<PAGE> 1
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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as Permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AFFILIATED NETWORKS, INC.
(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)(4) and
0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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AFFILIATED NETWORKS, INC.
2701 South Bayshore Drive, 5th Floor
Coconut Grove, Florida 33133
Notice of Special Meeting of Stockholders
To Be Held on November 16, 1999
A Special Meeting of Stockholders (the "Special Meeting") of Affiliated
Networks, Inc. (the "Company") will be held at the offices of the Company at
2701 South Bayshore Drive, 5th Floor, Coconut Grove, Florida 33133, on Tuesday,
November 16, 1999, at 10:00 a.m., for the following purposes:
(1) To approve an amendment to the Company's Amended and Restated
Articles of Incorporation (the "Amended Articles of Incorporation"), to change
the name of the Company to "MAREX.com, Inc." (the "Name Change Amendment");
(2) To approve the amendment and restatement of the Company's Amended
and Restated 1997 Stock Option Plan (the "Restated Plan"), to increase the
maximum number of shares which may be subject to options granted under the
Restated Plan by 2,000,000 shares; and
(3) To transact any other business that properly comes before the
Special Meeting or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on October 12,
1999 as the record date for the determination of stockholders entitled to notice
of, and to vote at, the Special Meeting or any adjournments thereof.
Whether or not you expect to be present, the Company requests that you
sign and date the enclosed proxy card as promptly as possible and return it in
the enclosed envelope. No postage is required if mailed in the United States.
All stockholders are cordially invited to attend the Special Meeting.
By Order of the Board of Directors,
/s/ David A. Schwedel
DAVID A. SCHWEDEL
Chief Executive Officer,
President and Director
Coconut Grove, Florida
October __, 1999
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AFFILIATED NETWORKS, INC.
PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
NOVEMBER 16, 1999
Affiliated Networks, Inc., a Florida corporation (the "Company"), is
furnishing this Proxy Statement to its stockholders in connection with the
solicitation of proxies to be voted at a Special Meeting of Stockholders (the
"Special Meeting") of the Company to be held on Tuesday, November 16, 1999 at
10:00 a.m. Proxies will be used for the following purposes: (1) to approve an
amendment to the Company's Amended and Restated Articles of Incorporation (the
"Amended Articles of Incorporation"), to change the name of the Company to
"MAREX.com, Inc." (the "Name Change Amendment"); (2) to approve the amendment
and restatement of the Company's Amended and Restated 1997 Stock Option Plan
(the "Restated Plan"), to increase the maximum number of shares which may be
subject to options granted under the Restated Plan by 2,000,000; and (3) to
transact any other business that properly comes before the Special Meeting. The
approximate date on which this Proxy Statement and accompanying form of proxy
will first be sent to the Company's stockholders is October __, 1999.
THIS SOLICITATION IS MADE ON BEHALF OF THE COMPANY BY THE BOARD OF
DIRECTORS OF THE COMPANY (THE "BOARD OF DIRECTORS" OR THE "BOARD"). Costs of the
solicitation will be paid by the Company. The Company will reimburse banks,
brokerage firms and other custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy material to stockholders.
Holders of record of Common Stock, par value $.01 per share (the
"Common Stock"), of the Company as of the close of business on October 12, 1999
are entitled to receive notice of, and to vote at, the Special Meeting. The
outstanding Common Stock is the only class of securities of the Company entitled
to vote at the Special Meeting, and each share of Common Stock entitles its
holder to one vote. Stockholders are not permitted to cumulate their shares for
the purpose of voting. At the close of business on October 12, 1999, there were
___________ shares of Common Stock issued and outstanding.
Unless contrary instructions are indicated on the proxy, all shares
represented by valid proxies received in time to be voted at the Special Meeting
(and not revoked before they are voted) will be voted "FOR" (i) the Name Change
Amendment, and (ii) the Restated Plan. If any other business properly comes
before the Special Meeting and is submitted to a vote of stockholders, then
proxies received by the Board of Directors will be voted in accordance with the
best judgment of the designated proxy holders. A stockholder may revoke his or
her proxy at any time before exercise by delivering to the Secretary of the
Company a written notice of such revocation, by filing with the Secretary of the
Company a duly executed proxy bearing a later date, or by voting in person at
the Special Meeting.
Shares represented by proxies that reflect abstentions or "broker
non-votes" (i.e., shares held by a broker or nominee which are represented at
the Special Meeting, but with respect to which such broker or nominee is not
empowered to vote on a particular proposal) will be counted as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. The Name Change Amendment, the Restated Plan and all other proposals
which properly come before the Special Meeting will be approved by a favorable
vote of a majority of the shares, cast at the Special Meeting, providing that a
quorum is present. Therefore, as to the Name Change Amendment, the Restated Plan
and any other proposals to come before the Special Meeting, abstentions and
broker non-votes will have the same effect as a vote against such proposals.
The principal executive offices of the Company are located at 2701
South Bayshore Drive, 5th Floor, Coconut Grove, Florida 33133. The Company's
telephone number is (305) 285-2003.
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PROPOSAL NO. 1
APPROVAL OF AN AMENDMENT TO THE AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF THE COMPANY TO
CHANGE THE NAME OF THE COMPANY
The Board of Directors of the Company has unanimously approved and
directed that there be submitted to stockholders for their approval an amendment
to Article I of the Amended Articles of Incorporation to change the name of the
Company to "MAREX.com, Inc." To effect such a change, Article I of the Company's
Amended Articles of Incorporation will be amended to read in its entirety as
follows:
"ARTICLE I
NAME AND ADDRESS
----------------
The name of this Corporation is MAREX.COM, INC. and its principal place
of business is the Coconut Grove Bank Building, 5th Floor, 2701 South Bayshore
Drive, Coconut Grove, Florida 33133."
The Name Change Amendment, if approved by stockholders, will become
effective on the date the Name Change Amendment is filed with the Secretary of
the State of Florida. The Company anticipates that the filing to effect the Name
Change Amendment will be made as soon after the Special Meeting as practicable.
The Board of Directors has determined that a change in the Company's
name is advisable due to the Company's decision to focus its business towards
its internet-based services and products for the marine industry. Previously,
the Company also focused on the publishing of research reports, stock handbooks
and global industry guides. The Board of Directors has decided that a change of
the Company's name will serve to emphasize the Company's shift in business
focus.
The change in name will not affect the validity of currently
outstanding stock certificates. The Company's current shareholders will not be
required to surrender or exchange any stock certificates that they now hold and
should not send such certificates to the Company or its transfer agent.
REQUIRED VOTE FOR APPROVAL AND RECOMMENDATION OF THE BOARD OF DIRECTORS
Approval of the Name Change Amendment requires the affirmative vote of
a majority of all of the issued and outstanding shares of the Common Stock
entitled to vote thereon. Accordingly, abstentions and broker non-votes will
have the effect of a vote against this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE NAME CHANGE AMENDMENT. PROPERLY EXECUTED PROXIES WILL BE VOTED FOR THE
NAME CHANGE AMENDMENT UNLESS STOCKHOLDERS DESIGNATE OTHERWISE.
PROPOSAL NO. 2
APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE
AMENDED AND RESTATED 1997 STOCK OPTION
PLAN
The Board adopted, and the shareholders approved, the Company's 1997
Stock Option Plan in January 1997. The Company amended and restated such plan in
January 1999 (as so amended and restated, the "Restated Plan"). The Board has
ratified the Committee's adoption of the further amendment and restatement of
the Restated Plan to increase the maximum number of shares available for grants
under the Restated Plan from 2,000,000 shares to 4,000,000 shares.
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The Restated Plan has authorized for issuance pursuant to the exercise
of options granted under the Restated Plan a total of 2,000,000 shares of Common
Stock (subject to adjustment for certain capital changes as described below). As
of September 28, 1999, options to purchase 1,471,500 shares of Common Stock were
outstanding or approved to be granted under the Restated Plan, and 322,500
shares have been issued pursuant to options exercised under the Restated Plan
since its inception. As of September 28, 1999, 206,000 shares of Common Stock
remain available for future grants of options under the Restated Plan.
