<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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:
[X] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
THE HYDROGIENE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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:
-------------------------------------------------------------------------
Notes:
<PAGE>
THE HYDROGIENE CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of The Hydrogiene Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of The
Hydrogiene Corporation (the "Company"), a Florida corporation, will be held on
Monday, May 22, 2000, at 1:00 p.m., local time, at The Monte Carlo Hotel, 3770
Las Vegas Boulevard South, Las Vegas, Nevada 89109, for the following purposes:
1. To elect seven (7) directors to serve for the ensuing year and until
their successors are duly elected and qualified.
2. To approve a change in the Company's state of incorporation from
Florida to Nevada by means of a merger of the Company with and into a newly
formed Nevada corporation.
3. To approve a change in the Company's name from "The Hydrogiene
Corporation" to "Synergie Holdings."
4. To approve an increase in the number of authorized shares of Common
Stock of the Company from fifty million (50,000,000) to two hundred fifty
million (250,000,000).
5. To approve the form of indemnification agreement to be entered into
between the Company and its directors and executive officers when the change in
the Company's state of incorporation, proposed above, occurs.
6. To approve the adoption of the Company's 2000 Stock Option Plan and
reserving shares for the issuance of shares thereunder equal to 15% of the
authorized shares. If the increase in authorized shares is approved, then there
will be 37,500,000 shares reserved, and if the increase is not approved, then
there will be 7,500,000 shares reserved.
7. To ratify the appointment of Weinberg & Company as independent
accountants of the Company for the fiscal year ending December 31, 2000.
8. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Only shareholders of record at the close of
business on April 19, 2000 are entitled to notice of and to vote at the meeting
and any adjournment thereof.
<PAGE>
All shareholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign and return the enclosed proxy card as promptly as possible in the postage-
paid envelope enclosed for that purpose. Any shareholder attending the meeting
may vote in person even if he or she has already returned a proxy.
Sincerely,
Karl J.Rolls, Jr.
Secretary
San Diego, California
May ___, 2000
2
<PAGE>
THE HYDROGIENE CORPORATION
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of The Hydrogiene Corporation
(the "Company"), for use at the Annual Meeting of Shareholders to be held on
Monday, May 22, 2000, at 1:00 p.m., local time, or at any adjournment or
postponement thereof, for the purposes set forth herein and in the accompanying
Notice of Annual Meeting of Shareholders. The Annual Meeting will be held at The
Monte Carlo Hotel, 3770 Las Vegas Boulevard South, Las Vegas, Nevada 89109. The
Company's telephone number is (858) 675-8033.
These proxy solicitation materials were mailed on or about May ___, 2000 to
all shareholders of record at the close of business on April 19, 2000 (the
"Record Date"). A copy of the Company's Annual Report to Shareholders for the
year ended December 31, 1999 ("fiscal 1999"), including financial statements,
was sent to the Shareholders prior to or concurrently with this Proxy Statement.
RECORD DATE; OUTSTANDING SHARES
Shareholders of record at the close of business on the Record Date are
entitled to notice of and to vote at the Annual Meeting and any adjournment
thereof. At the Record Date, 45,801,385 shares of the Company's Common Stock
were issued and outstanding.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company (Attention:
Karl J.Rolls, Jr., Secretary) a written notice of revocation or a duly executed
proxy bearing a later date, or by attending the meeting and voting in person.
VOTING AND SOLICITATION
On all matters each share has one vote.
The cost of soliciting proxies will be borne by the Company. In addition,
the Company may reimburse brokerage firms and other persons representing
beneficial owners of shares for expenses incurred in forwarding solicitation
materials to such beneficial owners. Proxies may be solicited by
3
<PAGE>
certain of the Company's directors, officers and regular employees, without
additional compensation, personally or by telephone, telegraph or letter.
SPECIAL CONSIDERATIONS
This proxy statement submits for shareholder approval a number of proposed
changes in the Bylaws of the Company. As discussed more fully in PROPOSALS TWO
through FOUR, the Company proposes to change its state of incorporation from
Florida to Nevada by means of a merger into a Nevada corporation to be formed.
Simultaneous with this reincorporation, assuming shareholder approval of the
several proposals in this proxy statement, the Company intends to effect certain
changes in its Articles of Incorporation and Bylaws which could be viewed as
having negative consequences on shareholder rights but which the Board of
Directors believes to be in the best interest of the Company. Specifically, the
Company intends to make the following changes in connection with its
reincorporation in Nevada: the elimination of the right of shareholders to call
special meetings and to act by written consent, the addition of advance notice
requirements for director nominees and business items proposed by the
shareholders, and an increase in the number of authorized shares of Common Stock
of the Company (See PROPOSALS TWO through FOUR for a full explanation of the
proposed changes.)
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR ANNUAL MEETING FOR FISCAL YEAR
2000
Proposals of shareholders of the Company which are to be presented by such
shareholders at the Company's Annual Meeting for the year ended December 31,
2000 ("fiscal 2000") must be received by the Company no later than September 30,
2000 in order that they may be included in the Proxy Statement and form of proxy
relating to that meeting.
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
A Board of seven (7) directors is to be elected at this meeting. Unless
otherwise instructed, the proxyholders will vote the proxies received by them
for the Company's nominees named below. All of the nominees are presently
directors of the Company. In the event any nominee of the Company is unable or
declines to serve as a director at the time of the Annual Meeting, the proxies
will be voted for any nominee who shall be designated by the present Board of
Directors to fill the vacancy. In the event additional persons are nominated for
election as directors, the proxyholders intend to vote all proxies received by
them in such a manner as will ensure the election of as many of the nominees
listed below as possible, and, in such event, the specific nominees to be voted
for will be determined by the proxyholders. The Company is not aware of any
nominee who will be unable or will decline to serve as a director. The term of
office of each person elected as a director
4
<PAGE>
will continue until the next Annual Meeting of Shareholders or until his
successor has been elected and qualified.
The names of the nominees, and certain information about them, are set
forth below:
<TABLE>
<CAPTION>
PRINCIPAL DIRECTOR
NAME OF NOMINEE AGE OCCUPATION SINCE
<S> <C> <C> <C>
Charles W. Kallmann 72 Chief Executive Officer, 1995
Director of the Company
Michael Brette 49 President of BST International; 1998
Chairman, Capital Asset Management;
Vice Pres. & Director of the Company
John Aguero 53 President & Director of the Company; 2000
President & CEO of National Brokers
& Distributors
Arden E. Roney 63 Business Consultant; Co-Founder of 1998
Nu-Skin
George J. Grosek 43 Director of Euro-American Credit & 2000
Trade
Norman Arikawa 56 Chief Accountant, Port of Los Angeles 2000
Joseph Cerbone 61 President, National Capital Companies; 2000
Chairman, Travis Morgan Securities
</TABLE>
Except as set forth below, each of the nominees has been engaged in his
principal occupation set forth above during the past five (5) years. There is no
family relationship between any director or executive officer of the Company.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of eleven (11) regular
meetings.
During fiscal 1999, each director attended one hundred percent (100%) of
the meetings of the Board of Directors.
During fiscal 1999 the Company did not have any committees of the Board of
Directors. The Company intends to establish both an Audit Committee and a
Compensation Committee during fiscal 2000.
5
<PAGE>
DIRECTOR COMPENSATION
During 1999, no directors fees were paid. In April 2000, the Board of
Directors approved a policy to pay directors who are not employees of the
Company ("Outside Directors") for each Board meeting attended. Members of the
Audit Committee will be paid a fee of $2,500 per year for their service.
Outside Directors may also receive consulting fees for projects completed at the
request of management. Employee directors are not compensated for their service
on the Board of Directors or on committees of the Board.
REQUIRED VOTE
Each shareholder voting in the election of directors may cast one vote for
each share held (for or against each director). Votes withheld from any
director are counted for purposes of determining the presence or absence of a
quorum but have no legal effect under Florida law. Abstentions and shares held
by brokers that are present but not voted, because the brokers were prohibited
from exercising discretionary authority ("broker non-votes"), will be counted as
present for purposes of determining the presence or absence of a quorum.
MANAGEMENT RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED ABOVE.
PROPOSAL TWO
REINCORPORATION IN NEVADA
INTRODUCTION
For the reasons set forth below, the Board of Directors believes that the
best interests of the Company and its shareholders will be served by changing
the state of incorporation of the Company from Florida to Nevada (the
"Reincorporation Proposal," the "Proposed Reincorporation" or the "Merger").
SHAREHOLDERS ARE URGED TO READ CAREFULLY THE FOLLOWING SECTIONS OF THIS PROXY
STATEMENT, INCLUDING THE RELATED EXHIBITS REFERENCED BELOW AND ATTACHED HERETO,
BEFORE VOTING ON THE REINCORPORATION PROPOSAL. Throughout the Proxy Statement,
the term the "Company" refers to the existing Florida corporation ("The
Hydrogiene Corporation") and the term "Synergie Holdings" refers to the new
Nevada corporation to be formed, which is the proposed successor to the Company.
PURPOSE FOR PROPOSED REINCORPORATION
The primary purpose for reincorporating in Nevada is that the corporate tax
and related fees that the Company pays as a Florida corporation, and the
corporate tax and related fees that the Company will pay based upon its
increased capitalization are significantly higher than the comparable fees for a
Nevada corporation. Additionally, after considering the advantages and
6
<PAGE>
disadvantages of the Reincorporation Proposal, including the differences between
Florida Law and Nevada Law, the Board of Directors concluded that the benefits
of being incorporated in Nevada outweigh the benefits of remaining in Florida,
in light of the detriments of remaining in Florida, including the continuing
expense of Florida's annual corporate tax. The Board of Directors of the Company
believes that the best interests of the Company and its shareholders will be
served by changing the Company's state of incorporation from Florida to Nevada.
See "Comparison of Shareholder Rights" and "Possible Disadvantages of the
Reincorporation Proposal."
The Reincorporation Proposal will be effected by merging the Company into
Synergie Holdings. Upon completion of the merger, the Company will cease to
exist and Synergie Holdings will continue to operate the business of the
Company. This discussion assumes that shareholder approval of the Company's
name is obtained pursuant to PROPOSAL THREE - Name Change. If shareholder
approval of the Company's name change is not obtained but the Reincorporation
Proposal is approved by the shareholders, the Company will cease to exist and
the business of the Company will be carried on by the Nevada corporation using
the name The Hydrogiene Corporation.
Pursuant to the Agreement and Plan of Merger, a copy of which is attached
hereto as Exhibit A (the "Merger Agreement"), each outstanding share of the
Company's Common Stock will automatically be converted into one share of
Synergie Holdings Common Stock, $.0001 par value, upon the effective date of the
merger. Each stock certificate representing issued and outstanding shares of the
Company's Common Stock will continue to represent the same number of shares of
Common Stock of Synergie Holdings. IT WILL NOT BE NECESSARY FOR SHAREHOLDERS TO
EXCHANGE THEIR EXISTING STOCK CERTIFICATES FOR STOCK CERTIFICATES OF SYNERGIE
HOLDINGS. However, shareholders may exchange their certificates if they so
choose. The Common Stock of the Company is listed for trading on the OTC
Bulletin Board, and after the merger Synergie Holdings's Common Stock will
continue to be traded on the OTC Bulletin Board without interruption, under the
same symbol ("HICS") as the shares of the Company Common Stock are traded under
such system prior to the merger.
Under Florida law, the affirmative vote of a majority of the outstanding
shares of Common Stock of the Company is required for approval of the Merger
Agreement and the other terms of the Proposed Reincorporation. See "Vote
Required for the Reincorporation Proposal." The Proposed Reincorporation has
been unanimously approved by the Company's Board of Directors. If approved by
the shareholders, it is anticipated that the Merger will become effective as
soon as practicable (the "Effective Date") following the Annual Meeting of
Shareholders. However, pursuant to the Merger Agreement, the Merger may be
abandoned or the Merger Agreement may be amended by the Board of Directors
(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 of the Proposed Reincorporation if, in the opinion
of the Board of Directors, circumstances arise which make it inadvisable to
proceed under the original terms of the Merger Agreement. Shareholders of the
Company will have dissenters' rights of appraisal with respect to the Merger if
they comply with the provisions of Sections 607.1301, 607.1302 and 607.1320 of
the Florida Business Corporation Act which are attached to this Proxy Statement
as Exhibit E. See "Dissenters' Rights of Appraisal for the Reincorporation
Proposal."
7
<PAGE>
The discussion set forth below is qualified in its entirety by reference to
the Merger Agreement, the Articles of Incorporation of Synergie Holdings (the
"Articles of Incorporation") and the Bylaws of Synergie Holdings, copies of
which are attached hereto as Exhibits A, B and C, respectively.
APPROVAL BY SHAREHOLDERS OF THE PROPOSED REINCORPORATION WILL CONSTITUTE
APPROVAL OF THE MERGER AGREEMENT, THE Articles of Incorporation AND THE BYLAWS
OF SYNERGIE HOLDINGS AND ALL PROVISIONS THEREOF EXCEPT WITH RESPECT TO MORE
MATTERS SET FORTH IN PROPOSALS THREE AND FOUR TO BE SEPARATELY VOTED UPON BY THE
SHAREHOLDERS.
VOTE REQUIRED FOR THE REINCORPORATION PROPOSAL
Approval of the Reincorporation Proposal, which will also constitute
approval of (i) the Merger Agreement, (ii) the Articles of Incorporation and the
Bylaws of Synergie Holdings (except those provisions regarding the increase in
the number of authorized shares which have been submitted for separate
shareholder approval in Proposal Four will require the affirmative vote of the
majority of outstanding shares of the Company on the Record Date entitled to
vote on the proposal. In addition, the affirmative votes must constitute at
least a majority of the required quorum, which quorum is a majority of the
shares outstanding on the Record Date. Votes that are cast against the proposal
will be counted for purposes of determining (x) the presence or absence of a
quorum and (y) the total number of negative votes cast with respect to the
proposal. Abstentions and shares held by brokers that are present but not
voted, because the brokers were prohibited from exercising discretionary
authority ("broker non-votes"), will be counted as present for purposes of
determining the presence or absence of a quorum.
THE BOARD RECOMMENDS A VOTE "FOR" THE PROPOSED REINCORPORATION IN NEVADA.
THE EFFECT OF AN ABSTENTION IS THE SAME AS THAT OF A VOTE AGAINST THE
REINCORPORATION PROPOSAL.
PRINCIPAL REASONS FOR THE PROPOSED REINCORPORATION
Reduced Corporate Fees and Taxes. One of the reasons for reincorporating
in Nevada is that the corporate tax and related fees that the Company pays as a
Florida corporation, and the corporate tax and related fees that the Company
will pay based upon its increased capitalization are significantly higher than
the comparable fees for a Nevada Corporation.
Prominence, Predictability and Flexibility of Nevada Law. For many years
Nevada 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 responsive to the legal and
business needs of corporations organized under its laws. Many corporations have
chosen Nevada initially as a state of incorporation or have subsequently changed
corporate domicile to Nevada in a manner similar to that proposed by the
Company.
