SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PAWNBROKER.COM, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(4) Date Filed:
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<PAGE>
PAWNBROKER.COM, INC.
85 KEYSTONE, SUITE F
RENO, NEVADA 89503
April 13, 2000
Dear Stockholders:
You are cordially invited to attend the annual meeting of stockholders of
Pawnbroker.com, Inc. to be held on Wednesday, May 3, 2000 at 11:00 a.m. at the
principal Nevada offices of Pawnbroker.com, 85 Keystone, Suite F, Reno, Nevada
89503.
In addition to the items set forth in the accompanying Notice of Special
Meeting of Stockholders and Proxy Statement, we will report on current
activities of the Company and will provide an opportunity to discuss matters of
interest to you as a stockholder.
We sincerely hope you will be able to attend our Special Meeting. However,
whether or not you plan to attend, please sign, date and promptly return the
enclosed proxy to ensure that your shares are represented.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in Pawnbroker.com, Inc.
Very truly yours,
/s/ Neil McElwee
----------------------------------------------
Neil McElwee
Chief Executive Officer and Director
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<PAGE>
PAWNBROKER.COM, INC.
85 KEYSTONE, SUITE F
RENO, NEVADA 89503
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
MAY 3, 2000
(11:00 a.m. local time)
To the Shareholders of Pawnbroker.com, Inc.
Notice is hereby given that the special meeting of shareholders ("Special
meeting") of Pawnbroker.com, Inc. ("Pawnbroker.com" or the "Company") will be
held at the principal Nevada offices of Pawnbroker.com, 85 Keystone, Suite F,
Reno, Nevada 89503 on Wednesday, May 3, 2000 beginning at 11:00 a.m. local time,
for the following purposes:
(1) To approve a proposal to increase the number of shares authorized to
be issued by the Company to 100,000,000 shares of common stock and
50,000,000 shares of preferred stock.
(2) To approve a proposal to an amendment to the Pawnbroker.com 1999 Stock
Option Plan to increase the number of shares authorized to be issued
by the Company under to 8,000,000 shares of common stock.
(3) To amend and restate the Company's bylaws to, among other things, (i)
reduce the quorum requirement for meetings of shareholders to
one-third of shares entitled to vote at such meeting; (ii) create a
staggered board of directors consisting of three classes of directors,
each class to be elected for a term of three years after an initial
period; and (iii) to effect a change in the Company's fiscal year to
December 31, effective December 31, 2000.
(4) To consider and act upon any other matters as may properly come before
the Special meeting or any adjournment thereof.
Only shareholders of record at the close of business on March 30, 2000,
will be entitled to notice of and to vote at the meeting or any adjournment
thereof.
YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the Special
Meeting, it is important that your shares be represented. Therefore, we urge you
to sign, date and promptly return the enclosed proxy in the enclosed envelope.
Your proxy may be revoked at any time prior to the Special meeting. If you later
desire to revoke your proxy, you may do so at any time before it is exercised.
If you attend the Special Meeting, you shall, of course, have the right to vote
in person.
April 13, 2000 BY ORDER OF THE BOARD OF DIRECTORS
/s/ Neil McElwee
--------------------------------------------------
Neil McElwee
Chief Executive Officer and Director
THE PROXY STATEMENT WHICH ACCOMPANIES THIS NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS CONTAINS MATERIAL INFORMATION CONCERNING THE MATTERS TO BE
CONSIDERED AT THE SPECIAL MEETING, AND SHOULD BE READ IN CONJUNCTION WITH THIS
NOTICE.
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PAWNBROKER.COM, INC.
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
MAY 3, 2000
GENERAL INFORMATION
Your proxy, using the enclosed form, is solicited by the Board of Directors
of Pawnbroker.com, Inc. ("Pawnbroker.com" or the "Company") for the Special
meeting of Shareholders ("Special meeting") to be held at 11:00 a.m. (Pacific
time) on Wednesday, May 3, 2000, at the principal Nevada offices of
Pawnbroker.com, 85 Keystone, Suite F, Reno, Nevada 89503, and at any adjournment
thereof. Management anticipates that the mailing to shareholders of this proxy
statement and enclosed proxy will occur on or about April 13, 2000.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Special
meeting are summarized in the accompanying Notice of Special meeting of
Shareholders. Each proposal is described in more detail in this Proxy Statement.
VOTING RIGHTS
The Company's common stock is the only type of security entitled to vote at
the Special meeting. Only shareholders of record at the close of business on
March 30, 2000 ("Record Date") are entitled to receive notice of the Special
meeting and to vote the shares they hold at the Special meeting or at any
adjournment or postponement. As of the Record Date, there were 17,814,750 shares
of common stock outstanding, each share being entitled to one vote on each
matter to be voted upon. There is no cumulative voting.
The presence at the meeting, either in person or by proxy, of the holders
of at least 50.01% of the shares of common stock outstanding on the Record Date
will constitute a quorum, permitting the transaction of business at the Special
meeting. Proxies received but marked as abstentions and broker non-votes will be
included in the calculation of the number of shares considered to be present at
the Special meeting. The affirmative vote by holders of a majority of the shares
present and entitled to vote will be required to approve a proposal to (i)
authorize the Company to issue up to 100,000,000 shares of common stock and
50,000,000 shares of preferred stock; (ii) to amend the Company's 1999 Stock
Option Plan to increase the number of shares issuable under the plan to
8,000,000 shares of common stock; (iii) to amend and restate the Company's
bylaws and (iv) to approve additional proposals which may be presented at the
Special meeting.
Whether or not you are able to attend the meeting in person, you are urged
to complete, sign, date, and return the accompanying proxy in the enclosed
envelope. Your proxy is solicited by the
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Company's Board of Directors and when properly completed, will be voted at the
Special meeting in accordance with your instructions. Proxies which are executed
but do not specify a vote for, against, or in abstention, will be voted FOR
proposals contained in this Proxy Statement. With respect to any other matters
that may come properly before the Special meeting, the proxies will be voted as
recommended by the Board of Directors or, if no recommendation is given, in the
discretion of the proxy holders.
Your proxy may be revoked or changed at any time prior to the Special
meeting. You may do this by advising the Secretary of the Company in writing of
your desire to revoke your proxy, or by sending the Secretary another signed
proxy with a later date before the beginning of the Special meeting. If you
decide to attend the Special meeting and wish to change your proxy vote, you may
do so by voting in person. Expenses in connection with the solicitation of
proxies will be paid by Pawnbroker.com. Proxies are being solicited primarily by
mail, although employees of Pawnbroker.com (including officers) who will receive
no extra compensation for their services may solicit proxies by telephone,
telegraph, facsimile transmission or in person. The Company has not retained a
proxy solicitor in connection with the Special meeting.
A copy of the proposed Amended and Restated 1999 Stock Option Plan of the
Company and the proposed Amended and Restated Bylaws of the Company are being
furnished to each shareholder with this Proxy Statement.
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<PAGE>
PROPOSAL NO. 1
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO AUTHORIZE 150,000,000
SHARES OF CAPITAL STOCK, CONSISTING OF 100,000,000 SHARES OF COMMON STOCK AND
50,000,000 SHARES PREFERRED STOCK
On December 23, 1999, Pawnbroker.com's Board of Directors approved an
amendment to the Company's Certificate of Incorporation, as amended, that would
authorize the Company to issue, from time to time, as determined by the Board of
Directors, up to 100,000,000 shares of common stock ("Common Shares") and
50,000,000 shares of preferred stock ("Preferred Shares"), each with a $.001 par
value per share.
The Company is currently authorized to issue up to 70,000,000 shares of
common stock, and the proposed amendment to the Company's Certificate of
Incorporation will increase the number of shares authorized to be issued by the
Corporation to 100,000,000 shares of common stock. As of March 30, 2000, the
Company had 17,814,750 shares of common stock issued and outstanding. If the
proposed amendment is approved, the Board of Directors would be empowered,
without the necessity of further action or authorization by the Company's
shareholders (unless such action or authorization is required in a specific case
by applicable laws or regulations or stock exchange rules), to authorize the
issuance of up to an additional 82,185,250 Common Shares.
The Company is currently authorized to issue up to 30,000,000 shares of
preferred stock, and the proposed amendment to the Company's Certificate of
Incorporation will increase the number of shares authorized to be issued by the
Corporation to 50,000,000 shares of preferred stock ("Preferred Shares"). As of
the Proxy Statement, the Company had not issued any shares of preferred stock.
If the proposed amendment is approved, the Board of Directors would be
empowered, without the necessity of further action or authorization by the
Company's shareholders (unless such action or authorization is required in a
specific case by applicable laws or regulations or stock exchange rules), to
authorize the issuance of the Preferred Shares and to fix by resolution the
designations, preferences, limitations, restrictions and relative rights of each
such series or class. Each series or class of Preferred Shares could, as
determined by the Board of Directors at the time of issuance, rank, with respect
to dividends and redemption and liquidation rights, senior to the Company's
Common Shares.
The Preferred Shares will provide authorized and unissued shares of
preferred stock, which may be used by the Company for any proper corporate
purpose. Such purpose might include, without limitation, issuance as part or all
of the consideration required to be paid by the Company in the acquisition of
other businesses or properties, or issuance in public or private sales for cash
as a means of obtaining additional capital for use in the Company's business and
operations. There are no transactions presently under review by the Board of
Directors which contemplate the issuance of Preferred Shares, though as part of
the Company's efforts to raise capital, it may issue one or more series in the
future.
It is not possible to state the precise effects of the authorization of the
Preferred Shares upon the rights of the holders of the Company's Common Shares
until the Board of Directors determines the respective preferences, limitations,
and relative rights of the holders of each class or series of the Preferred
Shares. However, such effects might include: (a) reduction of the amount
otherwise available for payment of dividends on Common Shares, to the extent
dividends are payable on any issued Preferred Shares; (b) restrictions on
dividends on the Common Shares; (c) dilution of the voting power of the Common
Shares to the extent that the Preferred Shares had voting rights; (d) conversion
of the Preferred Shares into Common Shares at such prices as the Board
determines, which could include issuance at below the fair market value or
original issue price of the Common Shares; and (e) the holders of
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<PAGE>
Common Shares not being entitled to share in the Company's assets upon
liquidation until satisfaction of any liquidation preference granted to holders
of the Preferred Shares.