The Restated Plan, as most recently amended and restated, is described
below and attached as an exhibit hereto. Such amendment and restatement of the
Restated Plan is effective as of October 1, 1999, subject to stockholder
approval at the Special Meeting. If such amendment and restatement of the
Restated Plan is not approved by the stockholders, the Restated Plan shall
continue in effect as it existed immediately prior to the adoption of such
amendment and restatement.
The purpose of the Restated Plan is to promote the interest of the
Company and its shareholders through awards of options to purchase shares of the
Common Stock to selected groups of employees, directors or consultants of the
Company, which will further the development and financial success of the
Company. The Board and the Committee believe that the amendment and restatement
of the Restated Plan submitted for approval by the stockholders at the special
meeting will enable the Company to continue to provide appropriate performance
incentives to selected employees, directors and consultants of the Company for
the benefit of the Company and its stockholders.
SUMMARY OF THE RESTATED PLAN
The following summary of the Restated Plan, which incorporates the
changes proposed to be approved by the stockholders at the Special Meeting, is
qualified in its entirety by reference to the Restated Plan itself, which
appears as an exhibit to this Proxy Statement.
The Restated Plan authorizes the granting of options to purchase up to
4,000,000 shares, in the aggregate (subject to adjustment for certain capital
changes as described below), of Common Stock, to selected employees, directors
or consultants of the Company. The shares of Common Stock that may be acquired
upon the exercise of options granted under the Restated Plan may be authorized
and unissued shares of Common Stock or previously issued shares acquired by the
Company or its subsidiary. The Company's shareholders will not have any
preemptive right to purchase or subscribe for any Common Stock by reason of the
reservation and issuance of Common Stock under the Restated Plan. If any option
granted under the Restated Plan should expire or terminate for any reason other
than having been exercised in full, the unpurchased shares subject to that
option will again be available for purposes of the Restated Plan.
The Restated Plan is administered by a Committee, which consists of not
less than three directors designated by the Board, or, if a Committee is not so
designated, the Restated Plan is administered by the Board. Subject to the
provisions of the Restated Plan, the Committee in its sole discretion determines
the eligible individuals to whom options are granted under the Restated Plan and
the number of shares of Common Stock covered by each such option. In addition,
the Committee has discretionary authority to construe and interpret the Restated
Plan and option agreements and determine questions concerning eligibility to
receive options under the Restated Plan. The acts of the Committee are final,
conclusive and binding on all persons under the Restated Plan or any option
agreement.
Options granted under the Restated Plan are set forth in a written
option award agreement between the Company and the recipient of such option
(referred to as an "optionee"). Such an agreement contains such terms and
conditions as the Committee prescribes, consistent with the Restated Plan,
including the option exercise price, term and any restrictions on the
exercisability of the option. Options granted under the Restated Plan are either
"incentive stock options" ("ISOs"), which are intended to qualify for special
income tax treatment, or stock options other than ISOs, as determined by the
Committee in its discretion. However, non-employee directors and consultants of
the Company are not eligible to receive ISOs.
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Under the Restated Plan, the option price per share of Common Stock is
determined by the Committee, subject to the requirement that the option price of
any ISO granted under the Restated Plan may not be less than the greater of (a)
thirty-three cents ($0.33), (b) the book value per share of the Common Stock on
the date that the ISO is granted, and (c) the fair market value per share of
Common Stock on the ISO's grant date. The Restated Plan generally defines "fair
market value" as the average of the high and low reported sale prices of the
Common Stock on the relevant date on the principal exchange on which the Common
Stock is listed or traded, or, if the Common Stock is not then listed on an
exchange, the average of the closing bid and asked prices for the Common Stock
on the relevant date as reported by Nasdaq National Market (or any successor or
similar quotation system regularly reporting the market value of the Common
Stock in the over-the-counter market), or, if neither such method is
practicable, another reasonable valuation method selected by the Committee. The
exercise price of an option may be paid by: check, money order, or wire
transfer, subject to any legal restrictions; delivery of already owned shares of
Common Stock having a fair market value equal to the exercise price; in
accordance with any "cashless exercise" program established by the Committee; a
combination of the foregoing; or in any other manner prescribed by the Committee
and permitted by applicable law. Cash proceeds received by the Company on the
exercise of options granted under the Restated Plan constitute general funds of
the Company.
Except as otherwise permitted by the Committee in accordance with the
Restated Plan, no option granted under the Restated Plan is assignable or
transferable, other than by will or by the laws of descent and distribution, and
during the lifetime of an optionee, an option is exercisable only by such
optionee. Options granted under the Restated Plan generally become exercisable
in equal installments over a four-year period commencing with the date of grant
and expire on the fifth anniversary of the grant date. However, the Committee
may prescribe different exercise terms for options granted under the Restated
Plan, subject to the requirement that no option may be exercised after the
expiration of ten years from the date it was granted under the Restated Plan.
Unless the Committee otherwise determines, an optionee's unexercised
option granted under the Restated Plan automatically terminates (a) 30 days
after the optionee's employment is terminated without cause by the Company or
its subsidiary or due to retirement; (b) twelve months after the date of the
optionee's death while employed (or twelve months after death within the 30-day
period described in (a) above) or nine months after the qualification of the
executor or administrator of the deceased optionee's estate, if later; and (c)
immediately upon the termination of the optionee's service with the Company or a
subsidiary under any other circumstances.
In order to preserve the benefits intended to be made available under
the Restated Plan or outstanding options, the Committee will, in its discretion,
make appropriate adjustments in the number, class and kind of shares available
under the Restated Plan, the limitation on the number of shares covered by
options granted to a single employee, and the number, class, kind and price of
shares subject to outstanding options in the event of changes in outstanding
Common Stock resulting from changes in the Company's corporate structure or
capitalization, such as the payment of a stock dividend, a stock split, a
recapitalization, reorganization, merger or consolidation (whether or not the
Company is the surviving corporation), a spin-off, liquidation or other
substantial distribution of assets or the issuance of Company stock for less
than full consideration, or rights or convertible securities with respect to
Company stock.
In the event of (a) a stock sale, consolidation, merger, combination,
reorganization or other transaction (other than through a public offering)
resulting in less than fifty percent of the combined voting power of the
surviving or resulting entity being owned by the shareholders of the Company
immediately prior to such transaction, (b) a liquidation, dissolution or other
disposition of all or substantially all of the assets or business of the
Company, or (c) a public offering of Common Stock of the Company pursuant to a
registration statement declared effective under the Securities Act, the
Committee, in its discretion and on such terms and conditions as it deems
appropriate, may provide that: any outstanding options shall become exercisable;
outstanding options shall be adjusted by substituting shares or other securities
of the surviving corporation, a successor to the Company, or another corporation
that is a party to the transaction having approximately the same value as the
shares of Common Stock covered by any such options; and/or that outstanding
options shall be cashed out based upon the highest value of the consideration
receivable in such transaction for Common Stock subject to such an option, or,
if higher, the highest fair market value of the Common Stock during the 30
business days immediately prior to the closing or expiration date of such
transaction, less the option exercise price thereof. The Committee may, in its
discretion, provide that any options subject to any such acceleration,
adjustment or conversion cannot be exercised after such an event.
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Persons exercising options under the Restated Plan are required to pay,
or make other arrangements satisfactory to the Company to pay, tax withholding
obligations arising under applicable law with respect to such options. Such
taxes must be paid in cash or, if permitted by the Committee, an optionee may
elect to satisfy all or a part of such tax obligations by the withholding of
Common Stock otherwise deliverable upon the exercise of the optionee's option or
by tendering shares of Common Stock already owned by the optionee, in accordance
with the Restated Plan and procedures approved by the Committee.
The Restated Plan will terminate on December 1, 2006, unless the
Restated Plan is terminated earlier by the Board or due to delivery of all
shares of Common Stock available under the Restated Plan; however, any option
outstanding when the Restated Plan terminates will remain outstanding until it
expires or is exercised. The Board may amend the Restated Plan, and the
Committee may amend any outstanding option, at any time; however, no such
amendment may impair the previously accrued rights of an optionee under an
outstanding option without the optionee's consent. The Company must obtain
approval of the stockholders, if such approval is required by any applicable law
(including requirements relating to ISOs) or rule, of any amendment of the
Restated Plan that would: (a) except as described above in the event of capital
changes of the Company, decrease the minimum option exercise price required by
the Restated Plan or increase the number of shares of Common Stock that may be
delivered under the Restated Plan; (b) change the class of persons eligible to
receive options under the Restated Plan; or (c) extend the duration of the
Restated Plan or the exercise period of any option.
