SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 13a-6 (e) (2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
TravelNow.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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price of other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11 (a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
TravelNow.com Inc.
318 Park Central East, Suite 306
Springfield, Missouri 65806
Dear Shareholders:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders
of TravelNow.com Inc. (the "Company") to be held at 11:00 a.m. local time,
September 26, 2000, at the University Plaza Holiday Inn, 333 S. John Q. Hammons
Parkway, Springfield, Missouri 65806.
Your approval is requested in electing directors to serve for the coming
year, ratifying and approving the Company's 2000 Omnibus Stock Incentive Plan,
ratifying and approving the appointment of an auditor for the Company for the
fiscal year ending March 31, 2001 and approving the Company's proposed
reincorporation in the State of Delaware. You will also transact any other
business that may properly come before the meeting and any adjournment or
postponement thereof.
Whether or not you plan to attend the meeting, we ask that you complete,
sign, date, and return the enclosed proxy card at your earliest convenience in
the provided postage-paid, addressed envelope to ensure that your shares will be
represented. If you attend the meeting, you may withdraw your proxy and vote
your shares in person.
Very truly yours,
By: /s/ Jeffrey A. Wasson
-----------------------------------
Jeffrey A. Wasson
Chief Executive Officer & Director
<PAGE>
TravelNow.com Inc.
318 Park Central East, Suite 306
Springfield, Missouri 65806
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 26, 2000
To the Shareholders of TravelNow.com Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
TravelNow.com Inc., a Florida corporation (the "Company"), will be held at the
University Plaza Holiday Inn, 333 S. John Q. Hammons Parkway, Springfield,
Missouri 65806, on September 26, 2000, at 11:00 a.m. local time, for the
following purposes:
(1) ELECTION OF DIRECTORS. To elect five (5) directors to hold office until
the 2001 Annual Meeting of Shareholders or until their successors are elected
and qualified;
(2) RATIFICATION AND APPROVAL OF THE 2000 OMNIBUS STOCK INCENTIVE PLAN. To
ratify and approve the provisions of the Company's 2000 Omnibus Stock Incentive
Plan;
(3) RATIFICATION AND APPROVAL OF THE APPOINTMENT OF INDEPENDENT AUDITORS.
To ratify and approve the appointment of Deloitte & Touche LLP as the
independent auditors for the Company for the fiscal year ending March 31, 2001;
(4) REINCORPORATION IN DELAWARE. To approve the proposed reincorporation of
the Company in Delaware; and
(5) OTHER BUSINESS. To transact such other business as may properly come
before the Annual Meeting of Shareholders and any adjournment or postponement
thereof.
Shareholders are or may be entitled to assert dissenters' rights under
Sections 607.1301 to 607.1320 of the Florida Business Corporation Act (copies of
which are attached to the Proxy Statement as Exhibit F).
The foregoing items of business are more fully described in the Proxy
Statement, which is attached hereto and made a part hereof. SHAREHOLDERS ARE
URGED TO READ CAREFULLY THE ATTACHED PROXY STATEMENT, INCLUDING THE RELATED
EXHIBITS ATTACHED TO THE PROXY STATEMENT, BEFORE VOTING ON THE MATTERS DESCRIBED
HEREIN AND THEREIN.
The Board of Directors has fixed the close of business on August 30, 2000,
as the record date for determining the shareholders entitled to notice of and to
vote at the 2000 Annual Meeting of Shareholders and any adjournment or
postponement thereof.
By Order of the Board of Directors
/s/ Jeffrey A. Wasson
----------------------------------
Jeffrey A. Wasson
Chief Executive Officer & Director
Springfield, Missouri
August 31, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING OF SHAREHOLDERS IN
PERSON, YOU ARE URGED TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS
PROMPTLY AS POSSIBLE IN THE POSTAGE-PREPAID ENVELOPE PROVIDED TO ENSURE YOUR
REPRESENTATION AND THE PRESENCE OF A QUORUM AT THE ANNUAL MEETING. IF YOU SEND
IN YOUR PROXY CARD AND THEN DECIDE TO ATTEND THE ANNUAL MEETING TO VOTE YOUR
SHARES IN PERSON, YOU MAY STILL DO SO. YOUR PROXY IS REVOCABLE IN ACCORDANCE
WITH THE PROCEDURES SET FORTH IN THE PROXY STATEMENT.
<PAGE>
TravelNow.com Inc.
318 Park Central East, Suite 306
Springfield, Missouri 65806
GENERAL INFORMATION
This Proxy Statement is furnished to the shareholders of TravelNow.com
Inc., a Florida corporation (the "Company"), in connection with the solicitation
by the Board of Directors of the Company (the "Board" or "Board of Directors")
of proxies in the accompanying form for use in voting at the 2000 Annual Meeting
of Shareholders of the Company (the "Annual Meeting") to be held on September
26, 2000, at the University Plaza Holiday Inn, 333 S. John Q. Hammons Parkway,
Springfield, Missouri 65806, at 11:00 a.m. local time, and any adjournment or
postponement thereof. The shares represented by the proxies received, properly
marked, dated, executed and not revoked will be voted by the Chief Executive
Officer at the Annual Meeting.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is exercised by delivering to the Company (to
the attention of Mr. H. Whit Ehrler, the Company's Chief Financial Officer) a
written notice of revocation or a duly executed proxy bearing a later date, or
by attending the Annual Meeting and voting in person.
SOLICITATION AND VOTING PROCEDURES
This Proxy Statement and the accompanying proxy were first sent by mail to
shareholders of the Company on or about August 31, 2000. The solicitation of
proxies will be conducted by mail, and the Company will bear all attendant
costs. The Company will reimburse brokerage firms and others for their expenses
incurred in forwarding solicitation material regarding the Annual Meeting to
beneficial owners of the Company's common stock, $0.01 par value per share (the
"Common Stock"). The Company may conduct further solicitation personally, by
telephone or by facsimile through its officers, directors and regular employees,
none of whom will receive additional compensation for assisting with such
solicitation.
The close of business on August 30, 2000 has been fixed as the record date
(the "Record Date") for determining the holders of shares of the Common Stock
entitled to notice of and to vote at the Annual Meeting. As of the Record Date,
the Company had approximately 10,882,637 shares of Common Stock outstanding
and entitled to vote at the Annual Meeting. The holder of each outstanding share
of Common Stock on the Record Date is entitled to one (1) vote on all matters.
The holders of a majority of the shares entitled to vote, present in person
or represented by proxy, shall constitute a quorum at the Annual Meeting. For
Proposal No. 1 (the election of directors), the five candidates receiving the
greatest number of affirmative votes will be elected, provided a quorum is
present and voting. The affirmative vote of a majority of the shares present in
person or represented by proxy at the Annual Meeting will be required to ratify
and approve each of Proposal No. 2 (the 2000 Omnibus Stock Incentive Plan),
Proposal No. 3 (Appointment of Independent Auditors) and Proposal No. 4
(Reincorporation in Delaware).
Votes to abstain and broker non-votes are counted as present for purposes
of determining the presence of a quorum. A broker non-vote occurs when a nominee
holding shares for a beneficial owner does not vote on a particular proposal
because the nominee does not have the discretionary voting power with respect to
that item and has not received instructions from the beneficial owner.
Abstentions will be considered votes cast in opposition on Proposal No. 2,
Proposal No. 3 and Proposal No. 4. Broker non-votes will not be considered votes
cast and will have no effect on the vote relating to Proposal No. 2, Proposal
No. 3 and Proposal No. 4.
1
<PAGE>
CHANGES IN CONTROL
On July 23, 1999, an Agreement and Plan of Merger was consummated between
TravelNow.com Inc., a Missouri corporation ("TravelNow of Missouri"), and the
Company, which, at that time, was known as Sentry Accounting, Inc. Pursuant to
the Agreement and Plan of Merger, the Company acquired 100% of the issued and
outstanding stock of TravelNow of Missouri in exchange for 1,475,533 shares of
restricted Common Stock of the Company. At the time of the merger, 491,000
shares of Common Stock were freely transferable or unrestricted and held by
shareholders of the Company, approximately 80% of which were held by the Chief
Executive Officer of the Company, Teresa B. Crowley. After the merger, the total
number of shares of Common Stock issued and outstanding was 1,966,533. On July
28, 1999, the Company issued a stock dividend of approximately 4.25 shares for
each share outstanding, increasing the total shares of Common Stock from
1,966,533 to 10,324,304 shares issued and outstanding. Pursuant to the merger,
the shareholders of TravelNow of Missouri received approximately 75% of the
Common Stock of the Company.
At the time of the filing of the Articles of Merger, the Company changed
its name from Old Sentry Accounting, Inc. to TravelNow.com Inc.
The transaction consummated between TravelNow of Missouri and the Company
is generally known as a reverse merger. A reverse merger is normally the result
of a merger in which the acquiring corporation (the Company) has less size and
substance than the acquired company (TravelNow of Missouri). The acquiring
corporation (the Company) survives as a legal entity, but the shareholders of
the acquired company (TravelNow of Missouri) obtain a majority of the voting
rights of the combined entity. The substantive effect of the transaction is thus
reversed from the legal effect.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Currently, the Board of Directors of the Company consists of five (5)
persons, each having a term of office of one (1) year. On October 22, 1999,
pursuant to its authority under the Company's Bylaws, the Board of Directors
increased the number of directorships on the Board from two (2) to five (5). On
that date, H. Whit Ehrler, Bill Perkin and Jerry Rutherford were appointed by
the Board to fill the vacancies created by the increase in the number of
directorships. On May 3, 2000, John Christopher Noble resigned from his position
on the Board of Directors, as well as from his positions as Co-Chief Executive
Officer and Secretary. On that date, Antoine Toffa was appointed by the Board to
fill the newly created vacancy. At each annual meeting of shareholders,
directors will be elected for a full term of one (1) year to succeed those
directors whose terms are expiring.
The Board has nominated Jeffrey A. Wasson, H. Whit Ehrler, Bill Perkin,
Jerry Rutherford and Antoine Toffa as directors, each to serve a one (1) year
term until the 2001 annual meeting of shareholders or until the director's
earlier resignation or removal. Each of the nominees has consented, if elected
as a director of the company, to serve until his term expires. The Board of
Directors has no reason to believe that any of the nominees will not serve if
elected, but if any of them should become unavailable to serve as a director,
and if the Board designates a substitute nominee, the persons named as proxies
will vote for the substitute nominee designated by the Board.
The five (5) nominees receiving a plurality of the votes of the shares
present, either in person or represented by proxy, will be elected as directors.
Votes withheld from any director are counted for purposes of determining the
presence or absence of a quorum.
Certain information about Jeffrey A. Wasson, H. Whit Ehrler, Bill Perkin,
Jerry Rutherford and Antoine Toffa, the director nominees, is furnished below.
Jeffrey A. Wasson was a founding member of the Company in May 1995. Mr.
Wasson was elected to the Board of Directors on August 6, 1999. Currently, Mr.
Wasson serves as the Company's Chief Executive Officer. From August of 1991
until May of 1995, Mr. Wasson was a student at the University of Missouri in
Columbia, Missouri, majoring in Travel and Tourism.
2
<PAGE>
H. Whit Ehrler joined the Company as Vice President and Chief Financial
Officer on August 23, 1999. Mr. Ehrler was elected to the Board of Directors on
October 22, 1999 to fill a newly created seat on the Board. Mr. Ehrler was Vice
President, Finance & Administration of Carrollton Graphics, Inc. in Carrollton,
Ohio from June 1997 through August 1999. From 1994 through June 1997, Mr. Ehrler
was with Helson Ehrler Investment Partners in Stamford, Connecticut.
Bill Perkin was elected to the Board of Directors on October 22, 1999, to
fill a newly created seat on the Board. Since February 1, 2000, Mr. Perkin has
been the Chief Executive Officer of Eclectic Enterprises, Inc. d/b/a
Way2Bid.com. From 1988 to July 2000, Mr. Perkin was the sole owner of Perkin
Marketing Services, Inc., an advertising marketing company with principal
offices located in Springfield, Missouri.
Jerry Rutherford was elected to the Board of Directors on October 22,
1999, to fill a newly created seat on the Board. Since March of 1995, Mr.
Rutherford has operated several businesses owned entirely by Mr. Rutherford,
including ERA Rutherford Realtors located in Springfield, Missouri. Mr.
Rutherford was a Vice President and General Manager of TeleCable of Springfield,
Inc. in Springfield, Missouri from April 19, 1979, until March 1995, at the time
of its acquisition by Telecommunications, Inc. in February of 1995.
Antoine Toffa was appointed to the Board of Directors on May 3, 2000, to
fill a newly vacated seat on the Board. Mr. Toffa holds a master's degree in
Business Administration from Harvard Business School. He is also a member of the
Board of Directors of 800 Travel Systems, Inc. In June 1996, Mr. Toffa founded
Trip.com, Inc., and acted as President and Chief Executive Officer of Trip.com,
Inc. until September 1999. Prior to June 1996, Mr. Toffa was General Manager of
Product Development for US West Media Group. From 1990 to 1994, Mr. Toffa acted
as a consultant for Time Warner Interactive and Mars & Co. In January 2000, Mr.
Toffa was chosen as the Person of the Year in interactive travel by Interactive
Travel Report. Mr. Toffa was also voted one of 100 rising stars in the travel
industry by Travel Agent Magazine in April 1999.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES NAMED
ABOVE.
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information with respect to the
executive officers and directors of the Company as of August 18, 2000.
Name Age Position with TravelNow.com Inc.
-------------------- --- --------------------------------
Jeffrey A. Wasson 27 Chief Executive Officer & Director
H. Whit Ehrler 59 Vice President, Chief Financial Officer
& Director
Christopher R. Kuhn 33 Vice President & Chief Information Officer
Ross E. Summers 48 Vice President & General Manager
Marvin McDaniel 51 Vice President of Travel Services
Michael Bauer 31 Vice President of Sales & Marketing
Bill Perkin 44 Director
Jerry Rutherford 56 Director
Antoine Toffa 34 Director
3
<PAGE>
For information concerning the backgrounds of Mr. Wasson, Mr. Ehrler, Mr.
Perkin, Mr. Rutherford and Mr. Toffa see "Proposal No. 1 Election of Directors"
above.
Christopher R. Kuhn joined the Company on July 12, 1999, as Vice President
and Chief Information Officer. Prior to joining the Company, Mr. Kuhn was
Director of Web Development for Compaq Computer from August 1998 until July
1999, Manager of Web Service Solutions with Digital Equipment from April 1998
until August 1998 and Manager of Web Engineering for MCI Telecommunications from
November 1989 until April 1998.
Ross Summers joined the Company as General Manager in September 1999. Mr.
Summers was appointed Vice President of the Company on May 3, 2000 and Secretary
of the Company on June 7, 2000. Mr. Summers has eighteen (18) years of
telecommunications management experience, most recently as General Manager of
TCI and AT&T Cable Services. Mr. Summers was an original investor in the
Company. He is a graduate from the University of Missouri-Columbia.
Marvin McDaniel officially became an employee of the Company in February
2000. Mr. McDaniel has more than twenty-six (26) years of experience in the
travel industry as owner of Carlson Wagonlit/McDaniel Travel, one of the largest
full-service travel agencies in southern Missouri. Prior to joining the Company,
Mr. McDaniel was instrumental in the Company's growth, providing travel
expertise and a number of travel-related facilities in the early stages of the
Company's development. Mr. McDaniel is a graduate of Southwest Missouri State
University with a major in mathematics.
Michael Bauer joined the Company as Vice President of Sales & Marketing in
April 2000 and has six (6) years of travel industry experience. Mr. Bauer was an
Account Executive for Ambassadors Performance Group from September 1998 through
April 2000. From 1994 through 1998, Mr. Bauer was with Martiz Travel Company
where he held various positions. From 1993 through 1994, Mr. Bauer was with
Marketsource in Chicago, Illinois. Mr. Bauer held various positions with Walt
Disney World, in Orlando Florida from 1991 through 1993. He attended the
University of Iowa in Iowa City, Iowa, majoring in Leisure Studies.
RELATIONSHIPS AMONG DIRECTORS OR EXECUTIVE OFFICERS
There are no family relationships among any of the directors or executive
officers of the Company.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During the fiscal year ended March 31, 2000, the Board met five (5) times.
During the fiscal year ended March 31, 2000, all directors attended more than
75% of all the meetings of the Board. The Board has an audit committee, a
compensation committee and a stock option committee, as described below. The
Board does not have a nominating committee or a committee performing the
functions of a nominating committee. While there are no formal procedures for
shareholders to recommend nominations, the Board will consider shareholder
recommendations. Such recommendations should be addressed to Mr. Ross Summers,
the Company's Secretary, at the Company's principal executive offices.
Audit Committee
---------------
In December 1999, the Board of Directors formed the audit committee for the
purpose of reviewing the Company's internal accounting procedures and consulting
with and reviewing the services provided by the Company's independent public
accountants, Deloitte & Touche LLP ("Deloitte & Touche").
Currently, the audit committee consists of the three (3) independent
directors, Bill Perkin, Jerry Rutherford and Antoine Toffa. The audit committee
did not meet during the fiscal year ended March 31, 2000.
The Board of Directors has adopted a written charter for the audit
committee, a copy of which charter is attached to this Proxy Statement as
Exhibit A.
4
<PAGE>
Compensation Committee
----------------------
In December 1999, the Board of Directors formed the compensation committee.
The compensation committee reviews and recommends to the Board the compensation
and benefits of all of the officers of the Company and reviews general policy
relating to compensation and benefits of the Company's employees. The
compensation committee consists of two (2) of the independent directors, Bill
Perkin and Jerry Rutherford. The compensation committee did not meet during the
fiscal year ended March 31, 2000.
Stock Option Committee
----------------------
In May 2000, the Board of Directors formed the stock option committee. The
stock option committee administers the TravelNow.com Inc. 2000 Omnibus Stock
Incentive Plan and grants stock options pursuant to such plan. See "Proposal No.
3," below. Currently, the stock option committee consists of two (2) of the
independent directors, Bill Perkin and Jerry Rutherford. The stock option
committee did not meet during the fiscal year ended March 31, 2000.
COMPENSATION OF DIRECTORS
In exchange for agreeing to serve as a member of the Board of Directors,
Antoine Toffa was granted options exercisable at any time after May 3, 2000, to
acquire 20,000 shares of Common Stock at $8.25 per share. The Company's other
non-employee directors are not currently compensated for serving in such
capacity but may be compensated in the future.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In April 2000, the Company made a loan to each of its then Co-Chief
Executive Officers, Jeffrey A. Wasson and John Christopher Noble. Mr. Wasson
received $65,000, and Mr. Noble received $60,000. The loans were made to pay the
taxes related to the restricted stock award each Co-Chief Executive Officer
received on May 18, 1999. Mr. Wasson and Mr. Noble each executed a Promissory
Note in favor of the Company related to their respective loan. Each note is
payable on demand and has an interest rate of 8% per annum.
There were no transactions, or series of transactions, during fiscal year
end 1999 or fiscal year end 2000, and other than the above, there have not been
nor are there any currently proposed transactions, or series of transactions, to
which the Company was a party, and in which, to the Company's knowledge, any
director, executive officer, nominee, five percent (5%) or greater shareholder
or any member of the immediate family of any of the foregoing persons, has or
will have any direct or indirect material interest.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
On August 25, 1997, John Christopher Noble, a 17.7% shareholder of the
Company pled guilty to a charge of assault in the third degree, a Class A
misdemeanor, in the Circuit Court of Greene County, Missouri. The Circuit Court
ordered Mr. Noble to pay a fine of $10.00, court costs of $249.50, restitution
of $900.00, and to complete fifty (50) hours of community service and placed Mr.
Noble on probation until August 24, 1999. Mr. Noble has fully complied with the
Circuit Court's order and the probation has been completed.
5
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Deloitte & Touche has served as the Company's independent auditors since
July 27, 1999, and has been appointed by the Board to continue as the Company's
independent auditors for the Company's fiscal year ending March 31, 2001. In the
event that ratification of this selection of auditors is not approved by the
holders of a majority of the shares of Common Stock entitled to vote at the
Annual Meeting in person or by proxy, management will review its future
selection of auditors. A representative of Deloitte & Touche is expected to be
present at the Annual Meeting. The representative will have an opportunity to
make a statement and to respond to appropriate questions.
Prior to the appointment of Deloitte and Touche in July of 1999, Guida &
Jiminez, PA, located in Tampa Florida, acted as the Company's independent
auditors. On July 23, 1999, Guida & Jiminez resigned from its position as the
Company's independent accountant. Guida & Jiminez's reports on the financial
statements of the Company have never contained an adverse opinion or a
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principles. There were no disagreements between the
Company and Guida & Jiminez on any matter or accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which, if not
resolved to Guida & Jiminez's satisfaction, would have caused Guida & Jiminez to
make reference to the subject matter of such disagreement in connection with its
reports.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF
DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING MARCH 31, 2001.
PROPOSAL NO. 3
RATIFICATION OF THE 2000 OMNIBUS STOCK INCENTIVE PLAN
The Board of Directors of the Company has adopted, subject to shareholder
approval, the 2000 Omnibus Stock Incentive Plan (the "Plan"). The purpose of the
Plan is to encourage stock ownership by all employees of, and certain other
persons associated with, the Company and its subsidiaries so that they may
acquire or increase their proprietary interest in the success of the Company and
to encourage them to remain in the employ of, or continue their relationship
with, the Company. A further purpose of the Plan is to provide such individuals
with additional incentive and reward opportunities designed to enhance the
profitable growth of the Company. The full text of the Plan is attached as
Exhibit B to this Proxy Statement. Reference should be made to Exhibit B for a
complete statement of the provisions of the Plan summarized on the following
pages.
TERM AND NUMBER OF AUTHORIZED SHARES
The Plan authorizes the committee to grant awards beginning on May 3, 2000
until the expiration of the Plan ten (10) years after such date. Up to 1,552,395
shares of Common Stock are available to be made subject to awards under the
Plan. Shares of Common Stock subject to awards which terminate by expiration,
forfeiture, cancellation or otherwise without the issuance of shares, or which
are settled in cash in lieu of Common Stock, will again be available to be made
subject to awards under the Plan.
ADMINISTRATION
The Plan provides for administration by a committee of disinterested
persons, to be comprised of either the compensation committee of the Board or
another committee designated by the Board. In May 2000, the Board formed the
stock option committee to administer the Plan. Members of the stock option
committee may participate in the Plan, but only to the extent set forth below in
the sections titled "Non-Employee Director Options" and "Non-Employee Director
Awards." Among the powers granted to the stock option committee are the powers
to interpret the Plan, establish rules and regulations for its operation, select
eligible persons to receive awards and determine the timing, form, amount and
other terms and conditions pertaining to any award.
ELIGIBILITY FOR PARTICIPATION
Any employee of the Company or any of its subsidiaries, and any consultant
or independent contractor of the Company or any of its subsidiaries, is eligible
to participate in the Plan. The selection of participants from among these
individuals is within the discretion of the stock option committee. Awards may
also be granted by the Board to directors of the Company who are not employees
of the Company or any of its subsidiaries, but only to the extent set forth in
the sections titled "Non-Employee Director Options" and "Non-Employee Director
Stock Awards."
6
<PAGE>
AMENDMENT OF PLAN
The Company, through the Board, may amend the Plan at any time, but may
not, without shareholder approval, adopt any amendment which in the opinion of
the Company's counsel requires the approval of the Company's shareholders.
TYPES OF AWARDS
The Plan provides for the granting of any or all of the following types of
awards: (1) stock options, including non-qualified stock options and stock
options intended to qualify as "incentive stock options" under Section 422 of
the Internal Revenue Code (the "Code"): (2) stock appreciation rights (SARs), in
tandem with stock options or freestanding; (3) restricted common stock; (4)
performance shares; (5) annual cash bonuses; and (6) any other incentive award
of, or based on, the Common Stock which is established by the stock option
committee and which is consistent with the Plan's purpose. The awards may be
granted singly or in combination as determined by the stock option committee.
STOCK OPTIONS. Under the Plan, the stock option committee may grant awards
in the form of options (an "Option") to purchase shares of Common Stock. The
stock option committee will, with regard to each Option, determine the number of
shares subject to the Option, the manner and time of the Option's exercise, and
the exercise price per share of stock subject to the Option. The exercise price
of an Option may, at the discretion of the stock option committee, be paid by a
participant in cash, shares of Common Stock, "Cashless Exercise" (described in
Section 6.2(b) of the Plan), any combination thereof, or such other
consideration as the stock option committee may deem appropriate. The stock
option committee may grant non-qualified options or incentive stock options
which satisfy the applicable requirements of Section 422 of the Code.
NON-EMPLOYEE DIRECTOR OPTIONS. The Plan permits the grant of Options to
purchase shares of Common Stock to each person who is a non-employee director,
provided each such grant is approved by the Board with the recipient of such
award abstaining from the vote. The per share exercise price of a non-employee
director Option is equal to the per share fair market value of the Common Stock
as of the date of grant of the Option. Also, the period within which an Option
may be exercised will expire ten (10) years from the date the Option is granted.
Non-employee director Options are forfeited if the directorship of an optionee
is terminated on account of any act of fraud, intentional misrepresentation,
embezzlement, misappropriation or conversion of assets or opportunities of the
Company or any of its subsidiaries. The exercise price of a non-employee
director Option may be paid by a director in cash, shares of Common Stock,
Cashless Exercise, any combination thereof, or such other consideration as the
Board may deem appropriate.
STOCK APPRECIATION RIGHTS. The Plan authorizes the stock option committee
to grant SARs either in tandem with an Option ("Tandem SARs") or independent of
an Option ("Freestanding SARs"). A SAR is a right to receive a payment equal to
the appreciation in market value of a stated number of shares of Common Stock
from the SAR's exercise price to the market value on the date of its exercise.
A Tandem SAR may be granted either at the time of the grant of the
related Option or at any time thereafter during the term of the Option. A Tandem
SAR shall be exercisable to the extent its related Option is exercisable, and
the exercise price of such a SAR will be the same as the option price under the
related Option. Upon the exercise of an Option as to some or all of the shares
covered thereby, the related Tandem SAR will be canceled automatically to the
extent of the number of shares for which the Option is exercised.
The stock option committee will, with regard to a Freestanding SAR,
determine the number of shares subject to the SAR, the manner and time of the
SAR's exercise, and the exercise price of the SAR.
RESTRICTED STOCK AWARDS. The Plan authorizes the stock option committee to
grant awards in the form of restricted shares of Common Stock ("Restricted Stock
Awards"). Such awards will be subject to such terms, conditions, restrictions
7
<PAGE>
and/or limitations, if any, as the stock option committee deems appropriate
including, without limitation, restrictions on transferability and continued
employment. The Plan gives the stock option committee the discretion to
accelerate the vesting of Restricted Stock Awards under such circumstances as
the stock option committee deems appropriate.
