<PAGE> 1
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 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
800 TRAVEL SYSTEMS, 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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
800 TRAVEL SYSTEMS, INC.
4802 Gunn Highway
Tampa, Florida 33624
Dear Stockholder: October 29, 1999
You are cordially invited to attend the Annual Meeting (the "Meeting")
of stockholders of 800 Travel Systems, Inc. (the "Company"). The Meeting will be
held December 1, 1999 at 11:00 a.m., Eastern Daylight Savings Time, at the Hyatt
Regency Westshore, located at 6200 Courtney Campbell Causeway, Tampa, Florida
33607.
The Notice of the Meeting and the Proxy Statement on the following
pages cover the formal business of the Meeting, which includes the election of
Directors, a proposal to approve the Company's 1998 Stock Option Plan and a
proposal to ratify the appointment of the Company's independent certified public
accountants. We will report on the progress of the Company and comment on
matters of current interest.
It is important that your shares be represented at the Meeting. We ask
that you promptly sign, date and return the enclosed proxy card in the envelope
provided, even if you plan to attend the Meeting. Returning your proxy card will
not prevent you from voting in person at the Meeting if you are present and
choose to do so.
If your shares are held in street name by a brokerage firm, your broker
will supply you with a proxy to be returned to the brokerage firm. It is
important that you return the form to the brokerage firm as quickly as possible
so that the brokerage firm may vote your shares. You may not vote your shares in
person at the Meeting unless you obtain a power of attorney or legal proxy from
your broker authorizing you to vote the shares, and you present this power of
attorney or proxy at the Meeting.
Your Board of Directors and management look forward to greeting you
personally at the Meeting.
Cordially,
/s/ Mark D. Mastrini
Mark D. Mastrini
President, Chief Executive Officer
and Chief Operating Officer
<PAGE> 3
800 TRAVEL SYSTEMS, INC.
4802 Gunn Highway
Tampa, Florida 33624
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, DECEMBER 1, 1999
Notice is hereby given that the Annual Meeting of stockholders of 800
Travel Systems, Inc. (the "Company"), a Delaware corporation, will be held at
the Hyatt Regency Westshore, located at 6200 Courtney Campbell Causeway, Tampa,
Florida 33607, on December 1, 1999, at 11:00 a.m., Eastern Standard Time (the
"Meeting") for the following purposes:
1. To re-elect one Director to serve until the Annual Meeting in
2000, two Directors to serve until the Annual Meeting in 2001
and two Directors to serve until the Annual Meeting in 2002,
until their successors are elected and qualified or until
their earlier resignation, removal from office or death;
2. To approve the Company's 1998 Stock Option Plan to authorize
the issuance of 250,000 shares of Common Stock covered by the
plan;
3. To ratify the appointment of Grant Thornton LLP as the
Company's independent auditors for fiscal year 1999; and
4. To transact such other business as may properly come before
the Meeting or any adjournment thereof.
Your attention is directed to the Proxy Statement accompanying this
Notice for a more complete description of the matters to be acted upon at the
Meeting. The 1998 Annual Report of the Company is also enclosed. Stockholders of
record at the close of business on Monday, October 11, 1999 are entitled to
receive notice of and to vote at the Meeting and any adjournment thereof.
All stockholders are cordially invited to attend the Meeting. Whether
or not you expect to attend, please sign and return the enclosed Proxy promptly
in the envelope provided to assure the presence of a quorum. You may revoke your
Proxy and vote in person at the Meeting, if you desire. If your shares are held
in street name by a brokerage firm, your broker will supply you with a proxy to
be returned to the brokerage firm. It is important that you return the form to
the brokerage firm as quickly as possible so that the brokerage firm may vote
your shares. You may not vote your shares in person at the Meeting unless you
obtain a power of attorney or legal proxy from your broker authorizing you to
vote the shares, and you present this power of attorney or proxy at the Meeting.
Please note that attendance at the Meeting will be limited to
stockholders of the Company as of the record date (or their duly authorized
representatives). If your shares are held by a bank or broker, please bring to
the Meeting your bank or brokerage statement evidencing your beneficial
ownership of the Company stock.
By order of the Board of Directors
/s/ Robert B. Morgan
ROBERT B. MORGAN
Secretary
Tampa, Florida
October 29, 1999
<PAGE> 4
800 TRAVEL SYSTEMS, INC.
4802 Gunn Highway
Tampa, Florida 33624
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of 800 Travel Systems, Inc. (the "Company")
to be voted at the Annual Meeting of Stockholders (the "Meeting") to be held on
Wednesday December 1, 1999, at 11:00 a.m., Eastern Standard Time at the Hyatt
Regency Westshore in Tampa, Florida.
The Board of Directors has fixed the close of business on October 11,
1999 as the record date for the determination of stockholders entitled to
receive notice of, and to vote at, the Meeting. A stockholder giving a proxy has
the right to revoke it by giving written notice of such revocation to the
Secretary of the Company at any time before it is voted, by submitting to the
Company a duly executed, later dated proxy or by voting the shares subject to
such proxy by written ballot at the Meeting. The presence at the Meeting of a
stockholder who has given a proxy does not revoke such proxy unless such
stockholder files the aforementioned notice of revocation or votes by written
ballot.
This Proxy Statement and the enclosed form of proxy are first being
mailed to stockholders on or about October 29, 1999. All shares represented by
valid proxies pursuant to this solicitation (and not revoked before they are
exercised) will be voted as specified in the proxy. Each stockholder will be
entitled to one vote for each share of Common Stock registered in his or her
name on the books of the Company as of the close of business on October 11,
1999, on all matters that come before the Meeting. If a proxy is signed but no
specification is given, the share will be voted "FOR" Proposals 1, 2 and 3 (to
elect the Board's nominees to the Board of Directors, to approve the 1998 Stock
Option Plan and to ratify the appointment of Independent Auditors for 1999).
The cost of soliciting proxies will be borne by the Company. The
solicitation of proxies may be made by mail, telephone, facsimile or telegraph
or in person by directors, officers and regular employees of the Company,
without additional compensation for such services. Arrangements will be made
with brokerage houses and other custodians, nominees and fiduciaries to forward
proxy soliciting material to the beneficial owners of stock held of record by
such persons, and the Company will reimburse them for reasonable out of pocket
expenses incurred by them in so doing.
PROPOSAL ONE
RE-ELECTION OF DIRECTORS
There are currently five seats on the Board of Directors of the
Company, with no vacancies. The Board is divided into three classes of Directors
and the Directors set forth herein will be re-elected at the Meeting to serve as
Class I, Class II and Class III Directors. Initially, Class I Directors will be
re-elected at the Meeting to hold office until the Company's annual meeting in
2000, Class II Directors will be re-elected at the Meeting to hold office until
the Company's annual meeting in 2001, and Class III Directors will be re-elected
at the Meeting to hold office until the Company's annual meeting in 2002. After
completion of the initial terms, all Directors elected or re-elected as Class I,
Class II or Class III Directors will serve staggered three-year terms. Directors
hold their positions until the annual meeting
<PAGE> 5
of stockholders in the year in which their term expires and until their
respective successors are elected and qualified or until their earlier
resignation, removal from office or death. Each of the Company's current
Directors will be re-elected at the Meeting. The Board of Directors recommends
that L. Douglas Bailey be re-elected at the Meeting to hold office as a Class I
Director, Carl A. Bellini and George A. Warde be re-elected at the Meeting to
hold office as Class II Directors, and Mark D. Mastrini and Michael A. Gaggi be
re-elected at the Meeting to hold office as Class III Directors, until their
successors shall be duly elected and qualified or until their earlier
resignation, removal from office or death.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
RE-ELECTION OF L. DOUGLAS BAILEY, CARL A. BELLINI, GEORGE A. WARDE, MARK D.
MASTRINI, AND MICHAEL A. GAGGI AS DIRECTORS TO SERVE THE TERMS DESCRIBED ABOVE.
For further information on Messrs. Bailey, Bellini, Warde, Mastrini, and Gaggi
see "Management - Directors and Executive Officers" and "Security Ownership of
Management and Others." Stockholders may vote for Messrs. Bailey, Bellini,
Warde, Mastrini, and Gaggi and the affirmative vote of holders of a majority of
the shares represented, in person or by proxy, and entitled to vote at the
Meeting is required to re-elect Messrs. Bailey, Bellini, Warde, Mastrini, and
Gaggi. Abstentions and broker non-votes will be counted toward the number of
shares represented at the Meeting. Stockholders may not vote cumulatively in the
election of Directors. In the event Messrs. Bailey, Bellini, Warde, Mastrini,
and Gaggi should be unable to serve, which is not anticipated, the Board of
Directors will vote for such other person or persons for the office of Director
as the Board of Directors may recommend.
MANAGEMENT - DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth (i) the names and ages of the Directors
and executive officers of the Company and the positions they hold with the
Company and (ii) the names and ages of the nominees for Director listed herein.