8
<PAGE>
Increased Ability to Attract and Retain Qualified Directors. Both Florida
and Nevada law permit a corporation to include a provision in its charter
document which reduces or limits the monetary liability of directors for
breaches of fiduciary duty in certain circumstances. The increasing frequency of
claims and litigation directed against directors and officers has greatly
expanded the risks facing directors and officers of corporations in exercising
their respective duties. The amount of time and money required to respond to
such claims and to defend such litigation can be substantial. It is the
Company's desire to reduce these risks to its directors and officers and to
limit situations in which monetary damages can be recovered against directors so
that the Company may continue to attract and retain qualified directors who
otherwise might be unwilling to serve because of the risks involved. The
Company believes that, in general, Nevada law provides greater protection to
directors and officers than Florida law.
NO CHANGE IN THE BOARD MEMBERS, BUSINESS, MANAGEMENT, EMPLOYEE PLANS OR LOCATION
OF PRINCIPAL FACILITIES OF THE COMPANY
The Reincorporation Proposal will effect a change only in the legal
domicile of the Company and certain other changes of a legal nature, certain of
which are described in this Proxy Statement. The Proposed Reincorporation will
NOT result in any change in the business, management, location of the principal
facilities of the Company, fiscal year, assets or liabilities (except to the
extent of legal and other costs of effecting the Reincorporation). The seven (7)
directors who are elected at the Annual Meeting of Shareholders will become the
directors of Synergie Holdings. All employee benefit plans of the Company will
be assumed and continued by Synergie Holdings and each option or right issued
pursuant to such plans will automatically be converted into an option or right
to purchase the same number of shares of Synergie Holdings 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 Reincorporation Proposal will also
constitute approval of the assumption of these plans by Synergie Holdings.
Employee benefit arrangements of the Company will also be continued by Synergie
Holdings upon the terms and subject to the conditions currently in effect. As
noted above, after the Reincorporation the shares of Common Stock of Synergie
Holdings will continue to be traded, without interruption, on the OTC Bulletin
Board and under the same symbol ("HICS") as the shares of Common Stock of the
Company are traded under prior to the Reincorporation.
Prior to the Effective Date of the Reincorporation, the Company will obtain
any requisite consents to such Reincorporation from parties with whom it may
have contractual arrangements. As a result, the Company's rights and obligations
under such contractual arrangements will continue and be assumed by Synergie
Holdings.
ANTI-TAKEOVER IMPLICATIONS
Nevada, like many other states, permits a corporation to adopt a number of
measures through amendment of the corporate Articles of Incorporation or bylaws
or otherwise, which measures are designed to reduce a corporation's
vulnerability to unsolicited takeover attempts. The Reincorporation Proposal is
not being proposed in order to prevent such a change in control, nor is
9
<PAGE>
it in response to any present attempt known to the Board of Directors to acquire
control of the Company or to obtain representation on the Board of Directors.
In the discharge of its fiduciary obligations to its shareholders, the
Board of Directors has evaluated the Company's vulnerability to potential
unsolicited bidders. In the course of such evaluation, the Board of Directors of
the Company has considered or may consider in the future certain defensive
strategies designed to enhance the Board's ability to negotiate with an
unsolicited bidder. These strategies include, but are not limited to, the
adoption of a shareholder rights plan and severance agreements for its
management and key employees which become effective upon the occurrence of a
change in control of the Company. With the exception of certain provisions in
the Employment Agreement with the Company's president, none of these measures
has been implemented by the Company under Florida law and none has been provided
for by Synergie Holdings under Nevada law.
Certain effects of the Reincorporation Proposal may be considered to have
anti-takeover implications. The Nevada Revised Statutes, from which Synergie
Holdings does NOT intend to opt out, restricts certain "business combinations"
with "interested stockholders" unless the Board of Directors approves the
business combination in advance of the time the person becomes an interested
shareholder. See "Comparison of Shareholder Rights." Likewise, the elimination
of the right of shareholders controlling at least ten percent (10%) of the
voting shares to call a special meeting of the shareholders could be seen as
promoting an anti-takeover effect by allowing shareholder action only at a
meeting properly called by the Board of Directors or an annual meeting. In
addition, the elimination of the ability of a majority of shareholders to act by
written consent also could be viewed as having an anti-takeover effect in that
it can make it more difficult for shareholders to coordinate action outside a
duly called annual or special meeting. Moreover, the increased number of
authorized but unissued shares (see PROPOSAL FOUR -- Increase in Authorized
Shares) may be used by the Board of Directors to create impediments to a
takeover attempt. For a detailed discussion of the changes which will be
implemented as part of the Proposed Reincorporation, see "The Charters and
Bylaws of the Company and Synergie Holdings." For a discussion of these and
other differences between the laws of Florida and Nevada, see "Comparison of
Shareholder Rights."
The Board of Directors believes that unsolicited takeover attempts may be
unfair or disadvantageous to the Company and its shareholders because: (i) a
non-negotiated takeover bid may be timed to take advantage of temporarily
depressed stock prices; (ii) a non-negotiated takeover bid may be designed to
foreclose or minimize the possibility of more favorable competing bids or
alternative transactions; (iii) a non-negotiated takeover bid may involve the
acquisition of only a controlling interest in the corporation's stock, without
affording all shareholders the opportunity to receive the same economic
benefits; and (iv) certain of the Company's contractual arrangements provide
that they may not be assigned pursuant to a transaction which results in a
"change of control" of the Company without the prior written consent of the
licensor or other contracting party.
By contrast, in a transaction in which an acquiror must negotiate with an
independent board of directors, the board can and should take account of the
underlying and long-term values of the Company's business, technology and other
assets, the possibilities for alternative transactions on
10
<PAGE>
more favorable terms, possible advantages from a tax-free reorganization,
anticipated favorable developments in the Company's business not yet reflected
in the stock price and equality of treatment of all shareholders.
Despite the belief of the Board of Directors as to the benefits to
shareholders of the Reincorporation Proposal, it may be disadvantageous to the
extent that it has the effect of discouraging a future takeover attempt which is
not approved by the Board of Directors, but which a majority of the shareholders
may deem to be in their best interests or in which shareholders may receive a
substantial premium for their shares over the then current market value or over
their cost basis in such shares. As a result of such effects of the
Reincorporation Proposal, shareholders who might wish to participate in a tender
offer may not have an opportunity to do so. In addition, to the extent that
such provisions enable the Board of Directors to resist a takeover or a change
in control of the Company, they could make it more difficult to change the
existing Board of Directors and management.
THE CHARTERS AND BYLAWS OF THE COMPANY AND SYNERGIE HOLDINGS
The provisions of the Synergie Holdings Articles of Incorporation and
Bylaws are similar to the Company Articles of Incorporation and Bylaws in many
respects. However, the Reincorporation Proposal includes the implementation of
certain provisions in the Synergie Holdings Articles of Incorporation and Bylaws
which alter the rights of shareholders and the powers of management. These
provisions have anti-takeover implications as described in this Proxy Statement.
Approval by Shareholders of the Proposed Reincorporation will constitute an
approval of the inclusion in the Synergie Holdings Articles of Incorporation and
Bylaws of the provisions described below. In addition, Synergie Holdings could
implement certain other changes by amendment of its Articles of Incorporation or
Bylaws. For a discussion of such changes, see "Comparison of Shareholder
Rights." This discussion of the Articles of Incorporation and Bylaws of
Synergie Holdings is qualified by reference to Exhibits B and C hereto,
respectively.
The Articles of Incorporation of the Company currently authorize the
Company to issue up to fifty million (50,000,000) shares of Common Stock, $.0001
par value, and fifty million (50,000,000) shares of Preferred Stock, $.0001 par
value. In the event that the proposed increase in the number of authorized
shares of Common Stock (see PROPOSAL FOUR -- Increase in Authorized Shares of
Common Stock) receives the requisite votes for shareholder approval and that the
Reincorporation proposed herein is effected, the Articles of Incorporation of
Synergie Holdings will provide that such company will have two hundred fifty
million (250,000,000) authorized shares of Common Stock, $.0001 par value. In
the event that only the Reincorporation Proposal but not the increase in the
number of authorized shares is approved, Synergie Holdings' Articles of
Incorporation will provide for the authorization to issue up to fifty million
(50,000,000) shares of Common Stock, $.0001 par value. Synergie Holdings'
Articles of Incorporation will not authorize the issuance of any Preferred
Stock.
MONETARY LIABILITY OF DIRECTORS AND OFFICERS
11
<PAGE>
The Articles of Incorporation of the Company and the Articles of
Incorporation of Synergie Holdings both provide for the elimination of personal
monetary liability of directors and officers to the fullest extent permissible
under law. In addition, Synergie Holdings proposes to enter into
indemnification agreements with the directors and executive officers after the
Proposed Reincorporation. See PROPOSAL FIVE "APPROVAL OF FORM OF
INDEMNIFICATION AGREEMENT."
SIZE OF THE BOARD OF DIRECTORS
The Articles of Incorporation and the Bylaws of Synergie Holdings provide
for a Board of Directors consisting of one (1) to fifteen (15) directors with
the exact number to be set by the Board of Directors. Until changed, the number
of directors of Synergie Holdings will be set at seven (7) directors. The
Bylaws of the Company provide for a Board of Directors consisting of not less
than one (1) nor more than seven (7) directors. The exact number of members of
the Board of Directors of the Company is presently set at seven (7) members.
Under Florida law, although changes in the number of directors, in general, must
be approved by a majority of the outstanding shares, the Board of Directors may
fix the exact number of directors within a stated range set forth in the
articles of incorporation or bylaws, if the stated ranges have been approved by
the shareholders. Nevada law permits a corporation to provide in its Articles
of Incorporation or in its Bylaws for a fixed number of directors or a variable
number of directors within a fixed minimum and maximum, and for the manner in
which the number of directors may be increased or decreased within the range.
Following the Proposed Reincorporation, the Board of Directors of Synergie
Holdings could change the size of the Board of Directors from seven directors to
a number within the range specified in the Articles of Incorporation and the
Bylaws without further stockholder approval. If the Reincorporation Proposal is
approved, the seven directors of the Company who are elected at the Annual
Meeting of Shareholders will continue as the seven directors of Synergie
Holdings after the Proposed Reincorporation is consummated and until their
successors have been duly elected and qualified.
POWER TO CALL SPECIAL SHAREHOLDERS' MEETINGS
Under Florida law, a special meeting of shareholders may be called by the
Board of Directors, the Chairman of the Board, the President, the holders of
shares entitled to cast not less than ten percent (10%) of the votes at such
meeting and such additional persons as are authorized by the articles of
incorporation or the bylaws. The Company's Bylaws permit a special meeting of
shareholders to be called by the President, the Board of Directors, or the
shareholders holding not less than ten percent (10%) of the voting power of the
Company. Under Nevada law, a special meeting of stockholders may be called by
the Board of Directors. The Bylaws of Synergie Holdings currently authorize the
Board of Directors to call a special meeting of stockholders. Therefore, after
the Proposed Reincorporation, stockholders (regardless of percentage holding)
will not be entitled to call special meetings.
FILLING VACANCIES ON THE BOARD OF DIRECTORS
12
<PAGE>
Under Florida law, any vacancy on the board of directors including one
created by removal of a director may be filled by the Board. A vacancy may be
filled by a majority of the remaining directors then in office, or by a sole
remaining director or by the shareholders, unless the Articles of Incorporation
provide otherwise. Under Nevada law, vacancies and newly created directorships
may be filled by a majority of the directors then in office (even though less
than a quorum) or by a sole remaining director, unless otherwise provided in the
Articles of incorporation.
NOMINATIONS OF DIRECTOR CANDIDATES AND INTRODUCTION OF BUSINESS AT SHAREHOLDER
MEETINGS
The Bylaws of Synergie Holdings establish an advance notice procedure with
regard to the nomination, other than by or at the direction of the Board of
Directors, of candidates for election as directors (the "Nomination Procedure")
and with regard to certain matters to be brought before an annual meeting or
special meeting of stockholders (the "Business Procedure").
The Nomination Procedure provides that only persons nominated by or at the
direction of the Board of Directors or by a stockholder who has given timely
written notice to the Secretary of the Company prior to the meeting, will be
eligible for election as directors. The Business Procedure provides that at an
annual or special meeting, and subject to any other applicable requirements,
only such business may be conducted as has been brought before the meeting by or
at the direction of the Board of Directors or by a stockholder who has given
timely written notice to the Secretary of the Company of such stockholder's
intention to bring such business before the meeting. In all cases, to be timely,
notice must be received by the Company not less than one hundred fifty (150)
days prior to the meeting (or if fewer than one hundred (100) days notice or
prior public disclosure of the meeting date is given or made to stockholders,
not later than the tenth day following the day on which such notice was mailed
or such public disclosure was made).
Under the Nomination Procedure, a stockholder's notice to the Company must
contain certain information about the nominee, including name, address, the
consent of the nominee to be nominated and such other information as would be
required to be included in a proxy statement soliciting proxies for the election
of the proposed nominee, and certain information about the stockholder proposing
to nominate that person, including name, address, a representation that the
stockholder is a holder of record of stock entitled to vote at the meeting and a
description of all arrangements or understandings between the stockholder and
each nominee. Under the Business Procedure, notice relating to the conduct of
business at a meeting other than the nomination of directors must contain
certain information about the business and about the stockholder who proposes to
bring the business before the meeting. If the chairman or other officer
presiding at the meeting determines that a person was not nominated in
accordance with the Nomination Procedure, such person will not be eligible for
election as a director, or if he or she determines that other business was not
properly brought before such meeting in accordance with the Business Procedure,
such business will not be conducted at such meeting. Nothing in the Nomination
Procedure or the Business Procedure will preclude discussion by any stockholder
of any nomination or business properly made or brought before an annual or
special meeting in accordance with the above-described procedures.
13
<PAGE>
By requiring advance notice of nominations by stockholders, the Nomination
Procedure affords the Board of Directors an opportunity to consider the
qualifications of the proposed nominees and, to the extent deemed necessary or
desirable by the Board, to inform the stockholders about such qualifications. By
requiring advance notice of proposed business, the Business Procedure provides
the Board with an opportunity to inform stockholders of any business proposed to
be conducted at a meeting and the Board's position on any such proposal,
enabling stockholders to better determine whether they desire to attend the
meeting or grant a proxy to the Board of Directors as to the disposition of such
business. Although the Synergie Holdings Bylaws do not give the Board any power
to approve or disapprove stockholder nominations for the election of directors
or any other business desired by stockholders to be conducted at a meeting, the
Synergie Holdings Bylaws may have the effect of precluding a nomination for the
election of directors or of precluding any other business at a particular
meeting if the proper procedures are not followed. In addition, the procedures
may discourage or deter a third party from conducting a solicitation of proxies
to elect its own slate of directors or otherwise attempting to obtain control of
the Company, even if the conduct of such business or such attempt might be
beneficial to the Company and its stockholders.