Although the Board of Directors would authorize the issuance of Preferred
Shares based on its judgment as to the best interests of the Company and its
shareholders, the issuance of authorized Preferred Shares could have the effect
of diluting the voting power per share and could have the effect of diluting the
book value per share of the outstanding Common Shares. In addition, the
Preferred Shares could, in certain instances, render more difficult or
discourage a merger, tender offer, or proxy contest and thus potentially have an
"anti-takeover" effect, especially if Preferred Shares were issued in response
to a potential takeover. In addition, issuances of authorized Preferred Shares
can be implemented, and have been implemented by some companies in recent years,
with voting or conversion privileges intended to make acquisition of the Company
more difficult or more costly. Such an issuance could deter the types of
transactions which may be proposed or could discourage or limit the shareholders
participation in certain types of transactions that might be proposed (such as a
tender offer), whether or not such transactions were favored by the majority of
the shareholders, and could enhance the ability of officers and directors to
retain their positions.
If the amendment is authorized, Article Number Four of the Company's
Articles of Incorporation, as amended, will be amended to read as follows:
FOURTH:
(a) Authorized Capital Stock. The total number of shares of capital
stock which the Corporation is authorized to issue shall be 150,000,000
shares, consisting of 100,000,000 shares of common stock, par value $0.0001
per share ("Common Stock"), and 50,000,000 shares of preferred stock, par
value $0.0001 per share ("Preferred Stock").
(b) Common Stock. All shares of Common Stock shall be voting shares
and shall be entitled to one vote per share. Holders of Common Stock shall
not be entitled to cumulate their votes in the election of directors and
shall not be entitled to any preemptive rights to acquire shares of any
class or series of capital stock of the Corporation. Subject to any
preferential rights of holders of Preferred Stock, holders of Common Stock
shall be entitled to receive their pro rata shares, based upon the number
of shares of Common Stock held by them, of such dividends or other
distributions as may be declared by the board of directors from time to
time and of any distribution of the assets of the Corporation upon its
liquidation, dissolution or winding up, whether voluntary or involuntary.
(c) Preferred Stock. The board of directors of the Corporation is
hereby authorized to provide, by resolution or resolutions adopted by such
board, for the issuance of Preferred Stock from time to time in one or more
classes and/or series, to establish the number of shares of each such class
or series, and to fix the powers, designations, preferences and relative,
participating, optional or other rights, if any, and the qualifications,
limitations or restrictions thereof, if any, of the shares of each such
class or series, all to the full extent permitted by the Delaware General
Corporation Law, Sections 102(a)(4) and 151, or any successor provisions.
Without limiting the generality of the foregoing, the board of directors is
authorized to provide that shares of a class or series of Preferred Stock:
(1) are entitled to cumulative, partially cumulative or
noncumulative dividends or other distributions in payable in cash,
capital stock or indebtedness of the Corporation or other property, at
such times and in such amounts as are set
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<PAGE>
forth in the board resolutions establishing such class or series or as
are determined in a manner specified in such resolutions;
(2) are entitled to a preference with respect to payment of
dividends over one or more other classes and/or series of capital
stock of the Corporation;
(3) are entitled to a preference with respect to any distribution
of assets of the Corporation upon its liquidation, dissolution or
winding up over one or more other classes and/or series of capital
stock of the Corporation in such amount as is set forth in the board
resolutions establishing such class or series or as is determined in a
manner specified in such resolutions;
(4) are redeemable or exchangeable at the option of the
Corporation and/or on a mandatory basis for cash, capital stock or
indebtedness of the Corporation or other property, at such times or
upon the occurrence of such events, and at such prices, as are set
forth in the board resolutions establishing such class or series or as
are determined in a manner specified in such resolutions;
(5) are entitled to the benefits of such sinking fund, if any, as
is required to be established by the Corporation for the redemption
and/or purchase of such shares by the board resolutions establishing
such class or series;
(6) are convertible at the option of the holders thereof into
shares of any other class or series of capital stock of the
Corporation, at such times or upon the occurrence of such events, and
upon such terms, as are set forth in the board resolutions
establishing such class or series or as are determined in a manner
specified in such resolutions;
(7) are exchangeable at the option of the holders thereof for
cash, capital stock or indebtedness of the Corporation or other
property, at such times or upon the occurrence of such events, and at
such prices, as are set forth in the board resolutions establishing
such class or series or as are determined in a manner specified in
such resolutions;
(8) are entitled to such voting rights, if any, as are specified
in the board resolutions establishing such class or series (including,
without limiting the generality of the foregoing, the right to elect
one or more directors voting alone as a single class or series or
together with one or more other classes and/or series of Preferred
Stock, if so specified by such board resolutions) at all times or upon
the occurrence of specified events; and
(9) are subject to restrictions on the issuance of additional
shares of Preferred Stock of such class or series or of any other
class or series, or on the reissuance of shares of Preferred Stock of
such class or series or of any other class or series, or on increases
or decreases in the number of authorized shares of Preferred Stock of
such class or series or of any other class or series.
Without limiting the generality of the foregoing authorizations, any of the
voting powers, designations, preferences, rights and qualifications, limitations
or restrictions of a class or series
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of Preferred Stock may be made dependent upon facts ascertainable outside the
board resolutions establishing such class or series, all to the full extent
permitted the Delaware General Corporation Law. Unless otherwise specified in
the board resolutions establishing a class or series of Preferred Stock, holders
of a class or series of Preferred Stock shall not be entitled to cumulate their
votes in any election of directors in which they are entitled to vote and shall
not be entitled to any preemptive rights to acquire shares of any class or
series of capital stock of the Corporation.
The affirmative vote by holders of a majority of the shares of Common Stock
present and entitled to vote at the meeting is required to approve the proposed
amendment. If the amendment is not approved by the shareholders, the Company's
Articles of Incorporation, as amended, which authorize the issuance of
100,000,000 Common Shares and 50,000,000 Preferred Shares, will continue in
effect. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL.
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PROPOSAL NO. 2
AMENDMENT TO THE COMPANY'S 1999 STOCK OPTION PLAN TO INCREASE THE NUMBER OF
SHARES AUTHORIZED UNDER THE PLAN TO 8,000,000 SHARES
The following is only a summary of the Company's 1999 Stock Option Plan,
with the amendments proposed by the Board of Directors, and is qualified in its
entirety by the form of the plan attached to this Proxy Statement as Exhibit A.
On December 23, 1999, Pawnbroker.com's Board of Directors approved an
amendment to the Company's 1999 Stock Option Plan (the "Option Plan"), that
would authorize the Company to grant, from time to time, as determined by the
Plan Administrator (which currently is the Board of Directors), options
exercisable to acquire up to 8,000,000 shares of common stock under the Option
Plan. The Company is currently authorized to grant options exercisable to
acquire up to 2,000,000 shares of common stock under the Option Plan, and as of
the Proxy Statement, the Company has granted options exercisable to acquire up
to 2,000,000 shares of common stock under the Option Plan. Under the proposed
amendment to the Option Plan, the Company would be authorized to grant options
exercisable to acquire an additional 6,000,000 shares of common stock under the
Option Plan.
The Option Plan is intended to help attract and retain key Company
employees and such other persons as the Plan Administrator may select and to
give such persons an equity incentive to achieve the objectives of the Company's
shareholders. The Board of Directors determined that it was in the best interest
of the Company and its shareholders to increase the number of shares that are
issuable under the Option Plan to achieve the Company's objectives. Below is a
summary describing the Option Plan and certain material provisions of the Option
Plan.
Incentive stock options may be granted to any individual who, at the time
the option is granted, is an employee of the Company or any related corporation.
Non-qualified stock options may be granted to employees and to such other
persons as the Plan Administrator may select. The Plan Administrator fixes the
exercise price for options in the exercise of its sole discretion, subject to
certain minimum exercise prices in the case of Incentive Stock Options. The
exercise price may be paid in cash, certified check or cashier's check or, with
the approval of the Plan Administrator, by other means, including withholding of
option shares or delivery of previously held shares. Options will not be
exercisable until they vest according to a vesting schedule specified by the
Plan Administrator at the time of grant of the option. If no vesting schedule is
specified, options vest in full over the course of five (5) years from the date
of grant. Vesting of options may be accelerated at the sole discretion of the
Plan Administrator.
Options are non-transferable except by will or the laws of descent and
distribution. With certain exceptions, vested but unexercised options terminate
upon the earlier of: (i) the expiration of the option term specified by the Plan
Administrator at the date of grant (generally ten years; or, with respect to
Incentive Stock options granted to greater-than ten percent shareholders, a
maximum of five years); or (ii) the expiration of ninety (90) days from the date
of an employee optionee's termination of employment with the Company or any
related corporation for any reason whatsoever. Unless accelerated in accordance
with the Plan, unvested options terminate immediately upon termination of
employment of the optionee by the Company for any reason whatsoever, including
death or disability.
The Company may require, as a condition of the issuance of any common stock
upon exercise of an option, that the recipient agree to be bound by the terms of
an agreement, which may restrict the disposition of Common Stock.
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The affirmative vote by holders of a majority of the shares of common stock
present and entitled to vote at the meeting is required to approve the proposed
amendment. If the amendment is not approved by the shareholders, the Company's
1999 Stock Option Plan, which authorize the issuance of 2,000,000 Common Shares
will continue in effect. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
PROPOSAL.
PROPOSAL NO. 3
AMENDMENT AND RESTATEMENT OF THE COMPANY'S BYLAWS TO CHANGE THE QUORUM
REQUIREMENT FOR SHAREHOLDER MEETINGS TO ONE-THIRD, TO CREATE A STAGGERED BOARD
OF DIRECTORS CONSISTING OF THREE CLASSES AND TO CHANGE THE FISCAL YEAR END TO
DECEMBER 31, EFFECTIVE DECEMBER 31, 2000.
The following is only a summary of the proposed changes to the Company's
current Bylaws. This summary is qualified in its entirety by the form of the
Amended and Restated Bylaws of the Company, with the amendments proposed by the
Board of Directors, attached to this Proxy Statement as Exhibit B.