Executive officers shall serve at the pleasure of the Board of Directors.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Mark D. Mastrini 36 President, Chief Executive Officer, Chief Operating
Officer and Director (3)
Robert B. Morgan 34 Chief Financial Officer, Secretary and Treasurer
Michael A. Gaggi 37 Director (1)(3)
George A. Warde 77 Chairman of the Board (1)(2)(3)
Carl A. Bellini 66 Director (1)(2)(3)
L. Douglas Bailey 57 Director(2)(3)
Biagio Bellizzi 60 Vice President-Marketing
Frank Zhao 39 Vice President-Controller
Constance Norris 45 Executive Vice President-Operations
</TABLE>
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
(3) Directors Currently Nominated for Re-Election.
2
<PAGE> 6
INFORMATION REGARDING OUTSIDE DIRECTORS:
MR. GEORGE A. WARDE has served as a director of the Company since
October 1997, and as its Chairman since April 1998. Mr. Warde is currently a
general manager for Casino Express Airlines. Since 1992, he has served as a
consultant to various businesses including Oaklawn Partners Ltd. (a consulting
firm), Sener (a financial advisory firm in Madrid, Spain), Aircraft Braking
Systems, Inc. (a manufacturer of aircraft braking systems), Ayres Corp. (an
aircraft manufacturer), Airline Capital Holding Corp. (an investment holding
company that invests in airline projects), America Trans Africa Airlines (an
airline) and Rich Airways (an airline on whose board he is also serving as a
director). From October 1994 until January 1995, he served as temporary
president and chief executive officer of Private Jet Expeditions, an airline.
From August 1995 until February 1996, he served as president and chief executive
officer of Presidential Air, an airline. From 1988 until 1992, Mr. Warde was
managing director of Foshing Airlines, an airline which services continental
Asia. From 1983 until 1988, he served as vice chairman of Continental Airlines
and as president of its Pacific Division. From 1981 until 1983, he served as
president and chief executive officer of Continental Airlines, and as a member
of its board of directors. From 1974 until 1981, Mr. Warde served as senior vice
president and a board member of Airbus Industrie, an airplane manufacturer in
Toulouse, France. From 1960 until 1974 he was president, chief executive officer
and director of American Airlines Inc. From 1950 until 1960, Mr. Warde was a
superintendent of maintenance for Pan American World Airways. From 1940 until
1950, he was director of overseas maintenance for American Airlines.
MR. CARL A. BELLINI has served as a director of the Company since
November 1997. From 1992 until 1997, Mr. Bellini was executive vice president of
marketing and stores of Revco D.S., Inc., the nation's second largest drugstore
chain which was sold to the CVS chain in May 1997. From 1994 until 1997, Mr.
Bellini was a director of Revco and from 1993 until 1997 he was chief operating
officer of Revco. From 1989 until 1992, he was president and chief executive
officer of Erol's, Inc., a video and electronics chain. Prior thereto, from 1987
until 1989, Mr. Bellini was executive vice president of stores for Revco. From
1980 until 1987, Mr. Bellini was associated in various capacities with The
Sherwin-Williams Company, including as president and manager of the stores
division and as president in charge of the retail paint and Gray Drug Fair drug
store divisions. From 1975 until 1980, Mr. Bellini served as senior vice
president of operations, distribution and real estate of Family Dollar Store.
From 1955 until 1975, Mr. Bellini was associated in a variety of operations and
management positions with W.T. Grant, a retail variety chain. Mr. Bellini is on
the board of directors of Sel-Lab Marketing, a cosmetics firm. He is also
advisor to the boards of Manco, a privately owned adhesives and tape company, a
New York Stock Exchange listed manufacturer of security devices, and Farmacia
Ahumada, a Chilean drugstore chain, and a consultant to Ratcher Press, a
publisher of Chain Drug Review and Mass Marketing Review, which are industry
publications.
MR. L. DOUGLAS BAILEY has served as a director of the Company since
November 1997. In 1995, he founded Bailey & Associates, Inc., an international
retail consulting firm providing information and assistance to consumer goods
companies and retail stores. From 1993 until 1995, Mr. Bailey was president of
Home Shopping Club, Inc., the flagship company of the Home Shopping Network.
From 1972 until 1992, he was employed in various capacities with the Eckerd Drug
Company, most recently as senior vice president of procurement. In 1980, Mr.
Bailey and his wife founded Regent Properties, a company specializing in the
development of commercial warehouse and office space. From 1969 until 1970, Mr.
Bailey was the Florida general merchandise manager of Cunningham Drugs, a
drugstore chain. From 1964 until 1968, Mr. Bailey was softlines merchandise
manager of Sears, Roebuck & Co. Mr. Bailey is on the board of directors of
Sel-Lab Marketing, a cosmetics firm. He also serves on the boards of the
Pinellas (Florida) Industrial Council and the Florida Lung Association, and
serves on the board of trustees or advisory boards of Ruth Eckerd Hall (a
performing arts center), The Goodwill Suncoast Foundation, Inc. (a private
foundation), the University of Florida Retail School, the University of South
Florida's Stavros Economic Center and Morton Plant Mease Hospital.
3
<PAGE> 7
INFORMATION REGARDING INSIDE DIRECTORS AND EXECUTIVE OFFICERS:
MR. MARK D. MASTRINI has served as the Company's Chief Operating
Officer since January 1996, President since January 1997 and Chief Executive
Officer since April 1998. Prior to joining the Company, from October 1992 until
October 1996, Mr. Mastrini was the founder and owner of One on One Consulting, a
consulting firm in Pueblo, Colorado. From September 1992 until October 1994, Mr.
Mastrini was owner of X-Press Printing, a printing business in Pueblo, Colorado.
From October 1993 until December 1996, he was the owner and editor of Pueblo
West Eagle Monthly Magazine. From May 1991 until June 1992, Mr. Mastrini was
Vice President of Sales and Marketing at the Braniff Airlines in Dallas, Texas,
an airline which subsequently filed for protection under Chapter 11 of the
Bankruptcy Code in the Bankruptcy Court in the Eastern District of New York in
July 1992.
MR. MICHAEL A. GAGGI has served as a director of the Company since its
incorporation as 800 Travel Systems, Inc. in November 1995, and was its Chairman
until April 1998. Since January 1998, Mr. Gaggi has been providing services to
privately and publicly-held companies through 8607 Colonial Group, Inc., a
financial consulting firm which he controls. Mr. Gaggi served as a senior vice
president at Joseph Stevens & Company, Inc., an investment banking firm in New
York City from 1994 until December 1997, when he resigned from such position.
From 1993 until 1994, Mr. Gaggi was employed as a vice president by Barington
Capital. Mr. Gaggi has been a principal director of Upscale Eyeglass Boutiques
Myoptics since 1990. Joseph Stevens & Company, Inc. is not affiliated with or
related to The Joseph Stevens Group, Inc., the travel agency acquired by the
Company in January 1998, its sole stockholder, The Joseph Stevens Group, LLC or
any of its equity members.
MR. ROBERT B. MORGAN was appointed the Company's Chief Financial
Officer, Secretary and Treasurer on September 8, 1999. Prior to joining the
Company, Mr. Morgan served for ten years as the Vice President and Chief
Financial and Information Officer for Ace Auto Parts Co., Inc., a publicly held
distributor of automotive parts and accessories. From 1985 to 1989, Mr. Morgan
was an Accounting Manager for Club Corporation of America, a worldwide
hospitality and lodging services organization. Mr. Morgan is a certified public
accountant.
INFORMATION REGARDING CERTAIN SIGNIFICANT EMPLOYEES:
MR. JERROLD B. SENDROW, age 55, served as the Company's Chief Financial
Officer, Vice President-Finance, Treasurer and Secretary since the incorporation
of the Company in November 1995 until his resignation from the Company on August
25, 1999, and served as a director from inception until July 1997. From June
1994 through November 1995, Mr. Sendrow was employed by 1-800 Low-Air Fare,
Inc., the Company's predecessor, in the same capacities. From March 1993 through
June 1994, Mr. Sendrow was employed by MSW Columbia Travel Group, Inc. as vice
president-finance. From December 1984 through March 1993, Mr. Sendrow was
employed by Pisa Brothers, Inc. as controller. Mr. Sendrow has over 23 years
experience in the travel industry.
MR. BIAGIO BELLIZZI has served as the Company's Vice
President-Marketing since its incorporation as 800 Travel Systems, Inc. in
November 1995. From June 1995 through November 1995, Mr. Bellizzi was employed
by 1-800 Low-Air Fare, Inc., the Company's predecessor, as Vice
President-Operations. From 1991 through June 1995, Mr. Bellizzi was employed by
Thomas Cook Travel, Inc. as Director-Leisure Marketing from 1993 until 1995 and
as Director-Retail Offices from 1991 to 1993. Mr. Bellizzi has over 30 years
experience in the travel industry.