PERFORMANCE SHARES. The Plan also allows for the granting of performance
shares. Under the Plan, "Performance Share Awards" means units which are
expressed in terms of Common Stock. Such awards will be contingent upon the
attainment by the Company of certain performance objectives over a period to be
determined by the stock option committee. The performance objectives to be
achieved during a performance period and the measure of whether and to what
degree such objectives have been attained will also be determined by the stock
option committee.
CASH BONUS. Contingent cash bonuses may also be granted under the Plan. The
actual payment of a bonus will depend upon the extent to which the Company and
the participant achieve over the designated performance period such corporate
and individual goals as may be established by the stock option committee. The
stock option committee may also establish the fund to be available for the
payment of cash bonuses for a particular performance period.
OTHER INCENTIVE AWARDS. Under the Plan, the stock option committee also has
the discretion to grant other types of awards under which shares of Common Stock
are or may in the future be acquired by a participant. Such awards may include
grants of debt securities convertible into or exchangeable for shares of Common
Stock upon the attainment of performance goals or such other conditions as the
stock option committee may determine.
NON-EMPLOYEE DIRECTOR STOCK AWARDS. An award of shares of the Common Stock
may be granted to a non-employee director at the discretion and with the
approval of the Board, with the recipient of such shares abstaining from such
vote. In addition, the Board may, at its discretion, grant such other awards
based on the Common Stock of the Company as it deems appropriate.
OTHER TERMS OF AWARDS. Options will be exercisable for, and Restricted
Stock Awards will be made in, Common Stock. Performance Share Awards and SARs
may be paid in cash, Common Stock, or a combination of cash and Common Stock, as
the stock option committee may determine. If an award is granted in the form of
a Restricted Stock Award, Option, Performance Share Award or any other form of a
stock-based grant, the stock option committee may include as part of such award
an entitlement to receive voting rights, dividends or dividend equivalents.
The Plan provides for the forfeiture of awards under certain
circumstances as determined by the stock option committee. The Plan authorizes
the stock option committee to promulgate administrative guidelines for the
purpose of determining what treatment will be afforded to a participant under
the Plan in the event of his or her death, disability, retirement or termination
for an approved reason.
Upon granting any award, the stock option committee may, by way of an
award notice or otherwise, establish such other terms, conditions, restrictions
and/or limitations governing the award as are not inconsistent with the Plan.
CHANGE OF CONTROL EVENT
Upon the occurrence of a Change of Control Event (as defined in the
Plan), awards may be treated as follows: (i) all of the participant's
outstanding awards could become immediately vested, fully earned, exercisable,
and/or in the case of Options, converted into Stock Appreciation Rights, as
appropriate, and (ii) the Company could make full payment to each such
participant with respect to any Performance Share Award, Stock Appreciation
Right or Other Incentive Award, deliver certificates to such participant with
respect to each Restricted Stock Award and permit the exercise of Options and/or
Stock Appreciation Rights, respectively, granted to such participant.
8
<PAGE>
FEDERAL INCOME TAX TREATMENT
Under current federal tax law, the following are the federal income
tax consequences generally arising with respect to awards under the Plan. A
participant who is granted an incentive stock option will not realize any
taxable income at the time of the grant or at the time of exercise. Similarly,
the Company will not be entitled to any deduction at the time of grant or at the
time of exercise. If the participant makes no disposition of the shares of
Common Stock acquired pursuant to an incentive stock option before the later of
two (2) years after the date of grant of such Option and one (1) year after the
transfer of such shares to him or her, any gain or loss realized on a subsequent
disposition of such shares will be treated as long-term capital gain or loss.
Under such circumstances, the Company will not be entitled to any deduction for
federal income tax purposes. Conversely, if the participant disposes of shares
of Common Stock acquired pursuant to an incentive stock option before the later
of two (2) years after the date of grant of such Option and one (1) year after
the transfer of such shares to him or her, any gain or loss realized will be
treated as ordinary income and the Company will be entitled to a deduction for
federal income tax purposes.
The participant who is granted a non-qualified stock option will not
realize taxable income at the time of grant, but will realize taxable income at
the time of exercise equal to the difference between the exercise price of the
shares of Common Stock acquired pursuant to such Option and the market value of
such shares on the date of exercise. The Company will be entitled to a
corresponding deduction for federal income tax purposes in the same amount.
The grant of a SAR will produce no federal income tax consequences for
the participant or the Company. The exercise of a SAR will result in taxable
income to the participant equal to the difference between the exercise price of
the shares and the market price of such shares on the date of exercise. The
Company will be entitled to a corresponding deduction for federal income tax
purposes in the same amount.
A participant who has been granted a Performance Share Award generally
will not realize taxable income at the time of grant, and the Company will not
be entitled to a deduction at such time. A participant will realize ordinary
income at the time the award is paid, and the Company will have a corresponding
deduction.
A participant who has been granted a Restricted Stock Award generally
will not realize taxable income at the time of the grant, and the Company will
not be entitled to a deduction at the time of the grant, assuming that the
restrictions constitute a substantial risk of forfeiture for federal income tax
purposes. When such restrictions lapse, the participant will receive taxable
income in an amount equal to the excess of the fair market value of the shares
at such time over the amount, if any, paid for such shares. The Company will be
entitled to a corresponding deduction.
Although a recipient of a Restricted Stock Award is not normally taxed
at the time of grant, such recipient may elect under Code Section 83(b) to pay
income tax at that time. In such a case, the recipient will recognize taxable
income in an amount equal to the excess of the fair market value of the shares
at the time of grant over the amount, if any, paid for such shares. The Company
will be entitled to a corresponding deduction at such time.
9
<PAGE>
OTHER INFORMATION
The closing price of the Common Stock reported on the Nasdaq on May 3,
2000 was $8.25 per share.
NEW PLAN BENEFITS
2000 OMNIBUS STOCK INCENTIVE PLAN
Name and Position Dollar Value(1) Number of Units
----------------------- ------------ ---------------
John Christopher Noble (2) $0.00 0
Jeffrey A. Wasson, Chief
Executive Officer (3) $0.00 0
H. Whit Ehrler, Chief Financial $0.00 15,757
Officer and Vice President
Christopher R. Kuhn, Chief $0.00 15,757
Information Officer and Vice
President
Michael Bauer, Vice $0.00 37,606
President
Marvin McDaniel, Vice $0.00 12,606
President
Ross Summers, Vice $0.00 12,606
President
All current Executive Officers, $0.00 94,332
as a group
All current Directors who are
not Executive Officers, as a group $0.00 20,000
All Employees, as a group $0.00 245,783
--------------
(1) The options were granted on May 3, 2000 and have an exercise price of
$8.25 per share. The options vest in three (3) equal annual
installments. The first installment will vest on May 3, 2001, and the
remaining installments will vest on the following two (2)
anniversaries of such date, respectively. Because none of the options
have vested at this time and because the options had no value as of
the date of grant, the dollar value of the options is $0.00.
(2) On May 3, 2000, Mr. Noble resigned from his positions as Co-Chief
Executive Officer, Secretary, Director and employee of the Company.
Because he was no longer an employee of the Company on May 3, 2000,
the date of the grant of the options, he did not receive any stock
options of the Company pursuant to the Plan.
(3) Mr. Wasson has elected not to participate in the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE COMPANY'S
2000 OMNIBUS STOCK INCENTIVE PLAN.
10
<PAGE>
PROPOSAL NO. 4
REINCORPORATION IN DELAWARE
For the reasons set forth below, the Board believes that it is in the
best interests of the Company and its shareholders to change the state of
incorporation of the Company from Florida to Delaware (the "Proposed
Reincorporation"). Throughout this Proxy Statement, the Company as currently
incorporated in Florida will be referred to as "TN-Florida" and the Company as
reincorporated in Delaware (subject to approval by the shareholders) will be
referred to as "TN-Delaware."
As the Company plans for the future, the Board and the Company's
management believe that it is in the best interests of the Company and its
shareholders that the Company be able to draw upon well-established principles
of corporate governance in making legal and business decisions. The
predictability of Delaware law provides a reliable foundation on which the
Company's governance decisions can be based, and the Company believes that its
shareholders will benefit from the responsiveness of Delaware law to their needs
and to those of the corporation they own.
REASONS FOR THE PROPOSED REINCORPORATION
For many years, Delaware has followed a policy of encouraging
incorporation in that state and, in furtherance of that policy, has been a
leader in adopting, construing and implementing comprehensive, flexible
corporate laws that are responsive to the legal and business needs of the
corporations organized under its laws. Many corporations have chosen Delaware as
their original state of incorporation or have subsequently changed their
corporate domiciles to Delaware for these reasons. Because of Delaware's
popularity as the state of incorporation for many major corporations, both the
legislature and the courts in Delaware have demonstrated an ability and a
willingness to act quickly and effectively to meet changing business needs. The
Delaware courts have developed considerable expertise in dealing with corporate
issues and a substantial body of case law has developed construing Delaware law
and establishing public policies with respect to corporate legal affairs.
There is substantial judicial precedent in the Delaware courts as to
the legal principles applicable to measures that may be taken by corporations
and as to the conduct of the boards of directors under the business judgment
rule and other standards. The Company believes that its shareholders will
benefit from the well-established principles of corporate governance that
Delaware law affords.
THE MERGER
The Proposed Reincorporation will be effected by merging TN-Florida
into TN-Delaware, a new Delaware corporation that is a wholly-owned subsidiary
of TN-Florida (the "Reincorporation Merger"). Upon completion of the
Reincorporation Merger, TN-Florida as a corporate entity, will cease to exist
and TN-Delaware will succeed to the assets and assume the liabilities of
TN-Florida and will continue to operate the business of the Company under its
current name, TravelNow.com Inc.
As provided by the Merger Agreement, in substantially the form
attached hereto as Exhibit E (the "Merger Agreement"), each outstanding share of
TN-Florida Common Stock will be automatically converted into one share of
TN-Delaware common stock, $0.01 par value per share, upon the effective date of
the Reincorporation Merger. Each stock certificate representing issued and
outstanding shares of TN-Florida Common Stock will continue to represent the
same number of shares of TN-Delaware common stock. IT WILL NOT BE NECESSARY FOR
SHAREHOLDERS TO EXCHANGE THEIR EXISTING TN-FLORIDA STOCK CERTIFICATES FOR
TN-DELAWARE STOCK CERTIFICATES. HOWEVER, SHAREHOLDERS MAY REQUEST THAT THEIR
CERTIFICATES BE EXCHANGED IF THEY SO CHOOSE.
After the Reincorporation Merger, the rights of the shareholders and
the Company's corporate affairs will be governed by the Delaware General
Corporation Law (the "DGCL") and by the certificate of incorporation and bylaws
of TN-Delaware. Certain material differences between Florida corporate law and
Delaware corporate law are discussed below under "Comparison of Shareholders'
Rights under Delaware and Florida Corporate Law."
If approved by the shareholders, it is anticipated that the
Reincorporation Merger will become effective (the "Effective Date") as soon as
practicable following the Annual Meeting. However, as described in the Merger
Agreement, the Reincorporation Merger (and thus the Proposed Reincorporation)
may be abandoned or the Merger Agreement may be amended by the Board (except
that the principal terms may not be amended without shareholder approval) either
before or after shareholder approval has been obtained and prior to the
Effective Date if, in the opinion of the Board, circumstances arise which make
it inadvisable to proceed with the Proposed Reincorporation under the original
terms of the Merger Agreement.
The discussion set forth below is qualified in its entirety by
reference to the TN-Delaware Charter (also known as its certificate of
incorporation), the TN-Delaware Bylaws and the Merger Agreement, copies of which
are attached to this Proxy Statement as Exhibits C, D and E, respectively.
11
<PAGE>
RIGHTS OF DISSENTING SHAREHOLDERS
If the Reincorporation Merger is approved, each shareholder who did
not approve the Proposed Reincorporation and who complies with the dissenters'
rights provisions of the Florida Business Corporation Act ("FBCA") will have the
right to be paid in cash the fair value of his Common Stock. For purposes of
this portion of the Proxy Statement, when reference is made to the Company, it
shall mean TN-Florida or TN-Delaware, depending on when the Proposed
Reincorporation is consummated.
In order to receive cash payment for his Common Stock, a dissenting
shareholder must comply with the procedures specified by Sections 607.1301 to
607.1320 of the FBCA, which are attached as Exhibit F to this Proxy Statement.
Any shareholder considering exercising his dissenter's rights is urged to review
Sections 607.1301 to 607.1320 carefully. The following summary of the principal
provisions of Sections 607.1301 to 607.1320 is qualified in its entirety by
reference to the text thereof. Further, the following discussion is subject to
the possibility that the Company may abandon the Proposed Reincorporation, as
discussed above. If the Company abandons the Proposed Reincorporation, the
rights of dissenting shareholders would terminate and such dissenters would be
reinstated to all of their rights as shareholders.
Any shareholder who wishes to dissent from the Proposed
Reincorporation and receive a cash payment for his Common Stock must (a) deliver
to the Company before the vote is taken written notice of the shareholder's
intent to demand payment for his Common Stock if the Proposed Reincorporation is
effectuated and (b) not vote his shares in favor of the Proposed
Reincorporation. Please note, a proxy vote against the Proposed Reincorporation
DOES NOT constitute notice of intent to demand payment.
FAILURE TO DELIVER THE REQUIRED NOTICE PRIOR TO THE SHAREHOLDER VOTE WILL RESULT
IN THE FORFEITURE OF DISSENTERS' RIGHTS.
COMMUNICATIONS WITH RESPECT TO DISSENTERS' RIGHTS SHOULD BE ADDRESSED TO THE
SECRETARY OF THE COMPANY, MR. ROSS SUMMERS, AT 318 PARK CENTRAL EAST, SUITE 306,
SPRINGFIELD, MISSOURI 65806.
If the Proposed Reincorporation is approved by the required vote of
the shareholders of the Company, then within ten (10) days after such approval,
the Company will give written notice of such approval to each shareholder who
filed a notice of intent to demand payment for his shares. Within twenty (20)
days after the Company gives such notice, any shareholder who elects to dissent
must file with the Company a notice of his election to dissent, which notice
must include his name and address, the number, classes and series of shares as
to which he dissents and a demand for payment of the fair value of his shares.
Upon filing a notice of election to dissent, a dissenting shareholder
will cease to have any of the rights of a shareholder except the right to be
paid the fair value of his Common Stock pursuant to Section 607.1320. If a
shareholder loses his dissenter's rights, either by withdrawal of his demand
before the Company makes an offer of payment, abandonment of the Proposed
Reincorporation by the Company or otherwise, he will not have the right to
receive a cash payment for his Common Stock and will be reinstated to all of his
rights as a shareholder as they existed at the time of the filing of his demand.
AT THE TIME OF DEMANDING PAYMENT FOR HIS SHARES OF COMPANY COMMON STOCK, EACH
SHAREHOLDER DEMANDING PAYMENT MUST SUBMIT THE CERTIFICATE OR CERTIFICATES
REPRESENTING HIS SHARES OF COMPANY COMMON STOCKS FOR NOTATION THEREON THAT SUCH
DEMAND HAS BEEN MADE. FAILURE TO DO SO WILL, AT THE OPTION OF THE COMPANY,
TERMINATE HIS DISSENTER'S RIGHTS UNLESS A COURT, FOR GOOD CAUSE, DETERMINES
OTHERWISE.
Within ten (10) days after the expiration of the period in which a
shareholder must file the notice of election to dissent, the Company will make a
written offer to each such shareholder to pay an amount the Company estimates to
be the fair value of such shareholder's Common Stock. If any shareholder accepts
the offer within thirty (30) days after the Company makes such offer, the
Company shall make such payment within ninety (90) days following the acceptance
of the offer or the consummation of the Proposed Reincorporation, whichever is
later. Upon payment, the dissenting shareholder shall cease to have any interest
in the Common Stock.
If any dissenting shareholders do not accept the offer made by the
Company within the aforementioned thirty (30) day period, then within thirty
(30) days after receipt of written demand from any dissenting shareholder given
within sixty (60) days after the date the Proposed Reincorporation is effected,
the Company shall, or at any time within such sixty (60) day period the Company
may, file an action in any court of general civil jurisdiction in the county in
Florida where the registered office of the Company is located requesting that
the fair value of such Common Stock be found and determined. If the Company
fails to institute the proceeding within such sixty (60) day period, any
dissenting shareholder may institute such proceeding. All dissenting
shareholders, except those who have agreed on the price to be paid for their
Common Stock, are required to be made parties to such a proceeding.
12
<PAGE>
In any such proceeding, the court, at the Company's request, will
determine whether or not any particular dissenting shareholder is entitled to
receive payment for his Common Stock. If the Company does not request such a
determination or if the court finds that a dissenting shareholder is so
entitled, the court, directly or through an appraiser, will fix the value of the
Common Stock. The expenses of any such proceeding, as determined by the court,
shall be assessed against the Company, except that the court may apportion costs
to any dissenting shareholder whom it finds to have been acting arbitrarily,
vexatiously or otherwise not in good faith in refusing an offer by the Company.
THE PROVISIONS OF SECTIONS 607.1301 TO 607.1320 ARE TECHNICAL AND COMPLEX. IT IS
SUGGESTED THAT ANY SHAREHOLDER WHO DESIRES TO EXERCISE HIS RIGHT TO DISSENT
CONSULT HIS LEGAL COUNSEL, AS FAILURE TO COMPLY STRICTLY WITH SUCH PROVISIONS
MAY LEAD TO A LOSS OF DISSENTERS' RIGHTS.
NO CHANGE IN THE CORPORATE NAME, BOARD MEMBERS, BUSINESS, MANAGEMENT, EMPLOYEE
BENEFIT PLANS OR LOCATION OF PRINCIPAL FACILITIES OF THE COMPANY
The proposed Reincorporation will result only in a change in the legal
domicile of the Company and certain other changes of a legal nature, the most
significant of which are described in this Proxy Statement. The Proposed
Reincorporation will NOT result in any change in the name, business, management,
fiscal year, assets, liabilities or location of the offices of the Company. The
directors who serve on the Board of TN-Florida will become the initial directors
of TN-Delaware. All stock options and all employee benefits, stock option and
stock purchase plans of TN-Florida will be assumed and continued by TN-Delaware,
and each option or right issued by such plans will automatically be converted
into an option or right to purchase the same number of shares of TN-Delaware
common stock, at the same price per share, upon the same terms and subject to
the same conditions. Shareholders should note that approval of the Proposed
Reincorporation will also constitute approval of the assumption of these plans
by TN-Delaware. Other employee benefit programs of TN-Florida also will be
continued by TN-Delaware upon the terms and subject to the conditions currently
in effect. The Company believes that the Proposed Reincorporation will not
affect any of its material contracts with any third parties and that
TN-Florida's rights and obligations under such material contractual arrangements
will continue and be assumed by TN-Delaware.
TRADING OF THE COMMON STOCK
TN-Florida Common Stock is currently listed on the Nasdaq Small Cap
Market. After the Reincorporation Merger, TN-Delaware common stock will be
listed on the Nasdaq Small Cap Market under the same symbol ("TNOW") as the
shares of TN-Florida Common Stock are listed. There will be no interruption in
the trading of the Company's Common Stock as a result of the Reincorporation
Merger. As of the date the Board approved the Proposed Reincorporation, the
closing price of TN-Florida Common Stock on the Nasdaq Small Cap Market was
$9.375 per share.
COMPARISON OF SHAREHOLDER RIGHTS UNDER DELAWARE AND FLORIDA CORPORATE LAW
Although it is impractical to compare all of the differences between
the corporation laws of Florida and Delaware, the following is a summary of
certain significant differences between the provisions of Florida law applicable
to the Company and those of Delaware law which will be applicable to the
Company.
13
<PAGE>
DIVIDENDS
DELAWARE. A Delaware corporation may pay dividends either out of
surplus or, if there is no surplus, out of net profits for the fiscal year in
which the dividend is declared and/or out of net profits for the preceding
fiscal year.
FLORIDA. A Florida corporation may not make distributions to
shareholders if, after giving it effect, in the judgment of the board of
directors: (a) the corporation would not be able to pay its debts as they become
due in the usual course of business; or (b) the corporation's total assets would
be less than the sum of its total liabilities plus (unless the articles of
incorporation permit otherwise) the amount that would be needed, if the
corporation were to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of shareholders whose preferential rights
are superior to those receiving the distribution.
RIGHT TO INSPECT BOOKS AND RECORDS
DELAWARE. Under Delaware law, any shareholder of a corporation has the
right to inspect the corporation's stock ledger, list of shareholders and its
other books and records, upon a written demand under oath in which the
shareholder states a "proper purpose" for such inspection.
FLORIDA. Under Florida law, any shareholder may examine the
corporation's books and records, including minutes of meetings, accounting
records and the record of shareholders, provided that such shareholder makes
written demand at least five (5) business days before the date on which the
shareholder wishes to inspect and copy and such shareholder (i) makes the demand
"in good faith and for a proper purpose," and (ii) describes the purpose with
reasonable particularity and describes the records he desires to inspect. In
addition, the records must be directly connected with the shareholder's purpose.
INTERESTED DIRECTOR TRANSACTIONS
Under both Florida and Delaware law, certain contracts or transactions
in which one (1) or more of a corporation's directors have an interest are not
void or voidable because of such interest if the contract or transaction is fair
to the corporation when authorized, or if it is approved in good faith by the
shareholders or by the directors who are not interested therein after the
material facts as to the contract or transaction and the interest of any
interested directors are disclosed. With certain exceptions, Florida and
Delaware law are the same in this area.
DELAWARE. Under Delaware law, the approval of the board of directors
can be obtained for the contract or transaction by the vote of a majority of the
disinterested directors, even though less than a quorum.
FLORIDA. Under Florida law, if approval of the board of directors is
to be relied upon for this purpose, the contract or transaction may be approved
by a majority vote of a quorum of the directors without counting the vote of the
interested director or directors (except for purposes of establishing quorum).
SPECIAL MEETINGS OF SHAREHOLDERS
DELAWARE. Under Delaware law, a special meeting may be called by the
board of directors or by such other persons as are authorized by the certificate
of incorporation or the bylaws.
FLORIDA. Under Florida law, a special meeting of shareholders may be
called by the board of directors or by the holders of at least 10% of the shares
entitled to vote at the meeting or by such other persons or groups as may be
authorized in the articles of incorporation or the by-laws.
CERTAIN ACTIONS
DELAWARE. Delaware law provides that shareholders have six (6) years
in which to bring an action against directors responsible for the payment of an
unlawful dividend. Delaware law requires that the plaintiff held stock at the
time when the transaction complained of occurred.
FLORIDA. Under Florida law, all directors voting for or assenting to
an unlawful distribution are jointly and severally liable to the corporation for
the excess of the amount of dividend over what could have been distributed
lawfully. Florida law requires that any action be commenced within two (2) years
after the date of the distribution. Florida law requires that the plaintiff held
stock at the time when the transaction complained of occurred.
14
<PAGE>
TENDER OFFER AND BUSINESS COMBINATION STATUTES
DELAWARE. Delaware law regulates hostile takeovers by providing that
an "interested stockholder," defined as a shareholder owning 15% or more of the
corporation's voting stock or an affiliate or associate thereof, may not engage
in a "business combination" transaction, defined to include a merger,
consolidation or a variety of self-dealing transactions with the corporation for
a period of three (3) years from the date on which such shareholder became an
"interested stockholder" unless (a) prior to such date the corporation's board
of directors approves either the "business combination" transaction or the
transaction in which the shareholder became an "interested stockholder," (b) the
shareholder, in a single transaction in which he became an "interested
stockholder," acquires at least 85% of the voting stock outstanding at the time
the transaction commenced (excluding shares owned by certain employee stock
plans and persons who are directors and also officers of the corporation) or (c)
on or subsequent to such date, the "business combination" transaction is
approved by the corporation's board of directors and authorized at an annual or
special meeting of the corporation's shareholders, by the affirmative vote of at
least two-thirds (2/3) of the outstanding voting stock not owned by the
"interested stockholder."
Thus, the effect of such provision of Delaware law is to prevent any
attempted hostile takeover of a Delaware corporation from being completed for
three (3) years unless (a) at least 85% of the voting shares of the target are
acquired in a single transaction; (b) at least two-thirds (2/3) of the voting
shares of the target, excluding the shares held by the bidder, vote in favor of
the acquisition; or (c) the corporation opts out of the statutory protection.
FLORIDA. Florida law regulates tender offers and business combinations
involving the acquisition by a person, either directly or indirectly, of
ownership of, or the power to direct the voting of, at least 20% or more
("Control Shares") of the outstanding voting securities of an issuing public
corporation (a "Control Share Acquisition"). An "issuing public corporation" is
a corporation that has 100 or more shareholders, its principal place of
business, principal office or substantial assets within Florida and either (i)
more than 10% of its shareholders reside in Florida, (ii) more than 10% of its
shares are owned by Florida residents or (iii) it has 1,000 shareholders
residing in Florida. A special meeting of shareholders must be held by the
corporation to consider the voting rights to be accorded to the shares acquired
or to be acquired in the Control Share Acquisition within fifty (50) days after
a request for such meeting is submitted by the person seeking to acquire
control. Such voting rights must be approved by a majority of each class of
outstanding voting securities of such corporation excluding the shares held or
controlled by the person seeking approval before the Control Shares may be
voted. If the Control Shares are accorded full voting rights and the acquiring
person has acquired Control Shares with a majority or more of the voting power
of the corporation, all shareholders shall have dissenters' rights as provided
by applicable Florida law.
In addition, Florida law regulates mergers and other business
combinations between a corporation and a shareholder who owns more than 10% of
the outstanding voting shares of such corporation ("Interested Shareholder").
Specifically, any such merger between a corporation and an Interested
Shareholder must be approved by the vote of the holders of two-thirds of the
voting shares of such corporation excluding the shares beneficially owned by
such shareholder. The approval by shareholders is not required, however, in
certain circumstances, including, but not limited to the following: (i) the
merger or business combination is approved by a majority of disinterested
directors, (ii) the Interested Shareholder is the beneficial owner of at least
90% of the outstanding voting shares, excluding the shares acquired directly
from the subject corporation in a transaction not approved by a majority of
disinterested directors, or (iii) the Interested Shareholder has been the
beneficial owner of at least 80% of the corporation's outstanding voting shares
for at least five (5) years preceding the announcement date.