ACTION BY WRITTEN CONSENT OF THE SHAREHOLDERS
Any action by the stockholders must be taken at a duly called annual or
special meeting, according to the Bylaws of Synergie Holdings. Thus, although
the Bylaws of the Company allow shareholder action by written consent, such
action by written consent will no longer be authorized after the Proposed
Reincorporation.
REMOVAL OF DIRECTORS
The Bylaws of Synergie Holdings permit a director to be removed with or
without cause by not less than two-thirds of the outstanding shares then
entitled to vote in an election of directors. Florida law permits the removal
of directors, with or without cause, by a majority of the outstanding shares
then entitled to vote. Thus, because Synergie Holdings' Articles of
Incorporation do not alter the applicability of Nevada law, after the Proposed
Reincorporation it will require the vote of shareholders representing not less
than two-thirds of the voting power of the outstanding shares to remove a
director.
COMPARISON OF SHAREHOLDER RIGHTS
Although the corporate statutes of Nevada and Florida are substantially
similar, certain differences exist. The most significant differences, in the
judgment of the management of the Company, are summarized below. This summary
is not intended to be complete, and shareholders should refer to the Florida
Business Corporation Act (the "Florida Law") and the Nevada Revised Statutes
(the "Nevada Law") to understand how these laws will apply to the Company and
Synergie Holdings.
Classified Board of Directors. The Florida Law permits classification of a
corporation's board of directors into one, two or three classes, with each class
composed of as equal a number of
14
<PAGE>
directors as is possible, if provided for in a corporation;s articles of
incorporation, in its initial bylaws or in subsequent bylaws adopted by a vote
of the shareholders. Neither the current Articles of Incorporation nor the
current Bylaws of the Company provide for multiple classes of directors.
The Nevada Law also permits corporations to classify boards of directors
provided that at least one-fourth of the total number of directors is elected
annually. Since neither the Company nor Synergie Holdings have a classified
board, there will be no difference in shareholders' rights with respect to this
issue.
Cumulative Voting. Cumulative voting for directors entitles shareholders
to cast a number of votes that is equal to the number of voting shares held
multiplied by the number of directors to be elected. Shareholders may cast all
such votes either for one nominee or distribute such votes among up to as many
candidates as there are positions to be filled. Cumulative voting may enable a
minority shareholder or group of shareholders to elect at least one
representative to the board of directors where such shareholders would not
otherwise be able to elect any directors.
Under Florida Law, cumulative voting is not available unless provided in
the corporation's articles of incorporation. The current Articles of
Incorporation of the Company do not permit cumulative voting. The Nevada Law
permits cumulative voting in the election of directors if provided in the
Articles of Incorporation and as long as certain procedures are followed. The
new Articles of Incorporation of Synergie Holdings will not permit cumulative
voting.
Since neither the Company nor Synergie Holdings utilize cumulative voting,
there will be no significant difference in shareholders' rights with respect to
this issue.
Removal of Directors. The Florida Law provides that shareholders may
remove directors with or without cause at a meeting expressly called for that
purpose by a vote of the holders of a majority of shares entitled to vote at an
election of directors, unless the corporation's articles of incorporation
provide that directors may be removed only for cause. If a director is elected
by a voting group, only shareholders of that voting group may take part in the
vote to remove the director. A director may be removed only if the number of
votes cast in favor of removal exceeds the number of votes cast against removal.
However, in the event directors are elected by cumulative voting, directors may
not be removed if the number of votes sufficient to elect the director under
cumulative voting is voted against such removal.
None of the directors of the Company are elected by a voting group and
cumulative voting is not permitted by the Articles of Incorporation of the
Company. The Articles of Incorporation of the Company do not contain a
provision stating that directors may only be removed for cause. However, the
Company's Bylaws specifically provide that the directors may be removed with or
without cause by the shareholders.
Under Nevada Law, a director of a corporation may be removed with or
without cause only with the approval of at least two-thirds of the voting power
of the outstanding shares entitled to vote. In addition, under the Nevada Law,
the Articles of Incorporation may require the concurrence of
15
<PAGE>
more than two-thirds of the voting power of the outstanding shares entitled to
vote to remove a director in office.
If a director is elected by a voting group, only shareholders of that
voting group may take part in the vote to remove the director. In such case, a
director of a corporation may be removed with or without cause only with the
approval of at least two-thirds of the voting power of the voting group.
Under Nevada Law, in the event directors are elected by cumulative voting,
any director or directors who constitute fewer than all of the incumbent
directors may not be removed from office except upon the vote of shareholders
owning sufficient shares to prevent each director's election under commutative
voting. None of the directors of Synergie Holdings will be elected by a voting
group and cumulative voting is not permitted by the Articles of Incorporation of
Synergie Holdings.
Therefore, it will be more difficult under Nevada Law to remove a director
from office because it will require the voting power of two-thirds of the
outstanding shares instead of a simple majority required under Florida Law.
Vacancies on the Board of Directors. Under the Florida Law, subject to the
rights, if any, of any series of preferred stock to elect directors and to fill
vacancies on the board of directors, vacancies on the board of directors will be
filled by the affirmative vote of a majority of the remaining directors then in
office, even if less than a quorum or by the shareholders, unless the articles
of incorporation provide otherwise. The Articles of incorporation of the
Company do not provide otherwise. Any director so appointed under Florida Law
will hold office until the next shareholders' meeting at which directors are
elected.
Similarly, the Nevada Law provides that vacancies may be filled by a
majority of the remaining directors, though less than a quorum, unless the
articles of incorporation provide otherwise. In addition, the Bylaws of the
Company and Synergie Holdings address the issue of director vacancies in the
same manner. Therefore, the change from Florida Law to Nevada Law will not alter
significantly shareholders' rights with respect to filling vacancies.
Indemnification of Officers and Directors and Advancement of Expenses.
The Florida and Nevada Laws have substantially identical provisions regarding
indemnification by a corporation of its officers, directors, employees and
agents. Both Florida and Nevada Laws generally permit a corporation to
indemnify its officers, directors, employees and agents against liability, if
they acted in good faith and in a manner they 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 their conduct
was unlawful. A similar standard is applicable in derivative actions, except
that indemnification can be made in the event the person seeking indemnification
has been adjudicated liable, for the amount deemed proper, fair and reasonable
by the appropriate court upon application thereto.
16
<PAGE>
Both Florida and Nevada Laws require that to the extent that such officers,
directors, employees and agents have been successful in defense of any
proceeding, they must be indemnified by the corporation against expenses
actually and reasonably incurred in connection therewith.
The Florida Law also provides that, unless a corporation's articles of
incorporation provide otherwise, if a corporation does not so indemnify such
persons, they may seek, and a court may order, indemnification under certain
circumstances even if the board of directors or shareholders of the corporation
have determined that the persons are not entitled to indemnification if it
determines that the director, officer, employee or agent is entitled to
mandatory indemnification, or is entitled to indemnification in view of all the
relevant circumstances, regardless of whether such person met the standard of
conduct required by the Florida Law. Nevada Law does not have a comparable
provision although Nevada Law provides that a court may order a corporation to
provide indemnification to a director, officer, employee or agent to the extent
it deems proper in view of all circumstances.
There is no significant difference in shareholder rights on this issue
because the Company does not have such a provision in its current Bylaws that
would prevent a person from seeking a court order if the board of directors or
shareholders of the corporation have determined that the persons are not
entitled to indemnification.
Florida and Nevada Law differ in their provisions for advancement of
expenses incurred by an officer or director in defending a civil or criminal
action, suit or proceeding. The Florida Law provides that expenses incurred by
an officer or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation in
advance of the final disposition of the action, suit or proceeding upon receipt
of an undertaking by or on behalf of the director or officer to repay the amount
if it is ultimately determined that he or she is not entitled to be indemnified
by the corporation. Thus, the Company has the discretion to decide whether or
not to advance expenses.
Under the Nevada Law, the articles of incorporation, bylaws or an agreement
may provide that the corporation must pay advancements of expenses in advance of
the final disposition of the action, suit or proceedings upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if it
is ultimately determined that he or she is not entitled to be indemnified by the
corporation. Thus, a corporation may have no discretion to decide whether or
not to advance expenses if there is such a provision in the articles of
incorporation, bylaws or an agreement.
There will be a difference in shareholders' rights with respect to this
issue because the new Bylaws for Synergie Holdings will provide for mandatory
advancement of expenses, whereas presently the decision for advancement of
expense is discretionary with the Company, because the Bylaws are silent on the
matter of mandatory advancement of expenses.
Limitation on Personal Liability of Directors. Under Florida Law, a
director is not personally liable for monetary damages to the corporation,
shareholders or any other person for any statement, vote, decision or failure to
act, regarding corporate management or policy, unless (a) the
17
<PAGE>
director breached or failed to perform his duties as a director and (b) such
breach or failure constitutes (1) a violation of criminal law, unless the
director had reasonable cause to believe his conduct was lawful or had no
reasonable cause to believe his conduct was unlawful, (2) a transaction from
which the director derived an improper personal benefit, (3) a circumstance
resulting in an unlawful distribution, (4) in a proceeding by or in the right of
the corporation to procure a judgment in its favor or by or in the right of a
shareholder, conscious disregard for the best interests of the corporation or
willful misconduct, or (5) in a proceeding by or in the right of one other than
the corporation or a shareholder, recklessness or an act or omission committed
in bad faith or with malicious purpose or in a manner exhibiting wanton and
willful disregard of human rights, safety, or property. The current Articles of
Incorporation of the Company limit the liability of directors to the Company to
the fullest extent permitted by law.
While the Nevada Law has a similar provision permitting the adoption of
provisions in the articles of incorporation limiting personal liability, the
Nevada provision differs in two respects. First, the Nevada provision applies
to both directors as well as officers. Second, while the Florida provision
excepts from the limitation on liability the breach of the duty of loyalty, the
Nevada counterpart does not contain this exception. Thus, the Nevada provision
expressly permits a corporation to limit the liability of officers, as well as
directors, and permits limitation of liability arising from a breach of the duty
of loyalty.
The new Articles of Incorporation for Synergie Holdings will limit the
liability of Synergie Holdings' directors and officers. Therefore, the Company
has a narrower limitation on liability, and more parties were potentially liable
to the Company. The Company, however, could determine to indemnify such persons
in its discretion subject to the conditions of the Florida Law.
Dividends. The Florida Law is more restrictive than the Nevada Law with
respect to when dividends may be paid. Under Florida Law, unless otherwise
provided in the articles of incorporation, a corporation may pay distributions,
including repurchases of stock, unless after giving effect to the dividend or
distribution, the corporation would be unable to pay its debts as they become
due in the usual course of business, or if the total assets of the corporation
would be less than the sum of its total liabilities plus the amount needed, if
the corporation were dissolved at the time the distribution was paid, to satisfy
the preferential rights of shareholders whose preferential rights upon
dissolution of the corporation are greater than those of the shareholders
receiving the dividend.
The Nevada Law provides that no distribution (including dividends on, or
redemption or repurchases of, shares of capital stock) may be made if, after
giving effect to such distribution, the corporation would not be able to pay its
debts as they become due in the usual course of business, or, except as
specifically allowed in the articles of incorporation, the corporation's total
assets would be less than the sum of its total liabilities plus the amount that
would be needed at the time of a liquidation to satisfy the preferential rights
of preferred shareholders.
The Articles of Incorporation of Synergie Holdings will not contain a
specific exception to the Nevada Law that prohibits dividends be paid, if at the
time the dividend is paid, the corporation's
18
<PAGE>
total assets would be less than the sum of its total liabilities plus the amount
that would be needed at the time of a liquidation to satisfy the preferential
rights of preferred shareholders. Therefore, there will not be any significant
difference in shareholder rights with respect to dividends.
Amendment to Articles of Incorporation. Both the Florida Law and the
Nevada Law require the approval of the holders of a majority of all outstanding
shares entitled to vote, with each shareholder being entitled to one vote for
each share so held, to approve proposed amendments to a corporation's articles
of incorporation.
Neither state requires shareholder approval for the board of directors of a
corporation to fix the voting powers, designations, preferences, limitations,
restrictions and rights of a class of stock, prior to issuance, provided that
the corporation's organizational documents grant such power to its board of
directors.
The holders of the outstanding shares of a particular class are entitled to
vote as a class on a proposed amendment if the amendment would alter or change
the power, preferences or special rights of one or more series of any class so
as to affect them adversely.
Since both the Florida Law and the Nevada Law require the approval of the
holders of a majority of all outstanding shares entitled to vote to approve an
amendments to the articles of incorporation, there will be no significant
difference in shareholders' rights with respect to this issue.
Special Meetings of Shareholders. The Florida Law permits special meetings
of shareholders to be called by the board of directors or by any other person
authorized in the Articles of Incorporation or bylaws to call a special
shareholder meeting or by written request by the holders of not less than ten
percent of all shares entitled to vote (unless a greater percentage, not to
exceed 50%, is specified in the articles of incorporation). The Nevada Law does
not address the manner in which special meetings of shareholders may be called.
The current Bylaws of the Company provide that a special meeting of
shareholders may be called by the President or the Board of Directors or the
holders of not less than ten percent of all shares entitled to vote. The
Synergie Holdings Bylaws will provide that a special meeting of shareholders may
be called only by the Board of Directors. Thus, after the Reincorporation is
consummated, shareholders of Synergie Holdings will not have the right to call a
special shareholders meeting no matter what percentage of the voting power they
possess.
Actions by Written Consent of Shareholders. The Florida Law and the Nevada
Law both provide that, unless the articles of incorporation provide otherwise,
any action required or permitted to be taken at a meeting of the shareholders
may be taken without a meeting if the holders of outstanding stock, having at
least the minimum number of votes that would be necessary to authorize or take
such action at a meeting, consent to the action in writing. In addition, the
Florida Law requires the corporation to give notice within ten days of the
taking of corporate action without a meeting by less than unanimous written
consent to those shareholders who did not consent in writing.
19
<PAGE>
The Articles of Incorporation of the Company do not contain a provision
restricting action by written consent of the shareholders. However, the new
Articles of Incorporation of Synergie Holdings will contain a provision that
prohibits the shareholders from taking action by written consent. Therefore,
there will be a difference in shareholder rights with respect to action by
written consent of the shareholders.
Shareholder Inspection Rights. The Florida Law grants any shareholder the
right to inspect and to copy for any proper purpose the corporation's stock
ledger, a list of its shareholders, and its other records. A proper purpose is
one reasonably related to such person's interest as a shareholder. Directors
also have the right to examine the corporation's stock ledger, a list of its
shareholders and its other records for a purpose reasonably related to their
positions as directors.
Under Nevada Law a person must have been a shareholder of record for at
least six months in order to have the right to inspect the corporation's stock
ledger. In addition, the Nevada Law provides the right to inspect the
corporation's financial records for a shareholder who owns at least 15% of the
corporation's issued and outstanding shares, or has been authorized in writing
by the holder(s) of at least 15% of the issued and outstanding shares. This
financial record inspection right does not apply to any corporation that
furnishes its stockholders a detailed annual financial statement. Nor does it
apply to any corporation that is listed and traded on any recognized stock
exchange.
