<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[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 Section 240.14a-11(c)
or Section 240.14a-12
- --------------------------------------------------------------------------------
Columbia Capital Corp.
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
Kenneth A. Klotz
CHIEF EXECUTIVE OFFICER
(Name of Person(s) Filing Proxy Statement)
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:
-----------------------------------------------------------------------
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:
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4) Date Filed:
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<PAGE>
COLUMBIA CAPITAL CORP.
A DELAWARE CORPORATION
EXECUTIVE OFFICES
2701 WEST OAKLAND PARK BOULEVARD
FORT LAUDERDALE, FLORIDA 33311
(954) 453-6575
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 12, 1998
------------------------
TO THE STOCKHOLDERS OF COLUMBIA CAPITAL CORP.:
The Annual Meeting of Stockholders (the "Meeting") of Columbia Capital
Corp., a Delaware corporation (the "Company"), will be held at
_____________________, ___________, __________ _______________, (____)
______-__________, on June 12, 1998, at 10:00 a.m., local time, to
consider and vote on the following proposals:
PURPOSE OF MEETING
(1) To elect to the Board of Directors five (5) directors, to serve until
the next Annual Meeting of Stockholders of the Company or until their
successors are elected and qualify, subject to their prior death,
resignation or removal.
(2) To approve: (i) an amendment to the Certificate of Incorporation, and
(ii) the Amended and Restated Bylaws of the Company.
(3) To adopt the Company's 1998 Stock Option Plan (the "1998 Stock Option
Plan") and to reserve up to 500,000 shares of the Company's Common
Stock for issuance under the 1998 Stock Option Plan.
(4) To approve the form of indemnification agreements between the Company
and the members of the Company's Board of Directors.
(5) To ratify the appointment of Davis Kinard & Co. P.C., Certified Public
Accountants, as independent public accountants for the Company for the
year ending December 31, 1998.
(6) To transact such other business as may properly come before the
Meeting and any adjournments thereof.
<PAGE>
ONLY STOCKHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON MAY 5, 1998 (THE
"RECORD DATE") ARE ENTITLED TO NOTICE OF AND TO VOTE AT THE MEETING.
PLEASE FILL IN, SIGN, DATE, AND RETURN THE ENCLOSED PROXY TO INTERWEST
TRANSFER CO., INC., P.O. BOX 17136, SALT LAKE CITY, UTAH 84117, ATTN: PROXY
SERVICES, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING. A RETURN ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE.
By Order of the Board of Directors
COLUMBIA CAPITAL CORP.
By:--------------------------------------
Kenneth A. Klotz
Chief Executive Officer
Abilene, Texas
DATED: May __, 1998
<PAGE>
COLUMBIA CAPITAL CORP.
A DELAWARE CORPORATION
EXECUTIVE OFFICES
2701 WEST OAKLAND PARK BOULEVARD
FORT LAUDERDALE, FLORIDA 33311
(954) 453-6575
----------------------
PROXY STATEMENT
------------------------
This proxy statement is furnished to the stockholders of Columbia Capital
Corp., a Delaware corporation (the "Company"), in connection with the Annual
Meeting of Stockholders (the "Meeting") to be held at, at _____________________,
___________, __________ _______________, (____) ______-__________, on
June 12, 1998 at 10:00 a.m., local time.
The Meeting will be held to consider and vote on the following proposals:
PURPOSE OF MEETING
(1) To elect to the Board of Directors five (5) directors, to serve until
the next Annual Meeting of Stockholders of the Company or until their
successors are elected and qualify, subject to their prior death,
resignation or removal.
(2) To approve: (i) an amendment to the Certificate of Incorporation, and
(ii) the Amended and Restated Bylaws of the Company.
(3) To adopt the Company's 1998 Stock Option Plan (the "1998 Stock Option
Plan") and to reserve up to 500,000 shares of the Company's Common
Stock for issuance under the 1998 Stock Option Plan.
(4) To approve the form of indemnification agreements between the Company
and the members of the Company's Board of Directors.
(5) To ratify the appointment of Davis Kinard & Co., P.C., Certified
Public Accountants, as independent public accountants for the Company
for the year ending December 31, 1998.
(6) To transact such other business as may properly come before the
Meeting and any adjournments thereof.
The list of all stockholders of record on May 5, 1998, will be available
at the Meeting and at the offices of the Company at 2701 West Oakland Park
Boulevard, Fort Lauderdale, Florida 33311, (954) 453-6575 for the ten (10)
days preceding the Meeting.
Upon written request, the Company will provide, without charge: (i) a copy
of the exhibits to this Proxy Statement, and (ii) a copy of its Annual Report on
Form 10-KSB, for the year ended December 31, 1997, to any stockholder of record
or any stockholder who owned Common Stock listed in the name of a bank or
broker, as nominee, at the close of business on May 5, 1998.
Requests should be addressed to the Company, to the attention of
Columbia Capital Corp., Glenn M. Gallant, Secretary, 2701 West Oakland Park
Boulevard, Fort Lauderdale, Florida 33311, (954) 453-6575.
<PAGE>
INCORPORATION BY REFERENCE
Columbia Capital Corp., a Delaware corporation (the "Company") is currently
subject to the reporting requirements of the Exchange Act and, in accordance
therewith, files reports, proxy and information statements and other information
with the Securities and Exchange Commission ("Commission"). Such reports, proxy
and information statements and other information may be inspected and copied at
the public reference facilities of the Commission at 450 Fifth Street, N.W. Room
1024, Washington D.C. 20549; at its New York Regional Office, 7 World Trade
Center, Suite 1300, New York, New York 10048; and at its Chicago Regional
Office, 500 West Madison Street, Suite 1400, Chicago Illinois 60661-2511, and
copies of such materials can be obtained from the Public Reference Section of
the Commission, 450 Fifth Street, N.W., Washington D.C. 20549 at prescribed
rates. The Company intends to furnish its stockholders with annual reports
containing audited financial statements and such other periodic reports as the
Company may determine to be appropriate or as may be required by law.
Portions of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1997, are incorporated by reference in this Proxy Statement.
As part of this Proxy Statement, the Company also incorporates by reference
a copy of the following documents filed herewith as exhibits to this Proxy
Statement:
1. Appendix A - Restated Certificate of Incorporation
2. Appendix B - Bylaws
3. Appendix C - 1998 Stock Option Plan
4. Appendix D - Indemnification Agreement
Upon written request, the Company will provide, without charge: (i) a
copy of the exhibits to this Proxy Statement, and (ii) a copy of its Annual
Report on Form 10-KSB, for the year ended December 31, 1997, to any
stockholder of record or any stockholder who owned Common Stock listed in the
name of a bank or broker, as nominee, at the close of business on May 5, 1998.
Requests should be addressed to the Company, to the attention of
Columbia Capital Corp., Glenn M. Gallant, Secretary, 2701 West Oakland Park
Boulevard, Fort Lauderdale, Florida 33311, (954) 453-6575.
2
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INFORMATION CONCERNING SOLICITATION AND VOTING
The following information is provided to stockholders to explain the use of
this Proxy Statement for this Meeting:
RECORD DATE
Only stockholders of record at the close of business on May 5, 1998 are
entitled to vote at the Meeting. The Company's Common Stock is its only class
of voting securities. On May 5, 1998, the record date (the "Record Date")
fixed by the Board of Directors, the Company had issued and outstanding
12,500,000 shares of Common Stock of record.
REVOCABILITY OF PROXIES
A PROXY FOR USE AT THE MEETING IS ENCLOSED. ANY STOCKHOLDER WHO EXECUTES
AND DELIVERS A PROXY HAS THE RIGHT TO REVOKE IT AT ANY TIME BEFORE ITS EXERCISE
BY FILING WITH THE SECRETARY OF THE COMPANY AN INSTRUMENT REVOKING IT OR A DULY
EXECUTED PROXY BEARING A LATER DATE. IN ADDITION, A STOCKHOLDER MAY REVOKE A
PROXY PREVIOUSLY EXECUTED BY HIM BY ATTENDING THE MEETING AND ELECTING TO VOTE
IN PERSON.
VOTING AND SOLICITATION
Proxies are being solicited by the Board of Directors of the Company. The
cost of this solicitation will be borne by the Company. Solicitation will be
primarily by mail, but may also be made by telephone, fax transmission or
personal contact by certain officers and directors of the Company, who will not
receive any compensation therefor. Shares of Common Stock represented by
properly executed proxies will, unless such proxies have been previously
revoked, be voted in accordance with the instructions indicated thereon. IN THE
ABSENCE OF SPECIFIC INSTRUCTIONS TO THE CONTRARY, PROPERLY EXECUTED PROXIES WILL
BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED ABOVE. No business other than that
set forth in the accompanying Notice of Special Meeting of Stockholders is
expected to come before the Meeting. Should any other matter requiring a vote
of stockholders properly arise, the persons named in the enclosed form of proxy
will vote such proxy in accordance with the recommendation of the Board of
Directors.
Each share of Common Stock is entitled to one vote for each share held as
of record, and there are no preemptive rights. The Company's current
Certificate of Incorporation (the "Certificate of Incorporation") and Bylaws
(the "Bylaws") do not provide for cumulative voting for the election of
directors or any other purpose.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
Shares representing 50% of the voting power of the 12,500,000 shares of
Common Stock outstanding on the Record Date must be represented at the Meeting
to constitute a quorum for conducting business. In the absence of a quorum, the
stockholders present in person or by proxy, by majority vote and without further
notice, may adjourn the meeting from time to time until a quorum is attained.
At any reconvened meeting following such adjournment at which a quorum shall be
present, any business may be transacted which might have been transacted at the
Meeting as originally notified.
The required quorum for the transaction of business at the Meeting is a
majority of the votes eligible to be cast by holders of shares of Common Stock
issued and outstanding on the Record Date. Shares that are voted "FOR" or
"AGAINST" a matter are treated as being present at the Meeting for purposes of
3
<PAGE>
establishing a quorum and are also treated as shares entitled to vote at the
Meeting (the "Votes Cast") with respect to such matter.
The Company will count abstentions for purposes of determining both: (i)
the presence or absence of a quorum for the transaction of business, and (ii)
the total number of Votes Cast with respect to a proposal (other than the
election of directors). Accordingly, abstentions will have the same effect as a
vote against the proposal.
Further, the Company intends to count broker non-votes for the purpose of
determining the presence or absence of a quorum for the transaction of business,
although broker non-votes will not be counted for purposes of determining the
number of Votes Cast with respect to the particular proposal on which the broker
has expressly not voted. Thus, a broker non-vote will not affect the outcome of
the voting on a proposal.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to be presented
by such stockholders at the Company's next Annual Meeting of Stockholders for
the fiscal year ending December 31, 1998 must be received by the Company no
later than December 31, 1998, in order to be considered for inclusion in the
proxy statement and form of proxy relating to that meeting.
DIRECTORS AND EXECUTIVE OFFICERS
The directors of the Company currently have terms which will end at the
next annual meeting of the stockholders of the Company or until their successors
are elected and qualify, subject to their prior death, resignation or removal.
Officers serve at the discretion of the Board of Directors.
The following table sets forth certain information concerning the persons
who have been nominated by the Board of Directors to be directors of the Company
in connection with Proposal 1 of this Proxy Statement and the current executive
officers of the Company:
NAME POSITION AGE
Glenn M. Gallant Secretary, Chairman and Director 43
Douglas R. Baetz Director 47
Kenneth A. Klotz President and Director 52
Charles LaMontagne Treasurer and Director 44
Olan Beard Vice President and Director 43
GLENN M. GALLANT has served as the Company's Chairman of the Board of
Director and Secretary since September 23, 1997. Mr. Gallant is a financier
with years of experience in development and management in a wide range of
industries. Together with Douglas R. Baetz, Mr. Gallant owns and supervises
the management of New SeaEscape Cruises, Inc., a cruise line operating from
South Florida, and Network Holdings International, Inc., a publicly-traded
sales organization that markets various travel products. In addition, Mr.
Gallant owns and supervises the operations for Berwyn, a credit card service
company and Century a credit card issuing company. There have been and will
continue to be significant business transactions between the Company and
affiliates of Mr. Gallant.
4
<PAGE>
DOUGLAS R. BAETZ has served as a director of the Company since September
23, 1997. Mr. Baetz is a financier with years of experience in development
and management in a wide range of industries. Together with Glenn Gallant, Mr.
Baetz owns and supervises the management of New SeaEscape Cruises, Inc., a
cruise line operation from South Florida and Network Holdings International,
Inc., a publicly-traded sales organization that markets travel products. In
addition, Mr. Baetz owns and supervises the operations for Berwyn, a credit card
service company and Century a credit card issuing company. There have been and
will continue to be significant business transactions between the Company and
affiliates of Mr. Baetz.
KENNETH A. KLOTZ joined FICI in 1994 as President and Chief Executive
Officer. Mr. Klotz became a member of the Company's Board of Directors on
September 23, 1997 and has served as the Company's President and Chief Executive
Officer since that date. Mr. Klotz has worked extensively in the computer data
processing industry for over thirty years, generally focusing on the
management of information systems using mainframe computer equipment. Mr.
Klotz has served in key executive roles for the last fourteen years.
CHARLES LAMONTAGNE joined FICI in 1994 as Senior Vice President of Banking
Services and Chief Financial Officer. Mr. LaMontagne became a member of the
Company's Board of Directors on September 23, 1997 and has served as the
Company's Senior Vice President of Banking Services since that date. On March
10, 1998, Mr. LaMontagne was appointed Chief Financial Officer of the Company.
Prior to joining FICI, Mr. LaMontagne worked in a variety of Texas banks and
refining companies for over nineteen years, generally focusing on controller
responsibilities. Mr. LaMontagne has extensive experience in a wide array of
issues pertaining to financial control and budgeting.
OLAN BEARD joined FICI in 1994 as Senior Vice President of Credit Card
Services and Chief Operations Officer. Mr. Beard became a member of the
Company's Board of Directors on September 23, 1997, and has served as the
Company's Senior Vice President and Chief Operations Officer since that date.
Prior to joining FICI, Mr. Beard worked in a variety of Texas banks for over
twenty years, gradually ascending the line of command, and serving in key
executive positions for the past sixteen years. Mr. Beard has extensive
experience in operations generally and in credit card operations particularly.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth certain
information concerning compensation of certain of the Company's executive
officers (the "Named Executives"), including the Company's Chief Executive
Officer and all executive officers whose total annual salary and bonus
exceeded $100,000, for the years ended December, 1997 and 1996:
<TABLE>
<CAPTION>
Long Term Compensation
---------------------------------
Annual Compensation Awards Payouts
------------------------------------ -------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Other Restricted LTIP All Other
Principal Salary Bonus Compen- Awards Options/ Payouts Compen-
Position Year ($) ($) sation ($) SARs (#) ($) sation ($)
- -------- ---- ------ ----- ------- ---------- -------- ------- ----------
Kenneth A. Klotz (1) 1997 86,000 -0- -0- 2,400 -- -- --
1996 86,000 -0- -0- 2,400 -- -- --
Lynn Dixon(2) 1997 -0- -0- -0- -0- -- -- --
1996 -0- -0- -0- -0- -- -- --
</TABLE>
_______________________
(1) Mr. Klotz was appointed as the Company's Chief Executive Officer on
September 23, 1997. Mr. Klotz's combined annualized base compensation
during the fiscal year ended December 31, 1997 was $86,000. Mr. Klotz does
not have a written employment agreement with the Company or FICI.
(2) Mr. Lynn Dixon served as Chief Executive Officer without compensation.
5
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OPTION/SAR GRANTS TABLE DURING LAST FISCAL YEAR. No options or SARs
were granted to the above named executives during the year ended December 31,
1997.
EMPLOYMENT AGREEMENTS.
COMPENSATION OF DIRECTORS. The Company does not currently compensate
directors for services rendered as directors.
INDEMNIFICATION OF OFFICERS AND DIRECTORS. The Company's Certificate of
Incorporation and Bylaws designate the relative duties and responsibilities
of the Company's officers, establish procedures for actions by directors and
stockholders and other items. The Company's Certificate of Incorporation and
Bylaws also contain extensive indemnification provisions which will permit
the Company to indemnify its officers and directors to the maximum extent
provided by Delaware law.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS. Except as
set forth in employment agreements of certain employees of the Company and
its subsidiaries, the Company has no compensatory plans or arrangements which
relate to the resignation, retirement or any other termination of an
executive officer or key employee with the Company or a change in control of
the Company or a change in such executive officer's or key employee's
responsibilities following a change in control.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The Board
of Directors has no standing compensation committee or other board committee
performing equivalent functions.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
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Compliance with Section 16 of the Securities Exchange Act of 1934 (the
"Exchange Act"). Section 16(a) of the Exchange Act requires the Company's
directors, executive officers and beneficial holders of more than 10% of the
Company's Common Stock to file with the Commission initial reports of
ownership and reports of changes in ownership and reports of changes in
ownership of such equity securities of the Company. Based solely upon a
review of such forms, or on written representations from certain reporting
persons that no other reports were required for such persons, except for
those reports discussed in the next paragraph, the Company believes that all
reports required pursuant to Section 16(a) with respect to its executive
officers, directors and 10% beneficial stockholders for the fiscal year ended
December 31, 1997 were timely filed.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table reflects, as of March 27, 1998, the beneficial Common Stock
ownership of: (a) each director of the Company, (b) each current named executive
officer, (c) each person known by the Company to be a beneficial owner of five
percent (5%) or more of its Common Stock and (d) all executive officers and
directors of the Company as a group:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES(1) PERCENT
- ------------------------------------ ------------------- -------
<S> <C> <C>
Glenn M. Gallant
3020 N. W. 33rd Avenue
Fort Lauderdale, Florida 33311 5,315,625 42.53
Douglas R. Baetz
3020 N. W. 33rd Avenue
Fort Lauderdale, Florida 33311 5,315,625 42.53
Kenneth A. Klotz
1157 North 5th
Abilene, Texas 79601 2,000 (2)
Charles LaMontagne
1157 North 5th
Abilene, Texas 79601 1,000 (2)
Olan Beard
1157 North 5th
Abilene, Texas 79601 -0- --
All Directors and Officers as a Group
(5 persons) 10,634,250 85.07
</TABLE>
____________________
# Pursuant to the rules of the Commission, shares of Common Stock
which an individual or group has a right to acquire within 60 days pursuant
to the exercise of options or warrants are deemed to be outstanding for the
purpose of computing the percentage ownership of such individual or group,
but are not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person shown in the table.
(1) These numbers give effect to a 1 for 2 reverse stock split which
occurred on September 23, 1997.
(2) Represents less than 1% of the issued and outstanding shares of the
Company.
