<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
3Dshopping.com
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 18, 1999
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To the Shareholders of
3Dshopping.com:
The annual meeting of the shareholders of 3Dshopping.com, a California
corporation, will be held at 10:00 a.m., Pacific Time, on November 18, 1999, at
the Company's headquarters at 308 Washington Boulevard, Marina del Rey,
California for the following purposes:
1. Electing directors to serve for the following year and until their
successors are elected;
2. Voting on amendments to the Company's 1999 Stock Option Plan;
3. Voting on the adoption of the Company's Employee Stock Purchase Plan;
and
4. Transacting any other business that properly comes before the meeting.
The nominees for election to the Board of Directors are: Robert J. Grant,
Donald L. Hejmanowski, Joel F. McIntyre and Lawrence Weisdorn.
Only shareholders of record at the close of business on October 15, 1999
will be entitled to vote at the annual meeting.
PLEASE DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE POSTAGE-PREPAID
ENVELOPE ENCLOSED FOR THAT PURPOSE. You may attend the meeting in person even if
you send in your proxy; retention of the proxy is not necessary for admission to
or identification at the meeting.
By Order of the Board of Directors
Robert J. Grant
SECRETARY
Marina del Rey, California
October 28, 1999
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
---------------------
The mailing address of the principal executive offices of the Company is 308
Washington Boulevard, Marina del Rey, California 90292. The approximate date
that this proxy statement and the accompanying proxy form is first being sent to
shareholders is October 28, 1999.
UPON WRITTEN REQUEST TO ROBERT J. GRANT, SECRETARY, ANY PERSON WHOSE PROXY
IS SOLICITED BY THIS PROXY STATEMENT WILL BE PROVIDED, WITHOUT CHARGE, A COPY OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K. A COMPLETE COPY OF THE ANNUAL REPORT
ON FORM 10-K IS ALSO AVAILABLE FOR DOWNLOAD AT THE COMPANY'S WEB SITE AT
www.3Dshopping.com.
SOLICITATION AND REVOCABILITY OF PROXY
The enclosed proxy is solicited on behalf of the Board of Directors of
3Dshopping.com, a California corporation, for use at the Annual Meeting of
Shareholders to be held on November 18, 1999 and at any adjournment thereof. The
Company will bear the cost of preparing and mailing the proxy, proxy statement,
and any other material furnished to shareholders by the Company in connection
with the annual meeting. Proxies will be solicited by use of the mails, and
officers and employees of the Company may also solicit proxies by telephone or
personal contact. Copies of solicitation materials will be furnished to
fiduciaries, custodians, and brokerage houses for forwarding to beneficial
owners of the stock held in their names.
Any person giving a proxy in the form accompanying this proxy statement has
the power to revoke it at any time before its exercise. The proxy may be revoked
by filing with the Company, attention Robert J. Grant, Secretary, an instrument
of revocation or a duly executed proxy bearing a later date. The proxy may also
be revoked by voting in person at the meeting. A shareholder who attends the
meeting, however, is not required to revoke the proxy and vote in person. All
valid, unrevoked proxies will be voted at the annual meeting in accordance with
the instructions given.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
The common stock is the only outstanding authorized voting security of the
Company. The record date for determining holders of common stock entitled to
vote at the annual meeting is October 15, 1999. On that date there were
4,755,747 shares of common stock outstanding, entitled to one vote per share.
Shareholders will have cumulative voting rights with respect to the election of
directors only upon proper compliance with the notice requirements of California
law. Cumulative voting rights allow shareholders to give one nominee for
director, and only one nominee, a number of votes equal to the number of votes
to which a shareholder's shares are normally entitled multiplied by the number
of nominees. Alternatively, a shareholder can distribute this total number of
votes between as many of the nominees as the shareholder desires. Cumulative
voting rights can only be exercised if a shareholder gives notice at the annual
meeting
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prior to the voting for directors of the shareholder's intention to cumulate
votes. Once such notice is given, all shareholders may cumulate their votes for
nominees. The Company is seeking discretionary authority in the proxy to
cumulate votes.
The following table sets forth certain information regarding the beneficial
ownership as of September 15, 1999 of the common stock by (i) each person known
by the Company to own beneficially more than 5 percent of the common stock,
(ii) each director and nominee for director of the Company, (iii) each executive
officer of the Company named in the Summary Compensation Table, and (iv) all
executive officers and directors as a group. Except as otherwise noted, the
persons listed below have sole investment and voting power with respect to the
common stock owned by them.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE
BENEFICIAL OWNER BENEFICIALLY OWNED OF SHARES
- ---------------- ------------------ ----------
<S> <C> <C>
Lawrence Weisdorn................................. 700,000 14.7%
Donald L. Hejmanowski............................. 250,000 5.3%
Robert J. Grant................................... 117,000 2.4%
Joel F. McIntyre.................................. 6,000 *
All directors and executive officers as a group
(seven persons)................................. 1,117,500 23.1%
</TABLE>
- ------------------------
* Less than 1%.
The shares beneficially owned by Mr. Grant include 37,000 shares subject to
immediately exercisable options. The shares beneficially owned by Mr. McIntyre
are shares subject to immediately exercisable options. The number of shares
beneficially owned by the Company's executive officers and directors as a group
includes 35,000 shares subject to immediately exercisable options, 10,000 of
which are held by C. Michael Mellin and 25,000 of which are held by Robert J.
Vitamante, as well as the other shares subject to options described in this
paragraph.
PROPOSAL 1: ELECTION OF DIRECTORS
The directors of the Company are elected at each annual meeting to serve
until the next annual meeting and until their successors are elected and
qualified. Each nominee is now serving as a director of the Company. If a quorum
of shareholders is present at the annual meeting, the four nominees for election
as directors who receive the greatest number of votes cast at the meeting will
be elected directors. Abstentions and broker nonvotes will have no effect on the
results of the vote. Unless otherwise instructed, proxy holders will vote the
proxies they receive for the nominees named below. If any of the nominees for
director at the annual meeting becomes unavailable for election for any reason,
the proxy holders will have discretionary authority to vote pursuant to the
proxy for a substitute or substitutes. If any shareholder gives notice at the
annual meeting prior to the voting for directors of the shareholder's intention
to cumulate votes, the proxy holders will have discretionary authority to
cumulate votes for directors. The following table briefly describes the
Company's nominees for directors.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE
- ---- -------- --------
<S> <C> <C>
Lawrence Weisdorn........................................... 41 1996
Robert J. Grant............................................. 50 1996
Donald L. Hejmanowski....................................... 40 1996
Joel F. McIntyre............................................ 61 1999
</TABLE>
LAWRENCE WEISDORN has been the Company's Chairman of the Board and Chief
Executive Officer since May 1999. Prior to that time, he served as the Company's
President and a director since the Company's inception in August 1996. From
January 1995 to August 1996, Mr. Weisdorn was a founder and served as
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President and Chief Executive Officer of Samuel Hamann Graphix, Inc. Samuel
Hamann Graphix was formed in June 1996 to develop technology for high quality
graphics usable in television commercials and commercial operations. During the
eight years before he joined Samuel Hamann Graphix, Mr. Weisdorn worked as an
independent marketing and sales consultant.
ROBERT J. GRANT has been the Company's Treasurer and Secretary and a
director since August 1996. During this period of time until May 1999,
Mr. Grant also served as the Company's acting Chief Financial Officer. From
April 1996 to August 1996, Mr. Grant served as Office Manager of Samuel Hamann
Graphix, Inc. From March 1995 to April 1996, he was a salesperson for two car
dealerships. From January 1994 to March 1995, Mr. Grant was a principal of
Grant & Associates, an industrial real estate company. From January 1993 to
January 1994, he worked in corporate sales at Investors Title, a title insurance
company. Mr. Grant declared personal bankruptcy under chapter 7 of the federal
Bankruptcy Code in 1995.
DONALD L. HEJMANOWSKI has been a director of the Company since August 1996.
Mr. Hejmanowski is President and a director of Genesis Oil & Gas. He has held
that position since April 1998. From 1990 to April 1998, Mr. Hejmanowski worked
as an independent corporate finance consultant, assisting companies with
financing, corporate strategy and financial public relations. From August 1996
to February 1997, Mr. Hejmanowski was employed by us as the Company's investor
relations manager.
JOEL F. MCINTYRE became a director of the Company in June 1999. From 1963
through 1993, Mr. McIntyre was an attorney with the law firm of Paul, Hastings,
Janofsky and Walker. In 1993, Mr. McIntyre founded his own law firm specializing
in business law and transactional matters. Mr. McIntyre currently serves on the
Board of Directors of Hawker Pacific Aerospace and International Aluminum
Corporation, both publicly-held companies. Mr. McIntyre received a B.A. from
Stanford University in 1960 and a J.D. from University of California, Los
Angeles in 1963.