4
<PAGE> 8
MR. FRANK ZHAO was appointed Vice President-Controller of the Company
in October 1997. Prior to joining the Company, Mr. Zhao was a senior accountant
at Toho Shipping (USA), a shipping company. From 1993 until 1995, Mr. Zhao was
an associate auditor at Coopers and Lybrand in Washington, D.C. From 1986 until
1990, Mr. Zhao was finance manager of PDL Ltd., a trading and investment company
in Hong Kong. From 1983 until 1986 he was a financial consultant at Beijing
International Trust and Investment Corporation, an investment company in
Beijing, China. Mr. Zhao is a certified public accountant.
MS. CONSTANCE NORRIS has served as the Company's Executive Vice
President-Operations since April 1998 and has been employed by the Company since
February 1996. From April 1995 through November 1995, Ms. Norris was employed by
the Company's predecessor, 1-800-Low-Air-Fare, Inc., as a Supervisor of
Reservations and Training. Ms. Norris was the founder and President of Universal
Star Tour and Travel, Inc. in Orlando, Florida from 1993 until 1995. From 1989
until 1994, Ms. Norris was general manager for Promotional Travel, Inc. based in
Altamonte Springs, Florida.
BOARD OF DIRECTORS
During 1998, the Board of Directors took various actions by unanimous
written consent and held two Board Meetings. Carl Bellini was unable to attend
one of the meetings of the Board of Directors. The entire Board of Directors
functions as a Nominating Committee for recommending to stockholders candidates
for positions on the Board of Directors and the Board will consider written
recommendations from stockholders for nominations to the Board of Directors in
accordance with the procedures set forth in the By-Laws of the Company.
AUDIT COMMITTEE
The Audit Committee, consisting of Messrs. Warde, Bellini and Bailey,
is authorized to recommend to the Board independent certified public accounting
firms for selection as auditors of the Company, make recommendations to the
Board on auditing matters, examine and make recommendations to the Board
concerning the scope of audits, and review and approve the terms of transactions
between the Company and related party entities. The Audit Committee did not meet
separately during 1998. The Company retained Grant Thornton LLP to conduct the
audit for the year ended December 31, 1998.
COMPENSATION COMMITTEE
The Compensation Committee, consisting of Messrs. Warde, Gaggi and
Bellini, is authorized to exercise all of the powers of the Board of Directors
with respect to matters pertaining to compensation and benefits, including, but
not limited to, salary matters, incentive/bonus plans, stock option plans,
investment programs and insurance plans, and the Compensation Committee is
authorized to exercise all of the powers of the Board in matters pertaining to
employee promotions and the designation and/or revision of employee positions
and job titles. The Compensation Committee did not meet separately during 1998.
See "Certain Transactions" for additional information on certain
members of management.
5
<PAGE> 9
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, officers and stockholders of more than 10% of the Company's
Common Stock to file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of Common Stock and any other
equity securities of the Company. To the Company's knowledge, based solely upon
a review of forms, reports and certificates furnished to the Company by such
persons, all such reports were filed on a timely basis during 1998 except for
the following: (i) Messrs. Gaggi, Mastrini, Sendrow and Bellini received options
to purchase the Company's Common Stock in December 1998 and filed their Form 4s
required as a result of such grants late; and (ii) Mr. Pasquale Guadagno
purchased shares of the Company's Common Stock in January 1998 and filed Form 4
required as a result of such purchase late.
VOTING SECURITIES AND PRINCIPAL SECURITY HOLDERS
As of September 30, 1999, the Company had outstanding and entitled to
vote 7,616,796 shares of Common Stock, par value $.01 per share ("Common
Stock"), and 3,321,800 Redeemable Common Stock Purchase Warrants ("Warrants").
The holders of Common Stock are entitled to vote as a single class and
to one vote per share, exercisable in person or by proxy, at all meetings of
stockholders. Holders of Warrants will not be entitled to vote at the Meeting.
The presence in person or by proxy of a majority of the issued and outstanding
shares of stock of the Company entitled to vote will constitute a quorum for
purposes of conducting business at the Meeting. Directors will be elected by a
plurality vote. The approval of the 1998 Stock Option Plan and the ratification
of auditors will require the affirmative vote of a majority of the votes cast
with respect to such proposals. For purposes of determining the votes cast with
respect to any matter presented for consideration at the Meeting, only those
votes cast "for" or "against" are included. Abstentions and broker non-votes are
counted only for the purpose of determining whether a quorum is present.
Abstentions and broker non-votes will not be included in vote totals and will
not affect the outcome of the vote.
[the remainder of this page is intentionally left blank]
6
<PAGE> 10
To the knowledge of the Company, the following table sets forth, as of
September 30, 1999, information as to the beneficial ownership of the Company's
Common Stock by (i) each person known to the Company as having beneficial
ownership of more than 5% of the Company's Common Stock, (ii) each person
serving the Company as a Director on such date and each nominee for Director,
(iii) each person serving the Company as an executive officer on such date who
qualifies as a "named executive officer" as defined in Item 402(a)(2) of
Regulation S-B under the Securities Exchange Act of 1934, and (iv) all of the
Directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Percentage
Number of Shares of Common Stock
Name and Address(1) Beneficially Owned(2) Outstanding(2)
- ------------------------------------------------------------------------------- --------------------
<S> <C> <C>
SECURITY OWNERSHIP OF OFFICERS AND DIRECTORS:
Michael A. Gaggi(3) 562,904 7.4%
Mark D. Mastrini(4) 480,000 6.3%
George A. Warde(5) 85,000 1.1%
Carl A. Bellini(6) 100,000 1.3%
L. Douglas Bailey(6) 100,000 1.3%
Officers and Directors as a Group (5 persons)(7) 1,327,904 14.8%
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS:
Pasquale and Jane Guadagno(8) 770,899 10.1%
Dunkeld Holdings Ltd.(9) 471,500 6.1%
Joseph and Louise Modica(10) 414,566 5.4%
</TABLE>
- ----------------------
(1) Unless otherwise indicated, the address of each of the beneficial
owners identified is 4802 Gunn Highway, Suite 140, Tampa, Florida 33624.
(2) Unless otherwise noted, each person has voting and investment
power, with respect to all such shares. Based on 7,616,796
shares of Common Stock outstanding. Pursuant to the rules of
the Securities and Exchange Commission, certain shares of
Common Stock which a person has the right to acquire within 60 days
of the date hereof pursuant to the exercise of stock options are deemed to
be outstanding for the purpose of computing the percentage
ownership of such person but are not deemed outstanding for the
purpose of computing the percentage ownership of any other
person.
(3) Does not include 2,500 shares owned beneficially by
Rose Gaggi, Mr. Gaggi's mother, as to which shares Mr. Gaggi
disclaims beneficial ownership. Includes 20,335 shares issuable
upon exercise of options which are immediately exercisable at
$1.00 per share.
(4) Includes 350,000 shares issuable upon exercise of options which
are immediately exercisable at $5.00 per share.
(5) Includes 50,000 shares issuable upon exercise of
options which are immediately exercisable at $3.00 per share and
35,000 shares issuable upon exercise of options which are
immediately exercisable at $3.10 per share.
(6) Includes 50,000 shares issuable upon exercise of options which are
immediately exercisable at $3.00 per share and 50,000 shares issuable upon
exercise of options which are immediately exercisable at $3.10
per share.
(7) Includes 655,335 shares issuable pursuant to the
options referred to in footnotes 3, 4, 5 and 6.
(8) Includes 45,999 shares issuable upon exercise of options which are
immediately exercisable at $1.00 per share. The address of such
persons is c/o Robb Peck McCooey, 55 Broadway, New York, New
York 10006.
(9) Includes 67,000 shares issuable upon exercise
of options which are immediately exercisable at $1.00 per share.
The address of Dunkeld Holdings is Northfork House, 2nd Floor,
Frederick Street, P.O. Box N-3813, Nassau, Bahamas.
(10) The address of such persons is 157 Narrow North, Staten Island, New
York 10305.
7
<PAGE> 11
EXECUTIVE COMPENSATION
COMPENSATION TO OUTSIDE DIRECTORS
The Company pays each Director who is not an employee of the Company
("outside director") $2,000 for each Board of Directors meeting attended, plus
reimbursement for all expenses incurred by such Director in connection with such
attendance at any meeting of the Board of Directors.
During 1998, the Company also granted options to purchase 100,000
shares of Common Stock to each of the outside directors as consideration for
their agreements to serve as Directors of the Company. Such options are
exercisable by each of them as follows: (i) 50,000 options at $3.00 per share
and (ii) 50,000 options at $3.10 per share.