On December 23, 1999, Pawnbroker.com's Board of Directors approved an
amendment to the Company's Bylaws that would, among other things, (i) reduce the
quorum requirement for meetings of shareholders to one-third of the shares
entitled to vote at such meeting; (ii) create a staggered board of directors
consisting of three classes of directors, each class to be elected for a term of
three years after an initial period; and (iii) to effect a change in the
Company's fiscal year to December 31, effective December 31, 2000. Below is a
summary of the material changes to the Company's current Bylaws:
1. Reduction of Quorum Required for Shareholder Meetings. The current
provisions of Company's Bylaws related to the quorum requirement for
shareholder meetings provides as follows:
The holders of a majority of the outstanding shares of stock shall
constitute a quorum at a meeting of the stockholders for the
transaction of any business. The stockholders present may adjourn the
meeting despite the absence of quorum.
The proposed amendment to the Company's Bylaws provides as follows:
Any number of stockholders, together holding at least one-third of the
capital stock of the Corporation issued and outstanding and entitled
to vote, who shall be present in person or represented by proxy at any
meeting duly called, shall constitute a quorum for the transaction of
all business, except as otherwise provided by law, by the Certificate
of Incorporation or by these Bylaws.
If adopted, the Amended and Restated Bylaws would reduce the quorum
requirement for meetings of the shareholders of the Company from a majority
of the shares entitled to vote to one-third of the shares entitled to vote
at the meeting.
2. Staggered Board of Directors. The Company's current Bylaws related to the
board of directors provides that (i) the number of directors constituting
the whole board shall be one and that the
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number of directors may be fixed from time to time by an action of the
shareholders or the board of directors, or if not fixed, the number shall
be seven; (ii) the directors of the Company who are elected at an annual
meeting of the shareholders, or who are elected in the interim to fill
vacancies and newly created directorships shall hold office until their
successors are elected and qualified or until their earlier resignation or
removal; and (iii) vacancies and newly created directorships may be filled
by a majority of the remaining directors or by a majority of the
shareholders, constituting a quorum at an annual or special meeting of the
shareholders. Under the current Bylaws of the Company, there is one class
of directors.
The proposed Amended and Restated Bylaws provide for the Company's board of
directors to be divided into three classes. The term of office for the
first class ("Class A") to expire at the annual meeting next ensuing, of
the second class ("Class B") one year thereafter, and of the third class
("Class C") two years thereafter, and at each annual election held after
such classification and election, directors shall be chosen for a full term
of three (3) years, as the case maybe, to succeed those whose terms expire.
As such, Class A directors will serve for an initial term of one (1) year
and their successor will be elected at the next annual meeting for a term
of three (3) years; Class B directors will serve for an initial term of two
(2) years and their successor will be elected at the annual meeting follow
the expiration of their term for a term of three (3) years; and Class C
directors will serve for a full term of three (3) years and their successor
will be elected at the expiration of their term for a term of three (3)
years. Under the proposed amendment to the Bylaws, one-third of the board
of directors will be elected each year at the annual meeting. Vacancies and
newly created directorships may be filled by a majority of the remaining
directors or by a majority of the shareholders, constituting a quorum at an
annual or special meeting of the shareholders, and such director shall hold
office until their successor is elected and qualified at the next annual
meeting or until their earlier resignation or removal. At the next annual
meeting, shareholders shall elect the Class A, Class B and Class C
directors.
3. Change of Fiscal Year End. The current provisions of Company's Bylaws
permit the Company's board of directors to fix the fiscal year end. The
current fiscal year end of the Company is March 31. Under the proposed
Amended and Restated Bylaws of the Company, the fiscal year end of the
Company shall be changed to December 31, effective December 31, 2000.
The affirmative vote by holders of a majority of the shares of common stock
present and entitled to vote at the meeting is required to approve the proposed
amendment and restatement of the Company's Bylaws. If the amendment is not
approved by the shareholders, the Company's current Bylaws will continue in
effect. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL.
STOCK OWNERSHIP
Stock Ownership of Certain Beneficial Owners
As of March 30, 2000, there were 17,814,750 shares of the Company's common
stock issued and outstanding. The following table sets forth, as of March 30,
2000, certain information with respect to the beneficial ownership of shares of
the Company's common stock by (i) each person known to the Company who
beneficially owns more than 5% of its common stock, (i) each director; (ii) each
executive officer; (iii) all directors and executive officers as a group:
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<TABLE>
Title of Class Name and Address of Amount and Nature of Percentage of Class(1)
Beneficial Owner Beneficial Ownership
- -------------- ------------------- -------------------- ----------------------
<S> <C> <C> <C>
5% Shareholders
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Stock Dotcom Fund, S.A.
Box 571, Providenciales, 1,600,000 8.98%
Turks & Caicos Islands
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Stock Packard Financial Group
#11 Old Parham Rd, St. 1,950,000 10.95%
Charles Nevis, West Indies
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Stock Doug McLeod(2)
688-6 Ishikawa, Kanagawa, 83,750 .005%
Japan
- ----------------------------------------------------------------------------------------------------------------------
Executive Officers and Directors
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Stock Neil McElwee,
CEO, Director -- --
85 Keystone, Suite F
Reno, NV 89503
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Stock William Galine
Vice President, Director 3,197,700(3) 17.95%(3)
85 Keystone, Suite F
Reno, NV 89503
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Stock Cheryl Schlader(4)
85 Keystone, Suite F 3,324,600(4) 18.76%(4)
Reno, NV 89503
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Stock Joseph Schlader(5)
President, Director 3,324,600(5) 18.76%(5)
85 Keystone, Suite F
Reno, NV 89503
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Stock Officers and Directors as 6,540,300 36.71%
a Group
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>
(1) Based on an aggregate of 17,814,750 shares outstanding as of March 30,
2000.
(2) Doug McLeod served as an officer and director of the Registrant from March
1999 to September 30, 1999.
(3) Includes 140,100 shares of common stock owned by Panagiota Galine, Mr.
Galine's wife.
(4) Joseph Schlader and Cheryl Schlader are husband and wife. As such, each
would be deemed to be the beneficial owner the other's shares. Includes
1,751,409 shares of common stock owned by Cheryl Schlader.
(5) Joseph Schlader and Cheryl Schlader are husband and wife. As such, each
would be deemed to be the beneficial owner the other's shares. Includes
1,591,200 shares of common stock owned by Joseph Schlader.
13
<PAGE>
SHAREHOLDER PROPOSALS FOR SPECIAL MEETING PROXY STATEMENT
To be considered for inclusion in the proxy materials relating to the
Special meeting of shareholders, shareholder proposals must be at the Company's
principal executive offices, 85 Keystone, Suite F, Reno, Nevada 89503, no later
than April 20, 2000.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Neil McElwee
-------------------------------------------------
Neil McElwee
Chief Executive Officer and Director
April 13, 2000
14
<PAGE>
EXHIBIT A
PAWNBROKER.COM, INC.
AMENDED AND RESTATED
1999 STOCK OPTION PLAN
This 1999 Stock Option Plan (the "Plan") provides for the grant of options
to acquire shares of common stock, $0.00001 par value (the "Common Stock"), of
Pawnbroker.com, Inc., a Delaware corporation (the "Company"). Stock options
granted under this Plan that qualify under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), are referred to in this Plan as
"Incentive Stock Options." Incentive Stock Options and stock options that do not
qualify under Section 422 of the Code ("Non-Qualified Stock Options") granted
under this Plan are referred to collectively as "Options."
1. PURPOSES.
The purposes of this Plan are to retain the services of valued key
employees and consultants of the Company and such other persons as the Plan
Administrator shall select in accordance with Section 3 below, to encourage such
persons to acquire a greater proprietary interest in the Company, thereby
strengthening their incentive to achieve the objectives of the shareholders of
the Company, and to serve as an aid and inducement in the hiring of new
employees and to provide an equity incentive to consultants and other persons
selected by the Plan Administrator.
2. ADMINISTRATION.
This Plan shall be administered initially by the Board of Directors of the
Company (the "Board"), except that the Board may, in its discretion, establish a
committee composed of two (2) or more members of the Board or two (2) or more
other persons to administer the Plan, which committee (the "Committee") may be
an executive, compensation or other committee, including a separate committee
especially created for this purpose. The Committee shall have the powers and
authority vested in the Board hereunder (including the power and authority to
interpret any provision of the Plan or of any Option). The members of any such
Committee shall serve at the pleasure of the Board. A majority of the members of
the Committee shall constitute a quorum, and all actions of the Committee shall
be taken by a majority of the members present. Any action may be taken by a
written instrument signed by all of the members of the Committee and any action
so taken shall be fully effective as if it had been taken at a meeting. The
Board or, if applicable, the Committee is referred to herein as the "Plan
Administrator."
The Plan shall be administered by the Board or by the Committee which, for
the purposes hereof, shall be composed of two (2) or more members of the Board
who are "Non-Employee Directors" (as defined below), and, as applicable, outside
directors. The term "outside director" shall have the meaning assigned to it
under Section 162(m) of the Code (as amended from time to time) and the
regulations (or any successor regulations) promulgated thereunder ("Section
162(m) of the Code"). The term "Non-Employee Director" shall have the meaning
assigned to it under Rule 16b-3 (as amended from time to time) promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") or any
successor rule or regulatory requirement.
Subject to the provisions of this Plan, and with a view to effecting its
purpose, the Plan Administrator shall have sole authority, in its absolute
discretion, to (i) construe and interpret this Plan; (ii) define the terms used
in the Plan; (iii) prescribe, amend and rescind the rules and regulations
relating to this Plan; (iv) correct any defect, supply any omission or reconcile
any inconsistency in this Plan; (v) grant Options under this Plan; (vi)
determine the individuals to whom Options shall be granted under this Plan and
whether the Option is an Incentive Stock Option or a Non-Qualified Stock Option;
(vii) determine the time or times at which Options shall be granted under this
Plan; (viii) determine the number of shares of Common Stock subject to each
Option, the exercise price of each Option, the duration of each Option and the
times at which each Option shall become exercisable; (ix) determine all other
terms and conditions of the Options; and (x) make all other determinations and
interpretations necessary and
<PAGE>
advisable for the administration of the Plan. All decisions, determinations and
interpretations made by the Plan Administrator shall be binding and conclusive
on all participants in the Plan and on their legal representatives, heirs and
beneficiaries.