7
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MATTERS FOR CONSIDERATION BY STOCKHOLDERS
PROPOSAL 1. ELECTION OF DIRECTORS.
Five (5) directors will be elected at the Annual Meeting, each to hold
office until the next Annual Meeting of the Stockholders of the Company or
until their successors are elected and qualify, subject to their prior death,
resignation or removal. Officers serve at the discretion of the Board of
Directors. There are no family relationships among any of the Company's
directors and executive officers. In the absence of instructions to the
contrary, shares of Common Stock represented by properly executed proxies
will be voted for the five(5) nominees listed hereinbelow, all of whom are
recommended by management of the Company and who have consented to be named
and to serve if elected.
In the event that any management nominee is unable or declines to serve
as a director at the time of the Meeting, the proxies will be voted for any
nominee who is designated by the present Board of Directors to fill the
vacancy. It is not expected that any nominee will be unable or will decline
to serve as a director.
The Board of Directors met four (4) times during the year ended December
31, 1997. All directors standing for reelection attended one of the meetings of
the Board and 3 of the 5 directors standing for reelection attended all of the
meetings of the Board. The Board did not have any standing committee on
nominations, compensation or audit, or other Board committees performing
equivalent functions during the year ended December 31, 1997.
The Board knows of no reason why any of the nominees will be unavailable
or decline to serve as a director. The information presented below is as of
March 1, 1998 and is based in part on information furnished by the nominees
and, in part, from the records of the Company.
The affirmative vote of a plurality of the combined Votes Cast at the
Meeting is required to elect the directors nominated below.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE ELECTION OF THE NOMINEES
LISTED BELOW.
NOMINEES FOR ELECTION AS DIRECTOR
The following persons have been recommended by management of the Company
and have consented to be named and to serve as members of the Company's Board
of Directors if elected. Glenn M. Gallant has been nominated to be the
Chairman of the Board of Directors. Biographies of such persons may be
reviewed in the section of this Proxy Statement entitled "Directors and
Executive Officers."
NAME DIRECTOR SINCE:
---- ---------------
Glenn M. Gallant September, 1997
Douglas R. Baetz September, 1997
Kenneth A. Klotz September, 1997
Charles LaMontagne September, 1997
Olan Beard September, 1997
8
<PAGE>
PROPOSAL 2. AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION AND
BYLAWS
Approval of Proposal 2 constitutes adoption of the amended Certificate
of Incorporation of the Company (see "Appendix B") and the Amended and
Restated Bylaws of the Company (see "Appendix C"). The proposed amended
Certificate of Incorporation and proposed Amended and Restated Bylaws of the
Company differ from the Company's current Certificate of Incorporation and
Bylaws in certain respects, the most important of which are described below.
CERTAIN ANTI-TAKEOVER PROCEDURAL REQUIREMENTS
The Restated Certificate of Incorporation adopts certain measures (the
"Measures") which are intended to protect the Company's stockholders by
rendering it more difficult for a person or persons to obtain control of the
Company without cooperation of the Company's management. These Measures
include the potential implementation of certain supermajority requirements
for the amendment of the Company's Certificate of Incorporation and Bylaws.
Such Measures are often referred to as "anti-takeover" provisions. The
Company's current Certificate of Incorporation and Bylaws do not include such
anti-takeover provisions.
The inclusion of such "anti-takeover" provisions in the Certificate of
Incorporation may delay, deter or prevent a takeover of the Company which the
stockholders may consider to be in their best interests, thereby possibly
depriving holders of the Company's securities of certain opportunities to
sell or otherwise dispose of their securities at above-market prices, or
limit the ability of stockholders to remove incumbent directors as readily as
the stockholders may consider to be in their best interests.
The Measures are not being proposed in response to any present attempt,
known by the Board of Directors of the Company to acquire control of the
Company, to obtain representation on the Company's Board of Directors or to
take significant corporate action. Rather, management believes that the
Measures are prudent and in the best interests of the Company and its
stockholders and should be adopted for their protection. The Board of
Directors further believes that the present is an appropriate time to adopt
the proposed Measures, since they would lessen the likelihood that the
Company would be required to incur significant expense and might be subject
to substantial disruption in connection with such an attempt.
The Board of Directors does not have any current plans to seek
stockholder approval of any amendments to, or make changes in, the Company's
charter documents that may be deemed to have "anti-takeover" implications,
except as described in this Proxy Statement or as set forth in the amended
Certificate of Incorporation and Amended and Restated Bylaws. The Board of
Directors may consider other "anti-takeover" measures in the future,
including measures which do not require stockholder approval. Severance
agreements, pension agreements, restricted stock awards, acceleration of
outstanding options and plans and agreements of a similar nature which become
applicable in the event of "change in control" have become increasingly
common in recent years for executives of major public companies.
SUPERMAJORITY REQUIRED FOR AMENDMENT
In order to insure that the substantive provisions set forth in the
amended Certificate of Incorporation are not circumvented by the amendment of
such Certificate of Incorporation pursuant to a vote of a majority of the
voting power of the Company's outstanding shares, the amended Certificate of
Incorporation also provides that any amendment, change or repeal of the
provisions contained in the amended Certificate of Incorporation with respect
to: (i) the Company's capitalization, (ii) amendment of the Bylaws, (iii)
determination by the Board of the number of directors, (iv) filling Board
vacancies, (v) the requirement that stockholder action be taken at an annual
or special meeting, (vi) requirements with respect to appraisal rights for
stockholders, (vii) the amendment of the provision imposing such
supermajority requirement for amendment of the Certificate of Incorporation,
or (viii) classification of the Board of Directors, shall require
9
<PAGE>
the affirmative vote of the holders of at least 66-2/3% of the voting power
of all outstanding shares of voting stock, including, in any instance where
the repeal or amendment is proposed by an Interested Stockholder (as such
term is defined in Section 203 of the Delaware General Corporation Law) or
its affiliate or associate, the affirmative vote of a majority of the voting
power of all outstanding shares of voting stock held by persons other than
such Interested Stockholder or its affiliates or associates. However, only
the affirmative vote of the majority of the voting power of all outstanding
shares of voting stock is required if the amendment of any of the foregoing
provisions is approved by a majority of the Continuing Directors (as such
term is defined in the amended Certificate of Incorporation). The Company's
Certificate of Incorporation does not currently include such provisions and
Delaware law does not contain anti-takeover protections which apply to the
Company.
The current Certificate of Incorporation permits the Board of Directors
to adopt, amend or repeal any or all of the Company's bylaws without
stockholder action.
CLASSIFIED BOARD
The amended Certificate of Incorporation provides that at the first
annual meeting of the Company's stockholders after the authorized number of
directors is seven (7) or more, the Board of Directors shall be divided into
three classes, Class I, Class II and Class III. The current Certificate of
Incorporation does not include provision for a classified Board of Directors.
The current Bylaws provide no limit on the authorized number of directors.
There are currently five (5) members of the Board of Directors. The Amended
and Restated Bylaws of the Company provide that the minimum number of
directors shall be three (3) and that maximum authorized number of directors
shall not exceed nine (9) members. If adopted by the shareholders the
amended Certificate of Incorporation in connection with this resolution, the
provision for the classified Board of Directors will take effect at the first
annual meeting of the Company's stockholders following such adoption. Upon
the effectiveness of the classified Board of Directors, the initial Class I
directors will serve for a term of one year, the Class II directors for a
term of two years, and the Class III directors for a term of three years.
Thereafter, all directors shall serve for three year terms. The effect of
these provisions is that not more than one-third of the Company's directors
will be elected at any single annual meeting. As a result, a person seeking
control of the Company might not necessarily be able to acquire a controlling
block of stock and effect an entire change in management at a single annual
meeting.
SPECIAL MEETINGS OF STOCKHOLDERS
The Amended and Restated Bylaws of the Company provide that a special
meeting of stockholders may be called by the Chairman of the Board of
Directors, the President, a majority of the Board of Directors or 50% of the
stockholders of record of all shares entitled to vote. The current Bylaws of
the Company provide that a special meeting of stockholders may be called by
the President or any director.
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CORPORATE ACTION WITHOUT A STOCKHOLDER MEETING
The amended Certificate of Incorporation provides that any action
required or permitted to be taken by the stockholders of the Company must be
effected at a duly called annual meeting or at a special meeting of
stockholders of the Company. The Company's current Certificate of
Incorporation and Bylaws permit corporate action without a meeting of
stockholders upon the written consent of the holders of that number of shares
necessary to authorize the proposed action being taken.
AUTHORIZED CAPITAL. The Company's current Certificate of Incorporation
authorizes the issuance of up to 50,000,000 shares of Common Stock, par value
$0.001 per share and will further authorize the issuance of up to 5,000,000
shares of preferred stock, par value $0.001 per share. The par value of the
Company's Stock will not be changed by reason of the adoption of the amended
Certificate of Incorporation.
LIMITATION OF LIABILITY OF DIRECTORS. Under Delaware corporate law, a
corporation may provide in its charter that directors shall not be liable to
the corporation or its stockholders for monetary damages for breach of their
fiduciary duty. Delaware law limits a director's liability for monetary
damages, except for breach of a director's duties under certain
circumstances. The amended Certificate of Incorporation of the Company
contains a provisions limiting a director's liability for monetary damages to
the fullest extent permitted by Delaware law.
INDEMNIFICATION OF DIRECTORS AND OFFICERS. The amended Certificate and
Bylaws provide that the Company shall indemnify its directors and officers to
the fullest extent permitted under Delaware law. See "Proposal 4 - Approval
of Form of Indemnification Agreement - Indemnification of Directors and
Officers Under Delaware and Delaware Law."
The Company currently does not have directors' and officers' liability
insurance. Further, the Company may enter into agreement of indemnification
with its directors to provide for indemnification to the fullest extent
permitted, as currently provided under Delaware law, if Proposal 4 is
adopted. The Company has also presented to the stockholders a proposal to
adopt a form of Indemnification Agreement between the Company and the members
of its Board of Directors. See "Proposal 4 - Approval of Form of
Indemnification Agreement."
The members of the Board of Directors of the Company have a personal
interest in seeing that the proposed Indemnification Agreement between the
Company and the members of the Board of Directors is effected and that the
limitation on liability and indemnification provisions are included as a part
of the Certificate of Incorporation and Bylaws of the Company.
SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN THE CURRENT CERTIFICATE OF
INCORPORATION AND THE AMENDED CERTIFICATE OF INCORPORATION
To the extent that the discussion below discusses Delaware corporate
law, it does not purport to be a complete statement of such laws.
BUSINESS COMBINATIONS WITH SUBSTANTIAL STOCKHOLDERS. Delaware law
contains a statutory provision which is intended to curb abusive takeovers of
Delaware corporations. Section 203 of the Delaware General Corporation Law
addresses the problem by preventing certain business combinations of the
corporation with interested stockholders within three years after such
stockholders become interested. Section 203 provides, with certain
exceptions, that a Delaware corporation may not engage in any of a broad
range of business
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combinations with a person or an affiliate, or associate of such person, who
is an "interested stockholder" for a period of three (3) years from the date
that such person became an interested stockholder unless: (i) the transaction
resulting in a person becoming an interested stockholder, or the business
combination, is approved by the Board of Directors of the corporation before
the person becomes an interested stockholder; (ii) the interested stockholder
acquired 85% or more of the outstanding voting stock of the corporation in
the same transaction that makes such person an interested stockholder
(excluding shares owned by persons who are both officers and directors of the
corporation, and shares held by certain employee stock ownership plans); or
(iii) on or after the date the person becomes an interested stockholder, the
business combination is approved by the corporation's board of directors and
by the holders of at least 66-2/3% of the corporation's outstanding voting
stock at an annual or special meeting, excluding shares owned by the
interested stockholder. Under Section 203, an "interested stockholder" is
defined as any person who is: (i) the owner of fifteen percent (15%) or more
of the outstanding voting stock of the corporation or (ii) an affiliate or
associate of the corporation and who was the owner of fifteen percent (15%)
or more of the outstanding voting stock of the corporation at any time within
the three (3) year period immediately prior to the date on which it is sought
to be determined whether such person is an interested stockholder.
Delaware law provides for certain "antitakeover" protections against
persons who acquire or intend to acquire 20% or more of the voting power of
certain Delaware corporations, defined by statute as "issuing public
corporations." However, in order to fall within the definition of an "issuing
public corporation," the Delaware corporation must have: (i) its principal
place of business, principal office or substantial assets within the State of
Delaware, and (ii) either more than 10% of its stockholders resident in the
State of Delaware, more than 10% of its shares owned by Delaware residents or
at least 1,000 Delaware resident stockholders (with shares held by banks,
brokers or nominees disregarded for the purpose of calculating such
percentage). As the Company's principal place of business and principal
office are located outside of the State of Delaware and the Company does not
have any significant assets in the State of Delaware, the Company does not
fall within the definition of an "issuing public corporation" for purposes of
the Delaware antitakeover statute, and therefore, such antitakeover
provisions do not apply to the Company.
Because the provision may have a deterrent effect on the ability or
desire of third persons to acquire a substantial block of the Company's
Common Stock and to attempt to gain control of the Company, directors of the
Company could be deemed to have a personal interest in the adoption of the
amended Certificate of Incorporation and the Amended and Restated Bylaws.
A corporation may, at its option, exclude itself from the coverage of
Section 203 by amending its certificate of incorporation or bylaws by action
of its stockholders to exempt itself from coverage, provided that such bylaw
or certificate of incorporation amendment shall not become effective until
twelve (12) months after the date it is adopted. The Company has not adopted
such an amendment to the Certificate of Incorporation. It is not anticipated
that the Board of Directors of the Company will seek stockholder approval to
"opt out" of the operation of this provision.
LIABILITY OF DIRECTORS. Delaware law permits a Delaware corporation to
include in its certificate of incorporation a provision which eliminates or
limits the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duties as a
director. However, no such provision may eliminate or limit the liability of
a director: (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders; (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law; (iii)
for declaration of unlawful dividends or illegal redemptions or stock
repurchases; or (iv) for any transaction from which the director derived an
improper personal benefit. The amended Certificate of Incorporation includes
such a provision.
Under Delaware law a director is not personally liable for monetary
damages to any person for his actions as a director unless the director
breached his duties by way of: (i) a criminal violation, unless the director
has reasonable cause to believe his conduct was lawful or had no reasonable
cause to believe his
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conduct was unlawful; (ii) a transaction from which the director derived an
improper personal benefit; (iii) declaration of unlawful distributions; (iv)
in a derivative action, conscious disregard by the director for the best
interests of the corporation or willful misconduct by the director; or (v) in
a third party action, recklessness or actions or omissions committed in bad
faith or with malicious purpose or in a manner exhibiting wanton and willful
disregard of human rights, safety or property.
INDEMNIFICATION OF DIRECTORS AND OFFICERS. Delaware law generally
provide for similar provisions with respect to the power of a corporation to
indemnify its directors and officers. However, Delaware provides that no
indemnification is permitted for criminal violations (unless the director,
officer, employee or agent had reasonable cause to believe his conduct was
unlawful), transactions in which the director or officer derived an improper
personal benefit, declaration of unlawful dividends or, in derivative
actions, willful misconduct or conscious disregard for the best interests of
the corporation. See "Proposal 4 - Approval of Form of Indemnification
Agreement - Indemnification of Directors and Officers Under Delaware and
Delaware Law."
SPECIAL MEETINGS OF STOCKHOLDERS. Under Delaware law, a special meeting
of stockholders may be called by the corporation's board of directors or by
such persons as may be authorized by the corporation's certificate of
incorporation or bylaws. The Amended and Restated Bylaws provide that a
special meeting may be called by the Chairman of the Board of Directors, the
President, a majority of the Board of Directors or 50% of the stockholders of
record of all shares entitled to vote.
Delaware law provides that a special meeting of stockholders may be
called by: (i) a corporation's board of directors; (ii) the persons
authorized by the articles of incorporation or bylaws; or (iii) the holders
of not less than 10% of all votes entitled to be cast on any issue to be
considered at the proposed special meeting. A corporation's certificate of
incorporation may require a higher percentage of votes, up to a maximum of
50% to call a special meeting of stockholders. The Company's current
Certificate of Incorporation does not include any such provision. The current
Bylaws of the Company provide that a special meeting of stockholders may be
called by the Board of Directors, the President or 10% of the stockholders of
record of all shares entitled to vote. The amended Certificate of
Incorporation and the Amended and Restated Bylaws provide for the calling of
a special meeting of stockholders by the holders of 50% of all votes entitled
to be cast on any issue to be considered at the proposed special meeting.
MERGER WITH SUBSIDIARY. Under Delaware law, a parent corporation may
merge into a subsidiary and a subsidiary may merge into its parent, without
stockholder approval, where such parent corporation owns at least 90% of the
outstanding shares of each class of capital stock of its subsidiary.
Delaware law permits such a merger of a subsidiary without stockholder
approval if 80% of each class of capital stock of the subsidiary is owned by
the parent corporation.
REMOVAL OF DIRECTORS; FILLING VACANCIES ON THE BOARD OF DIRECTORS.
Under Delaware law, any director or the entire board of directors generally
may be removed with or without cause by the holders of a majority of the
shares entitled to vote at an election of directors. Under Delaware law,
stockholders may remove one or more directors, with or without cause, unless
the certificate of incorporation provide that directors may be removed only
with cause, at a meeting of stockholders called expressly at least in part
for that purpose. The Company's current Certificate of Incorporation does
not refer to removal of directors. Therefore, any member of the Company's
Board of Directors may be removed with or without cause.
Under the Amended and Restated Bylaws, newly created directorships
resulting from any increase in the number of directors or any vacancies on
the Board of Directors may be filled by the affirmative vote of a majority of
the directors then in office. In addition, the Amended and Restated Bylaws
provide that the directors elected to fill vacancies on the Board of
Directors will hold office until the next election of directors. The
Company's existing bylaws provide that vacancies on the Board of Directors
may be filled by a majority vote of the remaining members of the Board of
Directors.
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COMMITTEES OF THE BOARD OF DIRECTORS. Delaware law provides that the
board of directors may delegate certain of their duties to one or more
committees elected by a majority of the board. A Delaware corporation can
delegate to a committee of the board of directors, among other things, the
responsibility of nominating candidates for election to the office of
director, to fill vacancies on the board of directors, and to reduce earned
or capital surplus and authorize the acquisition of the corporation's own
stock. Moreover, if either the corporation's certificate of incorporation or
bylaws, or the resolution of the board of directors creating the committee so
permits, a committee of the board of directors may declare dividends and
authorize the issuance of stock. Delaware law places more limitations on the
types of activities that can be delegated to committees of the board. Under
Delaware law, a committee of the board of directors may not approve or
recommend to stockholders actions or proposals required to be approved by the
stockholders, fill a vacancy on the board, adopt, amend or repeal the bylaws,
authorize the issuance of stock, or authorize the reacquisition of the
corporation's own stock.