SUMMARY COMPENSATION TABLE
EXECUTIVE COMPENSATION TABLES
The following table sets forth the annual and long-term compensation
for services to the Company for the years ended December 31, 1998, 1997 and
1996, provided by Mr. Mastrini, the Chief Executive Officer of the Company and
the only employee of the Company whose compensation exceeded $100,000 during
such years.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Securities
Name and Other Annual Restricted Stock Underlying
Principal Position Year Salary Compensation Awards ($) Options
------------------ ---- -------- ------------ ---------------- ----------
<S> <C> <C> <C> <C> <C>
Mark D. Mastrini 1996 $ 66,459 $ 0 $120,000(1) 0
President and Chief 1997 $125,205 $8,333 $ 0 0
Operating Officer 1998 $176,357 $8,333 $ 0 455,000(2)
</TABLE>
(1) Represents 100,000 shares of Common Stock, valued at $1.20 per share.
(2) Includes 25,000 warrants identical to the Warrants sold to the public in
the IPO, all of which warrants Mr. Mastrini disposed of in April 1998.
8
<PAGE> 12
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR 1998
The following table summarizes option grants made by the Company to
each of its executive officers named in the Summary Compensation table above as
a part of such person's 1998 base compensation. No grants of stock appreciation
rights (SARS) were made by the Company in fiscal year 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES % OF TOTAL OPTIONS
UNDERLYING OPTIONS GRANTED TO EMPLOYEES IN EXERCISE OF BASE EXPIRATION
NAME GRANTED FISCAL YEAR 1998 PRICE ($/SH) DATE
- ---------------- -------------------- ------------------------ ---------------- ------------
<S> <C> <C> <C> <C>
Mark D. Mastrini 15,000 2.7 5.50 01/23/08
50,000 8.8 5.00 01/21/08
40,000 7.1 3.00 04/01/08
50,000 8.8 5.00 09/01/08
250,000 44.2 5.00 09/01/08
25,000 4.4 6.25 01/21/03
</TABLE>
AGGREGATED OPTIONS/SAR EXERCISES DURING YEAR ENDED DECEMBER 31, 1998
AND VALUE OF OPTIONS/SAR AT DECEMBER 31, 1998
The following table summarizes option exercises during the year ended
December 31, 1998 by the executive officers named in the Summary Compensation
Table above, and the values of the options held by such persons at December 31,
1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT DECEMBER 31, OPTIONS AT DECEMBER 31,
SHARES ACQUIRED VALUE 1998 EXERCISABLE/ 1998 EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- --------------------- --------------- -------- ------------------------ -----------------------
<S> <C> <C> <C> <C>
Mark D. Mastrini 0 0 325,000(1)/80,000 $2,356,250/$601,875
</TABLE>
(1) Does not include 25,000 warrants identical to the Warrants sold to the
public in the IPO, all of which warrants Mr. Mastrini disposed of in
April 1998.
EMPLOYMENT AGREEMENTS
Mr. Mark Mastrini has entered into an employment agreement with the
Company (the "Employment Agreement"), pursuant to which he has agreed to serve
as the Company's Chief Executive Officer and President. The Employment Agreement
terminates on May 31, 2001, and is renewable for subsequent one year terms
subject to the terms of the Employment Agreement. Mr. Mastrini agreed to devote
his entire working time and attention to the business of the Company. In
addition, Mr. Mastrini has agreed not to compete with the business of the
Company for a period of ninety days following the termination of his employment
with the Company. As of June 1, 1999, Mr. Mastrini is entitled to a base annual
salary of $200,000, which salary may be adjusted on June 1, 2000 to
9
<PAGE> 13
reflect the increase in the consumer price index and to provide for a five
percent raise. As additional compensation pursuant to the Employment Agreement,
the Company issued 100,000 shares of Common Stock to Mr. Mastrini, which shares
became fully vested as of September 1, 1999, and the Company granted options to
purchase 50,000 shares of Common Stock, which vested as follows: 25,000 on
January 21, 1998, and 25,000 on January 21, 1999.
CERTAIN TRANSACTIONS
In April 1998, the Company and Mr. Gaggi entered into a Consulting
Agreement. Under the terms of the Consulting Agreement, Mr. Gaggi is entitled to
$5,000 per month in return for providing consulting services to the Company. In
May 1999, the Company increased the monthly payments paid to Mr. Gaggi in return
for such consulting services to $10,500 per month.
In July 1999, The Colonial Group, a company which is majority owned by
Mr. Gaggi, agreed to provide investor-relation services to the Company for
$3,000 per month.
During 1996 and 1997, the Company paid personal expenses of Mr. Gaggi
of $101,041.20 and of Mr. Vito Balsamo, a former director and promoter of the
Company, of $146,614.72. In May 1998, Mr. Gaggi tendered 24,765 shares of Common
Stock to the Company in satisfaction of his outstanding obligation to the
Company of $101,041.20, and Mr. Balsamo tendered 24,766 shares of Common Stock
to the Company in satisfaction of his outstanding obligation to the Company of
$146,614.72.
Lucien Bittar served as a consultant to the Company from January 1997
until March 1998 pursuant to an agreement which is scheduled to expire, in
January 2000 and which provides for a consulting fee of $6,000 per month. Since
April 1998, Mr. Bittar has been on an unpaid leave of absence. At his option Mr.
Bittar may return as a consultant to the same terms for the remainder of the
original term of his consulting agreement. Mr. Bittar served as the Company's
President and Chief Operating Officer and a director from, its incorporation as
800 Travel Systems, Inc. in November 1995 until January 1997. Mr. Bittar served
as the Vice Chairman of the Board from April 1996 until February 1997. From
August 1994 through November 1995, Mr. Bittar was president and a director of
1-800 Low Air Fare, Inc., the Company's predecessor. Mr. Bittar founded Filigree
Consulting Inc., a travel company, in May 1989 and served as its president and
chief executive officer from that time until he joined 1-800 Low-Air Fare, Inc.
in August 1994. Prior to 1989, Mr. Bittar was employed by Thomas Cook Travel,
Inc. During that time he served as executive vice president responsible for all
United States operations and a member of the Board of Directors. Mr. Bittar
currently owns 175,000 shares of Common Stock.
Mr. Balsamo, a former director of the Company, may be considered a
promoter of the Company. Since December 1997, Mr. Balsamo has been Vice
President of Investments at Lexington Capital Partners and Company Ltd. From
1994 until December 1997, Mr. Balsamo held the position of Senior Vice President
of Joseph Stevens & Company, L.P., the investment banking firm with which Mr.
Gaggi is affiliated. Before joining Joseph Stevens & Company Mr. Balsamo served
as Vice President of Barington Capital (September 1993-1994) and as account
executive with Thomas James and Company (September 1992-September 1993).
10
<PAGE> 14
PROPOSAL TWO
APPROVAL OF THE 1998 STOCK OPTION PLAN
The Board of Directors adopted the 800 Travel Systems, Inc. 1998 Stock
Option Plan (the "Stock Option Plan") on December 2, 1998, subject to approval
by the stockholders of the Company at the Annual Meeting of Stockholders.
The Stock Option Plan authorizes the Compensation Committee to grant
options to purchase shares of the Company's Common Stock ("Options") to
officers, key employees and directors of the Company. The purposes of the Stock
Option Plan are to enable the Company to attract and retain officers and key
employees and to align the interests of such persons and members of the Board of
Directors with the interests of stockholders by giving them a personal interest
in the value of the Company's Common Stock.
SUMMARY OF THE STOCK OPTION PLAN
THE FOLLOWING GENERAL DESCRIPTION OF CERTAIN FEATURES OF THE STOCK
OPTION PLAN IS QUALIFIED IN ITS ENTIRETY TO REFERENCE TO THE STOCK OPTION PLAN,
WHICH IS ATTACHED AS APPENDIX A TO THIS PROXY.
Shares Available Under the Stock Option Plan. Subject to adjustment as
provided in the Stock Option Plan, the number of shares of Common Stock that may
be issued or transferred and covered by outstanding awards granted under the
Stock Option Plan will not in the aggregate exceed 250,000, which may be
original issue shares, treasury shares, or a combination thereof. As of December
31, 1998, the Company has issued options to purchase 100,000 shares of Common
Stock under the Stock Option Plan.
Eligibility. Officers, other key salaried employees of the Company and
members of the Board of Directors may be selected by the Compensation Committee
to receive benefits under the Stock Option Plan. It is estimated that
approximately 25 individuals currently are eligible to participate in the Plan.
Options. Options granted to eligible employees under the Stock Option
Plan may be Options that are intended to qualify as "Incentive Stock Options"
within the meaning of Section 422 of the Code or Options that are not intended
to so qualify ("Nonstatutory Options"). Options granted to members of the Board
of Directors will be Nonstatutory Options.