BOARD MEETINGS AND COMMITTEES
The Board of Directors met one time in the fiscal year ended June 30, 1999
("1999"). No director attended fewer than 75 percent of the aggregate of all
meetings of the Board of Directors and the committees of which the director was
a member during 1999. In July 1999, the Company formed a standing Audit
Committee and Compensation Committee. The Company does not have a Nominating
Committee.
Commencing with fiscal year 2000, the Audit Committee will make
recommendations concerning the engagement of the independent public accountants,
will review with the independent public accountants the plans and results of
audits, will approve professional services provided by the independent public
accountants, will review the independence of the independent public accountants,
will consider the range of audit and nonaudit fees, and will review the adequacy
of the Company's internal accounting controls. The Audit Committee presently
consists of Mr. Hejmanowski and Mr. McIntyre. The Compensation Committee will
determine compensation for the Company's executive officers and will administer
the Company's 1999 Stock Option Plan. The Compensation Committee presently
consists of Mr. Hejmanowski and Mr. McIntyre.
COMPENSATION OF DIRECTORS
Directors who are not officers of the Company receive $1,000 for attendance
at each board meeting and $500 for attendance at each committee meeting plus
reasonable out-of-pocket expenses incurred in attending meetings.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth all compensation paid by the Company for each
of the last three years to the Chief Executive Officer. No other executive
officer of the Company had total annual salary and bonus exceeding $100,000 for
the fiscal year ended June 30, 1999.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------------
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS
- --------------------------- -------- -------- --------
<S> <C> <C> <C>
Lawrence Weisdorn........................................ 1999 $53,000 $0
Chief Executive Officer and 1998 $48,000 $0
Chairman of the Board 1997 $41,000 $0
</TABLE>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The Company did not grant any stock options in 1999 to Mr. Weisdorn.
OPTION EXERCISES AND YEAR-END OPTION VALUES
Mr. Weisdorn has never beneficially owned any options to purchase shares of
the Company's common stock.
CERTAIN TRANSACTIONS
The Company was founded by Lawrence Weisdorn, Jr. in August 1996. At the
time of the Company's inception, Mr. Weisdorn was the principal shareholder of
Samuel Hamann Graphix, Inc., a development stage company that had been in
existence for about one year at that time. The Company acquired property,
equipment and other prepaid assets from Samuel Hamann Graphix. In return for
these assets, the Company assumed certain payroll and other liabilities of
Samuel Hamann Graphix and liabilities of Mr. Weisdorn in the amount of $18,500.
The purchase price was allocated to the tangible assets at their original cost
of $13,194, and the balance of $5,306 was attributed to goodwill.
From August 1996 to June 30, 1998, Mr. Weisdorn and his father, Lawrence
Weisdorn, Sr. advanced a total of $178,683 to the Company. These advances were
made in the form of loans on which the Company pays annual interest of 7%. In
fiscal 1998, the Weisdorns advanced $108,860 to the Company and during fiscal
1998 were owed as much as $111,824. At June 30, 1999, the Company owed Lawrence
Weisdorn, Sr. $50,201, and the Company's chief executive officer, Lawrence
Weisdorn, Jr., a total of $20,522. All sums owing to the Weisdorns were repaid
from the proceeds of the Company's unit offering in July 1999.
In August 1999, the Company loaned $225,000 to Mr. C. Michael Mellin, the
Company's Senior Vice President, Technology Operations. The annual rate of
interest on the loan is 10% and is secured by a mortgage interest on
Mr. Mellin's residence. The loan is payable on the earlier of the sale of
Mr. Mellin's house or on demand by the Company.
Effective October 1999, the Company adopted a policy on future related party
transactions. Under that policy, any future transactions between the Company and
any of its executive officers, directors or affiliates will be approved or
ratified by a majority of the independent outside members of the Company's Board
of Directors who do not have an interest in the transactions.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In the last fiscal year, the board of directors did not have a compensation
committee. Compensation decisions with respect to executive officers were made
by the Chief Executive Officer, Lawrence Weisdorn.
4
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee was formed in July 1999 and presently consists of
two outside directors and, pursuant to authority delegated by the Board of
Directors, determines and administers the compensation of the Company's
executive officers. In setting the compensation for the executive officers other
than the Chief Executive Officer, the Compensation Committee works closely with
the Chief Executive Officer, who makes specific recommendations to the committee
concerning compensation for each of the other executive officers. Although the
Board of Directors has granted the Compensation Committee full authority to set
executive compensation, in practice the decisions of the Compensation Committee
are usually reported as recommendations to the full Board of Directors.
There was no Compensation Committee of the Company's Board of Directors in
fiscal 1999. Compensation decisions for fiscal 1999 with respect to executive
officers of the Company were made by Lawrence Weisdorn, Chief Executive Officer
of the Company. Agreements between Mr. Weisdorn and the Company are described in
"Certain Transactions."
Internal Revenue Code Section 162(m), as currently in effect, limits to
$1,000,000 per person the amount that the Company may deduct for compensation
paid to any of its most highly compensated officers. Generally the levels of
salary and bonus paid by the Company do not exceed this limit. However, upon the
exercise of nonstatutory stock options, the excess of the current market price
over the option price (option spread) is treated as compensation and, therefore,
it may be possible for option exercises by an officer in any year to cause the
officer's total compensation to exceed $1,000,000. Under certain regulations,
option spread compensation from options that meet certain requirements will not
be subject to the $1,000,000 cap on deductibility, and it is the Company's
current policy generally to grant options that meet those requirements.
COMPENSATION PRINCIPLES
Executive compensation in fiscal year 2000 will be based on several general
principles, including the following:
- Provide competitive total compensation that enables the Company to attract
and retain key executives.
- Link corporate and individual performance to compensation.
- Encourage long-term success and align shareholder interests with
management interests by giving executives the opportunity to acquire stock
in the Company.
- Reward initiative.
COMPENSATION COMPONENTS
The primary components of the Company's executive officer compensation
program are base salary, annual incentive arrangements and long-term incentive
compensation in the form of stock options.
BASE SALARY. Executive officer base salaries for fiscal 1999 were
established by Mr. Weisdorn to provide salary levels appropriate for the
responsibilities of the executive officers of the Company. In determining
salaries, Mr. Weisdorn took into account individual experience, job
responsibility and individual performance. No specific weight was attached to
these factors in establishing base salaries. For fiscal 2000 and future years,
the Company will attempt to establish base salary levels for the Company's
executive officers that are competitive with those established by companies of
similar size in the Internet marketing industry. When determining salaries, the
Compensation Committee will also take into account individual experience levels,
job responsibility and individual performance. Each executive officer's salary
will be reviewed annually, and increases to base salary will be made to reflect
competitive market increases and the individual factors described above.
5
<PAGE>
STOCK OPTIONS. The Company's 1999 Stock Option Plan (the "Plan") is
intended as a long-term incentive plan for executive officers, managers and
other key employees of the Company. The objectives of the Plan are to align
employee and shareholder long-term interests by creating a direct link between
compensation and shareholder value. The Compensation Committee administers the
Plan and recommends to the full Board of Directors awards of stock options to
executive officers and other employees of the Company. In the past, options
granted under the Plan generally have been granted at an exercise price equal to
the fair market value of the Common Stock on the date of grant. Prior to the
Company's initial public offering in July 1999, fair market value was based on
the reported bid prices of the Common Stock on the NASD OTC Bulletin Board. For
options granted after the initial public offering, fair market value will be
established by the Board of Directors, upon recommendation of the Compensation
Committee, as the closing price as reported on the American Stock Exchange on
the date of grant. Options generally become exercisable over a four-year period
with 25% of the options exercisable at the end of each year from the date of
grant. Stock options generally have a ten-year term, but terminate earlier if
employment is terminated. Initial option grants to executive officers depend
upon the level of responsibility and position, and subsequent grants are made
based on the Compensation Committee's subjective assessment of performance,
among other factors. In fiscal 1999 the Board of Directors made the following
option grants under the Plan to executive officers of the Company: Robert J.
Vitamante--142,940 shares and Brian A. Smith--90,000 shares. The Compensation
Committee expects that in the future, if additional grants are made,
consideration will be given to the number of options granted in the past and the
exercise price of such grants. See "Amendment to the 1999 Stock Option Plan."