AMENDMENT OR REPEAL OF THE CERTIFICATE. Under Delaware law, unless the
certificate of incorporation otherwise provides, amendments to the
certificate of incorporation generally require the approval of the holders of
a majority of the outstanding stock entitled to vote thereon, and if the
amendment would increase or decrease the number of authorized shares of any
class or series or the par value of such shares or would adversely affect the
rights, powers or preferences of such class or series, a majority of the
outstanding stock of such class or series also would have to approve the
amendment. The amended Certificate of Incorporation does not provide
otherwise. However, the amended Certificate of Incorporation imposes certain
supermajority requirements on the vote of stockholders to amend the
Certificate of Incorporation of the Company, unless such amendments are also
adopted by the Board of Directors of the Company. Except with regard to
minor amendments, all amendments to the certificate of incorporation of a
Delaware corporation must be approved by a majority of all the votes entitled
to be cast by each voting group, unless the certificate of incorporation
require a greater or lesser vote. The Company's current Certificate of
Incorporation does not provide for a greater or lesser vote.
AMENDMENTS TO BYLAWS. Under Delaware law, directors may amend the
bylaws of a corporation only if such right is expressly conferred upon the
directors in its certificate of incorporation. Under Delaware law, a
corporation's board of directors may amend or repeal the bylaws unless such
power is expressly reserved to the stockholders in the certificate of
incorporation or under Delaware law, or the stockholders expressly provide in
amending or repealing all or any part of the bylaws, that the board of
directors may not amend or repeal the affected bylaws. The amended
Certificate of Incorporation permits the Board of Directors to adopt, alter
or amend the Amended and Restated Bylaws. However, the amended Certificate
of Incorporation imposes certain supermajority requirements on the vote of
stockholders to amend the Amended and Restated Bylaws, unless such amendments
are also adopted by the Board of Directors of the Company. The Company's
current Certificate of Incorporation provides the Board of Directors with the
authority to adopt, alter or amend the Bylaws.
VOTE REQUIRED FOR MERGERS. Delaware law provides that the sale, lease,
exchange or disposal of all, or substantially all, of the assets of a
Delaware corporation, not in the ordinary course of business, as well as any
merger, consolidation or share exchange generally must be recommended by the
Board of Directors and approved by a vote of a majority of the shares of each
class of the stock of the corporation entitled to vote on such matters.
Under Delaware law, the vote of the stockholders of a corporation surviving a
merger is not required if: (i) the certificate of incorporation of the
surviving corporation will not substantially differ from its certificate of
incorporation before the merger; and (ii) each stockholder of the surviving
corporation before the effective date will hold the same number of shares,
with identical designations, preferences, limitations and relative rights
immediately after the merger. Delaware law has a similar provision requiring
stockholder approval in the case of the disposition of assets or a merger or
a share exchange. However, with respect to mergers which do not require the
vote of the corporation's stockholders, Delaware law, requires that either no
shares of common stock of the surviving corporation and no shares, securities
or obligations convertible
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into such stock are to be issued or delivered under the plan of merger or the
authorized unissued shares or the treasury shares of common stock of the
surviving corporation to be issued or delivered under the plan of merger,
plus those initially issuable upon conversion of any other shares, securities
or obligations to be issued or delivered under such plan, do not exceed 20%
of the shares of common stock of such constituent corporation outstanding
immediately prior to the effective date of the merger.
STOCK REDEMPTIONS AND REPURCHASES. Delaware corporations may generally
purchase or redeem their own shares of capital stock. Under Delaware law, a
Delaware corporation may purchase or redeem its own shares of capital stock,
except when the capital of the corporation is impaired or when such purchase
or redemption would cause any impairment of the capital of the corporation.
Subject to any restrictions imposed by its certificate of incorporation, a
Delaware corporation may make distributions to stockholders, so long as,
after giving effect to such distribution: (i) the corporation would be able
to pay its debts as they become due in the usual course of business; or (ii)
the corporation's total assets would not be less than the sum of its total
liabilities plus (unless the certificate of incorporation permit otherwise),
the amount that would be needed if the corporation were to be dissolved at
the time of the distribution to satisfy the preferential rights upon
dissolution of stockholders whose preferential rights are superior to those
receiving the distribution. The Company's current Certificate of
Incorporation do not contains any additional restrictions on distributions to
stockholders or provide for the authorization of a class of preferred stock.
PROXIES. Under Delaware law, a proxy executed by a stockholder will
remain valid for a period of three years unless the proxy provides for a
longer period. Under Delaware law, a proxy is effective only for a period of
11 months unless otherwise provided in the proxy.
CONSIDERATION FOR STOCK. Under Delaware law, a corporation may issue
its capital stock only in return for certain tangible or intangible property
or benefit to the corporation, including cash, promissory notes, services
performed, promises to perform services evidenced by a written contract, and
other securities of the corporation. Shares may be issued for less than par
value. Under Delaware law, a corporation may accept as consideration for its
stock a combination of cash, property or past services in an amount not less
than the par value of the shares being issued, and a secured promissory note
or other binding obligation executed by the subscriber for any balance, the
total of which must equal at least the par value of the issued stock, as
determined by the board of directors.
STOCKHOLDERS' RIGHTS TO EXAMINE BOOKS AND RECORDS. Delaware law
provides that any stockholder of record may demand to examine the
corporation's books and records for any proper purpose. If management of the
corporation refuses, the stockholder can compel release of the books by court
order. Under Delaware law, any stockholder may inspect and copy certain of
the corporation's records upon written demand, including the corporation's
certificate of incorporation, bylaws, certain resolutions of the Board of
Directors relating to the creation of classes or series of stock, minutes of
stockholder meetings during the prior three (3) years, written communications
to stockholders, a list of names and business addresses of the corporation's
officers and directors, the corporation's most recent corporate report
delivered to the Delaware Secretary of State and the corporation's financial
statements during the prior three (3) year period. However, only a
stockholder whose demand is in good faith and with a proper purpose and
describes in particularity the purpose and the desired records which are
related to such purpose, may examine certain of the corporation's books,
including minutes of meetings of the Board of Directors, minutes of other
meetings or actions taken by stockholders not otherwise expressly available
for inspection to all stockholders, accounting records of the corporation, a
list of names and address of the corporation's stockholders and any other
books and records of the corporation. Under Delaware law, if the corporation
refuses to allow a stockholder of a corporation to examine the corporation's
books, the corporation may be liable to the stockholder for costs (including
reasonable attorney's fees) incurred by the stockholder. There is no such
corresponding provision in Delaware law.
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DIVIDENDS. Delaware law provides that the corporation may pay dividends
out of surplus, out the corporation's net profits for the preceding fiscal
year, or both provided that there remains in the stated capital account an
amount equal to the par value represented by all shares of the corporation's
stock having a distribution preference. Delaware law provides that dividends
may be paid, unless after giving effect to such distribution, the corporation
would not be able to pay its debts as they come due in the usual course of
business, or the corporation's total assets would be less than the sum of its
total liabilities, plus (unless the corporation's certificate of
incorporation permit otherwise) the amount needed to satisfy preferential
distributions.
CORPORATE ACTION WITHOUT A STOCKHOLDER MEETING. Delaware law permits
corporate action without a meeting of stockholders upon the written consent
of the holders of that number of shares necessary to authorize the proposed
corporate action being taken, unless the certificate of incorporation
expressly provides otherwise. The Company's current Certificate of
Incorporation do not include any such contrary provision. The amended
Certificate of Incorporation provides that any action required or permitted
to be taken by the stockholders of the Company must be effected at a duly
called annual meeting or at a special meeting of stockholders of the Company.
In the event such proposed corporate action is taken without a meeting by
less than the unanimous written consent of stockholders, Delaware law
requires that prompt notice of the taking of such action be sent to those
stockholders who have not consented in writing. Delaware law provides that
such notice must be given within ten (10) days of the date such stockholder
authorization is granted.
VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS
Under the Company's Certificate of Incorporation and Delaware law, the
adoption of the Amended Certificate of Incorporation and the Amended and
Restated Bylaws must be approved by the affirmative vote of the holders of a
majority of the issued and outstanding shares of the Company's Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
PROPOSAL 3 APPROVAL OF THE COMPANY'S 1998 STOCK OPTION PLAN
GENERAL
The 1998 Stock Option Plan (the "1998 Stock Option Plan") was adopted by
the Board of Directors on March 25, 1998. The Company has reserved for
issuance thereunder an aggregate of 500,000 shares of Common Stock. The 1998
Stock Option Plan provides for the grant to employees of the Company of
incentive stock options within the meaning of Section 422 of the Code, and
for the grant to employees and consultants of nonstatutory stock options.
The success of the Company depends upon its ability to attract and
retain highly qualified and competent employees. The 1998 Stock Option Plan
enhances that ability and provides additional incentive to such personnel to
advance the interests of the Company and its stockholders. Management of the
Company believes that the reservation of 500,000 shares of Common Stock for
issuance under the 1998 Stock Option Plan, would provide an adequate reserve
of shares for issuance under the 1998 Stock Option Plan in order to enable
the Company to compete with other companies to attract and retain valuable
employees.
A description of the 1998 Stock Option Plan is set forth below. The
description is intended to be a summary of the material provisions of the
1998 Stock Option Plan and does not purport to be complete. The following
discussion summarizes certain aspects of the 1998 Stock Option Plan, but is
qualified in its entirety by reference to the 1998 Stock Option Plan which is
attached hereto as "Appendix D."
1998 STOCK OPTION PLAN
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The general purposes of the 1998 Stock Option Plan are to attract and
retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to employees and consultants
of the Company and to promote the success of the Company's business. It is
intended that these purposes will be effected through the granting of stock
options, which may be either "incentive stock options" as defined in Section
422 of the Code, or nonstatutory stock options.
The 1998 Stock Option Plan provides that options may be granted to the
employees (including officers and directors who are employees) and
consultants of the Company, or of any parent or subsidiary of the Company.
Incentive stock options may be granted only to employees. An employee or
consultant who has been granted an option may, if otherwise eligible, be
granted additional options.
As of March 25, 1998, the Company's Board of Directors approved the
Company's 1998 Stock Option Plan, subject to the ratification of the
Company's stockholders.
The Company has reserved for issuance up to 500,000 shares of Common
Stock under the 1998 Stock Option Plan. No options have been granted under
the 1998 Stock Option Plan as of the date of this Proxy Statement.
ADMINISTRATION OF AND ELIGIBILITY UNDER 1998 STOCK OPTION PLAN. The
1998 Stock Option Plan, as adopted, provides for the issuance of options to
purchase shares of Common Stock to officers, directors, employees,
independent contractors and consultants of the Company and its subsidiaries
as an incentive to remain in the employ of or to provide services to the
Company and its subsidiaries. The 1998 Stock Option Plan authorizes the
issuance of incentive stock options ("ISOs"), non-qualified stock options
("NSOs") and stock appreciation rights ("SARs") to be granted by a committee
(the "Committee") to be established by the Board of Directors to administer
the 1998 Stock Option Plan, which will consist of at least two outside
directors of the Company.
Subject to the terms and conditions of the 1998 Stock Option Plan, the
Committee will have the sole authority to determine: (a) the persons
("optionees") to whom options to purchase shares of Common Stock and SARs
will be granted, (b) the number of options and SARs to be granted to each
such optionee, (c) the price to be paid for each share of Common Stock upon
the exercise of each option, (d) the period within which each option and SAR
will be exercised and any extensions thereof, and (e) the terms and
conditions of each such stock option agreement and SAR agreement which may be
entered into between the Company and any such optionee.
All officers, directors and employees of the Company and its
subsidiaries and certain consultants and other persons providing significant
services to the Company and its subsidiaries will be eligible to receive
grants of options and SARs under the 1998 Stock Option Plan. However, only
employees of the Company and its subsidiaries are eligible to be granted ISOs.
STOCK OPTION AGREEMENTS. All options granted under the 1998 Stock
Option Plan will be evidenced by an option agreement or SAR agreement between
the Company and the optionee receiving such option or SAR. Provisions of
such agreements entered into under the 1998 Stock Option Plan need not be
identical and may include any term or condition which is not inconsistent
with the 1998 Stock Option Plan and which the Committee deems appropriate for
inclusion.
INCENTIVE STOCK OPTIONS. Except for ISOs granted to stockholders
possessing more than ten percent (10%) of the total combined voting power of
all classes of the securities of the Company or its subsidiaries to whom such
ownership is attributed on the date of grant ("Ten Percent Stockholders"),
the exercise price of each ISO must be at least 100% of the fair market value
of the Company's Common Stock as determined on
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the date of grant. ISOs granted to Ten Percent Stockholders must be at an
exercise price of not less than 110% of such fair market value.
Each ISO must be exercised, if at all, within ten (10) years from the
date of grant, but, within five (5) years of the date of grant in the case of
ISO's granted to Ten Percent Stockholders.
An optionee of an ISO may not exercise an ISO granted under the 1998
Stock Option Plan so long as such person holds a previously granted and
unexercised ISO.
The aggregate fair market value (determined as of time of the grant of
the ISO) of the Common Stock with respect to which the ISOs are exercisable
for the first time by the optionee during any calendar year shall not exceed
$100,000.
NON-QUALIFIED STOCK OPTIONS. The exercise price of each NSO will be
determined by the Committee on the date of grant. The Company hereby
undertakes not to grant any non-qualified stock options under the 1998 Stock
Option Plan at an exercise price less than 85% of the fair market value of
the Common Stock on the date of grant of any non-qualified stock option under
the 1998 Stock Option Plan.
The exercise period for each NSO will be determined by the Committee at
the time such option is granted, but in no event will such exercise period
exceed ten (10) years from the date of grant.
STOCK APPRECIATION RIGHTS. Each SAR granted under the 1998 Stock Option
Plan will entitle the holder thereof, upon the exercise of the SAR, to
receive from the Company, in exchange therefor, an amount equal in value to
the excess of the fair market value of the Common Stock on the date of
exercise of one share of Common Stock over its fair market value on the date
of exercise of one share of Common Stock over its fair market value on the
date of grant (or in the case of an SAR granted in connection with an option,
the excess of the fair market of one share of Common Stock at the time of
exercise over the option exercise price per share under the option to which
the SAR relates), multiplied by the number of shares of Common Stock covered
by the SAR or the option, or portion thereof, that is surrendered.
SARs will be exercisable only at the time or times established by the
Committee. If an SAR is granted in connection with an option, the SAR will
be exercisable only to the extent and on the same conditions that the related
option could be exercised. The Committee may withdraw any SAR granted under
the 1998 Stock Option Plan at any time and may impose any conditions upon the
exercise of an SAR or adopt rules and regulations from time to time affecting
the rights of holders of SARs.
LIMIT TO OPTIONS GRANTED UNDER THE 1998 STOCK OPTION PLAN. Under
Section 162(m) of the Code, which was enacted in 1993, the deductibility for
federal income tax purposes of compensation paid to the Company's Chief
Executive Officer and the four other most highly compensated executive
officers who receive salary and bonus in excess of $100,000 in a particular
year is limited to $1,000,000 per year per individual. For purposes of this
legislation, compensation expense attributable to stock options and SARs
would be subject to this limitation unless, among other things, the option
plan under which the options and SARs is granted includes a limit on the
number of shares with respect to which awards may be made to any one employee
in a fiscal year. Such a potential compensation expense deduction could
arise, for example, upon the exercise by one of these executive of a
nonstatutory option, i.e., an option that is not an incentive stock option
qualifying for favorable tax treatment, or upon a disqualifying disposition
of stock received upon exercise of an incentive stock option.
In order to exclude compensation resulting from options granted under
the Company's 1998 Stock Option Plan from the $1,000,000 limit on
deductibility, the Board of Directors has approved a provision in the 1998
Stock Option Plan which will place a 125,000 share limit on the number of
options that may be granted
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under the 1998 Stock Option Plan to an employee in any fiscal year. This
limit is subject to appropriate adjustment in the case of stock splits,
reverse stock splits and the like. The purpose of this provision, which is
intended to comply with Section 162(m) of the Code and the regulations
thereunder, is to preserve the Company's ability to deduct in full any
compensation expense related to stock options.
TERMINATION OF OPTION AND TRANSFERABILITY. In general, any unexpired
options and SARs granted under the 1998 Stock Option Plan will terminate: (a)
in the event of death or disability, pursuant to the terms of the option
agreement or SAR agreement, but not less than six (6) months or more than
twelve (12) months after the applicable date of such event, (b) in the event
of retirement, pursuant to the terms of the option agreement or SAR
agreement, but no less that thirty (30) days or more than three (3) months
after such retirement date, or (c) in the event of termination of such person
other than for death, disability or retirement, until thirty (30) days after
the date of such termination. However, the Committee may in its sole
discretion accelerate the exercisability of any or all options or SARs upon
termination of employment or cessation of services.
The options and SARs granted under the 1998 Stock Option Plan generally
will be non-transferable, except by will or the laws of descent and
distribution.
ADJUSTMENTS RESULTING FROM CHANGES IN CAPITALIZATION. The number of
shares of Common Stock reserved under the 1998 Stock Option Plan and the
number and price of shares of Common Stock covered by each outstanding option
or SAR under the 1998 Stock Option Plan will be proportionately adjusted by
the Committee for any increase or decrease in the number of issued and
outstanding shares of Common Stock resulting from any stock dividends,
split-ups, consolidations, recapitalizations, reorganizations or like event.
AMENDMENT OR DISCONTINUANCE OF STOCK OPTION PLAN. The Board of
Directors has the right to amend, suspend or terminate the 1998 Stock Option
Plan at any time. Unless sooner terminated by the Board of Directors, the
1998 Stock Option Plan will terminate on March 25, 2008, the tenth (10th)
anniversary date of the effectiveness of the 1998 Stock Option Plan.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
Options granted under the 1998 Stock Option Plan may be either
"incentive stock options," as defined in Section 422 of the Code, or
nonstatutory options.
An optionee who is granted an incentive stock option will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum
tax. Upon the sale or exchange of the shares more than two years after grant
of the option and one year after exercising the option, any gain or loss will
be treated as long-term capital gain or loss. If these holding periods are
not satisfied, the optionee will recognize ordinary income at the time of
sale or exchange equal to the difference between the exercise price and the
lower of: (i) the fair market value of the shares at the date of the option
exercise, or (ii) the sale price of the shares. A different rule for
measuring ordinary income upon such a premature disposition may apply if the
optionee is also an officer, director or Ten Percent Stockholder of the
Company. Generally, the Company will be entitled to a deduction in the same
amount as the ordinary income recognized by the optionee. Any gain or loss
recognized on such a premature disposition of the shares in excess of the
amount treated as ordinary income will be characterized as long-term or
short-term capital gain or loss, depending on the holding period.