If the Option is designated as an Incentive Stock Option, the purchase
price of the Common Stock that is the subject of such Option may be not less
than the fair market value of the Common Stock on the date the Option is
granted. If the Option is a Nonstatutory Option, the purchase price may be equal
to or less than the fair market value of the Common Stock on the date the Option
is granted, as the Committee shall determine. Incentive Stock Options granted to
an individual who owns (or is deemed to own) at least 10% of the total combined
voting power of all classes of stock of the Company must have an exercise price
of at least 110% of the fair market value of the Common Stock on the date of
grant and a term of no more than five years. The option price is payable at the
time of exercise (i) in cash, (ii) if permitted by a participant's Stock Option
Agreement, by the delivery of shares of Common Stock having a fair market value
equal to the option price, or (iii) in such other manner as the Compensation
Committee may approve. The Stock Option Plan also authorizes the Company to make
or guarantee
11
<PAGE> 15
loan to participants to enable them to exercise their options. Such loans must
(i) provide for recourse to the participant, (ii) bear interest at a rate no
less than the prime rate of interest, and (iii) be secured by the shares of
Common Stock purchased.
No Options may be exercised more than 10 years from the date of grant.
Each employee's or director's stock option agreement may specify the period of
continuous service with the Company that is necessary before the Option will
become exercisable. Except in the case of an employee who is permanently and
totally disabled, if the Option is intended to be an Incentive Stock Option it
will be exercisable only if the recipient is an employee of either the Company
or a subsidiary corporation at all times during the period beginning on the date
of the grant of the Option and ending on a date which is no later than three
months before the date of such exercise, all as specified in the employee's or
director's stock option agreement. Successive grants may be made to the same
recipient regardless of whether Options previously granted to him or her remain
unexercised.
Transferability. No Incentive Stock Option, and unless the Compensation
Committee's prior written consent is obtained (which consent may be obtained at
the time an Option is granted) and the transaction does not violate the
requirements of Rule l6b-3 promulgated under the Exchange Act, no Nonqualified
Stock Option, may be transferred other than by will or the laws of descent and
distribution. Each Option may be exercisable during the participant's lifetime
only by the participant, in the event of the participant's incapacity, by
participant's guardian or legal representative acting in a fiduciary capacity on
behalf of the participant under state law and court supervision, or in the case
of a Nonqualified Stock Option that has been transferred with the Compensation
Committee's prior written consent, only by the transferee consented to by the
Compensation Committee. Unless the Compensation Committee's prior written
consent is obtained (which consent may be obtained at the time an Option is
granted) and the transaction does not violate the requirements of Rule 16b-3
promulgated under the Exchange Act, no shares of Common Stock acquired by an
officer, as that term is defined under Rule 16b-3, of the Company or Director
pursuant to the exercise of an Option may be transferred prior to the expiration
of the six-month period following the date on which the Option was granted.
Adjustments. The maximum number of shares that may be issued or
transferred under the Stock Option Plan and the number of shares covered by
outstanding Options and the option prices per share applicable thereto are
subject to adjustment in the event of stock dividends, stock splits,
combinations, exchanges of shares, recapitalizations, mergers, consolidations,
liquidation of the Company, and similar transactions or events.
Administration and Amendments. The Stock Option Plan will be
administered by the Compensation Committee. In connection with its
administration of the Stock Option Plan, the Compensation Committee is
authorized to interpret the Stock Option Plan and related agreements and other
documents.
The Stock Option Plan may be amended from time to time by the Board of
Directors in such respects as it deems advisable. Further approval by the
stockholders of the Company will be required for any amendment that would (i)
increase the aggregate number of shares of Common Stock that may be issued under
the Stock Option Plan, (ii) materially change the classes of persons eligible to
participate in the Plan, or (iii) otherwise cause Rule 16b-3 under the Exchange
Act to cease to be applicable to the Stock Option Plan. No amendment may change
the Plan so as to cause any Option intended to be an Incentive Stock Option to
fail to meet the Internal Revenue Code requirements for an
12
<PAGE> 16
incentive stock option. No amendment may change any rights an optionee may have
under any outstanding Option without the written consent of the Optionee. The
Board may at any time terminate or discontinue the Stock Option Plan. Unless
terminated sooner, the Stock Option Plan will continue in effect until all
Options granted thereunder have expired or been exercised, provided that no
Options may be granted after 10 years from the date the Board of Directors
adopted the Stock Option Plan.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain of the federal income tax
consequences of certain transactions under the Stock Option Plan based on
federal income tax laws in effect on September 30, 1999. This summary is not
intended to be exhaustive and does not describe state or local tax consequences.
Nonstatutory Options. In general, (i) an employee or director will not
recognize taxable income at the time he or she is granted Nonstatutory Options;
(ii) at the time of exercise of a Nonstatutory Option, ordinary income will be
recognized by the employee in an amount equal to the difference between the
option price paid for the shares and the fair market value of the shares; and
(iii) at the time of sale of shares acquired pursuant to the exercise of a
Nonstatutory Option, any appreciation (or depreciation) in the value of the
shares after the date of exercise will be treated as either short-term or
long-term capital gain (or loss) depending on how long the shares have been
held.
Incentive Stock Options. No income generally will be recognized by an
employee upon either the grant or the exercise of an Incentive Stock Option. If
the shares of Common Stock issued to an employee pursuant to the exercise of an
Incentive Stock Option and the shares are not sold or otherwise transferred by
the employee within two years after the date of grant or within one year after
the transfer of the shares to the employee, then upon the sale of the shares any
amount realized in excess of the option price will be taxed to the employee as
long-term capital gain and any loss sustained will be a long-term capital loss.
Although an employee will not realize ordinary income upon the exercise of an
Incentive Stock Option, if the shares are sold or transferred after the
expiration of the one-year or two-year holding periods described above, the
excess of the fair market value of the Common Stock acquired at the time of
exercise over the option price may constitute an adjustment in computing
alternative minimum taxable income under Section 56 of the Code and, thus, may
result in the imposition of the "alternative minimum tax" pursuant to Section 55
of the Code on the employee.
If shares of Common Stock acquired upon the exercise of an Incentive
Stock Option are disposed of before the expiration of one-year or two-year
holding periods described above, including where the employee pays the option
price through a so-called cashless exercise, the employee generally will
recognize ordinary income in the year of disposition in an amount equal to any
excess of the fair market value of the shares at the time of exercise (or, if
less, the amount realized on the disposition of the shares in a sale or
exchange) over the option price paid for the shares. Any further gain (or loss)
realized by the employee generally will be taxed as short-term or long-term
capital gain (or loss) depending on the holding period.
Tax Consequences to the Company. To the extent that the recipient of an
Option recognizes ordinary income in the circumstances described above, the
Company generally will be entitled to a corresponding federal income tax
deduction, provided that, among other things, (i) the income meets the test of
reasonableness, and is an ordinary and necessary business expense; (ii) the
benefits do not constitute an "excess parachute payment" within the meaning of
Section 280G of the Code; and (iii) the
13
<PAGE> 17
deduction is not disallowed because the compensation paid to the employee
during the period exceeds the $1 million limitation on executive compensation of
named executive officers.
The affirmative vote of a majority of the shares of Common Stock of the
Company cast at the Meeting is necessary for approval of the Stock Option Plan.
The Board believes that the approval of the Stock Option Plan is in the best
interests of the Company and the stockholders because the Stock Option Plan will
enable the Company to provide competitive equity incentives to officers and key
salaried employees to enhance the profitability of the Company and increase
stockholder value. The Stock Option Plan further will serve to align the
interests of such persons and members of the Board of Directors with the
interests of stockholders by giving them a personal interest in the value of the
Company's Common Stock. THE BOARD OF DIRECTORS HAS APPROVED THE STOCK OPTION
PLAN AND RECOMMENDS THAT THE COMPANY STOCKHOLDERS VOTE "FOR" APPROVAL OF THE
STOCK OPTION PLAN.
PROPOSAL THREE
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has appointed Grant Thornton LLP to perform the
audit of the Company's financial statements for the year ending December 31,
1999, subject to ratification by the Company's stockholders at the Meeting.
Grant Thornton LLP served as the Company's Independent Auditors for the year
ended December 31, 1998. Representatives of Grant Thornton LLP will be present
at the Meeting. They will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions of
stockholders.
If the selection of Grant Thornton LLP is not ratified, or prior to the
next annual meeting of stockholders, such firm shall decline to act or otherwise
become incapable of acting, or if its engagement shall be otherwise discontinued
by the Board of Directors, the Board of Directors will appoint other independent
certified public accountants whose engagement for any period subsequent to the
next annual meeting will be subject to stockholder approval at such meeting. THE
BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE INDEPENDENT AUDITORS.
OTHER MATTERS
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Any stockholder intending to present a proposal at the 2000 Annual
Meeting in accordance with Rule 14a-8 under the Securities Exchange Act of 1934
for inclusion in the Company's proxy materials for such meeting must, in
addition to meeting other applicable requirements under the rules and
regulations of the Securities and Exchange Commission, submit such proposal to
Robert B. Morgan, Secretary, in writing no later than January 31, 2000.
MATTERS NOT DETERMINED AT TIME OF SOLICITATION
The Board of Directors does not know of any matters, other than those
referred to in the accompanying Notice for the Meeting, to be presented at the
meeting for action by the stockholders. However, if any other matters are
properly brought before the meeting or any adjournments thereof, it is
14
<PAGE> 18
intended that votes will be cast with respect to such matters, pursuant to the
proxies, in accordance with the best judgment of the person acting under the
proxies.