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Because there was no Compensation Committee for fiscal 1999, the Board of
Directors set Mr. Weisdorn's compensation for fiscal 1999. The Board of
Directors employed the same criteria that Mr. Weisdorn used to set compensation
for the other executive officers. The Board of Directors increased
Mr. Weisdorn's salary in fiscal 1999, as it had the previous year. The increase
in salary was based on the view that Mr. Weisdorn's salary was below competitive
salary levels for executives with similar experience and ability, and partly in
recognition of Mr. Weisdorn's individual performance and important contributions
to the Company's future success.
COMPENSATION COMMITTEE MEMBERS
Donald L. Hejmanowski
Joel F. McIntyre
6
<PAGE>
PERFORMANCE GRAPH
Because the Company did not have a class of securities registered under
Section 12 of the Securities Exchange Act of 1934 prior to the end of its last
fiscal year, no performance graph is being included with this proxy statement.
PROPOSAL 2: AMENDMENTS TO THE 1999 STOCK OPTION PLAN
The Company maintains the 1999 Stock Option Plan (the "Plan") for the
benefit of its employees and others who provide services to the Company. The
Board of Directors believes the availability of stock options is an important
factor in the Company's ability to attract and retain experienced and competent
employees and to provide an incentive for them to exert their best efforts on
behalf of the Company. As of September 30, 1999, out of a total of 1,000,000
shares reserved for issuance under the Plan, only 533,560 shares remained
available for grant. The Board of Directors believes additional shares will be
needed under the Plan to provide appropriate incentives to key employees and
others. Accordingly, on September 21, 1999 the Board of Directors adopted an
amendment to the Plan, subject to shareholder approval, to reserve an additional
1,000,000 shares for the Plan, thereby increasing the total number of shares
reserved for issuance under the Plan from 1,000,000 to 2,000,000 shares. See
"--Tax Consequences."
The Company's Board of Directors has also adopted an amendment to the Plan,
subject to shareholder approval, to impose a limit of 250,000 stock options that
may be granted to any person in a calendar year. This limit is necessary to
comply with Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"). See "--Tax Consequences."
Certain provisions of the Plan are described below. The complete text of the
Plan, marked to show the proposed amendment, is attached to this proxy statement
as Appendix A.
DESCRIPTION OF THE PLAN
ELIGIBILITY. All employees, officers and directors of the Company and its
subsidiaries are eligible to participate in the Plan.
ADMINISTRATION. The Plan is administered by the Compensation Committee (the
"Committee"), which may promulgate rules and regulations for the operation of
the Plan and generally supervises the administration of the Plan. Only the Board
of Directors, however, may amend, modify or terminate the Plan. The Committee
determines individuals to whom option grants are made under the Plan and the
price and terms of any such grants.
TERM OF PLAN. The Plan will continue until all shares available for
issuance under the Plan have been issued and all restrictions on such shares
have lapsed. The Board of Directors may suspend or terminate the Plan at any
time except with respect to options then outstanding under the Plan.
STOCK OPTIONS. The Committee determines the persons to whom options are
granted, the option price, the number of shares to be covered by each option,
the period of each option, the times at which options may be exercised and
whether the option is an incentive stock option ("ISO") or a nonqualified stock
option ("NSO"). If the option is an ISO, the option price cannot be less than
the fair market value of the common stock on the date of grant. If an optionee
with respect to an ISO at the time of grant owns stock possessing more than
10 percent of the combined voting power of the Company, the option price may not
be less than 110 percent of the fair market value of the common stock on the
date of grant. In addition, the Plan limits the amount of ISOs that may become
exercisable under the Plan in any year to $100,000 per optionee (based on the
fair market value of the stock on the date of grant). No monetary consideration
is paid to the Company upon the granting of options.
Options granted under the Plan generally continue in effect for the period
fixed by the Committee, except that ISOs are not exercisable after the
expiration of 10 years (5 years in the case of optionees
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<PAGE>
owning more than 10 percent of the combined voting power of the Company's stock
at the time of grant) from the date of grant. Options are exercisable in
accordance with the terms of an option agreement entered into at the time of
grant and are nontransferable except on death of a holder. Options may be
exercised only while an optionee is employed by the Company or a subsidiary or
within 12 months following termination of employment by reason of death or
disability or 30 days following termination for any other reason. The Plan
provides that the Committee may extend the exercise period for any period up to
the expiration date of the option and may increase the number of shares for
which the option may be exercised up to the total number underlying the option.
The purchase price for each share purchased pursuant to exercise of options must
be paid in cash, including cash that may be the proceeds of a loan from the
Company, in shares of common stock valued at fair market value, or in other
forms of consideration, as determined by the Committee. Upon the exercise of an
option, the number of shares subject to the option and the number of shares
available under the Plan for future option grants are reduced by the number of
shares with respect to which the option is exercised.
CHANGES IN CAPITAL STRUCTURE. The Plan provides that if the outstanding
common stock is increased or decreased or changed into or exchanged for a
different number or kind of shares or other securities of the Company or of
another corporation by reason of any recapitalization, stock split or certain
other transactions, appropriate adjustment will be made by the Committee in the
number and kind of shares available for awards under the Plan. In the event of a
dissolution, merger, consolidation or plan of exchange affecting the Company,
the Committee may, in its sole discretion, provide a 30-day period prior to the
event during which outstanding options shall be exercisable to the extent
exercisable and upon the expiration of such 30-day period, all unexercised
options shall immediately terminate. The Committee may, in its sole discretion,
accelerate the exercisability of options so that they are exercisable in full
during such 30-day period.
TAX CONSEQUENCES
The discussion below is based on the Code, regulations under the Code,
administrative rulings and court decisions as of the date hereof. All of these
are subject to change and could affect the validity of this discussion. The
discussion does not discuss any foreign, state or local tax consequences.
Certain options authorized to be granted under the Plan are intended to
qualify as ISOs for federal income tax purposes. An optionee will recognize no
income upon grant of an ISO or, provided the optionee has been an employee of
the Company at all times from the date of grant to the date three months before
exercise, upon exercise of the ISO. However, the amount by which the fair market
value of the shares at the time of exercise of an ISO exceeds the exercise price
is included in the alternative minimum taxable income of the optionee. If an
employee exercises an ISO and does not dispose of any of the option shares
within two years following the date of grant and does not dispose of any of the
option shares within one year following the date of exercise (the "holding
periods"), any gain realized on subsequent disposition of the shares generally
will be treated as gain from the sale or exchange of a capital asset. If an
employee disposes of shares acquired upon exercise of an ISO before the
expiration of the holding periods, the employee generally will realize ordinary
compensation income in the year of such disqualifying disposition equal to the
lesser of (i) the excess of the fair market value of the shares on the exercise
date over the exercise price or (ii) the amount of gain realized on the
disposition. Any gain on disposition in excess of the amount treated as ordinary
income generally will be capital gain realized by the employee. The Company will
not be allowed any deduction for federal income tax purposes at either the time
of the grant or exercise of an ISO. Upon any disqualifying disposition by an
employee, the Company generally will be allowed a deduction to the extent the
employee realized ordinary income.
Certain options authorized to be granted under the Plan will be treated as
NSOs for federal income tax purposes. No income is realized by the grantee of an
NSO until the option is exercised. At the time of exercise of an NSO, the
optionee will realize ordinary compensation income, and the Company generally
will be entitled to a deduction, in the amount by which the fair market value of
the shares subject to the
8
<PAGE>
option at the time of exercise exceeds the exercise price. The Company is
required to withhold on the amount of ordinary compensation income. Upon the
sale or disposition of shares acquired upon exercise of an NSO, any excess of
the amount realized from the sale or disposition over the fair market value of
the shares on the date of exercise generally will be taxable as capital gain.
Section 162(m) of the Code limits to $1,000,000 per person the amount that
the Company may deduct for compensation paid to certain of its most highly
compensated officers in any year. Under regulations under the Code, compensation
income realized through the exercise of an option will not be subject to the
$1,000,000 limit if the option and the Plan meet certain requirements. One
requirement is shareholder approval at least once every five years of
per-employee limits on the number of shares as to which options may be granted.
Approval of this Proposal 2 will constitute approval of the per-employee limits
under the Plan. Other requirements are that the option be granted by a committee
comprised solely of two or more outside directors (as defined in Treasury
Regulation Section 1.162-27(e)(3)) and that the exercise price of the option be
not less than the fair market value of the common stock on the date of grant.
Accordingly, the Company believes that if this Proposal 2 is approved by
shareholders, compensation received on exercise of options granted under the
Plan in compliance with all of the requirements in this paragraph will be exempt
from the $1,000,000 deduction limit.
