SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
13a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
GO ONLINE NETWORKS CORPORATION
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price of other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
GO ONLINE NETWORKS CORPORATION
5681 Beach Boulevard, Suite 101
Buena Park, California 90621
October 19, 2000
Dear Shareholders:
You are cordially invited to attend the 2000 Annual Meeting of
Shareholders of Go Online Networks Corporation (the "Company") to be held at
1:00 p.m. local time, November 17, 2000, at the Embassy Suites Hotel, 1325
E. Dyer Road, Santa Ana, California 92705.
Your approval is requested in amending the Company's Articles of
Incorporation in order to increase the authorized but unissued shares of
common stock of the Company from 100,000,000 to 200,000,000, electing directors
to serve for the coming year, ratifying and approving the Company's 2000
Incentive Stock Option Plan, and ratifying the appointment of auditors for the
Company for the fiscal year ending December 31, 2000. You will also transact
any other business that may properly come before the meeting and any adjournment
or postponement thereof.
Whether or not you plan to attend the meeting, we ask that you
complete, sign, date, and return the enclosed proxy card at your earliest
convenience in the provided postage-paid, addressed envelope to ensure that
your stock will be represented. If you attend the meeting, you may withdraw
your proxy and vote your shares in person.
Very truly yours,
By: /s/ Joseph M. Naughton
--------------------------------------
Joseph M. Naughton
Chief Executive Officer, President and
Chairman of the Board
<PAGE>
GO ONLINE NETWORKS CORPORATION
5681 Beach Boulevard, Suite 101
Buena Park, California 90621
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 17, 2000
To the Shareholders of Go Online Networks Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Go Online Networks Corporation, a Delaware corporation (the "Company"), will be
held at the Embassy Suites Hotel, 1325 E. Dyer Road, Santa Ana, California
92705, on November 17, 2000, at 1:00 p.m. local time, for the following
purposes:
(1) INCREASE IN AUTHORIZED STOCK. To approve an amendment to the
Company's Articles of Incorporation in order to increase the authorized but
unissued shares of common stock of the Company from 100,000,000 to 200,000,000;
(2) ELECTION OF DIRECTORS. To elect four directors to hold office
until the 2001 Annual Meeting of Shareholders or until their successors are
elected and qualified;
(3) RATIFICATION AND APPROVAL OF THE 2000 STOCK OPTION PLAN.
To ratify and approve the provisions of the Company's 2000 Stock Option Plan;
(4) RATIFICATION AND APPROVAL OF THE APPOINTMENT OF INDEPENDENT
AUDITORS. To ratify and approve the appointment of Miller & McCollom as the
independent auditors for the Company for the fiscal year ending December 31,
2000; and
(5) OTHER BUSINESS. To transact such other business as may properly
come before the Annual Meeting of Shareholders and any adjournment or
postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement which is attached hereto and made a part hereof.
The Board of Directors has fixed the close of business on October 13,
2000 as the record date for determining the shareholders entitled to notice
of and to vote at the 2000 Annual Meeting of Shareholders and any adjournment
or postponement thereof.
By Order of the Board of Directors
/s/ Joseph M. Naughton
--------------------------------------
Joseph M. Naughton
Chief Executive Officer, President and
Chairman of the Board
Buena Park, California
October 19, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING OF SHAREHOLDERS IN
PERSON, YOU ARE URGED TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS
PROMPTLY AS POSSIBLE IN THE POSTAGE-PREPAID ENVELOPE PROVIDED TO ENSURE YOUR
REPRESENTATION AND THE PRESENCE OF A QUORUM AT THE ANNUAL MEETING. IF YOU SEND
IN YOUR PROXY CARD AND THEN DECIDE TO ATTEND THE ANNUAL MEETING TO VOTE YOUR
SHARES IN PERSON, YOU MAY STILL DO SO. YOUR PROXY IS REVOCABLE IN ACCORDANCE
WITH THE PROCEDURES SET FORTH IN THE PROXY STATEMENT.
<PAGE>
GO ONLINE NETWORKS CORPORATION
5681 Beach Boulevard, Suite 101
Buena Park, California 90621
GENERAL INFORMATION
This Proxy Statement is furnished to the shareholders of Go Online
Networks Corporation, a Delaware corporation (the "Company"), in connection with
the solicitation by the Board of Directors of the Company (the "Board" or "Board
of Directors") of proxies in the accompanying form for use in voting at the 2000
Annual Meeting of Shareholders of the Company (the "Annual Meeting") to be held
on November 17, 2000, at the Embassy Suites Hotel, 1325 E. Dyer Road, Santa
Ana, California 92705, on November 15, 2000, at 1:00 p.m. local time, and any
adjournment or postponement thereof. The shares represented by the proxies
received, properly marked, dated, executed and not revoked will be voted at the
Annual Meeting.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is exercised by delivering to the
Company (to the attention of Mr. Joseph M. Naughton), the Company's President) a
written notice of revocation or a duly executed proxy bearing a later date, or
by attending the Annual Meeting and voting in person.
SOLICITATION AND VOTING PROCEDURES
This Proxy Statement and the accompanying proxy were first sent by mail
to shareholders on or about October 19, 2000. The solicitation of proxies will
be conducted by mail, and the Company will bear all attendant costs. These costs
will include the expense of preparing and mailing proxy materials for the Annual
Meeting and reimbursements paid to brokerage firms and others for their expenses
incurred in forwarding solicitation material regarding the Annual Meeting to
beneficial owners of the Company's common stock (the "Common Stock"). The
Company may conduct further solicitation personally, by telephone or by
facsimile through its officers, directors and regular employees, none of whom
will receive additional compensation for assisting with such solicitation.
The close of business on October 13, 2000 has been fixed as the record
date (the "Record Date") for determining the holders of shares of the Common
Stock of the Company entitled to notice of and to vote at the Annual Meeting.
As of the close of business on the Record Date, the Company had approximately
83,960,343 shares of Common Stock outstanding and entitled to vote at the
Annual Meeting. Each outstanding share of Common Stock on the Record Date is
entitled to one vote on all matters.
1
<PAGE>
A majority of the shares entitled to vote, present in person or
represented by proxy, shall constitute a quorum at the Annual Meeting. For the
approval of Proposal No. 1 (the increase in the Company's authorized but
unissued shares of common stock), it must be approved by the holders of a
majority of the outstanding Common Stock. For Proposal No. 2 (the election of
directors), the four candidates receiving the greatest number of affirmative
votes will be elected, provided a quorum is present and voting. The affirmative
vote of a majority of the shares present in person or represented by proxy at
the Annual Meeting will be required to ratify and approve each of Proposal No. 3
(the 2000 Stock Option Plan) and Proposal No. 4 (appointment of independent
auditors).
Votes to abstain and broker non-votes are counted as present for purposes
of determining the presence of a quorum. A broker non-vote occurs when a nominee
holding shares for a beneficial owner does not vote on a particular proposal
because the nominee does not have the discretionary voting power with respect to
that item and has not received instructions from the beneficial owner. Because
abstentions and broker non-votes will be included in tabulations of the votes
entitled to vote for purposes of determining whether a proposal has been
approved, abstentions and broker non-votes will have the same effect as negative
votes on Proposal No. 1, Proposal No. 3 and Proposal No. 4.
An automated system administered by the Company's transfer agent will
tabulate votes cast by proxy at the Annual Meeting and an officer of the Company
will tabulate votes cast in person at the Annual Meeting.