All other options that do not qualify as incentive options are referred
to as nonstatutory options. An optionee will not recognize any taxable
income at the time he or she is granted a non-statutory option. However,
upon its exercise, the optionee will recognize taxable income generally
measured as the excess of the then fair market value of the shares purchased
over the purchase price. Any taxable income recognized
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in connection with an option exercise by an option who is also an employee of
the Company will be subject to tax withholding by the Company. Upon the
resale of such shares by the optionee, any difference between the sale price
and the optionee's purchase price, to the extent not recognized as taxable
income as described above, will be treated as long-term capital gain or loss,
depending on the holding period.
Generally, the Company will be entitled to a tax deduction in the same
amount as the ordinary income recognized by the optionee with respect to
shares acquired upon exercise of a nonstatutory option.
The foregoing is only a summary of the effect of federal income taxation
upon the optionee and the Company with respect to the grant and exercise of
options under the 1998 Stock Option Plan, does not purport to be complete,
and does not discuss the tax consequences of the optionee's death or the
income tax laws of any municipality, state or foreign country in which an
optionee may reside.
VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS
Approval of the 1998 Stock Option Plan requires the affirmative vote of
a majority of the combined Votes Cast.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
PROPOSAL 4. APPROVAL OF FORM OF INDEMNIFICATION AGREEMENT
GENERAL
The stockholders are being asked at the Meeting to approve proposed
agreements (the "Indemnification Agreements") to be entered into between the
Company and its directors and officers, in substantially the form attached
hereto as "Appendix D."
The Board of Directors believes that the Indemnification Agreements are
a response to: (i) the increasing hazard and related expense of unfounded
litigation directed against directors and executive officers; (ii) the
general unavailability of directors' and officers' liability insurance or
significant limitations in amounts and breadth of coverage; (iii) dramatic
increases in premiums for such coverage; and (iv) the potential inability of
the Company to continue to attract and retain qualified directors and
executive officers in light of these circumstances.
The Company does not now have directors' and officers' liability insurance.
The Board of Directors believes that the Indemnification Agreements will
serve the best interests of the Company and its stockholders by strengthening
the Company's ability to attract and retain the services of knowledgeable and
experienced persons as directors and officers who, through their efforts and
expertise, can make a significant contribution to the success of the Company.
The Indemnification Agreements are intended to complement the indemnity and
protection available under Delaware law, the Company's Certificate of
Incorporation and Bylaws and any policies of insurance which may hereafter be
maintained by the Company and to provide for indemnification of certain of
its agents to the fullest extend permitted by applicable law.
The following discussion summarizes certain aspects of the
Indemnification Agreement, but is qualified in its entirety by reference to
the form of Indemnification Agreement which is attached as "Appendix D"
hereto.
INDEMNIFICATION OF DIRECTORS AND OFFICERS UNDER DELAWARE LAW
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In general, Delaware law empowers a corporation to indemnify any person
who was or is a party or who is threatened to be made a party to any
threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except in the case of an action by
or in the right of the corporation, by reason of the fact that he or she is
or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or other enterprise. Depending on the character
of the proceeding, a corporation may indemnify against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred in connection with such action, suit or proceeding if
the person indemnified acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceedings, had no
reasonable cause to believe his or her conduct was unlawful.
A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he or she is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses, including amounts paid in
settlement and attorney's fees actually and reasonably incurred by him or her
in connection with the defense or settlement of the action or suit if he or
she acted in good faith and in a manner which he or she reasonably believed
to be in or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue or matter as to which
such a person has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the corporation or for
amounts paid in settlement to the corporation unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in defense of any claim,
issue or matter therein, he or she must be indemnified by the corporation
against expenses, including attorney's fees, actually and reasonably incurred
by him in connection with the defense. Any indemnification under this
section, unless ordered by a court or advanced pursuant to this section, must
be made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or
agent is proper in the circumstances. The determination must be made: (a) by
the stockholders; (b) by the board of directors by majority vote of a quorum
consisting of directors who were not parties to the action, suit or
proceeding; (c) if a majority vote of a quorum consisting of directors who
were not parties to the action, suit or proceeding so orders, by independent
legal counsel in a written opinion; or (d) if a quorum consisting of
directors who were not parties to the action, suit or proceeding cannot be
obtained, by independent legal counsel in a written opinion.
The certificate of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred
in defending a civil or criminal action, suit or proceeding must be paid by
the corporation as they are incurred and in advance of the final disposition
of the action, suit or proceeding upon receipt of an undertaking by or on
behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he or she is not
entitled to be indemnified by the corporation. The provisions of this
section do not affect any rights to advancement of expenses to which
corporate personnel other than directors or officers may be entitled under
any contract or otherwise by law.
The indemnification and advancement of expenses authorized in or ordered
by a court: (a) does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the
certificate of incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, for either an action in his or her
official capacity or an action in another capacity while
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holding his or her office, except that indemnification, unless ordered by a
court pursuant to this section or for the advancement of any director or
officer if a final adjudication establishes that his or her acts or omissions
involved intentional misconduct, fraud or a knowing violation of the law and
was material to the cause of action; and (b) continues for a person who has
ceased to be a director, officer, employee or agent and inures to the benefit
of the heirs, executors and administrators of such a person.
Delaware law provides that a director shall not be held personally
liable for monetary damages for breach of fiduciary duty as a director,
provided (as specified in the Delaware law) that such limitation of liability
shall not act to limit liability for the following conduct: (a) breaches of
the director's duty of loyalty to the corporation or its stockholders; (b)
acts or omissions not in good faith or which involve intentional misconduct
or knowing violation of law; (c) the payment of unlawful dividends or
unlawful stock repurchases or redemptions; or (d) any transaction from which
the director derived an improper personal benefit.
Delaware law provides that no indemnification is permitted for criminal
violations (unless the director, officer, employee or agent had reasonable
cause to believe his conduct was lawful), transactions in which the director or
officer derived an improper personal benefit, declaration of unlawful dividends
or, in derivative actions, willful misconduct or conscious disregard for the
best interests of the corporation.
INDEMNIFICATION AGREEMENTS
The Indemnification Agreements provide the Indemnitee with the maximum
indemnification allowed under applicable law. Since Delaware statutes are
non-exclusive, it is possible that certain claims beyond the scope of the
statute may be indemnifiable. The Indemnification Agreements provide a
scheme of indemnification which may be broader than that specifically
provided by Delaware law. It has not yet been determined, however, to what
extent the indemnification expressly permitted by Delaware law may be
expanded, and therefore the scope of indemnification provided by the
Indemnification Agreements may be subject to future judicial interpretation.
The Indemnification Agreements provide that the Company shall indemnify
an Indemnitee who is or was a party or is threatened, pending or completed
action or proceeding whether civil, criminal, administrative or investigative
by reason of the fact that the Indemnitee is or was a director, officer, key
employee or agent of the Company or any subsidiary of the Company. The
Company shall advance all expenses, judgments, fines, penalties and amounts
paid in settlement (including taxes imposed on Indemnitee on account of
receipt of such payouts) incurred by the Indemnitee in connection with the
investigation, defense, settlement or appeal of any civil or criminal action
or proceeding as described above. The Indemnitee shall repay such amounts
advanced only if it shall be ultimately determined that he or she is not
entitled to be indemnified by the Company. The advances paid to the
Indemnitee by the Company shall be delivered within 20 days following a
written request by the Indemnitee. Any award of indemnification to an
Indemnitee, if not covered by insurance, would come directly from the assets
of the Company, thereby affecting a stockholder's investment.
The Indemnification Agreements set forth a number of procedural and
substantive matters which are not addressed or are addressed in less detail
in Delaware law, including the following:
First, in the event an action is instituted by the Indemnitee under the
Indemnification Agreements to enforce or interpret any of the terms therein,
Indemnitee shall be entitled to be paid all costs and expenses, including
reasonable attorneys' fees, incurred by the Indemnitee with respect to such
action, unless as a part or such action, a court of competent jurisdiction
determines that each of the material assertions made by the Indemnitee were
not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under the Indemnification
Agreements or to enforce or interpret any of the terms therein, the
Indemnitee shall be entitled to be paid all costs and expenses, including
reasonable attorneys' fees, incurred by the Indemnitee in the defense of such
action, unless as a part of such action the court determines that each of the
Indemnitee's material defenses to such action were made in bad faith or were
frivolous. Delaware law does not set forth any procedure for contesting a
corporation's determination of a party's right to indemnification.
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Second, the Indemnification Agreements explicitly provide for partial
indemnification of costs and expenses in the event that an Indemnitee is not
entitled to full indemnification under the terms of the Indemnification
Agreement. Delaware law does not specifically address this issue. Delaware
law does, however, provide that to the extent that an Indemnitee has been
successful on the merits, he or she shall be entitled to such indemnification.
Third, in the event the Company shall be obligated to pay the expenses
of any proceeding against the Indemnitee, the Company shall be entitled to
assume the defense of such proceeding, with counsel approved by the
indemnified party, which approval shall not be unreasonably withheld, upon
the delivery to the Indemnitee of written notice of its election to do so.
The Company shall have the right to conduct such defense as it sees fit in
its sole discretion, including the right to settle any claim against
Indemnitee without the consent of the Indemnitee.
Fourth, indemnification provided by the Indemnification Agreements is
not exclusive of any rights to which the Indemnitee may be entitled under the
Company's Certificate of Incorporation, as the case may be, its Bylaws, any
agreement, any vote of stockholders or disinterested directors, Delaware law,
or otherwise. The indemnification provided under the Indemnification
Agreements continues for any action taken or not taken while serving in an
indemnified capacity even though the Indemnitee may have ceased to serve in
such capacity at the time of the action, suit or other covered proceeding.
Finally, the Indemnification Agreements provide for certain exceptions
to indemnification which include the following: (a) indemnification for
liabilities where the law prohibits indemnification; (b) indemnification or
advancement of expenses with respect to proceedings or claims initiated or
brought voluntarily by an Indemnitee and not by way of defense, except with
respect to proceedings brought to establish or enforce a right to
indemnification under the Indemnification Agreements or any statute or law or
otherwise as required under Delaware law; and (c) indemnification for
expenses in the payment of profits arising from the purchase and sale by the
Indemnitee of securities in violation of Section 16(b) of the Exchange Act or
any similar or successor statute.
The proposed Indemnification Agreements, together with the limitations
on the directors' liability provided by the Company's Certificate of
Incorporation, as the case may be, and the Company's Bylaws, reduce
significantly the number of instances in which directors might be held liable
to the Company for monetary damages for breach of their fiduciary duties.
Therefore, it should be noted that the current directors of the Company have
a direct personal interest in the approval of the Indemnification Agreements.
At present, there is no pending litigation or proceeding involving an
Indemnitee where indemnification would be required or permitted under the
Indemnification Agreements.
INDEMNIFICATION OF LIABILITIES UNDER THE SECURITIES ACT OF 1933
The Commission has expressed its opinion that indemnification of
directors, officers and controlling persons of the Company against
liabilities arising under the 1933 Act, is against public policy as expressed
in the 1933 Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by an Indemnitee of the Company in the
successful defense of any such act or proceeding) is asserted by such
Indemnitee in connection with securities which have been registered by the
Company, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
Delaware law generally provides that no contract or transaction between
a corporation and one or more of its directors or officers shall be void or
voidable solely for this reason, or solely because the director or officer is
present or participates in the meeting of the board or committee thereof
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose, if: (a) the material
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facts as to his relationship or interest and as to the contract or
transaction are disclosed or are known to the board of directors or the
committee, and the board or committee in good faith authorizes the contract
or transaction by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum, (b)
the material facts as to his relationship or interest and as to the contract
or transaction are disclosed or are known to the stockholders entitled to
vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the stockholders, or (c) the contract or transaction is
fair as to the corporation as of the time it is authorized, approved or
ratified, by the board, a committee thereof, or the stockholders.
Since the Company intends to enter into these Indemnification Agreements
with each of its directors, the Indemnification Agreements must either be
fair to the Company or be approved by the requisite vote of stockholders.
Although the Company believes that the form of Indemnification Agreement is
fair to the Company, and that stockholder approval may not therefore be
required to validate the Indemnification Agreements, the Company believes
that it is appropriate to submit the Indemnification Agreements to the
stockholders for their consideration. If the Indemnification Agreements are
not approved by the stockholders, the invalidity of such agreements could
hereafter be asserted by the stockholders. In such an instance, the person
asserting the validity of the Indemnification Agreements will bear the burden
of proving that they were fair to the Company at the time they were
authorized.
VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS
Approval of the Indemnification Agreements will require the affirmative
vote of a majority of the votes present or represented and entitled to vote
on this subject matter at the meeting and held by disinterested stockholders.
Since each director is an interested party with respect to this matter,
shares owned directly or indirectly by any director may not be voted on this
proposal although they will be counted for purposes of determining whether a
quorum is present. An abstention is not an affirmative vote and, therefor,
will have the same effect as a vote against the proposal. A broker non-vote
will not be treated as entitled to vote on this subject matter at the
meeting. See "Information Concerning Solicitation and Voting - Quorum;
Abstentions; Broker Non-Votes."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
PROPOSAL 5. RATIFICATION OF APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANT.
The Board of Directors of the Company has appointed the firm of Davis
Kinard & Co. P.C. as independent certified public accountants for the Company
for the year ending December 31, 1998, subject to stockholder approval. The
Company has been advised by Davis Kinard & Co. P.C. that neither that firm
nor any of its partners has any material relationship with the Company or any
affiliate of the Company.
A representative of Davis Kinard & Co. P.C. is expected to be present at
the Meeting to make a statement, if he or she desires to do so, and to be
available to respond to appropriate questions at the Meeting. In the event
that the stockholders disapprove the appointment of Davis Kinard & Co. P.C.
as independent public accountants for the Company, the Board of Directors
will review its selection.
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VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS
Approval of the appointment of Davis Kinard & Co. P.C. as independent
certified public accountants for the Company for the year ending December 31,
1998 requires the affirmative vote of a majority of the combined Votes Cast.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION
OF THE APPOINTMENT OF DAVIS KINARD & CO. P.C. AS THE COMPANY'S INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 1998.
OTHER MATTERS
The Company knows of no other matters to be submitted at the Meeting.
If any other matters properly come before the Meeting, it is the intention of
the persons named in the enclosed proxy card to vote the shares they
represent as the Board of Directors may recommend.
By Order of the Board of Directors of
COLUMBIA CAPITAL CORP.
By: /s/ Kenneth A. Klotz
--------------------------------------------
Kenneth A. Klotz
Chief Executive Officer
Abilene, Texas
May __, 1998
<PAGE>
RESTATED
CERTIFICATE OF INCORPORATION
OF
COLUMBIA CAPITAL CORP.
This Restated Certificate of Incorporation (the "Certificate") of
Columbia Capital Corp. (the "Corporation"), was duly adopted by the Board of
Directors of the Corporation on March 25, 1998 and the stockholders of the
Corporation on ____________, 1998, as set forth below, in accordance with
Sections 228, 242 and 245 of the General Corporation Law of the State of
Delaware. The original Certificate of Incorporation was filed on February 5,
1993.
The following Restated Certificate of Incorporation was adopted on
____________, ____ by the vote of the stockholders of the Corporation. The
vote of stockholders of the Corporation by which the foregoing Restated
Certificate of Incorporation was adopted, at a meeting of the stockholders of
the Corporation on June 12, 1998, was __________ shares in favor, _______
shares opposed and _________ shares abstained or not voting, out of the
Corporation's total of __________ eligible voting shares issued and
outstanding, as of May 5, 1998 the record date for such meeting. The number of
shares voted for the Restated Certificate of Incorporation was sufficient for
approval.
The text of the Certificate of Incorporation as amended or supplemented
heretofore is hereby restated and further amended to read in its entirety as
follows:
FIRST: The name of the corporation is Columbia Capital Corp.
SECOND: The address of the registered office of the Corporation in the
State of Delaware shall be at Corporation Service Co. 1013 Centre Rd.
Wilmington, Delaware 19805. The name and address of the Corporation's registered
agent in the State of Delaware is Corporation Service Co. 1013 Centre Rd.
Wilmington, Delaware 19805.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may now or hereafter be organized under
the General Corporation Law of the State of Delaware.
FOURTH: 1. The total number of shares of stock which the Corporation
shall have authority to issue is Fifty-Five Million (55,000,000) shares,
consisting of Fifty Million
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(50,000,000) shares of Common Stock, par value $0.001 per share (the "Common
Stock"), and Five Million (5,000,000) shares of Preferred Stock, par value
$0.001 per share (the "Preferred Stock").
2. Shares of Preferred Stock may be issued from time to time
in one or more series as may be established from time to time by resolution
of the Board of Directors of the Corporation (the "Board of Directors"), each
of which series shall consist of such number of shares and have such
distinctive designation or title as shall be fixed by resolution of the Board
of Directors prior to the issuance of any shares of such series. Each such
class or series of Preferred Stock shall have such voting powers, full or
limited, or no voting powers, and such preferences and relative,
participating, optional or other special rights and such qualifications,
limitations or restrictions thereof, as shall be stated in such resolution of
the Board of Directors providing for the issuance of such series of Preferred
Stock. The Board of Directors is further authorized to increase or decrease
(but not below the number of shares of such class or series then outstanding)
the number of shares of any series subsequent to the issuance of shares of
that series.
FIFTH: In furtherance and not in limitation of the powers conferred by
statute and subject to Article Sixth hereof, the Board of Directors is expressly
authorized to adopt, repeal, rescind, alter or amend in any respect the Bylaws
of the Corporation (the "Bylaws").
SIXTH: Notwithstanding Article Fifth hereof, the Bylaws may be
adopted, rescinded, altered or amended in any respect by the stockholders of
the Corporation, but only by the affirmative vote of the holders of not less
than 66 2/3% of the voting power of all outstanding shares of voting stock
regardless of class and voting together as a single voting class; PROVIDED,
HOWEVER, that where such action is approved by a majority of the continuing
directors the affirmative vote of a majority of the voting power of all
outstanding shares of voting stock, regardless of class and voting together
as a single voting class, shall be required for approval of such action.