The approximate number of individuals as of September 28, 1999 in the
following classes eligible to participate in the Restated Plan is as follows:
(a) 27 officers and other employees of the Company; and (b) 3 non-employee
directors.
The market value of the Common Stock as of September 28, 1999, is $8.00
per share.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain significant United States
Federal income tax consequences, under the Internal Revenue Code, as in effect
on the date of this summary, applicable to the Company and recipients of options
under the Restated Plan (referred to as "optionees"), in connection with the
grant and exercise of options under the Restated Plan. This summary is not
intended to be exhaustive, and, among other things, does not describe state,
local or foreign tax consequences, or the effect of gift, estate or inheritance
taxes.
The grant of stock options under the Restated Plan will not result in
taxable income to optionees or an income tax deduction for the Company. However,
the transfer of Common Stock to optionees upon exercise of their options may or
may not give rise to taxable income to such optionees and tax deductions for the
Company, depending upon whether the options are incentive stock options ("ISOs")
or stock options not intended to qualify as ISOs ("non-qualified stock options"
or "NQOs").
The exercise of a NQO by an optionee generally results in immediate
recognition of taxable ordinary income by the optionee and a corresponding tax
deduction for the Company in the amount by which the fair market value of the
shares of Common Stock purchased, on the date of such exercise, exceeds the
aggregate option price. Any appreciation or depreciation in the fair market
value of such shares after the date of such exercise will generally result in a
capital gain or loss of the optionee at the time he or she disposes of such
shares.
In general, the exercise of an ISO by an optionee is exempt from income
tax (although not from the alternative minimum tax) and does not result in a tax
deduction for the Company at any time unless the optionee disposes of the Common
Stock purchased thereby within two years of the date such ISO was granted or one
year of the date of such exercise (a "disqualifying disposition"). If these
holding period requirements under the Internal Revenue Code are satisfied, and
if the optionee has been an employee of the Company at all times from the date
of grant of the ISO to the day three months before such exercise (or twelve
months in the case of termination of employment due to disability), then such
optionee will recognize any gain or loss upon disposition of such shares as
capital gain or loss. However, if the optionee makes a disqualifying disposition
of any such shares, he or she will generally be obligated to report as taxable
ordinary income for the year in which such disposition occurred, the
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excess, with certain adjustments, of the fair market value of the shares
disposed of, on the date the ISO was exercised, over the option price paid for
such shares. The Company is generally entitled to a tax deduction in the amount
so reported by the optionee. Any additional gain realized by such optionee on
such a disqualifying disposition of such shares would be capital gain. If the
total amount realized in a disqualifying disposition is less than the exercise
price of the ISO, the difference would be a capital loss for the optionee.
Under Section 162(m) of the Internal Revenue Code, the Company may be
limited as to Federal income tax deductions to the extent that total annual
compensation in excess of $1 million is paid to the Chief Executive Officer of
the Company or any one of the other four highest paid executive officers who are
employed by the Company on the last day of the Company's taxable year. However,
certain "performance-based compensation" the material terms of which are
disclosed to and approved by the Company's shareholders is not subject to this
deduction limitation. Under a separate exception to the deduction limitations of
Section 162(m) of the Internal Revenue Code, compensation resulting from the
exercise of options granted under the Restated Plan within a reliance period,
provided under Section 162(m) of the Internal Revenue Code, will generally be
deductible by the Company without regard to the limitations otherwise imposed by
Section 162(m) of the Internal Revenue Code. Compensation resulting from the
exercise of options granted under the Restated Plan after such reliance period
ends is not intended to qualify as performance-based compensation under Section
162(m) of the Internal Revenue Code.
Under certain circumstances, accelerated vesting or exercise of options
granted to optionees under the Restated Plan in connection with a "change of
control" of the Company might be deemed an "excess parachute payment" for
purposes of the golden parachute payment provisions of Section 280G of the
Internal Revenue Code. To the extent it is so considered, the optionee would be
subject to an excise tax equal to 20% of the amount of the excess parachute
payment, and the Company would be denied a tax deduction for the excess
parachute payment.
NEW PLAN BENEFITS
AMENDED AND RESTATED 1997 STOCK
OPTION PLAN, AS AMENDED AND RESTATED
<TABLE>
<CAPTION>
Number Value ($)
Name and Position Dollar of Units (#)
- ----------------- ------ ----------------
<S> <C> <C>
David A. Schwedel
Chief Executive Officer, President and Director (a)............... -- --
Timothy W. Richardson
Chief Information Officer (a)..................................... -- --
Kenbian A. Ng
Chief Financial Officer (a)....................................... -- --
Executive Group (a)............................................... -- --
Non-Executive Director Group(a)................................... -- --
Non-Executive Officer Employee Group (a).......................... -- --
</TABLE>
- ---------------------
(a) The benefits or amounts to be received under the Restated Plan by such
individual or group are not determinable. All officers, directors and
employees are eligible to receive benefits under the Restated Plan, but
only upon the determination of the Committee. No such determination will be
made until the shareholders approve the Restated Plan. No benefits were
awarded under the Restated Plan during the fiscal year ended December 31,
1998.
REQUIRED VOTE FOR APPROVAL AND RECOMMENDATION OF THE BOARD OF DIRECTORS AND
COMMITTEE
Approval of the Restated Plan requires the affirmative vote of a
majority of all the issued and outstanding shares of the Common Stock entitled
to vote thereon. Accordingly, abstentions and broker non-votes will have the
effect of a vote against this proposal
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THE BOARD OF DIRECTORS AND THE COMMITTEE UNANIMOUSLY RECOMMENDS A VOTE
FOR THE RESTATED PLAN. PROPERLY EXECUTED PROXIES WILL BE VOTED FOR THE RESTATED
PLAN, AS AMENDED AND RESTATED UNLESS STOCKHOLDERS DESIGNATE OTHERWISE.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 28, 1999, certain
information known by the Company with respect to the ownership of shares of
Common Stock as to (i) all persons who are beneficial owners of more than 5% of
the Common Stock of the Company, (ii) each director of the Company, (iii) each
executive officer of the Company and (iv) the directors and executive officers
of the Company as a group. Each person's address is c/o the Company's principal
offices at 2701 South Bayshore Drive, 5th Floor, Coconut Grove, Florida 33133.
<TABLE>
<CAPTION>
Amount and Nature of
Name and Address the Beneficial Ownership Ownership
of Beneficial Owner of Common Stock Percentage
- ---------------------------------------------- ---------------------------------- ------------------------------
<S> <C> <C>
David A. Schwedel 3,083,000(1) 40.4%
Timothy W. Richardson 40,000(2) *
Kenbian A. Ng 19,000(3) *
Roger A. Trombino 102,000(4) 1.3%
Dan Gallagher 102,000(4) 1.3%
George Glazer 90,000(5) 1.2%
Roger A. Baumann 472,579 6.2%
Gandhara Foundation 471,429 6.2%
Leonard A. Wien 628,000(6) 8.2%
All executive officers and directors 3,436,000(7) 45.1%
(6 persons)
</TABLE>
- --------------------
(1) The number of shares includes (i) fully vested options held by David
Schwedel to purchase 920,000 shares of Common Stock and (ii) warrants
issued to DAS Consulting, Inc., a corporation wholly owned by David
Schwedel, exercisable at any time for 3,000 shares of Common Stock.
(2) The number reflects fully vested options to purchase 40,000 shares of
Common Stock.
(3) This number reflects fully vested options to purchase 19,000 shares of
Common Stock.
(4) This number reflects fully vested options to purchase 102,000 shares of
Common Stock.
(5) This number reflects fully vested options to purchase 90,000 shares of
Common Stock.
(6) These shares are held by the Wien Family Holdings Limited Partnership.
Mr. Wien, a private investor, is the general partner of the partnership
and has both voting and investment power over the partnership. The number
reflected includes warrants exercisable at any time for 3,000 shares of
Common Stock.
(7) This number includes (i) fully vested options to purchase 1,273,000
shares of Common Stock and (ii) warrants exercisable at any time for
3,000 shares of Common Stock.