2
<PAGE>
PROPOSAL 1
AMENDMENT OF THE COMPANY'S ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED CAPITAL STOCK
On October 13, 2000, the Company's Board of Directors unanimously approved
a resolution to amend Article 5 of the Company's Articles of Incorporation to
increase the number of authorized shares of Common Stock from 100,000,000 shares
to 200,000,000 shares, subject to stockholder approval. As of the Record Date,
the Company had 83,960,343 shares of Common Stock issued and outstanding. The
purpose of the amendment is to provide the Company with additional shares of
Common Stock which may be made available for future financing and acquisition
transactions, stock dividends or splits, employee benefit plans and other
general corporate purposes. If the amendment is approved, the Company also will
have greater flexibility in the future to issue shares in excess of those
currently authorized, without the expense and delay of a special stockholders
meeting. The Company currently has no arrangements or understandings for the
issuance of additional shares of Common Stock other than as provided in certain
employee benefit plans and in connection with the potential conversions of
issued and outstanding convertible debentures issued in connection with the
NetStrat, Inc. and Amer Software, Inc. acquisitions. If the Board of Directors
deems it in the best interests of the Company and the stockholders to issue
additional shares of Common Stock, the Board of Directors will have the
authority to determine the terms of the issuance and generally would not seek
approval by the stockholders unless such approval is required by applicable law
or by the Nasdaq rules. An issuance of additional shares of Common Stock could
dilute the voting power of a person seeking control of the Company, thereby
deterring or rendering more difficult a merger, tender offer, proxy contest or
an extraordinary corporate transaction opposed by the Board of Directors. The
Company has no knowledge that any person intends to effect such a transaction.
THE COMPANY BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE CERTIFICATE
AMENDMENT TO INCREASE AUTHORIZED CAPITAL STOCK
PROPOSAL NO. 2
ELECTION OF DIRECTORS
Currently, the Board of Directors of the Company consists of four
persons, each having a term of office of one year. At each annual meeting of
shareholders, directors will be elected for a full term of one year to succeed
those directors whose terms are expiring.
The Board has nominated Joseph M. Naughton, Scott Claverie, Jim Cannon
and Michael Abelson as directors, each to serve a one year term until the 2001
annual meeting of shareholders or until the director's earlier resignation or
removal. Each of the nominees has consented, if elected as a director of the
Company, to serve until his term expires. The Board of Directors has no reason
to believe that any of the nominees will not serve if elected, but if any of
them should become unavailable to serve as a director, and if the Board
designates a substitute nominee, the persons named as proxies will vote for the
substitute nominee designated by the Board.
3
<PAGE>
The four nominees receiving a plurality of the votes of the shares
present in person or represented by proxy will be elected as directors. Votes
withheld from any director are counted for purposes of determining the presence
or absence of a quorum.
Certain information about the director nominees, is furnished below.
JOSEPH M. NAUGHTON, Chairman. Mr. Naughton has been our Chairman since
May 1991. From September 1986 through October 1987, Mr. Naughton was Operations
Manager for Shop Television Network in which he oversaw the marketing and
merchandising from that company. In October 1987 Mr. Naughton was elected to
Shop Television Network's Board and Directors and appointed simultaneously
Executive Vice President and Chief Operating Officer. Shop Television Network's
wholly-owned subsidiary ShopTV, Inc. was acquired by the JC Penney Company in
1988 and Mr. Naughton was a Vice President of Operations for the renamed JC
Penny Television Shopping Channel, the TV home shopping program arm of the JC
Penney Company until June 1991. Mr. Naughton was responsible for overseeing the
video production and cable distribution for the JC Penney and Shop Television
Network. Prior to Shop Television Network, Mr. Naughton served as VP/General
Merchandising Manager for the GEMCO division of Lucky Stores. From May 1970
until October 1986, Mr. Naughton worked for Lucky Stores, Inc. and its wholly
owned subsidiary Gemco Stores.
SCOTT CLAVERIE, Director and President of AMS Acquisition Corp. Mr.
Claverie will be directing the operations and marketing efforts of
ShopGoOnline.com. From June 1997 until June 1999, Mr. Claverie was Business
Operations Manager for Cal State University at Chico where he was responsible
for management and support of the support staff for the university's voice
network. From February 1994 until June 1996, he was a branch manager for
Computer Telephone Corp. Computer Telephone Corp. markets a large variety of
telecommunication services and was responsible for managing a significant
portion of Pacific Bell's customer base. From September 1991 to February 1994,
Mr. Claverie was an account executive for MCI Telecommunications, where he
marketed communication products and services to the business community. From
June 1987 through August 1990, he was Advertising Director of the Chico News &
Review, where he supervised and coordinated activities of sales personnel in the
display and classified departments. From May 1981 through September 1986, Mr.
Claverie was a retail manager for Gemco Stores, managing the operations for the
fine jewelry and camera department.
4
<PAGE>
JIM CANNON, Director of Operations. Mr. Cannon has over 30 years of
experience in the hospitality, lodging, and food and beverage industry. A
graduate of Cornell University with a Bachelor's of Science degree in Business
and Food Technology. He is an eleven-year veteran of the Days Inn organization,
serving as Vice President of Franchise Operations. From September 1998 until
April 1999, Mr. Cannon was with ShoLodge Franchise Systems. From March 1997
until September 1998, Mr. Cannon was Director of Franchise Sales for Country &
Hearth Inns in Atlanta, Georgia. From August 1990 through August 1996, Mr.
Cannon was National Director of Franchise Development for Hospitality
International, Inc. in Atlanta, Georgia. During 1990 and 1991, Mr. Cannon
worked in sales of Friendship Inn and Econolodge franchises for Econolodges of
America, Inc. in North Bergen, New Jersey. In addition, Mr. Cannon's past
experience includes senior level executive positions with Columbia Sussex
Corporation, Inc. (a Holiday Inn Franchise Group), Days Inn or America, Inc and
other hotels and restaurants.
DR. MICHAEL ABELSON, Director. Dr. Abelson is President of Abelson &
Company, a firm he founded in 1986, which specializes in improving real estate
management and sales associate profitability. Dr. Abelson is also on the
faculty of Texas A&M University in the Department of Management, which he joined
in 1981.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE ELECTION OF THE NOMINEES NAMED ABOVE
RELATIONSHIPS AMONG DIRECTORS OR EXECUTIVE OFFICERS
There are no family relationships among any of the directors or
executive officers of the Company.
5
<PAGE>
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 1999, the Board met four times.
The Board does not have an audit committee, a compensation committee, or any
other committee performing the functions of such committees. During the fiscal
year ended December 31, 1999, all directors attended more than 75% of all the
meetings of the Board.
The Board does not have a nominating committee or a committee
performing the functions of a nominating committee. While there are no formal
procedures for shareholders to recommend nominations, the Board will consider
shareholder recommendations. Such recommendations should be addressed to Joseph
M. Naughton, the Company's President, at the Company's principal executive
offices.
COMPENSATION OF DIRECTORS
The Company's directors are not currently compensated for serving in
such capacity.
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
Name Age Positions
---- --- ---------
Joseph M. Naughton 57 Chairman, Chief Executive Officer, Director
Scott Claverie 40 Director; President of AMS Acquisition Corp.
Dba GoOn-line.com
Jim Cannon 66 Director; Director of Operations, Go Online
Kiosk Division; Secretary
Michael Abelson 52 Director
For information concerning the backgrounds of such officers,see
"Election of Directors" above.
6
<PAGE>
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Miller & McCollom has served as the Company's independent auditors for the
fiscal year ended December 31, 2000 and has been appointed by the Board
to continue as the Company's independent auditors for the Company's fiscal year
ending December 31, 2000. In the event that ratification of this selection of
auditors is not approved by a majority of the shares of Common Stock entitled
to vote at the Annual Meeting in person or by proxy, management will review its
future selection of auditors. A representative of Miller & McCollom is expected
to be available by telephone at the Annual Meeting. The representative will
have an opportunity to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF
THE APPOINTMENT OF MILLER & MCCOLLOM AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2000
PROPOSAL NO. 4
RATIFICATION OF THE 2000 STOCK OPTION PLAN
On October 3, 2000, the Board of Directors unanimously approved the 2000
Stock Option Plan (the "Plan"), a copy of which is included with this Proxy
Statement. Assuming a quorum is present, the Plan will become effective if it
receives the affirmative vote of a majority of the shares represented at the
Annual Meeting and entitled to vote. In the event that ratification of the Plan
is not approved by a majority of the shares of Common Stock entitled to vote at
the Annual Meeting, management will revise the Plan and submit it for
shareholder approval at a future meeting.