SEVENTH: The business and affairs of the Corporation shall be managed
by and under the direction of the Board of Directors. Except as may
otherwise be provided pursuant to Section 2 of Article Fourth hereof in
connection with rights to elect additional directors under specified
circumstances which may be granted to the holders of any series of Preferred
Stock, the exact number of directors of the Corporation shall be determined
from time to time by a Bylaw or Amendment thereto provided that the number of
directors shall not be reduced to less than three (3), except that there need
be only as many directors as there are stockholders in
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the event that the outstanding shares are held of record by fewer than three
(3) stockholders.
Elections of directors need not be by written ballot unless the
Bylaws of the Corporation shall so provide.
EIGHTH: Each director shall serve until his successor is elected and
qualified or until his death, resignation or removal; no decrease in the
authorized number of directors shall shorten the term of any incumbent
director; and additional directors, elected pursuant to Section 2 of Article
Fourth hereof in connection with rights to elect such additional directors
under specified circumstances which may be granted to the holders of any
series of Preferred Stock, shall not be included in any class, but shall
serve for such term or terms and pursuant to such other provisions as are
specified in the resolution of the Board of Directors establishing such
series.
NINTH: Except as may otherwise be provided pursuant to Section 2 of
Article Fourth hereof in connection with rights to elect additional directors
under specified circumstances which may be granted to the holders of any
series of Preferred Stock, newly created directorships resulting from any
increase in the number of directors, or any vacancies on the Board of
Directors resulting from death, resignation, removal or other causes, shall
be filled solely by the affirmative vote of a majority of the remaining
directors then in office, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding sentence
shall hold office for the remainder of the full term of the class of
directors in which the new directorship was created or the vacancy occurred
and until such director's successor shall have been elected and qualified or
until such director's death, resignation or removal, whichever first occurs.
TENTH: Except for such additional directors as may be elected by the
holders of any series of Preferred Stock pursuant to the terms thereof
established by a resolution of the Board of Directors pursuant to Article
Fourth hereof, any director may be removed from office with or without cause
and only by the affirmative vote of the holders of not less than 66 2/3% of
the voting power of all outstanding shares of voting stock entitled to vote
in connection with the election of such director regardless of class and
voting together as a single voting class; PROVIDED, HOWEVER, that where such
removal is approved by a majority of the continuing directors, the
affirmative vote of a majority of the voting power of all outstanding shares
of voting stock entitled to vote in connection with the election of such
director, regardless of class and voting together as a single voting class,
shall be required for approval of such removal.
ELEVENTH: Any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called
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Annual Meeting or at a special meeting of stockholders of the Corporation.
TWELFTH: 1. At the first Annual Meeting of Stockholders of the
Corporation (the "Annual Meeting") after the authorized number of directors
is seven (7) or more, the Board of Directors shall be divided into three (3)
classes: Class I, Class II and Class III. The number of directors in each
class shall be the whole number contained in such quotient obtained by
dividing the authorized number of directors by three (3). If a fraction is
also contained in such quotient, then additional directors shall be
apportioned as follows: If such fraction is one-third, the additional
director shall be a member of Class III; and if such fraction is two-thirds,
one of the additional directors shall be a member of Class II and the other
shall be a member of Class III. Each director shall serve for a term ending
on the date of the third Annual Meeting following the Annual Meeting at which
such director was elected; PROVIDED, HOWEVER, that the directors first
elected to Class I shall serve for a term ending on the date of the first
Annual Meeting following their election, the directors first elected to Class
II shall serve for a term ending on the date of the second Annual Meeting
following their election and the directors first elected to Class III shall
serve for a term ending on the date of the third Annual Meeting following
their election.
Whenever the authorized number of directors shall be
reduced to less than seven (7) directors, the existing directors shall serve
out the remainder of their terms based upon their respective classes and each
subsequently elected director shall serve for a one (1) year term. At such
subsequent time as the authorized number of directors is seven (7) or more
directors, the prior paragraph shall again become operative.
2. Notwithstanding the foregoing provisions of this Article
Twelfth: each director shall serve until his successor is elected and
qualified or until his death, resignation or removal; no decrease in the
authorized number of directors shall shorten the term of any incumbent
director; and additional directors, elected pursuant to Section 2 of Article
Fourth hereof in connection with rights to elect such additional directors
under specified circumstances which may be granted to the holders of any
series of Preferred Stock, shall not be included in any class, but shall
serve for such term or terms and pursuant to such other provisions as are
specified in the resolution of the Board of Directors establishing such
series.
THIRTEENTH: Meetings of stockholders of the Corporation may be held
within or without the State of Delaware, as the Bylaws may provide. The
books of the Corporation may be kept (subject to any provision of applicable
law) outside the State of Delaware at such place or places as may be
designated from time to time by the Board of Directors or in the Bylaws.
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FOURTEENTH: For the purposes of this Restated Certificate of Incorporation,
the following definitions shall apply:
(a) "continuing director" means: (i) any member of the Board
of Directors who (A) is not an interested stockholder or
an affiliate or associate of an interested stockholder
and (B) was a member of the Board of Directors prior to
the time that an interested stockholder became an
interested stockholder; and (ii) any person who is
elected or nominated to succeed a continuing director, or
to join the Board of Directors, by a majority of the
continuing directors.
(b) The terms "affiliate," "associate," "control,"
"interested stockholder," "owner," "person" and "voting
stock" shall have the meanings set forth in Section
203(c) of the Delaware General Corporation Law.
FIFTEENTH: The provisions set forth in this Article Fourteenth and in
Articles Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh and
Twelfth hereof may not be repealed, rescinded, altered or amended in any
respect, and no other provision or provisions may be adopted which impair(s)
in any respect the operation or effect of any such provision, except by the
affirmative vote of the holders of not less than 66 2/3% of the voting power
of all outstanding shares of voting stock regardless of class and voting
together as a single voting class, and, where such action is proposed by an
interested stockholder or by any associate or affiliate of an interested
stockholder, the affirmative vote of the holders of a majority of the voting
power of all outstanding shares of voting stock, regardless of class and
voting together as a single class, other than shares held by the interested
stockholder which proposed (or the affiliate or associate of which proposed)
such action, or any affiliate or associate of such interested stockholder;
PROVIDED, HOWEVER, that where such action is approved by a majority of the
continuing directors, the affirmative vote of a majority of the voting power
of all outstanding shares of voting stock, regardless of class and voting
together as a single voting class, shall be required for approval of such
action.
SIXTEENTH: The Corporation reserves the right to adopt, repeal,
rescind, alter or amend in any respect any provision contained in this
Certificate in the manner now or hereafter prescribed by applicable law, and
all rights conferred on stockholders herein are granted subject to this
reservation. Notwithstanding the preceding sentence, the provisions set
forth in Articles Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth,
Eleventh, Twelfth and Fifteenth may not be repealed, rescinded,
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altered or amended in any respect, and no other provision or provisions may
be adopted which impair(s) in any respect the operation or effect of any such
provision, unless such action is approved as specified in Article Fourteenth
hereof.
SEVENTEENTH: No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (a) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) under Section 174 of the Delaware General
Corporation Law, or (d) for any transaction from which the director derived
an improper personal benefit. If the Delaware General Corporation Law
hereafter is amended to authorize the further elimination or limitation of
the liability of directors, then the liability of a director of the
Corporation, in addition to the limitation on personal liability provided
herein, shall be limited to the fullest extent permitted by the amended
Delaware General Corporation Law. Any repeal or modification of this Section
by the stockholders of the Corporation shall be prospective only and shall
not adversely affect any limitation on the personal liability of a director
of the Corporation existing at the time of such repeal or modification.
EIGHTEENTH: No contract or other transaction of the Corporation with
any other person, firm or corporation, or in which this corporation is
interested, shall be affected or invalidated by: (a) the fact that any one or
more of the directors or officers of the Corporation is interested in or is a
director or officer of such other firm or corporation; or, (b) the fact that
any director or officer of the Corporation, individually or jointly with
others, may be a party to or may be interested in any such contract or
transaction, so long as the contract or transaction is authorized, approved
or ratified at a meeting of the Board of Directors by sufficient vote thereon
by directors not interested therein, to which such fact of relationship or
interest has been disclosed, or the contract or transaction has been approved
or ratified by vote or written consent of the stockholders entitled to vote,
to whom such fact of relationship or interest has been disclosed, or so long
as the contract or transaction is fair and reasonable to the Corporation.
Each person who may become a director or officer of the Corporation is hereby
relieved from any liability that might otherwise arise by reason of his
contracting with the Corporation for the benefit of himself or any firm or
corporation in which he may in any way be interested.
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IN WITNESS WHEREOF Columbia Capital Corp. has caused this Restated
Certificate of Incorporation to be executed by its President and to be
attested to by its Secretary as of the ___th day of _________, ____.
Columbia Capital Corp.
By:
---------------------------------------------
Kenneth A. Klotz
Chief Executive Officer
By:
---------------------------------------------
Glenn M. Gallant
Secretary
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COLUMBIA CAPITAL CORP.
1998 STOCK OPTION PLAN
1. PURPOSE. The purpose of the Columbia Capital Corp. 1998 Stock
Option Plan (the "Plan"), is to provide an incentive to officers, directors,
employees, independent contractors, and consultants of Columbia Capital
Corp., a Delaware corporation (sometimes referred to herein as the
"Company"), and any parent companies and subsidiaries (together with the
Company herein collectively referred to as "CLCK") to remain in the employ of
CLCK or provide services to CLCK and contribute to its success.
As used in the Plan, the term "Code" shall mean the Internal Revenue
Code of 1986, as amended, and any successor statute, and the terms "Parent"
and "Subsidiary" shall have the meanings set forth in Sections 424(e) and (f)
of the Code.
This Plan was adopted by the Board of Directors as of March 25, 1998,
and the stockholders of the Company as of _________ __, 1998.
2. ADMINISTRATION. The Plan shall be administered by a committee
(the "Plan Committee") which shall be established by the Board of Directors
of the Company (the "Board"). The Plan Committee shall be comprised of at
least two members who shall be outside directors of the Company, as defined
in Section 162(m) of the Code or any successor provision. Members of the
Plan Committee shall be appointed, both initially and as vacancies occur, by
the Board. The Board may serve as the Plan Committee if by the terms of the
Plan all members of the Board are otherwise eligible to serve on the Plan
Committee. The Board, at any time it so desires, may increase or decrease,
but not below two, the number of members of the Plan Committee, may remove
from membership on the Plan Committee all or any portion of its members, and
may appoint such person or persons as it desires to fill any vacancy existing
on the Plan Committee, whether by removal, resignation or otherwise. The
provisions of the Plan and all option and stock appreciation right (SAR)
agreements executed pursuant thereto, and its decisions shall be conclusive
and binding upon all interested persons. Subject to the provisions of the
Plan, the Plan Committee shall have the sole authority to determine:
(a) The persons (hereinafter, "optionees") to whom options to
purchase shares of Common Stock of the Company ("Stock") and SARs shall be
granted;
(b) The number of options and SARs to be granted to each optionee;
(c) The price to be paid for each share of Stock upon the exercise of
each option;
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(d) The period within which each option and SAR shall be exercised
and, with the consent of the optionee, any extensions of such period
(provided, however, that the original period and all extensions shall not
exceed the maximum period permissible under the Plan); and
(e) The terms and conditions of each stock option and/or SAR
agreement entered into between the Company and persons to whom the Company
has granted an option or SAR and of any amendments thereto (provided that the
optionee consents to each such amendment).
The Plan Committee shall meet at such times and places as it determines,
including by means of a telephone conference call. A majority of the members
shall constitute a quorum, and a decision of a majority of those present at
any meeting at which a quorum is present shall constitute the decision of the
Plan Committee. A memorandum signed by all of the members of the Plan
Committee shall constitute the decision of the Plan Committee without the
necessity, in such event, for holding an actual meeting.
3. ELIGIBILITY. Officers, directors and employees of CLCK independent
contractors, consultants and other persons providing significant services to
CLCK shall be eligible to receive grants of options under the Plan.
4. STOCK SUBJECT TO PLAN. There shall be reserved for issue, upon the
exercise of options granted under the Plan, 500,000 shares of Stock or the
number of shares of Stock, which, in accordance with the provisions of
Section 9 hereof, shall be substituted therefor. Such shares may be treasury
shares. If an option granted under the Plan shall expire or terminate for
any reason without having been exercised in full, unpurchased shares subject
thereto shall again be available for the purposes of the Plan. The maximum
number of shares with respect to which options which may be granted to an
optionee who is an employee of CLCK shall not exceed 125,000 shares in any
fiscal year during the term of the Plan.
5. TERMS OF OPTIONS AND SARS.
(a) INCENTIVE STOCK OPTIONS. It is intended that options granted
pursuant to this Section 5(a) qualify as incentive stock options as defined
in Section 422 of the Code. Incentive stock options shall be granted only to
employees of CLCK. Each stock option agreement evidencing an incentive stock
option shall provide that the option is subject to the following terms and
conditions and to such other terms and conditions not inconsistent therewith
as the Plan Committee may deem appropriate in each case:
(1) OPTION PRICE. The price to be paid for each share of
Stock upon the exercise of each incentive stock option
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shall be determined by the Plan Committee at the time the option is granted,
but shall in no event be less than 100% of the Fair Market Value (as defined
below) of the shares on the date the option is granted, or not less than 110%
of the Fair Market Value of such shares on the date such option is granted in
the case of an individual then owning (within the meaning of Section 424(d)
of the Code) 10% or more of the total combined voting power of all classes of
stock of the Company or of its Parent or Subsidiaries. As used in this Plan,
the term "date the option is granted" means the date on which the Plan
Committee authorizes the grant of an option hereunder or any later date
specified by the Plan Committee. For the purposes of the Plan, Fair Market
Value of the shares shall be (i) the closing sales price of shares of Stock
sold on the New York Stock Exchange, American Stock Exchange or the NASDAQ
National Market System on the date the option is granted (or if there was no
sale on such date, the highest asked price for the Stock on such date), (ii)
if the Stock is not listed on either of those exchanges or traded on the
NASDAQ National Market System on the date the option is granted, the mean
between the "bid" and "asked" price of the Stock in the National
Over-The-Counter Market (or other similar market quotation system) on the
date the option is granted, or (iii) if the Stock is not traded in any
market, the price determined by the Plan Committee to be the fair market
value, based upon such evidence as it may deem necessary or desirable.
(2) PERIOD OF OPTION AND EXERCISE. The period or periods
within which an option may be exercised shall be determined by the Plan
Committee at the time the option is granted, but in no event shall any option
granted hereunder be exercised more than ten years from the date the option
was granted nor more than five years from the date the option was granted in
the case of an individual then owning (within the meaning of Section 424(d)
of the Code) more than 10% of the total combined voting power of all classes
of stock of the Company or of its Parent or Subsidiaries.
(3) PAYMENT FOR STOCK. The option exercise price for each
share of Stock purchased under an option shall be paid in full at the time of
purchase. The Plan Committee may provide that the option price be payable,
at the election of the holder of the option and with the consent of the Plan
Committee, in whole or in part either in cash or by delivery of Stock in
transferable form, such Stock to be valued for such purpose at its Fair
Market Value on the date on which the option is exercised. No share of Stock
shall be issued upon exercise until full payment therefor has been made, and
no optionee shall have any rights as an owner of Stock until the date of
issuance to him of the stock certificate evidencing such Stock.
(4) LIMITATION ON AMOUNT BECOMING EXERCISABLE IN ANY ONE
CALENDAR YEAR. Subject to the overall limitations of Section 4 hereof
(relating to the aggregate shares subject to the Plan), the aggregate Fair
Market Value (determined as of the time
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the option is granted) of Stock with respect to which incentive stock options
are exercisable for the first time by the optionee during any calendar year
(under the Plan and all other incentive stock option plans of the Company,
the Parent, and Subsidiaries) shall not exceed $100,000.
(b) NONQUALIFIED STOCK OPTIONS. Nonqualified stock options may be
granted not only to employees but also to directors who are not employees of
CLCK and to consultants, independent contractors and other persons who
provide substantial services to CLCK. Each nonqualified stock option granted
under the Plan shall be evidenced by a stock option agreement between the
person to whom such option is granted and the Company. Such stock option
agreement shall provide that the option is subject to the following terms and
conditions and to such other terms and conditions not inconsistent therewith
as the Plan Committee may deem appropriate in each case:
(1) OPTION PRICE. The price to be paid for each share of
Stock upon the exercise of an option shall be determined by the Plan
Committee at the time the option is granted, but in no event shall be less
than 85% of the Fair Market Value of the shares on the date the option is
granted. As used in this Plan, the term "date the option is granted" means
the date on which the Plan Committee authorized the grant of an option
hereunder or any later date specified by the Plan Committee. To the extent
that the fair market value of Stock is relevant to the pricing of the option
by the Plan Committee, fair market value of the Stock shall be determined as
set forth in Section 5(a)(1) hereof.
(2) PERIOD OF OPTION AND EXERCISE. The periods, installments
or intervals during which an option may be exercised shall be determined by
the Plan Committee at the time the option is granted, but in no event shall
such period exceed 10 years from the date the option is granted.
(3) PAYMENT FOR STOCK. The option exercise price for each
share of Stock purchased under an option shall be paid in full at the time of
purchase. The Plan Committee may provide that the option exercise price be
payable at the election of the holder of the option, with the consent of the
Plan Committee, in whole or in part either in cash or by delivery of Stock in
transferable form, such Stock to be valued for such purpose at its Fair
Market Value on the date on which the option is exercised. No share of Stock
shall be issued until full payment therefor has been made, and no optionee
shall have any rights as an owner of shares of Stock until the date of
issuance to him of the stock certificate evidencing such Stock.
(c) STOCK APPRECIATION RIGHTS. SARs may be granted in writing under
the Plan by the Plan Committee subject to the following terms and conditions
and such other terms and conditions as the Plan Committee may prescribe.
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(1) RIGHT OF OPTIONEE. Each SAR shall entitle the holder
thereof, upon the exercise of the SAR, to receive from the Company in
exchange therefor an amount equal in value to the excess of the Fair Market
Value on the date of exercise of one share of Stock over its Fair Market
Value on the date of grant (or, in the case of an SAR granted in connection
with an option, the excess of the Fair Market Value of one share of Stock at
the time of exercise over the option exercise price per share under the
option to which the SAR relates), multiplied by the number of shares covered
by the SAR or the option, or portion thereof, that is surrendered. No SAR
shall be exercisable at a time that the amount determined under this
subparagraph is negative. Payment by the Company upon exercise of an SAR
shall be made in Stock valued at the Fair Market Value of the Stock on the
date of exercise.
(2) EXERCISE. An SAR shall be exercisable only at the time
or times established by the Plan Committee. If an SAR is granted in
connection with an option, the following rules shall apply: (i) the SAR shall
be exercisable only to the extent and on the same conditions that the related
option could be exercised; (ii) upon exercise of the SAR, the option or
portion thereof to which the SAR relates terminates; and (iii) upon exercise
of the option, the related SAR or portion thereof terminates.