Therefore, under Nevada Law there will be a difference in shareholders
rights to inspect the corporation's stock ledger for persons who have been
shareholders of the Company for less than six months. There will not be any
significant difference in shareholder rights, to inspect the corporation's stock
ledger, for persons who have held their shares for more than six months.
Dissolution. Under Florida Law, the board of directors of a corporation
may submit a proposal of voluntary dissolution to the shareholders. The board
of directors must recommend dissolution to the shareholders as part of the
dissolution proposal, unless the board of directors determines that because of a
conflict of interest or other special circumstances it should make no
recommendation and communicates the basis for its determination to the
shareholders. The board of directors may condition the dissolution proposal on
any basis. The shareholders must then approve the voluntary dissolution
proposal by a majority vote of all votes entitled to be cast on that proposal,
unless the articles of incorporation, bylaws adopted by the shareholders or the
board of directors in making the dissolution proposal require a greater vote.
The Articles of Incorporation and Bylaws of the Company are silent on the
matter of dissolution.
Alternatively, under Florida Law, without any action on the part of the
board of directors, shareholders may decide to dissolve a corporation by written
consent. In this case, the action must be approved by a majority vote of all
votes entitled to be cast on that proposal. Within 10 days of obtaining the
written consent of the shareholders, the corporation must notify all other
shareholders
20
<PAGE>
who did not so consent concerning the nature of the action authorized. This
notice is required to be sent to shareholders regardless of whether or not they
were entitled to vote on the action.
Similarly, under Nevada law a board of directors may adopt a resolution
that the corporation be dissolved. The directors must recommend the dissolution
proposal to the shareholders. The corporation must notify each shareholder
entitled to vote on the dissolution proposal and the shareholders entitled to
vote must approve the dissolution by a majority vote, unless the articles of
incorporation or bylaws requires a greater percentage.
The Articles of Incorporation of Synergie Holdings will not contain a
provision requiring a greater percentage than a majority to approve a
dissolution. Thus, there will not be any significant difference in the rights
of shareholders with respect to this issue. Nevertheless, as discussed above
under "Actions by Written Consent of Shareholders," shareholders will not be
permitted to act by written consent. Therefore, the right of shareholders to
dissolve a corporation by written consent will not be permitted under the new
Synergie Holdings' Articles of Incorporation or Bylaws.
Shareholder Vote for Mergers and Other Corporate Reorganizations. In
general, both Florida Law and Nevada Law provide that mergers, share exchanges
or a sale of substantially all of the assets of the corporation other than in
the usual and regular course of business, must be approved by a majority vote of
each voting group of shares entitled to vote on such transaction. However, under
both Florida Law and Nevada Law, the Articles of Incorporation or the board of
directors recommending the transaction may require a greater affirmative vote.
Neither the Articles of Incorporation of the Company nor the Articles of
Synergie Holdings require a greater affirmative vote.
Neither the Nevada Law nor the Florida Law require shareholder approval by
the shareholders of a surviving corporation in a merger or consolidation as long
as the surviving corporation issues no more than 20% of its voting stock in the
transaction.
Therefore, there will not be any significant difference in the rights of
shareholders with respect to this issue.
Affiliated Transactions. Both the Florida Law and the Nevada Law contain
provisions restricting the ability of a corporation to engage in business
combinations with an interested shareholder.
The Florida Law provides that an "affiliated transaction" with an
"interested shareholder" must generally be approved by the affirmative vote of
the holders of two-thirds of the voting shares, other than the shares owned by
the interested shareholder. An interested shareholder is any person who is the
beneficial owner of more than 10% of the outstanding voting stock of the
corporation. The transactions covered by the statute include, with certain
exceptions, (a) mergers and consolidations to which the corporation and the
interested shareholder are parties, (b) sales or other dispositions of
substantial amounts of the corporation's assets to the interested shareholder,
(c)
21
<PAGE>
issuances by the corporation of substantial amounts of its securities to the
interested shareholder, (d) the adoption of any plan for the liquidation or
dissolution of the corporation proposed by or pursuant to an arrangement with
the interested shareholder, (e) any reclassification of the corporation's
securities that has the effect of substantially increasing the percentage of
outstanding voting shares of the corporation beneficially owned by the
interested shareholder, and (f) the receipt by the interested shareholder of
certain loans or other financial assistance from the corporation.
Under Florida Law, the two-thirds approval requirement does not apply if,
among other things: (a) the transaction has been approved by a majority of the
corporation's disinterested directors (as defined in the statute), (b) the
interested shareholder has been the beneficial owner of at least 80% of the
corporation's outstanding voting shares for at least five years preceding the
transaction, (c) the interested shareholder is the beneficial owner of at least
90% of the outstanding voting shares, (d) the corporation has not had more than
300 shareholders of record at any time during the preceding three years, (e) the
corporation is an investment company under the Investment Company Act of 1940,
or (f) certain fair price and procedural requirements are satisfied.
Florida Law permits a corporation to elect out of provisions imposing
restrictions on affiliate transactions. The Articles of Incorporation of the
Company do not contain a clause electing not to be governed by the affiliate
transaction provisions of the Florida Law.
The Nevada Law applies solely to domestic corporations with 200 or more
shareholders when at least 100 shareholders are residents of Nevada, unless the
articles of incorporation of the corporation provides otherwise. The Nevada Law
provides that an "affiliated transaction" with an "interested shareholder" that
occurs within three years after an interested shareholder acquires shares must
generally have been approved by the board of directors of the corporation prior
to the acquisition of shares by the interested shareholder.
Under Nevada Law an affiliated transaction with an interested shareholder
that occurs after three years after an interested shareholder acquires shares
must generally be either approved by the affirmative vote of the holders of a
majority of the voting shares, other than the shares owned by the interested
shareholder, or by the board of directors of the corporation prior to the
acquisition of shares by the interested shareholder, unless the consideration
received by the shareholders meets certain fair value requirements. The
definition of "affiliated transaction" and "interested shareholder" are
substantially the same as under Florida Law.
As in Florida, a Nevada corporation may opt-out of the provisions imposing
restrictions on affiliate transactions. The new Articles of Incorporation of
Synergie Holdings will not contain a clause electing not to be governed by the
affiliate transaction provisions of the Nevada Law. Therefore there are
differences in shareholder rights under Florida Law and Nevada Law with respect
to affiliated transactions.
Control-Share Acquisitions. Both Florida and Nevada law contain provisions
that are intended to benefit companies that are the object of takeover attempts
and their shareholders. The Company, however, cannot avail itself of the
benefits of Florida's control-share acquisition statute.
22
<PAGE>
This statute applies only to Florida corporations that has (1) 100 or more
shareholders, (2) its principal place of business, its principal office or
substantial assets in Florida, and (3) either (a) more than 10% of its
shareholders reside in Florida, (b) more than 10% of its shares are owned by
residents of Florida, or (c) 1,000 of its shareholders reside in Florida. Shares
held by banks (except as trustee or guardian), brokers, or nominees are
disregarded for purposes of calculating the percentage or number of residents.
The Company does not meet these requirements and therefore the Florida control-
share acquisition statute does not apply to the Company.
Nevada's control-share acquisition statutes prohibit an acquiror, under
certain circumstances, from voting shares of a target corporation's stock after
crossing certain threshold ownership percentages unless the acquiror obtains the
approval of the target corporation's shareholders. This statute is designed to
prevent any party from obtaining control of the voting rights of a corporation
without approval of the shareholders of the corporation.
The Nevada statute applies solely to domestic corporations that do business
in Nevada directly or through an affiliated corporation and the corporation has
200 or more shareholders when at least 100 shareholders are residents of Nevada.
Upon completion of the reincorporation in Nevada, Synergie Holdings may become
subject to the control-share acquisition statutes in Nevada in the future upon
meeting the aforementioned criteria.
Under the Nevada statute, any person ("Acquiring Person") who acquires
shares of any public corporation in excess of 20% will not be permitted to vote
those shares or any other shares acquired within 90 days or acquired pursuant to
a plan to make a control-share acquisition unless the remaining shareholders
vote to enfranchise the control-shares. The Acquiring Person, officers, and
employee-directors of the corporation may not vote on the matter. The issue of
voting rights for the Acquiring Person's control-shares must be submitted to a
shareholder vote, if requested by the Acquiring Person, at a special meeting to
be held within 50 days of the request, provided the Acquiring Person delivers a
statement with prescribed disclosures at the time of the request and undertakes
to pay the cost of the special meeting.
If the measure is approved, all shareholders are entitled to dissenters'
rights based on the highest price paid for the control-shares by the Acquiring
Person unless otherwise provided in the corporation's articles of incorporation
or bylaws. If the measure is not approved, or if the Acquiring Person elects not
to deliver a disclosure statement to the issuing public corporation within 10
days after the last acquisition of control-shares by the Acquiring Person, the
corporation has the right to acquire the control-shares for "fair value" if its
articles of incorporation provided for such a buy-back prior to the control-
share acquisition. If a corporation does not desire to be bound by the Nevada
control-share acquisition statutes, it may opt out of them if its articles of
incorporation or bylaws in effect on the tenth day following the acquisition of
a controlling interest state that the sections do not apply. Synergie Holdings
will not have provisions in its Articles of Incorporation or Bylaws limiting
such statutes.
Therefore, Synergie Holdings will become subject the control-share
acquisition statutes at such time as it has at least 100 shareholders who are
residents of Nevada and Synergie Holdings
23
<PAGE>
does business in Nevada directly or through an affiliated corporation. The
Company's Board of Directors believes that shareholders would benefit from the
control-share acquisition statute because it would give them a statutory right
to receive important information about any person seeking to take over Synergie
Holdings.
Dissenters' Rights. Appraisal rights permit dissenting shareholders of a
corporation engaged in certain major corporate transactions to receive cash
equal to the fair market value of the shareholder's shares (as determined by
agreement of the parties or by a court), in lieu of the consideration such
shareholder would otherwise receive in any such transaction.
Under Florida Law, shareholders are entitled to dissenters' rights in the
event of (a) the consummation of a plan of merger, if the shareholder is
entitled to vote on the merger or if the corporation is a subsidiary that is
merged with its parent; (b) the consummation of a sale or exchange of all of
substantially all the assets of a corporation other than in the usual and
regular course of business; (c) amendments to the articles of incorporation if
the shareholder is entitled to vote on the amendment and if such amendment would
adversely affect the rights of preferences of shareholders; (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) the approval of a control-share acquisition pursuant to Florida
law; and (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 shares.
Under Florida Law, unless the articles of incorporation provide otherwise,
no appraisal rights are available for the shares of any class or series of
stock, which, at the record date for the meeting held to approve such
transaction, were either (1) 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. ("NASD") or (2)
held of record by more than 2,000 shareholders.
Under Nevada Law, shareholders are entitled to dissenter's rights in the
event of (a) a merger in which the shareholder is entitled to vote or if the
corporation is a subsidiary that is merged with its parent; (b) consummation of
a plan of share exchange to which the corporation is a party as the corporation
shares of which will be acquired, if the shareholder is entitled to vote on the
plan; and (c) any corporate action taken pursuant to a vote of the shareholders
that the articles of incorporation, by laws or a resolution of the board of
directors provided that voting or non-voting shareholders are entitled to
dissent and obtain payment for their shares.
Under Nevada Law, unless provided in the articles of incorporation or
certain other conditions are met, no appraisal rights are available for the
shares of any class or series of stock, which, at the record date for the
meeting to approve such transaction, were either listed on a national securities
exchange, included in the National Market System by the NASD or held of record
by more than 2,000 shareholders.
24
<PAGE>
Therefore, there are no significant differences in shareholder rights to
appraisal rights under Nevada Law when compared to Florida Law, although there
are some differences under the laws of the two states.
POSSIBLE DISADVANTAGES OF THE REINCORPORATION PROPOSAL
Despite the belief of the Board of Directors that the Reincorporation
Proposal is in the best interests of the Company and its shareholders,
shareholders should be aware that many of the provisions in the Synergie
Holdings' Articles of Incorporation, and Bylaws and under Nevada Law have not
yet received extensive scrutiny and interpretation by the Nevada courts.
The Board of Directors, however, believes Nevada Law will provide the
Company with the comprehensive, flexible structure which it needs to operate
effectively.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The reincorporation provided for in the Merger Agreement is intended to be
tax-free under the Internal Revenue Code of 1986, as amended. Accordingly, it is
expected that under present federal income tax laws, no gain or loss will be
recognized by the Company, Synergie Holdings or the holders of Common Stock of
the Company as a result of the consummation of the Reincorporation. The effect
of state tax laws upon shareholders may vary from state to state. Each former
holder of the Company shares will have the same basis in the Synergie Holdings
shares received by him pursuant to the reincorporation as he has in the Company
shares held by him at the time of consummation of the Reincorporation, and his
holding period with respect to such Synergie Holdings shares will include the
period during which he held the corresponding Company shares, provided the
latter were held by him as capital assets at the time of consummation of the
reincorporation. The foregoing is only a summary of the federal income tax
consequences and is not tax advice. The Company has not secured, nor does it
intend to secure, any ruling from the Internal Revenue Service on the nontaxable
nature of the transaction.
A successful challenge by the Internal Revenue Service to the tax-free status
of the Reincorporation would result in a shareholder recognizing gain or loss
with respect to each share of Company Common Stock converted in the
Reincorporation equal to the difference between that shareholder's basis in such
shares and the fair market value, as of the time of the Reincorporation, of the
Synergie Holdings Common Stock converted in the Reincorporation. In such event,
a shareholder's aggregate basis in the shares of Synergie Holdings Common Stock
acquired in the Reincorporation would equal the fair market value of all such
shares, and such shareholder's holding period for such shares would not include
the period during which such shareholder held the Company Common Stock.
State, local or foreign income tax consequences to shareholders may vary
from the federal tax consequences described generally above. Shareholders should
consult their own tax advisors as to the effect of the Reincorporation under
applicable federal, state, local or foreign income tax laws.
25
<PAGE>
For financial accounting purposes, the Reincorporation will be accounted
for as a reincorporation. Accordingly, there will be no impact on the carrying
amount of assets or liabilities of the Company as currently reported.
EACH SHAREHOLDER IS URGED TO CONSULT WITH HIS OWN TAX ADVISOR WITH RESPECT
TO THE TAX CONSEQUENCE, IF ANY, TO HIM IF THE REINCORPORATION PROPOSAL IS
APPROVED AND THE REINCORPORATION IS EFFECTED.