7
<PAGE>
Purpose of the Plan. The purpose of the Plan is to provide the Company
and its subsidiaries with a means to attract and retain individuals eligible to
participate in the Plan. Additionally, the Plan will allow the Company to
provide incentive stock option compensation opportunities that are competitive
with other similar companies. Lastly, the Plan will provide individuals with
additional incentive and reward opportunities designed to enhance the Company's
long-term profitable growth.
Amount of Common Stock Subject to the Plan. The aggregate number of
shares of Common Stock that may be awarded under the Plan is limited to
5,000,000 shares for the fiscal year ending December 31, 2000, and 5% of the
issued and outstanding stock on each plan year thereafter, subject to
adjustment based on the recapitalization or reorganization of the Company as
described in the Plan. If the Plan is ratified by the shareholders, the Company
will be required at all times to reserve a sufficient number of shares of Common
Stock to meet the requirements of the Plan.
Administration of the Plan. The Plan is to be administered by the Board
of Directors of the Company.
Options that may be granted under the Plan include incentive stock options
and options that do not constitute incentive stock options. The Board of
Directors will have the sole authority to determine the type of award, or
combinations thereof, which is best suited to the circumstances of the
particular individual. Additionally, the Board of Directors will be entitled to
determine certain specific provisions of each option, particularly with respect
to exercise price, term and vesting.
Participants. The Board of Directors Committee will have the sole
authority to determine and designate the employees who will receive awards under
the Plan. Awards may be granted to the same person on one or more occasions, and
may include combinations of the different types of awards available under the
Plan.
8
<PAGE>
Exercise Price of Options. The exercise price of each incentive stock
option granted under the Plan shall be determined by the Board of Directors and
shall in no event be less than the Fair Market Value (as defined in the Plan)
of Common Stock on the date the option is granted (or 110% of Fair Market
Value in the case of a person who owns, directly or indirectly, more than 10%
of the total combined voting power of all classes of the Company's stock).
The exercise price of each option that does not constitute an incentive stock
option granted under the Plan will be determined by the Committee but shall not
be less than 50% of the Fair Market Value. The closing price of the Common
Stock on October 13, 2000 was $0.15 per share.
Term and Exercise of Options. The term of each option will be as
specified by the Board of Directors on the date of grant but not for longer than
10 years. Options shall be exercisable in whole or in such installments and at
such times as the Board of Directors may determine; however, no option will be
exercisable earlier than six months from the date of grant. Each option will
specify the effect of the termination of employment on the exercise of the
option.
Federal Income Tax Consequences. The following is merely a summary of
the general effect of federal income taxation upon an optionee and the Company
with respect to the grant and exercise of options awarded under the Plan. This
summary does not purport to be complete and does not discuss the tax
consequences arising in the context of the optionee's death or the income tax
laws of any state, municipality or foreign country in which the optionee's
income may be taxable.
INCENTIVE STOCK OPTIONS. Under current applicable law, no taxable
income is recognized by an optionee at the granting, or upon the exercise of,
an incentive stock option. However, the exercise is an adjustment item for
alternative minimum tax purposes and may subject the optionee to the
alternative minimum tax. Following a disposition of the shares underlying the
option more than two years after the grant of the option and one year after the
exercise thereof, any gain or loss is treated as long-term capital gain or loss.
The maximum federal rate of tax on net capital gains on shares held more than 12
months is generally 20%. Generally, capital losses are allowed in full against
capital gains and up to $3,000 of other income. If the previously described
holding periods are not satisfied, the optionee will recognize ordinary income
on the disposition equal to the difference between the exercise price and the
price received on the disposition. Any such gain or loss in excess of the amount
of ordinary income is treated as long-term or short-term capital gain or loss,
depending on the holding period. Unless the provisions of Section 162(m) of the
Internal Revenue Code restrict the Company, it is entitled to a deduction in the
same amount as and at the time the optionee recognizes ordinary income.
9
<PAGE>
OPTIONS NOT CONSTITUTING INCENTIVE STOCK OPTIONS. Upon the granting of
an option which does not constitute an incentive stock option, an optionee does
not recognize any taxable income. However, upon exercise, the optionee
recognizes taxable income, generally measured as the excess of the fair market
value at the time of exercise over the exercise price. Such taxable income
recognized by an employee of the Company is subject to applicable tax
withholding. Unless the provisions of Section 162(m) of the Internal Revenue
Code restrict the Company, it is entitled to a deduction in the same amount as
and at the time the optionee recognizes ordinary income. To the extent not
recognized as ordinary income above, any difference between the sales price and
the exercise price is treated as long-term or short-term capital gain or loss,
depending on the holding period. The maximum federal rate of tax on net capital
gains on shares held more than 12 months is generally 20%. However, lower rates
may apply depending upon when the stock is acquired and the optionee's
applicable income tax bracket. Generally, capital losses are allowed in full
against capital gains and up to $3,000 of other income.
Termination or Amendment of the Plan. The Board of Directors may
terminate or amend the Plan; provided that no such termination or amendment
may, without prior consent, impair the rights of any holder with respect to
an award granted prior to the time of such termination or amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION
AND APPROVAL OF THE 2000 STOCK OPTION PLAN
EXECUTIVE COMPENSATION AND RELATED INFORMATION
Summary Compensation Table
The following summary compensation table shows certain compensation
information for services rendered in all capacities for the four fiscal years
ended December 31, 1996, 1997, 1998 and 1999. Other than as set forth herein,
no executive officer's salary and bonus exceeded $100,000 in any of the
applicable years. The following information includes the dollar value of base
salaries, bonus awards, the number of stock options granted and certain other
compensation, if any, whether paid or deferred.
10
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
-------------------------- -------------------------------
Awards Payouts
--------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SECURITIES
OTHER ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
SALARY BONUS COMPENSATION STOCK Awards OPTIONS PAYOUTS COMPENSATION
NAME AND PRINCIPAL YEAR ($) ($) ($) ($) SARS (#) ($) ($)
POSITION
Joseph Naughton 1999 $96,000 -0- -0- -0- -0- -0- -0-
(President, CEO) (12/31)
1998 96,000 -0- -0- - 0 - - 0 - -0- -0-
(12/31)
1997 96,000 -0- -0- -0- -0- -0- -0-
(12/31)
1996 96,000 -0- -0- -0- -0- -0- -0-
(12/31)
Jim Cannon (1) 1999 40,000 -0- -0- -0- -0- -0- -0-
(12/31)
1998 -0- -0- -0- - 0 - - 0 - -0- -0-
(12/31)
Michael English (2) 1996 $48,000 -0- -0- -0- -0- -0- -0-
(12/31)
</TABLE>
(1) Mr. Cannon commenced his employment with the Company in 1999.
(2) Mr. English was President of the Company until his resignation during 1996.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<S> <C> <C> <C> <C>
NUMBER OF SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS/SAR'S GRANTED
OPTIONS/SAR'S GRANTED TO EMPLOYEES IN FISCAL EXERCISE OF BASE PRICE
(#) YEAR ($/SH) EXPIRATION DATE
NAME
Joseph M. Naughton -0- -- -- --
------------------ ---------------------- ---------------------- ----------------------- ---------------
James Cannon -0- -- -- --
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<S> <C> <C> <C> <C>
NUMBER OF UNEXCERCISED
SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-
OPTIONS/SARS AT FY-END (#) MONEY OPTION/SARS
SHARES ACQUIRED ON EXERCISABLE/UNEXERCISABLE AT FY-END ($)
NAME EXERCISE (#) VALUE REALIZED ($) EXERCISABLE/UNEXERCISABLE
------------------- ------------------ -------------------------- -----------------------------
Joseph M. Naughton -0- -0- - 0 - --
James Cannon -0- -0- - 0 - --
</TABLE>
Employment Agreements
Effective May 1, 1999 we entered into a consulting agreement with Michael
Abelson, one of our directors, whereby Mr. Abelson was engaged to assist in the
creation of our real estate website for our ShopGoOnline.com operating division.