(3) RULES. The Plan Committee may withdraw any SAR granted
under the Plan at any time and may impose any conditions upon the exercise of
an SAR or adopt rules and regulations from time to time affecting the rights
of holders of SARs granted prior to adoption or amendment of such rules and
regulations as well as SARs granted thereafter.
(4) FRACTIONAL SHARES. No fractional shares shall be issued
upon exercise of an SAR. In lieu thereof, cash may be paid in an amount
equal to the value of the fraction or, if the Plan Committee shall determine,
the number of shares may be rounded downward to the next whole share.
(5) SHARES SUBJECT TO PLAN. Upon the exercise of an SAR for
shares, the number of shares of Stock reserved for issuance under the Plan
shall be reduced by the number of shares issued.
6. NONTRANSFERABILITY. The options and SARs granted pursuant to the
Plan shall be nontransferable except by will or the laws of descent and
distribution of the state or country of the optionee's domicile at the time
of death or for options other than incentive stock options, pursuant to a
qualified domestic relations order as defined in the Code or Title I of the
Employee Retirement Income Security Act and shall be exercisable during the
optionee's lifetime only by him (or, in the case of a transfer pursuant to a
qualified domestic relations order, by the transferee under such qualified
domestic relations order) and after his death, by his
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personal representative or by the person entitled thereto under his will or
the laws of intestate succession.
7. TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP. Unless otherwise
specified in the applicable option and/or SAR agreement or SAR, upon
termination of the optionee's employment or other relationship with CLCK, his
rights to exercise options and SARs then held by him shall be only as follows
(in no case do the time periods referred to below extend the term specified
in any option):
(a) DEATH OR DISABILITY. Upon the death or disability (within the
meaning of Section 22(e)(3) of the Code) of an optionee, any option or SAR
which he holds may be exercised (to the extent exercisable at his death or
disability), unless it otherwise expires, within such period after the date
of his death (not less than six months nor more than twelve months) as the
Plan Committee shall prescribe in his option agreement or SAR, by the
optionee or, in the event of death, by the optionee's representative or by
the person entitled thereto under his will or the laws of intestate
succession.
(b) RETIREMENT. Upon the retirement (either pursuant to an CLCK
retirement plan, if any, or pursuant to the approval of the Board) of an
officer, director or employee, an outstanding option or SAR may be exercised
(to the extent exercisable at the date of such retirement) by him within such
period after the date of his retirement (provided that such period is no less
than 30 days and no more than three months) as the Plan Committee shall
prescribe in his option agreement or SAR.
(c) OTHER TERMINATION. In the event an officer, director or
employee ceases to serve as an officer or director or leaves the employ of
CLCK for any reasons other than as set forth in (a) and (b), above, or a
nonemployee ceases to provide services to CLCK, any option or SAR which he
holds shall remain exercisable (to the extent exercisable as of the date of
such termination) until 30 days after the date of such termination.
(d) PLAN COMMITTEE DISCRETION. The Plan Committee may in its sole
discretion accelerate the exercisability of any or all options or SARs.
8. TRANSFER TO RELATED CORPORATION. In the event an employee leaves
the employ of the Company to become an employee of a Parent or a Subsidiary
or any employee leaves the employ of a Parent or a Subsidiary to become an
employee of the Company or another Parent or Subsidiary, such employee shall
be deemed to continue as an employee for purposes of this Plan.
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9. ADJUSTMENT OF SHARES; TERMINATION OF OPTIONS AND SARS.
(a) ADJUSTMENT OF SHARES. In the event of changes in the
outstanding Stock by reason of stock dividends, split-ups, consolidations,
recapitalizations, reorganizations or like events (as determined by the Plan
Committee), an appropriate adjustment shall be made by the Plan Committee in
the number of shares reserved under the Plan, in the number of shares set
forth in Section 4 hereof, in the number of shares and the option price per
share specified in any stock option agreement, and in the number of SARs with
respect to any unexercised shares. The determination of the Plan Committee
as to what adjustments shall be made shall be conclusive. Adjustments for
any options to purchase fractional shares shall also be determined by the
Plan Committee. The Plan Committee shall give prompt notice to all optionees
of any adjustment pursuant to this Section.
(b) TERMINATION OF OPTIONS AND SARS ON MERGER, REORGANIZATION OR
LIQUIDATION OF THE COMPANY. Notwithstanding anything to the contrary in this
Plan, in the event of any merger, consolidation or other reorganization of
the Company in which the Company is not the surviving or continuing
corporation (as determined by the Plan Committee) or in the event of the
liquidation or dissolution of the Company, all options and SARs granted
hereunder shall terminate on the effective date of the merger, consolidation,
reorganization, liquidation or dissolution unless there is an agreement with
respect thereto which expressly provides for the assumption of such options
and SARs by the continuing or surviving corporation.
10. SECURITIES LAW REQUIREMENTS. The Company's obligation to issue
shares of its Stock upon exercise of an option or SAR is expressly
conditioned upon the completion by the Company of any registration or other
qualification of such shares under any state and/or federal law or rulings
and regulations of any government regulatory body or the making of such
investment representations or other representations and undertakings by the
optionee (or his legal representative, heir or legatee, as the case may be)
in order to comply with the requirements of any exemption from any such
registration or other qualification of such shares which the Company in its
sole discretion shall deem necessary or advisable. The Company may refuse to
permit the sale or other disposition of any shares acquired pursuant to any
such representation until it is satisfied that such sale or other disposition
would not be in contravention of applicable state or federal securities law.
11. TAX WITHHOLDING. As a condition to the exercise of an option or
SAR or otherwise, the Company may require an optionee to pay over to the
Company all applicable federal, state and local taxes which the Company is
required to withhold with respect to the exercise of an option or SAR granted
hereunder. At the discretion of the Plan Committee and upon the request of
an optionee, the
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minimum statutory withholding tax requirements may be satisfied by the
withholding of shares of Stock otherwise issuable to the optionee upon the
exercise of an option or SAR.
12. AMENDMENT. The Board may amend the Plan at any time, except that
without shareholder approval:
(a) The number of shares of Stock which may be reserved for
issuance under the Plan shall not be increased except as provided in Section
9(a) hereof;
(b) The option price per share of Stock subject to incentive stock
options may not be fixed at less than 100% of the Fair Market Value of a
share of Stock on the date the option is granted;
(c) The maximum period of ten (10) years during which the options
or SARs may be exercised may not be extended;
(d) The class of persons eligible to receive options or SARs under
the Plan as set forth in Section 3 shall not be changed; and
(e) This Section 12 may not be amended in a manner that limits or
reduces the amendments which require shareholder approval.
13. EFFECTIVE DATE. The Plan shall be effective upon the date of its
adoption by both the Board, and subject to the approval of the stockholders
of the Company within the 12 month period following such adoption date.
14. TERMINATION. The Plan shall terminate automatically as of the
close of business on the day preceding the 10th anniversary date of its
effectiveness or earlier by resolution of the Board, or upon consummation of
any merger, consolidation or other reorganization in which the options
granted hereunder terminate, all as described in Section 9(b) hereof. Unless
otherwise provided herein, the termination of the Plan shall not affect the
validity of any option agreement outstanding at the date of such termination.
15. STOCK OPTION AND SAR AGREEMENT. Each option and SAR granted under
the Plan shall be evidenced by a written agreement executed by the Company
and accepted by the optionee, which (i) shall contain each of the provisions
and agreements herein specifically required to be contained therein, (ii)
shall indicate whether an option is to be an incentive stock option or a
nonqualified stock option, and if it is to be an incentive stock option, the
stock option agreement shall contain terms and conditions permitting such
option to qualify for treatment as an incentive stock option under Section
422 of the Code, (iii) may
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contain the agreement of the optionee to remain in the employ of, and/or to
render services to, the Company or any Parent or Subsidiary for a period of
time to be determined by the Plan Committee, and (iv) may contain such other
terms and conditions as the Plan Committee deems desirable and which are not
inconsistent with the Plan.
16. NO RIGHT TO EMPLOYMENT. Nothing in this Plan or in any option or
SAR granted hereunder shall confer upon any optionee any right to continue in
the employ of CLCK or to continue to perform services for CLCK, or shall
interfere with or restrict in any way the rights of CLCK to discharge or
terminate any officer, director, employee, independent contractor or
consultant at any time for any reason whatsoever, with or without good cause.
17. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
Executed and dated as of the date first written above at Fort
Lauderdale, Florida.
Columbia Capital Corp.
By:-----------------------------
Kenneth A. Klotz
Chief Executive Officer
<PAGE>
APPENDIX "D"
FORM OF
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is effective as of the
______ day of___________________, 199_____ by and between Columbia Capital
Corp., (the "Company"), and _______________________________ ("Indemnitee").
WHEREAS, the Company and Indemnitee recognize the continued difficulty
in obtaining liability insurance for directors, officers, employees, agents
and fiduciaries, the significant increases in the cost of such insurance and
the general reductions in the coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, agents and fiduciaries to expensive litigation risks at the same
time as the availability and coverage of liability insurance have been
severely limited;
WHEREAS, the Company desires to attract and retain the services of
highly qualified individuals, such as Indemnitee, to serve the Company and,
in part, in order to induce Indemnitee to continue to provide services to the
Company, wishes to provide for the indemnification and advancement of
expenses to Indemnitee to the maximum extent permitted by law; and
WHEREAS, in view of the considerations set forth above, the Company
desires that Indemnitee shall be indemnified by the Company as set forth
herein.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. INDEMNIFICATION.
a. INDEMNIFICATION OF EXPENSES. The Company shall indemnify
Indemnitee to the fullest extent permitted by law if Indemnitee was or is or
becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, any threatened, pending
or completed action, suit, proceeding or alternative dispute resolution
mechanism, or any hearing, inquiry or investigation that Indemnitee in good
faith believes might lead to the institution of any such action, suit,
proceeding or alternative dispute resolution mechanism, whether civil,
criminal, administrative, investigative or other (hereinafter a "Claim") by
reason of (or arising in part out of) any event or occurrence related to the
fact that Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company, or any subsidiary of the Company (regardless of
whether it was a subsidiary of the Company at the time of the event giving
rise to Claim), or is or was serving at the request of the Company as a
director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of any
action or inaction on the part of Indemnitee while serving in such capacity
(hereinafter an "Indemnifiable Event") against any and all expenses
(including attorneys' fees and all other costs, expenses and obligations
incurred in connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, be a witness
in or participate in, any such action, suit, proceeding, alternative dispute
resolution mechanism, hearing, inquiry or
<PAGE>
investigation), judgments, fines, penalties and amounts paid in settlement
(if such settlement is approved in advance by the Company, which approval
shall not be unreasonably withheld) of such Claim and any federal, state,
local or foreign taxes imposed on the Indemnitee as a result of the actual or
deemed receipt of any payments under this Agreement (collectively,
hereinafter "Expenses"), including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses.
Such payment of Expenses shall be made by the Company as soon as practicable
but in any event no later than five (5) days after written demand by
Indemnitee therefor is presented to the Company.
b. REVIEWING PARTY. Notwithstanding the foregoing: (i) the
obligations of the Company under Section 1(a) shall be subject to the
condition that the Reviewing Party (as described in Section 10(e) hereof)
shall not have determined (in a written opinion, in any case in which the
Independent Legal Counsel referred to in Section 1(c) hereof is involved)
that Indemnitee would not be permitted to be indemnified under applicable
law, and (ii) the obligation of the Company to make an advance payment of
Expenses to Indemnitee pursuant to Section 2(a) (an "Expense Advance") shall
be subject to the condition that, if, when and to the extent that the
Reviewing Party determines that Indemnitee would not be permitted to be so
indemnified under applicable law, the Company shall be entitled to be
reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid; PROVIDED, HOWEVER, that if Indemnitee has
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be indemnified
under applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). Indemnitee's obligation to reimburse the Company for
any Expense Advance shall be unsecured and no interest shall be charged
thereon. If there has not been a Change in Control (as defined in Section
10(c) hereof), the Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control (other than a
Change in Control which has been approved by a majority of the Company's
Board of Directors who were directors immediately prior to such Change in
Control), the Reviewing Party shall be the Independent Legal Counsel referred
to in Section 1(c) hereof. If there has been no determination by the
Reviewing Party or if the Reviewing Part determines that Indemnitee
substantively would not be permitted to be indemnified in whole or in part
under applicable law, Indemnitee shall have the right to commence litigation
seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the
legal or factual bases therefor, and the Company hereby consents to service
of process and to appear in any such proceeding. Any determination by the
Reviewing Party otherwise shall be conclusive and binding on the Company and
Indemnitee.
c. CHANGE IN CONTROL. The Company agrees that if there is a
Change in Control of the Company (other than a Change in Control which has
been approved by a majority of the Company's Board of Directors who were
directors immediately prior to such Change in Control) then with respect to
all matters thereafter arising concerning the rights of Indemnitee to
payments of Expense and Expense Advances under this Agreement or any other
agreement or under the Company's Certificate of Incorporation or Bylaws as
now or hereafter in effect, Independent Legal Counsel (as defined in Section
10(d) hereof) shall be selected by Indemnitee and approved by the Company
(which approval shall not be unreasonably withheld). Such counsel, among
other things, shall render its written opinion to the Company and Indemnitee
as to whether and to what extent
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Indemnitee would be permitted to be indemnified under applicable law and the
Company agrees to abide by such opinion. The Company agrees to pay the
reasonable fees of the Independent Legal Counsel referred to above and to
fully indemnify such counsel against any and all expenses (including
attorney's fees), claims, liabilities and damages arising out of or relating
to this Agreement or its engagement pursuant hereto.
d. MANDATORY PAYMENT OF EXPENSES. Notwithstanding any other
provision of this Agreement other than Section 9 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
action, suit, proceeding, inquiry or investigation referred to in
Section(1)(a) hereof or in the defense of any claim, issue or matter therein,
Indemnitee shall be indemnified against all Expenses incurred by Indemnitee
in connection therewith.
2. EXPENSES; INDEMNIFICATION PROCEDURE.
a. ADVANCEMENT OF EXPENSES. The Company shall advance all
Expenses incurred by Indemnitee. The advances to be made hereunder shall be
paid by the Company to Indemnitee as soon as practicable but in any event no
later than five (5) days after written demand by Indemnitee therefor to the
Company.
b. NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a
condition precedent to Indemnitee's right to be indemnified under this
Agreement, give the Company notice in writing as soon as practicable of any
Claim made against Indemnitee for which indemnification will or could be
sought under this Agreement. Notice to the Company shall be directed to the
Chief Executive Officer of the Company at the address shown on the signature
page of this Agreement (or such other address as the Company shall designate
in writing to Indemnitee). In addition, Indemnitee shall give the Company
such information and cooperation as it may reasonably require and as shall be
within Indemnitee's power.
c. NO PRESUMPTIONS; BURDEN OF PROOF. For purposes of this
Agreement, the termination of any Claim by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of
NOLO CONTENDERE, or its equivalent, shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law. In addition, neither the failure of the
Reviewing Party to have made a determination as to whether Indemnitee has met
any particular standard of conduct or had any particular belief, nor an
actual determination by the Reviewing Party that Indemnitee has not met such
standard of conduct or did not have such belief, prior to the commencement of
legal proceedings by Indemnitee to secure a judicial determination that
Indemnitee should be indemnified under applicable law, shall be a defense to
Indemnitee's claim or create a presumption that Indemnitee has not met any
particular standard of conduct or did not have any particular belief. In
connection with any determination by the Reviewing Party or otherwise as to
whether the Indemnitee is entitled to be indemnified hereunder, the burden of
proof shall be on the Company to establish that Indemnitee is not so entitled.
d. NOTICE TO INSURERS. If, at the time of the receipt by the
Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company
has liability insurance in effect which may cover such Claim, the Company
shall give prompt notice of the commencement of such Claim to the insurers in
accordance with the procedures set forth in the respective policies. The
Company shall
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thereafter take all necessary or desirable action to cause such insurers to
pay, on behalf of the Indemnitee, all amounts payable as a result of such
action, suit, proceeding, inquiry or investigation in accordance with the
terms of such policies.
e. SELECTION OF COUNSEL. In the event the Company shall be
obligated hereunder to pay the Expenses of any Claim, the Company shall be
entitled to assume the defense of such Claim with counsel approved by
Indemnitee, which approval shall not be unreasonably withheld, upon the
delivery to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred
by Indemnitee with respect to the same Claim; PROVIDED, THAT: (i) Indemnitee
shall have the right to employ Indemnitee's counsel in any such Claim at
Indemnitee's expense, and (ii) if (A) the employment of counsel by Indemnitee
has been previously authorized by the Company, (B) Indemnitee shall have
reasonably concluded that there be a conflict of interest between the Company
and Indemnitee in the conduct of any such defense, or (C) the Company shall
not continue to retain such counsel to defend such Claim, then the fees and
expenses of Indemnitee's counsel shall be at the expense of the Company. The
Company shall have the right to conduct such defense as it sees fit in its
sole discretion, including the right to settle any claim against Indemnitee
without the consent of the Indemnitee.
3. ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.
a. SCOPE. The Company hereby agrees to indemnify the Indemnitee
to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions of
this Agreement, the Company's Certificate of Incorporation, the Company's
Bylaws or by statute. In the event of any change after the date of this
Agreement in any applicable law, statute or rule which expands the right of a
corporation of the Company's state of incorporation to indemnify a member of
its board of directors or an officer, employee, agent or fiduciary, it is the
intent of the parties hereto that Indemnitee shall enjoy by this Agreement
the greater benefits afforded by such change. In the event of any change in
any applicable law, statute or rule which narrows the right of a corporation
of the Company's state of incorporation to indemnify a member of its board of
directors or an officer, employee, agent or fiduciary, such change, to the
extent not otherwise required by such law, statute or rule to be applied to
this Agreement, shall have no effect on this Agreement or the parties' rights
and obligations hereunder except as set forth in Section 8(a) hereof.
b. NONEXCLUSIVITY. The indemnification provided by this
Agreement shall be in addition to any rights to which Indemnitee may be
entitled under the Company's Certificate of Incorporation, its Bylaws, any
agreement, any vote of stockholders or disinterested directors, the laws of
the Company's state of incorporation, or otherwise. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
Indemnitee took or did not take while serving in an indemnified capacity even
though Indemnitee may have ceased to serve in such capacity.
4. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, Certificate of Incorporation, Bylaw or
otherwise) of the amounts otherwise indemnifiable hereunder.