By Order of the Board of Directors
/s/ Robert B. Morgan
Robert B. Morgan, Secretary
Dated: October 29, 1999
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSBA FOR THE YEAR ENDED
DECEMBER 31, 1998 (THE "ANNUAL REPORT"), INCLUDING FINANCIAL STATEMENTS,
ACCOMPANIES THIS PROXY STATEMENT. THE ANNUAL REPORT IS NOT TO BE REGARDED AS
PROXY SOLICITING MATERIAL OR AS COMMUNICATION BY MEANS OF WHICH ANY SOLICITATION
IS TO BE MADE.
15
<PAGE> 19
APPENDIX A
800 TRAVEL SYSTEMS, INC.
1998 STOCK OPTION PLAN
1. PURPOSE OF THE 1998 STOCK OPTION PLAN.
800 Travel Systems, Inc., a Delaware corporation (the "Corporation"),
desires to attract and retain the best available employees and to encourage the
highest level of performance. The 1998 Stock Option Plan (the "Stock Option
Plan") is intended to contribute significantly to the attainment of these
objectives, by (i) providing long-term incentives and rewards to all key
employees of the Corporation (including officers and directors who are key
employees of the Corporation and also including key employees of any subsidiary
of the Corporation which may include officers or directors of any subsidiary of
the Corporation who are also key employees of said subsidiary), and those
directors and officers, consultants, advisers, agents or independent
representatives of the Corporation or of any subsidiary (together, "Eligible
Individuals"), who are contributing or in a position to contribute to the
long-term success and growth of the Corporation or of any subsidiary, (ii)
assisting the Corporation and any subsidiary in attracting and retaining
Eligible Individuals with experience and ability, and (iii) associating more
closely the interests of such Eligible Individuals with those of the
Corporation's stockholders.
2. SCOPE AND DURATION OF THE STOCK OPTION PLAN.
Under the Stock Option Plan, options ("Options") to purchase common
stock, par value $.01 per share ("Common Stock"), may be granted to Eligible
Individuals. Options granted to employees (including officers and directors who
are employees) of the Corporation or a subsidiary corporation thereof, may, at
the time of grant, be designated by the Corporation's Board of Directors as
incentive stock options ("ISOs"), with the attendant tax benefits as provided
for under Sections 421 and 422 of the Internal Revenue Code of 1986, as amended
(the "Code"). The aggregate number of shares of Common Stock reserved for grant
from time to time under the Stock Option Plan is 250,000 shares of Common Stock,
which shares of Common Stock may be authorized but unissued shares of Common
Stock or shares of Common Stock which shall have been or which may be reacquired
by the Corporation, as the Board of Directors of the Corporation shall from time
to time determine. Such aggregate numbers shall be subject to adjustment as
provided in Paragraph 11. If an Option shall expire or terminate for any reason
without having been exercised in full, the shares of Common Stock represented by
the portion thereof not so exercised or surrendered shall (unless the Stock
Option Plan shall have been terminated) become available for other options under
the Stock Option Plan. Subject to Paragraph 13, no Option shall be granted under
the Stock Option Plan after December 15, 2007. The grant of an Option and/or a
Right is sometimes referred to herein as an Award thereof.
3. ADMINISTRATION OF THE STOCK OPTION PLAN.
This Stock Option Plan will be administered by the Board of Directors
of the Corporation (the "Board of Directors"). The Board of Directors, in its
discretion, may designate an option committee (the "Option Committee" or
"Committee") composed of at least two members of the Board of Directors to
administer this Stock Option Plan. Subject to the express provisions of this
Plan, the Board of Directors or the Committee (hereinafter, the terms "Option
Committee" or "Committee" shall mean the
A-1
<PAGE> 20
Board of Directors whenever no such Option Committee has been designated) shall
have authority in its discretion, subject to and not inconsistent with the
express provisions of this Stock Option Plan, to direct the grant of Options, to
determine the purchase price of the Common Stock covered by each Option, the
Eligible Individuals to whom, and the time or times at which, Options shall be
granted and subject to the maximum set forth in Paragraph 4 hereof, the number
of shares of Common Stock to be covered by each Option; to designate Options as
ISOs; to interpret the Stock Option Plan; to determine the time or times at
which Options may be exercised; to prescribe, amend and rescind rules and
regulations relating to the Stock Option Plan, including, without limitation,
such rules and regulations as it shall deem advisable, so that transactions
involving Options may qualify for exemption under such rules and regulations as
the Securities and Exchange Commission may promulgate from time to time
exempting transactions from Section 16(b) of the Securities and Exchange Act of
1934, as amended; to determine the terms and provisions of and to cause the
Corporation to enter into agreements with Eligible Individuals in connection
with (Awards) Options granted under the Stock Option Plan (the "Agreements"),
which Agreements may vary from one another as the Committee shall deem
appropriate; and to make all other determinations it may deem necessary or
advisable for the administration of the Stock Option Plan.
Members of the Committee shall serve at the pleasure of the Board of
Directors. The Committee shall have and may exercise all of the powers of the
Board of Directors under the Stock Option Plan, other than the power to appoint
a director to committee membership. A majority of the Committee shall constitute
a quorum, and acts of a majority of the members present at any meeting at which
a quorum is present shall be deemed the acts of the Committee. The Committee may
also act by instrument signed by a majority of the members of the Committee.
Every action, decision, interpretation or determination by the Committee with
respect to the application or administration of this Stock Option Plan shall be
final and binding upon the Corporation and each person holding any Option
granted under this Stock Option Plan.
4. ELIGIBILITY: FACTORS IN GRANTING OPTIONS AND DESIGNATING ISOS (AWARDS).
(a) Options may be granted only to (i) key employees (including
officers and directors who are employees) of the Corporation or any subsidiary
corporation thereof on the date of grant (Options so granted may be designated
as ISOs), and (ii) directors or officers of the Corporation or a subsidiary
corporation thereof on the date of grant, without regard to whether they are
employees, and (iii) consultants or advisers to or agents or independent
representatives of the Corporation or a subsidiary thereof. In determining the
persons to whom Options (Awards) shall be granted and the number of shares of
Common Stock to be covered by each Award, the Committee shall take into account
the nature of the duties of the respective persons, their present and potential
contributions to the Corporation's (including subsidiaries) successful operation
and such other factors as the Board of Directors in its discretion shall deem
relevant. Subject to the provisions of Paragraph 2, an Eligible Individual may
receive Options (Awards) on more than one occasion under the Stock Option Plan.
No person shall be eligible for an Option grant if he shall have filed with the
Secretary of the Corporation an instrument waiving such eligibility; provided
that any such waiver may be revoked by filing with the Secretary of the
Corporation an instrument of evocation, which revocation will be effective upon
such filing.
(b) In the case of each ISO granted to an employee, the aggregate
fair market value (determined at the time the ISO is granted) of the Common
Stock with respect to which the ISO is exercisable for the first time by such
employee during any calendar year (under all plans of the Corporation and any
subsidiary corporation thereof) may not exceed $100,000.
A-2
<PAGE> 21
5. OPTION PRICE.
(a) The purchase price per share of the Common Stock covered by
each Option shall be established by the Committee, but in no event shall it be
less than the fair market value of a share of the Common Stock on the date the
Option is granted. If, at the time an Option is granted, the Common Stock is
publicly traded, such fair market value shall be the closing price (or the mean
of the latest bid and asked prices) of a share of Common Stock on such date as
reported in The Wall Street Journal (or a publication or reporting service
deemed equivalent to The Wall Street Journal for such purpose by the Board of
Directors) for any national securities exchange or other securities market which
at the time is included in the stock price quotations of such publication. In
the event that the Committee shall determine such stock price quotation is not
representative of fair market value by reason of the lack of a significant
number of recent transactions or otherwise, the Committee may determine fair
market value in such a manner as it shall deem appropriate under the
circumstances. If, at the time an Option is granted, the Common Stock is not
publicly traded, the Committee shall make a good faith attempt to determine such
fair market value.
(b) In the case of an employee who, at the time an ISO is granted
owns stock possessing more than 10% of the total combined voting power of all
classes of the stock of the employer corporation or of its parent or a
subsidiary corporation thereof (a "10% Holder"), the purchase price of the
Common Stock covered by any ISO shall in no event be less than 110% of the fair
market value of the Common Stock at the time the ISO is granted.
6. TERM OF OPTIONS.
The term of each Option shall be fixed by the Committee, but in no
event shall it be exercisable more than 10 years from the date of grant, subject
to earlier termination as provided in Paragraphs 9 and 10. An ISO granted to a
10% Holder shall not be exercisable more than 5 years from the date of grant.