The term of the agreement is for one year but can be terminated by us with or
without cause with 30 days notice. Compensation to Mr. Abelson is summarized as
follows:
* Monthly cash consulting fee of $5,000;
* Quarterly bonus equal to 15% of the gross revenues earned by us through our
real estate web site developed by Mr. Abelson; and
* options to acquire 25,000 shares of stock for each $500,000 in gross
revenues attributable to the real estate web site developed by us.
Effective April 12, 1999 we entered into an employment agreement with James
Cannon. The agreement is for a term of one year but is subject to termination
by us for cause. Both we and Mr. Cannon have the right to terminate the
agreement after giving the other party thirty days notice. In the event that
the agreement is terminated by us without cause, Mr. Cannon will be entitled to
compensation earned computed pro-rata up to the date of termination. Mr.
Cannon's compensation during the term of the agreement will be as follows:
* Base salary of $60,000 per year;
* Quarterly bonus of 20% of the net advertising revenues of the Community
Marquee Division generated as a result of Mr. Cannon's direct efforts
during the previous quarter;
* Alternative quarterly bonus equal to 25% of the net advertising revenues of
the Community Marquee Division generated by parties other than Mr. Cannon;
and
* Options to purchase 25,000 shares of our common stock for each twenty-
five kiosks shipped up to a maximum of 150 kiosks. The exercise price of
the options shall be equal to 60% of the closing bid price of our common
stock on the last business day of the month in which Mr.Cannon becomes
eligible.
The Company has also entered into an employment agreement with Andrew Hart,
President of Digital West, who remains as President of Digital West. Mr. Hart's
employment agreement provides for a term of three years with an annual salary
equal to 2% of Digital West's gross income up to $15,000,000 and 1.25% of
Digital Wests annual sales in excess of $15,000,000. For the first six months,
Mr. Hart will receive a guaranteed monthly salary against those percentages of
$15,000 per month, with $12,000 guaranteed subsequent to such six month period.
Mr. Hart will also receive a cash bonus equal to 15% of the total cumulative
EBITDA of Digital West less $825,000 and any and all funds advanced to Digital
West by the Company. Mr. Hart will also receive stock options to purchase
common stock as follows: At the end of year one, Mr. Hart will become eligible
to purchase 250,000 shares of stock at $0.22 per share; at the end of year two
Mr. Hart will become eligible to purchase an additional 200,000 shares of stock
at $0.40 per share; and at the end of year three Mr. Hart will become eligible
to purchase an additional 200,000 shares of stock at $0.80 per share. All
options granted are exercisable for two years from the date of grant.
12
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the common stock and series A preferred stock of the Company
as of August 31, 2000 by:
* each person or entity known to own beneficially more than 5% of the common
stock or 5% of the preferred stock;
* each of the Company's directors;
* each of the Company's named executive officers; and
* all executive officers and directors of the Company as a group.
13
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner (1) Beneficial Ownership Class
--------------- --------------------- --------------------- -----------
<S> <C> <C> <C>
Joseph M. Naughton 8,047,125 (2) 9.4%
Common Stock
Preferred Stock 0 0.0%
Common Stock James M. Cannon 1,008,000 (3) 1.4%
Preferred Stock 0 0.0%
Common Stock Scott Claverie 937,500 1.1%
Preferred Stock 0 0.0%
Common Stock Michael Abelson 485,000 (4) 0.7%
Preferred Stock 0 0.0%
Preferred Stock Nicanor Concepcion & Fahma
Concepcion, Joint Tenants
624 Park Ave. 130,000 26.0%
Norton, VA 24273
Preferred Stock Avelino Rosales
23 White Drive 63,333 12.7%
Cedarhurst, NY 11516
Preferred Stock Bill Tillson
14623 Deervale Place 40,000 8.0%
Sherman Oaks, CA 91403
Common Stock All Officers and Directors
as a Group (4 persons) 10,477,625 (2,3,4) 12.6%
===================== ========
</TABLE>
1. Except as otherwise set forth, the address for each of these shareholders
is c/o Go Online Networks Corporation, 5681 Beach Boulevard, Suite 101/100,
Buena Park, CA 90621.
2. Mr. Naughton's shares are held through several different entities and
trusts, as to which Mr. Naughton is the primary beneficial owner.
3. Reflects 8,000 shares which Mr. Cannon owns director and up to 1,000,000
shares which Mr. Cannon could obtain upon the exercise of a warrant to purchase
shares of common stock at $.20 per share.
4. In addition, Mr. Abelson will receive options to purchase 25,000 shares
of common stock for each $500,000 in gross revenues attributable to the real
estate website developed by us.
14
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Joseph M. Naughton, our Chief Executive Officer has made several loans to
Go Online. As of December 31, 1998 and as of December 31, 1999 the amounts
payable to Mr. Naughton for advances totaled $130,242 and $124,222
respectively. In addition there is unpaid compensation due to him of $48,000
for 1996, $61,250 for 1997, $70,485 for 1998 and $72,750 for 1999. The balances
payable for compensation to Mr. Naughton totaled $179,735 at December 31, 1998
and $252,485 at December 31, 1999. The balances payable to Mr. Naughton are
uncollateralized, bear no interest and are payable on demand. This loan is on
terms which are substantially better than could be obtained from third parties.
Effective February 26, 1999 we entered into a joint venture agreement with
Scott Claverie whereby 25,000 shares of AMS Acquisition Corp. were transferred
(25% ownership of AMS) to Mr. Claverie. We also granted Mr. Claverie warrants
to acquire an additional 26,000 shares of AMS at $1.00 per share following the
end of the first profitable quarter of operations, but in no event later than
twelve months after the February 26, 1999 agreement date. Effective April 19,
1999 we exchanged 1,250,000 restricted shares of our common stock for the
warrants. These 1,250,000 shares were recorded at $.275 per share, one half of
the market value of free trading shares of our common stock on April 19, 1999,
and recorded as an expense totaling $343,750. As a part of the joint venture
agreement, we agreed to provide AMS with $25,000 for working capital. Mr.
Claverie transferred to AMS all equipment, intellectual property, technology
associated with the individuals internet-based business. These transactions
were all on terms as fair as those obtainable from third parties.
15
<PAGE>
SHAREHOLDER PROPOSALS
REQUIREMENTS FOR SHAREHOLDER PROPOSALS TO BE BROUGHT BEFORE AN ANNUAL
MEETING. For shareholder proposals to be included in an annual meeting, the
shareholder must have given timely notice thereof in writing to the Secretary of
the Company. To be timely for the 2001 Annual Meeting, a shareholder's notice
must be delivered to or mailed and received by the Secretary of the Company at
the principal executive offices of the Company, between January 1, 2001 and
April 15, 2001. A shareholder's notice to the Secretary must set forth as to
each matter the stockholder proposed to bring before the annual meeting (i) a
brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, (ii)
the name and record address of the shareholder proposing such business, (iii)
the class and number of shares of the Company which are beneficially owned by
the shareholder, and (iv) any material interest of the shareholder in such
business.
REQUIREMENTS FOR SHAREHOLDER PROPOSALS TO BE CONSIDERED FOR INCLUSION IN
THE COMPANY'S PROXY MATERIALS. Shareholder proposals submitted pursuant to Rule
14a-8 under the Exchange Act and intended to be presented at the Company's 2001
Annual Meeting of Shareholders must be received by the Company not later than
April 15, 2001 in order to be considered for inclusion in the Company's proxy
materials for that meeting.
1999 ANNUAL REPORT TO SHAREHOLDERS
Included with this Proxy Statement is the Company's 1999 annual report
on Form 10-KSB (the "Annual Report") for the fiscal year ended December 31,
1999. The Company will provide, without charge, to each person solicited upon
written request, an additional copy of the Annual Report and a copy of the
exhibits to the Annual Report as required to be filed with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended.