The Board or, if applicable, the Committee may delegate to one or more
executive officers of the Company the authority to grant Options under this Plan
to employees of the Company who, on the Date of Grant, are not subject to
Section 16 of the Exchange Act with respect to the Common Stock
("Non-Insiders"), and are not "covered employees" as such term is defined for
purposes of Section 162(m) of the Code ("Non-Covered Employees"), and in
connection therewith the authority to determine: (i) the number of shares of
Common Stock subject to such Options; (ii) the duration of the Option; (iii) the
vesting schedule for determining the times at which such Option shall become
exercisable; and (iv) all other terms and conditions of such Options. The
exercise price for any Option granted by action of an executive officer or
officers pursuant to such delegation of authority shall not be less than the
fair market value per share of the Common Stock on the Date of Grant. Unless
expressly approved in advance by the Board or the Committee, such delegation of
authority shall not include the authority to accelerate vesting, extend the
period for exercise or otherwise alter the terms of outstanding Options. The
term "Plan Administrator" when used in any provision of this Plan other than
Sections 2, 5(f), 5(m), and 11 shall be deemed to refer to the Board or the
Committee, as the case may be, and an executive officer who has been authorized
to grant Options pursuant thereto, insofar as such provisions may be applied to
persons that are Non-Insiders and Non-Covered Employees and Options granted to
such persons.
3. ELIGIBILITY.
Incentive Stock Options may be granted to any individual who, at the time
the Option is granted, is an employee of the Company or any Related Corporation
(as defined below) ("Employees"). Non-Qualified Stock Options may be granted to
Employees and to such other persons other than directors who are not Employees
as the Plan Administrator shall select. Options may be granted in substitution
for outstanding Options of another corporation in connection with the merger,
consolidation, acquisition of property or stock or other reorganization between
such other corporation and the Company or any subsidiary of the Company. Options
also may be granted in exchange for outstanding Options. Any person to whom an
Option is granted under this Plan is referred to as an "Optionee." Any person
who is the owner of an Option is referred to as a "Holder."
As used in this Plan, the term "Related Corporation" shall mean any
corporation (other than the Company) that is a "Parent Corporation" of the
Company or "Subsidiary Corporation" of the Company, as those terms are defined
in Sections 424(e) and 424(f), respectively, of the Code (or any successor
provisions) and the regulations thereunder (as amended from time to time).
4. STOCK.
The Plan Administrator is authorized to grant Options to acquire up to a
total of eight million (8,000,000) shares of the Company's authorized but
unissued, or reacquired, Common Stock. The number of shares with respect to
which Options may be granted hereunder is subject to adjustment as set forth in
Section 5(m) hereof. In the event that any outstanding Option expires or is
terminated for any reason, the shares of Common Stock allocable to the
unexercised portion of such Option may again be subject to an Option granted to
the same Optionee or to a different person eligible under Section 3 of this
Plan; provided however, that any canceled Options will be counted against the
maximum number of shares with respect to which Options may be granted to any
particular person as set forth in Section 3 hereof.
<PAGE>
5. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted under this Plan shall be evidenced by a written
agreement approved by the Plan Administrator (the "Agreement"). Agreements may
contain such provisions, not inconsistent with this Plan, as the Plan
Administrator in its discretion may deem advisable. All Options also shall
comply with the following requirements:
(a) Number of Shares and Type of Option.
Each Agreement shall state the number of shares of Common Stock to
which it pertains and whether the Option is intended to be an Incentive Stock
Option or a Non-Qualified Stock Option. In the absence of action to the contrary
by the Plan Administrator in connection with the grant of an Option, all Options
shall be Non-Qualified Stock Options. The aggregate fair market value
(determined at the Date of Grant, as defined below) of the stock with respect to
which Incentive Stock Options are exercisable for the first time by the Optionee
during any calendar year (granted under this Plan and all other Incentive Stock
Option plans of the Company, a Related Corporation or a predecessor corporation)
shall not exceed $100,000, or such other limit as may be prescribed by the Code
as it may be amended from time to time. Any portion of an Option which exceeds
the annual limit shall not be void but rather shall be a Non-Qualified Stock
Option.
(b) Date of Grant.
Each Agreement shall state the date the Plan Administrator has deemed
to be the effective date of the Option for purposes of this Plan (the "Date of
Grant").
(c) Option Price.
Each Agreement shall state the price per share of Common Stock at
which it is exercisable. The exercise price shall be fixed by the Plan
Administrator at whatever price the Plan Administrator may determine in the
exercise of its sole discretion; provided that the per share exercise price for
an Incentive Stock Option or any Option granted to a "covered employee" as such
term is defined for purposes of Section 162(m) of the Code ("Covered Employee")
shall not be less than the fair market value per share of the Common Stock at
the Date of Grant as determined by the Plan Administrator in good faith;
provided further, that with respect to Incentive Stock Options granted to
greater-than-ten percent (> 10%) shareholders of the Company (as determined with
reference to Section 424(d) of the Code), the exercise price per share shall not
be less than one hundred ten percent (110%) of the fair market value per share
of the Common Stock at the Date of Grant as determined by the Plan Administrator
in good faith; and, provided further, that Options granted in substitution for
outstanding options of another corporation in connection with the merger,
consolidation, acquisition of property or stock or other reorganization
involving such other corporation and the Company or any subsidiary of the
Company may be granted with an exercise price equal to the exercise price for
the substituted option of the other corporation, subject to any adjustment
consistent with the terms of the transaction pursuant to which the substitution
is to occur.
(d) Duration of Options.
At the time of the grant of the Option, the Plan Administrator shall
designate, subject to paragraph 5(g) below, the expiration date of the Option,
which date shall not be later than ten (10) years from the Date of Grant in the
case of Incentive Stock Options; provided, that the expiration date of any
Incentive Stock Option granted to a greater-than-ten percent ( > 10%)
shareholder of the Company (as determined with reference to Section 424(d) of
the Code) shall not be later than five (5) years from the Date of Grant. In the
absence of action to the contrary by the Plan Administrator in connection with
the grant of a particular Option, and except in the case of Incentive Stock
Options as described above, all Options granted under this Section 5 shall
expire ten (10) years from the Date of Grant.
<PAGE>
(e) Vesting Schedule.
No Option shall be exercisable until it has vested. The vesting
schedule for each Option shall be specified by the Plan Administrator at the
time of grant of the Option prior to the provision of services with respect to
which such Option is granted; provided, that if no vesting schedule is specified
at the time of grant, the Option shall vest according to the following schedule:
Number of Years Percentage of Total
Following Date of Grant Option Vested
- ------------------------------------- ----------------------------------
One 20%
Two 40%
Three 60%
Four 80%
Five 100%
The Plan Administrator may specify a vesting schedule for all or any
portion of an Option based on the achievement of performance objectives
established in advance of the commencement by the Optionee of services related
to the achievement of the performance objectives. Performance objectives shall
be expressed in terms of one or more of the following: return on equity, return
on assets, share price, market share, sales, earnings per share, costs, net
earnings, net worth, inventories, cash and cash equivalents, gross margin or the
Company's performance relative to its internal business plan. Performance
objectives may be in respect of the performance of the Company as a whole
(whether on a consolidated or unconsolidated basis), a Related Corporation, or a
subdivision, operating unit, product or product line of either of the foregoing.
Performance objectives may be absolute or relative and may be expressed in terms
of a progression or a range. An Option that is exercisable (in full or in part)
upon the achievement of one or more performance objectives may be exercised only
following written notice to the Optionee and the Company by the Plan
Administrator that the performance objective has been achieved.
(f) Acceleration of Vesting.
The vesting of one or more outstanding Options may be accelerated by
the Plan Administrator at such times and in such amounts as it shall determine
in its sole discretion.
(g) Term of Option.
Vested Options shall terminate, to the extent not previously
exercised, upon the occurrence of the first of the following events: (i) the
expiration of the Option, as designated by the Plan Administrator in accordance
with Section 5(d) above; (ii) the date of an Optionee's termination of
employment or contractual relationship with the Company or any Related
Corporation for cause (as determined in the sole discretion of the Plan
Administrator); (iii) the expiration of three (3) months from the date of an
Optionee's termination of employment or contractual relationship with the
Company or any Related Corporation for any reason whatsoever other than cause,
death or Disability (as defined below) unless, in the case of a Non-Qualified
Stock Option, the exercise period is extended by the Plan Administrator until a
date not later than the expiration date of the Option; or (iv) the expiration of
one year from termination of an Optionee's employment or contractual
relationship by reason of death or Disability (as defined below) unless, in the
case of a Non-Qualified Stock Option, the exercise period is extended by the
Plan Administrator until a date not later than the expiration date of the
Option. Upon the death of an Optionee, any vested Options held by the Optionee
shall be exercisable only by the person or persons to whom such Optionee's
rights under such Option shall pass by the Optionee's will or by the laws of
descent and distribution of the state or county of the Optionee's domicile at
the time of death and only until such Options terminate as provided above. For
purposes of the Plan, unless otherwise defined in the Agreement, "Disability"
shall mean medically determinable
<PAGE>
physical or mental impairment which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months or that can be expected to
result in death (within the meaning of Section 22(e)(3) of the Code). The Plan
Administrator shall determine whether an Optionee has incurred a Disability on
the basis of medical evidence acceptable to the Plan Administrator. Upon making
a determination of Disability, the Plan Administrator shall, for purposes of the
Plan, determine the date of an Optionee's termination of employment or
contractual relationship.
Unless accelerated in accordance with Section 5(f) above, unvested
Options shall terminate immediately upon termination of employment of the
Optionee by the Company for any reason whatsoever, including death or
Disability. For purposes of this Plan, transfer of employment between or among
the Company and/or any Related Corporation shall not be deemed to constitute a
termination of employment with the Company or any Related Corporation. For
purposes of this subsection, employment shall be deemed to continue while the
Optionee is on military leave, sick leave or other bona fide leave of absence
(as determined by the Plan Administrator). The foregoing notwithstanding,
employment shall not be deemed to continue beyond the first ninety (90) days of
such leave, unless the Optionee's re-employment rights are guaranteed by statute
or by contract.
(h) Exercise of Options.
Options shall be exercisable, in full or in part, at any time after
vesting, until termination. If less than all of the shares included in the
vested portion of any Option are purchased, the remainder may be purchased at
any subsequent time prior to the expiration of the Option term. No portion of
any Option for less than One Hundred (100) shares (as adjusted pursuant to
Section 5(m) below) may be exercised; provided, that if the vested portion of
any Option is less than One Hundred (100) shares, it may be exercised with
respect to all shares for which it is vested. Only whole shares may be issued
pursuant to an Option, and to the extent that an Option covers less than one (1)
share, it is unexercisable.