DISSENTERS' RIGHTS
DELAWARE. Under Delaware law, dissenters' rights are not available
with respect to a sale, lease, exchange or other disposition of all or
substantially all of a corporation's assets or any amendment of its charter,
unless such corporation's charter expressly provides for dissenters' rights in
such instances. Shareholders of a Delaware corporation have no dissenters'
rights if: (i) the corporation's shares are listed on a national securities
exchange or designated as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers, Inc., (ii)
the corporation's shares are held of record by more than 2,000 shareholders, or
15
<PAGE>
(iii) the corporation is the survivor of a merger that did not require approval
by its shareholders; provided, however, that dissenters' rights will be
available if shareholders are required under the merger or consolidation to
accept for their shares anything other than (i) shares of stock of the surviving
corporation, (ii) shares of stock of a corporation listed on a national
securities exchange, designated as a national market system security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc. or held of record by more than 2,000 shareholders, (iii) cash in lieu of
fractional shares or (iv) any combination of the foregoing.
FLORIDA. Under Florida laws shareholders may dissent from, and demand
cash payment of the fair value of their shares in respect of, (i) a merger or
consolidation of the corporation and (ii) a sale or exchange of all or
substantially all of a corporation's assets, including a sale in dissolution.
However, shareholders of a Florida corporation have no dissenters' rights in the
case of a merger or consolidation if their shares are either listed on a
national securities exchange, quoted on the NASDAQ National Market System or
held of record by not fewer than 2,000 shareholders.
FEDERAL INCOME TAX CONSEQUENCES OF THE PROPOSED REINCORPORATION
For shareholders of the Company who receive common stock of
TN-Delaware in exchange for their Common Stock of TN-Florida pursuant to the
Merger Agreement, the Proposed Reincorporation of the Company will be a tax free
reorganization under the Internal Revenue Code of 1986, as amended. Accordingly,
a holder of the Common Stock (each, a "Holder") who receives common stock of
TN-Delaware pursuant to the Merger Agreement will not recognize a gain or loss
as a result of the Proposed Reincorporation. The Holder's tax basis in a share
of common stock of TN-Delaware will be the same as that Holder's basis in the
corresponding share of TN-Florida Common Stock held immediately prior to the
Proposed Reincorporation. The Holder's holding period in a share of TN-Delaware
common stock will include the period during which the Holder held the
corresponding share of TN-Florida Common Stock, provided that the Holder held
the corresponding share in TN-Florida as a capital asset at the time of the
Proposed Reincorporation.
In addition, neither TN-Florida nor TN-Delaware will recognize gain or
loss as a result of the Proposed Reincorporation, and TN-Delaware will generally
succeed, without adjustment, to the tax attributes of the Company.
THE FOREGOING SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES IS INCLUDED FOR GENERAL
INFORMATION ONLY AND DOES NOT ADDRESS ALL INCOME AND OTHER TAX CONSEQUENCES TO
ALL OF THE COMPANY'S SHAREHOLDERS, INCLUDING SHAREHOLDERS WHO EXERCISE
DISSENTERS' RIGHTS AND RECEIVE CASH PAYMENTS FOR THEIR COMMON STOCK. THE
COMPANY'S SHAREHOLDERS, INCLUDING DISSENTING SHAREHOLDERS, ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES OF THE PROPOSED
REINCORPORATION AND WITH RESPECT TO THE SPECIFIC APPLICATION AND EFFECT OF ALL
TAX LAWS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE PROPOSED
REINCORPORATION. APPROVAL BY SHAREHOLDERS OF THE PROPOSED REINCORPORATION WILL
ALSO CONSTITUTE APPROVAL OF THE MERGER AGREEMENT AND ALL PROVISIONS THEREOF
EXCEPT THOSE PROVISIONS WHICH WILL BE VOTED ON SEPARATELY AT A SPECIAL MEETING.
COMPENSATION OF DIRECTORS AND EXECUTIVES OFFICERS
Donald R. Mastropietro served as Chief Executive Officer of the
Company from its inception in June 1996 until September 30, 1998. During the
fiscal year ended March 31, 1999, Mr. Mastropietro received compensation of
$10,500. Mr. Mastropietro did not receive any compensation for the 1998 fiscal
year. Teresa B. Crowley served as Chief Executive Officer of the Company from
September 30, 1998, until July 23, 1999. During the fiscal year ending March 31,
1999, Ms. Crowley received compensation of $3,000. Ms. Crowley did not receive
any compensation for the fiscal year ended March 31, 2000.
16
<PAGE>
The following summary compensation table sets forth the compensation
the Company paid during the fiscal year ended March 31, 2000 to the Co-Chief
Executive Officers. Because none of our executive officers worked the entire
term, no individuals at the Company received compensation in excess of $100,000
in the fiscal year ended March 31, 2000. The following table also includes the
actual compensation that the Company paid during the fiscal year ended March 31,
2000, to the other executive officers of the Company whose salary and bonus is
anticipated to exceed $100,000 annually during the current fiscal year, for
services rendered to the Company in all capacities.
<TABLE>
<CAPTION>
Summary Compensation Table
Other Annual Long-Term
Name and Principal Position Annual Compensation Compensation ($) Compensation Awards
---------------------------- ------------------- --------------- ---------------------------
Year Securities Restricted
Ended Underlying Stock
March 31 Salary ($) Bonus ($) Options (#) Awards
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
John Christopher Noble 2000 $90,385.00 (4) $2,969 (3) 792,830 (10)
Jeff Wasson,
Chief Executive Officer 2000 $90,385.00 (5) $4,000 (3)
792,830 (10)
H. Whit Ehrler,
Chief Financial Officer and
Vice President 2000 $73,500.00 (8)(7) (3) 250,000 (9)
Christopher R. Kuhn,
Chief Information Officer
and Vice President 2000 $90,000.00 (8)(6) (3) 250,000 (9)
Michael Bauer (2)
Vice President 2000 $0.00 (3)
Marvin McDaniel (2)
Vice President 2000 $26,000.00 (3)
Ross Summers (2)
Vice President 2000 $25,769.18 (3)
</TABLE>
--------------------
(1) J.D. Bryant joined the Company after January 1, 2000 and was appointed
Vice President of Business Development on May 3, 2000. Mr. Bryant's
employment with the Company ended on August 3, 2000. For the fiscal
year ended March 31, 2000, he was paid $18,461.52, which would have
been $120,000 annually.
(2) Marvin McDaniel, who joined the Company after January 1, 2000 and was
appointed as an executive officer on May 3, 2000, will receive an
annual salary of $104,000. Ross Summers, who joined the Company on
September 15, 1999 and was appointed as an executive officer of the
Company on May 3, 2000, will receive an annual salary of $104,000. Mr.
Michael Bauer, who joined the Company on April 11, 2000 and was also
appointed as an executive officer of the Company on May 3, 2000, will
receive an annual salary of $104,000.
(3) For the period covered by this proxy statement no "other annual
compensation" had been paid to these Executive Officers.
17
<PAGE>
(4) Effective January 1, 2000, John Christopher Noble's Employment
Agreement was amended to reflect an increase in his salary to $150,000
per year, as recommended by the Company's compensation committee,
comprised of two (2) of the Company's independent directors. Mr. Noble
was a founding member of the Company in May 1995. He acted as Co-Chief
Executive Officer, Secretary and served as a Director until May 3,
2000 when he resigned from all positions at the Company. Pursuant to
an unexecuted, but tentatively agreed upon, Mutual Release and
Termination Agreement between Mr. Noble and the Company, Mr. Noble
will continue to receive his salary and certain benefits for a period
of eighteen (18) months. In addition to the amounts shown in the table
above, direct payments, exclusive of benefits, to Mr. Noble will total
approximately $267,000.
(5) Mr. Wasson's Employment Agreement has been amended to reflect an
increase in salary to $150,000 per year, effective January 1, 2000, as
recommended by the Company's compensation committee, comprised of two
(2) of the Company's independent directors.
(6) Pursuant to Mr. Kuhn's Employment Agreement he received a non-interest
bearing loan of $80,000 upon completion of his first full year of
employment with the Company, which year ended on July 12, 2000. Upon
completion of a second full year of employment, the loan of $80,000
will be forgiven and all state and federal income taxes related to
such forgiveness will be grossed-up and paid by the Company at that
time. If Mr. Kuhn voluntarily leaves the Company or is terminated for
cause or if he fails to remain with the Company for the full two (2)
year period, he will be obligated to repay the non-interest bearing
loan in thirty-two (32) equal monthly installments.
(7) The Employment Agreement with Mr. Ehrler provides that he will receive
a non-interest bearing loan of $80,000 after he completes the first
full year of employment, which year will end on August 23, 2000. Upon
completion of a second full year of employment, the loan of $80,000
will be forgiven and all state and federal income taxes related to
such forgiveness will be grossed-up and paid by the Company at that
time. If Mr. Ehrler voluntarily leaves the Company or is terminated
for cause or if he fails to remain with the Company for the full two
(2) year period, he will be obligated to repay the non-interest
bearing loan in thirty-two (32) equal monthly installments.
(8) Mr. Kuhn joined the Company on July 12, 1999, and Mr. Ehrler joined
the Company on August 23, 1999. The salaries set forth above are the
annual amounts called for by their respective compensation
arrangements with the Company.
(9) See the table following the caption "Option Grants as of March 31,
2000."
(10) These bonuses were unanimously approved at a special meeting of
shareholders of the Company on May 18, 1999, in which all shareholders
were present in person or by proxy. On the date of grant, there was no
established market value for these securities. The bonuses were given
in recognition of the dedication of the recipients to their work on
the Company's behalf.
Option Grants as of March 31, 2000.
-----------------------------------
The following table sets forth certain information with respect to
stock options granted to the named executive officers during the fiscal year
ended March 31, 2000, including the potential realizable value over the five (5)
year term of the options based on assumed rates of stock appreciation of 5% and
10% compounded annually with respect to those options. The "Value of
Unexercisable In-the-Money-Options" is based upon a value of $10.25 per share
which was the closing price of our shares on the OTC Bulletin board on March 31,
2000, minus the per share exercise price, multiplied by the number of shares
underlying the option. None of the stock options granted to the below named
executives were eligible to be exercised prior to July 12, 2000. These assumed
rates of appreciation comply with the rules of the Securities and Exchange
Commission and do not represent our estimate of future stock price. Actual
gains, if any, on stock option exercises will be dependent on the future
performance of our common stock. The options set forth below were granted
pursuant to separate stock option agreements executed in conjunction with the
employment agreements between the Company and the below named executives.
18
<PAGE>
<TABLE>
<CAPTION>
Option Grants in the Last Fiscal Year
Individual Grants
-------------------------------------
Number of Shares
Underlying Options
Granted Which Were Value of Unexercised
Unexercised On March Exercise Price in-the-Money Options at
Name (1) 31, 2000 (2) Exercise Date (3) ($/ Share) March 31, 2000 (4)
------------ --------------------- ---------------- -------------- ------------------------
5% 10%
--- ---
<S> <C> <C> <C> <C> <C>
Christopher
R. Kuhn (5) 100,000 07/12/2000 $ 1.50 $1,116,746 $1,409,196
50,000 07/12/2002 $15.00
50,000 07/12/2000 $30.00
50,000 07/12/2000 $45.00
H. Whit
Ehrler (5) 100,000 08/23/2000 $ 1.50 $1,116,746 $1,409,196
50,000 08/23/2002 $15.00
50,000 08/23/2000 $30.00
50,000 08/23/2000 $45.00
</TABLE>
------------
(1) In addition to the options granted to Mr. Kuhn and Mr. Ehrler, set
forth in the table above, the Company has granted to Mr. Dayberry, the
Company's Database Administrator, five separate options, each for
6,000 shares, to purchase a total of 30,000 shares of the Common
Stock. Each option may be exercised (or will vest) in three (3) equal
annual installments commencing with the initial exercise date. The
exercise date of the first option covering the initial underlying
6,000 shares is September 22, 2000, with exercise dates of the
remaining options being September 22 in each of the following years,
2001, 2002, 2003 and 2004. The option price or strike price for each
6,000 share option on each of the exercise dates is $5.00 in 2000,
$20.00 in 2001, $35.00 in 2002, $50.00 in 2003, and $65.00 in 2004.
All unexercised options will expire on September 22, 2004, except for
the option that may be exercised on September 22, 2004. That option
will not expire until December 22, 2004. The initial option, with a
strike price of $5.00 per share, is considered an unexercisable
in-the-money option as of the date of this filing. The value of this
unexercisable in-the-money-option is based upon a value of $10.25 per
share which was the closing price of the Company's shares on the OTC
Bulletin Board on March 31, 2000, minus the per share exercise price,
multiplied by the number of shares underlying the option. The
potential realizable value of this unexercisable in the money option
assuming an annual rate of appreciation of 5% and 10% is $40,203 and
$50,731 respectively.
(2) All options are considered unqualified options under the Internal
Revenue Code, therefore, upon their exercise, the employee will
realize taxable gain equal to the difference between the fair market
value as of the exercise date and the exercise price.
(3) Options are exercisable in three (3) equal installments (i.e., 33% of
the shares may be purchased per installment). The first installment
may be exercised on the exercise date set forth in the table above
with the balance of the options exercisable in two (2) equal
installments on the two succeeding anniversary dates following the
exercise date. Certain of the installments are not exercisable until
the end of Mr. Kuhn and Mr. Ehrler's five (5) year option
agreements. Mr. Kuhn and Mr. Ehrler each have an additional ninety
(90) days after the end of the five (5) year period to exercise the
options with respect to those installments.
(4) The closing price of the Company's shares on the OTC Bulletin Board on
March 31, 2000, was $10.25. The first installments of the initial
options granted to Mr. Ehrler and Mr. Dayberry are exercisable on
August 23, 2000 and September 22, 2000 respectively. The first
installment of the initial options granted to Mr. Kuhn was exercisable
on July 12, 2000. As of the date hereof, Mr. Kuhn has exercised the
first installment of his initial options and has received 33,333
shares of Common Stock.
(5) As of the end of the Company's fiscal year 2000, the Company has
issued stock options covering 530,000 shares of Common Stock of which
Mr. Kuhn held 47% of those options, Mr. Ehrler held 47% of those
options and Mr. Dayberry held 6% of those options.
On May 3, 2000, the Board of Directors adopted, subject to shareholder
approval, the TravelNow.com Inc. 2000 Omnibus Stock Incentive Plan (the "Plan").
For a description of the Plan see "Proposal No. 3" above.
19
<PAGE>
On May 3, 2000, pursuant to the Plan the stock option committee
awarded stock options to all employees of the Company employed on that date
(other than the Chief Executive Officer). Each person was given the right to
purchase for $8.25 a share that number of shares as equals that employee's
annual salary divided by the closing sale price of the Common Stock on May 3,
2000. In addition, the stock option committee determined that the Company will
offer stock options to new employees four (4) times a year on the last day of
each calendar quarter. Each employee will have a waiting period of ninety (90)
days before they become eligible to receive an award. The stock options vest in
three (3) annual installments beginning on the first anniversary date of the
initial grant date or the quarterly grant date.
In accordance with the terms of the Plan, management will ask for
approval of a grant of shares for services rendered by Keating Communications
Inc., the Company's public relations firm, which also provides certain
assistance with regard to investor relations. If approved by the stock option
committee, the Company will issue a maximum of 18,674 shares by Keating
Communications Inc., or its affiliate Keating Ventures, for these services.
Management will ask for the approval of the issuance of 2,000 shares to Mr.
Scott Wayne for services rendered as a consultant to the Company and for the
issuance of 250 shares to Mr. Allen Darnell for services rendered as an employee
of the Company. Management will also ask for approval of the issuance, to Becker
Communications, of 6,000 shares in exchange for its services in developing a
logo and certain other intangible property for the Company.
In addition, on May 3, 2000, the Company granted Antoine Toffa options
to acquire 20,000 shares of Common Stock in exchange for his service as a Board
member. The options are exercisable at any time at the price of $8.25 per share
and will expire on the last Tuesday in September 2002.
Adjustments in the Event of Recapitalization, Merger of the Company.
-------------------------------------------------------------------
Under the stock option agreements with the above-named executives, in
the event of a corporate reorganization, such executives will have the right to
exercise any unexpired option whether currently exercisable or not as to any
installments.
Compensation of Directors.
--------------------------
Directors who are also employees are not separately compensated.
In exchange for agreeing to serve as a member of the Board of
Directors, Antoine Toffa was granted options exercisable at any time after May
3, 2000, to acquire 20,000 shares of Common Stock at $8.25 per share. The
Company's other non-employee directors are not currently compensated for serving
in such capacity but may be compensated in the future.
Employment Agreements/Termination of Employment Agreements.
-----------------------------------------------------------
Employment Agreement with Jeff Wasson, Chief Executive Officer.
Mr. Wasson's Employment Agreement is for a term of five (5) years,
from October 1, 1999 to September 30, 2004 and calls for participation in all
employee benefit programs of the Company. Effective January 1, 2000, Mr.
Wasson's Employment Agreement was amended to increase his base salary to
$150,000 per year for the remainder of the term. In the event of a termination
of Mr. Wasson by the Company without cause, the Company shall make a lump sum
payment to Mr. Wasson equal to his base salary for the remainder of that year.
Thereafter, on each remaining anniversary date of Mr. Wasson's termination
during the balance of the term of the Employment Agreement, Mr. Wasson will be
paid a lump sum equal to this base salary. In addition, Mr. Wasson agrees not to
20
<PAGE>
directly or indirectly solicit or have contact with (1) the Company's travel
suppliers, (2) GDS systems or (3) the Company's employees or customers for two
(2) years after termination of employment. However, the Company cannot give any
assurance that these provisions will be enforceable.
Mutual Release and Termination Agreement with John Christopher Noble.
Mr. Noble's Employment Agreement was for a term of five (5) years,
from October 1, 1999 to September 30, 2004 and called for participation in all
employee benefit programs of the Company. Effective January 1, 2000, Mr. Noble's
Employment Agreement was amended to increase his base salary to $150,000 per
year for the remainder of the term. Mr. Noble resigned on May 3, 2000, from his
positions at the Company as Co-Chief Executive Officer, Secretary, Director and
employee. Although a Mutual Release and Termination Agreement has not been
executed as of the date of this Proxy Statement, the Company and Mr. Noble have
tentatively agreed that effective as of May 3, 2000, Mr. Noble will continue to
receive his salary and certain benefits for a period of eighteen (18) months.
Pursuant to a provision in Mr. Noble's Employment Agreement, which survives
termination, Mr. Noble agrees not to directly or indirectly solicit or have
contact with (1) the Company's travel suppliers, (2) GDS systems or (3) the
Company's employees or customers for two (2) years after termination of
employment. However, the Company cannot give any assurance that these provisions
will be enforceable.
Employment Agreement with Christopher R. Kuhn, Vice President & Chief
Information Officer.
The term of Mr. Kuhn's agreement is for five (5) years, from July 12,
1999 to July 11, 2004 and calls for participation in all employee benefit
programs of the Company. Mr. Kuhn's Employment Agreement calls for a base salary
of $130,000 per year and receipt of a non-interest bearing loan of $80,000 after
the completion of the first full year of continuous full-time employment. Upon
completion of a second full year of continuous full-time employment, the loan of
$80,000 will be forgiven and all state and federal income taxes related to such
forgiveness will be grossed-up and paid by the Company at that time. If Mr. Kuhn
voluntarily leaves, or is discharged for cause before the completion of the two
(2) year period, he is obligated to repay the non-interest bearing loan to the
Company in equal monthly installments over a period of thirty-two (32) months.
In the event of a termination of Mr. Kuhn by the Company without
cause, the Company shall make a lump sum payment to Mr. Kuhn equal to his base
salary for the remainder of that year. Thereafter, on each remaining anniversary
date of Mr. Kuhn's termination during the balance of the term of the Employment
Agreement, Mr. Kuhn will be paid a lump-sum equal to his base salary. In
addition, Mr. Kuhn agrees not to directly or indirectly solicit or have contact
with (1) the Company's travel suppliers, (2) GDS systems or (3) the Company's
employees or customers for two (2) years after termination of employment.
However, the Company cannot give any assurance that these provisions will be
enforceable.
Employment Agreement with H. Whit Ehrler, Vice President & Chief Financial
Officer.
The term of Mr. Ehrler's agreement is for five (5) years from August
23, 1999 to August 22, 2004 and calls for participation in all employee benefit
programs of the Company. Mr. Ehrler's Employment Agreement calls for a base
salary of $130,000 per year and receipt of a non-interest bearing loan of
$80,000 after the completion of the first full year of continuous full-time
employment. Upon completion of a second full year of continuous full-time
employment, the loan of $80,000 will be forgiven and all state and federal
income taxes related to such forgiveness will be grossed-up and paid by the
Company at that time. If Mr. Ehrler voluntarily leaves or is discharged for
cause before the completion of the two (2) year period, he is obligated to repay
the non-interest bearing loan to the Company in equal monthly installments over
a period of thirty-two (32) months.
In the event of a termination of Mr. Ehrler by the Company without
cause, the Company shall make a lump-sum payment to Mr. Ehrler equal to his base
salary for the remainder of that year. Thereafter, on each remaining anniversary
date of Mr. Ehrler's termination during the balance of the term of the
Employment Agreement, Mr. Ehrler will be paid a lump sum equal to his base
salary. In addition, Mr. Ehrler agrees not to directly or indirectly solicit or
have contact with (1) the Company's travel suppliers, (2) GDS systems or (3) the
Company's employees or customers for two (2) years after termination of
employment. However, the Company cannot give any assurance that these provisions
will be enforceable.
21
<PAGE>
SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Common Stock as of August 15, 2000, giving effect to the
exercise of options held by the named security owner, by the following
individuals or groups: (i) each person or entity who is known by the Company to
own beneficially more than 5% of our outstanding common stock, (ii) each of the
executive officers and directors, (iii) each of our directors and executive
officers as a group. The persons named in the table below have sole voting and
investment power with respect to all shares of common stock held by them. To the
extent that subsequent to the date of this filing any shares are issued, there
will be further dilution to our current shareholders.
Shares Beneficially Owned as of August 15, 2000 (1).
----------------------------------------------------
Title of Class Name of Beneficial Owner Number Percent (2)
-------------- ------------------------ ------ ----------
Common Stock John Christopher Noble (3) 1,832,767 16.8
Common Stock Jeff Wasson (3) 1,895,067 17.3
Common Stock Jerry Rutherford (3) 1,356,569 12.4
Common Stock Ross Summers (3)(4) 455,219 4.2
Common Stock H. Whit Ehrler (3) (4) 33,333 (6) 0.3
Common Stock Christopher R. Kuhn (3) (4) 33,333 0.3
Common Stock Bill Perkin (3) 106,601 1.0
Common Stock Michael Bauer (2) (4) - 0 - 0.0
Common Stock Marvin McDaniel (3) (4) 425,065 3.9
Common Stock Antoine Toffa (3) 20,000 (7) 0.2
Common Stock All directors and executive
officers as a group 4,325,187 (5) 39.6
-------------
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting and
investment power with respect to securities.
(2) The total number of sharess of common Stock outstanding includes
500,000, which were converted from shares of Class A Convertible
Preferred Stock to shares of Common Stock on the effective dae of the
Company's SB-2 Registration Statement (August 9, 2000), as of the
preceding day, an additional 27,000 shares of Common Stock may be
issued to the holder of the Preferred Stock for payment of dividends
accrued.
(3) Mr. Noble's address is: 2431 E. Montclair Court, Springfield, Missouri
65806. Mr. Wasson, Mr. Summers, Mr. Ehrler, Mr. Kuhn, Mr. Bauer, Mr.
McDaniel and Mr. Toffa have elected to use as their address the
address of the Company, 318 Park Central East, Suite 306, Springfield,
Missouri 65806. Mr. Rutherford's address is: 3222 S. Campbell Avenue,
Suite MM, Springfield, Missouri 65807. Mr. Perkin's address is: 3343
E. Montclair, Springfield, Missouri 65804.
(4) On May 3, 2000, the Board of Directors approved the TravelNow.com Inc.
2000 Omnibus Stock Incentive Plan and, these individuals were granted
the right to purchase shares equal to their respective annual salary,
divided by the closing sale price of the Common Stock on May 3, 2000.
The stock options vest in three (3) equal annual installments
beginning on the first anniversary of the initial grant date, which
was May 3, 2000.
(5) This total excludes the 1,832,767 shares owned by John Christopher
Noble, who resigned as Co-Chief Executive Officer, Secretary and
Director of the Company, effective May 3, 2000.
(6) This number represents the number of shares of Common Stock which Mr.
Ehrler has the right to acquire from stock options, beginning August
23, 2000.
(7) This number represents the number of shares of Common Stock which Mr.
Toffa has the right to acquire from stock options, beginning May 3,
2000.
22
<PAGE>
Certain individual holders of the Company's capital stock have entered
into a Standstill Agreement with the Company, effective July 17, 2000. The
Standstill Agreement provides that such individual holders shall not transfer or
sell their shares of Common Stock, except in privately negotiated transactions,
for a period of one (1) year, beginning on the effective date of the Standstill
Agreement. The individual holders, however, may pledge or encumber up to thirty
percent (30%) of their shares of Common Stock during such one (1) year period.
This Standstill Agreement affects approximately 7,300,000 shares of the Common
Stock.
SHAREHOLDER PROPOSALS
REQUIREMENTS FOR SHAREHOLDER PROPOSALS TO BE CONSIDERED FOR INCLUSION
IN THE COMPANY'S PROXY MATERIALS. Shareholder proposals submitted pursuant to
Rule 14a-8 under the Exchange Act and intended to be presented at the Company's
2001 Annual Meeting of Shareholders must be received by the Company not later
than April 20, 2001 in order to be considered for inclusion in the Company's
proxy materials for that meeting.
REQUIREMENTS FOR SHAREHOLDER PROPOSALS TO BE BROUGHT BEFORE AN ANNUAL
MEETING. For shareholder proposals to be included in an annual meeting, the
shareholder must have given timely notice thereof in writing to the Secretary of
the Company. Pursuant to the Bylaws of the Company, to be timely for the 2001
Annual Meeting, a shareholder's notice must be delivered to or mailed and
received by the Secretary of the Company at the principal executive offices of
the Company between May 30, 2001 and June 29, 2001. Such shareholder's notice
shall set forth, or be accompanied by, (a) in the event the shareholder proposes
to nominate one or more persons for election or reelection as a director (1) the
name and residence address of the shareholder and of the person or persons to be
nominated; (2) a representation that the shareholder is a holder of record of
voting stock of the corporation and intends to appear in person or by proxy at
the meeting to nominate the person or persons specified in the notice; (3) such
information regarding each nominee as would have been required to be included in
a proxy statement filed pursuant to Regulation 14A promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended
(or pursuant to any successor act or regulation) had proxies been solicited with
respect to such nominee by the management or board of directors of the
corporation; (4) a description of all arrangements or understandings among the
shareholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the shareholder; and (5) the written consent of each nominee to serve as a
director of the corporation if so elected; and (b) in the event the shareholder
proposes to bring any other business before the meeting; (1) the name and
residence address of the shareholder proposing to bring business before the
meeting and the beneficial owner, if any, on whose behalf the proposal is made;
(2) the class and number of shares of the corporation which are owned
beneficially and of record by such shareholder and such beneficial owner; (3) a
representation that the shareholder is a holder of record of the voting stock of
the corporation and intends to appear in person or by proxy at the meeting to
bring the business before the meeting; and (4) a brief description of the
business of such shareholder and beneficial owner, if any, on whose behalf the
proposal is made.