For additional copies, please write to Joseph M. Naughton, President of the
Company, at 5681 Beach Boulevard, Suite 101, Buena Park, California 90621.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the SEC initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors and greater than
ten percent shareholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file. To the Company's knowledge,
based solely on the review of copies of such reports furnished to the Company
and written representations that no other reports were required, the Company has
been informed that all Section 16(a) filing requirements applicable to the
Company's officers, directors and greater than ten percent shareholders were
complied with.
16
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other business which will be presented
at the Annual Meeting. If any other business is properly brought before the
Annual Meeting, it is intended that proxies in the enclosed form will be voted
in respect thereof in accordance with the judgments of the person voting the
proxies.
It is important that the proxies be returned promptly and that your
shares be represented. Stockholders are urged to mark, date, execute and
promptly return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors
By: /s/ Joseph M. Naughton
--------------------------------------
Joseph M. Naughton
Chief Executive Officer, President and
Chairman of the Board
Buena Park, California
October 19, 2000
17
<PAGE>
Appendix A
GO ONLINE NETWORKS CORPORATION
a Delaware corporation
2000 STOCK OPTION PLAN
1. Name, Effective Date and Purpose.
------------------------------------
1.1 This Plan document is intended to implement and govern two separate
stock option plans of GO ONLINE NETWORKS CORPORATION (the "Company"): The
Incentive Stock option plan ("Plan A") and the Nonstatutory Stock Option Plan
("Plan B"). Plan A provides for the granting of options that are intended to
qualify as incentive stock options ("Incentive Stock Options") within the
meaning of Section 422A(b) of the Internal Revenue Code (the "Code"), as
amended. Plan B provides for the granting of options that are not intended to
so qualify. Unless specified otherwise, all the provisions of this Plan relate
equally to both Plan A and Plan B and are condensed for convenience into one
Plan document.
1.2 Plan A and Plan B are each established effective as of November 15, 2000
or upon approval by the stockholders of the Company. The purpose of Plan A and
Plan B (sometimes together referred to as the "Plan" or this "Plan") is to
promote the growth and general prosperity of the Company and its Affiliated
Companies. This Plan will permit the Company to grant options ("Options") to
purchase shares of its common stock ("Common Stock"). The granting of Options
will help the Company attract and retain the best available persons for
positions of substantial responsibility, and will provide certain key employees
with an additional incentive to contribute to the success of the Company and its
Affiliated Companies. For purposes of this Plan, the term "Affiliated
Companies" shall mean any component member of a controlled group of
corporations, as defined under Code Section 1563, in which the Company is also a
component member.
2. Administration.
--------------
2.1 The Plan shall be administered solely by the Board of Directors
(the "Board"). All decisions, determinations and interpretations of the Board
shall be final and binding on all Optionees.
2.2 The Board shall have sole authority, in its absolute discretion, to
determine which of the eligible persons of the Company and its Affiliated
Companies shall receive Options ("Optionees"), and, subject to the express
provisions and restrictions of this Plan, shall have sole authority, in its
absolute discretion, to determine the time when Options shall be granted, the
terms and conditions of any Option other than those terms and conditions fixed
under this Plan, the number of shares which may be issued upon exercise of an
Option and the means of payment for such shares, and shall have authority to do
everything necessary or appropriate to administer the Plan.
2.3 Aggregate limitations with respect to all participants in the Plan:
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<PAGE>
2.3.1 The Board shall not grant Options covering more than the number
of Available Shares of Common Stock to any employee in any Plan Year.
2.4 Aggregate limitations with respect to the participation of
directors and officers in the Plan:
2.4.1 No more than the number of Available Shares of Common Stock may
be optioned and sold to directors of the Company under Plan A and Plan B
considered in the aggregate in any Plan Year.
2.4.2 No more than the Available Shares of Common Stock may be optioned
and sold to non-director officers of the Company under Plan A and Plan B
considered in the aggregate in any Plan Year.
2.5 Definitions:
2.5.1 Available Shares: Those shares specified in Section 4.1 as
available for issuance pursuant to this Plan in any Plan Year.
2.5.2 Officer: The chief executive officer, president, chief financial
officer, chief accounting officer, any vice president in charge of a principal
business function (such as sales, administration, finance, or legal) and any
other person who performs similar policy-making functions for the Company.
2.5.3 Parent Corporation: A corporation as defined in Section 425(e) of
the Code.
2.5.4 Plan Year: Any twelve (12) month period (or shorter period during
the final year of this Plan) commencing October 1 during the term of this Plan.
2.5.5 Restricted Shareholder: An individual who, at the time an Option
is granted under either Plan A or Plan B, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the employer
corporation or of its Parent Corporation or Subsidiary Corporation, with stock
ownership to be determined in light of the attribution rules set forth in
Section 425(d) of the Code.
2.5.6 Subsidiary Corporation: A corporation as defined in Section
425(f) of the Code.
3. Eligibility.
-----------
A-2
<PAGE>
3.1 Plan A: The Board may, in its discretion, grant one or more Options
under Plan A to any key employee of the Company or its Affiliated Companies,
including any employee who is a director of the Company or of any of its
Affiliated Companies presently existing or hereinafter organized or acquired.
Such Options may be granted to one or more such employees without being granted
to other eligible employees, as the Board may deem fit.
3.2 Plan B: The Board may, in its discretion, grant one or more options
under Plan B to any key management employee, any employee or non-employee
director of the Company or its Affiliated Companies, including any employee who
is a director of the Company or of any of its Affiliated Companies presently
existing or hereinafter organized or acquired, or any person who performs
consulting or other services for the Company or its Affiliated Companies and who
is designated by the Board as eligible to participate in Plan B. Such Options
may be granted to one or more such persons without being granted to other
eligible persons, as the Board may deem fit.
4. Stock to be Optioned.
-----------------------
4.1 The aggregate number of shares which may be optioned and sold under
Plan A and Plan B in any Plan Year shall not exceed the following amounts of the
shares of Authorized Common Stock of the Company:
Plan Year Available Shares
--------- ----------------
December 31, 2000 5,000,000
----------------- ---------
Each subsequent Plan Year beginning,
January 1, 2001 5% of outstanding stock on December 31 of the year preceding
--------------- ------------------------------------------------------------
each such Plan Year
----------------------
The foregoing constitutes an absolute cumulative limitation on the total number
of shares, that may be optioned under both Plan A and Plan B in any Plan Year.
Therefore, at any particular date during a Plan Year, the maximum aggregate
number of shares which may be optioned under either Plan A or Plan B or both is
equal to the Available Shares minus the number of shares previously optioned and
sold under both Plan A and Plan B during that Plan Year. All shares to be
optioned and sold under either Plan A or Plan B may be either authorized but
unissued shares or shares held in the treasury.
4.2 Shares of Common Stock that: (i) are repurchased by the Company
after issuance hereunder pursuant to the exercise of an Option, or (ii) are not
purchased by the Optionee prior to the expiration or termination of the
applicable Option, shall again become available to be covered by Options to be
issued hereunder and shall not, as of the effective date of such repurchase or
expiration, be counted as covered by an outstanding Option for purposes of the
above-described maximum number of shares which may be optioned hereunder.
A-3
<PAGE>
5. Option Price. The Option Price for shares of Common Stock to be
-------------
issued under Plan A shall be 100%, and under Plan B between 50% to 100%, of the
fair market value of such shares on the date on which the Option covering such
shares is granted by the Board (or the Committee, if authorized by the Board),
except that if on the date on which such Option is granted the Optionee is a
Restricted Shareholder, then such Option Price for Options granted under Plan A
shall be 110% of the fair market value of the shares of Common Stock subject to
the Option on the date such Option is granted by the Board. The fair market
value of the shares of Common Stock for all purposes of this Plan is to be
determined by the Board in its sole discretion, exercised in good faith.
6. Term of Plan. Plan A and Plan B shall become effective on
--------------
November 15, 2000 or upon approval by the shareholders of the Company. Both
Plan A and Plan B shall continue in effect until December 31, 2009 unless
terminated earlier by action of the Board. No Option may be granted hereunder
after December 31, 2009.
