoma City, Oklahoma on May 21, 1999 at 10:00
a.m. Central Daylight Time (the "Annual Meeting"), and at any adjournment or
postponement thereof, with the same force and effect as the undersigned might or
could do if personally present thereat. The shares represented by this Proxy
shall be voted in the manner set forth hereon.
1. TO ELECT THE FOLLOWING NOMINEE AS A CLASS III DIRECTOR to serve for a three-
year term ending at the 2002 annual meeting of shareholders or until his
successor is duly elected and qualified:
Jimmy M. Wright
[ ] FOR the nominee listed above [ ] WITHHOLD AUTHORITY to vote for the
nominee listed above
2. [ ] FOR [ ] AGAINST [ ] ABSTAIN [ ] TO APPROVE THE VIALINK COMPANY 1999 STOCK
OPTION/STOCK ISSUANCE PLAN.
3. [ ] FOR [ ] AGAINST [ ] ABSTAIN [ ] TO APPROVE THE VIALINK COMPANY 1999
EMPLOYEE STOCK PURCHASE PLAN.
4. [ ]FOR [ ] AGAINST [ ] ABSTAIN [ ] TO AUTHORIZE AND APPROVE THE ISSUANCE OF
COMMON STOCK UNDERLYING THE CONVERTIBLE
NOTE TO BE ISSUED TO THE HEWLETT-PACKARD
COMPANY.
5. [ ] FOR [ ] AGAINST [ ] ABSTAIN [ ] TO APPROVE THE REINCORPORATION OF THE
COMPANY IN DELAWARE.
6. In accordance with the descretion of the proxy holders, to act upon all
matters incident to the conduct of the meeting and upon other matters as may
properly come before the meeting.
The Board of Directors recommends a vote FOR the director listed above and
a vote FOR each of the listed proposals. This Proxy, when properly executed,
will be voted as specified hereon. If no specification is made, this Proxy will
be voted "FOR" the election of the director listed above and "FOR" each of the
other proposals.
Please print the name(s) appearing on each share
certificate(s) over which you have voting authority:
------------------------
(Print name(s) exactly as it (they) appear(s) on certificates)
Please sign your name: Date: ,1999
-------------------------------- -------
(Authorized Signature(s))
IMPORTANT: Please sign as your name appears hereon. If shares are held
jointly, all holders must sign. When signing as attorney, executor,
administrator, trustee or guardian, please give your full title. If a
corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