1999 ANNUAL REPORT TO SHAREHOLDERS
Included with this Proxy Statement is the Company's annual report on
Form 10-KSB (the "Annual Report") for the fiscal year ended March 31, 2000. The
Company will provide, without charge, to each person solicited upon written
request, an additional copy of the Annual Report and a copy of the exhibits to
the Annual Report as required to be filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended. For
additional copies, please write to Mr. H. Whit Ehrler, Chief Financial Officer
of the Company, at 318 Park Central East, Suite 306, Springfield, Missouri
65806.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act of 1934, as amended (the "Exchange
Act") requires the Company's directors, executive officers and persons who own
more than 10% of the Company's Common Stock (collectively, "Reporting Persons")
23
<PAGE>
to file reports of ownership and changes in ownership of the Common Stock.
Reporting Persons are required by Securities and Exchange Commission regulations
to furnish the Company with copies of all Section 16(a) reports they file. Based
solely on its review of the copies of such reports received or written
representations from certain Reporting Persons, the Company believes that during
the fiscal year ended March 31, 2000, all Reporting Persons complied with all
applicable filing requirements.
OTHER MATTERS
The Board of Directors knows of no other business which will be
presented at the Annual Meeting. If any other business is properly brought
before the Annual Meeting, it is intended that proxies in the enclosed form will
be voted in respect thereof in accordance with the judgments of the person
voting the proxies.
It is important that the proxies be returned promptly and that your
shares be represented. Shareholders are urged to mark, date, execute and
promptly return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors
By: /s/ Jeffrey A. Wasson
----------------------------------
Jeffrey A. Wasson
Chief Executive Officer & Director
24
<PAGE>
REVOCABLE PROXY
TRAVELNOW.COM INC.
318 Park Central East, Suite 306, Springfield, Missouri 65806
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
The undersigned hereby appoints Jeffrey A. Wasson with full power of
substitution, as proxy of the undersigned, with all the powers that the
undersigned would possess if personally present to cast all votes that the
undersigned would be entitled to vote at the Annual Meeting of Shareholders of
TravelNow.Com Inc. (the "Company") to be held on September 26, 2000, at the
University Plaza Holiday Inn, 333 S. John Q. Hammons Parkway, Springfield,
Missouri 65806, at 11:00 a.m. local time, and any and all adjournments or
postponements thereof, with respect to the following matters described in the
accompanying Proxy Statement and, in their discretion, on other matters which
come before the meeting:
1. To elect five (5) directors:
[ ] FOR the nominees listed below [ ] WITHHOLD AUTHORITY
(Except as indicated to th
e contrary below)
Nominees: Jeffrey A. Wasson, H. Whit Ehrler, Bill Perkin,
Jerry Rutherford and Antione Toffa
Instructions: To withhold authority to vote for any individual
nominee or nominees, write their names here:
-------------------------------------------------------------------------------
2. To ratify and approve the 2000 Omnibus Stock Incentive Plan:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To ratify and approve the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending March 31,
200l.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To approve the reincorporation of the Company in Delaware.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
This proxy will be voted at the Annual Meeting of Shareholders or any
adjournment or postponement thereof as specified. If no specifications are made,
this Proxy will be voted FOR Proposals No. 1 through 4. This proxy hereby
revokes all prior proxies given with respect to the shares of the undersigned.
Date ____________________, 2000
------------------------------
(Signature)
------------------------------
------------------------------
(Please print your name)
Please sign name as fully and exactly as it appears hereon. When signing in
a fiduciary or representative capacity, please give full title as such. When
more than one owner, each owner should sign. Proxies executed by a corporation
should be signed in full corporate name by a duly authorized officer. If a
partnership, please sign in partnership name by an authorized person.
PLEASE MARK, SIGN, DATE AND MAIL TO THE COMPANY AT THE ADDRESS STATED ON
THE RETURN ENVELOPE.
<PAGE>
Exhibit A
TRAVELNOW.COM, INC.
-------------------
Audit Committee Charter
Dated May 3, 2000
Appointment of and Charge to Committee. The Board of Directors of
TravelNow.com, Inc. (the "Company") has appointed an Audit Committee (the
"Committee") consisting of at least three of its members, all of whom are
independent, to oversee the Company's financial reporting and audit functions.
The Committee is charged with (i) the responsibility for overseeing the
relationship between the Company's financial management ("Management") and its
outside independent auditors (the "Auditors") and ensuring that it functions in
a manner that ensures the integrity of those financial statements and reliable
financial reporting; (ii) ensuring the independence of the Auditors; and (iii)
compliance with legal and regulatory requirements.
Functions of the Committee. To that end, the Committee is charged with the
following functions:
1. Review drafts of the Company's audited annual financial statements
(the "Audited Statements") and interim unaudited quarterly financial
statements (the "Unaudited Statements") and make appropriate inquiries
of Management and the Auditors as to application of proper accounting
standards and other accounting practices;
2. Meet with Management and the Auditors to review the Audited Statements
and the Unaudited Statements before they are finalized and to resolve
any questions that the Committee may have about those financial
statements;
3. Meet independently, at least annually, with Management to review the
relationship with and performance of the Auditors, the accounting and
auditing principals and practices, internal controls, the financial
risk exposures and the steps taken by management to monitor and
control such exposures and any proposed changes in accounting
principles and practices;
4. Meet independently, at least annually, with the Auditors to review the
relationship with and performance of Management and the issues
reflected in paragraph 3 above;
5. Review the Management Letter issued by the Auditors in connection with
the annual Audit and review the sufficiency of Management's response
to the comments in the Management Letter;
<PAGE>
6. Review and ratify the engagement of the Auditors, including the scope
of their engagement and their fees, and any proposals for changes in
the Auditors. The Auditors ultimately are accountable to the Board of
Directors and the Committee as representatives of the shareholders
and, as the representatives of the shareholders, the Board of
Directors and the Committee have ultimate authority and responsibility
to select, evaluate and, where appropriate, replace the Auditors or to
nominate the Auditors to be proposed for shareholder approval in any
proxy statement;
7. Consult with Management on the advisability of appointing an internal
auditor. If the Company has appointed an internal auditor (the
"Internal Auditor"), meet at least annually with the Internal Auditor
to review the scope of his assignments and the report of the Internal
Auditor on the results of his or her activity;
8. Perform any functions required of an Audit Committee by the Securities
and Exchange Commission (the "SEC") or any other regulatory bodies
with authority over the Company (the "Regulatory Bodies") including,
but not limited to, providing required reports and a copy of this
Charter in the Company's proxy statement and filing this charter with
the SEC, as may be required;
9. Ensuring that (i) it receives from the Auditors a formal written
statement delineating all relationships between the Auditor and the
Company, consistent with Independence Standards Board Standard 1, and
(ii) the Committee is responsible for actively engaging in a dialogue
with the Auditors with respect to any disclosed relationship or
services that may impact the objectivity and independence of the
Auditor and for taking, or recommending that the full Board of
Directors take appropriate action to oversee the independence of the
Auditors; and
10. Perform any other functions that the Committee determines to be
advisable in the performance of the foregoing.
Membership of the Committee. The members of the Committee shall meet the
qualification requirements of the SEC or the Regulatory Bodies and, as required
by those rules, shall be comprised solely of, or a majority of, independent
directors each of whom is able to read and understand fundamental financial
statements, including a company's balance sheet, income statement and cash flow
statement, or will be able to do so within a reasonable period of time after his
or her appointment to the Committee.
Procedures to be Followed by the Committee. The Board shall appoint a
Chairperson who shall ensure that the Committee fulfills the foregoing functions
and who shall report, at least annually, to the Board on its activities,
conclusions and recommendations. The Chairperson shall report directly to the
Chairman of the Board of the Company.
<PAGE>
The Committee shall meet telephonically or in person, at least quarterly,
to review the Unaudited Statements and in person, at least annually, to review
the Audited Statements and at such other times as necessary to perform the other
functions described above. The Chairman or any Member of the Committee can call
a meeting of the Committee by written or oral notice to the other Members at
least forty-eight (48) hours prior to such meeting, unless the Members who do
not participate in such meeting waive such notice.
This Charter has been approved by the full Board of Directors of the
Company. This Charter shall be reviewed and reassessed at least annually by the
Committee and by the full Board of Directors.
<PAGE>
Exhibit B
TRAVELNOW.COM INC.
2000 OMNIBUS STOCK INCENTIVE PLAN
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I PURPOSE.............................................................1
Section 1.1 Purpose................................................1
Section 1.2 Establishment..........................................1
ARTICLE II DEFINITIONS........................................................1
ARTICLE III ADMINISTRATION....................................................4
Section 3.1 Administration by Committee............................4
Section 3.2 Committee to Make Rules and Interpret Plan.............5
Section 3.3 Committee Members Ineligible...........................5
ARTICLE IV
GRANT OF AWARDS; SHARES
SUBJECT TO THE PLAN..................................................5
Section 4.1 Committee to Grant Awards..............................5
Section 4.2 Six-Month Holding Period...............................6
ARTICLE V ELIGIBILITY.........................................................6
Section 5.1 Eligible Persons.......................................6
ARTICLE VI STOCK OPTIONS......................................................7
Section 6.1 Grant of Options.......................................7
Section 6.2 Conditions of Options..................................7
Section 6.3 Options to Non-Employee Directors......................8
ARTICLE VII STOCK APPRECIATION RIGHTS.........................................9
Section 7.1 Grant of SARs..........................................9
Section 7.2 Terms and Conditions of Tandem SARs...................10
Section 7.3 Terms and Conditions of Freestanding SARs.............10
Section 7.4 Deemed Exercise.......................................10
Section 7.5 Additional Terms and Conditions.......................10
Section 7.6 Exercise of SARs......................................10
ARTICLE VIII PERFORMANCE SHARE AWARD.........................................11
Section 8.1 Grant of Performance Share Awards.....................11
Section 8.2 Conditions of Performance Share Awards................11
ARTICLE IX RESTRICTED STOCK AWARDS...........................................12
Section 9.1 Grant of Restricted Stock Awards......................12
Section 9.2 Conditions of Restricted Stock Awards.................12
- i -
<PAGE>
ARTICLE X CASH BONUS.........................................................13
Section 10.1 Grant of Cash Bonus...................................13
Section 10.2 Conditions of Cash Bonus..............................13
ARTICLE XI OTHER INCENTIVE AWARDS............................................14
Section 11.1 Grant of Other Incentive Awards.......................14
Section 11.2 Conditions of Other Incentive Awards..................14
ARTICLE XII NON-EMPLOYEE DIRECTOR AWARDS.....................................14
ARTICLE XIII STOCK ADJUSTMENTS...............................................14
Section 13.1 Adjustment of Shares Available; Recapitalization......14
ARTICLE XIV GENERAL..........................................................15
Section 14.1 Amendment or Termination of Plan......................15
Section 14.2 Dividends and Dividend Equivalents....................15
Section 14.3 Termination of Employment.............................16
Section 14.4 Nonassignability......................................16
Section 14.5 Withholding Taxes.....................................16
Section 14.6 Change of Control.....................................17
Section 14.7 Forfeiture............................................17
Section 14.8 Amendments to Awards..................................17
Section 14.9 Regulatory Approval and Listings......................17
Section 14.10 Right to Continued Employment.........................17
Section 14.11 Beneficiaries.........................................18
Section 14.12 Indemnification.......................................18
Section 14.13 Reliance on Reports...................................18
Section 14.14 Relationship to Other Benefits........................18
Section 14.15 Expenses..............................................19
Section 14.16 Construction..........................................19
Section 14.17 Governing Law.........................................19
Section 14.18 Rule 16b-3 Compliance.................................19
Section 14.19 Nonexlusivity of the Plan.............................19
- ii -
<PAGE>
ARTICLE I
PURPOSE
-------
Section 1.1 Purpose. TravelNow.com Inc. 2000 Omnibus Stock Incentive Plan
(the "Plan") is intended as an incentive and to encourage stock ownership by
certain employees and other persons associated with TravelNow.com Inc., a
Florida corporation (the "Corporation"), so that they may acquire or increase
their proprietary interest in the success of the Corporation, and to encourage
them to remain in the employ of, or continue their relationship with, the
Corporation. In addition, the Plan is intended to enable the Corporation to
retain and attract personnel of the highest caliber who by their position,
ability and diligence are able to make important contributions to the
Corporation's success.
A further purpose of the Plan is to provide such persons with additional
incentive and reward opportunities designed to enhance the profitable growth of
the Corporation. So that the appropriate incentive can be provided, the Plan
provides for granting "Options", "Stock Appreciation Rights", "Restricted Stock
Awards", "Cash Bonus Awards", "Performance Share Awards", and/or "Other
Incentive Awards" (all preceding terms defined below) to employees of and
certain other persons associated with the Corporation and its Subsidiaries on
the terms and subject to the conditions set forth in the Plan.
Section 1.2 Establishment. The Plan is effective as of May 3, 2000 (the
"Effective Date"), and subject to the provisions of Section 13.1, "Awards" (term
defined below) may be made as provided herein for a period of 10 years after
such date.
The Plan shall be approved by the holders of a majority of the outstanding
shares of "Common Stock" (term defined below), which approval must occur within
the period ending twelve months after the date the Plan is adopted by the
"Board" (term defined below). Pending such approval by the shareholders, Awards
under the Plan may be granted to persons who are, or within the preceding six
months have been, "Insider Participants" (term defined below), but no such
Awards may be exercised or transferred prior to receipt of shareholder approval.
In the event shareholder approval is not obtained within such 12-month period,
all such Awards shall be void.
The Plan shall continue in effect until all matters relating to the payment
of Awards and administration of the Plan have been settled.
ARTICLE II
DEFINITIONS
-----------
Section 2.1 "Cash Bonus" means an Award granted under Article X of the
Plan.
Section 2.2 "Award" means, individually, collectively or in tandem, any
Option, Stock Appreciation Right, Restricted Stock Award, Performance Share
Award, Cash Bonus, or Other Incentive Award granted under the Plan to an
Eligible Person by the Committee pursuant to such terms, conditions,
restrictions, and/or limitations, if any, as the Committee may establish by the
Award Notice or otherwise.
- 1 -
<PAGE>
Section 2.3 "Award Notice" means any written instrument that establishes
the terms, conditions, restrictions, and/or limitations applicable to an Award
in addition to those established by this Plan and by the Committee's exercise of
its administrative powers.
Section 2.4 "Board" means the Board of Directors of the Corporation.
Section 2.5 "Change of Control Event" means each of the following:
(a) A change in shareholder ownership of the Corporation, whereby a
person or company, or a group of affiliated persons or companies, acquires
from a person or company, other than the Corporation, a sufficiently large
block of Common Stock, which, when voted together with the shares of Common
Stock of all other shareholders of the Corporation whose proxies or written
consents are solicited by such person, company or group without the benefit
of a management-supported proxy statement at any meeting of the
shareholders of the Corporation, would enable such person or company or
group of affiliated persons or companies to elect a majority of the members
of the Board; provided, however, that such a change in shareholder
ownership of the Corporation shall not be deemed to be a Change of Control
Event if, prior to such change in shareholder ownership, such person or
company or group of affiliated persons or companies owned a sufficiently
large block of Common Stock that when voted together with the shares of
Common Stock of all other shareholders of the Corporation whose proxies or
written consents are solicited by such person, company or group without the
benefit of a management-supported proxy statement at any meeting of the
shareholders of the Corporation, would enable such person or company or
group of affiliated persons or companies to elect a majority of the members
of the Board;
(b) A merger or consolidation of the Corporation with and into another
company, other than with or into a wholly-owned Subsidiary of the
Corporation, where the Corporation is not the surviving company; or the
Corporation is the surviving company and the members of the Board
immediately prior to the merger or consolidation do not constitute a
majority of the Board of the surviving company after the merger or
consolidation;
(c) The sale of all or substantially all of the assets of the
Corporation; or
(d) Any other kind of a corporate reorganization or takeover where the
Corporation is not the surviving company; or the Corporation is the
surviving company and the members of the Board immediately prior to the
reorganization do not constitute a majority of the Board of Directors of
the surviving company.
Notwithstanding the above, any increase in shares of Common Stock of
the Corporation owned by the Corporation, or any wholly-owned subsidiary
thereof, shall not constitute a Change of Control Event. With respect to
the events described in subparagraphs (b), (c) and (d) above, the Change of
Control Event shall be deemed to occur on the later of the transaction
described in such subparagraph or a shareholder vote approving such a
transaction.
- 2 -
<PAGE>
Section 2.6 "Code" means the Internal Revenue Code of 1986. Reference in
the Plan to any section of the Code shall be deemed to include any amendments or
successor provisions to such section and any regulations under such section.
Section 2.7 "Committee" means the Compensation Committee of the Board, or
such other committee designated by the Board, authorized to administer the Plan
under Article III hereof. The Committee shall consist of not less than two
members, each of whom is, a "Non-Employee Director" within the meaning of Rule
16b-3 promulgated under Section 16 of the Exchange Act (defined below) and an
"outside director" within the meaning of Code Section 162(m) and the regulations
promulgated thereunder.
Section 2.8 "Common Stock" means the common stock, par value $.01 per
share, of the Corporation, and after substitution such other stock as shall be
substituted therefor as provided in Article XII.
Section 2.9 "Date of Grant" means the date on which the granting of an
Award is authorized by the Committee or such later date as may be specified by
the Committee in such authorization.
Section 2.10 "Director Options" means non-qualified Options awarded under
Section 6.3.
Section 2.11 "Eligible Person" means any employee of the Corporation, any
employee of any Subsidiary or affiliate of the Corporation, any consultant or
independent contractor to the Corporation or any Subsidiary or affiliate of the
Corporation, or any individual who satisfies the requirements of Section 6.3 or
Article XII.
Section 2.12 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
Section 2.13 "Fair Market Value" means (a) during any such time as the
Common Stock is not listed upon an established stock exchange or the Nasdaq
National or SmallCap Markets, the fair market value dollar amount per share
determined by the Board, in good faith; or (b) during such time as the Common
Stock is listed upon an established stock exchange or exchanges or the Nasdaq
National or SmallCap Markets, the reported closing price, or in the case of a
listing on the Nasdaq SmallCap Market the reported last price, of the Common
Stock on such stock exchange or exchanges or markets on the day for which such
value is to be determined, or if no sale of the Common Stock shall have been
made on any stock exchange or the Nasdaq National or SmallCap Markets that day,
on the next succeeding day on which there was a sale of such Common Stock.
Section 2.14 "Incentive Stock Option" means an Option within the meaning of
Section 422 of the Code.
Section 2.15 "Non-Employee Director" shall have the meaning designated
under Rule 16b-3(b)(3)(i) of the Exchange Act.
- 3 -
<PAGE>
Section 2.16 "Insider Participant" means a Participant who is, or within
the preceding six months was, subject to the provisions of Section 16 of the
Exchange Act.
Section 2.17 "Other Incentive Award" means an Award granted under Article
XI of the Plan.
Section 2.18 "Option" means an Award granted under Article VI of the Plan
and includes both non-qualified options and Incentive Stock Options.
Section 2.19 "Participant" means an Eligible Person of the Corporation or a
Subsidiary to whom an Award has been granted by the Committee under the Plan.
Section 2.20 "Performance Share Award" means an Award granted under Article
VIII of the Plan.
Section 2.21 "Plan" means TravelNow.com Inc. 2000 Omnibus Stock Incentive
Plan.
Section 2.22 "Restricted Stock Award" means an Award granted under Article
IX of the Plan.
Section 2.23 "Stock Appreciation Right" or "SAR" means an Award granted
under Article VII of the Plan.
Section 2.24 "Subsidiary" means any corporation of which a majority of the
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Corporation.
ARTICLE III
ADMINISTRATION
--------------
Section 3.1 Administration by Committee. The Committee shall administer the
Plan. Unless otherwise provided in the by-laws of the Corporation or the
resolutions adopted from time to time by the Board establishing the Committee,
the Board may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by the
Board. The Committee shall select one of its members as Chairman, and shall hold
meetings at such times and places as it may determine. A majority of the
Committee shall constitute a quorum and the acts of a majority of the members
present at any meeting at which a quorum is present or acts reduced to or
approved in writing by a majority of the members of the Committee shall be the
valid acts of the Committee.
Subject to the provisions of the Plan, the Committee shall have exclusive
power to:
(a) Select the Eligible Persons to participate in the Plan.
- 4 -
<PAGE>
(b) Determine the time or times when Awards will be made.
(c) Determine the form of an Award, whether a Stock Option, an SAR, a
Restricted Stock Award, a Performance Share Award, a Cash Bonus, or Other
Incentive Award established by the Committee in accordance with Article XI
below, the number of shares of Common Stock subject to the Award or with
reference to which the Award is determined, all the terms, conditions
(including performance requirements), restrictions and/or limitations, if
any, of an Award, including the exercise price, if applicable, the time and
conditions of exercise or vesting, and the terms of any Award Notice, which
may include the waiver or amendment of prior terms and conditions or
acceleration or early vesting or payment of an Award under certain
circumstances determined by the Committee.
(d) Determine whether Awards will be granted singly, in combination or
in tandem.
(e) Grant waivers of Plan terms, conditions, restrictions, and
limitations.
(f) Accelerate the vesting, exercise, or payment of an Award or the
performance period of an Award when such action or actions would be in the
best interest of the Corporation.
(g) Correct any defect or supply appropriate text for any omission or
reconcile any inconsistency in the Plan and to construe and interpret the
Plan and any Award, rules and regulations, Award Notice, or other
instrument hereunder.
(h) Take any and all other action it deems necessary or advisable for
the proper operation or administration of the Plan.
Section 3.2 Committee to Make Rules and Interpret Plan. The Committee shall
have the authority, subject to the provisions of the Plan, to establish, adopt,
or revise such rules and regulations and to make all such determinations
relating to the Plan as it may deem necessary or advisable for the
administration of the Plan. The Committee's interpretation of the Plan or any
Awards granted pursuant thereto and all decisions and determinations by the
Committee with respect to the Plan shall be final, binding, and conclusive on
all parties unless otherwise determined by the Board.
Section 3.3 Committee Members Ineligible. No Committee member shall be
eligible to participate in the Plan except to the extent set forth in Section
6.3 and Article XII.
ARTICLE IV
GRANT OF AWARDS; SHARES
SUBJECT TO THE PLAN
-------------------
Section 4.1 Committee to Grant Awards. The Committee may, from time to
time, grant Awards to one or more Eligible Persons, provided, however, that:
- 5 -
<PAGE>
(a) Subject to Article XIII, the aggregate number of shares of Common
Stock made subject to Awards may not exceed 1,552,395; and with respect to
Options and/or SARs granted to any one Participant during any calendar
year, the maximum number of shares of Common Stock that may be subject to
such Option and/or SAR is 500,000.
(b) Any shares of Common Stock related to Awards which terminate by
expiration, forfeiture, cancellation or otherwise without the issuance of
shares of Common Stock, are settled in cash in lieu of Common Stock, or are
exchanged in the Committee's discretion for Awards not involving Common
Stock, shall be available again for grant under the Plan, so long as the
holder of any such Award received no benefits of Common Stock ownership
(including but not limited to dividends) from the shares of Common Stock
related to such Award. Any shares of Common Stock with respect to which an
SAR has been exercised and paid in cash shall again be available for grant
under the Plan.
(c) Any shares of Common Stock issued by the Corporation through the
assumption or substitution of outstanding grants from an acquired company
shall reduce the shares available for grants under the Plan.
(d) Common Stock delivered by the Corporation in payment of any Award
under the Plan may be authorized and unissued Common Stock or Common Stock
held in the treasury of the Corporation or may be purchased on the open
market or by private purchase.
(e) The Committee shall, in its sole discretion, determine the manner
in which fractional shares arising under this Plan shall be treated.
Section 4.2 Six-Month Holding Period. With respect to Awards granted
hereunder to any Insider Participant on or following the date six months prior
to the date on which the Corporation shall be lawfully required to register the
Common Stock pursuant to Section 12 or 15(d) of the Exchange Act, each such
Award which is an "equity security" (as that term is defined in the Exchange
Act) must be held and not transferred by such Insider Participant for a period
of six months from the Date of Grant. Nothing in this Section 4.2 shall be
deemed to prohibit the exercise of Options within the six month period following
the Date of Grant, but the shares of Common Stock received by an Insider
Participant pursuant to the exercise of an Option must be held and not
transferred for a period of six months from the Date of Grant of the Option so
exercised.
ARTICLE V
ELIGIBILITY
-----------
Section 5.1 Eligible Persons. Eligible Persons shall be eligible to receive
Awards under the Plan, as the Committee shall select from time to time.
Directors who are not employees of the Corporation or its Subsidiaries
("Non-Employee Directors") may also participate in the Plan, but only to the
extent set forth in Section 6.3 hereof.
- 6 -
<PAGE>
Subject to the provisions of the Plan, the Committee shall, from time to
time, select from the Eligible Persons those to whom Awards shall be granted and
shall determine the type or types of Awards to be made and shall establish in
the related Award Notices the terms, conditions, restrictions and/or
limitations, if any, applicable to the Awards in addition to those set forth in
the Plan and the administrative rules and regulations issued by the Committee.
ARTICLE VI
STOCK OPTIONS
-------------
Section 6.1 Grant of Options. The Committee may, from time to time, subject
to the provisions of the Plan and such other terms and conditions as it may
determine, grant Options to Eligible Persons (including "reload" options
automatically granted upon the occurrence of specified exercises of options).
These Options may be Incentive Stock Options or non-qualified Options, or a
combination of both; provided, however, that Incentive Stock Options may only be
granted to employees of the Corporation or its Subsidiaries. Each grant of an
Option shall be evidenced by an Award Notice executed by the Corporation and the
Participant, and shall contain such terms and conditions and be in such form as
the Committee may from time to time approve, subject to the requirements of
Section 6.2.
Section 6.2 Conditions of Options. Each Option so granted shall be subject
to the following conditions:
(a) Exercise Price. As limited by Section 6.2(e) below, each Option
shall state the exercise price, which shall be set by the Committee in its
discretion at the Date of Grant, which price shall not be less than 100% of
the Fair Market Value of the Common Stock on the Date of Grant.