7. Exercise of Option. Subject to the actions, conditions and/or
--------------------
limitations set forth in this Plan document and/or any applicable Stock Option
Agreement entered into hereunder, Options granted under this Plan shall be
exercisable in accordance with the following rules:
7.1 No Option granted under Plan A may be exercised in whole or in part
until six (6) months after the date on which the Option is granted by the Board,
or by the Committee if so authorized (hereinafter the "Option Grant Date").
7.2 Subject to the specific provisions of this Section 7, Options shall
become exercisable at such times and in such installments (which may be
cumulative) as the Board shall provide in the terms of each individual Option;
provided, however, each Option granted under the Plan shall become exercisable
in installments of not more than 20% of the number of shares covered by such
Option each year from the Option Grant Date; and provided, further, that by a
resolution adopted after an Option is granted the Board may, on such terms and
conditions as it may determine to be appropriate and subject to the specific
provisions of this section 7, accelerate the time at which such Option or
installment thereof may be exercised. For purposes of this Plan, any accrued
installment of an Option granted hereunder shall be referred to as an "Accrued
Installment."
7.3 Subject to the specific restrictions contained in this Section 7,
an Option may be exercised when Accrued Installments accrue, as provided in the
terms under which such Option was granted, for a period of up to ten (10) years
from the Option Grant Date. In no event shall any Option be exercised on or
after the expiration of said maximum applicable period, regardless of the
circumstances then existing (including but not limited to the death or
termination of employment of the Optionee).
7.4 The Board shall fix the expiration date of the Option (the "Option
Expiration Date") at the time the Option grant is authorized.
8. Rules Applicable to Certain Dispositions.
--------------------------------------------
A-4
<PAGE>
8.1 Notwithstanding the foregoing provisions of Section 7, in the event
the Company or the shareholders of the Company enter into an agreement to
dispose of all or substantially all of the assets or capital stock of the
Company by means of a sale, merger, consolidation, reorganization, liquidation,
or otherwise, an Option shall become immediately exercisable with respect to the
full number of shares subject to that Option during the period commencing as of
the later of (i) date of execution of such agreement or (ii) six (6) months
after the Option Grant Date, and ending as of the earlier of:
8.1.1 the Option Expiration Date; or
8.1.2 the date on which the disposition of assets or capital stock
contemplated by the agreement is consummated.
The exercise of any Option made exercisable solely by reason of this Section 8.1
shall be conditioned upon the consummation of the disposition of assets or stock
under the above referenced agreement. Upon the consummation of any such
disposition of assets or stock, the Plan and any unexercised Options issued
hereunder (or any unexercised portion thereof) shall terminate and cease to be
effective.
8.2 Notwithstanding the foregoing, in the event that any such agreement
shall be terminated without consummating the disposition of said stock or
assets, any unexercised non-vested installments that had become exercisable
solely by reason of the provisions of section 8.1 shall again become non-vested
and unexercisable as of said termination of such agreement.
8.3 Notwithstanding the provisions set forth in Section 8.1, the Board
may, at its election and subject to the approval of the corporation purchasing
or acquiring the stock or assets of the Company (the "Surviving Corporation"),
arrange for the Optionee to receive upon surrender of Optionee's Option a new
option covering shares of the Surviving Corporation in the same proportion, at
an equivalent option price and subject to the same terms and conditions as the
old Option. For purposes of the preceding sentence, the excess of the aggregate
fair market value of the shares subject to such new option immediately after
consummation of such disposition of stock or assets over the aggregate option
price of such shares of the Surviving Corporation shall not be more than the
excess of the aggregate fair market value of all shares subject to the old
Option immediately before consummation of such disposition of stock or assets
over the aggregate Option Price of such shares of the Company, and the new
option shall not give the Optionee additional benefits which such Optionee did
not have under the old Option or deprive the Optionee of benefits which the
Optionee had under the old Option. If such substitution of options is
effectuated, the Optionee's rights under the old Option shall thereupon
terminate.
9. Mergers and Acquisitions.
--------------------------
A-5
<PAGE>
9.1 If the Company at any time should succeed to the business of
another corporation through a merger or consolidation, or through the
acquisition of stock or assets of such corporation, Options may be granted under
the Plan to option holders of such corporation or its subsidiaries, in
substitution for options or rights to purchase stock of such corporation held by
them at the time of succession. The Board shall have sole and absolute
discretion to determine the extent to which such substitute Options shall be
granted (if at all), the person or persons within the eligible group to receive
such substitute Options (who need not be all option holders of such
corporation), the number of Options to be received by each person, the Option
Price of such Option, and the terms and conditions of such substitute Options;
provided however, that the terms and conditions of the substitute Options shall
comply with the provisions of Section 425 of the Code, such that the excess of
the aggregate fair market value of the shares subject to such substitute Option
immediately after the substitution or assumption over the aggregate option price
of such shares is not more than the excess of the aggregate fair market value of
all shares subject to the substitution Option immediately before such
substitution or assumption over the aggregate option price of such shares, and
the substitution Option or the assumption of the old option does not give the
holder thereof additional benefits which he or she did not have under such old
option.
9.2 Notwithstanding anything to the contrary herein, no Option shall be
granted, nor any action taken, permitted or omitted, which could cause the Plan,
or any Options granted hereunder as to which Rule 16b-3 under the Securities
Exchange Act of 1934 may apply, not to comply with such Rule.
10. Termination of Employment.
----------------------------
10.1 In the event that the Optionee's employment, directorship or
consulting or other arrangement with the Company (or Affiliated Company) is
terminated for any reason other than death or disability, any unexercised
Accrued Installments of the Option granted hereunder to such terminated Optionee
shall expire and become unexercisable as of the earlier of:
10.1.1 the applicable Option Expiration Date; or
10.1.2 a date 30 days after such termination occurs, provided,
however, that the Board may, in the exercise of its discretion, extend said date
up to and including a date three months following such termination with respect
to Options granted under Plan A, or up to and including a date two years
following such termination with respect to Options granted under Plan B.
10.2 In the event that Optionee's employment, directorship or
consulting or other arrangement with the Company is terminated due to the death
or disability of the Optionee, any unexercised Accrued Installments of the
Option granted hereunder to such Optionee shall expire and become unexercisable
as of the earlier of:
10.2.1 the applicable Option Expiration Date; or
A-6
<PAGE>
10.2.2 the first anniversary of the date of death of such Optionee
(if applicable); or
10.2.3 the first anniversary of the date of the termination of
employment, directorship or consulting or other arrangement by reason of
disability (if applicable). Any such Accrued Installments of a deceased
Optionee may be exercised prior to their expiration by (and only by) the person
or persons to whom the Optionee's Option right shall pass by will or by the laws
of descent and distribution, if applicable, subject, however, to all the terms
and conditions of this Plan and the applicable Stock Option Agreement governing
the exercise of Options granted hereunder.
10.3 For purposes of this section 10, an Optionee shall be deemed
employed by the Company (or Affiliated Company) during any period of leave of
absence from active employment as authorized by the Company (or Affiliated
Company).
11. Exercise of Options.
---------------------
11.1 An Option shall be deemed exercised when written notice of such
exercise has been given to the Company at its principal business office by the
person entitled to exercise the Option and full payment in cash or cash
equivalents (or with shares of Common Stock pursuant to section 14) for the
shares with respect to which the Option is exercised has been received by the
Company. The Board may cause the Company to give or arrange for financial
assistance (including without limitation direct loans, with or without interest,
secured or unsecured, or guarantees of third party loans) to an Optionee for the
purpose of providing funds for the purchase of shares pursuant to the exercise
of Options, when in the judgment of the Board such assistance is in the best
interests of the Company, is consistent with the Certificate of Incorporation
and Bylaws of the Company and applicable laws, and will permit the shares to be
fully paid and nonassessable when issued.
11.2 An Option may be exercised in accordance with this section 11 as
to all or any portion of the shares covered by an Accrued Installment of the
Option from time to time during the applicable Option period, but shall not be
exercisable with respect to fractions of a share.