* Less than 1%.
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EXECUTIVE COMPENSATION
The following is the aggregate annual remuneration of the Company's
Chief Executive Officer (the "Named Officer") for the last three fiscal years.*
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION
-------------------------------------------- ----------------------
FISCAL NUMBER OF
NAME AND PRINCIPAL POSITION YEAR SALARY OPTIONS GRANTED
- ---------------------------------------------- ------------------- ---------------------- ----------------------
<S> <C> <C> <C>
David A. Schwedel 1998 $75,000 -0-
Chief Executive Officer, 1997 $75,000 450,000
President and Director 1996 $65,000 420,000
</TABLE>
* No officer or director was paid more than $100,000 by the Company per year.
(1) Columns for "Bonus" and "Other Annual Compensation" have been omitted
because no bonus or other annual compensation were paid during each year
presented.
OPTIONS GRANT TABLE
No options were granted to any named Officer in 1998.
STOCK OPTION PLANS
1996 INCENTIVE STOCK OPTION PLAN. The Company's 1996 Incentive Stock
Option plan, as amended, allows the Company to issue, in the aggregate, options
for up to 900,000 shares of the Company's Common Stock to selected employees.
The options may be exercised at a price that is the greater of thirty-three
cents per share, the fair market value of the Common Stock on the date of grant,
or the book value per share on the date of grant. Each option is 100% vested as
of the date of the grant and expires on the fifth anniversary of the date of
grant unless terminated earlier.
AMENDED AND RESTATED 1997 STOCK OPTION PLAN. The Company's Restated
Plan, not amended and restated as proposed herein, allows the Company to issue,
in the aggregate, options for up to 2,000,000 shares of the Company's Common
Stock to selected employees, directors or consultants of the Company. The
options may be exercised at a price that is the greater of thirty-three cents
per share, the fair market value of the Common Stock on the date of grant, or
the book value per share on the date of grant. The options vest over a period of
four years with an initial vesting of 20% on the date of grant with an
additional 20% vesting on each anniversary thereafter. Each option shall expire
on the fifth anniversary of the date of grant unless terminated earlier.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
FOR 2000 ANNUAL MEETING
Any stockholder intending to submit to the Company a proposal for
inclusion in the Company's proxy materials relating to the 2000 Annual Meeting
must submit such proposal so that it is received by the Company no later than
January 1, 2000.
OTHER MATTERS
The Company is not aware of any matters that may be presented for
action by the stockholders at the Special Meeting other than those set forth
above. If any other matter shall properly come before the Special Meeting, the
persons named in the accompanying form of proxy intend to vote thereon in
accordance with their best judgment.
10
<PAGE> 11
STOCKHOLDERS ARE URGED TO IMMEDIATELY MARK, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED, TO WHICH NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES.
By Order of the Board of Directors,
/s/ David A. Schwedel
DAVID A. SCHWEDEL
Chief Executive Officer,
President and Director
October __, 1999
Coconut Grove, Florida
11
<PAGE> 12
AMENDED AND RESTATED 1997 STOCK OPTION PLAN
MAREX.COM, INC.
1. PURPOSE. The purpose of the MAREX.com, Inc. 1997 Stock
Option Plan, as amended and restated effective as of October 1, 1999, is to
promote the interest of MAREX.com, Inc. (the "Company"), and its Subsidiaries
and shareholders by permitting the Company to award to selected groups of
employees, directors or consultants of the Company and its Subsidiaries options
to purchase shares of the Common Stock of the Company, the award to be based
upon relative profit contribution achieved during the fiscal year preceding such
award. The Plan will serve as a direct incentive to each member of the
participating groups to increase the profitability of the Company and its
Subsidiaries.
2. DEFINITIONS. As used in the Plan, the following capitalized
terms shall have the meanings set forth below:
(a) "AGREEMENT" - a stock option award agreement or letter
evidencing an Option.
(b) "BOARD" - the Board of Directors of the Company.
(c) "CODE" - the Internal Revenue Code of 1986, as it may be
amended from time to time, including regulations and rules thereunder and
successor provisions and regulations and rules thereto.
(d) "COMMITTEE" - the Committee of the Board, or such other
Board committee as may be designated by the Board to administer the Plan.
(e) "COMPANY" - MAREX.com, Inc., a Florida corporation, or any
successor entity.
(f) "FAIR MARKET VALUE" - of a share of Stock as of a given
date shall be: (i) the mean of the highest and lowest reported sale prices for a
share of Stock, on the principal exchange on which the Stock is then listed or
admitted to trading, for such date, or, if no such prices are reported for such
date, the most recent day for which such prices are available shall be used;
(ii) if the Stock is not then listed or admitted to trading on a stock exchange,
the mean of the closing representative bid and asked prices for the Stock on
such date as reported by Nasdaq National Market (or any successor or similar
quotation system regularly reporting the market value of the Stock in the
over-the-counter market), or, if no such prices are reported for such date, the
most recent day for which such prices are available shall be used; or (iii) in
the event each of the methods provided for in clauses (i) and (ii) above shall
not be practicable, the fair market value determined by such other reasonable
valuation method as the Committee shall, in its discretion, select and apply in
good faith as of the given date; PROVIDED, HOWEVER, that for purposes of
paragraphs (a) and (g) of Section 6, such fair market value shall be determined
subject to Section 422(c)(7) of the Code.
(g) "ISO" or "INCENTIVE STOCK OPTION" - an option to purchase
Stock granted to an Optionee under the Plan in accordance with the terms and
conditions set forth in Section 6 and which conforms to the applicable
provisions of Section 422 of the Code.
(h) "NOTICE" - written notice actually received by the Company
at its executive offices on the day of such receipt, if received on or before
1:30 p.m., on a day when the Company's executive offices are open for business,
or, if received after such time, such notice shall be deemed received on the
next such day, which notice may be delivered in person to the Company's Chief
Financial Officer or sent by facsimile to the Company, or sent by certified or
registered mail or overnight courier, prepaid, addressed to the Company at The
Coconut Grove Bank Building, 2701 South Bayshore Drive, 5th Floor, Coconut
Grove, Florida 33133, Attention: Chief Financial Officer.
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<PAGE> 13
(i) "OPTION" - an option to purchase Stock granted to an
Optionee under the Plan in accordance with the terms and conditions set forth in
Section 6. Options may be either ISOs or stock options other than ISOs.
(j) "OPTIONEE"- an individual who is eligible, pursuant to
Section 5, and who has been selected, pursuant to Section 3(c), to participate
in the Plan, and who has been granted an Option under the Plan in accordance
with the terms and conditions set forth in Section 6.
(k) "PLAN" - this MAREX.com, Inc. 1997 Stock Option Plan, as
amended and restated effective October 1, 1999.
(l) "SECURITIES ACT" - the Securities Act of 1933, as it may
be amended from time to time, including regulations and rules thereunder and
successor provisions and regulations and rules thereto.
(m) "STOCK" - the $0.01 par value Common Stock of the Company.
(n) "SUBSIDIARY" - shall mean (i) any present or future
corporation which is or would be a "subsidiary corporation" of the Company as
the term is defined in Section 424(f) of the Code and (ii) for purposes of
Options which are not ISOs, any partnership, limited liability company or
unincorporated entity in which the Company presently or in the future owns,
directly or indirectly, an aggregate profits interest or capital interest of
fifty percent (50%) or more, which the Committee in its discretion determines
will be a "Subsidiary" for purposes of the Plan.
3. ADMINISTRATION OF THE PLAN. (a) The Committee shall have
exclusive authority to operate, manage and administer the Plan in accordance
with its terms and conditions. Notwithstanding the foregoing, in its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights, duties and responsibilities of the Committee under the Plan, including,
but not limited to, establishing procedures to be followed by the Committee,
except with respect to matters which under any applicable law, regulation or
rule, are required to be determined in the sole discretion of the Committee.
(b) The Committee shall be appointed from time to time by the
Board, and the Committee shall consist of not less than three (3) members of the
Board. Appointment of Committee members shall be effective upon their acceptance
of such appointment. Committee members may be removed by the Board at any time
either with or without cause, and such members may resign at any time by
delivering notice thereof to the Board. Any vacancy on the Committee, whether
due to action of the Board or any other reason, shall be filled by the Board.