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5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses incurred in connection with any Claim, but not, however,
for all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses to which Indemnitee is entitled.
6. MUTUAL ACKNOWLEDGEMENT. Both the Company and Indemnitee
acknowledge that in certain instances, Federal law or applicable public
policy may prohibit the Company from indemnifying its directors, officers,
employees, agents or fiduciaries under this Agreement or otherwise.
Indemnitee understands and acknowledges that the Company has undertaken or
may be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Company's rights under public policy
to indemnify Indemnitee.
7. LIABILITY INSURANCE. To the extent the Company maintains liability
insurance applicable to directors, officers, employees, agents or
fiduciaries, Indemnitee shall be covered by such policies in such a manner as
to provide Indemnitee the same rights and benefits as are accorded to the
most favorably insured of the Company's directors, if Indemnitee is a
director; or of the Company's officers, if Indemnitee is not a director of
the Company's key employees, agents or fiduciaries, if Indemnitee is not an
officer or director but is a key employee, agent or fiduciary.
8. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
a. EXCLUDED ACTION OR OMISSIONS. To indemnify Indemnitee for
Indemnitee's acts, omissions or transactions from which Indemnitee may not be
relieved of liability under applicable law.
b. CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance
expenses to Indemnitee with respect to Claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except: (i) with respect
to proceedings brought to establish or enforce a right to indemnification
under this Agreement or any other agreement or insurance policy or under the
Company's Certificate of Incorporation or Bylaws now or hereafter in effect
relating to Claims for Indemnifiable Events, (ii) in specific cases if the
Board of Directors has approved the initiation or bringing of such suit, or
(iii) as otherwise as required under the laws of the Company's state of
incorporation, regardless of whether Indemnitee ultimately is determined to
be entitled to such indemnification, advance expense payment or insurance
recovery, as the case may be.
c. LACK OF GOOD FAITH. To indemnify Indemnitee for any expenses
incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or
d. CLAIMS UNDER SECTION 16(b). To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any similar
successor statute.
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9. PERIOD OF LIMITATIONS. No legal action shall be brought and no
cause of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or
legal representatives after the expiration of two years from the date of
accrual of such cause of action, and any claim or cause of action of the
Company shall be extinguished and deemed released unless asserted by the
timely filing of a legal action within such two-year period; PROVIDED,
HOWEVER, that if any shorter period of limitations is otherwise applicable to
any such cause of action, such shorter period shall govern.
10. CONSTRUCTION OF CERTAIN PHRASES.
a. For purposes of this Agreement, references to the "Company"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees,
agents or fiduciaries, so that if Indemnitee is or was serving at the request
of such constituent corporation as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust or other enterprise, Indemnitee shall stand in the same
position under the provisions of this Agreement with respect to the resulting
or surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.
b. For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed on Indemnitee with respect to an
employee benefit plan; and references to "serving at the request of the
Company" shall include any service as a director, officer, employee, agent or
fiduciary of the Company which imposes duties on, or involves services by,
such director, officer, employee, agent or fiduciary with respect to an
employee benefit plan, its participants or its beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to be in the interest of the participants and beneficiaries of an employee
benefit plan, Indemnitee shall be deemed to have acted in a manner "not
opposed to the best interests of the Company" as referred to in this
Agreement.
c. For purposes of this Agreement, a "Change in Control" shall be
deemed to have occurred if: (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
a corporation owned directly or indirectly by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing more than 20% of the total voting power represented by the
Company's then outstanding Voting Securities, (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company and any new director whose election by
the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two- thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof, or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation other than a merger or consolidation which would
result in the Voting Securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at least 80% of the
total voting power represented by the Voting Securities of the Company of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving
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entity outstanding immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of (in one
transaction or a series of transactions) all or substantially all of the
Company's assets.
d. For purposes of this Agreement, "Independent Legal Counsel"
shall mean an attorney or firm of attorneys, selected in accordance with the
provision of Section 1(c) hereof, who shall not have otherwise performed
services for the Company or Indemnitee within the last three years (other
than with respect to matters concerning the rights of Indemnitee under this
Agreement, or of other indemnitees under similar indemnity agreements).
e. For purposes of this Agreement, a "Reviewing Party" shall mean
any appropriate person or body consisting of a member or members of the
Company's Board of Directors or any other person or body appointed by the
Board of Directors who is not party to the particular Claim for which
Indemnitee is seeking indemnification, or Independent Legal Counsel.
f. For purposes of this Agreement, "Voting Securities" shall mean
any securities of the Company that vote generally in the election of
directors.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses,
heirs, and personal and legal representative. The Company shall require and
cause any successor (whether direct or indirect by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part,
of the business and/or assets of the Company, by written agreement in form
and substance satisfactory to Indemnitee, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
This Agreement shall continue in effect with respect to Claims relating to
Indemnifiable Events regardless of whether Indemnitee continues to serve as a
director, officer, employee, agent or fiduciary of the Company or any other
enterprise at the Company's request.
13. ATTORNEY'S FEES. In the event that any action is instituted by
Indemnitee under this Agreement or under any liability insurance policies
maintained by the Company to enforce or interpret any of the terms hereof or
thereof, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee with respect to such action, regardless of whether Indemnitee is
ultimately successful in such action, and shall be entitled to the
advancement of Expenses with respect to such action, unless as a part of such
action, a court of competent jurisdiction over such action determines that
each of the materials assertions made by Indemnitee as a basis for such
action were not made in good faith or were frivolous. In the event of an
action instituted by or in the name of the Company under this Agreement to
enforce or interpret any of the terms of this Agreement, Indemnitee shall be
entitled to be paid all Expenses incurred by Indemnitee in defense of such
action (including costs and expenses incurred with respect to Indemnitee's
counterclaims and cross-claims made in such action), and shall be entitled to
the advancement of Expenses with respect to such
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action, unless, as a part of such action, the court having jurisdiction over
such action determines that each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.
14. NOTICE. All notices and other communications required or permitted
hereunder shall be in writing, shall be effective when given and shall in any
event be deemed to be given: (a) five (5) days after deposit with the U.S.
Postal Service or other applicable postal service, if delivered by first
class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one
business day after the business day of deposit with Federal Express or
similar overnight courier, freight prepaid, or (d) one day after the business
day of delivery by facsimile transmission, if delivered by facsimile
transmission, with copy by first class mail, postage prepaid, and shall be
addressed if to Indemnitee, at the Indemnitee's address as set forth beneath
Indemnitee's signature to this Agreement and if to the Company at the address
of its principal corporate offices or at such other address as such party may
designate by ten days' advance written notice to the other party hereto.
15. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Florida
for all purposes in connection with any action or proceeding which arises out
of or relates to this Agreement and agree that any action instituted under
this Agreement shall be commenced, prosecuted and continued only in the
Superior Court of the State of Florida in and for Broward County, which shall
be the exclusive and only proper forum for adjudicating such a claim.
16. SEVERABILITY. The provisions of this Agreement shall be severable
in the event that any of the provisions hereof (including any provision
within a single section, paragraph or sentence) are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable, and
the remaining provisions shall remain enforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitations, each portion of this Agreement containing
any provision held to be invalid, void or otherwise unenforceable that is not
itself invalid, void or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable.
17. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed and enforced in accordance with the laws of the State of
Florida, as applied to contracts between Florida residents, entered into and
to be performed entirely within the State of Florida, without regard to the
conflict of laws principles thereof.
18. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all documents required
and shall do all acts that may be necessary to secure such rights and to
enable the Company effectively to bring suit to enforce such rights.
19. AMENDMENT AND TERMINATION. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless it is in writing
signed by both the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
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20. INTEGRATION AND ENTIRE AGREEMENT. This Agreement sets forth the
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.
21. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained in this
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written at Fort Lauderdale, Florida.
COLUMBIA CAPITAL CORP.
By: ----------------------------
Kenneth A. Klotz, President
AGREED TO AND ACCEPTED AS OF
THE DATE FIRST WRITTEN ABOVE:
- -----------------------------
[Name of Indemnitee]
Address:---------------------
- -----------------------------
- -----------------------------
- -----------------------------
Telecopier No. --------------
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AMENDED AND RESTATED BYLAWS
OF
COLUMBIA CAPITAL CORP.
(A DELAWARE CORPORATION)
The foregoing are the Amended and Restated Bylaws of Columbia Capital
Corp., a Delaware corporation (the "Corporation"), amending and restating the
Bylaws adopted on ____________ , 199_. These Amended and Restated Bylaws are
effective as of _________________, after approval by the Corporation's Board
of Directors and stockholders:
ARTICLE I
Offices
Section 1.01. PRINCIPAL EXECUTIVE OFFICE. The principal executive
office of the Corporation shall be located at 3020 N.W. 33rd Avenue, Fort
Lauderdale, Florida. The Board of Directors of the Corporation (the "Board
of Directors") may change the location of said principal executive office.
Section 1.02. OTHER OFFICES. The Corporation may also have an office
or offices at such other place or places, either within or without the State
of Delaware, as the Board of Directors may from time to time determine or as
the business of the Corporation may require.
ARTICLE II
Meetings of Stockholders
Section 2.01. ANNUAL MEETINGS. The annual meeting of stockholders of
the Corporation shall be held at a date and at such time as the Board of
Directors shall determine. At each annual meeting of stockholders, directors
shall be elected in accordance with the provisions of Section 3.03 hereof and
any other proper business may be transacted.
Section 2.02. SPECIAL MEETINGS. Special meetings of stockholders for
any purpose or purposes may be called at any time by a majority of the Board
of Directors, by the Chairman of the Board or by holders of not less than
fifty percent (50%) of the voting power of all outstanding shares of voting
stock regardless of class and voting together as a single voting class. The
term "voting stock" as used in these Bylaws shall have the meaning set forth
in Section 203(c) of the Delaware General Corporation Law. Special meetings
may not be called by any other person or persons. Each special meeting shall
be held at such date and time as is requested by the
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person or persons calling the meeting, within the limits fixed by law.
Section 2.03. PLACE OF MEETINGS. Each annual or special meeting of
stockholders shall be held at such location as may be determined by the Board
of Directors or, if no such determination is made, at such place as may be
determined by the Chairman of the Board. If no location is so determined,
any annual or special meeting shall be held at the principal executive office
of the Corporation.
Section 2.04. NOTICE OF MEETINGS. Written notice of each annual or
special meeting of stockholders stating the date and time when, and the place
where, it is to be held shall be delivered either personally or by mail to
stockholders entitled to vote at such meeting not less than ten (10) nor more
than sixty (60) days before the date of the meeting. The purpose or purposes
for which the meeting is called may, in the case of an annual meeting, and
shall, in the case of a special meeting, also be stated. If mailed, such
notice shall be directed to a stockholder at his address as it shall appear
on the stock books of the Corporation, unless he shall have filed with the
Secretary of the Corporation a written request that notices intended for him
be mailed to some other address, in which case such notice shall be mailed to
the address designated in such request.
Section 2.05. CONDUCT OF MEETINGS. All annual and special meetings of
stockholders shall be conducted in accordance with such rules and procedures
as the Board of Directors may determine subject to the requirements of
applicable law and, as to matters not governed by such rules and procedures,
as the chairman of such meeting shall determine. The chairman of any annual
or special meeting of stockholders shall be the Chairman of the Board. The
Secretary, or in the absence of the Secretary, a person designated by the
Chairman of the Board, shall act as secretary of the meeting.
Section 2.06. QUORUM. At any meeting of stockholders of the
Corporation, the presence, in person or by proxy, of the holders of record of
a majority of the shares then issued and outstanding and entitled to vote at
the meeting shall constitute a quorum for the transaction of business;
PROVIDED, HOWEVER, that this Section 2.06 shall not affect any different
requirement which may exist under statute, pursuant to the rights of any
authorized class or series of stock, or under the Certificate of
Incorporation of the Corporation, as amended or restated from time to time
(the "Certificate"), for the vote necessary for the adoption of any measure
governed thereby.
In the absence of a quorum, the stockholders present in person or
by proxy, by majority vote and without further notice, may adjourn the
meeting from time to time until a quorum is
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attained. At any reconvened meeting following such adjournment at which a
quorum shall be present, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 2.07. VOTES REQUIRED. The affirmative vote of a majority
of the shares present in person or represented by proxy at a duly called
meeting of stockholders of the Corporation, at which a quorum is present and
entitled to vote on the subject matter, shall be sufficient to take or
authorize action upon any matter which may properly come before the meeting,
except that the election of directors shall be by plurality vote, unless the
vote of a greater or different number thereof is required by statute, by the
rights of any authorized class of stock or by the Certificate.
Unless the Certificate or a resolution of the Board of Directors
adopted in connection with the issuance of shares of any class or series of
stock provides for a greater or lesser number of votes per share, or limits
or denies voting rights, each outstanding share of stock, regardless of class
or series, shall be entitled to one (l) vote on each matter submitted to a
vote at a meeting of stockholders.
Section 2.08. PROXIES. A stockholder may vote the shares owned of
record by him either in person or by proxy executed in writing (which shall
include writings sent by telex, telegraph, cable or facsimile transmission)
by the stockholder himself or by his duly authorized attorney-in-fact. No
proxy shall be valid after three (3) years from its date, unless the proxy
provides for a longer period. Each proxy shall be in writing, subscribed by
the stockholder or his duly authorized attorney-in-fact, and dated, but it
need not be sealed, witnessed or acknowledged.
Section 2.09. STOCKHOLDER ACTION. Any action required or permitted to
be taken by the stockholders of the Corporation must be effect at a duly
called Annual Meeting or at a special meeting of stockholders of the
Corporation.
Section 2.10. LIST OF STOCKHOLDERS. The Secretary of the Corporation
shall prepare and make (or cause to be prepared and made), at least ten (10)
days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order
and showing the address of, and the number of shares registered in the name
of, each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten (10) days prior to the meeting, either at
a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at
the time
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and place of the meeting during the duration thereof, and may be inspected by
any stockholder who is present.
Section 2.11. INSPECTORS OF ELECTION. In advance of any meeting of
stockholders, the Board of Directors may appoint Inspectors of Election to
act at such meeting or at any adjournment or adjournments thereof. If such
Inspectors are not so appointed or fail or refuse to act, the chairman of any
such meeting may (and, upon the demand of any stockholder or stockholder's
proxy, shall) make such an appointment.
The number of Inspectors of Election shall be one (1) or three (3). If
there are three (3) Inspectors of Election, the decision, act or certificate
of a majority shall be effective and shall represent the decision, act or
certificate of all. No such Inspector need be a stockholder of the
Corporation.
Subject to any provisions of the Certificate of Incorporation, the
Inspectors of Election shall determine the number of shares outstanding, the
voting power of each, the shares represented at the meeting, the existence of
a quorum and the authenticity, validity and effect of proxies; they shall
receive votes, ballots or consents, hear and determine all challenges and
questions in any way arising in connection with the right to vote, count and
tabulate all votes or consents, determine when the polls shall close and
determine the result; and finally, they shall do such acts as may be proper
to conduct the election or vote with fairness to all stockholders. On
request, the Inspectors shall make a report in writing to the secretary of
the meeting concerning any challenge, question or other matter as may have
been determined by them and shall execute and deliver to such secretary a
certificate of any fact found by them.
ARTICLE III
Directors
Section 3.01. POWERS. The business and affairs of the Corporation
shall be managed by and be under the direction of the Board of Directors.
The Board of Directors shall exercise all the powers of the Corporation,
except those that are conferred upon or reserved to the stockholders by
statute, the Certificate or these Bylaws.
Section 3.02. NUMBER. The number of directors shall be fixed from time
to time by resolution of the Board of Directors but shall not be less than
three (3) nor more than nine (9).
Section 3.03. ELECTION AND TERM OF OFFICE. Each director shall serve
until his successor is elected and qualified or until his death, resignation
or removal, no decrease in the authorized number of directors shall shorten
the term of any incumbent
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director, and additional directors elected in connection with rights to elect
such additional directors under specified circumstances which may be granted
to the holders of any series of Preferred Stock shall not be included in any
class, but shall serve for such term or terms and pursuant to such other
provisions as are specified in the resolution of the Board of Directors
establishing such series.
Section 3.04. ELECTION OF CHAIRMAN OF THE BOARD. At the organizational
meeting immediately following the annual meeting of stockholders, the
directors shall elect a Chairman of the Board from among the directors who
shall hold office until the corresponding meeting of the Board of Directors
in the next year and until his successor shall have been elected or until his
earlier resignation or removal. Any vacancy in such office may be filled for
the unexpired portion of the term in the same manner by the Board of
Directors at any regular or special meeting.
Section 3.05. REMOVAL. Any director may be removed from office only as
provided in the Certificate of Incorporation.
Section 3.06. VACANCIES AND ADDITIONAL DIRECTORSHIPS. Newly created
directorships resulting from death, resignation, disqualification, removal or
other cause shall be filled solely by the affirmative vote of a majority of
the remaining directors then in office, even though less than a quorum of the
Board of Directors. Any director elected in accordance with the preceding
sentence shall hold office for the remainder of the full term of the class of
directors in which the new directorship was created or the vacancy occurred
and until such director's successor shall have been elected and qualified.
No decrease in the number of directors constituting the Board of Directors
shall shorten the term of any incumbent director.
Section 3.07. REGULAR AND SPECIAL MEETINGS. Regular meetings of the
Board of Directors shall be held immediately following the annual meeting of
the stockholders; without call at such time as shall from time to time be
fixed by the Board of Directors; and as called by the Chairman of the Board
in accordance with applicable law.
Special meetings of the Board of Directors shall be held upon call by or
at the direction of the Chairman of the Board, the President or any two (2)
directors, except that when the Board of Directors consists of one (1)
director, then the one director may call a special meeting. Except as
otherwise required by law, notice of each special meeting shall be mailed to
each director, addressed to him at his residence or usual place of business,
at least three days before the day on which the meeting is to be held, or
shall be sent to him at such place by telex, telegram, cable, facsimile
transmission or telephoned or delivered to him personally, not later than the
day before the day on which the meeting is
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to be held. Such notice shall state the time and place of such meeting, but
need not state the purpose or purposes thereof, unless otherwise required by
law, the Certificate of Incorporation or these Bylaws ("Bylaws").
Notice of any meeting need not be given to any director who shall attend
such meeting in person (except when the person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened) or who shall waive notice thereof, before or after such meeting, in
a signed writing.
Section 3.08. QUORUM. At all meetings of the Board of Directors, a
majority of the fixed number of directors shall constitute a quorum for the
transaction of business, except that when the Board of Directors consists of
one (1) director, then the one director shall constitute a quorum.