RECOMMENDATION BY THE BOARD OF DIRECTORS
The Board of Directors recommends that the amendment to the Plan be
approved. The affirmative vote of the holders of a majority of the shares of
common stock present and entitled to vote on the matter is required to approve
this Proposal 2. Abstentions have the same effect as "no" votes in determining
whether the amendment is approved. Broker non-votes are counted for purposes of
determining whether a quorum exists at the annual meeting but are not counted
and have no effect on the results of the vote on Proposal 2. The proxies will be
voted for or against the proposal or as an abstention, in accordance with the
instructions specified on the proxy form. If no instructions are given, proxies
will be voted for approval of the amendment to the Plan.
PROPOSAL 3: ADOPTION OF THE 1999 EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors has adopted, subject to shareholder approval, an
employee stock purchase plan (the "ESPP") for the benefit of the Company's
employees and others who provide services to the Company. The Board believes the
availability of stock incentives is an important factor in the Company's ability
to attract and retain experienced and competent employees and to provide an
incentive for them to exert their best efforts on behalf of the Company. A total
of 2,000,000 shares are reserved for issuance under the ESPP.
Key provisions of the employee stock purchase plan are described below. The
complete text of the ESPP is attached to this document as Appendix B.
DESCRIPTION OF THE ESPP
ELIGIBILITY. Except as described below, all full-time employees of the
Company and designated subsidiaries, including employees who are officers or
directors, are eligible to participate in the ESPP. Any employee who would,
after a purchase of shares under an offering, own or be deemed to own five
percent or more of the voting power or value of all classes of stock of the
Company is ineligible to participate in an offering.
ESPP OFFERINGS AND PURCHASE OF SHARES. Offering periods are six months long
and commence on January 1 and July 1 of each year and end on the last day of
June and December following. On the first trading day of each offering period,
known as the "offering date," each eligible employee is automatically granted an
option to purchase shares of the Company's common stock to be automatically
exercised on the last trading day of the six-month purchase period comprising an
offering period. The last trading day of a
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purchase period is known as a "purchase date." No option will permit an employee
to purchase more than 10,000 shares or permit an employee's right to purchase
shares under the plan to accrue at a rate that exceeds $25,000 of fair market
value (determined at the offering date) for each calendar year that the option
is outstanding. Each eligible employee may elect to participate in the ESPP by
filing a subscription and payroll deduction authorization. Shares may be
purchased under the ESPP only through payroll deductions of not more than
15 percent of an employee's total compensation. On the purchase date the amounts
withheld will be applied to purchase shares for the employee from the Company.
The purchase price will be the lesser of 85 percent of the closing market price
of the Company's common stock on the offering date or on the purchase date.
An employee may terminate participation in the ESPP by written notice to the
Company at least 10 days before the purchase date. The employee will then
receive all funds withheld from his or her pay and not yet used to purchase
shares. No interest will be paid on funds withheld from employees unless
otherwise determined by the Board of Directors. An employee may reinstate
participation in the ESPP, but only after the first purchase date following
termination. The rights of employees under the ESPP are not transferable.
ADMINISTRATION. The ESPP is administered by the Compensation Committee of
the Board of Directors. The Committee may promulgate rules and regulations for
the operation of the ESPP, adopt forms for use in connection with the ESPP,
decide any question of interpretation of the ESPP or rights arising under the
ESPP and generally supervise the administration of the ESPP. The Company pays
all expenses of the ESPP other than commissions on sales of shares for
employees' accounts by the custodian.
CUSTODIAN. An independent custodian maintains the records under the ESPP.
Shares purchased by employees under the ESPP are delivered to and held by the
custodian on behalf of the employees. By appropriate instructions from an
employee, all or part of the shares may be sold or transferred into the
employee's own name and delivered to the employee.
AMENDMENTS. The Board of Directors may amend the ESPP, except that without
the approval of the shareholders of the Company, the ESPP may not be amended to
increase the number of reserved shares (except for adjustments authorized by the
ESPP), decrease the purchase price of shares or materially modify the class of
employees eligible to receive options under the ESPP. The Board of Directors may
terminate the ESPP at any time. Upon a termination, any cash and shares held in
each participating employee's account shall be distributed to each employee.
TAX CONSEQUENCES
The discussion below is based on the Code, regulations under the Code,
administrative rulings and court decisions as of the date hereof. All of these
are subject to change and could affect the validity of this discussion. The
discussion does not discuss any foreign, state or local tax consequences.
The ESPP is intended to qualify as an "employee stock purchase plan" within
the meaning of Section 423 of the Code. Under the Code, employees will not
recognize taxable income or gain with respect to shares purchased under the ESPP
either at an offering date or at a purchase date. If a current or former
employee disposes of shares purchased under the ESPP more than two years after
the offering date and more than one year after the purchase date, or in the
event of the employee's death at any time while owning the shares, the employee
will realize ordinary compensation income for the taxable year of disposition or
death equal to the lesser of
1. the excess of the fair market value of the shares at the time of
disposition or death over the purchase price, or
2. 15 percent of the fair market value of the shares on the offering date.
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Any gain on the disposition in excess of the amount treated as ordinary
compensation income generally will be capital gain. In the case of such a
disposition or death, the Company will not be allowed any deduction from income.
If an employee disposes of shares purchased under the ESPP within two years
after the offering date or within one year after the purchase date, the employee
will be required to report the excess of the fair market value of the shares on
the purchase date over the purchase price as ordinary compensation income for
the year of disposition. Any gain realized on disposition in excess of the
amount treated as ordinary compensation income generally will be capital gain
realized by the employee. In the event of a disposition within two years after
the offering date or within one year after the purchase date, the Company
generally will be allowed a deduction from income in the year of such
disposition equal to the amount that the employee is required to report as
ordinary compensation income.
Under the terms of the ESPP, participants are required to pay to the Company
any amounts necessary to satisfy any tax withholding determined by the Company
to be required in connection with either the purchase or disposition of shares
acquired under the ESPP.
RECOMMENDATION BY THE BOARD OF DIRECTORS
The Board of Directors recommends that the adoption of the ESPP be approved.
The affirmative vote of the holders of a majority of the shares of common stock
present and entitled to vote on the matter is required to approve this Proposal
3. Abstentions have the same effect as "no" votes in determining whether the
amendment is approved. Broker non-votes are counted for purposes of determining
whether a quorum exists at the annual meeting but are not counted and have no
effect on the results of the vote on Proposal 3. The proxies will be voted for
or against the proposal or as an abstention, in accordance with the instructions
specified on the proxy form. If no instructions are given, proxies will be voted
for approval of the adoption of the ESPP.
INDEPENDENT ACCOUNTANTS
Friedman, Minsk, Cole & Fastovsky audited the Company's financial statements
for the year ended June 30, 1999. Representatives of Friedman, Minsk, Cole &
Fastovsky will be at the annual meeting and will be available to respond to
appropriate questions. They do not plan to make any statement but will have the
opportunity to make a statement if they wish. The Audit Committee has not yet
selected or recommended an independent public accountant to audit the Company's
financial statements for the fiscal year ended June 30, 2000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors, and persons who own more than 10 percent of the
common stock to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC"). Executive officers, directors, and
beneficial owners of more than 10 percent of the common stock are required by
SEC regulation to furnish the Company with copies of all section 16(a) reports
they file. Based solely on a review of such reports received by the Company and
on written representations from certain reporting persons that they have
complied with the relevant filing requirements, the Company believes that all
section 16(a) filing requirements applicable to its executive officers and
directors have been complied with.
DISCRETIONARY AUTHORITY
Although the Notice of Annual Meeting of Shareholders provides for
transaction of any other business that properly comes before the meeting, the
Board of Directors has no knowledge of any matters to be presented at the
meeting other than the matters described in this proxy statement. The enclosed
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proxy, however, gives discretionary authority to the proxy holders to vote in
accordance with their judgment if any other matters are presented.
For this year's annual meeting of shareholders, if notice of a shareholder
proposal to be raised at the annual meeting of shareholders is received at the
principal executive offices of the Company after September 13, 1999, proxy
voting on that proposal when and if raised at the annual meeting will be subject
to the discretionary voting authority of the designated proxy holders. For the
2000 annual meeting of shareholders, if notice of a shareholder proposal to be
raised at the meeting is received at the principal executive offices of the
Company after September 13, 2000, proxy voting on that proposal when and if
raised at the annual meeting will be subject to the discretionary voting
authority of the designated proxy holders.
SHAREHOLDER PROPOSALS
Any shareholder proposal to be considered for inclusion in proxy materials
for the Company's 2000 annual meeting must be received at the principal
executive offices of the Company no later than July 2, 2000.