Options or portions thereof may be exercised by giving written notice
to the Company, which notice shall specify the number of shares to be purchased,
and be accompanied by payment in the amount of the aggregate exercise price for
the Common Stock so purchased, which payment shall be in the form specified in
Section 5(i) below. The Company shall not be obligated to issue, transfer or
deliver a certificate of Common Stock to the Holder of any Option, until
provision has been made by the Holder, to the satisfaction of the Company, for
the payment of the aggregate exercise price for all shares for which the Option
shall have been exercised and for satisfaction of any tax withholding
obligations associated with such exercise. During the lifetime of an Optionee,
Options are exercisable only by the Optionee or in the case of a Non-Qualified
Stock Option, transferee who takes title to such Option in the manner permitted
by subsection 5(k) hereof.
(i) Payment upon Exercise of Option.
Upon the exercise of any Option, the aggregate exercise price shall be
paid to the Company in cash or by certified or cashier's check. In addition, the
Holder may pay for all or any portion of the aggregate exercise price by
complying with one or more of the following alternatives:
(1) by delivering to the Company shares of Common Stock previously
held by such Holder, or by the Company withholding shares of Common Stock
otherwise deliverable pursuant to exercise of the Option, which shares of Common
Stock received or withheld shall have a fair market value at the date of
exercise (as determined by the Plan Administrator) equal to the aggregate
exercise price to be paid by the Optionee upon such exercise;
(2) by delivering a properly executed exercise notice together with
irrevocable instructions to a broker promptly to sell or margin a sufficient
portion of the shares and deliver directly to the Company the amount of sale or
margin loan proceeds to pay the exercise price; or
(3) by complying with any other payment mechanism approved by the Plan
Administrator at the time of exercise.
<PAGE>
Notwithstanding the foregoing, without the prior written consent of
the Plan Administrator, a Holder shall not surrender, or attest to the ownership
of, shares of Common Stock in payment of the exercise price if such action would
cause the Company to recognize compensation expense (or additional compensation
expense) with respect to any option for financial reporting purposes.
(j) Rights as a Shareholder.
A Holder shall have no rights as a shareholder with respect to any
shares covered by an Option until such Holder becomes a record holder of such
shares, irrespective of whether such Holder has given notice of exercise. No
rights shall accrue to a Holder and no adjustments shall be made on account of
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights declared on, or created in, the
Common Stock for which the record date is prior to the date the Holder becomes a
record holder of the shares of Common Stock covered by the Option, irrespective
of whether such Holder has given notice of exercise.
(k) Transfer of Option.
Options granted under this Plan and the rights and privileges
conferred by this Plan may not be transferred, assigned, pledged or hypothecated
in any manner (whether by operation of law or otherwise) other than by will, by
applicable laws of descent and distribution or (except in the case of an
Incentive Stock Option) pursuant to a qualified domestic relations order, and
shall not be subject to execution, attachment or similar process; provided
however, that any Agreement may provide or be amended to provide that a
Non-Qualified Stock Option to which it relates is transferable without payment
of consideration to immediate family members of the Optionee or to trusts or
partnerships or limited liability companies established exclusively for the
benefit of the Optionee and the Optionee's immediate family members. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any
Option or of any right or privilege conferred by this Plan contrary to the
provisions hereof, or upon the sale, levy or any attachment or similar process
upon the rights and privileges conferred by this Plan, such Option shall
thereupon terminate and become null and void.
(l) Securities Regulation and Tax Withholding.
(1) Shares shall not be issued with respect to an Option unless the
exercise of such Option and the issuance and delivery of such shares shall
comply with all relevant provisions of law, including, without limitation,
Section 162(m) of the Code, any applicable state securities laws, the Securities
Act of 1933, as amended, the Exchange Act, the rules and regulations thereunder
and the requirements of any stock exchange or automated inter-dealer quotation
system of a registered national securities association upon which such shares
may then be listed, and such issuance shall be further subject to the approval
of counsel for the Company with respect to such compliance, including the
availability of an exemption from registration for the issuance and sale of such
shares. The inability of the Company to obtain from any regulatory body the
authority deemed by the Company to be necessary for the lawful issuance and sale
of any shares under this Plan, or the unavailability of an exemption from
registration for the issuance and sale of any shares under this Plan, shall
relieve the Company of any liability with respect to the non-issuance or sale of
such shares.
As a condition to the exercise of an Option, the Plan Administrator
may require the Holder to represent and warrant in writing at the time of such
exercise that the shares are being purchased only for investment and without any
then-present intention to sell or distribute such shares. At the option of the
Plan Administrator, a stop-transfer order against such shares may be placed on
the stock books and records of the Company, and a legend indicating that the
stock may not be pledged, sold or otherwise transferred unless an opinion of
counsel is provided stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on the certificates representing
such shares in order to assure an exemption from registration. The Plan
Administrator also may require such other documentation as may from time to time
be necessary to comply with federal and state securities laws.
(2) The Holder shall pay to the Company by certified or cashier's
check, promptly upon exercise of an Option or, if later, the date that the
amount of such obligations becomes determinable, all applicable federal, state,
local and foreign withholding taxes that the Plan Administrator, in its
discretion, determines to result
<PAGE>
upon exercise of an Option or from a transfer or other disposition of shares of
Common Stock acquired upon exercise of an Option or otherwise related to an
Option or shares of Common Stock acquired in connection with an Option. Upon
approval of the Plan Administrator, a Holder may satisfy such obligation by
complying with one or more of the following alternatives selected by the Plan
Administrator:
(A) by delivering to the Company shares of Common Stock
previously held by such Holder or by the Company withholding shares of
Common Stock otherwise deliverable pursuant to the exercise of the
Option, which shares of Common Stock received or withheld shall have a
fair market value at the date of exercise (as determined by the Plan
Administrator) equal to any withholding tax obligations arising as a
result of such exercise, transfer or other disposition;
(B) by executing appropriate loan documents approved by the Plan
Administrator by which the Holder borrows funds from the Company to
pay any withholding taxes due under this Paragraph 2, with such
repayment terms as the Plan Administrator shall select; or
(C) by complying with any other payment mechanism approved by the
Plan Administrator from time to time.
Notwithstanding the foregoing, without the prior written consent of
the Plan Administrator, a Holder shall not surrender, or attest to the ownership
of, shares of Common Stock in payment of the exercise price if such action would
cause the Company to recognize compensation expense (or additional compensation
expense) with respect to any option for financial reporting purposes.
(3) The issuance, transfer or delivery of certificates of Common Stock
pursuant to the exercise of Options may be delayed, at the discretion of the
Plan Administrator, until the Plan Administrator is satisfied that the
applicable requirements of the federal and state securities laws and the
withholding provisions of the Code have been met and that the Holder has paid or
otherwise satisfied any withholding tax obligation as described in (2) above.
(m) Stock Dividend or Reorganization.
(1) If (i) the Company shall at any time be involved in a transaction
described in Section 424(a) of the Code (or any successor provision) or any
"corporate transaction" described in the regulations thereunder; (ii) the
Company shall declare a dividend payable in, or shall subdivide or combine, its
Common Stock or (iii) any other event with substantially the same effect shall
occur, the Plan Administrator shall, subject to applicable law, with respect to
each outstanding Option, proportionately adjust the number of shares of Common
Stock subject to such Option and/or the exercise price per share so as to
preserve the rights of the Holder substantially proportionate to the rights of
the Holder prior to such event, and to the extent that such action shall include
an increase or decrease in the number of shares of Common Stock subject to
outstanding Options, the number of shares available under Section 4 of this Plan
shall automatically be increased or decreased, as the case may be,
proportionately, without further action on the part of the Plan Administrator,
the Company, the Company's shareholders, or any Holder.
(2) In the event that the presently authorized capital stock of the
Company is changed into the same number of shares with a different par value, or
without par value, the stock resulting from any such change shall be deemed to
be Common Stock within the meaning of the Plan, and each Option shall apply to
the same number of shares of such new stock as it applied to old shares
immediately prior to such change.
(3) If the Company shall at any time declare an extraordinary dividend
with respect to the Common Stock, whether payable in cash or other property, the
Plan Administrator may, subject to applicable law, in the exercise of its sole
discretion and with respect to each outstanding Option, proportionately adjust
the number of shares of Common Stock subject to such Option and/or adjust the
exercise price per share so as to preserve the rights of the Holder
substantially proportionate to the rights of the Holder prior to such event, and
to the extent that such
<PAGE>
action shall include an increase or decrease in the number of shares of Common
Stock subject to outstanding Options, the number of shares available under
Section 4 of this Plan shall automatically be increased or decreased, as the
case may be, proportionately, without further action on the part of the Plan
Administrator, the Company, the Company's shareholders, or any Holder.
(4) The foregoing adjustments in the shares subject to Options shall
be made by the Plan Administrator, or by any successor administrator of this
Plan, or by the applicable terms of any assumption or substitution document.
(5) The grant of an Option shall not affect in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure, to merge, consolidate or dissolve,
to liquidate or to sell or transfer all or any part of its business or assets.
6. EFFECTIVE DATE; TERM.
Incentive Stock Options may be granted by the Plan Administrator from time
to time on or after the date on which this Plan is adopted (the "Effective
Date") through the day immediately preceding the tenth anniversary of the
Effective Date. Non-Qualified Stock Options may be granted by the Plan
Administrator on or after the Effective Date and until this Plan is terminated
by the Board in its sole discretion. Termination of this Plan shall not
terminate any Option granted prior to such termination. Any Incentive Stock
Options granted by the Plan Administrator prior to the approval of this Plan by
the shareholders of the Company in accordance with Section 422 of the Code shall
be granted subject to ratification of this Plan by the shareholders of the
Company within twelve (12) months before or after the Effective Date. Any Option
granted by the Plan Administrator to any Covered Employee prior to the approval
of this Plan by the shareholders of the Company in accordance with such Code
provision shall be granted subject to ratification of this Plan by the
shareholders of the Company within twelve (12) months before or after the
Effective Date. If such shareholder ratification is sought and not obtained, all
Options granted prior thereto and thereafter shall be considered Non-Qualified
Stock Options and any Options granted to Covered Employees will not be eligible
for the exclusion set forth in Section 162(m) of the Code with respect to the
deductibility by the Company of certain compensation.