SECURITIES ACT CONSEQUENCES
The shares of Synergie Holdings to be issued in exchange for shares of the
Company are not being registered under the Securities Act of 1933, as amended
(the "Securities Act"). In that respect, Synergie Holdings is relying on Rule
145(a)(2) of the Securities and Exchange Commission (the "Commission") under
the Securities Act, which provides that a merger which has as its sole purpose a
change in the domicile of the corporation does not involve the sale of
securities for purposes of the Securities Act. After the Reincorporation,
Synergie Holdings will be a publicly held company, its Common Stock is expected
to be quoted on the OTC Bulletin board and it will file with the Commission and
provide to its shareholders the same type of information that the Company has
previously filed and provided. Shareholders whose stock in the Company is fully
tradable before the Reincorporation will receive freely tradable shares of
Synergie Holdings. Shareholders holding restricted securities of the Company
will receive stock certificates of Synergie Holdings bearing the same
restrictive legend as appears on their present stock certificates, and their
shares of stock in Synergie Holdings will be subject to the same restrictions on
transfer as those which their present shares of stock in the Company are
subject. For purposes of computing compliance with the holding period of Rule
144, shareholders will be deemed to have acquired their shares of Synergie
Holdings Common Stock on the date they acquired their shares of the Company
Common Stock. In summary, Synergie Holdings and its shareholders will be in the
same respective position under the federal securities laws after the
Reincorporation as were the Company and its shareholders prior to the
Reincorporation.
ABANDONMENT
Notwithstanding a favorable vote of the shareholders, the Company reserves
the right by action of its Board of Directors to abandon the Proposed
Reincorporation prior to the Effective Date of the Reincorporation if it
determines that such abandonment is in the best interests of the Company. The
Board of Directors has made no determination as to any circumstances which may
prompt a decision to abandon the Proposed Reincorporation.
VOTE REQUIRED
Pursuant to Florida Law and the current articles of incorporation, the
affirmative vote of the holders of a majority of the outstanding shares of the
Company's Common Stock is required for approval of the Reincorporation of the
Company in Nevada. Approval of the Reincorporation
26
<PAGE>
Proposal by shareholders of the Company will constitute specific approval of the
Merger Agreement, the Synergie Holdings' Articles on Incorporation and Bylaws,
and of all other transactions and proceedings relating to the Reincorporation,
including ratification of the directors of the Company, the assumption by
Synergie Holdings of the Company's employee benefit plans and agreements, and
the obligations of the Company under such plans and agreements.
DISSENTERS' RIGHTS OF APPRAISAL FOR THE REINCORPORATION PROPOSAL Florida law
entitles the holders of record of shares of the Company common stock who follow
the procedures specified in Section 607.1320 of the Florida Business Corporation
Act to have their shares appraised and to receive the "fair value" of such
shares, which means the value of the shares at the close of business on the day
prior to the Company shareholders' approval, excluding any appreciation or
depreciation in anticipation of the corporate actions unless exclusion would be
inequitable. The right to dissent is provided in Section 607.1302, which
provides the Company stockholders the right to dissent if the corporate action
involves, among other things, the consummation of a plan of merger or the sale
of substantially all of the assets of the corporation. Accordingly, a
shareholder who dissents with respect to PROPOSAL TWO shall be entitled to
dissent. Throughout this section relating to the Company shareholders' right to
dissent, the reference to the Merger shall include the Reorganization Proposal
since shareholders are entitled to vote on PROPOSAL TWO, but as has been
indicated throughout this proxy statement/ prospectus, PROPOSAL TWO must be
approved by the Company shareholders before the Proposal can or will be
consummated. A shareholder may dissent as to less than all the shares of the
Company common stock registered in his or her name. Section 607.1302(5) of the
Florida Business Corporation Act provides that a shareholder entitled to dissent
and obtain payment for his shares may not challenge the corporate action unless
the corporate action is unlawful or fraudulent as to the shareholder or the
corporation. In order to exercise your rights as a dissenting shareholder and
obtain appraisal of and the fair value for your common stock of the Company, you
must demand and perfect the rights in accordance with Section 607.1320 of the
Florida Business Corporation Act. The following is a summary of that Section of
the Florida Business Corporation Act and is qualified in its entirety by
reference to Section 607.1320, a copy of which, including all the provisions
relating to dissenters and appraisal rights, is attached to this proxy
statement as Appendix E. The Company shareholders should carefully review
Section 607.1320 as well as the information discussed below to determine their
rights to an appraisal. It is also suggested shareholders seek the advice of
counsel.
27
<PAGE>
IF SHAREHOLDERS DO NOT COMPLY WITH THE DEADLINES AND PROCEDURES SPECIFIED IN THE
FLORIDA BUSINESS CORPORATION ACT, THEY MAY LOSE THEIR DISSENTERS' RIGHTS OF
APPRAISAL.If a shareholder of the Company elects to exercise the right to an
appraisal under Section 607.1320 of the Florida Business Corporation Act, such
shareholder must do ALL of the following: $ deliver to the Secretary of the
Company, John Rolls, 12335 World Trade Drive, No. 8, San Diego, California
92128, before the vote is taken at the Annual Meeting written, notice of their
intent to demand payment for their shares of Common Stock of the Company if the
Proposed Reincorporation is effected; and $ they must not vote in favor of the
Reincorporation.Shareholders must deliver the notice of intent even if they
submit a proxy or otherwise vote against the Reincorporation. MERELY VOTING
AGAINST, ABSTAINING FROM VOTING, OR FAILING TO VOTE IN FAVOR OF ADOPTION OF THE
REINCORPORATION WILL NOT CONSTITUTE A NOTICE OF INTENT TO EXERCISE DISSENTERS'
RIGHTS OF APPRAISAL UNDER THE FLORIDA BUSINESS CORPORATION ACT.If the Company
Shareholders approve the Reincorporation at the Annual Meeting and you meet the
requirements above, then the Company will send you, within 10 days of the
approval of the Reincorporation, written notice of such shareholder approval of
the Reincorporation. Within 20 days after the Company's notice to you of the
Reincorporation approval, any shareholder of the Company who elects to dissent
shall file with the Company: $ a notice of such election, stating the
shareholder's name and address and the number of the Company shares of common
stock to which he dissents; $ a demand for the payment of the fair value of his
shares of the Company; and $ deposit with the Company his shares of common
stock of the Company.Shareholders' failure to timely file their elections to
dissent shall subject them to the terms of the Reincorporation.Filing of the
notice of election to dissent entitles shareholders only to payment of the fair
value of their shares of common stock of the Company as provided in Section
607.1320 of the Florida Business Corporation Act, and they shall not be entitled
to vote or exercise any other rights as a Company shareholder.Shareholders may
withdraw in writing their notice of election to dissent any time before the
Company makes its offer to dissenting shareholders of its estimate of the fair
value of the Company common stock (discussed below). After such offer, no
withdrawal of a shareholder's election to dissent may be made without the
Company's consent.Shareholders' right to be paid the fair value of their Company
shares of common stock shall cease and they will be reinstated to their status
and rights of a the Company shareholder as of the date of their filing of their
notice of election to dissent if: $ your demand for appraisal is withdrawn in
accordance with Section 607.1320 of the Florida Business Corporation Act; $
the Reincorporation is abandoned, rescinded, or the Company's shareholders
revoke the authority to effect the Reincorporation; $ no demand for a fair value
determination by a court has been timely made; or $ the court determines the
shareholder is not entitled to relief provided by the dissenting shareholder
provisions of the Florida Business Corporation Act.IF SHAREHOLDERS ARE
CONSIDERING SEEKING DISSENTERS' RIGHTS OF APPRAISAL, THEY SHOULD BE AWARE THAT
THE FAIR VALUE OF THEIR SHARES AS DETERMINED UNDER THE APPLICABLE PROVISIONS OF
THE FLORIDA BUSINESS CORPORATION ACT COULD BE GREATER THAN, THE SAME AS OR LESS
THAN THE MERGER CONSIDERATION.Within 10 days of the later of (i) expiration of
the period in which shareholders may file their notice of election to dissent,
or (ii) after the Reincorporation is effected, i.e., the Effective Date of the
Reincorporation (but no later than 90 days from the date of shareholder approval
of the Reincorporation), the Company shall make a written offer to dissenting
shareholders
28
<PAGE>
to pay an amount it estimates to be the fair value of the Company common stock.
The Company's offer may be made conditional upon the consummation of the
Reincorporation. The Company's offer shall be accompanied by: $ The Company's
balance sheet as of the latest available date but not more than 12 months prior
to the Company offer; and $ The Company's profit and loss statement for the 12-
month period ended on the date of such balance sheet.If within 30 days from the
Company's offer the dissenting shareholder accepts the same, the Company shall
make the payment within 90 days of the later of (i) its offer, or (ii) the
Effective Date of the Reincorporation. Upon payment of the agreed value, the
dissenting shareholder ceases to have any interest in the shares.If either: $
The Company fails to make a timely offer; or $ The Company's offer is rejected
by the dissenting shareholder within 30 days of such offer, then the Company
within 30 days of written denial by the dissenting shareholder given within 60
days from the Effective Date of the Reincorporation shall, or at its election at
any time within such period of 60 days may, file an action in a Florida court of
appropriate jurisdiction requesting determination of the fair value of the
Company's common stock. The court shall also determine whether the shareholder
is entitled to payment. If the Company fails to initiate proceedings, the
dissenting shareholder may do so in the name of the Company. All dissenting
shareholders shall be made parties to the fair value proceedings other than
those dissenting shareholders who have accepted the Company's offer of payment.
The court may appoint one or more appraisers to receive evidence and recommend a
decision on the fair value of the shares. The court may indicate a fair interest
rate. The Company shall pay each dissenting shareholder the amount determined to
be due such shareholder within 10 days of the court's determination. Upon
payment, the dissenting shareholder shall cease to have any interest in the
shares. The court will determine all costs of the proceeding, including the
reasonable compensation and expenses of court-appointed appraisers. The Company
generally will pay these costs, but the court may order the dissenting
shareholders to pay some of them, in amounts the court finds equitable, if the
court finds that the shareholders acted arbitrarily, vexatiously or not in good
faith in demanding payment.
Shares of Synergie Holdings common stock into which Company shares of such
dissenting shareholders would have been converted had they assented to the
Reincorporation shall have the status of authorized but unissued shares. The
responsibility for any payments to dissenting shareholders and all costs
relating to any proceedings relating to dissenting shareholder payments are
included in Company Liabilities being assumed by Synergie Holdings. The
foregoing is only a summary of the applicable provisions of the Florida Business
Corporation Act, and is qualified in its entirety by reference to the full text
of such provisions, which is included in Appendix E.DIRECTORS' RECOMMENDATION
The Board of Directors has unanimously approved the Reincorporation Proposal
and the Reincorporation Merger which will effectuate the proposed
reincorporation and unanimously recommends a vote for approval of the
Reincorporation Proposal.
PROPOSAL THREE
AMENDMENT TO CERTIFICATE OF INCORPORATION TO CHANGE NAME
29
<PAGE>
The Company's Board of Directors has determined that it would be in the
best interest of the Company and its stockholders to amend the Company's
Certificate of Incorporation to change the Company's name to "Synergie Holdings,
Inc." The Board of Directors believes that the proposed name will enhance
the Company's future marketing efforts and distinguish it from its competitors.
In the event of stockholder approval of this proposal and PROPOSAL TWO,
Reincorporation in Nevada, the name change will be effected as part of the
reincorporation process.
RECOMMENDATION AND REQUIRED VOTE.
The affirmative vote of the holders of a majority of the outstanding Common
Shares of the Company is required for approval of this proposal. The Board of
Directors recommends a vote FOR the adoption of the proposed amendment to the
Articles of Incorporation.
PROPOSAL FOUR
INCREASE IN AUTHORIZED SHARES OF COMMON STOCK
GENERAL
The Articles of Incorporation of the Company currently authorize the
Company to issue up to fifty million (50,000,000) shares of Common Stock, no par
value, and one million two hundred thousand (1,200,000) shares of Preferred
Stock, no par value. After the Proposed Reincorporation, the Company proposes
that the Articles of Incorporation of Synergie Holdings provide for two hundred
fifty million (250,000,000) authorized shares of Common Stock, $.001 par value,
and one million two hundred thousand (1,200,000) shares of Preferred Stock,
$.001 par value.
CAPITALIZATION
The Board of Directors believes that it is prudent to increase the
authorized number of shares of Common Stock to two hundred fifty million
(250,000,000) shares in order to provide a reserve of shares available for
issuance to meet business needs as they arise. Like most companies, the Company
has historically maintained a substantial reserve of authorized but unissued
shares in order to avoid the time and expense of seeking shareholder approval
each time it needs to make a new issuance of Common Stock in light of possible
future activities which the Board of Directors deem to be in the best interests
of the shareholders. Such future activities may include, without limitation,
financings, establishing strategic relationships with corporate partners,
providing equity incentives to employees, officers or directors, or effecting
stock splits or dividends. The additional shares of Common Stock authorized may
also be used to acquire or invest in complementary businesses or products or to
obtain the right to use complementary technologies. Although the Company has no
present obligation to issue additional shares of Common Stock (except pursuant
to employee stock incentive plans), the Company continues to evaluate and
conduct discussions with third parties with
30
<PAGE>
respect to potential acquisitions or investments. However, the probability that
the Company will enter into any such transaction is presently uncertain.
Approval of the increase in the number of authorized shares of Common Stock
after the Proposed Reincorporation would not affect the rights, privileges, and
preferences of the holders of currently outstanding Common Stock of the Company,
except for effects incidental to increasing the number of shares of the
Company's Common Stock outstanding.
If the stockholders approve the increase in the number of authorized shares
of Common Stock after the Proposed Reincorporation, the Board of Directors may
cause the issuance of additional shares of Common Stock without further vote of
the stockholders of the Company, except as provided under Nevada corporate law
or under the rules of any national securities exchange on which shares of Common
Stock of the Company are then listed. Current holders of Common Stock have no
preemptive or like rights, which means that current stockholders do not have a
prior right to purchase any new issue of capital stock of the Company in order
to maintain their ownership interest therein. The issuance of additional shares
of Common Stock would decrease the proportionate equity interest of the
Company's current stockholders and, depending upon the price paid for such
additional shares, could result in dilution to the Company's current
stockholders.
In addition, the Board of Directors could use authorized but unissued
shares to create impediments to a takeover or a transfer of control of the
Company. Accordingly, the increase in the number of authorized shares of Common
Stock may deter a future takeover attempt which holders of Common Stock may deem
to be in their best interest or in which holders of Common Stock may be offered
a premium for their shares over the market price. The Board of Directors is not
currently aware of any attempt to take over or acquire the Company. While it may
be deemed to have potential anti-takeover effects, the proposed amendment to
increase the authorized Common Stock is not prompted by any specific effort or
takeover threat currently perceived by management.
VOTE REQUIRED
Approval of the increase in the number of authorized shares of Common Stock
of the Company after the Proposed Reincorporation in Nevada will require the
affirmative vote of the majority of outstanding shares of the Company on the
Record Date entitled to vote on the proposal. In addition, the affirmative votes
must constitute at least a majority of the required quorum, which quorum is a
majority of shares outstanding on the Record Date. Votes that are cast against
the proposal will be counted for purposes of determining (i) the presence or
absence of a quorum, and (ii) the total number of negative votes cast with
respect to the proposal. While there is no definitive statutory or case law
authority in Florida as to the proper treatment of abstentions in the counting
of votes with respect to a proposal such as the increase in authorized shares,
the Company believes that abstentions should be counted for purposes of
determining both (x) the presence or absence of a quorum for the transaction of
business and (y) the total number of votes cast with respect to the proposal.