(c) The Committee shall have all authority that may be
necessary or helpful to enable it to discharge its responsibilities with respect
to the Plan. Without limiting the generality of the foregoing sentence or
paragraph (a) of this Section 3, and in addition to the powers otherwise
expressly designated to the Committee in the Plan, the Committee shall have the
exclusive right and discretionary authority to: interpret the Plan and the
Agreements; construe any ambiguous provision of the Plan and/or the Agreements;
determine and specify (A) the classes or groups of eligible employees, directors
and consultants to whom Options shall be granted under the Plan, which may be
based upon information furnished to the Committee by the Company's management,
(B) any minimum profit performance of the Company or a Subsidiary necessary to
qualify individual members of such classes or groups to receive Options, (C) the
formula by which the number of shares of Stock to be included in each Option
shall be determined (such formula shall take into account profit performance of
the Company for the year prior to the grant in the case of both operating
personnel and management and staff personnel), (D) the periods for which Options
will be outstanding, and (E) the time or times, not more than once each calendar
year, as to any group or class, at which Options may be granted under the Plan;
decide all questions concerning eligibility for and the amount of Options
granted under the Plan; determine whether an Option shall take the form of an
ISO or Option other than an ISO; establish, amend, waive and/or rescind rules
and regulations and administrative guidelines for carrying out the Plan; to the
extent permitted under the Plan and the applicable Agreement, grant
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<PAGE> 14
waivers of terms, conditions, restrictions and limitations under the Plan or
applicable to any Option; to the extent permitted under the applicable
Agreement, permit the transfer of an Option or the exercise of an Option by one
other than the Optionee who received the grant of such Option (other than any
such a transfer or exercise which would cause any ISO to fail to qualify as an
"incentive stock option" under Section 422 of the Code); correct any errors,
supply any omissions or reconcile any inconsistencies in the Plan and/or any
Agreement or any other instrument relating to any Option; to the extent
permitted by the Plan, amend or adjust the terms and conditions of any
outstanding Option and/or adjust the number and/or class of shares of Stock
subject to any outstanding Option; in accordance with the terms of the Plan,
establish and administer any terms, conditions, performance goals, performance
targets, restrictions, limitations and other provisions of any Options; at any
time and from time to time after the granting of an Option, specify such
additional terms, conditions and restrictions with respect to any such Option as
may be deemed necessary or appropriate to ensure compliance with any and all
applicable laws or rules, including, but not limited to, terms, restrictions and
conditions for compliance with applicable securities laws, regarding an
Optionee's exercise of Options by tendering shares of Stock or under a "cashless
exercise" program established by the Committee, and methods of withholding or
providing for the payment of required taxes; adopt such procedures and subplans
and grant Options on such terms and conditions as the Committee determines
necessary or appropriate to permit participation in the Plan by individuals
otherwise eligible to so participate who are foreign nationals or employed
outside of the United States, or otherwise to conform to applicable requirements
or practices of jurisdictions outside of the United States; and take any and all
such other actions it deems necessary or advisable for the proper operation
and/or administration of the Plan. The Committee shall have full discretionary
authority in all matters related to the discharge of its responsibilities and
the exercise of its authority under the Plan. Decisions and actions by the
Committee with respect to the Plan and any Agreement shall be final, conclusive
and binding on all persons having or claiming to have any right or interest in
or under the Plan and/or any Agreement.
(d) Each Option shall be evidenced by an Agreement, which
shall be executed by the Company and the Optionee to whom such Option has been
granted, unless the Agreement provides otherwise; HOWEVER, two or more Options
to a single Optionee may be combined in a single Agreement. An Agreement shall
not be a precondition to the granting of an Option; HOWEVER, no person shall
have any rights under any Option unless and until the Optionee to whom the
Option shall have been granted (i) shall have executed and delivered to the
Company an Agreement or other instrument evidencing the Option, unless such
Agreement provides otherwise, and (ii) has otherwise complied with the
applicable terms and conditions of the Option. The Committee shall prescribe the
form of all Agreements, and, subject to the terms and conditions of the Plan,
shall determine the content of all Agreements. Any Agreement may be supplemented
or amended in writing from time to time as approved by the Committee; PROVIDED
that the terms and conditions of any such Agreement as supplemented or amended
are not inconsistent with the provisions of the Plan.
(e) A majority of the members of the entire Committee shall
constitute a quorum and the actions of a majority of the members of the
Committee in attendance at a meeting at which a quorum is present, or actions by
a written instrument signed by all members of the Committee, shall be the
actions of the Committee.
(f) The Committee may consult with counsel who may be counsel
to the Company. The Committee may, with the approval of the Board, employ such
other attorneys or consultants, accountants, appraisers, brokers or other
persons as it deems necessary or appropriate. In accordance with Section 12, the
Committee shall not incur any liability for any action taken in good faith in
reliance upon the advice of such counsel or such other persons.
(g) In serving on the Committee, the members thereof shall be
entitled to indemnification as directors of the Company, and to any limitation
of liability and reimbursement as directors with respect to their services as
members of the Committee.
(h) Except to the extent prohibited by applicable law or the
applicable rules of a stock exchange, the Committee may, in its discretion,
allocate all or any portion of its responsibilities and powers under this
Section 3 to any one or more of its members and/or delegate all or any part of
its responsibilities and powers under this Section 3 to any person or persons
selected by it; PROVIDED, HOWEVER, the Committee may not delegate its
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<PAGE> 15
authority to correct errors, omissions or inconsistencies in the Plan. Any such
authority delegated or allocated by the Committee under this paragraph (h) of
Section 3 shall be exercised in accordance with the terms and conditions of the
Plan and any rules, regulations or administrative guidelines that may from time
to time be established by the Committee, and any such allocation or delegation
may be revoked by the Committee at any time.
4. SHARES OF STOCK SUBJECT TO THE PLAN. (a) The shares of
stock subject to Options granted under the Plan shall be shares of Stock. Such
shares of Stock subject to the Plan may be either authorized and unissued shares
(which will not be subject to preemptive rights) or previously issued shares
acquired by the Company or any Subsidiary. The total number of shares of Stock
that may be delivered pursuant to Options granted under the Plan is 4,000,000.
(b) Notwithstanding any of the foregoing limitations set forth
in this Section 4, the numbers of shares of Stock specified in this Section 4
shall be adjusted as provided in Section 10.
(c) Any shares of Stock subject to an Option which for any
reason expires or is terminated without having been fully exercised may again be
granted pursuant to an Option under the Plan, subject to the limitations of this
Section 4.
(d) Any shares of Stock delivered under the Plan in assumption
or substitution of outstanding stock options, or obligations to grant future
stock options, under plans or arrangements of an entity other than the Company
or a Subsidiary in connection with the Company or a Subsidiary acquiring such
another entity, or an interest in such an entity, or a transaction otherwise
described in Section 6(i), shall not reduce the maximum number of shares of
Stock available for delivery under the Plan.
5. ELIGIBILITY. Executive and other employees, including
officers, of the Company and the Subsidiaries, directors (whether or not also
employees) of the Company or any Subsidiary; and consultants to the Company and
the Subsidiaries, shall be eligible to become Optionees and receive Options in
accordance with the terms and conditions of the Plan.
6. TERMS AND CONDITIONS OF STOCK OPTIONS. All Options granted
under the Plan shall be either ISOs or Options other than ISOs, as stated in the
applicable Agreement or a resolution of the Committee applicable to such
Options. Each Option shall be subject to all the applicable provisions of the
Plan, including the following terms and conditions, and to such other terms and
conditions not inconsistent therewith as the Committee shall determine and which
are set forth in the applicable Agreement. Options need not be uniform as to all
grants and recipients thereof.
(a) The option exercise price per share of shares of Stock
subject to each Option shall be determined by the Committee and stated
in the Agreement; PROVIDED, HOWEVER, that, subject to paragraphs (g)(C)
and/or (i) of this Section 6, if applicable, such price applicable to
any ISO shall not be less than the greater of (A) thirty three cents
($.33), (B) 100% of the Fair Market Value of a share of Stock at the
time that the ISO is granted, and (C) 100% of the book value (as
determined by the Committee in its good faith discretion) of a share of
Stock at the time the ISO is granted.