7. NO OBLIGATIONS TO EXERCISE OPTION.
The grant of an Option shall impose no obligation upon the Optionee to
exercise such Option.
8. NO RIGHT TO OPTIONS OR TO EMPLOYMENT.
Whether or not any Options are to be granted under this Plan shall be
exclusively within the discretion of the Plan Administrator, and nothing
contained in this Plan shall be construed as giving any person any right to
participate under this Plan. The grant of an Option shall in no way constitute
any form of agreement or understanding binding on the Company or any Related
Company, express or implied, that the Company or any Related Company will employ
or contract with an Optionee for any length of time, nor shall it interfere in
any way with the Company's or, where applicable, a Related Company's right to
terminate Optionee's employment at any time, which right is hereby reserved.
9. APPLICATION OF FUNDS.
The proceeds received by the Company from the sale of Common Stock issued
upon the exercise of Options shall be used for general corporate purposes,
unless otherwise directed by the Board.
<PAGE>
10. INDEMNIFICATION OF PLAN ADMINISTRATOR.
In addition to all other rights of indemnification they may have as members
of the Board, members of the Plan Administrator shall be indemnified by the
Company for all reasonable expenses and liabilities of any type or nature,
including attorneys' fees, incurred in connection with any action, suit or
proceeding to which they or any of them are a party by reason of, or in
connection with, this Plan or any Option granted under this Plan, and against
all amounts paid by them in settlement thereof (provided that such settlement is
approved by independent legal counsel selected by the Company), except to the
extent that such expenses relate to matters for which it is adjudged that such
Plan Administrator member is liable for willful misconduct; provided, that
within fifteen (15) days after the institution of any such action, suit or
proceeding, the Plan Administrator member involved therein shall, in writing,
notify the Company of such action, suit or proceeding, so that the Company may
have the opportunity to make appropriate arrangements to prosecute or defend the
same.
11. AMENDMENT OF PLAN.
The Plan Administrator may, at any time, modify, amend or terminate this
Plan or modify or amend Options granted under this Plan, including, without
limitation, such modifications or amendments as are necessary to maintain
compliance with applicable statutes, rules or regulations; provided however, no
amendment with respect to an outstanding Option which has the effect of reducing
the benefits afforded to the Holder thereof shall be made over the objection of
such Holder; further provided, that the events triggering acceleration of
vesting of outstanding Options may be modified, expanded or eliminated without
the consent of Holders. The Plan Administrator may condition the effectiveness
of any such amendment on the receipt of shareholder approval at such time and in
such manner as the Plan Administrator may consider necessary for the Company to
comply with or to avail the Company and/or the Optionees of the benefits of any
securities, tax, market listing or other administrative or regulatory
requirement. Without limiting the generality of the foregoing, the Plan
Administrator may modify grants to persons who are eligible to receive Options
under this Plan who are foreign nationals or employed outside the United States
to recognize differences in local law, tax policy or custom.
Effective Date: ----------------------
PAWNBROKER.COM, INC.
- ----------------------------
Secretary
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EXHIBIT B
PAWNBROKER.COM, INC.
AMENDED AND RESTATED BYLAWS
Incorporated Under the Laws of
the State of Delaware
BYLAWS
ARTICLE I
OFFICES
The registered office of the Corporation in Delaware shall be at 1209
Orange Street in the City of Wilmington, County of New Castle, in the State of
Delaware, and The Corporation Trust Company shall be the resident agent of this
Corporation in charge thereof. The Corporation may also have such other offices
at such other places, within or without the State of Delaware, as the Board of
Directors may from time to time designate or the business of the Corporation may
require.
ARTICLE II
STOCKHOLDERS
Section 1. Annual Meeting. The annual meeting of stockholders for the
election of directors and the transaction of any other business shall be held on
the third Thursday of May each year, or as soon after such date as may be
practicable, in such city and state and at such time and place as may be
designated by the Board of Directors, and set forth in the notice of such
meeting. If said day be a legal holiday, said meeting shall be held on the next
succeeding business day. At the annual meeting any business may be transacted
and any corporate action may be taken, whether stated in the notice of meeting
or not, except as otherwise expressly provided by statute or the Certificate of
Incorporation.
Section 2. Special Meetings. Special meetings of the stockholders for any
purpose may be called at any time by the Board of Directors, by the Chief
Executive Officer or by the President, and shall be called by the Chief
Executive Officer at the request of the holders of a majority of the outstanding
shares of capital stock entitled to vote. Special meetings shall be held at such
place or places within or without the State of Delaware as shall from time to
time be designated by the Board of Directors and stated in the notice of such
meeting. At a special meeting no business shall be transacted and no corporate
action shall be taken other than that stated in the notice of the meeting.
Section 3. Notice of Meetings. Written notice of the date, time and place
of any stockholder's meeting, whether annual or special, shall be given to each
stockholder entitled to vote thereat, by personal delivery or by mailing the
same to him at his address, as the same appears upon the records of the
Corporation, at least ten (10) days but not more than sixty (60) days before the
day of the meeting. Notice of a special meeting must also state the purpose or
<PAGE>
purposes for which the meeting is called. Notice of any adjourned meeting need
not be given except by announcement at the meeting so adjourned, unless
otherwise ordered in connection with such adjournment. Such further notice, if
any, shall be given as may be required by law.
Section 4. Quorum. Any number of stockholders, together holding at least
one-third of the capital stock of the Corporation issued and outstanding and
entitled to vote, who shall be present in person or represented by proxy at any
meeting duly called, shall constitute a quorum for the transaction of all
business, except as otherwise provided by law, by the Certificate of
Incorporation or by these Bylaws.
Section 5. Adjournment of Meetings. If less than a quorum shall attend at
the time for which a meeting shall have been called, the meeting may adjourn
from time to time by a majority vote of the stockholders present or represented
by proxy and entitled to vote without notice other than by announcement at the
meeting until a quorum shall attend. Any meeting at which a quorum is present
may also be adjourned in like manner and for such time or upon such call as may
be determined by a majority vote of the stockholders present or represented by
proxy and entitled to vote. At any adjourned meeting at which a quorum shall be
present, any business may be transacted and any corporate action may be taken
which might have been transacted at the meeting as originally called.
Section 6. Voting List. The Secretary shall prepare and make, at least ten
(10) days before every election of directors, a complete list of the
stockholders entitled to vote, arranged in alphabetical order and showing the
address of each stockholder and the number of shares of each stockholder. Such
list shall be open at the place where the election is to be held for said ten
days, to the examination of any stockholder, and shall be produced and kept at
the time and place of election during the whole time thereof, and subject to the
inspection of any stockholder who may be present.
Section 7. Voting. Each stockholder entitled to vote at any meeting may
vote either in person or by proxy, but no proxy shall be voted on or after three
(3) years from its date, unless said proxy provides for a longer period. Each
stockholder entitled to vote shall at every meeting of the stockholders be
entitled to one vote for each share of stock registered in his name on the
record of stockholders. At all meetings of stockholders all matters, except as
otherwise provided by statute, shall be determined by the affirmative vote of
the majority of shares present in person or by proxy and entitled to vote on the
subject matter. Voting at meetings of stockholders need not be by written
ballot.
Section 8. Record Date of Stockholders. The Board of Directors is
authorized to fix in advance a date not exceeding sixty (60) days nor less than
ten (10) days preceding the date of any meeting of stockholders, and not
exceeding sixty (60) days preceding the date for the payment of any dividend, or
the date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or a date in connection with
obtaining the consent of stockholders for any purposes, as a record date for the
determination of the stockholders entitled to notice of, and to vote at, any
such meeting, and any adjournment thereof, or entitled to receive payment of any
such dividend, or to any such allotment of rights, or to exercise the rights in
respect of any such change, conversion or exchange of capital stock, or to
<PAGE>
give such consent, and, in such case, such stockholders and only such
stockholders as shall be stockholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting, and any adjournment
thereof, or to receive payment of such dividend, or to receive such allotment of
rights, or to exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the Corporation, after
such record date fixed as aforesaid.
Section 9. Action Without Meeting. Any action required or permitted to be
taken at any annual or special meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted and shall be delivered to the
Corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the Corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. Prompt notice of
the taking of the corporate action without a meeting by less than unanimous
written consent shall be given to those stockholders who have not consented in
writing.
Section 10. Conduct of Meetings. The Chief Executive Officer, or in his
absence the President, shall preside at all regular or special meetings of
stockholders. To the maximum extent permitted by law, such presiding person
shall have the power to set procedural rules, including but not limited to rules
respecting the time allotted to stockholders to speak, governing all aspects of
the conduct of such meetings.
ARTICLE III
DIRECTORS
The business and affairs of the Corporation shall be managed by, or under
the direction of, a Board of Directors.
Section 1. Number and Qualifications. The number of directors shall be not
less than three and not more than twelve, the exact number within such minimum
and maximum limits to be fixed and determined from time to time by resolution of
a majority of the Board of Directors or by the affirmative vote of the holders
of at least a majority of all outstanding shares entitled to be voted in the
election of directors, voting together as a single class. The directors need not
be stockholders.
Section 2. Staggered Election of Directors. The Board of Directors shall be
divided into three classes, each consisting, as nearly as may be possible, of
one-third of the total number of directors constituting the entire Board of
Directors. At the annual meeting of shareholders in 2000, at which the staggered
board shall be elected, the first class of directors shall be elected for a year
term expiring upon the next following annual meeting of shareholders and upon
the election and qualification of their respective successors, the second class
of directors shall be elected for a term expiring upon the second next annual
meeting of
<PAGE>
shareholders and upon the election and qualification of their respective
successors, and the third class of directors shall be elected for a term
expiring upon the third next annual meeting of shareholders and upon the
election and qualification of their respective successors. At each succeeding
annual meeting of shareholders, successors to the class of directors whose term
expires at that annual meeting of shareholders shall be elected for a three-year
term. If the number of directors has changed, any increase or decrease shall be
apportioned among the classes so as to maintain the number of directors in each
class as nearly equal as possible, and any additional director of any class
elected to fill a vacancy resulting from an increase in such a class shall hold
office for a term that shall coincide with the remaining term of that class,
unless otherwise required by law, but in no case shall a decrease in the number
of directors for a class shorten the term of an incumbent director.