Accordingly, abstentions will have the same effect as a vote against the
proposal. The Company further believes that broker non-votes should be counted
for purposes of determining the presence or absence of a quorum, but should not
be counted for purposes of determining the number
31
<PAGE>
of votes cast with respect to the proposal. In the absence of controlling
precedent to the contrary, the Company intends to treat broker non-votes in this
manner.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE INCREASE IN THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK AFTER THE PROPOSED REINCORPORATION IN
Nevada. THE EFFECT OF AN ABSTENTION IS THE SAME AS THAT OF A VOTE AGAINST THE
PROPOSAL.
PROPOSAL FIVE
APPROVAL OF FORM OF INDEMNIFICATION AGREEMENT
GENERAL
The Company currently holds agreements with its directors and officers that
eliminate the liability of directors and officers to the fullest extent
permissible under Florida law. In the event the Company's Proposed
Reincorporation in Nevada (see PROPOSAL TWO -- REINCORPORATION IN Nevada)
receives the requisite votes for shareholder approval and the merger described
therein is effected, the Company proposes to enter into new indemnification
agreements in substantially the form attached hereto as Exhibit D (the
"Indemnification Agreements") to provide for the maximum indemnification allowed
under applicable Nevada law and under Synergie Holdings's Articles of
Incorporation. Although Florida and Nevada indemnification laws are similar,
Nevada law provides a somewhat broader scope of protection for directors and
officers. (See PROPOSAL TWO -- REINCORPORATION IN Nevada -- Significant
Differences Between the Corporation Law of Florida and Nevada, for a fuller
explanation of the material differences between Nevada and Florida law.)
The Board of Directors believes that the Indemnification Agreements serve
the best interest of the Company and its stockholders by strengthening the
Company's ability to attract and retain over time the services of knowledgeable
and experienced persons to serve as directors, officers and key employees who,
through their efforts and expertise, can make a significant contribution to the
success of the Company.
The Indemnification Agreements are intended to complement the indemnity and
other protection available under applicable law, Synergie Holdings's Articles of
Incorporation and Bylaws, and to provide for indemnification of indemnitees to
the fullest extent permitted by applicable law.
INDEMNIFICATION AGREEMENTS
The Indemnification Agreements provide the indemnitees with the maximum
indemnification allowed under applicable law. Since the Nevada statute is non-
exclusive, it is possible that certain claims beyond the scope of the statute
may be indemnifiable. The Indemnification Agreements provide a scheme of
indemnification which may be broader than that specifically provided by Nevada
Law. It has not yet been determined, however, to what extent the
32
<PAGE>
indemnification expressly permitted by Nevada Law may be expanded, and therefore
the scope of indemnification provided by the Indemnification Agreements may be
subject to future judicial interpretation.
The Indemnification Agreements provide that Synergie Holdings shall
indemnify an indemnitee who is or was a party or is threatened to be made a
party to any threatened, pending or completed action or proceeding whether
civil, criminal, administrative or investigative by reason of the fact that the
indemnitee is or was a director, officer, key employee or agent of Synergie
Holdings or any subsidiary of Synergie Holdings. Synergie Holdings shall advance
all expenses, judgments, fines, penalties and amounts paid in settlement
(including taxes imposed on the indemnitee on account of receipt of such
payouts) incurred by the indemnitee in connection with the investigation,
defense, settlement or appeal of any civil or criminal action or proceeding as
described above. The indemnitee shall repay such amounts advanced only if it
shall be ultimately determined that he or she is not entitled to be indemnified
by Synergie Holdings. The advances paid to the indemnitee by Synergie Holdings
shall be delivered within twenty (20) days following a written request by the
indemnitee. Any award of indemnification to an indemnitee, if not covered by
insurance, would come directly from the assets of Synergie Holdings, thereby
affecting a stockholder's investment.
The Indemnification Agreements set forth a number of procedural and
substantive matters which are not addressed or are addressed in less detail in
Nevada Law, including the following:
First, in the event an action is instituted by the indemnitee under the
Indemnification Agreements to enforce or interpret any of the terms therein,
indemnitee shall be entitled to be paid all costs and expenses, including
reasonable attorneys' fees, incurred by the indemnitee with respect to such
action, unless as a part of such action, a court of competent jurisdiction
determines that each of the material assertions made by the indemnitee were not
made in good faith or were frivolous. In the event of an action instituted by
or in the name of Synergie Holdings under the Indemnification Agreements or to
enforce or interpret any of the terms therein, the indemnitee shall be entitled
to be paid all costs and expenses, including reasonable attorneys' fees,
incurred by the indemnitee in the defense of such action, unless as a part of
such action the court determines that each of the indemnitee's material defenses
to such action were made in bad faith or were frivolous. Nevada Law does not set
forth any procedure for contesting a corporation's determination of a party's
right to indemnification.
Second, the Indemnification Agreements explicitly provide for partial
indemnification of costs and expenses in the event that an indemnitee is not
entitled to full indemnification under the terms of the Indemnification
Agreements. Nevada Law does not specifically address this issue. It does,
however, provide that to the extent that an indemnitee has been successful on
the merits, he or she shall be entitled to such indemnification.
Third, in the event Synergie Holdings shall be obligated to pay the
expenses of any proceeding against the indemnitee, Synergie Holdings shall be
entitled to assume the defense of such proceeding, with counsel approved by the
indemnified party, which approval shall not be unreasonably withheld, upon the
delivery to the indemnitee of written notice of its election to do so.
33
<PAGE>
Synergie Holdings shall have the right to conduct such defense as it sees fit in
its sole discretion, including the right to settle any claim against indemnitee
without the consent of the indemnitee.
Fourth, indemnification provided by the Indemnification Agreements is not
exclusive of any rights to which the indemnitee may be entitled under Synergie
Holdings's Articles of Incorporation, its Bylaws, any agreement, any vote of
stockholders or disinterested directors, Nevada Law, or otherwise. The
indemnification provided under the Indemnification Agreements continues for any
action taken or not taken while serving in an indemnified capacity even though
the indemnitee may have ceased to serve in such capacity at the time of the
action, suit or other covered proceeding.
Finally, the Indemnification Agreements provide for certain exceptions to
indemnification which include the following: (a) indemnification for liabilities
where the law prohibits indemnification; (b) indemnification or advancement of
expenses with respect to proceedings or claims initiated or brought voluntarily
by an indemnitee and not by way of defense, except with respect to proceedings
brought to establish or enforce a right to indemnification under the
Indemnification Agreements or any other statute or law or otherwise as required
under Section 145 of the Nevada General Corporation Law; and (c) indemnification
for expenses in the payment of profits arising from the purchase and sale by the
indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar or successor statute.
The proposed Indemnification Agreements, together with the limitations on
the directors' liability provided by Synergie Holdings's Articles of
Incorporation and Bylaws, reduce significantly the number of instances in which
directors might be held liable to Synergie Holdings for monetary damages for
breach of their fiduciary duties. Therefore, the current directors of Synergie
Holdings have a direct personal interest in the approval of the Indemnification
Agreements.
THE FOREGOING DISCUSSION OF THE INDEMNIFICATION AGREEMENTS IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO THE FORM OF INDEMNIFICATION AGREEMENT ATTACHED TO
THIS PROXY STATEMENT AS EXHIBIT D, WHICH YOU ARE URGED TO READ AND CONSIDER
CAREFULLY
At present there is no pending litigation or proceeding involving an
indemnitee where indemnification would be required or permitted under the
Indemnification Agreements. The Company is not aware of any threatened
litigation or proceeding which may result in a claim for indemnification under
the Indemnification Agreements by an Indemnitee.
INDEMNIFICATION OF LIABILITIES UNDER THE SECURITIES ACT OF 1933
The Securities and Exchange Commission has expressed its opinion that
indemnification of directors, officers and controlling persons of the Company
against liabilities arising under the Securities Act of 1933 (the "Act") is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by an indemnitee of
Synergie Holdings in the successful defense of any such act or proceeding) is
asserted by such indemnitee in connection
34
<PAGE>
with securities which have been registered by Synergie Holdings, Synergie
Holdings will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
REQUIRED VOTE
The affirmative vote of a majority of the votes cast and held by
disinterested shareholders will be required under Florida law to approve the
form of the Indemnification Agreement. Since each director and officer is an
interested party with respect to the Indemnification Agreements, shares owned
directly or indirectly by any director or officer may not be voted on this
proposal, although they will be counted for purposes of determining whether a
quorum is present. For this purpose, the "Votes Cast" are defined under Florida
law to be the shares of the Company's Common Stock represented and "voting" at
the Annual Meeting. In addition, the affirmative votes must constitute at least
a majority of the required quorum, which quorum is a majority of the shares
outstanding on the Record Date. Votes that are cast against the proposal will be
counted for purposes of determining (i) the presence or absence of a quorum and
(ii) the total number of Votes Cast with respect to the proposal. While there is
no definitive statutory or case law authority in Florida as to the proper
treatment of abstentions in the counting of votes with respect to a proposal
such as the adoption of the Indemnification Agreements, the Company believes
that abstentions and broker non-votes should be counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
The Company further believes that neither abstentions nor broker non-votes
should be counted as having been "voted" with respect to the proposal for
purposes of determining whether the requisite majority of votes cast has been
obtained. In the absence of controlling precedent to the contrary, the Company
intends to treat abstentions and broker non-votes in this manner.
MANAGEMENT RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE FORM OF INDEMNIFICATION AGREEMENTS.
PROPOSAL SIX
ADOPTION OF 2000 STOCK OPTION PLAN
GENERAL
The Company's 2000 Stock Option Plan (the "Plan") was adopted by the Board of
Directors in March 2000, pending shareholder approval. The Plan will be in
substantially the form attached hereto as Exhibit F. The Plan will allow the
grant of qualified and non-qualified stock option grants as determined by a
stock option committee created by the Board of Directors upon approval of the
Plan. The Board of Directors has reserved 15% of the authorized common stock
for issuance to the Plan. This means that if PROPOSAL FOUR to increase the
authorized shares from 50,000,000 to 250,000,000 is approved, then the Company
will set aside and reserve 37,500,000 shares. If the PROPOSAL SIX is not
approved, then there will be 7,500,000 shares reserved.
35
<PAGE>
PURPOSE
The principal purpose of the Plan is to provide equity incentives to the
Company's employees, consultants and members of the Board of Directors who are
neither employees of nor consultants to the Company ("Outside Directors") by
enabling them to participate in the Company's success and to encourage the
participants' continued service to the Company. The Plan is intended to foster
and promote the financial success of the Company and increase stockholder value
by enabling eligible key employees and others to participate in the long term
growth and financial success of the Company. A summary of the Plan is set forth
below.
ADMINISTRATION
The Plan may be administered by the Board of Directors of the Company or by a
committee, and is currently being administered by the Board of Directors (the
"Administrator"). Grants of options under the Plan shall be made by the Board or
a committee. No member of the Board or committee may vote on any option to be
granted him or take part in any consideration of the Plan as it may apply to
him. The interpretation and construction of any provision of the Plan is within
the sole discretion of the Board or committee, whose determination is final and
conclusive. Members of the Board or committee receive no additional compensation
for their services in connection with the administration of the Plan. Copies of
the Plan are available upon request at the Company's principal executive
offices.
ELIGIBILITY
The Plan provides that options may be granted to employees (including
officers and directors who are also employees), consultants of the Company or
any parent or majority-owned subsidiary and Outside Directors. Incentive stock
options may be granted only to employees. The Administrator selects the
optionees and determines the number of shares to be subject to each option and
the time or times at which shares become exercisable under the option. In making
such determination, the duties and responsibilities of the employee or
consultant, the value of his or her services, his or her present and potential
contribution to the success of the Company, the anticipated number of years of
future service and other relevant factors are taken into account. Generally,
such options become exercisable or "vest" quarterly, over three to five years.
Each option may be exercised only to the extent it is vested. No options have
been granted under the Plan.
TERMS OF OPTIONS
The terms of options granted under the Plan are determined by the
Administrator. Each option granted under the Plan is evidenced by a written
stock option agreement between the Company and the optionee and is subject to
the following additional terms and conditions:
(a) Exercise of Option. Options under the Plan generally become
exercisable. In quarterly increments over a period of three to five years. For
example, if the vesting period was five
36
<PAGE>
years, the option would become exercisable as to one-twentieth (1/20) of the
underlying shares after each quarter from the date of grant.
An option granted under the Option Plan is exercised by giving written
notice of exercise to the Company, specifying the number of full shares of
Common Stock to be purchased and tendering payment of the purchase price to the
Company. Payment for shares issued upon exercise of an option may consist of
cash, check, promissory note, other shares of the Company's Common Stock or any
combination of such methods of payment, or such other consideration and method
of payment as is permitted under the Florida General Corporation Law or Nevada,
if the Reincorporation is approved.
(b) Exercise Price. The per share exercise price of options granted
under the Plan (other than those to Outside Directors) is determined by the
Administrator and, in the case of incentive stock options, may not be less than
one hundred percent (100%) of the fair market value on the date of grant.
However, in the case of incentive stock options granted to an optionee who owns
more than ten percent (10%) of the voting power or value of all classes of stock
of the Company, the per share exercise price must not be less than one hundred
ten percent (110%) of the fair market value on the date of grant. The exercise
price of non-statutory stock options may be less than one hundred percent
(100%), but shall be no less than eighty-five percent (85%), of the fair market
value of the Company's Common Stock on the date of grant. If the Company's
Common Stock is listed on any established stock exchange or a national market
system, including without limitation the New York Stock Exchange (the "NYSE"),
the fair market value of a share of Common Stock shall be the closing sales
price for such stock (or the closing bid, if no sales were reported) as quoted
on such system or exchange (or the exchange with the greatest volume of trading
in Common Stock) on the date of grant of the Option, as reported in The Wall
Street journal or such other source as the Administrator deems reliable.
(c) Termination of Status as an Employee, Consultant or Outside
Director. If the optionee's employment or consulting relationship with the
Company or status as an Outside Director is terminated for any reason (other
than death or disability), options may be exercised within thirty (30) days (or
such other period of time not exceeding three (3) months as is determined by the
Administrator) after such termination as to all or part of the shares as to
which the optionee was entitled to exercise at the date of such termination.
(d) Death or Disability of Optionee. Options may be exercised within
no more than six (6) months following termination because of a permanent and
total disability or by the employee's estate after his or her death.
(e) Term and Termination of Options. Options granted under the Option
Plan may have a term of no more than ten (10) years from the date of grant. No
option may be exercised by any person after the expiration of its term. In the
case of an incentive stock option granted to an optionee who, immediately before
the grant of such option, owns more than ten percent (10%) of the voting power
or value of all classes of stock of the Company, the term of such incentive
stock option may not exceed five (5) years.
37
<PAGE>
(f) Non-Transferability of Options. An option is not transferable by
the optionee, other than by will or the laws of descent or distribution, and is
exercisable during the optionee's lifetime only by the optionee. In the event of
the optionee's death, options may be exercised by a person who acquires the
right to exercise the option by bequest or inheritance.