7. EXERCISE OF OPTIONS.
(a) Subject to the provisions of the Stock Option Plan, an Option
granted to an employee under the Stock Option Plan shall become fully
exercisable at the earlier of (A) employee's actual retirement date, unless such
retirement is without the consent of the Board of Directors and is prior to the
employee's normal retirement date as determined under any qualified retirement
plan maintained by the Corporation at such time or, if no such plan is than in
effect, age 65 (but in no event prior to the first anniversary of the date of
grant), or (B) at such time or times as the Committee in its sole discretion
shall determine at the time of the granting of the Option, except that in no
event shall any such Option
A-3
<PAGE> 22
be exercisable later than 10 years after its grant. Notwithstanding anything in
this Stock Option Plan to the contrary, Options that are not designated as ISOs
may be exercised in such manner and at such time or times as the Committee in
its sole discretion shall determine, except that in no event shall any such
Option be exercisable earlier than six months or later than 10 years after its
grant.
(b) An Option may be exercised as to any or all full shares of
Common Stock as to which the Option is then exercisable.
(c) The purchase price of the shares of Common Stock as to which
an Option is exercised shall be paid in full in cash at the time of exercise;
provided that, if permitted by the related Option Agreement or by the Committee,
the purchase price may be paid, in whole or in part, by surrender or delivery to
the Corporation of securities of the Corporation having a fair market value on
the date of the exercise equal to the portion of the purchase price being so
paid. Fair market value shall be determined as provided in Paragraph 5 for the
determination of such value on the date of the grant. In addition, the holder
shall, upon notification of the amount due and prior to or concurrently with
delivery to the holder of a certificate representing such shares of Common
Stock, pay promptly any amount necessary to satisfy applicable federal, state or
local tax requirements.
(d) Except as provided in Paragraphs 9 and 10, no Option may be
exercised unless the original grantee thereof is then an Eligible Individual.
(e) The Option holder shall have the rights of a stockholder with
respect to shares of Common Stock covered by an Option only upon becoming the
holder of record of such shares of Common Stock.
(f) Notwithstanding any other provision of this Stock Option Plan,
the Corporation shall not be required to issue or deliver any share of stock
upon the exercise of an Option prior to the admission of such share to listing
on any stock exchange or automated quotation system on which the Corporation's
Common Stock may then be listed.
8. NON-TRANSFERABILITY OF OPTIONS.
No Options granted under the Stock Option Plan shall be transferable
other than by will or by the laws of descent and distribution ("Permitted
Transferee"). With respect to ISOs, Options may be exercised, during the
lifetime of the holder, only by the holder, or by his guardian or legal
representative.
9. TERMINATION OF RELATIONSHIP TO THE CORPORATION.
(a) In the event that any original grantee shall cease to be an
Eligible Individual of the Corporation (or any subsidiary thereof), except as
set forth in Paragraph 10, such Option may (subject to the provisions of the
Stock Option Plan) be exercised (to the extent that the original grantee was
entitled to exercise such Option at the termination of his employment or service
as a director, officer, consultant, adviser, agent or independent
representative, as the case may be) at any time within three months after such
termination, but not more than 10 years (five years in the case of a 10% Holder)
after the date on which such Option was granted or the expiration of the Option,
if earlier. Notwithstanding the foregoing, if the position of an original
grantee shall be terminated by the Corporation or any subsidiary thereof for
cause or if the original grantee terminates his employment or position
voluntarily and without the consent of the Corporation or any subsidiary
corporation thereof, as the case may be (which consent shall be presumed in the
case of normal retirement), the Options granted to such person, whether held by
such person or by a Permitted Transferee shall, to the extent not theretofore
exercised, forthwith terminate immediately upon such termination. The holder of
any ISO may not exercise such Option unless at all times during the period
beginning with the date of grant of the ISO and ending on the three months
before the date of exercise he is an employee of the Corporation granting such
Option, a subsidiary thereof, or a corporation or a subsidiary corporation
issuing or assuming a stock option in a transaction to which Section 424(a) of
the Code applies.
(b) Other than as provided in Paragraph 9(a), Options granted
under the Stock Option Plan shall not be affected by any change of duties or
position so long as the holder remains an Eligible Individual.
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(c) Any Option Agreement may contain such provisions as the
Committee shall approve with reference to the determination of the date
employment terminates or the date other positions or relationships terminate for
purposes of the Stock Option Plan and the effect of leaves of absence, which
provisions may vary from one another.
(d) Nothing in the Stock Option Plan or in any Option granted
pursuant to the Stock Option Plan shall confer upon any Eligible Individual or
other person any right to continue in the employ of the Corporation or any
subsidiary corporation (or the right to be retained by, or have any continued
relationship with the Corporation or any subsidiary corporation thereof), or
affect the right of the Corporation or any such subsidiary corporation, as the
case may be, to terminate his employment, retention or relationship at any time.
The grant of any option pursuant to the Stock Option Plan shall be entirely in
the discretion of the Committee and nothing in the Stock Option Plan shall be
construed to confer on any Eligible Individual any right to receive any Option
under the Stock Option Plan.
10. DEATH OR DISABILITY OF HOLDER.
(a) If a person to whom an Option has been granted under the Stock
Option Plan shall die (and the conditions in sub-paragraph (b) below are met) or
become permanently and totally disabled (as such term is defined below) while
serving as an Eligible Individual and if the Option was otherwise exercisable
immediately prior to the happening of such event, then the period for exercise
provided in Paragraph 9 shall be extended to one year after the date of death of
the original grantee, or in the case of the permanent and total disability of
the original grantee, to one year after the date of permanent and total
disability of the original grantee, but, in either case, not more than 10 years
(five years in the case of a 10% Holder) after the date such Option was granted,
or the expiration of the Option, if earlier, as shall be prescribed in the
original grantee's Option Agreement. An Option may be exercised as set forth
herein in the event of the original grantee's death, by a Permitted Transferee
or the person or persons to whom the holder's rights under the Option pass by
will or applicable law, or if no such person has the right, by his executors or
administrators; or in the event of the original grantee's permanent and total
disability, by the holder or his guardian.
(b) In the case of death of a person to whom an Option was
originally granted, the provisions of subparagraph (a) apply if such person dies
(i) while in the employ of the Corporation or a subsidiary corporation thereof
or while serving as an Eligible Individual of the Corporation or a subsidiary
corporation thereof or (ii) within three months after the termination of such
position other than termination for cause, or voluntarily on the original
grantee's part and without the consent of the Corporation or a subsidiary
corporation thereof, which consent shall be presumed in the case of normal
retirement.
(c) The term "permanent and total disability" as used above shall
have the meaning set forth in Section 22(e)(3) of the Code.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
Notwithstanding any other provision of the Stock Option Plan, each
Agreement may contain such provisions as the Committee shall determine to be
appropriate for the adjustment of the number and class of shares of Common Stock
covered by such Option, the Option prices and the number of shares of Common
Stock as to which Options shall be exercisable at any time, in the event of
changes in the outstanding Common Stock of the Corporation by reason of stock
dividends, split-ups, split-downs, reverse splits, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, spin-offs,
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<PAGE> 24
reorganizations, liquidations and the like. In the event of any such change in
the outstanding Common Stock of the Corporation, the aggregate number of shares
of Common Stock as to which Options may be granted under the Stock Option Plan
to any Eligible Individual shall be appropriately adjusted by the Committee
whose determination shall be conclusive. In the event of (i) the dissolution,
liquidation, merger or consolidation of the Corporation or a sale of all or
substantially all of the assets of the Corporation, or (ii) the disposition by
the Corporation of substantially all of the assets or stock of a subsidiary of
which the original grantee is then an employee, officer or director, consultant,
adviser, agent or independent representative or (iii) a change in control (as
hereinafter defined) of the Corporation has occurred or is about to occur, then,
if the Committee shall so determine, each Option under the Stock Option Plan, if
such event shall occur with respect to the Corporation, or each Option granted
to an employee, officer, director, consultant, adviser, agent or independent
representative of a subsidiary respecting which such event shall occur, as
determined by the Option Committee, shall (x) become immediately and fully
exercisable or (y) terminate simultaneously with the happening of such event,
and the Corporation shall pay the optionee in lieu thereof an amount equal to
(a) the excess of the fair market value over the exercise price of one share on
the date on which such event occurs, multiplied by (b) the number of shares
subject to the Option, without regard to whether the Option is then otherwise
exercisable.