(b) Each Option shall be exercisable, in whole or in part, on
or after the date such Option is granted, in accordance with the
following chart:
------------------------------------------ -------------------
PERCENTAGE OF
DATES FIRST EXERCISABLE OPTION
SHARES
------------------------------------------ -------------------
Date of Grant 20%
------------------------------------------ -------------------
First Anniversary of Date of Grant 20%
------------------------------------------ -------------------
Second Anniversary of Date of Grant 20%
------------------------------------------ -------------------
Third Anniversary of Date of Grant 20%
------------------------------------------ -------------------
Fourth Anniversary of Date of Grant 20%
------------------------------------------ -------------------
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<PAGE> 16
unless the Committee, in its discretion, determines at the time any
Option is granted and specifies in the Agreement, that the Option shall
be exercisable at any other times or in any other installments, and/or
pursuant to any other conditions, subject to Section 14. To the extent
not exercised, exercisable installments of Options shall be
exercisable, in whole or in part, in any subsequent period ending not
later than five (5) years from the date such Option was granted, unless
the Committee specifies another period, not in excess of ten (10) years
from the date such Option was granted, in the Agreement, subject, in
all events, to paragraph (g)(C) of this Section 6 and the other terms
and conditions of the Plan and the Agreement.
(c) An Option shall not be exercisable with respect to a
fractional share of Stock or the lesser of fifty (50) shares or the
full number of shares of Stock then subject to the Option. No
fractional shares of Stock shall be issued upon the exercise of an
Option.
(d) Each Option may be exercised by giving Notice to the
Company specifying the number of shares of Stock to be purchased, which
shall be accompanied by payment in full including applicable taxes, if
any, in accordance with Section 9. Payment shall be made:
(i) in United States dollars by personal check, bank
draft, money order or wire transfer;
(ii) if permitted by applicable law, by tendering to
the Company shares of Stock, duly endorsed for transfer to the
Company, already owned by the person exercising the Option (or
by such person and his or her spouse jointly) for at least six
(6) months prior to the tender thereof and not used for
another such exercise during such six (6) month period, and
having a Fair Market Value on the date on which the Option is
exercised equal to the cash exercise price of the shares
purchased under such Option;
(iii) in accordance with any "cashless exercise"
program established by the Committee; or
(iv) by any combination of the consideration provided
in the foregoing clauses (i), (ii) and (iii);
or in any other manner permitted by applicable law and prescribed by
the Committee, in its discretion, and set forth in the Agreement.
(e) No Optionee or other person shall become the beneficial
owner of any shares of Stock subject to an Option, nor have any rights
to dividends or other rights of a shareholder with respect to any such
shares until he or she has exercised his or her Option in accordance
with the provisions of the Plan and the applicable Agreement.
(f) An Option may be exercised only if at all times during the
period beginning with the date of the granting of the Option and ending
on the date of such exercise, the Optionee was an employee, director or
consultant of the Company, a Subsidiary or of another corporation
referred to in Section 422(a)(2) of the Code; PROVIDED, HOWEVER:
(i) a former employee of the Company, a Subsidiary or
such other corporation may exercise his or her Option within
the period of thirty (30) days immediately following
involuntary termination of such employment without "cause" or
termination of such employment due to retirement under the
Retirement Plan of the Company (all as determined by the
Committee, in its discretion), or the stated period of the
Option, if shorter, to the extent such Option was exercisable,
in accordance with paragraph (b) of this Section 6 or similar
installment exercise provisions contained in the applicable
Agreement, as of the date of such termination of employment;
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<PAGE> 17
(ii) if an employee dies while employed by the
Company, a Subsidiary or such other corporation, the deceased
employee's unexercised Option may be exercised, in accordance
with Section 11(b), in whole or in part, irrespective of
satisfaction of the installment exercise provisions under
paragraph (b) of this Section 6, or similar installment
exercise provisions contained in the applicable Agreement,
within the period of twelve (12) months following his or her
death, or nine (9) months after the date of qualification of
the executor or administrator of the deceased Optionee's
estate, if later, but, in any case, not later than expiration
of the stated period of the Option; and
(iii) if a former employee dies during the thirty
(30)-day period immediately following termination of his or
her employment within which such deceased employee's Option is
exercisable pursuant to clause (i) above of this Section 6(f),
such Option, to the extent not previously exercised, may be
exercised, in accordance with Section 11(b), in whole or in
part, to the extent such Option was exercisable in accordance
with such clause (i) above as of the date of such former
employee's death, within the period of twelve (12) months
following his or her death, or nine (9) months after the date
of qualification of the executor or administrator of the
deceased Optionee's estate, if later, but, in any case, not
later than expiration of the stated period of the Option.
Notwithstanding the foregoing, the Committee may determine in its
discretion that an Option may be otherwise exercised prior to
expiration of such Option following termination of such continuous
employment, directorship or consultancy, whether or not exercisable at
such time, to the extent provided in the applicable Agreement.
(g) (A) No ISO shall be granted unless such Option, when
granted, qualifies as an "incentive stock option" under Section 422 of
the Code. No ISO shall be granted to any individual otherwise eligible
to participate in the Plan who is not an employee of the Company or any
of its Subsidiaries on the date of granting of such Option. Any ISO
granted under the Plan shall contain such terms and conditions,
consistent with the Plan, as the Committee may determine to be
necessary to qualify such Option as an "incentive stock option" under
Section 422 of the Code. Any ISO granted under the Plan may be modified
by the Committee to disqualify such Option from treatment as an
"incentive stock option" under Section 422 of the Code.
(B) Notwithstanding any intent to grant ISOs, an
Option granted under the Plan will not be considered an ISO to the
extent that it, together with any other "incentive stock options"
(within the meaning of Section 422 of the Code, but without regard to
subsection (d) of such Section) under the Plan or any other "incentive
stock option" plans of the Company and any Subsidiary, are exercisable
for the first time by any Optionee during any calendar year with
respect to Stock having an aggregate Fair Market Value in excess of
$100,000 (or such other limit as may be required by the Code) as of the
time the Option with respect to such Stock is granted. The rule set
forth in the preceding sentence shall be applied by taking Options into
account in the order in which they were granted.
(C) No ISO shall be granted to an individual
otherwise eligible to participate in the Plan who owns (within the
meaning of Section 424(d) of the Code), at the time the Option is
granted, more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or a Subsidiary. This
restriction does not apply if at the time such ISO is granted the
Option exercise price per share of Stock subject to the Option is not
less than the greater of (A) one dollar ten cents ($1.10), (B) 110% of
the Fair Market Value of a share of Stock on the date such ISO is
granted, and (C) 110% of the book value of a share of Stock (as
determined by the Committee in its good faith discretion) on the date
such ISO is granted, and the ISO by its terms is not exercisable after
the expiration of five (5) years from such date of grant.
(h) An Option and any shares of Stock received upon the
exercise of an Option shall be subject to such other transfer and/or
ownership restrictions and/or legending requirements as the
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<PAGE> 18
Committee may establish in its discretion and which are specified in
the Agreement and may be referred to on the certificates evidencing
such shares of Stock. The Committee may require an Optionee to give
prompt Notice to the Company concerning any disposition of shares of
Stock received upon the exercise of an ISO within: (i) two (2) years
from the date of granting such ISO to such Optionee or (ii) one (1)
year from the transfer of such shares of Stock to such Optionee or
(iii) such other period as the Committee may from time to time
determine. The Committee may direct that an Optionee with respect to an
ISO undertake in the applicable Agreement to give such notice described
in the preceding sentence, at such time and containing such information
as the Committee may prescribe, and/or that the certificates evidencing
shares of Stock acquired by exercise of an ISO refer to such
requirement to give such notice.
(i) In the event that a transaction described in Section
424(a) of the Code involving the Company or a Subsidiary is
consummated, such as the acquisition of property or stock from an
unrelated corporation, individuals who become eligible to participate
in the Plan in connection with such transaction, as determined by the
Committee, may be granted Options in substitution for stock options
granted by another corporation that is a party to such transaction. If
such substitute Options are granted, the Committee, in its discretion
and consistent with Section 424(a) of the Code, if applicable, and the
terms of the Plan, though notwithstanding paragraph (a) of this Section
6, shall determine the option exercise price and other terms and
conditions of such substitute Options.