(b) Form of Payment. The exercise price of an Option may be paid (i)
in cash or by check, bank draft or money order payable to the order of the
Corporation; (ii) in shares of Common Stock that have either (I) been owned
by the Participant for more than six months and have been paid for within
the meaning of SEC Rule 144 or (II) were obtained by the Participant in the
public market; (iii) a combination of the foregoing; or (iv) such other
consideration as the Committee may deem appropriate. In addition, the
Committee may allow a Participant to utilize a broker-dealer arrangement if
(A) the broker-dealer is a member of the National Association of Securities
Dealers, (B) the broker-dealer has received from the Participant or the
Corporation a fully- and duly-endorsed agreement evidencing such Option and
- 7 -
<PAGE>
instructions signed by the Participant requesting the Corporation to
deliver the shares of Common Stock subject to such Option to the
broker-dealer on behalf of the Participant and specifying the account into
which such shares should be deposited, (C) adequate provision has been made
with respect to the payment of any withholding taxes due upon such
exercise, and (D) the broker-dealer and the Participant have otherwise
complied with Section 220.3(e)(4) of Regulation T, 12 CFR, Part 220 and any
successor rules and regulations applicable to such exercise ("Cashless
Exercise"); provided, however, that an Insider Participant may not elect to
utilize this arrangement within six months of the date the Option is
granted (unless death or disability occurs prior to the expiration of such
six month period). The Committee shall establish appropriate methods for
accepting Common Stock, whether restricted or unrestricted, and may impose
such conditions as it deems appropriate on the use of such Common Stock in
payment of the exercise price. Common Stock used to exercise an Option
shall be valued at its then Fair Market Value.
(c) Exercise of Options. Options granted under the Plan shall be
exercisable, in whole or in such installments and at such times, and shall
expire at such time, as shall be provided by the Committee in the Award
Notice. Exercise of an Option shall be by written notice stating the
election to exercise in the form and manner determined by the Committee.
Every share of Common Stock acquired through the exercise of an Option
shall be deemed to be fully paid at the time of exercise and payment of the
exercise price.
(d) Other Terms and Conditions. Among other conditions that may be
imposed by the Committee, if deemed appropriate, are those relating to (i)
the period or periods and the conditions of exercisability of any Option;
(ii) the minimum periods during which Participants must be employed by the
Corporation or its Subsidiaries, or must hold Options before they may be
exercised; (iii) the minimum periods during which shares acquired upon
exercise must be held before sale or transfer shall be permitted; (iv)
conditions under which such Options or shares may be subject to forfeiture;
(v) restrictions on transferability; and (vi) the frequency of exercise or
the minimum or maximum number of shares that may be acquired at any one
time.
(e) Special Restrictions Relating to Incentive Stock Options. Options
issued in the form of Incentive Stock Options shall, in addition to being
subject to all applicable terms, conditions, restrictions and/or
limitations established by the Committee, comply with the requirements of
Section 422 of the Code (or any successor section thereto), including,
without limitation, the requirement that the exercise price of an Incentive
Stock Option not be less than 100% of the Fair Market Value of the Common
Stock on the Date of Grant, the requirement that each Incentive Stock
Option, unless sooner exercised, terminated or canceled, expire no later
than 10 years from its Date of Grant, and the requirement that the
aggregate Fair Market Value (determined on the Date of Grant) of the Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year (under this Plan or
any other plan of the Corporation or any Subsidiary) not exceed $100,000.
(f) Application of Funds. The proceeds received by the Corporation
from the sale of Stock pursuant to Options will be used for general
corporate purposes.
Section 6.3 Options to Non-Employee Directors. Notwithstanding any other
provision herein, no Options shall be granted hereunder to Non-Employee
Directors other than the Director Options granted pursuant to this Section 6.3.
Director Options may be awarded at the discretion and with the approval of the
Board with the recipient of such Option abstaining from the vote. Such Director
Options shall be granted at such time, in such number and with such restrictions
as determined by the Board. Each Director Option shall be evidenced by an Award
Notice executed by the Corporation and the Non-Employee Director, and shall
include the following terms and provisions:
- 8 -
<PAGE>
(a) The Option exercise price per share shall be equal to the Fair
Market Value of one share of Common Stock on the date the Director Option
is granted. The period within which each Option may be exercised shall
expire ten years from the date the option is granted (the "Option Period"),
unless ended sooner due to termination of service or death of the optionee,
or if fully exercised prior to the end of such ten year period.
(b) If the directorship of an optionee is terminated within the Option
Period for any reason other than (i) death of the optionee or (ii) on
account of any act of fraud, intentional misrepresentation, embezzlement,
misappropriation, or conversion of assets or opportunities of the
Corporation or any of its Subsidiaries, the Director Option may be
exercised by the optionee, to the extent the optionee was able to do so at
the date of termination of the directorship, within three months after such
termination (if otherwise within the Option Period).
(c) If an optionee dies during the Option Period while a Non-Employee
Director of the Corporation, or if an optionee dies within three months of
serving as a Non-Employee Director, the Director Option may be exercised,
to the extent the optionee was entitled to exercise such Option at the date
of his or her death, within one year after such death (if otherwise within
the Option Period), by the executor or the administrator of the estate of
the optionee, or by the person or persons who shall have lawfully acquired
the Director Option directly from the optionee.
(d) If the directorship of the optionee is terminated within the
Option Period for any of the reasons enumerated in Section 6.3(b)(ii), the
Director Option shall automatically terminate as of the date of termination
of such directorship.
(e) The exercise price of a Director Option may be paid: (A) in cash
or by check, bank draft or money order payable to the order of the
Corporation concurrently with the exercise of the option; (B) in shares of
Common Stock that have either (I) been owned by the Non-Employee Director
for more than six months and have been paid for within the meaning of SEC
Rule 144 or (II) were obtained by the Non-Employee Director in the public
market; (C) a combination of the foregoing; or (D) such other consideration
as the Board may deem appropriate. In addition to the foregoing, subject to
the discretion of the Board, any Option granted under the Plan may be
exercised by Cashless Exercise. The Board shall establish appropriate
methods for accepting Common Stock, and may impose such conditions as it
deems appropriate on the use of such Common Stock in payment of the
exercise price. Common Stock used to exercise an Option shall be valued at
its then Fair Market Value.
ARTICLE VII
STOCK APPRECIATION RIGHTS
-------------------------
Section 7.1 Grant of SARs. Awards may be granted in the form of Stock
Appreciation Rights (SARs). A SAR may be granted in tandem with all or a portion
of a related Option under the Plan ("Tandem SARs"), or may be granted separately
("Freestanding SARs"). A Tandem SAR may be granted either at the time of the
grant of the related Option or at any time thereafter during the term of the
- 9 -
<PAGE>
Option. The grant of a SAR shall be evidenced by an Award Notice executed by the
Corporation and the Participant, and shall contain such terms and conditions and
be in such form as the Committee may from time to time approve, subject to the
requirements of this Article VII. In no event shall any SARs granted extend for
a period in excess of 10 years from the Date of Grant.
Section 7.2 Terms and Conditions of Tandem SARs. A Tandem SAR shall be
exercisable to the extent, and only to the extent, that the related Option is
exercisable, and the "exercise price" of such an SAR shall be the exercise price
under the related Option. However, at no time shall a Tandem SAR be issued if
the exercise price of its related Option is less than one hundred percent (100%)
of the Fair Market Value of the Stock on the Date of Grant of the Tandem SAR. If
a related Option is exercised as to some or all of the shares covered by the
Award, the related Tandem SAR, if any, shall be canceled automatically to the
extent of the number of shares covered by the Option exercise. Upon exercise of
a Tandem SAR as to some or all of the shares covered by the Award, the related
Option shall be canceled automatically to the extent of the number of shares
covered by such exercise, and such shares shall again be eligible for a grant in
accordance with Article IV hereof, except to the extent any shares of Stock are
issued to settle the SAR.
Section 7.3 Terms and Conditions of Freestanding SARs. Freestanding SARs
shall be exercisable in whole or in such installments and at such times as may
be determined by the Committee. As limited by Section 6.2(e), the exercise price
of a Freestanding SAR shall be set by the Committee at the Date of Grant.
Section 7.4 Deemed Exercise. The Committee may provide that a SAR shall be
deemed to be exercised at the close of business on the scheduled expiration date
of such SAR, if at the time the SAR by its terms remains exercisable and, if
exercised, would result in a payment to the holder of such SAR.
Section 7.5 Additional Terms and Conditions. The Committee may, by way of
the Award Notice or otherwise, determine such other terms, conditions,
restrictions and/or limitations, if any, of any SAR Award, provided they are not
inconsistent with the Plan. Among other conditions that may be imposed by the
Committee are those requirements imposed by Rule 16b-3 of the Exchange Act,
including, without limitation, the requirement that SARs (whether Freestanding
or Tandem) granted to a person who is, or within the preceding six months was,
an Insider Participant shall not be exercisable until the six month anniversary
of the Grant Date.
Section 7.6 Exercise of SARs. A holder shall exercise his or her SARs by
giving written notice of such exercise in the form and manner determined by the
Committee, and the date upon which such written notice is received by the
Corporation shall be the exercise date for the SARs. A SAR shall entitle the
holder to receive a payment equal to the excess of the Fair Market Value of the
number of shares of Common Stock covered by the SAR on the date of exercise over
the exercise price of the SAR, multiplied by the number of shares with respect
to which the SARs relate; provided, however, that the Committee may unilaterally
limit the appreciation in value of the Common Stock attributable to the SAR at
any time prior to its exercise.
- 10 -
<PAGE>
Payment of a SAR may be in cash, in shares of Common Stock or Restricted
Stock, or any combination, as the Committee shall determine. To the extent paid
in shares of Common Stock or Restricted Stock, the value of the Stock or
Restricted Stock so paid shall be the Fair Market Value of a share of Common
Stock upon exercise of the SAR.
- 11 -
<PAGE>
ARTICLE VIII
PERFORMANCE SHARE AWARD
-----------------------
Section 8.1 Grant of Performance Share Awards. Grants of Performance Share
Awards may be made by the Committee to any Eligible Person during the term of
the Plan. Each Performance Share Award shall represent one share of Common
Stock. Each Performance Share shall be evidenced by an Award Notice. There may
be more than one award in existence at any one time for any Participant and
performance periods for separate Performance Share Awards need not be identical.
The Performance Shares will be paid out in full or in part on the basis of
the performance of the Corporation following the beginning of the Corporation's
fiscal year in which the Performance Share Award is made as hereinafter set
forth. In determining the size of Performance Share Awards, the Committee shall
take into account a Participant's responsibility level, performance, potential,
and cash compensation level, as well as such other considerations as it deems
appropriate. Performance Share Awards shall be deemed to have been made on
January 1 of the year in which awards are made. If any Performance Share Award
granted under the Plan shall be forfeited, canceled, or not paid out in full,
such Performance Share Award may again be granted under the Plan in accordance
with Article IV.
Section 8.2 Conditions of Performance Share Awards. A Performance Share
Award shall be subject to the following terms and conditions:
(a) Performance Share Account. Performance Share Awards shall be
credited to a Performance Share account to be maintained for each holder.
Each Performance Share Award shall be deemed to be the equivalent of one
share of Common Stock of the Corporation. A Performance Share Award under
the Plan shall not entitle the holder to any interest in or to any
dividend, voting, or other rights of a shareholder. The value of the
Performance Shares in a holder's Performance Share account at the time of
Award or the time of payment shall be the Fair Market Value at any such
time of an equivalent number of shares of the Common Stock.
(b) Performance Period and Criteria. Performance Shares shall be
contingent upon the attainment during a performance period of certain
performance objectives. The length of the performance period for each
Performance Share Award, the performance objectives to be achieved during
the Performance Share Award period, and the measure of whether and to what
degree such objectives have been attained shall be conclusively determined
by the Committee in the exercise of its discretion. The Committee may
revise performance objectives at such times as it deems appropriate during
the Performance Share Award period in order to take into account or into
consideration any unforeseen events or changes in circumstances; provided,
however, that any such revision which is adverse to the holder of a
Performance Share Award shall require the holder's consent.
- 12 -
<PAGE>
(c) Payment of Award. Following the end of the Performance Share Award
period, the holder of a Performance Share Award shall be entitled to
receive payment of an amount based on the achievement of the performance
measures for such Performance Share Award period. In the event that (i) the
Corporation is lawfully required to register the Common Stock pursuant to
Section 12 or 15(d) of the Exchange Act; and (ii) a recipient of a
Performance Share Award is, or within the preceding six months has been, an
Insider Participant, no Performance Share Award held by such Insider
Participant shall be payable within the first six months from the Date of
Grant of such Performance Share Award. The payment to which a holder of a
Performance Share Award shall be entitled at the end of a Performance Share
Award period shall be a dollar amount equal to the Fair Market Value of the
number of shares of Common Stock equal to the number of Performance Shares
earned and payable to such holder; provided, however, that the Committee
may unilaterally limit the appreciation in value of the Common Stock
attributable to the Performance Share Award at any time prior to the end of
the Performance Share Award period.
The Committee may authorize payment of a Performance Share Award in
any combination of cash and shares of Common Stock or all in cash or all in
Common Stock, as it deems appropriate. Such shares may include any
restrictions on transfer and forfeiture provisions as the Committee, from
time to time, deems appropriate.
(d) Additional Terms and Conditions. The Committee may, by way of the
Award Notice or otherwise, determine such other terms, conditions,
restrictions and/or limitations, if any, of any Performance Share Award,
provided they are not inconsistent with the Plan.
ARTICLE IX
RESTRICTED STOCK AWARDS
-----------------------
Section 9.1 Grant of Restricted Stock Awards. The Committee may grant a
Restricted Stock Award to any Eligible Person. Restricted Stock Awards shall be
awarded in such number and at such times during the term of the Plan as the
Committee shall determine. Each Restricted Stock Award may be evidenced in such
manner as the Committee deems appropriate, including, without limitation,
book-entry registration or issuance of a stock certificate or certificates, and
by an Award Notice setting forth the terms of such Restricted Stock Award.
Section 9.2 Conditions of Restricted Stock Awards. The grant of a
Restricted Stock Award shall be subject to the following:
(a) Restriction Period. Vesting of each Restricted Stock Award shall
require the holder to remain in the employment of the Corporation or a
Subsidiary for a prescribed period (a "Restriction Period"). The Committee
shall determine the Restriction Period or Periods which shall apply to the
shares of Common Stock covered by each Restricted Stock Award or portion
thereof. At the end of the Restriction Period the restrictions imposed
hereunder shall lapse with respect to the shares of Common Stock covered by
the Restricted Stock Award or portion thereof. The Committee may, in its
sole discretion, modify or accelerate the vesting of a Restricted Stock
Award under such circumstances as it deems appropriate.
- 13 -
<PAGE>
(b) Restrictions. The holder of a Restricted Stock Award may not sell,
transfer, pledge, exchange, hypothecate, or otherwise dispose of the shares
of Common Stock represented by the Restricted Stock Award during the
applicable Restriction Period. The Committee shall impose such other
restrictions on any shares of Common Stock covered by a Restricted Stock
Award as it may deem advisable including, without limitation, restrictions
under applicable Federal or state securities laws, and may legend the
certificates representing Restricted Stock to give appropriate notice of
such restrictions.
(c) Rights as Shareholders. During any Restriction Period, the
Committee may, in its discretion, grant to the holder of a Restricted Stock
Award all or any of the rights of a shareholder with respect to said
shares, including, but not by way of limitation, the right to vote such
shares and to receive dividends. If any dividends or other distributions
are paid in shares of Common Stock, all such shares shall be subject to the
same restrictions on transferability as the shares of Restricted Stock with
respect to which they were paid.
ARTICLE X
CASH BONUS
----------
Section 10.1 Grant of Cash Bonus. The Committee may, from time to time,
determine to award cash bonus payments to an Eligible Person based upon
performance criteria established from time to time by the Committee ("Cash
Bonus"). With respect to each such Eligible Person, the bonus awarded hereunder
shall be determined in relation to such person's level of responsibility in the
Corporation or any Subsidiary and the competitive compensation practices of
other major businesses, and such other factors as are deemed appropriate by the
Committee.
Section 10.2 Conditions of Cash Bonus. An Award under this Article X shall
be subject to the following terms and conditions:
(a) Amount of Fund. The Committee, in its discretion, shall determine
the amount of the fund to be available for cash bonuses for any performance
period.
(b) Bonuses and Performance Criteria. Cash Bonuses actually earned by
and paid to Participants will be based primarily upon achievement of such
Corporation and individual performance goals as the Committee may from time
to time establish. The Committee may also set the performance period over
which the goals so established are to be achieved.
(c) Payment of Bonus. Cash Bonuses awarded shall be made at such time
as determined by the Committee following the close of the performance
period to which such awards relate.
- 14 -
<PAGE>
(d) Additional Terms and Conditions. The Committee may, by way of a
written instrument or otherwise, determine such other terms, conditions,
restrictions and/or limitations, if any, of any Cash Bonus, provided they
are not inconsistent with the Plan.
ARTICLE XI
OTHER INCENTIVE AWARDS
----------------------
Section 11.1 Grant of Other Incentive Awards. The Committee may, in its
discretion, grant other types of awards of, or based on, Common Stock. Other
Incentive Awards are limited to awards under which Common Stock is or may in the
future be acquired. Such awards may include grants of debt securities
convertible into or exchangeable for shares of Common Stock upon such
conditions, including attainment of performance goals, as the Committee shall
determine.
Section 11.2 Conditions of Other Incentive Awards. The Committee may
prescribe limitations or conditions requiring forfeiture by the participant, or
permitting repurchase by the Corporation, of Other Incentive Awards, and may at
any time, if it determines such action to be in the best interests of the
Corporation, accelerate or waive any such limitations or conditions. Each grant
of an Other Incentive Award shall be evidenced by an Award Notice executed by
the Corporation and the Participant, and shall contain such terms and conditions
and be in such form as the Committee may from time to time approve.
Other Incentive Awards may not be sold, assigned, transferred, pledged, or
encumbered except as may be provided in the Award Notice, and in no event may be
transferred other than by will or by the laws of descent and distribution or be
exercised, during the life of the participant, other than by the participant or
the participant's guardian or legal representative.
The recipient of an Other Incentive Award will have the rights of a
shareholder only to the extent, if any, specified in the Award Notice governing
such Other Incentive Award.
ARTICLE XII
NON-EMPLOYEE DIRECTOR AWARDS
----------------------------
Shares of restricted or unrestricted Common Stock may be awarded to
Non-Employee Directors at the discretion and with the approval of the Board,
with the recipient of such shares abstaining from such vote. Such Awards shall
be granted at such time, in such number and with such restrictions as determined
by the Board. The Board may also, in its discretion, approve other types of
Awards for Non-Employee Directors which are based on the Common Stock, including
stock appreciation rights, stock performance rights and other incentive awards
Each Director Award shall be evidenced by an Award Notice executed by the
Corporation and the Non-Employee Director containing the terms, conditions and
restrictions of each Director Award.
- 15 -
<PAGE>
ARTICLE XIII
STOCK ADJUSTMENTS
-----------------
Section 13.1 Adjustment of Shares Available; Recapitalization. In the event
that the shares of Common Stock, as presently constituted, shall be changed into
or exchanged for a different number or kind of shares of stock or other
securities of the Corporation or of another corporation (whether by reason of
merger, consolidation, recapitalization, reclassification, stock split,
combination of shares or otherwise), or if the number of such shares of Common
Stock shall be increased through the payment of a stock dividend, or a dividend
on the shares of Common Stock of rights or warrants to purchase securities of
the Corporation shall be made, then there shall be substituted for or added to
each share available under and subject to the Plan as provided in Article IV
hereof, and each share theretofore appropriated or thereafter subject or which
may become subject to Performance Share Awards, Options, SARs, Restricted Stock
Awards or Other Incentive Awards under the Plan, the number and kind of shares
of stock or other securities into which each outstanding share of Common Stock
shall be so changed or for which each such share shall be exchanged or to which
each such share shall be entitled, as the case may be. In the event there shall
be any other change in the number or kind of the outstanding shares of Common
Stock, or any stock or other securities into which the Common Stock shall have
been changed or for which it shall have been exchanged, then if the Committee
shall, in its sole discretion, determine that such change equitably requires an
adjustment in the shares available under and subject to the Plan, or in any
Award theretofore granted or which may be granted under the Plan, such
adjustments shall be made in accordance with such determination, except that no
adjustment of the number of shares of Common Stock available under the Plan or
to which any Award relates that would otherwise be required shall be made unless
and until such adjustment either by itself or with other adjustments not
previously made would require an increase or decrease of at least 1% in the
number of shares of Common Stock available under the Plan or to which any Award
relates immediately prior to the making of such adjustment (the "Minimum
Adjustment"). Any adjustment representing a change of less than such minimum
amount shall be carried forward and made as soon as such adjustment together
with other adjustments required by this Section 13.1 and not previously made
would result in a Minimum Adjustment. Notwithstanding the foregoing, any
adjustment required by this Section 13.1 which otherwise would not result in a
Minimum Adjustment shall be made with respect to shares of Common Stock relating
to any Award immediately prior to exercise, payment or settlement of such Award.
No fractional shares of Common Stock or units of other securities shall be
issued pursuant to any such adjustment, and any fractions resulting from any
such adjustment shall be eliminated in each case by rounding downward to the
nearest whole share.
ARTICLE XIV
GENERAL
-------
Section 14.1 Amendment or Termination of Plan. The Board may suspend or
terminate the Plan at any time. In addition, the Board may, from time to time,
amend the Plan in any manner, provided, however, that any amendment to the Plan
- 16 -
<PAGE>
shall require approval of the shareholders of the Corporation if, in the opinion
of counsel to the Corporation, such approval is required by any section of the
Exchange Act, any other Federal or state law or any regulations or rules
promulgated thereunder or the rules of Nasdaq (or such other exchange on which
the Common Stock is traded).
Section 14.2 Dividends and Dividend Equivalents. If an Award is granted in
the form of a Performance Share Award, Restricted Stock, or an Option, the
Committee (or the Board) may choose, at the time of the grant of such award or
any time thereafter up to the time of payment of such Award, to include as part
of such Award an entitlement to receive dividends or dividend equivalents
subject to such terms, conditions, restrictions, and/or limitations, if any, as
the Committee (or the Board) may establish. Dividends and dividend equivalents
granted hereunder shall be paid in such form and manner (i.e., lump sum or
installments), and at such time as the Committee (or the Board) shall determine.
All dividends or dividend equivalents which are not paid currently may, at the
Committee's (or the Board's) discretion, accrue interest, be reinvested into
additional shares of Common Stock or, in the case of dividends or dividend
equivalents credited in connection with a Performance Share Award, be credited
as additional Performance Shares and paid to the Participant if and when, and to
the extent that, payment is made pursuant to such Performance Share Award.
Section 14.3 Termination of Employment. If a Participant's employment with
the Corporation or a Subsidiary terminates for a reason other than death,
disability, retirement, or any approved reason, all unexercised, unearned,
and/or unpaid Awards, including, but not by way of limitation, Awards earned,
but not yet paid, all unpaid dividends and dividend equivalents, and all
interest accrued on the foregoing shall be canceled or forfeited, as the case
may be, unless the Participant's Award Notice provides otherwise. The Committee
shall have the authority to promulgate rules and regulations to (i) determine
what events constitute disability, retirement, or termination for an approved
reason for purposes of the Plan, and (ii) determine the treatment of a
Participant under the Plan in the event of his or her death, disability,
retirement, or termination for an approved reason. Such rules and regulations
may include, without limitation, the method, if any, for prorating a Performance
Share Award, accelerating the vesting of any Options or Restricted Stock Award,
or providing for the exercise of any unexercised Options or SARs in the event of
a Participant's death, disability, retirement, or termination for an approved
reason.
Section 14.4 Nonassignability. No Awards shall be subject in any manner to
alienation, anticipation, sale, transfer, assignment, pledge, or encumbrance,
except for transfer by will or the laws of descent and distribution; provided,
however, that Awards (other than Incentive Stock Options) may, if permitted by
the Committee (or the Board), be transferred to one or more transferees during
the lifetime of the Participant in connection with the Participant's estate or
tax planning, and such transferees may exercise rights thereunder in accordance
with the terms thereof, but only if and to the extent consistent with the
registration of the offer and sale of Common Stock on Form S-8, Form S-3, or
such other registration form of the Securities and Exchange Commission, if
applicable, as may then be filed and effective with respect to the Plan. Any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of, or to
subject to execution, attachment or similar process, any Award contrary to the
provisions hereof, shall be void and ineffective, shall give no right to any
purported transferee, and may, at the sole discretion of the Committee (or the
Board), result in forfeiture of the Award involved in such attempt.
- 17 -
<PAGE>
Section 14.5 Withholding Taxes. The Corporation shall be entitled to deduct
from any payment under the Plan, regardless of the form of such payment, the
amount of all applicable income and employment taxes required by law to be
withheld with respect to such payment or may require the Participant to pay to
it such tax prior to and as a condition of the making of such payment. In
accordance with any applicable administrative guidelines it establishes, the
Committee may allow a Participant to pay the minimum amount of taxes required by
law to be withheld from an Award by withholding from any payment of Common Stock
due as a result of such Award, or by permitting the Participant to deliver to
the Corporation, shares of Common Stock, having a Fair Market Value, on the date
of payment, equal to the minimum amount of such required withholding taxes
determined on the date that the amount of tax to be withheld is to be
determined; provided, however, that in the event the Participant is, or within
the preceding six months has been an Insider Participant, such an election may
not be made within six months of the date the Award is granted (unless death or
disability of the Participant occurs prior to the expiration of such six month
period).
Section 14.6 Change of Control. Awards granted under the Plan to any
Participant may, in the discretion of the Committee (or the Board), provide that
(a) such Awards shall be immediately vested, fully earned, exercisable, and/or,
in the case of Options, converted into SARs, as appropriate, upon a Change of
Control Event, and (b) the Corporation shall make full payment to each such
Participant with respect to any Performance Share Award or Other Incentive
Award, deliver certificates to such Participant with respect to each Restricted
Stock Award, and permit the exercise of Options and/or SARs, respectively,
granted hereunder to such Participant.
Section 14.7 Forfeiture. If the employment a Participant is terminated on
account of any act of fraud, intentional misrepresentation, embezzlement,
misappropriation, or conversion of assets or opportunities of the Corporation or
any of its Subsidiaries, any Award granted hereunder, whether and regardless of
the extent to which such Award is vested, earned or exercisable, shall
automatically terminate as of the date of termination of such employment.
Section 14.8 Amendments to Awards. The Committee may at any time
unilaterally amend the terms of any Award Notice for any Award, whether or not
presently exercisable, earned, paid or vested, to the extent it deems
appropriate; provided, however, that any such amendment which is adverse to the
Participant shall require the Participant's consent.