BY ORDER OF THE BOARD OF DIRECTORS
Robert J. Grant
SECRETARY
Marina del Rey, California
October 28, 1999
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APPENDIX A
PROPOSED AMENDMENT TO
3DSHOPPING.COM
1999 STOCK OPTION PLAN
1. PURPOSE. The purpose of this 1999 Stock Option Plan (the "Plan") is to
enable 3Dshopping.com (the "Company") to attract and retain the services
of selected employees, officers, and directors of the Company and of any
subsidiary thereof, and to provide added incentive to such persons by
increasing their ownership interests in the Company.
2. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided below and
in paragraph 7, the shares to be offered under the Plan shall consist of
Common Stock of the Company, and the total number of shares of Common
Stock that may be issued under the Plan shall not exceed
<#>1,000,000</#> 2,000,000 shares. The shares issued under the Plan may
be authorized and unissued shares or reacquired shares. If an option
granted under the Plan expires, terminates or is canceled, the unissued
shares subject to such option shall again be available under the Plan.
3. EFFECTIVE DATE AND DURATION OF PLAN.
(a) EFFECTIVE DATE. The Plan shall become effective when adopted by
the Board of Directors; provided, however, that prior to
shareholder approval of the Plan, any awards shall be subject to
and conditioned on approval of the Plan by a majority of the votes
cast at a shareholders' meeting at which a quorum is present.
Options may be granted under the Plan at any time after the
effective date and before termination of the Plan.
(b) DURATION. The Plan shall continue in effect until all shares
available for issuance under the Plan have been issued and all
restrictions on such shares have lapsed. The Board of Directors may
suspend or terminate the Plan at any time except with respect to
options then outstanding under the Plan.
4. ADMINISTRATION. The Plan shall be administered by a committee of the
Board of Directors of the Company (the "Committee"), which shall
determine and designate from time to time the persons to whom awards
shall be made and the amount and other terms and conditions of the
awards. Subject to the provisions of the Plan, the Committee may from
time to time adopt and amend rules and regulations relating to
administration of the Plan, advance the lapse of any waiting period,
accelerate any exercise date, waive or modify any restriction applicable
to shares (except those restrictions imposed by law) and make all other
determinations in the judgment of the Committee necessary or desirable
for the administration of the Plan. The interpretation and construction
of the provisions of the Plan and related agreements by the Committee
shall be final and conclusive. The Committee may correct any defect or
supply any omission or reconcile any inconsistency in the Plan or in any
related agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect, and it shall be the sole and
final judge of such expediency. No director shall vote on any action by
the Committee or the Board of Directors of the Company with respect to
any matter relating to an award held by such director.
5. TYPES OF AWARDS; ELIGIBILITY. The Committee may, from time to time,
grant (i) Incentive Stock Options, as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), as provided in
Sections 6(a) and 6(b); and (ii) grant options other than Incentive
Stock Options ("Non-Statutory Stock Options"), as provided in Sections
6(a) and 6(c). Options may be awarded pursuant to this Plan only to
employees, officers, and directors of the Company or any subsidiary
thereof; provided, however, that only employees of the Company shall be
eligible to receive Incentive Stock Options under the Plan. The
Committee shall select the individuals to whom awards shall be made and
shall specify the action taken with respect to each individual to
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whom an award is made. At the discretion of the Committee, a director
may be given an election to surrender an award in exchange for the grant
of a new award. NO PERSON MAY BE GRANTED OPTIONS FOR MORE THAN AN
AGGREGATE OF 250,000 SHARES OF COMMON STOCK IN ANY CALENDAR YEAR.
6. OPTION GRANTS.
(a) TERMS OF GRANT. The Committee may grant options under the Plan.
With respect to each option grant, the Committee shall determine
the number of shares subject to the option, the option price, the
period of the option, the time or times at which the option may be
exercised, and whether the option is an Incentive Stock Option or a
Non-Statutory Stock Option. At the time of the grant of an option
or at any time thereafter, the Committee may provide that an
optionee who exercised an option with Common Stock of the Company
shall automatically receive a new option to purchase additional
shares equal to the number of shares surrendered and may specify
the terms and conditions of such new options.
(b) INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be subject
to the following additional terms and conditions:
i) LIMITATION ON AMOUNT OF GRANTS. No employee may be granted
Incentive Stock Options under the Plan if the aggregate fair
market value, on the date of grant, of the Common Stock with
respect to which Incentive Stock Options are exercisable for the
first time by that employee during any calendar year under the
Plan and under all incentive stock option plans (within the
meaning of Section 422 of the Code) of the Company or any parent
or subsidiary of the Company exceeds $100,000.
ii) LIMITATIONS ON GRANTS TO 10 PERCENT SHAREHOLDERS. An Incentive
Stock Option may be granted under the Plan to an employee
possessing more than ten percent of the total combined voting
power of all classes of stock of the Company or of any parent
or subsidiary of the Company only if the option price is at
least 110 percent of the fair market value of the Common Stock
subject to the option on the date it is granted and the option
by its terms is not exercisable after the expiration of five
years from the date it is granted.
iii) DURATION OF OPTIONS. Subject to Sections 6(b)(ii) and 6(f),
Incentive Stock Options granted under the Plan shall continue
in effect for the period fixed by the Committee, except that
no Incentive Stock Option shall be exercisable after the
expiration of ten years from the date it is granted.
iv) OPTION PRICE. The option price per share shall be determined
by the Committee at the time of grant. Except as provided in
Section 6(b)(ii), the option price shall not be less than
100 percent of the fair market value of the Common Stock
covered by the Incentive Stock Option at the date the option is
granted. The Committee shall make a good faith determination of
the fair market value. If the Common Stock of the Company is
not publicly traded on the date the option is granted, the
Committee may consider any valuation methods it deems
appropriate and may, but is not required to, obtain one or more
independent appraisals of the Company. If the Common Stock of
the Company is publicly traded on the date the option is
granted, the fair market value shall be deemed to be the
closing price of the Common Stock as reported in THE WALL
STREET JOURNAL on the day preceding the date the option is
granted, or, if there has been no sale on that date, on the
last preceding date on which a sale occurred or such other
value of the Common Stock as shall be specified by the
Committee.
v) LIMITATION ON TIME OF GRANT. No Incentive Stock Option shall be
granted on or after the tenth anniversary of the date of the
last action by the Committee approving an
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increase in the number of shares available for issuance under
the Plan, which action was subsequently approved within
12 months by the shareholders.
vi) CONVERSION OF INCENTIVE STOCK OPTIONS. The Committee may at
any time without the consent of the optionee convert an
Incentive Stock Option to a Non-Statutory Stock Option.
(c) NON-STATUTORY STOCK OPTIONS. Non-Statutory Stock Options shall be
subject to the following terms and conditions in addition to those
set forth in Section 6(a) above:
i) OPTION PRICE. The option price for Non-Statutory Stock Options
shall be determined by the Committee at the time of grant and
may be any amount determined by the Committee.
ii) DURATION OF OPTIONS. Non-Statutory Stock Options granted under
the Plan shall continue in effect for the period fixed by the
Committee.
(d) EXERCISE OF OPTIONS. Except as provided in paragraph 6(f) or as
determined by the Committee, no option granted under the Plan may
be exercised unless at the time of such exercise the optionee is
employed by or in the service of the Company or a subsidiary
thereof and shall have been so employed or provided such service
continuously since the date such option was granted. Absence on
leave or on account of illness or disability under rules
established by the Committee shall not, however, be deemed an
interruption of continuous service for this purpose. Unless
otherwise determined by the Committee, vesting of options shall not
continue during an absence on leave (including an extended illness)
or on account of disability. Except as provided in paragraphs 6(f)
and 7, options granted under the Plan may be exercised from time to
time over the period stated in each option in such amounts and at
such times as shall be prescribed by the Committee, provided that
options shall not be exercised for fractional shares. Unless
otherwise determined by the Committee, if the optionee does not
exercise an option in any one year with respect to the full number
of shares to which the optionee is entitled in that year, the
optionee's rights shall be cumulative and the optionee may purchase
those shares in any subsequent year during the term of the option.