(g) Other Provisions. The option agreement may contain such other
terms, provisions and conditions not inconsistent with the Option Plan as may be
determined by the Administrator.
CHANGES IN CAPITALIZATION
In the event a change, such as a stock split or stock dividend payable in
Common Stock, is made in the Company's capitalization, which results in an
exchange of Common Stock for a greater or lesser number of shares without
receipt of consideration by the Company, appropriate adjustment shall be made in
the option price and number of shares subject to outstanding options.
Appropriate adjustment will also be made in the number of shares of Common Stock
which have been authorized for issuance under the Plan but as to which no
options have yet been granted or which have been returned to the Plan upon
cancellation of an option. Such adjustments shall be made by the Board of
Directors, whose determination shall be final and conclusive, subject to any
required action by the shareholders of the Company.
In the event of the proposed dissolution or liquidation of the Company,
options outstanding under the Plan will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the Board.
In the event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation,
outstanding options shall be assumed or an equivalent option shall be
substituted by such successor corporation (or a parent or subsidiary of such
successor corporation), unless such successor corporation does not agree to
assume the options or to substitute an equivalent option, in which case the
optionee shall have the right to exercise all outstanding options as to all of
the optioned stock, including shares as to which the option would not otherwise
be exercisable. If the Board makes an outstanding option fully exercisable in
lieu of assumption or substitution in the event of a merger or sale of assets,
the Board shall notify the optionee that his or her outstanding options shall be
fully exercisable for a period of thirty (30) days from the date of such notice,
and the option will terminate upon the expiration of such period.
AMENDMENT AND TERMINATION OF THE OPTION PLAN
The Board may amend or terminate the Plan from time to time in such
respects as the Board may deem advisable; provided that, to the extent necessary
and desirable to comply with Section 422 of the Code or any other successor or
applicable law or regulation, the Company shall obtain shareholder approval of
any Plan amendment in such a manner and to such a degree as is required by the
applicable law, rule or regulation. Any amendment or termination of the Plan
shall not affect options already granted and such options shall remain in full
force and effect as if the Plan had not
38
<PAGE>
been amended or terminated, unless mutually agreed otherwise between the
optionee and the Administrator, which agreement must be in writing and signed by
the optionee and the Company.
The Plan will continue to require shareholder approval of amendments in
accordance with federal tax laws and regulations applicable to incentive stock
option plans, to the extent the Company desires that the Plan continue to
qualify for the grant of incentive stock options thereunder. The Code and the
rules and regulations thereunder governing incentive stock option plans
currently require shareholder approval for any increase in the number of shares
issuable under a plan and for certain changes in the eligibility standards under
a plan.
In any event, the Plan shall terminate in 2010. Any options outstanding
under the Option Plan at the time of termination shall remain outstanding until
they expire by their terms.
TAX INFORMATION
Options granted under the Plan may be either "incentive stock options," as
defined in Section 422 of the Code or nonstatutory options.
Incentive Stock Options. If an option granted under the Plan is an
incentive stock option, the optionee will recognize no income upon grant of the
incentive stock option and incur no tax liability due to the exercise unless the
optionee is subject to the alternative minimum tax. The Company will not be
allowed a deduction for federal income tax purposes as a result of the exercise
of an incentive stock option regardless of the applicability of the alternative
minimum tax. Upon the sale or exchange of the shares at least two (2) years
after grant of the option and one (1) year after receipt of the shares by the
optionee, any gain will be treated as long-term capital gain. If these holding
periods are not satisfied, the optionee will recognize ordinary income equal to
the difference between the exercise price and the lower of the fair market value
of the stock at the date of the option exercise or the sale price of the stock.
A different rule for measuring ordinary income upon such a premature disposition
may apply if the optionee is also an officer, director or ten percent (10%)
shareholder of the Company. The Company will be entitled to a deduction in the
same amount as the ordinary income recognized by the optionee. Any gain
recognized by the optionee on such a premature disposition of the shares in
excess of the amount treated as ordinary income will be characterized as capital
gain or loss.
Nonstatutory Options. All other options which do not qualify as incentive
stock options are referred to as nonstatutory options. An optionee will not
recognize any taxable income at the time he or she is granted a nonstatutory
option. However upon its exercise, the optionee will recognize ordinary income
for tax purposes measured by the excess of the then fair market value of the
shares over the option price. In certain circumstances, where the shares are
subject to a substantial risk of forfeiture when acquired or where the optionee
is an officer, director or ten percent (10%) shareholder of the Company, the
date of taxation may be deferred unless the optionee files an election with the
Internal Revenue Service under Section 83(b) of the Code. The income recognized
by an optionee who is also an employee of the Company will be subject to tax
withholding by the Company. Upon resale of such shares by the optionee, any
difference between the sales price and
39
<PAGE>
the exercise price, to the extent not recognized as ordinary income as provided
above, will be treated as capital gain or loss. The Company will be entitled to
a tax deduction in the amount and at the time that the Optionee recognizes
ordinary income with respect to shares acquired upon exercise of a nonstatutory
option.
The foregoing is only a summary of the effect of federal income taxation
upon the optionee and the Company, with respect to the grant and exercise of
options under the Plan, does not purport to be complete and does not discuss the
income tax laws of any municipality, state or foreign country in which an
optionee may reside.
STOCK PRICE
The closing price of a share of Common Stock on the OTCBB on March 31,
2000, was $1.562.
PLAN BENEFITS
The Company cannot now determine the exact number of options to be granted in
the future to the executive officers named under "EXECUTIVE OFFICER COMPENSATION
- -- Summary Compensation Table," all current executive officers as a group or all
other employees (including current officers who are not executive officers) as a
group.
REQUIRED VOTE
The affirmative vote of a majority of the votes cast will be required under
Florida law to approve the Company's Plan. (For a description of the method of
determining the number of Votes Cast, please see the "Required Vote" paragraph
relating to the proposed adoption of the Indemnification Agreement (PROPOSAL
FIVE) above).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE 2000
STOCK OPTION PLAN.
PROPOSAL SEVEN
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Weinberg & Co. ("Weinberg"),
independent public accountants, to audit the financial statements of the Company
for fiscal 1999. Weinberg has audited the financial statements of Decurion
Corporation, the company with which the Company merged in December 1999.
Representatives of Weinberg are expected to be present at the meeting with the
opportunity to make a statement if they desire to do so, and are expected to be
available to respond to appropriate questions. Ratification, under Florida law,
of the appointment of Weinberg requires the affirmative vote of a majority of
the Votes Cast. (For a description of the method of determining the number of
Votes Cast, please see the "Required Vote" paragraph relating to the proposed
adoption of the Indemnification Agreement (PROPOSAL FIVE) above.)
40
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF WEINBERG AS INDEPENDENT ACCOUNTANTS.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's executive
officers, directors, and persons who own more than ten percent (10%) of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange Commission.
Based solely on its review of the copies of such forms received by the
Company, the Company believes that, during fiscal 1999, all directors and
executive officers failed to timely file their Form 3 in December, upon becoming
a reporting company, due to a misunderstanding regarding the timing and
responsibility for such filings. All such filings have now been made and the
Company believes all filing requirements applicable to its executive officers
and directors have now been complied with.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company entered into an Employment Agreement dated August 21, 1997 with
principal stockholder Charles Kallmann. Under the agreement, Mr. Kallmann will
serve as Chief Executive Office of the Company at an annual salary of $144,000,
plus medical coverage, life insurance and the use of two company provided
vehicles. However, the agreement was amended effective on June 14, 1999, to
provide for an increase in Mr. Kallmann's salary to $216,000 annually. The
agreement expires on August 21, 2002. The agreement automatically renews for
succeeding three year terms unless notice of termination is received by either
party prior to the expiration.
The Company entered into a License Agreement dated August 21, 1997
("Licensing Agreement") with Magna IV, Ltd., a Delaware corporation, which Magna
IV subsequently assigned to the Company's principal stockholder Charles Kallmann
("Licensor"). The Licensing Agreement allows the Company to continue the
development, manufacturing and marketing of personal hygiene products. The
Licensing Agreement provides royalty payments to the Licensor equal to 3% of the
gross sales of all Hydrogiene products with minimum royalty payments of $100,000
in year one, $250,000 in year two, and $300,000 for each subsequent year. The
Licensing Agreement terminates on August 20, 2022, with an option by the
Licensor to renew the Licensing Agreement for an additional 25 years at the
increased royalty rate of four percent (4%).
The Company has entered into an agreement with Euro-American Credit & Trade
("EAC") pursuant to which EAC will use its best efforts to assist the Company in
raising equity capital of up to $10,000,000. EAC will be paid a fee of five
percent of the money raised. The agreement lasts for a period of ninety days
from the effective date of the Company's Form SB-2 Registration Statement, which
is expected to be in early May, 2000. George J. Grosek controls EAC and is a
director of the Company.
On March 27, 2000, the Company borrowed $231,500 from VentureNet.com, which
is due and payable in ten years, with interest at the prime interest rate plus
two percent. Michael Brette is President of VentureNet.com and is a Director
and Vice President of the Company.
The Company has an agreement with Arden Roney, a Director of the Company,
to provide consulting services in the area of marketing and related activities.
The Company is finalizing an agreement with National Capital Companies,
Inc., to acquire half of National Capital's ownership of National Brokers &
Distributors, Inc. Consideration for the transaction is proposed to be
restricted stock of the Company. Until the transaction is finalized, the Company
has agreed to advance monies for certain expenses of National Brokers &
Distributors. In consideration of those advances, the Company is entitled to
share in the revenues generated by them. Joe Cerbone is the President of
National Capital Companies, Inc., and is a director of the Company. John Aguero
is the President of National Brokers & Distributors, Inc., and is the President
and a Director of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 31, 2000 information relating to
the beneficial ownership of the Company's Common Stock by each person known by
the Company to be the beneficial owner of more than five percent (5%) of the
outstanding shares of Common Stock, by each director, by each of the executive
officers named in the Summary Compensation Table, and by all directors and
executive officers as a group.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to the securities. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of Hydrogiene Common Stock subject to options held by that person that
will be exercisable on or before May 15, 2000 are deemed outstanding. Such
shares, however, are not deemed outstanding for the purpose of computing the
percentage ownership of any other person.
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
41
<PAGE>
The following table shows, as to the Chief Executive Officer and each of
the four other most highly compensated executive officers, information
concerning compensation for services to the Company in all capacities.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Name and ------------------- ----------------------------------------
Principal Restricted Securities
Position Year Salary Bonus Stock Awards Underlying Options
- -------- ---- -------- ----- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Charles Kallman 1999 $177,000 -0- $ 403,263 $3,000,000
CEO 1998 144,000 -0- 430,000 -0-
1997 54,600 -0- -0- -0-
Wiebeke Kallmann 1999 40,625 -0- 367,859 -0-
VP Communications 1998 75,000 -0- 1,638,094 -0-
1997 25,000 -0- -0- -0-
</TABLE>
(1) Perquisites are not included since the aggregate amount is less than the
lesser of $50,000 or 10% of salary and bonus, in accordance with regulations
promulgated by the Securities and Exchange Commission (the "SEC"); therefore,
the Other Annual Compensation has not been included in this table.
(2) The Company has not granted any stock appreciation rights and does not have
any Long-Term Incentive Plans as that term is defined in regulations promulgated
by the SEC.
STOCK OPTION GRANTS AND EXERCISES
The following tables set forth, for the executive officers named in the
Summary Compensation Table, the stock options granted under the Company's stock
option plans and the options exercised by such executive officers during fiscal
1999.
STOCK OPTION GRANTS IN FISCAL 1999
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Alternative
to (f) and (g)
Grant Date
Individual Grants Value
- ---------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f)
Number of % of Total
Securities Options Granted Grant Date
Underlying to Employees in Exercise or Expiration Present
Name Options Fiscal Year Base Price Date Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CEO 5,000,000 100% $.15 10/31/02 $870,000 /(1)/
</TABLE>
42
<PAGE>
(1) The fair market value of the options was estimated on the grant date using
the Black-Scholes, option pricing model with the following weighted average
assumptions: expected dividend yield 0%, volatility 239%, risk-free interest
rate of 5%, expected option life of 2 years.
AGGREGATED OPTION EXERCISES IN FISCAL 1999 AND YEAR-END VALUES
No options were exercised during fiscal 1999 and the table has, therefore been
omitted.
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of Proxy to vote the shares they represent as
the Company may recommend.
THE BOARD OF DIRECTORS
Dated: May 10, 2000
43
<PAGE>
Exhibit A
AGREEMENT OF MERGER
This Agreement of Merger is entered into between Synergie Holdings, Inc., a
Nevada corporation (herein "Surviving Corporation") and The Hydrogiene
Corporation, a Florida corporation (herein "Merging Corporation").
1. Merging Corporation shall be merged into Surviving Corporation.
2. Each outstanding share of Merging Corporation shall be converted to one (1)
share of common stock of Surviving Corporation.
3. The outstanding shares of Surviving Corporation shall remain outstanding and
are not affected by the merger.
4. Merging Corporation shall from time to time, as and when requested by
Surviving Corporation execute and deliver all such documents and instruments and
take all such action necessary or desirable to evidence or carry out this
merger.
5. The effect of the merger and the effective date of the merger are as
prescribed by law.
IN WITNESS WHEREOF the parties have executed this Agreement.
SYNERGIE HOLDINGS, INC., a Nevada corporation
--------------------------------
Charles Kallmann, President
--------------------------------
Karl J. Rolls, Jr., Secretary
THE HYDROGIENE CORPORATION
a Florida corporation
--------------------------------
Charles Kallmann, President
--------------------------------
Karl J. Rolls, Jr., Secretary
44
<PAGE>
Exhibit B
ARTICLES OF INCORPORATION
OF
SYNERGIE HOLDINGS, INC.
KNOW ALL MEN BY THESE HERE PRESENTS:
That I, the undersigned, have this day voluntarily agreed to form a
corporation under and pursuant to the laws of the State of Nevada and do hereby
certify that:
I.
The name of the corporation is: SYNERGIE HOLDINGS, INC.
II.
The Resident Agent of this corporation for the service of process, until changed
according to law, shall be: Corporate Solutions of Las Vegas, 4970 S. Arville
St., Suite 107, Las Vegas, NV 89118
III.
This corporation may engage in any lawful activity or activities in Nevada and
throughout the world.
IV.
The total authorized capital stock of the corporation shall consist of Two
Hundred Fifty Million (250,000,000) shares at One Thousandth of a Cent ($0.001)
par value common stock. All of the voting power of the capital stock of this
corporation shall reside in the Common Stock. No capital stock of this
corporation shall be subject to assessment and no holder of any share or shares
shall have preemptive rights to subscribe to any or all issues of shares of
other securities of this corporation.
V.
Meetings of stockholders may be held within or without the State of Nevada, as
the Bylaws may provide. The books of the Corporation may be kept (subject to
any provision contained in the statutes) outside of the State of Nevada at such
place or places as may be designated from time to time by the Board of Directors
or in the Bylaws of the Corporation.
VI.