Section 14.9 Regulatory Approval and Listings. As soon as practicable
following the date on which the Corporation becomes subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Corporation shall
use its best efforts to file with the Securities and Exchange Commission, and
keep continuously effective and usable, a Registration Statement on Form S-8
with respect to shares of Common Stock subject to Awards hereunder.
Notwithstanding anything contained in this Plan to the contrary, the Corporation
shall have no obligation to issue or deliver certificates representing shares of
Common Stock evidencing Restricted Stock Awards or any other Award relating to
shares of Common Stock prior to:
(a) the obtaining of any approval from, or satisfaction of any waiting
period or other condition imposed by, any governmental agency which the
Committee shall, in its sole discretion, determine to be necessary or
advisable, and
- 18 -
<PAGE>
(b) the completion of any registration or other qualification of said
shares under any state or Federal law or ruling of any governmental body
which the Committee shall, in its sole discretion, determine to be
necessary or advisable.
Section 14.10 Right to Continued Employment. Participation in the Plan
shall not give any Eligible Person any right to remain in the employ or to
continue as a consultant or director of, or maintain any other relationship
with, the Corporation or any Subsidiary. The Corporation or, in the case of a
Subsidiary, the Subsidiary, reserves the right to terminate any Eligible Person
at any time. Further, the adoption of this plan shall not be deemed to give any
Eligible Person or any other individual any right to be selected as a
Participant or to be granted an Award.
Section 14.11 Beneficiaries. Each Participant shall file with the Committee
a written designation of one or more persons as the beneficiary (the
"Beneficiary") who shall be entitled to receive the amount, if any, payable
under the Plan upon his death. A Participant may, from time to time, revoke or
change his Beneficiary designation without the consent of any prior Beneficiary
by filing a new designation with the Committee. The last such designation
received by the Committee shall be controlling; provided, however, that no
designation, or change or revocation thereof, shall be effective unless received
by the Committee prior to the Participant's death, and in no event shall be
effective as of a date prior to such receipt.
If such Beneficiary designation is not in effect at the time of a
Participant's death, or if no designated Beneficiary survives the Participant,
or such designation conflicts with law, the payment of the amount, if any,
payable under the Plan upon his death shall be made to the Participant's estate.
If the committee is in doubt as to the right of any person to receive such
amount, the Committee may retain such amount, without liability or any interest
thereon, until the rights thereon are determined, or the Committee may pay such
amount into any court of appropriate jurisdiction and such payment shall be a
complete discharge of the liability of the Plan, the Corporation and the
Committee therefor.
Section 14.12 Indemnification. Each person who is or shall have been a
member of the Committee or of the Board shall be indemnified and held harmless
by the Corporation against and from any loss, cost, liability, or expense that
may be imposed upon or reasonably incurred by such person in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he may be involved by reason of any action or failure to act
under the Plan and against and from any and all amounts paid by such person in
satisfaction of judgment in any such action, suit, or proceeding against such
person. He or she shall give the Corporation an opportunity, at its own expense,
to handle and defend the same before he or she undertakes to handle and defend
it on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Corporation's Articles or Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Corporation may have to
indemnify or hold harmless any such person.
Section 14.13 Reliance on Reports. Each member of the Committee and each
member of the Board shall be fully justified in relying or acting in good faith
upon any report made by the independent public accountants of the Corporation
and its Subsidiaries and upon any other information furnished in connection with
the Plan by any person or persons other than himself. In no event shall any
- 19 -
<PAGE>
person who is or shall have been a member of the Committee or of the Board be
liable for any determination made or other action taken or any omission to act
in reliance upon any such report or information or for any action taken,
including the furnishing of information, or failure to act, if in good faith.
Section 14.14 Relationship to Other Benefits. No payment under the Plan
shall be taken into account in determining any benefits under any pension,
retirement, profit sharing, group insurance or other benefit plan of the
Corporation or any Subsidiary.
Section 14.15 Expenses. The expenses of administering the Plan shall be
borne by the Corporation subject to such allocation to its Subsidiaries as it
deems appropriate.
Section 14.16 Construction. Masculine pronouns and other words of masculine
gender shall refer to both men and women. The titles and headings of the
sections in the Plan are for the convenience of reference only, and in the event
of any conflict, the text of the plan, rather than such titles or headings,
shall control.
Section 14.17 Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of Missouri except as superseded by
applicable Federal law.
Section 14.18 Rule 16b-3 Compliance. It is the intent of the Corporation
that this Plan comply in all respects with applicable provisions of Rule 16b-3
in connection with any grant of Awards to or other transaction by an Insider
Participant (except for transactions exempted under alternative Exchange Act
Rules or acknowledged in writing to be non-exempt by such Participant).
Accordingly, if, at such time, any provision of this Plan or any Award Notice
relating to an Award does not comply with the requirements of Rule 16b-3 as then
applicable to any such transaction, such provision will be construed or deemed
amended to the extent necessary to conform to the applicable requirements of
Rule 16b-3 so that such Insider Participant shall avoid liability under Section
16(b).
Section 14.19 Nonexlusivity of the Plan. Neither the adoption of this Plan
by the Board nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.
END OF TRAVELNOW.COM INC.
2000 OMNIBUS STOCK INCENTIVE PLAN
---------------------------------
<PAGE>
Exhibit C
CERTIFICATE OF INCORPORATION
OF
TRAVELNOW.COM INC.
The undersigned, in order to form a corporation pursuant to the General
Corporation Law of the State of Delaware, certifies:
FIRST: NAME. The name of the corporation is TravelNow.com Inc. (the
"Corporation").
SECOND: REGISTERED OFFICE; AGENT. The Registered Office of the Corporation
in the State of Delaware is located at 1209 Orange Street in the City of
Wilmington, County of New Castle. The name of its Registered Agent at such
address is The Corporation Trust Company.
THIRD: PURPOSE. The purpose of the Corporation is to engage in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware as presently in effect or as it may
hereafter be amended.
FOURTH: CAPITALIZATION. The aggregate number of shares of capital stock
authorized to be issued by this Corporation shall be 50,000,000 shares of common
stock, $0.01 par value per share (the "Common Stock"), and 25,000,000 shares of
preferred stock, $0.01 par value per share (the "Preferred Stock"). Each share
of issued and outstanding Common Stock shall entitle the holder thereof to one
vote on each matter with respect to which shareholders have the right to vote,
to fully participate in all shareholder meetings, and to share ratably in the
net assets of the corporation upon liquidation or dissolution, but each such
share shall be subject to the rights and preferences of the Preferred Stock as
hereinafter set forth.
-1-
<PAGE>
The Preferred Stock may be issued from time to time in one or more series
in any manner permitted by law, as determined from time to time by the Board of
Directors and stated in any resolution providing for the issuance of such shares
adopted by the Board of Directors pursuant to authority hereby vested in it,
each series to be appropriately designated, prior to the issuance of any shares
thereof, by some distinguishing letter, number or title. All shares of each
series of Preferred Stock shall be alike in every particular and of equal rank,
have the same powers, preferences and rights and be subject to the same
qualifications, limitations and restrictions, without distinction between the
shares of different series thereof, except in regard to the following
particulars, which may differ as to different series:
A. the annual rate of dividends payable and the dates from which such
dividend shall commence to accrue, if at all;
B. the amount payable upon a share redemption and the manner in which
shares of a particular series may be redeemed;
C. the amount payable upon any voluntary or involuntary liquidation,
dissolution or winding up of the corporation;
D. the provisions of any sinking fund established with respect to the
shares of a series;
E. the terms and rates of conversion or exchange, if shares of a series are
convertible or exchangeable; and
-2-
<PAGE>
F. the provisions as to voting rights, if any; provided that the shares of
any series of Preferred Stock having voting power shall not have more than one
vote per share.
Before any shares of a particular series of Preferred Stock are issued, the
designations of such series and its terms in respect of the foregoing
particulars shall be fixed and determined by the Board of Directors in any
manner permitted by law and stated in a resolution providing for the issuance of
such shares adopted by the Board of Directors pursuant to authority hereby
vested in it. Such designations and terms shall be set forth in full or
summarized on the certificates for such series. The Board of Directors may
increase the number of such shares by providing that any unissued shares of
Preferred Stock shall constitute part of such series, or may decrease (but not
below the number of shares thereof then outstanding) the number of shares of any
series of Preferred Stock already created by providing that any unissued shares
previously assigned to such series shall no longer constitute part thereof. The
Board of Directors is hereby empowered to classify or reclassify any unissued
shares of Preferred Stock by fixing or altering the terms thereof in respect to
the referenced particulars and by assigning the same to an existing or newly
established series from time to time before the issuance of such shares.
The holders of shares of each series shall be entitled to receive, out of
any funds legally available therefor, when and as declared by the Board of
Directors, cash dividends at such rate per annum as shall be fixed by resolution
of the Board of Directors for such series, payable periodically on the dates
fixed by the Board of Directors for the series. Such dividends may be cumulative
or non-cumulative, deemed to accrue from day to day regardless of whether or not
earned or declared and may commence to accrue on each share of Preferred Stock
from such date or dates, and as may be determined and stated by the Board of
Directors prior to the issuance thereof. The corporation shall make dividend
payments ratably upon all outstanding shares of Preferred Stock in proportion to
the amount of dividends thereon to the date of such dividend payment, if any.
-3-
<PAGE>
As long as any shares of Preferred Stock shall remain outstanding, no
dividend (other than a dividend payable in shares ranking junior to such
Preferred Stock with respect to the payment of dividends or liquidated assets)
shall be declared or paid upon, nor shall any distribution be made or ordered in
respect of, shares of the Common Stock or any other class of shares ranking
junior to the shares of such Preferred Stock as to the payment or dividends of
liquidating assets, nor shall any monies (other than the net proceeds received
from the sale of shares ranking junior to the shares of such Preferred Stock as
to the payment of dividends or liquidating assets) be set aside for or applied
to the purchase or redemption (through a sinking fund or otherwise) of shares of
the Common Stock or of any other class of shares ranking junior to the shares of
such Preferred Stock as to dividends or assets unless:
(a) all dividends on the shares of Preferred Stock of all series for past
dividend periods shall have been paid and the full dividend on all outstanding
shares of Preferred Stock of all series for the then current dividend period
shall have been paid or declared and set apart for payment; and
(b) the corporation shall have set aside all amounts, if any, required to
be set aside as and for sinking funds, if any, for the shares of Preferred Stock
of all series for the then current year, and all defaults, if any, in complying
with any such sinking fund requirements in respect of previous years shall have
been cured.
-4-
<PAGE>
The corporation, at the option of the Board of Directors, may at any time
redeem the whole, or from time to time any part, of any series of Preferred
Stock, subject to such limitations as may be adopted by the Board authorizing
the issuance of such shares, by paying therefor in cash the amount which shall
have been determined by the Board of Directors, in the resolution authorizing
such series, to be payable upon the redemption of such shares at such time.
Redemption may be made of the whole or any part of the outstanding shares of any
one or more series, in the discretion of the Board of Directors; but if the
redemption shall be effected only with respect to a part of a series, the shares
to be redeemed may be selected by lot, or all of the shares of such series may
be redeemed pro rata, in such manner as may be prescribed by resolution of the
Board of Directors.
Subject to the foregoing provisions and to any qualifications, limitations,
or restrictions applicable to any particular series of Preferred Stock which may
be stated in the resolution providing for the issuance of such series, the Board
of Directors shall have authority to prescribe from time to time the manner in
which any series of Preferred Stock shall be redeemed.
Upon any liquidation, dissolution or winding up of the corporation, whether
voluntary or involuntary, the shares of Preferred Stock of each series shall be
entitled, before any distribution shall be made with respect to shares of Common
Stock or to any other class of shares junior to the shares of Preferred Stock as
to the payment of dividends or liquidating assets, to be paid the full
preferential amount fixed by the Board of Directors for such series as herein
authorized. If upon such liquidation or dissolution of the corporation, whether
voluntary or involuntary, the net assets of the corporation shall be
insufficient to permit the payment to all outstanding shares of Preferred Stock
of all series of the full preferential amounts to which they are respectively
entitled, the entire net assets of the corporation shall be distributed ratably
to all outstanding shares of Preferred Stock in proportion to the full
preferential amount to which each such share is entitled.
-5-
<PAGE>
FIFTH: INCORPORATOR. The name and mailing address of the incorporator are
Vicki R. Westerhaus, Esq., c/o Shook, Hardy & Bacon L.L.P., 1010 Grand
Boulevard, 5th Floor, P.O. Box 15607, Kansas City, Missouri 64106-0607.
SIXTH: WRITTEN BALLOT. Election of Directors of the Corporation need not be
by written ballot unless the Bylaws so provide.
SEVENTH: BYLAWS. In furtherance and not in limitation of the powers
conferred by the laws of the State of Delaware, the Board of Directors of the
Corporation is authorized and empowered to make, alter, amend and repeal the
Bylaws of the Corporation in any manner not inconsistent with the laws of the
State of Delaware.
EIGHTH: INDEMNIFICATION. The Corporation shall, to the fullest extent
permitted by Section 145 of the General Corporation Law of the State of Delaware
as presently in effect or as it may hereafter be amended, indemnify all persons
whom it may indemnify pursuant thereto and advance expenses of litigation to
Directors and Officers in accordance with the procedures and limitations set
forth in the Bylaws of the Corporation.
NINTH: DIRECTOR LIABILITY. To the fullest extent permitted by the General
Corporation Law of the State of Delaware as presently in effect or as it may
hereafter be amended, a Director of the Corporation shall not be liable to the
Corporation or its stockholders (the "Stockholders") for monetary damages for
breach of fiduciary duty as a Director.
-6-
<PAGE>
TENTH: COMPROMISES OR ARRANGEMENTS WITH CREDITORS OR STOCKHOLDERS. Whenever
a compromise or arrangement is proposed between the Corporation and its
creditors or any class of them and/or between the Corporation and its
Stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of the
Corporation or of any creditor or Stockholder thereof or on the application of
any receiver or receivers appointed for the Corporation under Section 291 of
Title 8 of the Delaware Code or on the application of trustees in dissolution or
of any receiver or receivers appointed for the Corporation under Section 279 of
Title 8 of the Delaware Code, order a meeting of the creditors or class of
creditors, and/or of the Stockholders or class of Stockholders of the
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the Stockholders or class of
Stockholders of the Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of the Corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the Stockholders or class of Stockholders, of the Corporation, as the case
may be, and also on the Corporation.
ELEVENTH: AMENDMENT OF CERTIFICATE. The Corporation reserves the right to
amend, alter, change or repeal any provision contained in this Certificate in
the manner now or hereafter prescribed by law, and all rights and powers
conferred herein on Stockholders, Directors and Officers are subject to this
reserved power.
-7-
<PAGE>
IN WITNESS WHEREOF, I have executed, signed and acknowledged this
Certificate of Incorporation this _____ day of August, 2000.
------------------------------------
Victoria R. Westerhaus
Sole Incorporator
-8-
<PAGE>
Exhibit D
BYLAWS
OF
TRAVELNOW.COM INC.
ARTICLE I
---------
OFFICES
-------
Section 1.01 Principal Office. The principal office of TravelNow.com Inc.
(the "Corporation") in the State of Missouri shall be established at such place
as the board of directors shall from time to time determine.
Section 1.02 Registered Office. The registered office of the Corporation in
the State of Delaware shall be The Corporation Trust Company, 1209 Orange
Street, in the City of Wilmington, County of New Castle, Delaware.
Section 1.03 Other Offices. The Corporation may have such additional
offices at such other places, either within or without the State of Delaware, as
the board of directors shall from time to time determine or the business of the
Corporation may require.
ARTICLE II
----------
MEETINGS OF SHAREHOLDERS
------------------------
Section 2.01. Annual Meetings. Unless otherwise set by the board of
directors, annual meetings of shareholders shall be held on the last Tuesday of
the sixth month following the close of each fiscal year at such time as
determined by the board of directors. The shareholders entitled to vote at such
meeting shall elect directors and transact such other business as may properly
be brought before the meeting.
Section 2.02. Special Meetings. Special meetings of the shareholders of the
Corporation may be called, for any purpose or purposes permitted by law, by the
board of directors on its own initiative and shall be called by the board of
directors upon written request by the chairman of the board, the chief executive
officer or the president of the Corporation, [or, upon delivery to the secretary
of one or more written demands for the meeting describing the purpose or
purposes for which it is to be held, by the holders of not less than ten percent
(10%) of all the shares entitled to be cast on any issue proposed to be
considered at the proposed special meeting. Notice of such meeting shall be
given by the secretary as provided herein. Only business within the purpose or
purposes described in such special meeting notice may be conducted at a special
shareholders meeting.
Section 2.03. Place of Meetings. All meetings of the shareholders of the
Corporation shall be held at such place, within or without the State of
Delaware, as shall be designated from time to time by the board of directors and
stated in the notice of such meeting or in a duly executed waiver thereof.
<PAGE>
Section 2.04. Voting List. At least ten (10) days before each meeting of
shareholders, the officer or agent of the Corporation having charge of the stock
transfer books for shares of the Corporation shall make a complete list of the
shareholders entitled to vote at the meeting and any adjournment thereof,
arranged in alphabetical order, with the address of and the number of shares
held by each shareholder, which list shall be kept on file at the place
identified in the meeting notice in the city where the meeting will be held or
the Corporation's principal place of business or at the office of its registrar
or transfer agent for a period of at least ten (10) days prior to the meeting,
and shall be subject to inspection by any shareholder at any time during such
ten (10) day period and during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting, and shall be
subject to the inspection of any shareholder during the whole time of the
meeting. The original share ledger or transfer book or a duplicate thereof,
shall be prima facie evidence as to who are the shareholders entitled to examine
such list or share ledger or transfer book, or to vote, in person or by proxy,
at any meeting of the shareholders.
Section 2.05. Fixing of a Record Date.
(a) The board of directors may fix, in advance, a record date, which
shall not be more than sixty (60) nor less than ten (10) days before the
date of any meeting of shareholders, nor more than ten (10) days after the
date upon which the resolution fixing the record date is adopted by the
board of directors for shareholder consent in lieu of a meeting, nor more
than sixty (60) days prior to any other action, as the record date for the
purpose of determining the shareholders entitled to notice of or to vote at
any meeting of the shareholders or any adjournment thereof, or to express
consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or distribution or allotment of any rights,
or entitled to exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action.
(b) If no record date is fixed:
(i) The record date for determining shareholders entitled to
notice of or to vote at a meeting of shareholders shall be at the
close of business on the day next preceding the day of notice, or, if
notice is waived, at the close of business on the day next preceding
the day on which the meeting is held.
(ii) The record date for determining shareholders for any other
purpose shall be at the close of business on the day on which the
board of directors adopts the resolution relating thereto.
Section 2.06. Notice of Meetings. Written notice stating the place, day and
hour of every meeting of the shareholders and, in the case of a special meeting,
or as otherwise required by statute, the purpose or purposes for which the
meeting is called, shall be given by the secretary of the Corporation (or in the
case of a special meeting, the officer or person(s) calling the meeting) to each
shareholder of record entitled to vote at such meeting and each other
shareholder entitled to notice of the meeting, either personally or by first
class mail, at least ten (10) days, but not more than sixty (60) days, prior to
the meeting date. If mailed, such notice shall be deemed to be delivered when
-2-
<PAGE>
deposited in the United States mail first-class postage prepaid, addressed to
the shareholder at his or her address as it appears on the records of the
Corporation, or as given by the shareholder to the Corporation for purposes of
notice.
Section 2.07. Precondition to Delivery of Notice of Special Meeting of
Shareholders Called by Shareholders. The secretary shall inform shareholders who
have delivered a written request for a special meeting and otherwise complied
with Section 2.02 of the reasonably estimated costs of preparing and mailing a
notice of the meeting, and, on payment of these costs to the Corporation, the
secretary shall deliver notice of such meeting to each shareholder entitled
thereto.
Section 2.08. Waiver of Notice. Whenever notice is required to be given of
any annual or special meeting of the shareholders, a written waiver thereof,
signed by the person entitled to notice, whether before or after the time stated
in such notice, shall be deemed equivalent to notice. Neither the business to be
transacted at, nor the purpose of, any annual or special meeting of the
shareholders need be specified in any written waiver of notice. Attendance of a
person at a meeting of the shareholders shall constitute a waiver of notice of
such meeting, except when the person attends the meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.
Section 2.09. Quorum. The presence, in person or by proxy, of a majority of
the shares entitled to vote shall constitute a quorum at a meeting of
shareholders. Broker non-votes and abstentions from voting will be counted as
present and entitled to vote for purposes of determining the presence of a
quorum. Treasury shares, shares of the Corporation's stock which are owned by
another corporation the majority of the voting stock of which is owned by the
Corporation, and shares of the Corporation's stock held by another corporation
in a fiduciary capacity for the benefit of the Corporation shall not be counted
in determining the total number of outstanding shares for voting purposes at any
given time. After a quorum has been established at a shareholder's meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof. When a specified item of business is required to be voted
on by any class or series of stock, a majority of the shares of such class or
series shall constitute a quorum for transaction of such item of business by
that class or series.
Section 2.10. Adjournment. When a meeting of the shareholders that is
properly called is adjourned to another time or place, it shall not be necessary
to give any notice of the adjourned meeting if the time and place to which the
meeting is adjourned are announced at the meeting at which the adjournment is
taken. At the adjourned meeting any business may be transacted that might have
been transacted at the original meeting. If the adjournment is for more than
thirty (30) days, or if after such adjournment the board of directors shall fix
a new record date for the adjourned meeting, a notice of the adjourned meeting
shall be given to each shareholder of record entitled to vote at such meeting.
The holders of a majority of the shares represented, and who would be entitled
to vote at a meeting if a quorum were present, where a quorum is not present,
may adjourn such meeting from time to time.
-3-
<PAGE>
Section 2.11. Organization. At every meeting of the shareholders, the
chairman of the board, if there be one, or, in the case of vacancy in office or
absence of the Chairman, one of the following officers present in the order
stated: the vice chairman of the board, if there be one, the chief executive
officer, the president, the vice presidents in their order of rank and then
seniority, or a chairman chosen by the shareholders entitled to cast a majority
of the votes that all shareholders present in person or by proxy are entitled to
cast, shall act as chairman. The chairman of the meeting shall have the right
and authority to prescribe such rules, regulations and procedures and perform
such acts as are necessary or desirable for the proper conduct of the meeting,
including, without limitation, the establishment of procedures for the
maintenance of order, safety, limitations on the time allotted to the questions
or comments on the affairs of the Corporation, restrictions on entry to such
meeting after the time prescribed for the commencement thereof, and the opening
and closing of the voting polls. The secretary, or in his or her absence, an
assistant secretary, or in the absence of both the secretary and the assistant
secretaries, a person appointed by the chairman shall act as secretary of the
meeting and keep the minutes thereof.
Section 2.12. Voting. If a quorum is present at any meeting:
(a) In all matters other than the election of directors, the
affirmative vote of the majority of shares present in person or represented
by proxy at the meeting and entitled to vote on the subject matter shall be
the act of the shareholders, unless the question is one for which, by
express provision of the law or of the Certificate of Incorporation or
these bylaws, a different vote is required, in which case such express
provision shall govern and control the decision of such question.
(b) Except as may be otherwise provided in the Certificate of
Incorporation, every shareholder of record shall have the right, at every
shareholders' meeting, to one vote for every share, and if the Corporation
has issued fractional shares, to a fraction of a vote equal to every
fractional share, of stock of the Corporation standing in his or her name
on the books of the Corporation. A shareholder may vote either in person or
by proxy.
(c) Treasury shares, shares of the Corporation's stock which are owned
by another corporation the majority of the voting stock of which is owned
by the Corporation, and the shares of the Corporation's stock held by
another corporation in a fiduciary capacity for the benefit of the
Corporation shall not be voted, directly or indirectly, at any meeting of
shareholders.
(d) At each election for directors, every shareholder entitled to vote
shall have the right to vote the number of shares owned by him or her, for
as many persons as there are directors to be elected at that time and for
whose election he or she has a right to vote, and no cumulative voting
shall be permitted. Directors shall be elected by a plurality of the votes
of the shares present in person or represented by proxy at the meeting and
entitled to vote on the election of directors. Voting at meetings of
shareholders need not be by written ballot.
(e) Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the
bylaws of the corporate shareholder; or, in the absence of any applicable
-4-
<PAGE>
bylaw, by such person as the board of directors of the corporate
shareholder may designate. Proof of such designation may be made by
presentation of a certified copy of the bylaws or other instrument of the
corporate shareholder. In the absence of any such designation, or in case
of conflicting designation, by the corporate shareholder, the chairman of
the board, the chief executive officer, the president, any vice president,
secretary or treasurer of the corporate shareholder shall be presumed to
possess, in that order, authority to vote such shares.
(f) Shares held by an administrator, executor, guardian or conservator
may be voted by such person, either in person or by proxy, without a
transfer of such shares into the name of such person, provided, that if
requested by the chairman of the board, the chief executive officer,
president, chief financial officer, treasurer or secretary, such person has
provided evidence of such fiduciary status acceptable to such officer.
(g) Shares standing in the name of a trustee may be voted by such
trustee, either in person or by proxy, but no trustee shall be entitled to
vote shares held by such trustee without a transfer of such shares into the
name of such trustee. Shares held by or under the control of a receiver, a
trustee in bankruptcy proceedings, or an assignee for the benefit of
creditors may be voted by him or her or his or her nominee, without the
transfer of such shares into his or her name, provided, that if requested
by the chairman of the board, chief executive officer, president, chief
financial officer, treasurer or secretary, such person has provided
evidence of such status acceptable to such officer.
(h) A shareholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name of the
pledgee, and thereafter the pledgee or the nominee of the pledgee shall be
entitled to vote the shares so transferred.
(i) In all matters other than the election of directors, (i)
abstentions from voting will be included in the number of shares present
and entitled to vote on such matters and, therefore, will be counted as
negative votes with respect to such matters, and (ii) broker non-votes will
be excluded from the number of shares present and entitled to vote on such
matters and, therefore, will have no effect on the vote for such matters.
Section 2.13. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy. Such proxy shall be in writing and filed with the secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
three (3) years from the date of its execution, unless otherwise provided in the
proxy. A proxy shall be irrevocable if it states that it is irrevocable and if,
and only as long as, it is coupled with an interest sufficient in law to support
to an irrevocable power. A shareholder may revoke any proxy which is not
irrevocable by attending the meeting and voting in person or by filing an
instrument in writing revoking the proxy or by delivering a proxy in accordance
with applicable law bearing a later date to the secretary of the Corporation.