(e) NONTRANSFERABILITY. Except as provided below, each stock option
granted under the Plan by its terms shall be nonassignable and
nontransferable by the optionee, either voluntarily or by operation
of law, and each option by its terms shall be exercisable during
the optionee's lifetime only by the optionee. A stock option may be
transferred by will or by the laws of descent and distribution of
the state or country of the optionee's domicile at the time of
death. The Committee may, in its discretion, authorize all or a
portion of an option to be on terms which permit transfer by the
optionee to (A) the spouse, children or grandchildren of the
optionee, including stepchildren and adopted children ("Immediate
Family Members"), (B) a trust or trusts for the exclusive benefit
of Immediate Family Members, or (C) a partnership or limited
liability company in which Immediate Family Members are the only
partners or members, provided that (X) there may be no
consideration for any transfer, (Y) the stock option agreement
pursuant to which the options are granted or an amendment thereto
must expressly provide for transferability in a manner consistent
with this paragraph, and (Z) subsequent transfers of transferred
options shall be prohibited except by will or by the laws of
descent and distribution. Following any transfer, options shall
continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer, provided that for
purposes of paragraphs 6(g) and 7 the term "optionee" shall be
deemed to refer to the transferee. The continued service
requirement of paragraph 6(d) and the events of termination of
service of paragraph 6(f) shall continue to be applied with respect
to the original optionee, and following the termination of
employment or service of the original
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optionee the options shall be exercisable by the transferee only to
the extent, and for the periods specified, and all other references
to employment or service, termination of employment or service,
life or death of the optionee shall continue to be applied with
respect to the original optionee.
(f) TERMINATION OF SERVICE.
i) GENERAL RULE. Unless otherwise determined by the Committee, in
the event the employment or service of the optionee with the
Company or a subsidiary thereof terminates for any reason other
than because of total disability or death as provided in
subparagraphs 6(f)(ii) and (iii) the option may be exercised at
any time prior to the expiration date of the option or the
expiration of 30 days after the date of such termination,
whichever is the shorter period, but only if and to the extent
the optionee was entitled to exercise the option at the date of
such termination.
ii) TERMINATION BECAUSE OF TOTAL DISABILITY. Unless otherwise
determined by the Committee, in the event of the termination of
employment or service because of total disability, the option
may be exercised at any time prior to the expiration date of
the option or the expiration of 12 months after the date of
such termination, whichever is the shorter period, but only if
and to the extent the optionee was entitled to exercise the
option at the date of such termination. The term "total
disability" means a mental or physical impairment which is
expected to result in death or which has lasted or is expected
to last for a continuous period of 12 months or more and which
causes the optionee to be unable, in the opinion of the Company
and two independent physicians, to perform his or her duties as
an employee, director or officer of the Company and to be
engaged in any substantial gainful activity. Total disability
shall be deemed to have occurred on the first day after the
Company and the two independent physicians have furnished their
opinion of total disability to the Company.
iii) TERMINATION BECAUSE OF DEATH. Unless otherwise determined by
the Committee, in the event of the death of an optionee while
employed by or providing service to the Company or a
subsidiary, the option may be exercised at any time prior to
the expiration date of the option or the expiration of
12 months after the date of such death, whichever is the
shorter period, but only if and to the extent the optionee was
entitled to exercise the option at the date of such
termination and only by the person or persons to whom such
optionee's rights under the option shall pass by the
optionee's will or by the laws of descent and distribution of
the state or country of domicile at the time of death.
iv) AMENDMENT OF EXERCISE PERIOD APPLICABLE TO TERMINATION. The
Committee, at the time of grant or at any time thereafter, may
extend the 30-day and 12-month exercise periods specified above
any length of time not later than the original expiration date
of the option, and may increase the portion of an option that
is exercisable, subject to such terms and conditions as the
Committee may determine.
v) FAILURE TO EXERCISE OPTION. To the extent that the option of
any deceased optionee or of any optionee whose employment or
service terminates is not exercised within the applicable
period, all further rights to purchase shares pursuant to such
option shall cease and terminate.
(g) PURCHASE OF SHARES.
i) Unless the Committee determines otherwise, shares may be
acquired pursuant to an option granted under the Plan only upon
receipt by the Company of notice in writing from the optionee of
the optionee's intention to exercise, specifying the number of
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shares as to which the optionee desires to exercise the option,
the date on which the optionee desires to complete the
transaction, and, if required in order to comply with the
Securities Act of 1933, as amended, containing a representation
that it is the optionee's present intention to acquire the
shares for investment and not with a view to distribution.
ii) Unless the Committee determines otherwise, on or before the
date specified for completion of the purchase of shares
pursuant to an option, the optionee must have paid the Company
the full purchase price of such shares in cash (including, with
the consent of the Committee, cash that may be the proceeds of
a loan from the Company) or, with the consent of the Committee,
in whole or in part, in Common Stock of the Company valued at
fair market value, restricted stock, performance units or other
contingent awards denominated in either stock or cash, deferred
compensation credits, promissory notes and other forms of
consideration. The Committee shall make a good faith
determination of the fair market value of Common Stock provided
in payment of the purchase price. If the Common Stock of the
Company is not publicly traded on the date the option is
exercised, the Committee may consider any valuation methods it
deems appropriate and may, but is not required to, obtain one
or more independent appraisals of the Company. No shares shall
be issued until full payment therefor has been made. With the
consent of the Committee, an optionee may request the Company
to apply automatically the shares to be received upon the
exercise of a portion of a stock option (even though stock
certificates have not yet been issued) to satisfy the purchase
price for additional portions of the option.
iii) Each optionee who has exercised an option shall immediately
upon notification of the amount due, if any, pay to the Company
in cash amounts necessary to satisfy any applicable federal,
state and local tax withholding requirements. If additional
withholding is or becomes required beyond any amount deposited
before delivery of the certificates, the optionee shall pay
such amount to the Company on demand. If the optionee fails to
pay the amount demanded, the Company may withhold that amount
from other amounts payable by the Company to the optionee,
including salary, subject to applicable law. With the consent
of the Committee an optionee may satisfy this obligation, in
whole or in part, by having the Company withhold from the
shares to be issued upon the exercise that number of shares
that would satisfy the withholding amount due or by delivering
to the Company Common Stock to satisfy the withholding amount.
iv) Upon the exercise of an option, the number of shares reserved
for issuance under the Plan shall be reduced by the number of
shares issued upon exercise of the option.
7. CHANGES IN CAPITAL STRUCTURE. If the outstanding Common Stock of the
Company is hereafter increased or decreased or changed into or exchanged
for a different number or kind of shares or other securities of the
Company or of another corporation by reason of any reorganization,
merger, consolidation, plan of exchange, recapitalization,
reclassification, stock split-up, combination of shares or dividend
payable in shares, appropriate adjustment shall be made by the Committee
in the number and kind of shares available for awards under the Plan. In
addition, the Committee shall make appropriate adjustment in the number
and kind of shares as to which outstanding options then unexercised,
shall be exercisable, so that the optionee's proportionate interest
before and after the occurrence of the event is maintained.
Notwithstanding the foregoing, the Committee shall have no obligation to
effect any adjustment that would or might result in the issuance of
fractional shares, and any fractional shares resulting from any
adjustment may be disregarded or provided for in any manner determined
by the Committee. Any such adjustments made by the Committee shall be
conclusive. In the event of dissolution of the Company or a
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merger, consolidation or plan of exchange affecting the Company, in lieu
of providing for options or in lieu of having the options continue
unchanged, the Committee may, in its sole discretion, provide a 30-day
period prior to such event during which optionees shall have the right
to exercise options in whole or in part without any limitation on
exercisability and upon the expiration of which 30-day period all
unexercised options shall immediately terminate.
8. AMENDMENT OF PLAN. The Board of Directors may at any time, and from
time to time, modify or amend the Plan in such respects as it shall deem
advisable because of changes in the law while the Plan is in effect or
for any other reason. Except as provided in paragraph 6(d), however, no
change in an award already granted shall be made without the written
consent of the holder of such award.
9. APPROVALS. The obligations of the Company under the Plan are subject to
the approval of state and federal authorities or agencies with
jurisdiction in the matter. The Company will use its best efforts to
take steps required by state or federal law or applicable regulations,
including rules and regulations of the Securities and Exchange
Commission and any stock exchange on which the Company's shares may then
be listed, in connection with the grants under the Plan. The foregoing
notwithstanding, the Company shall not be obligated to issue or deliver
Common Stock under the Plan if such issuance or delivery would violate
applicable state or federal securities laws.
10. EMPLOYMENT AND SERVICE RIGHTS. Nothing in the Plan or any award
pursuant to the Plan shall (i) confer upon any employee any right to be
continued in the employment of the Company or any subsidiary or
interfere in any way with the right of the Company or any subsidiary by
whom such employee is employed to terminate such employee's employment
at any time, for any reason, with or without cause, or to decrease such
employee's compensation or benefits, or (ii) confer upon any person
engaged by the Company any right to be retained or employed by the
Company or to the continuation, extension, renewal, or modification of
any compensation, contract, or arrangement with or by the Company.