7. TRANSFER, LEAVE OF ABSENCE. For purposes of the Plan, a
transfer of an employee from the Company to a Subsidiary, whether or not
incorporated, or vice versa, or from one Subsidiary to another, and a leave of
absence, duly authorized in writing by the Company or a Subsidiary, shall not be
deemed a termination of employment of the employee.
8. RIGHTS OF EMPLOYEES AND OTHER PERSONS. (a) No person shall
have any rights or claims under the Plan except in accordance with the
provisions of the Plan and the applicable Agreement.
(b) Nothing contained in the Plan or in any Agreement
shall be deemed to (i) give any employee or director the right to be retained in
the service of the Company or the Subsidiaries nor restrict in any way the right
of the Company or any Subsidiary to terminate any employee's employment or any
director's directorship at any time with or without cause or (ii) confer on any
consultant any right of continued relationship with the Company or the
Subsidiaries, or alter any relationship between them, including any right of the
Company or a Subsidiary to terminate its relationship with such consultant.
(c) The adoption of the Plan shall not be deemed to
give any employee of the Company or any Subsidiary or any other person any right
to be selected to participate in the Plan or to be granted an Option.
(d) Nothing contained in the Plan or in any Agreement
shall be deemed to give any employee the right to receive any bonus, whether
payable in cash or in Stock, or in any combination thereof, from the Company or
any Subsidiary, nor be construed as limiting in any way the right of the Company
or any Subsidiary to determine, in its sole discretion, whether or not it shall
pay any employee bonuses, and, if so paid, the amount thereof and the manner of
such payment.
9. TAX WITHHOLDING OBLIGATIONS. (a) The Company and/or any
Subsidiary are authorized to take whatever actions are necessary and proper to
satisfy all obligations of Optionees (including, for purposes of this Section 9,
any other person entitled to exercise an Option pursuant to the Plan or an
Agreement) for the payment of all Federal, state, local and foreign taxes in
connection with any Options (including, but not limited to, actions pursuant to
the following paragraph (b) of this Section 9).
(b) Each Optionee shall (and in no event shall Stock
be delivered to such Optionee with respect to an Option until), no later than
the date as of which the value of the Option first becomes includible in the
gross income of the Optionee for income tax purposes, pay to the Company in
cash, or make arrangements satisfactory to the Company, as determined in the
Committee's discretion, regarding payment to the Company of, any taxes of any
kind required by law to be withheld with respect to the Stock subject to such
Option, and the
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<PAGE> 19
Company and any Subsidiary shall, to the extent permitted by law, have the right
to deduct any such taxes from any payment of any kind otherwise due to such
Optionee. Notwithstanding the above, the Committee may, in its discretion and
pursuant to procedures approved by the Committee, permit the Optionee to (i)
elect withholding by the Company of Stock otherwise deliverable to such Optionee
pursuant to such Option (PROVIDED, HOWEVER, that the amount of any Stock so
withheld shall not exceed the minimum required withholding obligation taking
into account the Optionee's effective tax rate and all applicable Federal,
state, local and foreign taxes) and/or (ii) tender to the Company Stock owned by
such Optionee (or by such Optionee and his or her spouse jointly) and acquired
more than six (6) months prior to such tender in full or partial satisfaction of
such tax obligations.
10. CHANGES IN CAPITAL. (a) Upon changes in the outstanding
Stock by reason of a stock dividend, stock split, reverse stock split,
subdivision, recapitalization, merger, consolidation (whether or not the Company
is a surviving corporation), combination or exchange of shares of Stock,
separation, or reorganization, or in the event of an extraordinary dividend,
"spin-off," liquidation, other substantial distribution of assets of the Company
or acquisition of property or stock or other change in capital of the Company,
or the issuance by the Company of shares of its capital stock without receipt of
full consideration therefor, or rights or securities exercisable, convertible or
exchangeable for shares of such capital stock, the aggregate number, class and
kind of shares of stock available under the Plan as to which Options may be
granted and the number, class and kind of shares under each outstanding Option
and/or the option price per share applicable to any such Options shall be
appropriately adjusted by the Committee in its discretion to preserve the
benefits or potential benefits intended to be made available under the Plan or
with respect to any outstanding Options.
(b) In the event of (i) a stock sale, merger,
consolidation, combination, reorganization or other transaction (other than
through a public offering of Common Stock of the Company) resulting in less than
fifty percent (50%) of the combined voting power of the surviving or resulting
entity being owned by the shareholders of the Company immediately prior to such
transaction, (ii) the liquidation or dissolution of the Company or the sale or
other disposition of all or substantially all of the assets or business of the
Company (other than, in the case of either clause (i) or (ii) above, in
connection with any employee benefit plan of the Company or a Subsidiary), or
(iii) a public offering of Common Stock of the Company pursuant to a
registration statement declared effective under the Securities Act:
(1) In its discretion and on such terms and
conditions as it deems appropriate, the Committee may provide, either
by the terms of the Agreement applicable to any Option or by a
resolution adopted prior to the occurrence of such event, that any
outstanding Option shall be accelerated and become immediately
exercisable as to all or a portion of the shares of Stock covered
thereby, notwithstanding anything to the contrary in the Plan or the
Agreement.
(2) In its discretion, and on such terms and
conditions as it deems appropriate, the Committee may provide, either
by the terms of the Agreement applicable to any Option or by resolution
adopted prior to the occurrence of such event, that any outstanding
Option shall be adjusted by substituting for Stock subject to such
Option stock or other securities of the surviving corporation or any
successor corporation to the Company, or a parent or subsidiary
thereof, or that may be issuable by another corporation that is a party
to the transaction whether or not such stock or other securities are
publicly traded, in which event the aggregate exercise price shall
remain the same and the amount of shares or other securities subject to
the Option shall be the amount of shares or other securities which
could have been purchased on the closing date or expiration date of
such transaction with the proceeds which would have been received by
the Optionee if the Option had been exercised in full (or with respect
to a portion of such Option, as determined by the Committee, in its
discretion) prior to such transaction or expiration date and the
Optionee exchanged all of such shares in the transaction.
(3) In its discretion, and on such terms and
conditions as it deems appropriate, the Committee may provide, either
by the terms of the Agreement applicable to any Option or by resolution
adopted prior to the occurrence of such event, any outstanding Option
shall, in each case, be converted into a right to receive cash
following the closing date or expiration date of the transaction in an
amount equal to the highest value of the consideration to be received
in connection with such transaction for one
A-8
<PAGE> 20
share of Stock, or, if higher, the highest Fair Market Value of the
Stock during the 30 consecutive business days immediately prior to the
closing date or expiration date of such transaction, less the per share
exercise price of such Option, multiplied by the number of shares of
Stock subject to such Option, or a portion thereof.
(4) The Committee may, in its discretion, provide
that an Option cannot be exercised after such an event, to the extent
that such Option becomes subject to any acceleration, adjustment or
conversion in accordance with the foregoing paragraphs (1), (2) or (3)
of this subsection 10(b).
No Optionee shall have any right to prevent the consummation of any of the
foregoing acts affecting the number of shares of Stock available to such
Optionee. Any actions or determinations of the Committee under this Subsection
10(b) need not be uniform as to all outstanding Options, nor treat all Optionees
identically. Notwithstanding the foregoing adjustments, in no event may any
Option be exercised after ten (10) years from the date it was originally
granted, and any changes to ISOs pursuant to this Section 10 shall, unless the
Committee determines otherwise, only be effective to the extent such adjustments
or changes do not cause a "modification" (within the meaning of Section
424(h)(3) of the Code) of such ISOs or adversely affect the tax status of such
ISOs.
11. MISCELLANEOUS PROVISIONS. (a) The Plan shall be unfunded.
The Company shall not be required to establish any special or separate fund or
to make any other segregation of assets to assure the issuance of shares of
Stock or the payment of cash upon exercise or payment of any Option. Proceeds
from the sale of shares of Stock pursuant to Options granted under the Plan
shall constitute general funds of the Company. The expenses of the Plan shall be
borne by the Company.