-5-
<PAGE>
Section 2.14. Actions of the Shareholders Without a Meeting. Unless
otherwise provided in the Certificate of Incorporation, any action required to
be taken at any annual or special meeting of shareholders of the Corporation, or
any action which may be taken at any annual or special meeting of the
shareholders, may be taken without a meeting, without prior notice and without a
vote, if one or more consents in writing, setting forth the action so taken,
shall be dated and 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 delivered to the Corporation by delivery to its
registered office in Delaware, its principal place of business, the corporate
secretary, or another officer or agent of the Corporation having custody of the
minute book. If any class of shares is entitled to vote thereon as a class, such
written consent shall be required of the holders of outstanding stock of such
class and of the total outstanding stock, respectively, 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 of such class and all shares entitled to vote
thereon were present and voted. No written consent shall be effective to take
the corporate action referred to therein unless, within sixty (60) days of the
date of the earliest consent delivered in the manner set forth above, written
consents signed by the holders of the number of shares required to take action
are delivered to the Corporation by delivery as set forth above.
Section 2.15. Notice of Shareholder
(a) Nominations of persons for election to the board of directors of
the Corporation and the proposal of business to be considered by the
shareholders may be made at an annual meeting of shareholders (a) pursuant
to the Corporation's notice of meeting pursuant to Section 2.06 of these
bylaws, (b) by or at the direction of the board of directors, or (c) by any
shareholder of the Corporation who was a shareholder of record at the time
of giving of notice provided for in this Section 2.15, who is entitled to
vote at the meeting and who complies with the notice procedures set forth
in this Section 2.15.
(b) For nominations or other business to be properly brought before an
annual meeting of shareholders by a shareholder pursuant to this Section
2.15, the shareholder must have given timely notice thereof in writing to
the secretary of the Corporation and such other business must otherwise be
a proper matter for shareholder action. To be timely, a shareholder's
notice shall be delivered to the secretary at the principal executive
offices of the Corporation not later than the close of business on the
ninetieth (90th) calendar day nor earlier than the close of business on the
one hundred twentieth (120th) calendar day prior to the first anniversary
of the preceding year's annual meeting of shareholders; provided, however,
that in the event that the date of the annual meeting of shareholders is
more than thirty (30) calendar days before or more than sixty (60) calendar
days after such anniversary date, notice by the shareholder to be timely
must be so delivered not earlier than the close of business on the 120th
calendar day prior to such annual meeting of shareholders and not later
than the close of business on the later of the ninetieth (90th) calendar
day prior to such annual meeting of shareholders or the 10th calendar day
following the calendar day on which public announcement of the date of such
meeting is first made by the Corporation. In no event shall the public
-6-
<PAGE>
announcement of an adjournment of an annual meeting of shareholders
commence a new time period for the giving of a shareholder's notice as
described above. Such shareholder's notice shall set forth, or be
accompanied by, (a) in the event the shareholder proposes to nominate one
or more persons for election or reelection as a director (1) the name and
residence address of the shareholder and of the person or persons to be
nominated (2) a representation that the shareholder is a holder of record
of voting stock of the Corporation and intends to appear in person or by
proxy at the meeting to nominate the person or persons specified in the
notice; (3) such information regarding each nominee as would have been
required to be included in a proxy statement filed pursuant to Regulation
14A promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended (or pursuant to any successor
act or regulation), including, without limitation, Rule 14a-11 thereunder,
had proxies been solicited with respect to such nominee by the management
or board of directors of the Corporation; (4) a description of all
arrangements or understandings among the shareholder and each nominee and
any other person or persons (naming such person or persons) pursuant to
which the nomination or nominations are to be made by the shareholder; and
(5) the written consent of each nominee to serve as a director of the
Corporation if so elected; and (b) in the event the shareholder proposes to
bring any other business before the meeting, (1) the name and residence
address of the shareholder proposing to bring business before the meeting
and the beneficial owner, if any, on whose behalf the proposal is made, (2)
the class and number of shares of the Corporation which are owned
beneficially and of record by such shareholder and such beneficial owner,
(3) a representation that the shareholder is a holder of record of the
voting stock of the Corporation and intends to appear in person or by proxy
at the meeting to bring the business before the meeting; and (4) a brief
description of the business of such shareholder and beneficial owner, if
any, on whose behalf the proposal is made.
(c) Notwithstanding anything in the second sentence of the preceding
paragraph to the contrary, in the event that the number of directors to be
elected to the board of directors of the Corporation is increased and there
is no public announcement by the Corporation naming all of the nominees for
director or specifying the size of the increased board of directors at
least one hundred (100) calendar days prior to the first anniversary of the
preceding year's annual meeting of shareholders, a shareholder's notice
required by this Section 2.15 shall also be considered timely, but only
with respect to nominees for any new positions created by such increase, if
it shall be delivered to the secretary at the principal executive offices
of the Corporation not later than the close of business on the 10th
calendar day following the day on which such public announcement is first
made by the Corporation.
(d) Only such business shall be conducted at a special meeting of
shareholders as shall have been brought before the meeting pursuant to the
notice of meeting under Section 2.06 of these bylaws. Nominations of
persons for election to the board of directors may be made at a special
meeting of shareholders at which directors are to be elected pursuant to
the notice of meeting (a) by or at the direction of the board of directors,
or (b) provided that the board of directors has determined that directors
shall be elected at the meeting, by any shareholder of the Corporation who
is a shareholder of record at the time of giving of notice provided for in
this Section 2.15, who shall be entitled to vote at the meeting and who
complies with the notice procedures set forth in this Section 2.15. In the
event the Corporation calls a special meeting of shareholders for the
-7-
<PAGE>
purpose of electing one or more directors to the board of directors, any
shareholder may nominate a person or persons (as the case may be), for
election to such position(s) as specified in the Corporation's notice of
meeting pursuant to such clause (b), if the shareholder's notice required
by the second paragraph of this Section 2.15 shall be delivered to the
secretary at the principal executive offices of the Corporation not earlier
than the close of business on the one hundred twentieth (120th) calendar
day prior to such special meeting and not later than the close of business
on the later of the ninetieth (90th) calendar day prior to such special
meeting or the tenth (10th) calendar day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the board of directors to be elected at such meeting.
In no event shall the public announcement of an adjournment of a special
meeting commence a new time period for the giving of a shareholder's notice
as described above.
(e) Only such persons who are nominated in accordance with the
procedures set forth in this Section 2.15 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of
shareholders as shall have been brought before the meeting in accordance
with the procedures set forth in this Section 2.15. Except as otherwise
provided by law, the Certificate of Incorporation or these bylaws, the
chairman of the meeting shall have the power and duty to determine whether
a nomination or any business proposed to be brought before the meeting was
made or proposed, as the case may be, in accordance with the procedures set
forth in this Section 2.15 and, if any proposed nomination or business is
not in compliance with this Section 2.15, to declare that such defective
proposal or nomination shall be disregarded.
(f) For purposes of this Section 2.15, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document
publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange
Act of 1934, as amended.
(g) Notwithstanding the foregoing provisions of this Section 2.15, a
shareholder shall also comply with all applicable requirements of the
Securities Exchange Act of 1934 and the rules and regulations thereunder
with respect to the matters set forth in this Section 2.15. Nothing in this
Section 2.15 shall be deemed to affect any rights of shareholders to
request inclusion of proposals in the Corporation's proxy statement
pursuant to Rule 14a-8 under the Exchange Act.
ARTICLE III
-----------
BOARD OF DIRECTORS
------------------
Section 3.01. Powers and Duties. All corporate powers shall be exercised by
or under the authority of, and the business and affairs of the Corporation shall
be managed under the direction of, a board of directors, except as may be
otherwise provided in the Delaware General Corporation Law or the Certificate of
Incorporation.
-8-
<PAGE>
(a) A director shall perform his or her duties as a director,
including duties as a member of any committee of the Board upon which the
director may serve, in good faith, in a manner the director reasonably
believes to be in the best interests of the Corporation, and with such care
as an ordinarily prudent person in a like position would use under similar
circumstances. In performing his or her duties, a director shall be
entitled to rely on information, opinions, reports or statements, including
financial statements and other financial data, in each case prepared or
presented by:
i one or more officers or employees of the Corporation whom the
director reasonably believes to be reliable and competent in the matters
presented;
ii. counsel, public accountants or other persons as to matters
which the director reasonably believes to be within such person's
professional or expert competence; or
iii. a committee of the board upon which the director does not
serve, duly designated in accordance with provisions of the Certificate of
Incorporation or these bylaws, as to matters within its designated
authority, which committee the director reasonably believes to merit
confidence.
(b) A director shall not be considered to be acting in good faith if
the director has knowledge concerning the matter in question that would
cause such reliance described in the preceding subsection to be
unwarranted.
(c) A person who performs his or her duties in compliance with this
section shall not be liable for any action taken as a director or any
failure to take any action.
(d) A director of the Corporation who is present at a meeting of the
board of directors at which action on any corporate matter is taken shall
be presumed to have assented to the action taken, unless the director votes
against such action or abstains from voting in respect thereto.
Section 3.02. Qualification and Election. Unless otherwise provided in the
Certificate of Incorporation, directors need not be shareholders of the
Corporation. Except in the case of vacancies, directors shall be elected by the
shareholders. If the board of directors is classified with respect to the power
to elect directors or with respect to the terms of directors and if, due to a
vacancy or vacancies, or otherwise, directors of more than one class are to be
elected, each class of directors to be elected at the meeting shall be nominated
and elected separately. The candidates receiving the greatest number of votes,
up to the number of directors to be elected, shall be elected directors.
Section 3.03. Number and Term of Office. The board of directors of the
Corporation shall consist of the five (5) members, or such other number as may
thereafter be from time to time (i) determined by the board of directors or (ii)
set forth in a notice of a meeting of shareholders called for the election of
the board of directors. Notwithstanding the foregoing, no decrease shall have
-9-
<PAGE>
the effect of shortening the term of any incumbent director. Unless the board of
directors is classified with respect to the terms of directors, each director
shall serve until the next annual meeting of the shareholders and until his or
her successor shall have been elected and qualified or until his or her earlier
resignation, removal from office or death. If the board of directors is
classified with respect to the terms of the directors, each director shall serve
until the annual meeting two years thereafter if there are two classes of
directors, or three years thereafter if there are three classes of directors,
and in either case until his or her successor shall have been elected and
qualified or until his or her earlier resignation, removal from office or death.
Section 3.04. Organization. At every meeting of the board of directors, the
chairman of the board, if there be one, or in the absence of the chairman of the
board or if one shall have not been elected, the chief executive officer of the
Corporation or a chairman chosen by a majority of the directors present, shall
preside at the meeting. The secretary or, in his or her absence, any person
appointed by the chairman of the meeting shall act as secretary of the meeting
and keep the minutes thereof.
Section 3.05. Place of Meeting. Meetings of the board of directors of the
Corporation, regular or special, may be held either within or without the State
of Delaware, as shall be provided for in the resolution, notice, waiver of
notice or call of such meeting, or if not otherwise designated, at the principal
office of the Corporation.
Section 306. Annual Meetings. The board of directors shall hold an annual
meeting each year immediately following the annual meeting of the shareholders
at the place where such meeting of the shareholders was held for the purpose of
election of officers and consideration of any other business that may be
properly brought before the meeting. Notice of such annual meetings need not be
given to either old or new members of the board of directors.
Section 3.07. Regular Meetings. If the board of directors determines to
hold regular meetings, the board of directors may, at the annual meeting of the
board of directors, fix by resolution the date, time and place of other regular
meetings of the board. Notice of such regular meetings need not be given to any
member of the board of directors, unless the same is held at other than the
date, time and place of such meeting as fixed in accordance with this Section
3.07, in which event notice shall be given in the same manner as is provided in
Section 3.08 with respect to special meetings of the board of directors. In
addition, announcement of a changed date, time or place of a meeting of the
board of directors shall be deemed adequate notice to the directors present at
such meeting.
Section 3.08. Special Meetings. Special meetings of the board of directors
may be called by a majority of the board of directors or the chairman of the
board. Notice of any special meeting of directors shall be given to each
director at his or her business or residence in writing by first class or
overnight mail or courier service, telegram or facsimile transmission, orally by
telephone or by hand-delivery. If mailed by first class mail, such notice shall
be deemed adequately delivered when deposited in the United States mail so
addressed, with postage prepaid, at least five (5) days before such meeting. If
by telegram, overnight mail or courier service, such notice shall be deemed
-10-
<PAGE>
adequately delivered when the telegram is delivered to the telegraph company or
the notice is delivered to the overnight mail or courier service company at any
time during a day that is at least two (2) days prior to the date of such
meeting. If by facsimile transmission, such notice shall be deemed adequately
delivered when the notice is transmitted at least twenty-four (24) hours prior
to the time set for the meeting. If by telephone or by hand-delivery, the notice
shall be given at least twenty-four (24) hours prior to the time set for the
meeting.
Section 3.09. Action by Written Consent Without a Meeting. Any action of
the board of directors or of any committee thereof, which is required or
permitted to be taken at a regular or special meeting, may be taken without a
meeting if a consent in writing, setting forth the action so to be taken, signed
by all of the members of the board of directors or of the committee, as the case
may be, is filed in the minutes of the proceedings of the board of directors or
committee.
Section 3.10. Conference Telephone Meetings. One or more members of the
board of directors may participate in meetings of the board or a committee of
the board by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other.
Participation in a meeting pursuant to this section shall constitute presence in
person at such meeting.
Section 3.11. Quorum. A majority of the directors in office shall be
present at each meeting in order to constitute a quorum for the transaction of
business. An interested director may be counted in determining the presence of a
quorum at a meeting of the board of directors which authorizes, approves or
ratifies a contract or transaction in which such director has an interest.
Section 3.12. Voting. Except as otherwise specified in the Certificate of
Incorporation or these bylaws or provided by statute, the acts of a majority of
the directors present at a meeting at which a quorum is present shall be the
acts of the board of directors.
Section 3.13. Adjournment. A majority of the directors present, regardless
of whether or not a quorum exists, may adjourn any meeting of the board of
directors to another time and place, and no notice of any adjourned meeting need
be given, other than by announcement at the meeting.
Section 3.14. Compensation. The board of directors shall have the authority
to fix compensation of directors for their attendance at meeting of the board of
directors or committees thereof, or otherwise, and such compensation may include
expenses, if any, associated with attendance at such meetings.
Section 3.15. Resignations. Any director of the Corporation may resign at
any time by giving written notice to the chief executive officer or the
secretary of the Corporation. Such resignation shall take effect at the date of
the receipt of such notice or at any later time specified therein and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 3.16. Vacancies. Any vacancy occurring in the board of directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
-11-
<PAGE>
directors until the successor or successors are elected at the next annual
meeting of the shareholders or a special meeting if an annual meeting is not
held. A director elected to fill a vacancy shall hold office only until the next
election of directors by the shareholders.
Section 3.17. Removal. The shareholders may remove one or more directors
from office, with or without cause (unless the Certificate of Incorporation
provide that directors may be removed only for cause), by a vote or written
consent of the holders of a majority of the shares then entitled to vote. In
case the board of directors or any one or more directors is so removed, new
directors may be elected at the same meeting or by the same written consent. If
the corporation has cumulative voting and if less than the entire board is to be
removed, no individual director may be removed if the votes cast against the
resolution for his or her removal would be sufficient to elect him or her if
then cumulatively voted at an election of the entire board or a class of which
he or she is part.
Section 3.18. Executive and Other Committees. The board of directors, by
resolution adopted by a majority of the entire board, may designate from among
its members an executive committee and one or more other committees. The board
may designate an alternate member of any committee, one or more directors who
may replace any absent or disqualified member at any meeting of the committee.
(a) The executive committee or other committee shall have and exercise
all of the authority of the board to the extent provided in the resolution
designating the committee, except that no such committee of the board shall
have the authority of the board to:
i. approve or recommend to shareholders actions or proposals
required by law to be approved by shareholders;
ii. fill vacancies on the board of directors or any committee
thereof;
iii. amend or repeal these bylaws;
iv. authorize or approve the reacquisition of shares unless
pursuant to a general formula or method specified by the board of
directors; or
v. authorize or approve the issuance or sale of or contract for
the sale of shares or determine the designation and relative rights,
preferences and limitations of a voting group unless within limits
specifically prescribed by the board of directors.
(b) A majority of the directors in office designated to a committee,
or directors designated to replace them as provided in this section, shall
be present at each meeting to constitute a quorum for the transaction of
business, and the acts of a majority of the directors in office designated
to a committee or their replacements shall be the acts of the committee.
-12-
<PAGE>
(c) Each committee shall keep regular minutes of its proceedings and
report such proceedings periodically to the board of directors.
(d) Sections 3.05, 3.08, 3.09 and 3.10 and the second sentence of
Section 3.11 shall be applicable to committees of the board of directors.
(e) The chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that any nomination made at the meeting was not
made in accordance with the procedures of this section and, in such event,
the nomination shall be disregarded.
ARTICLE IV
----------
NOTICE AND WAIVER OF NOTICE
---------------------------
Section 4.01. Notice. Whenever written notice is required to be given to
any director under the provisions of the Certificate of Incorporation, these
bylaws or the laws of the State of Delaware, it shall be given to such director
by personal delivery, facsimile transmission, delivery to an overnight courier
service or representative, deposit in the United States first-class mail, or by
certified or registered mail, addressed to the address of such person (or, if
applicable, such director's facsimile number) appearing on the books of the
Corporation, or supplied by such person to the Corporation for the purpose of
notice. A notice of a meeting shall specify the place, day and hour of the
meeting. Notices to directors shall be deemed adequately delivered as provided
in Section 3.08 hereof. Notices to shareholders shall be given as provided in
Section 2.06 hereof.
Section 4.02. Waiver of Notice. Whenever any notice is required to be given
under the General Corporation Law of the State of Delaware, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent to the giving of
such notice. Except in the case of a special meeting of shareholders, neither
the business to be transacted at, nor the purpose of, the meeting need be
specified in the waiver of notice of such meeting. Attendance of a person,
either in person or by proxy, at any meeting, shall constitute a waiver of
notice of such meeting in the manner provided in the Delaware General
Corporation Law except when the person attends the meeting for the sole purpose
of objecting at the beginning of the meeting to the transaction of business
because the meeting is not lawfully called or convened.
ARTICLE V
---------
OFFICERS
--------
Section 5.01. Number and Qualification. The officers of the Corporation
shall consist of such officers and agents as may be appointed by the board of
directors. One person may hold more than one office. Officers may but need not
be directors or shareholders of the Corporation. The board of directors may
elect from among its members a chairman of the board who, if elected, shall be
an officer of the Corporation. A duly appointed officer may appoint one or more
officers or assistant officers to the extent authorized by the board of
directors.
-13-
<PAGE>
Section 5.02. Election and Term of Office. Except for such officers as may
be elected pursuant to Section 5.03, the officers of the Corporation shall be
appointed to hold office until the next annual meeting of directors and until a
successor shall have been duly elected and qualified, or until his or her death,
resignation or removal.
Section 5.03. Subordinate Officers, Committees and Agents. The
board of directors may from time to time elect officers and appoint such
committees, employees or other agents as the board deems that the business of
the Corporation may require, to hold office for such period, have such
authority, and perform such duties as are provided in these bylaws, or as the
board of directors may delegate.
Section 5.04. The Chairman of the Board. The chairman of the board, if
elected, shall preside at all meetings of the shareholders and of the board of
directors, and shall, at each annual meeting of shareholders, present a report
with respect to the condition and business of the Corporation. He or she shall
have the authority to sign on behalf of the Corporation, all reports, filings
and other documents with such government agencies as are required by applicable
law and shall perform such other duties as may from time to time be requested of
him or her by the board of directors. The chairman of the board shall assume the
duties of the chief executive officer when the chief executive officer is absent
or otherwise unable to discharge his or her responsibilities. To be eligible to
serve, the chairman of the board must be a director of the Corporation.
Section 5.05. The Chief Executive Officer. The chief executive officer
shall have general powers of supervision, direction and control over the
business and operations of the Corporation, subject, however, to the authority
of the board of directors; shall, at each annual meeting of shareholders,
present a report with respect to the condition and business of the Corporation;
shall have the authority to supervise preparation of and sign on behalf of the
Corporation, all reports, filings and other documents with such government
agencies as are required by applicable law; shall sign, execute, and
acknowledge, in the name of the Corporation, deeds, mortgages, bonds, contracts
or other instruments except in cases where the signing and execution thereof
shall be expressly delegated by the board of directors, or by these bylaws, to
some other officer or agent of the Corporation; and, in general, shall perform
all duties incident to the office of chief executive officer and such other
duties as from time to time may be assigned by the board of directors. If the
board of directors has elected a chairman of the board but not a vice chairman,
the chief executive officer shall assume the duties of the chairman of the board
when the chairman of the board is absent or unable to discharge his or her
responsibilities.
Section 5.06. The President. The president, if a person other than the
chief executive officer, shall perform the duties of the chief executive officer
in the absence of such officer and such other duties as may from time to time be
assigned to the president by the board of directors or the chief executive
officer.
Section 5.07. The Chief Financial Officer. The chief financial officer
shall be the principal financial officer of the Corporation and, unless another
officer is so designated, principal accounting officer of the Corporation;
whenever required by the board of directors, he or she shall render a statement
of the financial condition of the Corporation; shall keep and maintain, or cause
-14-
<PAGE>
to be kept and maintained, adequate and correct accounts of the properties and
business transactions of the Corporation, including, but not limited to,
accounts of its assets, liabilities, receipts, disbursements, gains, losses,
capital surplus and shares; shall be responsible for assuring adherence to such
financial policies as are promulgated by the board of directors; and, in
general, shall discharge such other duties as may from time to time be assigned
to him or her by the board of directors or the president. The books of account
shall be open at all reasonable times to inspection by any director.
Section 5.08. The Vice Presidents. The vice presidents shall perform duties
as may from time to time be assigned to them by the board of directors or the
president.
Section 5.09. The Secretary. The secretary shall attend all meetings of the
board of directors and committees thereof and shall record the time and place of
holding of such meeting, whether regular or special, and if special, how
authorized, the notice given, the names of those present at directors' meetings
or the number of shares present or represented at shareholders' meetings in
books to be kept for that purpose; shall see that notices are given and records
and reports properly kept and filed by the Corporation as required by law;
shall, unless otherwise designated by the board of directors, be the custodian
of the seal of the Corporation and see that it is affixed to all documents to be
executed on behalf of the Corporation under its seal; and, in general, shall
perform all duties incident to the office of secretary, and such other duties as
may from time to time be assigned to him or her by the board of directors or the
president.
Section 5.10. The Treasurer. The treasurer shall have or provide for the
custody of the funds or other property of the Corporation and shall keep a
separate book account of the same; shall collect and receive or provide for the
collection and receipt of monies earned by or in any manner due to or received
by the Corporation; shall deposit all funds in his or her custody as treasurer
in such banks or other places of deposit as the board of directors may from time
to time designate; shall, whenever so required by the board of directors, render
an accounting showing his or her transactions as treasurer; and, in general,
shall discharge such other duties as may from time to time be assigned to him or
her by the board of directors, the president or the chief financial officer. If
the board of directors fails to elect a chief financial officer, then the
treasurer shall perform the duties of the chief financial officer.
Section 5.11. Salaries and Compensation. The salaries, if any, of the
officers elected by the board of directors shall be fixed from time to time by
the board of directors or by such officer or committee as may be designated by
resolution of the board. The salaries or other compensation of any officers,
employees and agents elected, appointed or retained by an officer or committee
to which the board of directors has delegated such a power shall be fixed from
time to time by such officer or committee. No officer shall be prevented from
receiving such salary or other compensation by reason of the fact that he or she
is also a director of the Corporation.
Section 5.12. Resignations. Any officer or agent may resign at any time by
giving written notice of resignation to the board of directors or to the
president or the secretary of the Corporation. Any such resignation shall take
effect at the date of the receipt of such notice or at any later time specified
-15-
<PAGE>
therein and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 5.13. Removal. Any officer, committee member, employee or agent of
the Corporation may be removed, either for or without cause, by the board of
directors or other authority that elected or appointed such officer, committee
member or other agent.
Section 5.14. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, or any other cause, shall be filled by
the board of directors or by the officer or committee to which the power to fill
such office has been delegated, as the case may be.
Section 5.15. Bond. The chairman of the board, president, chief financial
officer and treasurer shall give such bond, if any, for the faithful performance
of the duties of such office as shall be required by the board of directors.
ARTICLE VI
----------
CERTIFICATES OF STOCK, TRANSFER
-------------------------------
Section 6.01. Share Certificates, Issuance. Every shareholder shall be
entitled to have a certificate representing all shares to which he or she is
entitled; and such certificate shall be signed (either manually or in facsimile)
by the chairman of the board, if any, or by the president or a vice president
and by the secretary or any assistant secretary of the Corporation and may be
sealed with the corporate seal or a facsimile thereof. In the event any officer
who has signed, or whose facsimile signature has been placed upon any share
certificate shall have ceased to be such officer because of death, resignation
or otherwise, before the certificate is issued, it may be issued with the same
effect as if the officer had not ceased to be such at the date of its issue.
Certificates representing shares of the Corporation shall otherwise be in such
form as provided by statute and approved by the board of directors. Every
certificate exchanged or returned to the Corporation shall be marked "CANCELED."
Section 6.02. Transfer. Transfers of shares shall be made on the books of
the Corporation upon surrender of the certificates therefor, endorsed by the
person named in the certificate or by an attorney lawfully appointed in writing.
Section 6.03. Registered Shareholders. Except as otherwise expressly set
forth in these bylaws, the Corporation shall be entitled to recognize a person
registered on its books in whose name any shares of the Corporation are
registered as the absolute owner thereof with the exclusive rights to receive
dividends, and to vote such shares as owner. Except as otherwise provided by
law, the Corporation shall not be bound to recognize any equitable or other
claim regardless of whether the Corporation shall have express or other notice
thereof.
Section 6.04. Lost, Destroyed or Mutilated Certificates. The holder of any
shares of the Corporation shall notify the Corporation of any loss, destruction
or mutilation of the certificates therefor, and the board of directors may, in
its discretion, cause new certificates to be issued to him or her, upon
-16-
<PAGE>
satisfactory proof of such loss, destruction, or mutilation and, if the board of
directors shall so determine, the deposit of a bond in such form and in such
sum, and with such surety or sureties, as it may direct.
ARTICLE VII
-----------
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
-------------------------------------------------
Section 7.01. Directors, Officers, Employees and Agents.
(a) Actions or Suits not by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is
threatened to be made a party (which shall include the giving of testimony
or similar involvement) to any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation)
by reason of the fact that he or she is or was or has agreed to become a
director, officer, employee or agent of the Corporation, or is or was
serving or has agreed to serve at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him or her or on his or her behalf in connection
with such action, suit or proceeding and any appeal therefrom, if he or she
acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the Corporation, and with respect
to any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of
nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith or in a manner which
he or she reasonably believed to be in or not opposed to the best interests
of the Corporation, or with respect to any criminal action or proceeding,
had reasonable cause to believe his or her conduct was unlawful.