Section 3. Removal and Resignation of Directors. Any director may be
removed from the Board of Directors, with or without cause, by the holders of a
majority of the shares of capital stock entitled to vote at an election of
directors, either by written consent or consents or at any special meeting of
the stockholders called for that purpose, and the office of such director shall
forthwith become vacant.
Any director may resign at any time upon written notice to the Corporation.
Such resignation shall take effect at the time specified therein, and if no time
be specified, at the time of its receipt by the President or Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
so specified therein.
Section 4. Filling of Vacancies. Any vacancy among the directors, occurring
from any cause whatsoever, may be filled by a majority of the remaining
directors, though less than a quorum, provided, however, that the stockholders
removing any director may at the same meeting fill the vacancy caused by such
removal, and provided further, that if the directors fail to fill any such
vacancy, the stockholders may at any special meeting called for that purpose
fill such vacancy. In case of any increase in the number of directors, the
additional directors may be elected by the directors in office before such
increase.
Any person elected to fill a vacancy shall hold office, subject to the
right of removal as herein before provided, until his successor is elected and
qualified.
Section 5. Regular Meetings. The Board of Directors shall hold an annual
meeting for the purpose of organization and the transaction of any business
immediately after the annual meeting of the stockholders, provided a quorum of
directors is present. Other regular meetings may be held at such times as may be
determined from time to time by resolution of the Board of Directors.
Section 6. Special Meetings. Special meetings of the Board of Directors may
be called by the Chairman of the Board of Directors, by the Chief Executive
Officer, or by the President.
Section 7. Notice and Place of Meetings. Meetings of the Board of Directors
may be held at the principal office of the Corporation, or at such other place
as shall be stated in
<PAGE>
the notice of such meeting. Notice of any special meeting, and, except as the
Board of Directors may otherwise determine by resolution, notice of any regular
meeting also, shall be mailed to each director addressed to him at his residence
or usual place of business at least two days before the day on which the meeting
is to be held, or if sent to him at such place by telegraph or cable, or
delivered personally or by telephone, not later than the day before the day on
which the meeting is to be held. No notice of the annual meeting of the Board of
Directors shall be required if it is held immediately after the annual meeting
of the stockholders and if a quorum is present.
Section 8. Business Transacted at Meetings, etc. Any business may be
transacted and any corporate action may be taken at any regular or special
meeting of the Board of Directors at which a quorum shall be present, whether
such business or proposed action be stated in the notice of such meeting or not,
unless special notice of such business or proposed action shall be required by
statute.
Section 9. Quorum. A majority of the Board of Directors at any time in
office shall constitute a quorum. At any meeting at which a quorum is present,
the vote of a majority of the members present shall be the act of the Board of
Directors unless the act of a greater number is specifically required by law or
by the Certificate of Incorporation or these Bylaws. The members of the Board
shall act only as the Board and the individual members thereof shall not have
any powers as such.
Section 10. Compensation. The directors shall not receive any stated salary
for their services as directors, but by resolution of the Board of Directors a
fixed fee and expenses of attendance may be allowed for attendance at each
meeting. Nothing herein contained shall preclude any director from serving the
Corporation in any other capacity, as an officer, agent or otherwise, and
receiving compensation therefor.
Section 11. Action Without a Meeting. Any action required or permitted to
be taken at any meeting of the Board of Directors, or of any committee thereof,
may be taken without a meeting if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of the proceedings of the Board or committee.
Section 12. Meetings Through Use of Communications Equipment. Members of
the Board of Directors, or any committee designated by the Board of Directors,
shall, except as otherwise provided by law, the Certificate of Incorporation or
these Bylaws, have the power to participate in a meeting of the Board of
Directors, or any committee, by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute presence in
person at the meeting.
<PAGE>
ARTICLE IV
COMMITTEES
Section 1. Executive Committee. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one (1) or more of their
number to constitute an Executive Committee to hold office at the pleasure of
the Board, which Committee shall, during the intervals between meetings of the
Board of Directors, have and exercise all of the powers of the Board of
Directors in the management of the business and affairs of the Corporation,
subject only to such restrictions or limitations as the Board of Directors may
from time to time specify, or as limited by the Delaware General Corporation
Law, and shall have power to authorize the seal of the Corporation to be affixed
to all papers which may require it.
Any member of the Executive Committee may be removed at any time, with or
without cause, by a resolution of a majority of the whole Board of Directors.
Any person ceasing to be a director shall ipso facto cease to be a member
of the Executive Committee.
Any vacancy in the Executive Committee occurring from any cause whatsoever
may be filled from among the directors by a resolution of a majority of the
whole Board of Directors.
Section 2. Other Committees. Other committees, whose members shall include
at least one (1) director, may be appointed by the Board of Directors or the
Executive Committee, which committees shall hold office for such time and have
such powers and perform such duties as may from time to time be assigned to them
by the Board of Directors or the Executive Committee.
Any member of such a committee may be removed at any time, with or without
cause, by the Board of Directors or the Executive Committee. Any vacancy in a
committee occurring from any cause whatsoever may be filled by the Board of
Directors or the Executive Committee.
Section 3. Resignation. Any member of a committee may resign at any time.
Such resignation shall be made in writing and shall take effect at the time
specified therein, or, if no time be specified, at the time of its receipt by
the Chief Executive Officer, the President or the Secretary. The acceptance of a
resignation shall not be necessary to make it effective unless so specified
therein.
Section 4. Quorum. A majority of the members of a committee shall
constitute a quorum. The act of a majority of the members of a committee present
at any meeting at which a quorum is present shall be the act of such committee.
The members of a committee shall act only as a committee, and the individual
members thereof shall not have any powers as such.
<PAGE>
Section 5. Record of Proceedings, etc. Each committee shall keep a record
of its acts and proceedings, and shall report the same to the Board of Directors
when and as required by the Board of Directors.
Section 6. Organization, Meetings, Notices, etc. A committee may hold its
meetings at the principal office of the Corporation, or at any other place which
a majority of the committee may at any time agree upon. Each committee may make
such rules as it may deem expedient for the regulation and carrying on of its
meetings and proceedings. Unless otherwise ordered by the Executive Committee,
any notice of a meeting of such committee may be given by the Secretary of the
Corporation or by the chairman of the committee and shall be sufficiently given
if mailed to each member at his residence or usual place of business at least
two days before the day on which the meeting is to be held, or if sent to him at
such place by telegraph or cable, or delivered personally or by telephone not
later than 24 hours before the time at which the meeting is to be held.
Section 7. Compensation. The members of any committee shall be entitled to
such compensation as may be allowed them by resolution of the Board of
Directors.
ARTICLE V
OFFICERS
Section 1. Number. The officers of the Corporation shall be a Chief
Executive Officer, a President, a Secretary, and such other officers as may be
appointed in accordance with the provisions of Section 3 of this Article V. The
Board of Directors in its sole discretion may also elect a Chairman of the Board
of Directors.
Section 2. Election, Term of office and Qualifications. The officers,
except as provided in Section 3 of this Article V, shall be chosen annually by
the Board of Directors. Each such officer shall, except as herein otherwise
provided, hold office until his successor shall have been elected and qualified
or until his earlier resignation or removal. The Chairman of the Board of
Directors, if any, and the Chief Executive Officer shall be directors of the
Corporation, and should any one of them cease to be a director, he shall ipso
facto cease to be such officer, except as otherwise provided by a majority of
the Board of Directors. Except as otherwise provided by law, any number of
offices may be held by the same person.
Section 3. Other Officers. Other officers, including a Chief Financial
Officer, one or more Vice-Presidents or one or more Assistant Secretaries,
Treasurers or Assistant Treasurers, may from time to time be appointed by the
Board of Directors, which other officers shall have such powers and perform such
duties as may be assigned to them by the Board of Directors or the officer or
committee appointing them.
Section 4. Removal of Officers. Any officer of the Corporation may be
removed from office, with or without cause, by a vote of a majority of the Board
of Directors.
Section 5. Resignation. Any officer of the Corporation may resign at any
time. Such resignation shall be in writing and shall take effect at the time
specified therein, and
<PAGE>
if no time be specified, at the time of its receipt by the Chief Executive
Officer, President or Secretary. The acceptance of a resignation shall not be
necessary in order to make it effective, unless so specified therein.
Section 6. Filling of Vacancies. A vacancy in any office shall be filled by
the Board of Directors or by the authority appointing the predecessor in such
office.
Section 7. Compensation. The compensation of the officers shall be fixed by
the Board of Directors, or by any committee upon whom power in that regard may
be conferred by the Board of Directors.
Section 8. Chairman of the Board of Directors. The Chairman of the Board of
Directors shall be a director and shall preside at all meetings of the Board of
Directors at which he shall be present, and shall have such power and perform
such duties as may from time to time be assigned to him by the Board of
Directors.
Section 9. The Chief Executive Officer. The Chief Executive Officer of the
Corporation shall, subject to the direction and control of the Board of
Directors, have general control and management of the business affairs and
policies of the Corporation. The Chief Executive Officer shall be generally
responsible for the proper conduct of the business of the Corporation. The Chief
Executive Officer shall act as liaison from and as spokesman for the Board of
Directors. The Chief Executive Officer shall participate in long-range planning
for the Corporation and shall be available to the other officers of the
Corporation for consultation. Except where the signature of the President is
required by law, the Chief Executive Officer shall posses the same power as the
President to sign all certificates, contracts or other instruments of the
Corporation. During the absence or disability of the President, the Chief
Executive Officer shall exercise all the powers and discharge all the duties of
the President. The Chief Executive Officer shall preside at all meetings of the
stockholders at which he or she is present and, in the absence of the Chief
Executive Officer, President shall preside at such meetings. The Chief Executive
Officer shall have such other powers and perform such other duties as from time
to time may be conferred or imposed upon the Chief Executive Officer by the
Board of Directors.
Section 10. The President. The President of the Corporation shall be the
principal administrative officer of the Corporation. During absence or
disability of the Chief Executive Officer, the President shall exercise all the
powers and discharge all the duties of the Chief Executive Officer; except as
otherwise provided by the Board of Directors. The President shall possess power
to sign all certificates, contracts and other instruments of the Corporation. In
the absence of the Chief Executive Officer, the President shall preside at all
meetings of the shareholders and of the Board of Directors. The President shall
perform all such other duties as are incident to the office of President or are
properly required by the Board of Directors.