11.3 As soon as practicable after any proper exercise of an Option in
accordance with the provisions of this Plan, the Company shall deliver to the
Optionee at the main office of the Company, or such other place as shall be
mutually acceptable, a certificate or certificates representing the shares of
Common Stock as to which the Option has been exercised. The time of issuance
and delivery of the Common Stock may be postponed by the Company for such period
as may be required for it with reasonable diligence to comply with any
applicable listing requirements of any national or regional securities exchange
and any law or regulation applicable to the issuance and delivery of such
shares.
A-7
<PAGE>
12. Authorization to Issue Options and Shareholder Approval. Unless in
-------------------------------------------------------
the judgment of counsel to the Company such permit is not necessary with respect
to particular grants, Options granted under the Plan shall be conditioned upon
the Company obtaining any required permit from the California Department of
Corporations and/or other appropriate governmental agencies, free of any
conditions not acceptable to the Board, authorizing the Company to grant such
Options, provided, however, such condition shall lapse as of the effective date
of issuance of such permit(s) in a form to which the Company does not object
within sixty (60) days. The grant of Options under the Plan also is conditioned
on approval of the Plan by the vote or consent of the holders of a majority of
the outstanding shares of the Company's Common Stock and no Option granted
hereunder shall be effective or exercisable unless and until the Plan has been
so approved.
13. Limit on Value of Optioned Shares. The aggregate fair market value
---------------------------------
(determined as of the Option Grant Date) of the shares of Common Stock to which
Options granted under Plan A are exercisable for the first time by any employee
of the Company during any calendar year under all incentive stock option plans
of the Company and its Affiliated Companies shall not exceed $100,000. The
limitation imposed by this section 13 shall not apply to Options granted under
Plan B.
14. Payment of Exercise Price with Company Stock. The Board may
--------------------------------------------------
provide that, upon exercise of the Option, the Optionee may elect to pay for all
or some of the shares of Common Stock underlying the Option with shares of
Common Stock of the Company previously acquired and owned at the time of
exercise by the Optionee, subject to all restrictions and limitations of
applicable laws, rules and regulations, including Section 425(c)(3) of the Code,
and provided that the Optionee will make representations and warranties
satisfactory to the Company regarding his or her title to the shares used to
effect the purchase, including without limitation representations and warranties
that the Optionee has good and marketable title to such shares free and clear of
any and all liens, encumbrances, charges, equities, claims, security interests,
options or restrictions, and has full power to deliver such shares without
obtaining the consent or approval of any person or governmental authority other
than those which have already given consent or approval in a form satisfactory
to the Company. The equivalent dollar value of the shares used to effect the
purchase shall be the fair market value of the shares on the date of the
purchase as determined by the Board in its sole discretion, exercised in good
faith.
15. Stock Option Agreements. The terms and conditions of Options
-------------------------
granted under the Plan shall be evidenced by a Stock Option Agreement
(hereinafter referred to as the "Agreement") executed by the Company and the
person to whom the Option is granted. Each agreement shall contain the
following provisions:
15.1 A provision fixing the number of shares which may be issued upon
exercise of the Option;
15.2 A provision establishing the Option exercise price per share;
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<PAGE>
15.3 A provision establishing the times and the installments in which
Options may be exercised, provided, however, such times and installments shall
not be more than 20% of the number of shares covered by such Option each year
from the Option Grant Date;
15.4 A provision incorporating therein this Plan by reference;
15.5 A provision clarifying which Options are intended to be Incentive
Stock Options under Plan A and which are intended to be nonstatutory stock
options under Plan B;
15.6 A provision fixing the maximum duration of the Option as not more
than five (5) years from the Option Grant Date for Options granted under Plan A
and not more than ten (10) years from the Option Grant Date for Options granted
under Plan B;
15.7 Such representations and warranties by the Optionee as may be
required by section 25 of this Plan or as may be required by the Board in its
discretion;
15.8 Any other restriction (in addition to those established under this
Plan) as may be established by the Board with respect to the exercise of the
Option, the transfer of the Option, and/or the transfer of the shares purchased
by exercise of the Option, provided that such restrictions are not in conflict
with this Plan; and
15.9 Such other terms and conditions consistent with this Plan as may
be established by the Board.
16. Taxes, Fees and Expenses. The Company shall pay all original issue
------------------------
and transfer taxes (but not income taxes, if any) with respect to the grant of
Options and/or the issue and transfer of shares pursuant to the exercise of such
Options, and all other fees and expenses necessarily incurred by the Company in
connection therewith, and will from time to time use its best efforts to comply
with all laws and regulations which, in the opinion of counsel for the Company,
shall be applicable thereto.
17. Withholding of Taxes. The grant of Options hereunder and the
----------------------
issuance of Common Stock pursuant to the exercise of such Options is conditioned
upon the Company's reservation of the right to withhold, in accordance with any
applicable law, from any compensation payable to the Optionee any taxes required
to be withheld by federal, state and local law as a result of the grant or
exercise of any such Option.
18. Amendment or Termination of the Plan.
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A-9
<PAGE>
18.1 The Board may amend this Plan from time to time in such respects
as the Board may deem advisable, provided, however, that no such amendment shall
operate to (i) affect adversely an Optionee's rights under this Plan with
respect to any Option granted hereunder prior to the adoption of such amendment,
except as may be necessary, in the judgment of counsel to the Company, to comply
with any applicable law, (ii) increase the maximum aggregate number of shares
which may be optioned and sold under the Plan (unless shareholders approve such
increase), (iii) change the manner of determining the option exercise price,
(iv) change the classes of persons eligible to receive Options under the Plan,
or (v) extend the maximum duration of the Option or the Plan.
18.2 The Board may at any time terminate this Plan. Any such
termination of the Plan shall not, without the written consent of the Optionee,
alter the terms of Options already granted, and such Options shall remain in
full force and effect as if this Plan had not been terminated.
19. Options Not Transferable. Options granted under this Plan may not
-------------------------
be sold, pledged, hypothecated, assigned, encumbered, gifted or otherwise
transferred or alienated in any manner, either voluntarily or involuntarily by
operation of law, other than by will or the laws of descent of distribution, and
may be exercised during the lifetime of an Optionee only by such Optionee.
20. No Restrictions on Transfer of Stock. Common Stock issued pursuant
------------------------------------
to the exercise of an Option granted under this Plan (hereinafter "Optioned
Stock"), or any interest in such Optioned Stock, may be sold, assigned, gifted,
pledged, hypothecated, uncumbered or otherwise transferred or alienated in any
manner by the holder(s) thereof, subject, however, to any representations or
warranties requested under section 25 of this Plan and also subject to
compliance with any applicable federal, state or other local law, regulation or
rule governing the sale or transfer of stock or securities.
21. Reservation of Shares of Common Stock. The Company, during the
-----------------------------------------
term of this Plan, shall at all times reserve and keep available such number of
shares of its Common Stock sufficient to satisfy the requirements of the Plan.
22. Restrictions on Issuance of Shares. The Company, during the term
------------------------------------
of this Plan, shall use its best efforts to obtain from the appropriate
regulatory agencies any requisite authorization to grant Options or issue and
sell such number of shares of its Common Stock as necessary to satisfy the
requirements of the Plan. The inability of the Company to obtain from any such
regulatory agency having jurisdiction thereof the authorization deemed by the
Company's counsel to be necessary to the lawful grant of Options or the issuance
and sale of any shares of its stock hereunder or the inability of the Company to
confirm to its satisfaction that any grant of Options or issuance and sale of
any shares of such stock will meet applicable legal requirements shall relieve
the Company of any liability in respect of the non-issuance or sale of such
stock as to which such authorization or confirmation have not been obtained.
A-10
<PAGE>
23. Notices. Any notice to be given to the Company pursuant to the
-------
provisions of this Plan shall be addressed to the Company in care of its
Secretary at its principal office, and any notice to be given to a person to
whom an Option is granted hereunder shall be addressed to him or her at the
address given beneath his or her signature on his or her Stock Option Agreement,
or at such other address as such person or his or her transferee (upon the
transfer of Optioned Stock) may hereafter designate in writing to the Company.