11. RIGHTS AS A SHAREHOLDER. The recipient of any award under the Plan
shall have no rights as a shareholder with respect to any Common Stock
until the date of issue to the recipient of a stock certificate for
such shares. Except as otherwise expressly provided in the Plan, no
adjustment shall be made for dividends or other rights for which the
record date occurs prior to the date such stock certificate is issued.
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APPENDIX B
3DSHOPPING.COM
1999 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE OF THE PLAN. 3Dshopping.com (the "COMPANY") believes that
ownership of shares of its common stock by employees of the Company and its
Participating Subsidiaries (hereinafter defined) is desirable as an incentive to
better performance and improvement of profits, and as a means by which employees
may share in the rewards of growth and success. The purpose of the Company's
1999 Employee Stock Purchase Plan (the "PLAN") is to provide a convenient means
by which employees of the Company and Participating Subsidiaries may purchase
the Company's shares through payroll deductions and a method by which the
Company may assist and encourage such employees to become share owners.
2. SHARES RESERVED FOR THE PLAN. There are 2,000,000 shares of the
Company's authorized but unissued or reacquired Common Stock reserved for
purposes of the Plan. The number of shares reserved for the Plan is subject to
adjustment in the event of any stock dividend, stock split, combination of
shares, recapitalization or other change in the outstanding Common Stock of the
Company. The determination of whether an adjustment shall be made and the manner
of any such adjustment shall be made by the Board of Directors of the Company,
which determination shall be conclusive.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Board
of Directors. The Board of Directors may promulgate rules and regulations for
the operation of the Plan, adopt forms for use in connection with the Plan, and
decide any question of interpretation of the Plan or rights arising thereunder.
The Board of Directors may consult with counsel for the Company on any matter
arising under the Plan. All determinations and decisions of the Board of
Directors shall be conclusive. Notwithstanding the foregoing, the Board of
Directors, if it so desires, may delegate to the Compensation Committee of the
Board the authority for general administration of the Plan.
4. ELIGIBLE EMPLOYEES. Except as indicated below, all full-time employees
of the Company and all full-time employees of each of the Company's subsidiary
corporations which is designated by the Board of Directors of the Company as a
participant in the Plan, (such participating subsidiary being hereinafter called
a "PARTICIPATING SUBSIDIARY") are eligible to participate in the Plan. Any
employee who would, after a purchase of shares under an Offering, own or be
deemed (under Section 424(d) of the Internal Revenue Code of 1986, as amended
(the "CODE")) to own stock (including stock subject to any outstanding options
held by the employee) possessing 5 percent or more of the total combined voting
power or value of all classes of stock of the Company or any parent or
subsidiary of the Company, shall be ineligible to participate in the Offering. A
"full-time employee" is one who is in the active service of the Company or a
Participating Subsidiary excluding, however, any employee whose customary
employment is 20 hours or less per week or whose customary employment is for not
more than five months per calendar year.
5. OFFERINGS. The Plan shall be implemented by a series of six-month
offerings ("OFFERINGS"), with a new Offering commencing on the first date of
each January and July and ending on the last date of each June and December,
respectively. The first Offering shall commence on the first January 1 or
July 1 to occur after shareholder approval of the Plan. The first trading day of
each Offering is the "OFFERING DATE" and the last trading day of each Offering
is the "PURCHASE DATE" for the Offering. On each Offering Date, each eligible
employee shall be granted an option under the Plan to purchase shares of Common
Stock on the Purchase Date for the price determined under paragraph 7 of the
Plan exclusively through payroll deductions authorized under paragraph 6 of the
Plan; provided, however, that (a) no option shall permit the purchase of more
than 10,000 shares, and (b) no option may be granted under the Plan that would
allow an employee's right to purchase shares under all stock purchase plans of
the Company and its parents and subsidiaries, to which Section 423 of the Code
applies, to accrue at a rate that exceeds $25,000 of fair market value of shares
(determined at the date of grant) for each calendar year in which such option is
outstanding. For this purpose, the right to purchase shares pursuant to an
option accrues on the first
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Purchase Date following the date on which the option was granted. To the extent
options granted under the Plan are not exercised on the first Purchase Date
following the date the options were granted, the options shall expire and be of
no further force or effect.
6. PARTICIPATION IN THE PLAN.
(a) INITIATING PARTICIPATION. An eligible employee may participate in
the Plan with respect to all or a portion of the shares covered by an option
by filing with the Company, on forms supplied by the Company, a subscription
and payroll deduction authorization. Once filed, a subscription and payroll
deduction authorization shall remain in effect for subsequent Offerings
unless amended or terminated. The payroll deduction authorization will
authorize the employing corporation to make payroll deductions from each of
the participant's regular paychecks during an Offering the participant is
participating in, beginning with the paycheck for the first payroll period
following the payroll period in which the payroll deduction authorization is
filed. Payroll deductions from any paycheck may not exceed 15 percent of the
total compensation payable to the participant for the period covered by the
paycheck. If payroll deductions are made by a Participating Subsidiary, that
corporation will promptly remit the amount of the deductions to the Company.
(b) AMENDING OR TERMINATING PARTICIPATION. After a participant has
begun participating in the Plan by initiating payroll deductions, the
participant may not amend the payroll deduction authorization except for an
amendment effective for the first paycheck following a Purchase Date, but
may terminate participation in the Plan at any time prior to the tenth day
before a Purchase Date by written notice to the Company. A permitted change
in payroll deductions shall be effective for any pay period only if written
notice is received by the Company at least three business days prior to the
payroll effective date published by the Company for that pay period.
Participation in the Plan shall also terminate when a participant ceases to
be an eligible employee for any reason, including death or retirement, more
than 30 days prior to a Purchase Date. A participant may not reinstate
participation in the Plan with respect to a particular Offering after once
terminating participation in the Plan with respect to that Offering. Upon
termination of a participant's participation in the Plan, all amounts
deducted from the participant's pay and not previously used to purchase
shares under the Plan shall be returned to the participant.
7. OPTION PRICE. The price at which shares shall be purchased in an
Offering shall be the lower of (a) 85% of the fair market value of a share of
Common Stock on the Offering Date of the Offering or (b) 85% of the fair market
value of a share of Common Stock on the Purchase Date of the Offering. The fair
market value of a share of Common Stock on any date shall be the closing price
of the Common Stock for such date as reported by the American Stock Exchange or,
if the Common Stock is not reported on the American Stock Exchange, such other
reported value of the Common Stock as shall be specified by the Board of
Directors.
8. SPECIAL RULES FOR NEW EMPLOYEES. If a person becomes a full-time
employee after the Offering Date of an Offering, the employee will be granted an
option having the same terms and conditions as the options granted on the
Offering Date, with the following two modifications: (i) the option will be
granted on the first trading date on or after the date the person becomes a
full-time employee (the "Interim Offering Date"); and (ii) the price at which
shares may be purchased shall be determined in accordance with paragraph 7 above
by substituting "Interim Offering Date" for "Offering Date."
9. PURCHASE OF SHARES. All amounts withheld from the pay of a participant
shall be credited to his or her account under the Plan by the Custodian
appointed under paragraph 10. No interest will be paid on such accounts, unless
otherwise determined by the Board of Directors. On each Purchase Date, the
amount of the account of each participant will be applied to the purchase of
whole shares by such participant from the Company at the price determined under
paragraph 7, except that no shares will be purchased for a participant unless at
all times beginning on the date the option is granted and ending on the date
that is 30 days prior to the next Purchase Date, the participant was an employee
of the Company
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or a Participating Subsidiary. Any cash balance remaining in a participant's
account after a Purchase Date because it was less than the amount required to
purchase a full share shall be retained in the participant's account for the
next Offering Period. Any other amounts in a participant's account after a
Purchase Date will be repaid to the participant.
10. DELIVERY AND CUSTODY OF SHARES. Shares purchased by participants
pursuant to the Plan will be delivered to and held in the custody of such
investment or financial firm (the "CUSTODIAN") as shall be appointed by the
Board of Directors. The Custodian may hold in nominee or street name
certificates for shares purchased pursuant to the Plan, and may commingle shares
in its custody pursuant to the Plan in a single account without identification
as to individual participants. By appropriate instructions to the Custodian on
forms to be provided for that purpose, a participant may from time to time
obtain (a) transfer into the participant's own name of all or part of the shares
held by the Custodian for the participant's account and delivery of such shares
to the participant; (b) transfer of all or part of the shares held for the
participant's account by the Custodian to a regular individual brokerage account
in the participant's own name, either with the firm then acting as Custodian or
with another firm, or (c) sale of all or part of the shares held by the
Custodian for the participant's account at the market price at the time the
order is executed and remittance of the net proceeds of sale to the participant.