(b) Actions or Suits by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is
threatened to be made a party (which shall include the giving of testimony
or similar involvement) to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that he or she is or was or has agreed to
become a director, officer, employee or agent of the Corporation, or is or
was serving or has agreed to serve at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement (to the
extent permitted by law) actually and reasonably incurred by him or her or
on his or her behalf in connection with the defense or settlement of such
action or suit and any appeal therefrom, if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the Corporation, except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Corporation for gross
negligence or misconduct in the performance of his or her duty to the
Corporation, unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall
-17-
<PAGE>
determine upon application that, despite the adjudication of such liability
and in view of all circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court or
Chancery or such other court shall deem proper.
Section 7.02. Expenses. Notwithstanding the other provisions of this
Article VII, to the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in any defense of any claim,
issue or matter therein, the Corporation shall indemnify him or her against
expenses (including attorneys' fees) actually and reasonably incurred by him or
her or on his or her behalf in connection therewith.
Section 7.03. Determination of Standard of Conduct. Any indemnification
hereunder, unless pursuant to a determination by a court, shall be paid by the
Corporation as authorized upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because such
person has met the applicable standard of conduct set forth above. Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination, either (a) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum (b) by a committee duly designated by majority vote of such
directors, even though less than a quorum, (c) if there are no such directors or
if such directors so direct, by independent legal counsel in a written opinion,
or (d) by the shareholders.
Section 7.04. Advance Expenses. To the extent permitted by applicable law,
expenses (including attorneys' fees) incurred by an officer, director, employee
or agent in defending any civil, criminal, administrative or investigative
action, suit or proceeding shall be paid, in the case of an officer or director,
and may be paid, in the case of an employee or agent, by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of any undertaking by or on behalf of the director, officer, employee or agent
to repay such amount if it shall ultimately be determined that he or she is not
entitled to be indemnified by the Corporation as authorized herein.
Section 7.05. Benefit. The indemnification provided by this Article shall
be in addition to the indemnification rights provided pursuant to the Delaware
General Corporation Law and shall not be deemed exclusive of any other rights to
which a person seeking indemnification may be entitled under any law (common or
statutory), bylaw, agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as to action
in another capacity while holding such office (provided that no indemnification
may be made if expressly prohibited by the Delaware General Corporation Law).
Section 7.06. Insurance. The corporation shall be empowered to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against liability asserted
against him or her and incurred by him or her in any such capacity or arising
-18-
<PAGE>
out of his or her status as such, whether or not the corporation would have the
power to indemnify him or her against such liability under the provisions
contained herein.
Section 7.07. No Rights of Subrogation. Indemnification herein shall be a
personal right, and the corporation shall have no liability under this Article
VII to any insurer or any person, corporation, partnership, association, trust
or other entity (other than the heirs, executors or administrators of any person
otherwise entitled to indemnification pursuant to the provisions of this Article
VII) by reason of subrogation, assignment or succession by any other means to
the claim of any person to indemnification hereunder.
Section 7.08. Indemnification for Past Directors. Indemnification as
provided in this section shall continue as to a person who has ceased to be a
director, officer, employee, or agent and shall inure to the benefit of the
heirs, executors, and administrators of such a person.
Section 7.09. Affiliates. For purposes of this Article VII, references to
"the Corporation" shall include any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and authority to
indemnify its directors, officers, employees or agents, so that any person who
is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position under
the provisions of this Article with respect to the resulting or surviving
corporation as he or she would have with respect to such constituent corporation
if its separate existence had continued.
Section 7.10. Reliance. Each person who shall act as an authorized
representative of the Corporation shall be deemed to be doing so in reliance
upon such rights of indemnification as are provided in this Article.
Section 7.11. Fund for Payment of Expenses. The Corporation may create a
fund of any nature, which may, but need not be, under the control of a trustee,
or otherwise may secure in any manner its indemnification obligations, whether
arising hereunder, under the Certificate of Incorporation by agreement, vote of
shareholders or directors, or otherwise.
Section 7.12 Amendments. The provisions of this Article VII relating to
indemnification and to the advancement of expenses shall constitute a contract
between the Corporation and each of its directors and officers which may be
modified as to any director or officer in a manner that is adverse to such
director or officer only with that person's consent or as specifically provided
in this section. Notwithstanding any other provision of these bylaws relating to
their amendment generally, any repeal or amendment of this Article VII which is
adverse to any director or officer shall apply to such director or officer only
on a prospective basis, and shall not limit the rights of a director or officer
to indemnification or to the advancement of expenses with respect to any action
or failure to act occurring prior to the time of such repeal or amendment.
-19-
<PAGE>
ARTICLE VIII
------------
MISCELLANEOUS
-------------
Section 8.01. Checks. All checks or demands for money and notes of the
Corporation, shall be signed by such officer or officers, or such other person
or persons as the board of directors may designate from time to time.
Section 8.02. Dividends. The board of directors, at any regular or special
meeting thereof, subject to any restrictions contained in the Certificate of
Incorporation, may declare and the Corporation may pay dividends upon the shares
of its stock in cash, property or the Corporation's shares in accordance with
the Delaware General Corporation Law.
Section 8.03. Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
financial institutions or other depositories as the board of directors may
approve or designate.
Section 8.04. Fiscal Year. The fiscal year of the Corporation shall end on
the 31st day of March, or as otherwise determined by the board of directors.
Section 8.05. Severability. The provisions of these bylaws shall be
separable each from any and all other provisions of these bylaws, and if any
such provision shall be adjudged to be invalid or unenforceable, such invalidity
or unenforceability shall not affect any other provision thereof, or the powers
granted to this corporation by the Certificate of Incorporation or these bylaws.
ARTICLE IX
----------
AMENDMENTS
----------
Section 9.01. Amendments to the Bylaws. Except as specifically set forth
elsewhere herein or in the Certificate of Incorporation, the board of directors
may amend or repeal these bylaws. The shareholders entitled to vote thereon may
amend or repeal these bylaws even though the bylaws may also be amended or
repealed by the board of directors.
Adopted: _____________, 2000
-20-
<PAGE>
Exhibit E
MERGER AGREEMENT
THIS MERGER AGREEMENT (the "Agreement") dated as of ____________, 2000, is made
and entered into by and between TravelNow.com Inc., a Florida corporation ("TNOW
Florida") and TravelNow.com Inc., a Delaware corporation ("TNOW Delaware").
W I T N E S S E T H:
--------------------
WHEREAS, TNOW Florida is a corporation organized and existing under the
laws of the State of Florida; and
WHEREAS, TNOW Delaware is a wholly-owned subsidiary corporation of TNOW
Florida, having been incorporated on _________, 2000; and
WHEREAS, the respective Boards of Directors of TNOW Florida and TNOW
Delaware have determined that it is advisable and in the best interests of each
of such corporations that TNOW Florida merge with and into TNOW Delaware upon
the terms and subject to the conditions set forth in this Agreement for the
purpose of effecting the change of the state of incorporation of TNOW Florida
from Florida to Delaware.
NOW THEREFORE, in consideration of the premises, the mutual covenants
herein contained and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Merger. On ______________ or as soon as practicable thereafter
(the "Effective Date"); TNOW Florida shall be merged with and into TNOW
Delaware (the "Merger"). The separate existence of TNOW Florida shall
cease, and TNOW Delaware shall be the surviving corporation (hereinafter
sometimes referred to as the "Surviving Corporation") and shall be governed
by the laws of the State of Delaware.
Section 2. Registered Office. The address of the registered office of TNOW
Delaware in the State of Delaware will be The Corporation Trust Company,
1209 Orange Street, in the City of Wilmington, County of Newcastle, State
of Delaware.
Section 3. Certificate of Incorporation. The Certificate of Incorporation
of the TNOW Delaware as in effect on the date hereof shall be the
Certificate of Incorporation of the Surviving Corporation, without change
unless and until amended in accordance with applicable law.
Section 4. Bylaws. The bylaws of the TNOW Delaware as in effect on the date
hereof shall be the bylaws of the Surviving Corporation, without change
unless and until amended or repealed in accordance with applicable law.
Page 1
<PAGE>
Section 5. Effect of Merger on Stock.
-------------------------
(a) On the Effective Date, by virtue of the Merger and without any
further action on the part of TNOW Florida or TNOW Delaware or their
shareholders (i) each outstanding share of TNOW Florida common stock, $.01
par value (the "Florida Common Stock") shall be converted into one (1)
share of TNOW Delaware common stock, $.01 par value, ("Delaware Common
Stock"), except for those shares of Florida Common Stock with respect to
which the holders thereof duly exercise their dissenters' rights under
Florida law, (ii) each share of Delaware Common Stock issued and
outstanding immediately prior thereto shall be cancelled and returned to
the status of authorized but unissued shares, and (iii) any fractional
Delaware Common Stock interests to which a holder of Florida Common Stock
would be entitled will be canceled with the holder thereof being entitled
to receive the next highest number of whole shares of Delaware Common
Stock.
(b) On and after the Effective Date, all of the outstanding
certificates which prior to that time represented shares of Florida Common
Stock shall be deemed for all purposes to evidence ownership of and to
represent the shares of Delaware Common Stock into which the shares of TNOW
Florida represented by such certificates have been converted as herein
provided and shall be so registered on the books and records of the
Surviving Corporation or its transfer agents. The registered owner of any
such outstanding stock certificate shall, until such certificate shall have
been surrendered for transfer or conversion or otherwise accounted for to
the Surviving Corporation or its transfer agent, have and be entitled to
exercise any voting and other rights with respect to and to receive any
dividend and other distributions upon the shares of TNOW Delaware evidenced
by such outstanding certificate as above provided.
(c) All options and rights to acquire Florida Common Stock under or
pursuant to any options or warrants which are outstanding on the Effective
Date of the Merger will automatically be converted into equivalent options
and rights to purchase that whole number of Delaware Common Stock into
which the number of Florida Common Stock subject to such options or
warrants immediately prior to the Effective Date would have been converted
in the merger had such rights been exercised immediately prior thereto
(with any fractional Delaware Common Stock interest resulting from the
exercise being settled in cash in the amount such holder would have
received for any such fraction in the merger had he exercised such warrants
or options immediately prior to the Merger). The option price per share of
Delaware Common Stock shall be the option price per share of Florida Common
Stock in affect prior to the Effective Date. All plans or agreements of
TNOW Florida under which such options and rights are granted or issued
shall be continued and assumed by TNOW Delaware unless and until amended or
terminated in accordance with their respective terms.
Section 6. Succession. On the Effective Date, the rights, privileges,
powers and franchises, both of a public as well as of a private nature, of
each of TNOW Florida and TNOW Delaware (referred to herein as the
"Constituent Corporations") shall be vested in and possessed by the
Surviving Corporation, subject to all of the disabilities, duties and
Page 2
<PAGE>
restrictions of or upon each of the Constituent Corporations; all property,
real, personal and mixed, of each of the Constituent Corporations and all
debts due to each of the Constituent Corporations on whatever account, and
all things in action or belonging to each of the Constituent Corporations
shall be transferred to and vested in the Surviving Corporation; all
property, rights, privileges, powers and franchises, and all and every
other interest, shall be thereafter the property of the Surviving
Corporation as they were of the Constituent Corporations, and the title to
any real estate vested by deed or otherwise in either of the Constituent
Corporations shall not revert or be in any way impaired by reason of the
Merger; provided, however, that the liabilities of the Constituent
Corporations and of their shareholders, directors and officers shall not be
affected and all rights of creditors and all liens upon any property of
either of the Constituent Corporations shall be preserved unimpaired, and
all debts, liabilities and duties of or upon each of the Constituent
Corporations shall attach to the Surviving Corporation, and may be enforced
against it to the same extent as if such debts, liabilities and duties had
been incurred or contracted by it.
Section 7. Further Assurances. TNOW Florida agrees that it will execute and
deliver, or cause to be executed and delivered, all such deeds, assignments
and other instruments, and will take or cause to be taken such further or
other action as the Surviving Corporation may deem necessary or desirable
in order to vest in and confirm to the Surviving Corporation title to and
possession of all the property, rights, privileges, immunities, powers,
purposes and franchises, and all and every other interest, of TNOW Florida
and otherwise to carry out the intent and purposes of this Agreement.
Section 8. Officers and Directors of the Surviving Corporation. On the
Effective Date, the officers and directors of TNOW Florida in office on
such date shall be the officers and directors of the Surviving Corporation,
and such persons shall hold office in accordance with the bylaws of TNOW
Delaware or until their respective successors shall have been appointed or
elected.
Section 9. Approval by Shareholders; Effective Date. This Agreement and the
Merger contemplated hereby are subject to approval by the requisite vote of
shareholders in accordance with applicable Florida law. As promptly as
practicable after approval of this Agreement by shareholders in accordance
with applicable law, duly authorized officers of the respective parties
shall make and execute Articles of Merger and a Certificate of Merger and
shall cause such documents to be filed with the Secretary of State of
Florida and the Secretary of State of Delaware, respectively, in accordance
with the laws of the States of Florida and Delaware. The Effective Date of
the Merger shall be the date on which the Merger becomes effective under
the laws of Florida or the date on which the Merger becomes effective under
the laws of Delaware, whichever occurs later.
Section 10. Amendment. The Board of Directors of TNOW Florida and TNOW
Delaware may amend this Agreement at any time prior to the Effective Date,
provided that an amendment made subsequent to the approval of the merger by
the shareholder of Company shall not (a) alter or change the amount or kind
of shares to be received in exchange for or on conversion of all or any of
Florida Common Stock (b) alter or change any term of the Certificate of
Page 3
<PAGE>
Incorporation of TNOW Delaware, or (c) alter or change any of the terms and
conditions of this Agreement if such alteration or change would adversely
affect the holders of Florida Common Stock.
Section 11. Abandonment or Deferral. Notwithstanding the approval of this
Agreement by the shareholders of TNOW Florida or TNOW Delaware, this
Agreement may be terminated and the Merger abandoned at any time prior to
the filing of this Agreement with the Secretary of State of Florida and the
Secretary of State of Delaware by the Board of Directors of either TNOW
Florida or TNOW Delaware or both, or the consummation of the Merger may be
deferred for a reasonable period of time if, in the opinion of the Boards
of Directors of the Constituent Corporations, such action would be in the
best interest of such corporations. In the event of termination of this
Agreement, this Agreement shall become void and of no effect and there
shall be no liability on the part of either party to this Agreement or its
Board of Directors or shareholders with respect thereto.
Section 12. Counterparts. In order to facilitate the filing and recording
of this Agreement, this Agreement may be executed in counterparts, each of
which when so executed shall be deemed to be an original and all such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers, all as of the day and year first above written.
TRAVELNOW.COM INC.
A FLORIDA CORPORATION
By:
-----------------------------
Name: Jeffrey A. Wasson
Title: Chief Executive Officer
TRAVELNOW.COM INC.
A DELAWARE CORPORATION
By:
-----------------------------
Name: Jeffrey A. Wasson
Title: Chief Executive Officer
Page 4
<PAGE>
EXHIBIT F
607.1301 DISSENTER'S RIGHTS; DEFINITIONS.--The following definitions apply
to ss. 6O7.l3O2 and 607.1320:
(1) "Corporation" means the issuer of the shares held by a dissenting
shareholder before the corporate action or the surviving or acquiring
corporation by merger or share exchange of that issuer.
(2) "Fair value," with respect to a dissenter's shares, means the value of
the shares as of the close of business on the day prior to the shareholders'
authorization date, excluding any appreciation or depreciation in anticipation
of the corporate action unless exclusion would be inequitable.
(3) "Shareholders' authorization date" means the date on which the
shareholders' vote authorizing the proposed action was taken, the date on which
the corporation received written consents without a meeting from the requisite
number of shareholders in order to authorize the action, or, in the case of a
merger pursuant to s. 607.1104, the day prior to the date on which a copy of the
plan of merger was mailed to each shareholder of record of the subsidiary
corporation.
6O7.13O2 RIGHT OF SHAREHOLDERS TO DISSENT.--(1) Any shareholder of a
corporation has the right to dissent from and obtain payment of the fair value
of his or her shares in the event of, any of the following corporate actions:
(a) Consummation of a plan of merger to which the corporation is a party;
1. If the shareholder is entitled to vote on the merger, or
2. If the corporation is a subsidiary that is merged with its parent under
s. 607.1l04, and the shareholders would have been entitled to vote on action
taken, except for the applicability of s. 607.1lO4;
(b) Consummation of a sale or exchange of all, or substantially all, of the
property of the corporation, other than in the usual and regular course of
business, if the shareholder is entitled to vote on the sale or exchange
pursuant to s. 607 1202, including a sale in dissolution but not including a
sale pursuant to court order or a sale for cash pursuant to a plan by which all
or substantially all of the net proceeds of the sale will be distributed to the
shareholders within 1 year after the date of sale;
(c) As provided in s.607.0902(11), the approval of a control-share
acquisition;
<PAGE>
(d) Consummation of a plan of share exchange to which the corporation is a
party as the corporation the shares of which will be acquired, if the
shareholder is entitled to vote on the plan;
(e) Any amendment of the articles of incorporation if the shareholder is
entitled to vote on the amendment and if such amendment would adversely affect
such shareholder by:
1. Altering or abolishing any preemptive rights attached to any of his or
her shares;
2. Altering or abolishing the voting rights pertaining to any of his or her
shares, except as such rights may be affected by the voting rights of new shares
then being authorized of any existing or new class or series of shares;
3. Effecting an exchange, cancellation, or reclassification of any of his
or her shares, when such exchange, cancellation, or reclassification would alter
or abolish the share holder's voting rights or alter his or her percentage of
equity in the corporation, or effecting a reduction or cancellation of accrued
dividends or other arrearages in respect to such shares;
4. Reducing the stated redemption price of any of the shareholder's
redeemable shares, altering or abolishing any provision relating to any sinking
fund for the redemption or purchase of any of his or he, shares, or making any
of his shares subject to redemption when they are not otherwise redeemable;
5. Making noncumulative, in whole or in part, dividends of any of the
shareholder's preferred shares which had theretofore been cumulative;
6. Reducing the stated dividend preference of any of the shareholder's
preferred shares; or
7. Reducing any stated preferential amount payable on any of the
shareholder's preferred shares upon voluntary or involuntary liquidation; or
(f) Any corporate action taken, to the extent the articles of incorporation
provide that a voting or nonvoting shareholder is entitled to dissent and obtain
payment for his or her shares.
(2) A shareholder dissenting from any amendment specified in paragraph
(1)(e) has the right to dissent only as to those of his or her shares which are
adversely affected by the amendment.
(3) A shareholder may dissent as to less than all the shares registered in
his or her name. In that event, the shareholder's rights shall be determined as
if the shares as to which he or she has dissented and his or her other shares
were registered in the names of different shareholders.
(4) Unless the articles of incorporation otherwise provide, this section
does not apply with respect to a plan of merger or share exchange or a proposed
sale or exchange of property, to the holders of shares of any class or series
which, on the record date fixed to determine the shareholders entitled to vote
at the meeting of shareholders at which such action is to be acted upon or to
consent to any such action without a meeting, were either registered on a
national securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of Securities
Dealers, Inc., or held of record by not fewer than 2,000 shareholders.
(5) A shareholder entitled to dissent and obtain payment for his or her
shares under this section may not challenge the corporate action creating his or
her entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.
607.1320 PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS.-- (l)(a) If a
proposed corporate action creating dissenters' rights under s. 607.1302 is
submitted to a vote at a shareholders' meeting, the meeting notice shall state
that shareholders are or may be entitled to assert dissenters' rights and be
accompanied by a copy of ss. 607.1301, 607.1302, and 607.1320. A shareholder who
wishes to assert dissenters' rights shall:
1. Deliver to the corporation before the vote is taken written notice of
the shareholder's intent to demand payment for his or her shares if the proposed
action is effectuated, and
2. Not vote his or her shares in favor of the proposed action. A proxy or
vote against the proposed action does not constitute such a notice of intent to
demand payment.
<PAGE>
(b) If proposed corporate action creating dissenters' rights under s.
607,1302 is effectuated by written consent without a meeting, the corporation
shall deliver a copy of ss. 607.1301 , 607.1302, and 607.1320 to each
shareholder simultaneously with any request for the shareholder's written
consent or, if such a request is not made, within 10 days after the date the
corporation received written consents without a meeting from the requisite
number of shareholders necessary to authorize the action.
(2) Within 10 days after the shareholders' authorization date, the
corporation shall give written notice of such authorization or consent or
adoption of the plan of merger, as the case may be, to each shareholder who
filed a notice of intent to demand payment for his or her shares pursuant to
paragraph (1)(a) or, in the case of action authorized by written consent, to
each shareholder, excepting any who voted for, or consented in writing to, the
proposed action.
(3) Within 20 days after the giving of notice to him or her, any
shareholder who elects to dissent shall file with the corporation a notice of
such election, stating 'shareholder's name and address, the number, classes, and
series of shares as to which he or she dissents, and a demand for payment of the
fair value of his or her shares. Any shareholder failing to file such election
to dissent within the period set forth shall be bound by the terms of the
proposed corporate action. Any shareholder filing an election to dissent shall
deposit his or her certificates for certificated shares with the corporation
simultaneously with the filing of the election to dissent. The corporation may
restrict the transfer of uncertificated shares from the date the shareholder's
election to dissent is filed with the corporation.
(4) Upon tiling a notice of election to dissent, the shareholder shall
thereafter be entitled only to payment as provided in this section and shall not
be entitled to vote or to exercise any other rights of a shareholder. A notice
of election may be withdrawn in writing by the shareholder at any time before an
offer is made by the corporation, as provided in subsection (5), to pay for his
or her shares, After such offer, no such notice of election may be withdrawn
unless the corporation consents thereto. However, the right of such shareholder
to be paid the fair value of his 0r her shares shall cease, and 2the shareholder
shall be reinstated to have all his or her rights as a shareholder as of the
filing of his or her notice of election, including any intervening preemptive
rights and the right to payment of any intervening dividend or other
distribution or, if any such rights have expired or any such dividend or
distribution other than in cash has been completed, in lieu thereof, at the
election of the corporation, the fair value thereof in cash as determined by the
board as of the time of such expiration or completion, but without prejudice
otherwise to any corporate proceedings that may have been taken in the interim,
if:
(a) Such demand is withdrawn as provided in this section;
(b) The proposed corporate action is abandoned or rescinded or the
shareholders revoke the authority to effect such, action;
(c) No demand or petition for the determination of fair value by a court
has been made or filed within the time provided in this section; or
(d) A court of competent jurisdiction determines that such shareholder is
not entitled to the relief provided by this section.
(5) Within 10 days after the expiration of the period in which shareholders
may file their notices of election to dissent, or within 10 days after such
corporate action is effected, whichever is later (but in no case later than 90
days from the shareholders' authorization date), the corporation shall make a
written offer to each dissenting shareholder who has made demand as provided in
this section to pay an amount the corporation estimates to be the fair value for
such shares. If the corporate action has not been consummated before the
expiration of the 90-day period after the shareholders' authorization date, the
offer may be made conditional upon the consummation of such action. Such notice
and offer shall be accompanied by:
(a) A balance sheet of the corporation, the shares of which the dissenting
shareholder holds, as of the latest available date and not more than 12 months
prior to the making of such offer; and
(b) A profit and loss statement of such corporation for the 12-month period
ended on the date of such balance sheet or, if the corporation was not in
existence throughout such 12-month period, for the portion thereof during which
it was in existence.
<PAGE>
(6) If within 30 days after the making of such offer any shareholder
accepts the same, payment for his or her shares shall be made within 90 days
after the making of such offer or the consummation of the proposed action,
whichever is later. Upon payment of the agreed value, the dissenting shareholder
shall cease to have any interest in such shares.
(7) II the corporation fails to make such offer within the period specified
therefor in subsection (5) or if it makes the offer and any dissenting
shareholder or shareholders fail to accept the same within the period of 30 days
thereafter, then the corporation, within 30 days after receipt of written demand
from any dissenting shareholder given within 60 days after the date on which
such corporate action was effected, shall, or at its election at any time within
such period of 60 days may, file an action in any court of competent junsdiction
in the county in this state where the registered office of the corporation is
located requesting that the fair value of such shares be determined The court
shall also determine whether each dissenting shareholder, as to whom the
corporation requests the court to make such determination, is entitled to
receive payment for his or her shares. If the corporation fails to institute the
proceeding as herein provided, any dissenting shareholder may do so in the name
of the corporation. All dissenting shareholders (whether or not residents of
this state), other than shareholders who have agreed with the corporation as to
the value of their shares, shall be made parties to the proceeding as an action
against their shares. The corporation shall serve a copy of the initial pleading
in such proceeding upon each dissenting shareholder who is a resident of this
state in the manner provided by law for the service of a summons and complaint
and upon each nonresident dissenting shareholder either by registered or
certified mail and publication or in such other manner as is permitted by law.
The jurisdiction of the court is plenary and exclusive. All shareholders who are
proper parties to the proceeding are entitled to judgment against the
corporation for the amount of the fair value of their shares. The court may, if
it so elects, appoint one or more persons as appraisers to receive evidence and
recommend a decision on the question of fair value, The appraisers shall have
such power and authority as is specified in the order of their appointment or an
amendment thereof. The corporation shall pay each dissenting shareholder the
amount found to be due him or her 10 days after final determination of the
proceedings. Upon payment of the judgment, the dissenting shareholder shall
cease to have any interest in such shares.
(8) The judgment may, at the discretion of the court, include a fair rate
of interest, to be determined by the court.
(9) The costs and expenses of any such proceeding shall be determined by
the court and shall be assessed against the corporation, but all or any part of
such costs and expenses may be apportioned and assessed as the court deems
equitable against any or all of the dissenting shareholders who are parties to
the proceeding, to whom the corporation has made an offer to pay for the shares,
if the court finds that the action of such shareholders in failing to accept
such offer was arbitrary, vexatious, or not in good faith. Such expenses shall
include reasonable compensation for, and reasonable expenses of, the appraisers,
but shall exclude the fees and expenses of counsel for, and experts employed by,
any party. If the fair value of the shares, as determined, materially exceeds
the amount which the corporation offered to pay therefor or if no offer was
made, the court in its discretion may award to any shareholder who is a party to
the proceeding such sum as the court determines to be reasonable compensation to
any attorney or expert employed by the shareholder in the proceeding. (10)
Shares acquired by a corporation pursuant to payment of the agreed value thereof
or pursuant to payment of the judgment entered therefor, as provided in this
section, may be held and disposed of by such corporation as authorized but
unissued shares of the corporation, except that, in the case of a merger, they
may be held and disposed of as the plan of merger otherwise provides. The shares
of the surviving corporation into which the shares of such dissenting
shareholders would have been converted had they assented to the merger shall
have the status of authorized but unissued shares of the surviving corporation.