Any such notice shall be deemed duly given when enclosed in a properly sealed
envelope or wrapper addressed as aforesaid, registered or certified, and
deposited, postage and registry or certification fee prepaid, in a post office
or branch post office regularly maintained by the United States Postal Service.
It should be the obligation of each Optionee and each transferee holding
optioned stock to provide the Secretary of the Company, by letter mailed as
provided hereinabove, with written notice of his or her correct mailing address.
24. Adjustments Upon Changes in Capitalization. If the outstanding
----------------------------------------------
shares of Common Stock of the Company are increased, decreased, changed into or
exchanged for a different number or kind of shares of the Company through
reorganization, recapitalization, reclassification, stock dividend, stock split
or reverse stock split, then an appropriate and proportionate adjustment shall
be made in the number or kind of shares which may be issued upon exercise or
Options granted under the Plan; provided, however, that no such adjustment need
be made if, upon the advice of counsel, the Board determines that such
adjustment may result in the receipt of federally taxable income to holders of
Options granted hereunder or the holders of Common Stock or other classes of the
Company's securities.
25. Representations and Warranties. As a condition to the grant of any
------------------------------
Option hereunder or the exercise of any portion of an Option, the Company may
require the person to be granted or exercising such Option to make any
representations and/or warranty to the Company as may, in the judgment of
counsel to the Company, be required under any applicable law or regulation,
including, but not limited to, a representation and warranty that the Option
and/or shares issuable or issued upon exercise of such Option are being acquired
only for investment, for such person's own account and without any present
intention to sell or distribute such Option or shares, as the case may be, if,
in the opinion of counsel for the Company, such representation is required under
the Securities Act of 1933, the California Corporate Securities Law of 1968 or
any other applicable law, regulation or rule of any governmental agency.
26. No Enlargement of Employee Rights. This Plan is purely voluntary
-----------------------------------
on the part of the Company, and the continuance of the Plan shall not be deemed
to constitute a contract between the Company and any employee, or to be
consideration for or a condition of the employment of any employee. Nothing
contained in the Plan shall be deemed to give any employee the right to be
retained in the employ of the Company or its Affiliated Companies, or to
interfere with the right of the Company or an Affiliated Company to discharge
any employee thereof at any time. No employee shall have any right to or
interest in Options authorized hereunder prior to the grant of such an Option to
such employee, and upon such grant he or she shall have only such rights and
interests as are expressly provided herein, subject, however, to all applicable
provisions of the Company's Certificate of Incorporation, as the same may be
amended from time to time.
A-11
<PAGE>
27. Information to Option Holders. During the period any options
--------------------------------
granted to employees of the Company remain outstanding, such employee-option
holders shall be entitled to receive, on an annual or other periodic basis,
financial and other information regarding the Company. The Board shall exercise
its discretion with regard to the nature and extent of the financial information
so provided, giving due regard to the size and circumstances of the Company and,
if the Company provides annual reports to its shareholders, the Company's
practice in connection with such annual reports. Notwithstanding the above, if
the issuance of options under either Plan A or Plan B is limited to key
employees whose duties in connection with the company assure their access to
equivalent information, this section 27 shall not apply to such employees and
plan. A copy of this Plan shall be delivered to the Secretary of the Company
and shall be shown by him or her to each eligible person making reasonable
inquiry concerning it. A copy of this Plan also shall be delivered to each
Optionee at the time his or her Options are granted.
28. Legends on Stock Certificates. Each certificate representing
--------------------------------
Common Stock issued under this Plan shall bear whatever legends are required by
federal or state law or by any governmental agency. In particular, unless an
appropriate registration statement is filed pursuant to the Federal Securities
Act of 1933, as amended, with respect to the shares of Common Stock issuable
under this Plan, each certificate representing such Common Stock shall be
endorsed on its face with the following legend or its equivalent:
Neither the Option pursuant to which the shares represented by this certificate
are issued nor said shares have been registered under the Securities Act of
1933, as amended (the "Act"). Transfer or sale of such securities or any
interest therein is unlawful except after registration, or pursuant to an
exemption from the registration requirements, as provided in the Act and the
regulations thereunder.
29. Specific Performance. The Options granted under this Plan and the
---------------------
Optioned Stock issued pursuant to the exercise of such Options cannot be readily
purchased or sold in the open market, and, for that reason among others, the
Company and its shareholders will be irreparably damaged in the event that this
Plan is not specifically enforced. In the event of any controversy concerning
the right or obligation to purchase or sell any such Option or Optioned Stock,
such right or obligation shall be enforceable in a court of equity by a decree
of specific performance. Such remedy shall, however, be cumulative and not
exclusive, and shall be in addition to any other remedy which the parties may
have.
30. Invalid Provision. In the event that any provision of this Plan is
-----------------
found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or enforceability shall not be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid or unenforceable provision was not contained herein.
A-12
<PAGE>
31. Applicable Law. This Plan shall be governed by and construed in
---------------
accordance with the laws of the State of California.
32. Successors and Assigns. This Plan shall be binding on and inure to
----------------------
the benefit of the Company and the employees to whom an Option is granted
hereunder, and such employees' heirs, executors, administrators, legatees,
personal representatives, assignees and transferees.
IN WITNESS WHEREOF, pursuant to the due authorization and adoption of this
Plan by the Board on October 13, 2000, the Company has caused this Plan to be
duly executed by its duly authorized officers.
GO ONLINE NETWORKS CORPORATION
/s/ Joseph M. Naughton
By: Joseph M. Naughton
Its: President
A-13
<PAGE>
GO ONLINE NETWORKS CORPORATION
5681 Beach Boulevard, Suite 101
Buena Park, California 90621
REVOCABLE PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph M. Naughton and Jim Cannon, or
either of them, with full power of substitution, as proxies of the undersigned,
with all the powers that the undersigned would possess if personally present to
cast all votes that the undersigned would be entitled to vote at the Annual
Meeting of Shareholders of Go Online Networks Corporation (the "Company") to be
held on November 17, 2000, at the Embassy Suites Hotel, 1325 E. Dyer Road, Santa
Ana, California 92705, at 1:00 p.m. local time, and any and all adjournments or
postponements thereof, with respect to the following matters described in the
accompanying Proxy Statement and, in their discretion, on other matters which
come before the meeting:
1. To approve the amendment of the Company's Articles of Incorporation
to increase the authorized common stock to 200,000,000 shares:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. To elect four directors:
[ ] FOR the nominees listed below [ ] WITHHOLD AUTHORITY
(Except as indicated to the contrary below)
Nominees: Joseph M. Naughton, Scott Claverie, Jim Cannon and Michael Abelson
Instructions: To withhold authority to vote for any individual nominee
or nominees, write their names here:
-----------------------------------------------------------------------
3. To ratify and approve the appointment of Miller & McCollom
as the Company's independent auditors for the fiscal year
ending December 31, 2000:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To ratify and approve the 2000 Stock Option Plan:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To transact such other business as may properly come before
the meeting or any adjournment or postponement thereof. This
proxy will be voted at the Annul Meeting of Shareholders or
any adjournment or postponement thereof as specified. If no
specifications are made, this Proxy will be voted FOR
Proposals No. 1 through 4. This proxy hereby revokes all prior
proxies given with respect to the shares of the undersigned.
Date _________________________, 2000
------------------------------------
(Signature)
------------------------------------
------------------------------------
(Please print your name)
Please sign name as fully and exactly as it appears opposite. When
signing in a fiduciary or representative capacity, please give full title as
such. When more than one owner, each owner should sign. Proxies executed by a
corporation should be signed in full corporate name by a duly authorized
officer. If a partnership, please sign in partnership name by an authorized
person.
PLEASE MARK, SIGN, DATE AND MAIL TO THE COMPANY
AT THE ADDRESS STATED ON THE RETURN ENVELOPE
<PAGE>