Upon termination of participation in the Plan, the participant may elect to have
the shares held by the Custodian for the account of the participant transferred
and delivered in accordance with (a) above, transferred to a brokerage account
in accordance with (b), or sold in accordance with (c).
11. RECORDS AND STATEMENTS. The Custodian will maintain the records of the
Plan. As soon as practicable after each Purchase Date each participant will
receive a statement showing the activity of his account since the preceding
Purchase Date and the balance on the Purchase Date as to both cash and shares.
Participants will be furnished such other reports and statements, and at such
intervals, as the Board of Directors shall determine from time to time.
12. EXPENSE OF THE PLAN. The Company will pay all expenses incident to
operation of the Plan, including costs of record keeping, accounting fees, legal
fees, commissions and issue or transfer taxes on purchases pursuant to the Plan
and on delivery of shares to a participant or into his or her brokerage account.
The Company will not pay expenses, commissions or taxes incurred in connection
with sales of shares by the Custodian at the request of a participant. Expenses
to be paid by a participant will be deducted from the proceeds of sale prior to
remittance.
13. RIGHTS NOT TRANSFERABLE. The right to purchase shares under this Plan
is not transferable by a participant except by will or by the laws of descent
and distribution of the state or country of the participant's domicile at the
time of death, and such right is exercisable during the participant's lifetime
only by the participant.
14. DIVIDENDS AND OTHER DISTRIBUTIONS. Cash dividends and other cash
distributions, if any, on shares held by the Custodian will be paid currently to
the participants entitled thereto unless the Company subsequently adopts a
dividend reinvestment plan and the participant directs that his or her cash
dividends be invested in accordance with such plan. Stock dividends and other
distributions in shares of the Company on shares held by the Custodian shall be
issued to the Custodian and held by it for the account of the respective
participants entitled thereto.
15. VOTING AND SHAREHOLDER COMMUNICATIONS. In connection with voting on
any matter submitted to the shareholders of the Company, the Custodian will
furnish to each participant a proxy authorizing the participant to vote the
shares held by the Custodian for his account. Copies of all general
communications to shareholders of the Company will be sent to participants in
the Plan.
16. TAX WITHHOLDING. Each participant who has purchased shares under the
Plan shall immediately upon notification of the amount due, if any, pay to the
Company in cash amounts necessary to satisfy any applicable federal, state and
local tax withholding determined by the Company to be required. If the
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Company determines that additional withholding is required beyond any amount
deposited at the time of purchase, the participant shall pay such amount to the
Company on demand. If the participant fails to pay the amount demanded, the
Company may withhold that amount from other amounts payable by the Company to
the participant, including salary, subject to applicable law.
17. RESPONSIBILITY AND INDEMNITY. Neither the Company, its Board of
Directors, the Custodian, any Participating Subsidiary, nor any member, officer,
agent, or employee of any of them, shall be liable to any participant under the
Plan for any mistake of judgment or for any omission or wrongful act unless
resulting from gross negligence, willful misconduct or intentional misfeasance.
The Company will indemnify and save harmless its Board of Directors, the
Custodian and any such member, officer, agent or employee against any claim,
loss, liability or expense arising out of the Plan, except such as may result
from the gross negligence, willful misconduct or intentional misfeasance of such
entity or person.
18. CONDITIONS AND APPROVALS. The obligations of the Company under the
Plan shall be subject to compliance with all applicable state and federal laws
and regulations, compliance with the rules of any stock exchange on which the
Company's securities may be listed, and approval of such federal and state
authorities or agencies as may have jurisdiction over the Plan or the Company.
The Company will use its best effort to comply with such laws, regulations and
rules and to obtain such approvals.
19. AMENDMENT OF THE PLAN. The Board of Directors of the Company may from
time to time amend the Plan in any and all respects, except that without the
approval of the shareholders of the Company, the Board of Directors may not
increase the number of shares reserved for the Plan (except for adjustments
authorized in paragraph 2 above), decrease the purchase price of shares offered
pursuant to the Plan, or materially modify the class of employees eligible to
receive options under the Plan.
20. TERMINATION OF THE PLAN. The Plan shall terminate when all of the
shares reserved for purposes of the Plan have been purchased, provided that the
Board of Directors in its sole discretion may at any time terminate the Plan
without any obligation on account of such termination, except as hereinafter in
this paragraph provided. Upon termination of the Plan, the cash and shares, if
any, held in the account of each participant shall forthwith be distributed to
the participant or to the participant's order, provided that if prior to the
termination of the Plan, the Board of Directors and shareholders of the Company
shall have adopted and approved a substantially similar plan, the Board of
Directors may in its discretion determine that the account of each participant
under this Plan shall be carried forward and continued as the account of such
participant under such other plan, subject to the right of any participant to
request distribution of the cash and shares, if any, held for his account.
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3Dshopping.com
PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS, NOVEMBER 18, 1999
The undersigned hereby appoints Lawrence Weisdorn and Robert J.
Vitamante, and each of them, proxies with power of substitution to vote on
behalf of the undersigned all shares that the undersigned may be entitled to
vote at the annual meeting of shareholders of 3Dshopping.com on November 18,
1999 and any adjournments thereof, with all powers that the undersigned would
possess if personally present, with respect to the following:
PLEASE SIGN AND RETURN THIS PROXY
(Continued and to be signed on the other side.)
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FOLD AND DETACH HERE
<PAGE>
Please mark
your votes as [X]
indicated in
this example
1. Election of Directors:
FOR all nominees WITHHOLD AUTHORITY
except as marked [ ] to vote for all [ ]
to the contrary below. nominees listed below.
(INSTRUCTIONS: To withhold authority to vote for any individual, strike a
line through the nominee's name below.)
Robert J. Grant; Donald L. Hejmanowski; Joel F. McIntyre; Lawrence Weisdorn
PLEASE NOTE: ANY SHARES OF STOCK OF 3Dshopping.com HELD IN THE NAME OF
FIDUCIARIES, CUSTODIANS OR BROKERAGE HOUSES FOR THE BENEFIT OF THEIR CLIENTS
MAY ONLY BE VOTED BY THE FIDUCIARY, CUSTODIAN OR BROKERAGE HOUSE ITSELF -- THE
BENEFICIAL OWNER MAY NOT DIRECTLY VOTE OR APPOINT A PROXY TO VOTE THE SHARES
AND MUST INSTRUCT THE PERSON OR ENTITY IN WHOSE NAME THE SHARES ARE HELD HOW
TO VOTE THE SHARES HELD FOR THE BENEFICIAL OWNER. THEREFORE, IF ANY SHARES OF
STOCK OF 3Dshopping.com ARE HELD IN "STREET NAME" BY A BROKERAGE HOUSE, ONLY
THE BROKERAGE HOUSE, AT THE INSTRUCTIONS OF ITS CLIENT, MAY VOTE OR APPOINT A
PROXY TO VOTE THE SHARES.
FOR AGAINST ABSTAIN
2. A proposal to approve the amendments to the
3Dshopping.com 1999 Stock Option Plan. [ ] [ ] [ ]
3. A proposal to adopt the 3Dshopping.com 1999
Employee Stock Purchase Plan. [ ] [ ] [ ]
4. Transaction of any business that properly comes
before the meeting or any adjournments thereof.
A majority of the proxies or substitutes at the
meeting may exercise all the powers granted
hereby.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED ON THIS CARD,
BUT IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR APPROVAL OF (i)
THE ELECTION OF THE NOMINEES FOR DIRECTORS LISTED ON THIS CARD TO SERVE FOR
THE FOLLOWING YEAR AND UNTIL THEIR SUCCESSORS ARE ELECTED, (ii) THE AMENDMENT
OF THE 3Dshopping.com 1999 STOCK OPTION PLAN AND (iii) THE ADOPTION OF THE
3Dshopping.com 1999 EMPLOYEE STOCK PURCHASE PLAN. THE PROXIES MAY VOTE IN
THEIR DISCRETION AS TO OTHER MATTERS THAT MAY COME BEFORE THIS MEETING.
THE ANNUAL MEETING OF SHAREHOLDERS OF 3Dshopping.com WILL BE HELD ON NOVEMBER
18, 1999 AT 10:00 A.M., PACIFIC TIME, AT THE HEADQUARTERS OF 3Dshopping.com
AT 308 WASHINGTON BOULEVARD, MARINA DEL REY, CALIFORNIA.
Shares:_______Signature(s) ________________________________ Dated _______, 1999
Please date and sign as name is imprinted hereon, including designation as
executor, trustee, etc., if applicable. A corporation must sign its name by
the president or other authorized officer.
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FOLD AND DETACH HERE