In the absence of a quorum, the directors present, by majority vote
and without notice other than by announcement, may adjourn the meeting from
time to time until a quorum shall be present. At any reconvened meeting
following such an adjournment at which a quorum shall be present, any
business may be transacted which might have been transacted at the meeting as
originally notified.
Section 3.09. VOTES REQUIRED. Except as otherwise provided by
applicable law or by the Certificate of Incorporation, the vote of a majority
of the directors present at a meeting duly held at which a quorum is present
shall be sufficient to pass any measure.
Section 3.10. PLACE AND CONDUCT OF MEETINGS. Each regular meeting and
special meeting of the Board of Directors shall be held at a location
determined as follows: The Board of Directors may designate any place,
within or without the State of Delaware, for the holding of any meeting. If
no such designation is made: (a) any meeting called by a majority of the
directors shall be held at such location, within the county of the
Corporation's principal executive office, as the directors calling the
meeting shall designate; and (b) any other meeting shall be held at such
location, within the county of the Corporation's principal executive office,
as the Chairman of the Board may designate or, in the absence of such
designation, at the Corporation's principal executive office. Subject to the
requirements of applicable law, all regular and special meetings of the Board
of Directors shall be conducted in accordance with such rules and procedures
as the Board of Directors may approve and, as to matters not governed by such
rules and procedures, as the chairman of such meeting shall determine. The
chairman of any regular or special meeting shall be the Chairman of the
Board, or, in his absence, a person designated by the Board of Directors.
The Secretary, or, in the absence of
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the Secretary, a person designated by the chairman of the meeting, shall act
as secretary of the meeting.
Section 3.11. FEES AND COMPENSATION. Directors shall be paid such
compensation as may be fixed from time to time by resolution of the Board of
Directors: (a) for their usual and contemplated services as directors; (b)
for their services as members of committees appointed by the Board of
Directors, including attendance at committee meetings as well as services
which may be required when committee members must consult with management
staff; and (c) for extraordinary services as directors or as members of
committees appointed by the Board of Directors, over and above those services
for which compensation is fixed pursuant to items (a) and (b) in this Section
3.11. Compensation may be in the form of an annual retainer fee or a fee for
attendance at meetings, or both, or in such other form or on such basis as
the resolutions of the Board of Directors shall fix. Directors shall be
reimbursed for all reasonable expenses incurred by them in attending meetings
of the Board of Directors and committees appointed by the Board of Directors
and in performing compensable extraordinary services. Nothing contained
herein shall be construed to preclude any director from serving the
Corporation in any other capacity, such as an officer, agent, employee,
consultant or otherwise, and receiving compensation therefor.
Section 3.12. COMMITTEES OF THE BOARD OF DIRECTORS. To the full extent
permitted by applicable law, the Board of Directors may from time to time
establish committees, including, but not limited to, standing or special
committees and an executive committee with authority and responsibility for
bookkeeping, with authority to act as signatories on Corporation bank or
similar accounts and with authority to choose attorneys for the Corporation
and direct litigation strategy, which shall have such duties and powers as
are authorized by these Bylaws or by the Board of Directors. Committee
members, and the chairman of each committee, shall be appointed by the Board
of Directors. The Chairman of the Board, in conjunction with the several
committee chairmen, shall make recommendations to the Board of Directors for
its final action concerning members to be appointed to the several committees
of the Board of Directors. Any member of any committee may be removed at any
time with or without cause by the Board of Directors. Vacancies which occur
on any committee shall be filled by a resolution of the Board of Directors.
If any vacancy shall occur in any committee by reason of death, resignation,
disqualification, removal or otherwise, the remaining members of such
committee, so long as a quorum is present, may continue to act until such
vacancy is filled by the Board of Directors. The Board of Directors may, by
resolution, at any time deemed desirable, discontinue any standing or special
committee. Members of standing committees, and their chairmen, shall be
elected yearly at the regular meeting of the Board of Directors which is held
immediately following the annual meeting of stockholders. The provisions of
Sections 3.07, 3.08, 3.09 and 3.10
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of these Bylaws shall apply, MUTATIS MUTANDIS, to any such Committee of the
Board of Directors.
ARTICLE IV
Officers
Section 4.01. DESIGNATION, ELECTION AND TERM OF OFFICE. The
Corporation shall have a Chairman of the Board, a President, Treasurer, such
senior vice presidents and vice presidents as the Board of Directors deems
appropriate, a Secretary and such other officers as the Board of Directors
may deem appropriate. These officers shall be elected annually by the Board
of Directors at the organizational meeting immediately following the annual
meeting of stockholders, and each such officer shall hold office until the
corresponding meeting of the Board of Directors in the next year and until
his successor shall have been elected and qualified or until his earlier
resignation, death or removal. Any vacancy in any of the above offices may
be filled for the unexpired portion of the term by the Board of Directors at
any regular or special meeting.
Section 4.02. CHAIRMAN OF THE BOARD. The Chairman of the Board of
Directors shall preside at all meetings of the directors and shall have such
other powers and duties as may from time to time be assigned to him by the
Board of Directors.
Section 4.03. PRESIDENT. The President shall be the chief executive
officer of the Corporation and shall, subject to the power of the Board of
Directors, have general supervision, direction and control of the business
and affairs of the Corporation. He shall preside at all meetings of the
stockholders and, in the absence of the Chairman of the Board, at all
meetings of the directors. He shall have the general powers and duties of
management usually vested in the office of president of a corporation, and
shall have such other duties as may be assigned to him from time to time by
the Board of Directors.
Section 4.04. TREASURER. The Treasurer shall keep and maintain, or
cause to be kept and maintained, adequate and correct books and records of
account of the properties and business transactions of the Corporation,
including accounts of its assets, liabilities, receipts, disbursements,
gains, losses, capital, retained earnings and shares. The books of account
shall at all reasonable times be open to inspection by the directors.
The Treasurer shall deposit all moneys and other valuables in the name
and to the credit of the Corporation with such depositaries as may be
designated by the Board of Directors. He shall disburse the funds of the
Corporation as may be ordered by the Board of Directors, shall render to the
President and directors, whenever they request it, an account of all of his
transactions as
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the Treasurer and of the financial condition of the Corporation, and shall
have such other powers and perform such other duties as may be prescribed by
the Board of Directors or the Bylaws.
Section 4.05. SECRETARY. The Secretary shall keep the minutes of the
meetings of the stockholders, the Board of Directors and all committees. He
shall be the custodian of the corporate seal and shall affix it to all
documents which he is authorized by law or the Board of Directors to sign and
seal. He also shall perform such other duties as may be assigned to him from
time to time by the Board of Directors or the Chairman of the Board or
President.
Section 4.06. ASSISTANT OFFICERS. The President may appoint one or
more assistant secretaries and such other assistant officers as the business
of the Corporation may require, each of whom shall hold office for such
period, have such authority and perform such duties as may be specified from
time to time by the President.
Section 4.07. WHEN DUTIES OF AN OFFICER MAY BE DELEGATED. In the case
of absence or disability of an officer of the Corporation or for any other
reason that may seem sufficient to the Board of Directors, the Board of
Directors or any officer designated by it, or the President, may, for the
time of the absence or disability, delegate such officer's duties and powers
to any other officer of the Corporation.
Section 4.08. OFFICERS HOLDING TWO OR MORE OFFICES. The same person
may hold any two (2) or more of the above-mentioned offices.
Section 4.09. COMPENSATION. The Board of Directors shall have the
power to fix the compensation of all officers and employees of the
Corporation.
Section 4.10. RESIGNATIONS. Any officer may resign at any time by
giving written notice to the Board of Directors, to the President, or to the
Secretary of the Corporation. Any such resignation shall take effect at the
time specified therein unless otherwise determined by the Board of Directors.
The acceptance of a resignation by the Corporation shall not be necessary to
make it effective.
Section 4.11. REMOVAL. Any officer of the Corporation may be removed,
with or without cause, by the affirmative vote of a majority of the entire
Board of Directors. Any assistant officer of the Corporation may be removed,
with or without cause, by the President or by the Board of Directors.
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ARTICLE V
Indemnification of Directors, Officers
Employees end other Corporate Agents
Section 5.01. ACTION, ETC. OTHER THAN BY OR IN THE RIGHT OF THE
CORPORATION. The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as
a director, officer, employee, trustee or agent of another corporation,
partnership, joint venture, trust or other enterprise (all such persons being
referred to hereinafter as an "Agent"), against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation, and with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of NOLO
CONTENDERE or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation,
and, with respect to any criminal action or proceeding, that he had
reasonable cause to believe that his conduct was unlawful.
Section 5.02. ACTION, ETC., BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by
or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was an Agent against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Corporation by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, unless and only to
the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such court shall
deem proper.
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Section 5.03. DETERMINATION OF RIGHT OF INDEMNIFICATION. Any
indemnification under Sections 5.01 or 5.02 (unless ordered by a court) shall
be made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the Agent is proper in the
circumstances because the Agent has met the applicable standard of conduct
set forth in Sections 5.01 and 5.02 hereof, which determination is made (a)
by the Board of Directors, by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (b) if
such a quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (c) by the stockholders.
Section 5.04. INDEMNIFICATION AGAINST EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding the other provisions of this Article V, to the extent that an
Agent has been successful on the merits or otherwise, including the dismissal
of an action without prejudice or the settlement of an action without
admission of liability, in defense of any action, suit or proceeding referred
to in Sections 5.01 or 5.02 hereof, or in defense of any claim, issue or
matter therein, such Agent shall be indemnified against expenses, including
attorneys' fees actually and reasonably incurred by such Agent in connection
therewith.
Section 5.05. ADVANCES OF EXPENSES. Except as limited by Section 5.06
of this Article V, expenses incurred by an Agent in defending any civil or
criminal action, suit, or proceeding shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding, if the
Agent shall undertake to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified as authorized
in this Article V. Notwithstanding the foregoing, no advance shall be made
by the Corporation if a determination is reasonably and promptly made by the
Board of Directors by a majority vote of a quorum of disinterested directors,
or (if such a quorum is not obtainable or, even if obtainable, a quorum of
disinterested directors so directs) by independent legal counsel in a written
opinion, that, based upon the facts known to the Board of Directors or
counsel at the time such determination is made, such person acted in bad
faith and in a manner that such person did not believe to be in or not
opposed to the best interest of the Corporation, or, with respect to any
criminal proceeding, that such person believed or had reasonable cause to
believe his conduct was unlawful.
Section 5.06. RIGHT OF AGENT TO INDEMNIFICATION UPON APPLICATION;
PROCEDURE UPON APPLICATION. Any indemnification or advance under this
Article V shall be made promptly, and in any event within ninety days, upon
the written request of the Agent, unless a determination shall be made in the
manner set forth in the second sentence of Subsection 5.05 hereof that such
Agent acted in a manner set forth therein so as to justify the Corporation's
not indemnifying or making an advance to the Agent. The right to
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indemnification or advances as granted by this Article V shall be enforceable
by the Agent in any court of competent jurisdiction, if the Board of
Directors or independent legal counsel denies the claim, in whole or in part,
or if no disposition of such claim is made within ninety (90) days. The
Agent's expenses incurred in connection with successfully establishing his
right to indemnification, in whole or in part, in any such proceeding shall
also be indemnified by the Corporation.
Section 5.07. OTHER RIGHTS AND REMEDIES. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article V
shall not be deemed exclusive of any other rights to which an Agent seeking
indemnification or advancement of expenses may be entitled under any Bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both
as to action in his official capacity and as to action in another capacity
while holding such office, and shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be an Agent
and shall inure to the benefit of the heirs, executors and administrators of
such a person. All rights to indemnification under this Article V shall be
deemed to be provided by a contract between the Corporation and the Agent who
serves in such capacity at any time while these Bylaws and other relevant
provisions of the Delaware General Corporation Law and other applicable law,
if any, are in effect. Any repeal or modification thereof shall not affect
any rights or obligations then existing.
Section 5.08. INSURANCE. Upon resolution passed by the Board of
Directors, the Corporation may purchase and maintain insurance on behalf of
any person who is or was an Agent against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him
against such liability under the provisions of this Article V.
Section 5.09. CONSTITUENT CORPORATIONS. For the purposes of this
Article V, references to "the Corporation" shall include, in addition to the
resulting corporation, all constituent corporations (including all
constituents of constituents) absorbed in a consolidation or merger as well
as the resulting or surviving corporation, which, if the separate existence
of such constituent corporation had continued, would have had power and
authority to indemnify its Agents, so that any Agent of such constituent
corporation shall stand in the same position under the provisions of the
Article V with respect to the resulting or surviving corporation as that
Agent would have with respect to such constituent corporation if its separate
existence had continued.
Section 5.10. OTHER ENTERPRISES, FINES, AND SERVING AT CORPORATION'S
REQUEST. For purposes of this Article V, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a
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person with respect to any employee benefit plan; and references to "serving
at the request of the Corporation" shall include any service as a director,
officer, employee or agent of the Corporation which imposes duties on, or
involves services by, such director, officer, employee or agent with respect
to any employee benefit plan, its participants or beneficiaries; and a person
who acted in good faith and in a manner he reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests
of the Corporation" as referred to in this Article V.
Section 5.11. SAVINGS CLAUSE. If this Article V or any portion thereof
shall be invalidated on any ground by any court of competent jurisdiction,
then the Corporation shall nevertheless indemnify each Agent as to expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, and whether internal or external, including
a grand jury proceeding and an action or suit brought by or in the right of
the Corporation, to the full extent permitted by any applicable portion of
this Article V that shall not have been invalidated, or by any other
applicable law.
ARTICLE VI
Stock
Section 6.01. CERTIFICATES. Except as otherwise provided by law, each
stockholder shall be entitled to a certificate or certificates which shall
represent and certify the number and class (and series, if appropriate) of
shares of stock owned by him in the Corporation. Each certificate shall be
signed in the name of the Corporation by the Chairman of the Board or a
Vice-Chairman of the Board or the President or a Vice President, together
with the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary. Any or all of the signatures on any certificate may be
a facsimile. In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same
effect as if such person were such officer, transfer agent or registrar at
the date of issue.
Section 6.02. TRANSFER OF SHARES. Shares of stock shall be
transferable on the books of the Corporation only by the holder thereof, in
person or by his duly authorized attorney, upon the surrender of the
certificate representing the shares to be transferred, properly endorsed, to
the Corporation's transfer agent, if the Corporation has a transfer agent, or
to the Corporation's registrar, if the Corporation has a registrar, or to the
Secretary,
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if the Corporation has neither a transfer agent nor a registrar.
The Board of Directors shall have power and authority to make such other
rules and regulations concerning the issue, transfer and registration of
certificates of the Corporation's stock as it may deem expedient.
Section 6.03. TRANSFER AGENTS AND REGISTRARS. The Corporation may have
one or more transfer agents and one or more registrars of its stock whose
respective duties the Board of Directors or the Secretary may, from time to
time, define. No certificate of stock shall be valid until countersigned by
a transfer agent, if the Corporation has a transfer agent, or until
registered by a registrar, if the Corporation has a registrar. The duties of
transfer agent and registrar may be combined.
Section 6.04. STOCK LEDGERS. Original or duplicate stock ledgers,
containing the names and addresses of the stockholders of the Corporation and
the number of shares of each class of stock held by them, shall be kept at
the principal executive office of the Corporation or at the office of its
transfer agent or registrar.
Section 6.05. RECORD DATES. The Board of Directors may fix, in
advance, a date as the record date for the purpose of determining
stockholders entitled to notice of, or to vote at, any meeting of
stockholders or any adjournment thereof, or stockholders entitled to receive
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or
exchange of stock, or in order to make a determination of stockholders for
any other proper purpose. Such date in any case shall be not more than sixty
(60) days, and in case of a meeting of stockholders, not less than ten (10)
days, prior to the date on which the particular action requiring such
determination of stockholders is to be taken. Only those stockholders of
record on the date so fixed shall be entitled to any of the foregoing rights,
notwithstanding the transfer of any such stock on the books of the
Corporation after any such record date fixed by the Board of Directors.
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P R O X Y
COLUMBIA CAPITAL CORP.
THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS
FOR AN ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 12, 1998
The undersigned stockholder appoints Glenn M. Gallant and Douglas R.
Baetz, or either of them, as proxy with full power of substitution, to vote
the shares of voting securities of Columbia Capital Corp. (the "Company")
which the undersigned is entitled to vote at a Special Meeting of
Stockholders to be held at the
___________________________________________________________,
__________,___________ _________, (____) _____-_______, on June 12, 1998, at
10:00 a.m., local time, and at any adjournments thereof, upon matters properly
coming before the meeting, as set forth in the Notice of Annual Meeting and
Proxy Statement, both of which have been received by the undersigned. Without
otherwise limiting the general authorization given hereby, such proxy is
instructed to vote as follows:
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE PROPOSALS INDICATED ON THIS CARD AND AS
SUCH PROXIES DEEM ADVISABLE WITH DISCRETIONARY AUTHORITY ON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT OR
ADJOURNMENTS THEREOF.
(1) [ ] FOR ALL NOMINEES LISTED HEREIN (EXCEPT AS MARKED UP TO THE CONTRARY
BELOW).
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME LISTED BELOW)
GLENN M. GALLANT DOUGLAS R. BAETZ
KENNETH A. KLOTZ CHARLES LAMONTAGNE OLAN BEARD
(2) To approve: (i) a amendment to the Certificate of Incorporation, and
(ii) the Amended and Restated Bylaws of the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) To adopt the Company's 1998 Stock Option Plan (the "1998 Stock Option
Plan") and to reserve up to 500,000 shares of the Company's Common
Stock for issuance under the 1998 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) To approve the form of indemnification agreements between the Company and
the members of the Company's Board of Directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) To ratify the appointment of _____________________, Certified Public
Accountants, as independent certified public accountants for the Company
for the year ending December 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
In his discretion, the proxy is authorized to vote upon such other
business as may properly come before the meeting.
DATED:__________________ -------------------------------------
Signature
-------------------------------------
Signature (if held jointly)
-------------------------------------
Print Names
(Please sign exactly as your name appears hereon.
When signing as attorney, executor, administrator,
trustee or guardian, please give your full title.
If shares are jointly held, each holder must sign.
If a corporation, please sign in full corporate
name by President or other authorized officer. If
a partnership, please sign in partnership name by
authorized person).
PLEASE CHECK THE BOXES ABOVE AND ON THE REVERSE SIDE, SIGN, DATE AND RETURN
THIS PROXY TO INTERWEST TRANSFER CO., INC., P.O. BOX 17136, SALT LAKE CITY,
UTAH 84117, ATTN: PROXY SERVICES, IN THE SELF-ADDRESSED ENVELOPE PROVIDED.