Section 11. Vice Presidents. During the absence or disability of the
President, the Senior Vice Presidents, if any, and the Vice Presidents, if any,
in the order designated by the Board of Directors, shall exercise all the
functions of the President. Each Vice President shall have such powers and
discharge such duties as may be assigned from time to time by the Board of
Directors.
<PAGE>
Section 12. The Secretary. The Secretary shall issue notices for all
meetings, except for notices for special meetings of the shareholders and
special meetings of the directors which are called by the requisite percentage
of shareholders or number of directors, shall keep minutes of all meetings,
shall have charge of the seal and the Corporation's books and shall make such
reports and perform such other duties as are incident to the office of
Secretary, or are properly required of him or her by the Board of Directors.
Section 13. The Chief Financial Officer - Treasurer. The Treasurer, who may
also hold the title "Chief Financial Officer," shall have the custody of all
moneys and securities of the Corporation and shall keep regular books of
account. The Treasurer shall disburse the funds of the Corporation in payment of
the just demands against the Corporation or as may be ordered by the Board of
Directors, taking proper vouchers or receipts for such disbursements, and shall
render to the Board of Directors from time to time as may be required an account
of all transactions as Treasurer and of the financial condition of the
Corporation. The Treasurer shall perform such other duties incident to his or
her office or that are properly required of him or her by the Board of
Directors.
ARTICLE VI
CAPITAL STOCK
Section 1. Issue of Certificates of Stock. Certificates of capital stock
shall be in such form as shall be approved by the Board of Directors. They shall
be numbered in the order of their issue and shall be signed by the Chairman of
the Board of Directors, the Chief Executive Officer or the President, and the
Secretary or any Assistant Secretary and the seal of the Corporation or a
facsimile thereof shall be impressed or affixed or reproduced thereon, provided,
however, that where such certificates are signed by a transfer agent or an
assistant transfer agent or by a transfer clerk acting on behalf of the
Corporation and a registrar, the signature of any such Chairman of the Board of
Directors, Chief Executive Officer, President, Secretary or Assistant Secretary,
may be facsimile. In case any officer or officers who shall have signed, or
whose facsimile signature or signatures shall have been used on any such
certificate or certificates shall cease to be such officer or officers of the
Corporation, whether because of death, resignation or otherwise, before such
certificate or certificates shall have been delivered by the Corporation, such
certificate or certificates may nevertheless be adopted by the Corporation and
be issued and delivered as though the person or persons who signed such
certificate or certificates, or whose facsimile signature or signatures shall
have been used thereon have not ceased to be such officer or officers of the
Corporation.
Section 2. Registration and Transfer of Shares. The name of each person
owning a share of the capital stock of the Corporation shall be entered on the
books of the Corporation together with the number of shares held by him, the
numbers of the certificates covering such shares and the dates of issue of such
certificates. The shares of stock of the Corporation shall be transferable on
the books of the Corporation by the holders thereof in person, or by their duly
authorized attorneys or legal representatives, on surrender and cancellation of
certificates for a like number of shares, accompanied by an assignment or power
of transfer endorsed thereon or attached thereto, duly executed, and with such
proof of the
<PAGE>
authenticity of the signature as the Corporation or its agents may reasonably
require. A record shall be made of each transfer.
The Board of Directors may make other and further rules and regulations
concerning the transfer and registration of certificates for stock and may
appoint a transfer agent or registrar or both and may require all certificates
of stock to bear the signature of either or both.
Section 3. Lost, Destroyed and Mutilated Certificates. The holder of any
stock of the Corporation shall immediately notify the Corporation of any loss,
theft, destruction or mutilation of the certificates therefor. The Corporation
may issue a new certificate of stock in the place of any certificate theretofore
issued by it alleged to have been lost, stolen or destroyed, and the Board of
Directors may, in its discretion, require the owner of the lost, stolen or
destroyed certificate, or his legal representatives, to give the Corporation a
bond, in such sum not exceeding double the value of the stock and with such
surety or sureties as they may require, to indemnify it against any claim that
may be made against it by reason of the issue of such new certificate and
against all other liability in the premises, or may remit such owner to such
remedy or remedies as he may have under the laws of the State of Delaware.
ARTICLE VII
DIVIDENDS, SURPLUS, ETC.
Section 1. General Discretion of Directors. The Board of Directors shall
have power to fix and vary the amount to be set aside or reserved as working
capital of the Corporation, or as reserves, or for other proper purposes of the
Corporation, and, subject to the requirements of the Certificate of
Incorporation, to determine whether any, if any, part of the surplus or net
profits of the Corporation shall be declared as dividends and paid to the
stockholders, and to fix the date or dates for the payment of dividends.
ARTICLE VIII
MISCELLANEOUS PROVISIONS.
Section 1. Fiscal Year. Effective January 1, 2001, the fiscal year of the
Corporation shall commence on the first day of January and end on the last day
of December in each year.
Section 2. Corporate Seal. The corporate seal shall be in such form as
approved by the Board of Directors and may be altered at their pleasure. The
corporate seal may be used by causing it or a facsimile thereof to be impressed
or affixed or reproduced or otherwise.
Section 3. Notices. Except as otherwise expressly provided, any notice
required by these Bylaws to be given shall be sufficient if given by depositing
the same in a post office or letter box in a sealed postpaid wrapper addressed
to the person entitled thereto at his address, as the same appears upon the
books of the Corporation, or by telegraphing or cabling the same to such person
at such addresses; and such notice shall be deemed to be given at the time it is
mailed, telegraphed or cabled.
<PAGE>
Section 4. Waiver of Notice. Any stockholder or director may at any time,
by writing or by telegraph or by cable, waive any notice required to be given
under these Bylaws, and if any stockholder or director shall be present at any
meeting for any purpose other than objecting at the beginning of the meeting to
the transaction of any business because the meeting is not lawfully called or
convened, his presence shall constitute a waiver of such notice.
Section 5. Checks, Drafts, etc. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the Corporation, shall be signed by such officer or officers, agent or agents of
the Corporation, and in such manner, as shall from time to time be designated by
resolution of the Board of Directors.
Section 6. Deposits. All funds of the Corporation shall be deposited from
time to time to the credit of the Corporation in such bank or banks, trust
companies or other depositories as the Board of Directors may select, and, for
the purpose of such deposit, checks, drafts, warrants and other orders for the
payment of money which are payable to the order of the Corporation, may be
endorsed for deposit, assigned and delivered by any officer of the Corporation,
or by such agents of the Corporation as the Board of Directors or the President
may authorize for that purpose.
Section 7. Voting Stock of Other Corporations. Except as otherwise ordered
by the Board of Directors or the Executive Committee, the President or the
Treasurer shall have full power and authority on behalf of the Corporation to
attend and to act and to vote at any meeting of the stockholders of any
corporation of which the Corporation is a stockholder and to execute a proxy to
any other person to represent the Corporation at any such meeting, and at any
such meeting the President or the Treasurer or the holder of any such proxy, as
the case may be, shall possess and may exercise any and all rights and powers
incident to ownership of such stock and which, as owner thereof, the Corporation
might have possessed and exercised if present. The Board of Directors or the
Executive Committee may from time to time confer like powers upon any other
person or persons.
Section 8. Indemnification of Officers and Directors. The Corporation shall
indemnify any and all of its directors or officers, including former directors
or officers, and any employee, who shall serve as an officer or director of any
corporation at the request of this Corporation, to the fullest extent permitted
under and in accordance with the laws of the State of Delaware.
ARTICLE IX
AMENDMENTS
The Board of Directors shall have the power to make, rescind, alter, amend
and repeal these Bylaws, provided, however, that the stockholders shall have
power to rescind, alter, amend or repeal any Bylaws made by the Board of
Directors, and to enact Bylaws which if so expressed shall not be rescinded,
altered, amended or repealed by the Board of Directors. No change of the time or
place for the annual meeting of the stockholders for the election of directors
shall be made except in accordance with the laws of the State of Delaware.
<PAGE>
PROXY
For the Special Meeting of the Stockholders of
PAWNBROKER.COM, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS.
The undersigned hereby appoints Neil McElwee and Joseph Schlader, and each
of them, with full power of substitution, as proxies to vote the shares, which
the undersigned is entitled to vote at the Special Meeting of Stockholders to be
held on Wednesday, May 3, 2000 and at any adjournment thereof.
(Continued and to be signed on the reverse side)
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FOLD HERE
<TABLE>
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C> <C>
1. APPROVE TO THE COMPANY'S [ ] [ ] [ ] 3. APPROVE AMENDMENT AND [ ] [ ] [ ]
CERTIFICATE OF INCORPORATION RESTATEMENT OF THE COMPANY'S
TO AUTHORIZE 150,000,000 BYLAWS TO, AMONG OTHER
SHARES OF CAPITAL STOCK, THINGS, CHANGE THE QUORUM
CONSISTING OF 100,000,000 REQUIREMENT FOR SHAREHOLDER
SHARES OF COMMON STOCK AND MEETINGS TO ONE-THIRD, TO
50,000,000 SHARES PREFERRED CREATE A STAGGERED BOARD OF
STOCK DIRECTORS CONSISTING OF THREE
CLASSES AND TO CHANGE THE
FISCAL YEAR END TO DECEMBER 31,
EFFECTIVE DECEMBER 31, 2000.
2. APPROVE AMENDMENT TO AMENDMENT
TO THE COMPANY'S 1999 STOCK
OPTION PLAN TO INCREASE THE
NUMBER OF SHARES AUTHORIZED
UNDER THE PLAN TO 8,000,000
SHARES
I PLAN TO ATTEND
THE MEETING. [ ]
This proxy, when properly signed will be
voted in the manner directed herein by the
undersigned stockholder. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF THE NOMINEES NAMED IN
PROPOSAL 1 AND FOR PROPOSALS 2 and 3.
IMPORTANT -- PLEASE SIGN AND RETURN
THIS PROXY PROMPTLY. When shares are
held by joint tenants, both should
sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as
such. If a corporation, please sign
in full corporate name by President
or other authorized officer. If a
partnership, please sign in partnership
name by an authorized person.
</TABLE>
Signature(s) Dated
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Signature(s) Dated
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Printed name(s)
------------------------------
Please sign exactly as the name(s) appears on the stock certificate(s).
Joint owners should each sign. Trustees and others acting in a
representative capacity should indicate the capacity in which they sign.
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