12. EFFECTIVENESS OF THE STOCK OPTION PLAN.
Options may be granted under the Stock Option Plan, subject to its
authorization and adoption by stockholders of the Corporation, at any time or
from time to time after its adoption by the Committee, but no Option shall be
exercised under the Stock Option Plan until the Stock Option Plan shall have
been authorized and adopted by a majority of the votes properly cast thereon at
a meeting of stockholders of the Corporation duly called and held within 12
months from the date of adoption of the Stock Option Plan by the Board of
Directors. If so adopted, the Stock Option Plan shall become effective as of the
date of its adoption by the Board of Directors. The exercise of the Options
shall also be expressly subject to the condition that at the time of exercise a
registration statement under the Securities Act of 1933, as amended (the "Act"),
shall be effective, or other provisions satisfactory to the Committee shall have
been made to ensure that such exercise will not result in a violation of such
Act, and such other qualification under any state or federal law, rule or
regulation as the Corporation shall determine to be necessary or advisable shall
have been effected. If the shares of Common Stock issuable upon exercise of an
Option are not registered under such Act, and if the Committee shall deem it
advisable, the Optionee may be required to represent and agree in writing (i)
that any shares of Common Stock acquired pursuant to the Stock Option Plan will
not be sold except pursuant to an effective registration statement under such
Act or an exemption from the registration provisions of the Act and (ii) that
such Optionee will be acquiring such shares of Common Stock for his own account
and not with a view to the distribution thereof and (iii) that the holder
accepts such restrictions on transfer of such shares, including, without
limitation, the affixing to any certificate representing such shares of an
appropriate legend restricting transfer as the Corporation may reasonably
impose.
13. TERMINATION AND AMENDMENT OF THE STOCK OPTION PLAN.
The Board of Directors of the Corporation may, at any time prior to the
termination of the Stock Option Plan, suspend, terminate, modify or amend the
Stock Option Plan; provided that any increase in the aggregate number of shares
of Common Stock reserved for issue upon the exercise of Options, any amendment
which would materially increase the benefits accruing to participants under the
Stock Option Plan, or any material modification in the requirements as to
eligibility for participation in the
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<PAGE> 25
Stock Option Plan, shall be subject to the approval of stockholders in the
manner provided in Paragraph 12, except that any such increase, amendment or
change that may result from adjustments authorized by Paragraph 11 or
adjustments based on revisions to the Code or regulations promulgated thereunder
(to the extent permitted by such authorities) shall not require such approval.
No suspension, termination, modification or amendment of the Stock Option Plan
may, without the express written consent of the Eligible Individual (or his
Permitted Transferee) to whom an Option shall theretofore have been granted,
adversely affect the rights of such Eligible Individual (or his Permitted
Transferee) under such Option.
14. FINANCING FOR INVESTMENT IN STOCK OF THE CORPORATION.
The Committee may cause the Corporation or any subsidiary to give or
arrange for financing, including direct loans, secured or unsecured, or
guaranties of loans by banks which loans may be secured in whole or in part by
assets of the Corporation or any subsidiary, to any Eligible Individual under
the Stock Option Plan who shall have been so employed or so served for a period
of at least six months at the end of the fiscal year ended immediately prior to
arranging such financing; but the Committee may, in any specific case, authorize
financing for an Eligible Individual who shall not have served for such a
period. Such financing shall be for the purpose of providing funds for the
purchase by the Eligible Individual of shares of Common Stock pursuant to the
exercise of an Option and/or for payment of taxes incurred in connection with
such exercise, and/or for the purpose of otherwise purchasing or carrying a
stock investment in the Corporation. The maximum amount of liability incurred by
the Corporation and its subsidiaries in connection with all such financing
outstanding shall be determined from time to time in the discretion of the Board
of Directors. Each loan shall bear interest at a rate not less than that
provided by the Code and other applicable law, rules, and regulations in order
to avoid the imputation of interest. Each recipient of such financing shall be
personally liable for the full amount of all financing extended to him. Such
financing shall be based upon the judgment of the Committee that such financing
may reasonably be expected to benefit the Corporation, and that such financing
as may be granted shall be consistent with the Certificate of Incorporation and
By-Laws of the Corporation or such subsidiary, and applicable laws. If any such
financing is authorized by the Board of Directors, such financing shall be
administered by the Committee.
15. SEVERABILITY.
In the event that any one or more provisions of the Stock Option Plan
or any Agreement, or any action taken pursuant to the Stock Option Plan or such
Agreement, should, for any reason, be unenforceable or invalid in any respect
under the laws of the United States, any state of the United States or any other
government, such unenforceability or invalidity shall not affect any other
provision of the Stock Option Plan or of such or any other Agreement, but in
such particular jurisdiction and instance the Stock Option Plan and the affected
Agreement shall be construed as if such unenforceable or invalid provision had
not been contained therein or if the action in question had not been taken
thereunder.
16. APPLICABLE LAW.
The Stock Option Plan shall be governed and interpreted, construed and
applied in accordance with the laws of the State of Delaware.
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17. WITHHOLDING.
A holder shall, upon notification of the amount due and prior to or
concurrently with delivery to such holder of a certificate representing such
shares of Common Stock, pay promptly any amount necessary to satisfy applicable
federal, state, local or other tax requirements.
18. MISCELLANEOUS.
1. The terms "parent," "subsidiary" and "subsidiary corporation"
shall have the meanings set forth in Sections 424(e) and (f) of the Code,
respectively.
2. The term "disinterested person" shall mean a person who is not
at the time he exercises discretion in administering the Stock Option Plan
eligible and has not at any time within one year prior thereto been eligible for
selection as a person to whom stock may be allocated or to whom stock options
may be granted pursuant to the Stock Option Plan or any other plan of the
Corporation or any of its affiliates entitling the participants therein to
acquire stock or stock options of the Corporation or any of its affiliates.
3. The term "terminated for cause" shall mean termination by the
Corporation (or a subsidiary thereof) of the employment of or other relationship
with, the original grantee by reason of the grantee's (i) willful refusal to
perform his obligations to the Corporation (or a subsidiary thereof), (ii)
willful misconduct, contrary to the interests of the Corporation (or a
subsidiary thereof), (iii) commission of a serious criminal act, whether
denominated a felony, misdemeanor or otherwise or (iv) such reasons as may be
included within the term "for cause" (or similar phrase) in the employment or
consulting agreement of the grantee. In the event of any dispute regarding
whether a termination for cause has occurred, the Board of Directors may by
resolution resolve such dispute and such resolution shall be final and
conclusive on all parties.
4. The term "change in control" shall mean an event or series of
events that would be required to be described as a change in control of the
Corporation in a proxy or information statement distributed by the Corporation
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, in
response to Item 6(e) of Schedule 14A promulgated thereunder, or any substitute
provision which may hereafter be promulgated thereunder or otherwise adopted.
The determination of whether and when a change in control has occurred or is
about to occur shall be made by the Board of Directors in office immediately
prior to the occurrence of the event or series of events constituting such
change in control.
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APPENDIX B
800 TRAVEL SYSTEMS, INC.
4802 GUNN HIGHWAY
TAMPA, FLORIDA 33624
PROXY FOR THE 1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 1, 1999
The undersigned, having received notice of the Annual Meeting of 800 Travel
Systems, Inc. to be held at 11:00 a.m. (Eastern Time), on Wednesday, December 1,
1999 (the "Meeting"), hereby designates and appoints Mark D. Mastrini and Robert
B. Morgan, and either of them with authority to act without the other, as
proxies for the undersigned, with full power of substitution and resubstitution,
to vote all of the shares of Common Stock which the undersigned is entitled to
vote at the Meeting and at any adjournment thereof, such proxies being directed
to vote as specified on the reverse side.
In their discretion, the proxies are authorized to vote upon such other matters
as may properly come before the Meeting or any adjournment thereof.
THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF 800 TRAVEL SYSTEMS,
INC. AND WILL BE VOTED AS SPECIFIED. IF NOT OTHERWISE SPECIFIED, THE ABOVE NAMED
PROXIES WILL BE VOTED "FOR" PROPOSALS 1, 2 AND 3 AND IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE BOARD OF DIRECTORS ON ANY OTHER MATTERS THAT MAY PROPERLY
COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT THEREOF, PROVIDED THAT THIS
PROXY WILL NOT BE VOTED TO ELECT MORE THAN FIVE DIRECTORS. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING MATTERS. PLEASE MARK AN "X" IN
ONE SPACE. TO BE EFFECTIVE, THIS PROXY MUST BE DEPOSITED AT THE COMPANY'S
REGISTRARS NOT LATER THAN 48 HOURS BEFORE THE TIME APPOINTED FOR THE MEETING.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
(Continued on the reverse side)
<PAGE> 28
1. Proposal to elect the following five (5) nominees as Directors: L. Douglas
Bailey, Carl A. Bellini, George A. Warde, Mark D. Mastrini and Michael A. Gaggi
FOR WITHHELD
[ ] [ ]
FOR, EXCEPT VOTE WITHHELD
FOR THE FOLLOWING NOMINEE(S):
- -----------------------------------
2. Proposal to approve the 1998 Stock Option Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Proposal to ratify Grant Thornton LLP as the Company's independent auditors
until the conclusion of the 2000 Annual Meeting.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting.
Dated:
--------------------------------------
Signature
-----------------------------------
Signature if held jointly
-------------------
IMPORTANT: Please sign exactly as your name
appears on this proxy and mail promptly in
the enclosed envelope. If you sign as agent
or in any other capacity, please state the
capacity in which you sign.