(b) Except as otherwise provided in this paragraph
(b) of Section 11 or by the Committee, an Option by its terms shall be personal
and may not be sold, transferred, pledged, assigned, encumbered or otherwise
alienated or hypothecated otherwise than by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of an Optionee only by
him or her. At the Committee's discretion, an Agreement may permit the exercise
of an Optionee's Option (or any portion thereof) after his or her death by the
beneficiary most recently named by such Optionee in a written designation
thereof filed with the Company, or, in lieu of any such surviving beneficiary,
as designated by the Optionee by will or by the laws of descent and
distribution. In the event any Option is exercised by the executors,
administrators, heirs or distributees of the estate of a deceased Optionee, or
such an Optionee's beneficiary, or the transferee of an Option, in any such case
pursuant to the terms and conditions of the Plan and the applicable Agreement
and in accordance with such terms and conditions as may be specified from time
to time by the Committee, the Company shall be under no obligation to issue
Stock thereunder unless and until the Committee is satisfied that the person or
persons exercising such Option is the duly appointed legal representative of the
deceased Optionee's estate or the proper legatees or distributees thereof or the
named beneficiary of such Optionee, or the valid transferee of such Option, as
applicable.
(c) If at any time the Committee shall determine, in
its discretion, that the listing, registration and/or qualification of shares of
Stock upon any securities exchange or under any state or Federal law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
shares of Stock hereunder, no Option may be exercised in whole or in part unless
and until such listing, registration, qualification, consent and/or approval
shall have been effected or obtained, or otherwise provided for, free of any
conditions not acceptable to the Committee.
(d) The Committee may require each person receiving
Stock in connection with any Option under the Plan to represent and agree with
the Company in writing that such person is acquiring the shares of Stock for
investment without a view to the distribution thereof. The Committee, in its
absolute discretion, may impose such restrictions on the ownership and
transferability of the shares of Stock purchasable or otherwise receivable by
any person under any Option as it deems appropriate. Any such restrictions shall
be set forth in the applicable Agreement, and the certificates evidencing such
shares may include any legend that the Committee deems appropriate to reflect
any such restrictions.
A-9
<PAGE> 21
(e) The Committee may, in its discretion, extend one
or more loans to Optionees who are key employees of the Company or a Subsidiary
in connection with the exercise or receipt of an Option granted to any such
employees. The terms and conditions of any such loan shall be set by the
Committee.
(f) By accepting any benefit under the Plan, each
Optionee and each person claiming under or through such Optionee shall be
conclusively deemed to have indicated their acceptance and ratification of, and
consent to, all of the terms and conditions of the Plan and any action taken
under the Plan by the Committee, the Company or the Board.
(g) Neither the adoption of the Plan nor anything
contained herein shall affect any other compensation or incentive plans or
arrangements of the Company or any Subsidiary, or prevent or limit the right of
the Company or any Subsidiary to establish any other forms of incentives or
compensation for their employees or consultants or directors, or grant or assume
options or other rights otherwise than under the Plan.
(h) The Plan shall be governed by and construed in
accordance with the laws of the State of Florida, except as superseded by
applicable Federal law.
(i) The words "Section" and "paragraph" shall refer
to provisions of the Plan, unless expressly indicated otherwise.
(j) Notwithstanding any other provision of the Plan
to the contrary, no provision of the Plan (including, without limitation,
Section 10) shall be applied to give any Optionee to whom the Company granted an
ISO prior to November 1, 1998, under the terms and conditions of the Plan as in
effect at the time of such grant, any additional benefits under such ISO which
would result in a "modification" of such ISO within the meaning of Section 424
of the Code.
12. LIMITS OF LIABILITY. (a) Any liability of the Company or a
Subsidiary to any Optionee with respect to any Option shall be based solely upon
contractual obligations created by the Plan and the Agreement.
(b) Neither the Company nor a Subsidiary nor any member of the
Committee or the Board, nor any other person participating in any determination
of any question under the Plan, or in the interpretation, administration or
application of the Plan, shall have any liability, in the absence of bad faith,
to any party for any action taken or not taken in connection with the Plan,
except as may expressly be provided by statute.
13. AMENDMENTS AND TERMINATION. The Board may, at any time and
with or without prior notice, amend, alter, suspend, or terminate the Plan;
PROVIDED, HOWEVER, no such amendment, alteration, suspension, or termination
shall be made which would impair the previously accrued rights of any holder of
an Option theretofore granted without his or her written consent or which,
without first obtaining approval of the stockholders of the Company (where such
approval is necessary to satisfy (i) any requirements under the Code relating to
ISOs or (ii) any applicable law, regulation or rule), would:
(a) except as is provided in Section 10, increase the maximum
number of shares of Stock which may be sold or awarded under the Plan;
(b) except as is provided in Section 10, decrease the minimum
option exercise price requirements of Section 6(a);
(c) change the class of persons eligible to receive Options
under the Plan; or
(d) extend the duration of the Plan or the period during which
Options may be exercised under Section 6(b).
A-10
<PAGE> 22
The Committee may amend the terms of any Option theretofore
granted, including any Agreement, retroactively or prospectively, but no such
amendment shall impair the previously accrued rights of any Optionee without his
or her written consent.
14. DURATION. Following the adoption of the Plan by the Board,
the Plan shall become effective as of the date on which it is approved by the
holders of a majority of the Company's outstanding Stock which is present and
voted at a meeting, or by written consent in lieu of a meeting, which approval
must occur within the period ending twelve (12) months after the date the Plan
is adopted by the Board. The Plan shall terminate upon the earliest to occur of:
(a) the effective date of a resolution adopted by the Board
terminating the Plan;
(b) the date all shares of Stock subject to the Plan are
delivered pursuant to the Plan's provisions;
(c) ten (10) years from the date the Plan is approved by the
Company's shareholders; or
(d) December 1, 2006.
No Option may be granted under the Plan after the earliest to occur of the
events or dates described in the foregoing paragraphs (a) through (c) of this
Section 14; HOWEVER, Options theretofore granted may extend beyond such date.
No such termination of the Plan shall affect the previously
accrued rights of any Optionee hereunder and all Options previously granted
hereunder shall continue in force and in operation after the termination of the
Plan, except as they may be otherwise terminated in accordance with the terms of
the Plan or the Agreement.
A-11
<PAGE> 23
<TABLE>
<CAPTION>
AFFILIATED NETWORKS, INC.
SPECIAL MEETING OF STOCKHOLDERS--NOVEMBER 16, 1999
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R The undersigned stockholder of AFFILIATED NETWORKS, INC. does hereby nominate, constitute and appoint David A.
Schwedel and Kenbian A. Ng., the true and lawful proxies, agents and attorneys of the undersigned, with full power of
O substitution, to vote for the undersigned all of the Common Stock of said corporation standing in the name of the
undersigned at the close of business on October 12, 1999 at the Special Meeting of Stockholders to be held at 2701 South
X Bayshore Drive, 5th Floor, Coconut Grove, Florida 33133, on November 16, 1999 at 10:00 a.m. or at any adjournment or
postponement thereof, with all of the powers which would be possessed by the undersigned if personally present as follows
Y on the reverse side.
<S> <C> <C>
- ----------- -----------
SEE SEE
REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE REVERSE
SIDE SIDE
- ----------- -----------
[X] Please mark votes as in this example.
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
IF NO CONTRARY INSTRUCTION IS INDICATED, THIS PROXY WILL BE VOTED FOR THE TWO
PROPOSALS.
<S> <C>
1. Amendment of the Amended and Restated Articles NOTE: Please sign name exactly as your name (or
of Incorporation of the Company to change the names) appears hereon. When signing as
name of the Company to "MAREX.com, Inc." attorney, executor, administrator, trustee or
guardian please give full title. If more than one
FOR AGAINST ABSTAIN trustee, all should sign. All joint owners must
sign.
[ ] [ ] [ ]
2. Amendment and Restatement of the Company's Signature:_____________________ Date: ___________
Amended and Restated 1997 Stock Option Plan, as
amended, to increase the maximum number of Signature:_____________________ Date: ___________
shares which may be subject to options granted
under the Plan by 2,000,000 shares. PLEASE FILL IN, DATE, SIGN AND MAIL THIS
PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF
FOR AGAINST ABSTAIN MAILED IN THE UNITED STATES.
[ ] [ ] [ ]
3. In their discretion, the Proxies are authorized to
vote upon such other business as may properly
come before the meeting.
</TABLE>