45
<PAGE>
The stockholders of the corporation may not take action by written consent
without a meeting but must take any such actions at a duly called annual or
special meeting.
VII.
Advanced notice of stockholder nomination for the election of directors and of
business to be brought by stockholders before any meeting of the stockholders of
the Corporation shall be given in the manner provided in the Bylaws of the
Corporation.
VIII.
The number of directors of the Corporation shall not be less than one nor more
than fifteen. The members of the governing board of this corporation shall be
styled directors, and they shall be seven in number until changed by the Board
of Directors, but in no case shall the number of directors be smaller than one
or the number of stockholders, whichever shall be the least. The names and
addresses of the first directors of this corporation are as follows:
John Aguero, 101 Convention Center Drive, #1001, Las Vegas, NV 89109
Norman Arikawa, 425 S. Palos Verdes Street, San Pedro, CA 90731
Michael Brette, 27349 Jefferson Avenue, Temecula, CA 92590
Joseph Cerbone, 18952 MacArthur Blvd., #315, Irvine, CA 92612
George J. Grosek, P.O. Box 10424, Newport Beach, CA 92658
Charles Kallmann, 1870 Caminito Ronald, #139, San Diego, CA 92128
Arden E. Roney, Drawer 1997, Newport Beach, CA 92659-0997
The name and address of the Incorporator, which is one (1) in number, signing
these Articles of Incorporation, is as follows:
Susan Shuey, 4970 S. Arville St., Ste. 107, Las Vegas, NV 89118
IX.
The Corporation may, to the fullest extent permitted by the provisions of
Section 78.751 of the Corporation Code of the Nevada Revised Statutes as the
same may be amended and supplemented, indemnify all persons whom it shall have
power to indemnify under such section from and against any and all of the
expenses, liabilities or other matters referred to in or covered by such
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall 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. The
Corporation shall pay or otherwise advance all expenses of officers and
directors incurred in defending a civil or criminal action, suit or proceeding
as such expenses are incurred and in advance of the final disposition of the
action, suit or proceeding, provided that the indemnified
46
<PAGE>
officer or director undertakes to repay the amounts so advanced if a court of
competent jurisdiction ultimately determines that such officer or director is
not entitled to be indemnified by the Corporation. Nothing herein shall be
construed to affect any rights to advancement of expenses to which personnel
other than officers or directors of the Corporation may be entitled under any
contract or otherwise by law.
X.
This corporation shall have perpetual existence.
IN WITNESS WHEREOF: the undersigned incorporator has executed these Articles of
Incorporation of Synergie Holdings, Inc., on this _______ day of May, 2000.
--------------------------------
INCORPORATOR
Exhibit C
By Laws
of
SYNERGIE HOLDINGS, INC.
A Nevada Corporation
ARTICLE I
Stockholders
Section 1. Annual Meeting. Annual meetings of the stockholders,
-------------------------
commencing with the year 2000, shall be held on the ___th day of ___________
each year if not a legal holiday and, if a legal holiday, then on the next
secular day following, or at such other time as may be set by the Board of
Directors from time to time, at which the stockholders shall elect by vote a
Board of Directors and transact such other business as may properly be brought
before the meeting.
Section 2. Special Meetings. Special meetings of the stockholders, for
--------------------------
any purpose or purposes, unless otherwise prescribed by statute or by the
Articles of Incorporation, may be called by the the Board of Directors.
Section 3. Place of Meetings. All annual meetings of the stockholders shall
----------------------------
be held at the registered office of the corporation or at such other place
within or without the State of Nevada as the directors shall determine. Special
meetings of the stockholders may be held at such time and place within or
without the State of Nevada as shall be stated in the notice of the meeting, or
in a
47
<PAGE>
duly executed waiver of notice thereof. Business transacted at any special
meeting of stockholders shall be limited to the purposes stated in the notice.
Section 4. Advanced Notice of Stockholder Nominees and Stockholder Business.
----------------------------------------------------------------------------
To be properly brought before an annual meeting or special meeting, nominations
for the election of director or other business must be (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board of Directors, (b) otherwise properly brought before the meeting by or
at the direction of the Board of Directors, or (c) otherwise properly brought
before the meeting by a stockholder. For such nominations or other business to
be considered properly brought before the meeting by a stockholder such a
stockholder must have given timely notice and in proper form of his intent to
bring such business before such board. To be timely, such stockholder's notice
must be delivered to or mailed and received by the Secretary of the corporation
not less than one-hundred fifty (150) days prior to the meeting; provided,
however, that in the event that less than one-hundred (100) days notice or prior
public disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than the
close of business on the tenth day following the day on which such notice of the
date of the meeting was mailed or such public disclosure was made. To be in
proper form, a stockholder's notice to the secretary shall set forth:
(i) the name and address of the stockholder who intends to make the
nominations or propose the business and, as the case may be, the name and
address of the person or persons to be nominated or the nature of the business
to be proposed;
(ii) a representation that the stockholder is a holder of record of stock of
the corporation entitled to vote at such meeting and, if applicable, intends to
appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice or introduce the business specified in the notice;
(iii) if applicable, a description of all arrangements or understandings
between the stockholder 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 stockholder;
(iv) such other information regarding each nominee or each matter of business
to be proposed by such stockholder as would be required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated, or intended to be nominated, or the
matter been proposed, or intended to be proposed by the Board of Directors; and
(v) if applicable, the consent of each nominee to serve as director of the
corporation if so elected.
Section 5. Quorum; Adjourned Meetings. The holders of a majority of the stock
-------------------------------------
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute or by the Articles of Incorporation. If, however, such quorum shall not
be
48
<PAGE>
present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented.
At such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.
Section 6. Voting. Each stockholder of record of the corporation holding
-----------------
stock which is entitled to vote at this meeting shall be entitled at each
meeting of stockholders to one vote for each share of stock standing in his name
on the books of the corporation. Upon the demand of any stockholder, the vote
for directors and the vote upon any question before the meeting shall be by
ballot.
When a quorum is present or represented at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall be sufficient to elect directors or to decide any
question brought before such meeting, unless the question is one upon which by
express provision of the statutes or of the Articles of Incorporation, a
different vote is required in which case such express provision shall govern and
control the decision of such question.
Section 7. Proxies. At any meeting of the stockholders any stockholder may be
------------------
represented and vote by a proxy or proxies appointed by an instrument in
writing. In the event that any such instrument in writing shall designate two or
more persons to act as proxies, a majority of such persons present at the
meeting, or, if only one shall be present, then that one shall have and may
exercise all of the powers conferred by such written instrument upon all of the
persons so designated unless the instrument shall otherwise provide. No proxy or
power of attorney to vote shall be used to vote at a meeting of the stockholders
unless it shall have been filed with the secretary of the meeting.
All questions regarding the qualification of voters, the validity of proxies
and the acceptance or rejection of votes shall be decided by the inspectors of
election who shall be appointed by the Board of Directors, or if not so
appointed, then by the presiding officer of the meeting.
Section 8. Action Without Meeting. The stockholders of the corporation may
---------------------------------
not take action by written consent without a meeting but must take any such
actions at a duly called annual or special meeting.
ARTICLE II
Directors
Section 1. Management of Corporation. The business of the corporation shall
------------------------------------
be managed by its Board of Directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the Articles of Incorporation or by these By Laws directed or required to be
exercised or done by the stockholders.
Section 2. Number, Tenure, and Qualifications. The number of directors which
---------------------------------------------
shall constitute the whole board shall not be less than one nor more than
fifteen. The number of directors may from
49
<PAGE>
time to time be increased or decreased to not less than one nor more than
fifteen by the Board of Directors. Until such time as the Board of Directors
determines otherwise, the number of directors shall be seven. The directors
shall be elected at the annual meeting of the stockholders and except as
provided in Section 3 of this Article, each director elected shall hold office
until his successor is elected and qualified. Directors need not be
stockholders.
Section 3. Vacancies. Vacancies in the Board of Directors including those
--------------------
caused by an increase in the number of directors, may be filled by a majority of
the remaining directors, though less than a quorum, or by a sole remaining
director and each director so elected shall hold office until his successor is
elected at an annual or a special meeting of the stockholders. The holders of
two-thirds of the outstanding shares of stock entitled to vote may at any time
peremptorily terminate the term of office of all or any of the directors by vote
at a meeting called for such purpose or by a written statement filed with the
secretary or, in his absence, with any other officer. Such removal shall be
effective immediately, even if successors are not elected simultaneously. A
vacancy or vacancies in the Board of Directors shall be deemed to exist in case
of the death, resignation or removal of any directors, or if the authorized
number of directors be increased, or if the stockholders fail at any annual or
special meeting of stockholders at which any director or directors are elected
to elect the full authorized number of directors to be voted for at that
meeting.
If the Board of Directors accepts the resignation of a director tendered to
take effect at a future time, the Board or the stockholders shall have power to
elect a successor to take office when the resignation is to become effective.
No reduction of the authorized number of directors shall have the effect of
removing any director prior to the expiration of his term of office.
Section 4 Annual and Regular Meetings. Regular meetings of the Board of
-------------------------------------
Directors shall be held at any place within or without the State which has been
designated from time to time by resolution of the Board or by written consent of
all members of the Board. In the absence of such designation regular meetings
shall be held at the registered office of the corporation. Special meetings of
the Board may be held either at a place so designated or at the registered
office.
Regular meetings of the Board of Directors may be held without call or notice
at such time and at such place as shall from time to time be fixed and
determined by the Board of Directors.
Section 5. First Meeting. The first meeting of each newly elected Board of
------------------------
Directors shall be held immediately following the adjournment of the meeting of
stockholders and at the place thereof. No notice of such meeting shall be
necessary to the directors in order legally to constitute the meeting, provided
a quorum is present. In the event such meeting is not so held, the meeting may
be held at such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the Board of Directors.
Section 6. Special Meetings. Special meetings of the Board of Directors may
---------------------------
be called by the Chairman or the President or by any Vice-President or by any
two directors.
50
<PAGE>
Written notice of the time and place of special meetings shall be delivered
personally to each director, or sent to each director by mail or by other form
of written communication, charges prepaid, addressed to him at his address as
it is shown upon the records or if such address is not readily ascertainable, at
the place in which the meetings of the directors are regularly held. In case
such notice is mailed or telegraphed, it shall be deposited in the United States
mail or delivered to the telegraph company at least three (3) days prior to the
time of the holding of the meeting. If case such notice is hand delivered as
above provided, it shall be so delivered at least twenty-four (24) hours prior
to the time of the holding of the meeting. Such mailing, telegraphing or
delivery as above provided shall be due, legal and personal notice to such
director.
Section 7. Business of Meetings. The transactions of any meeting of the Board
--------------------------------
of Directors, however called and noticed or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice, if a quorum be
present, and if, either before or after the meeting, each of the directors not
present signs a written waiver of notice, or a consent to holding such meeting,
or an approval of the minutes thereof. All such waivers, consents or approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.
Section 8. Quorum; Adjourned Meetings. A majority of the authorized number of
-------------------------------------
directors shall be necessary to constitute a quorum for the transaction of
business, except to adjourn as hereinafter provided. Every act or decision done
or made by a majority of the directors present at a meeting duty held at which a
quorum is present shall be regarded as the act of the Board of Directors, unless
a greater number be required by law or by the Articles of Incorporation. Any
action of a majority, although not at a regularly called meeting, and the
record thereof, if assented to in writing by all of the other members of the
Board shall be as valid and effective in all respects as if passed by the Board
in regular meeting.
A quorum of the directors may adjourn any directors meeting to meet again at
a stated day and hour; provided, however, that in the absence of a quorum, a
majority of the directors present at any directors meeting, either regular or
special, may adjourn from time to time until the time fixed for the next regular
meeting of the Board.
Notice of the time and place of holding an adjourned meeting need not be given
to the absent directors if the time and place be fixed at the meeting adjourned.
Section 9. Committees. The Board of Directors may, by resolution adopted by a
---------------------
majority of the whole Board, designate one or more committees of the Board of
Directors, each committee to consist of at least one or more of the directors of
the corporation which, to the extent provided in the resolution, shall have and
may exercise the power of the Board of Directors in the management of the
business and affairs of the corporation and may have power to authorize the seal
of the corporation to be affixed to all papers which may require it. Such
committee or committees shall have such name or names as may be determined from
time to time by the Board of Directors. The members of any such committee
present at any meeting and not disqualified from voting may, whether or not they
constitute a quorum, unanimously appoint another member of the Board of
51
<PAGE>
Directors to act at the meeting in the place of any absent or disqualified
member. At meetings of such committees, a majority of the members or alternate
members shall constitute a quorum for the transaction of business, and the act
of a majority of the members or alternate members at any meeting at which there
is a quorum shall be the act of the committee.
The committees shall keep regular minutes of their proceedings and report the
same to the Board of Directors.
Section 10. Action Without Meeting. Any action required or permitted to be
----------------------------------
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if a written consent thereto is signed by all members
of the Board of Directors or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or
committee.
Section 11. Special Compensation. The directors may be paid their expenses of
--------------------------------
attendance at each meeting of the Board of Directors and may be paid a fixed sum
for attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like reimbursement and
compensation for attending committee meetings.
ARTICLE III
Notices
Section 1. Notice of Meetings. Notices of meetings shall be in writing and
-----------------------------
signed by the President or a Vice-President or the Secretary or an Assistant
Secretary or by such other person or persons as the directors shall designate.
Such notice shall state the purpose or purposes for which the meeting is
called and the time and the place, which may be within or without this State,
where it is to be held. A copy of such notice shall be either delivered
personally to or shall be mailed, postage prepaid, to each stockholder of
record entitled to vote at such meeting not less than ten (10) nor more than
sixty (60) days before such meeting. If mailed, it shall be directed to a
stockholder at his address as it appears upon the records of the corporation and
upon such mailing of any such notice, the service thereof shall be complete and
the time of the notice shall begin to run from the date upon which such notice
is deposited in the mail for transmission to such stockholder. Personal delivery
of any such notice to any officer of a corporation or association, or to any
member of a partnership shall constitute delivery of such notice to such
corporation, association or partnership. In the event of the transfer of stock
after delivery of such notice of and prior to the holding of the meeting it
shall not be necessary to deliver or mail notice of the meeting to the
transferee.
Section 2. Effect of Irregularly Called Meetings. Whenever all parties
------------------------------------------------
entitled to vote at any meeting, whether of directors or stockholders, consent,
either by a writing on the records of the meeting or filed with the secretary,
or by presence at such meeting and oral consent entered on the
52
<PAGE>
minutes, or by taking part in the deliberations at such meeting without
objection, the doings of such meeting shall be as valid as if had at a meeting
regularly called and noticed, and at such meeting any business may be transacted
which is not excepted from the written consent or to the consideration of which
no objection for want of notice is made at the time, and if any meeting be
irregular for want of notice or of such consent, provided a quorum was present
at such meeting, the proceedings of said meeting may be ratified and approved
and rendered likewise valid and the irregularity or defect therein waived by a
writing signed by all parties having the right to vote at such meeting; and such
consent or approval of stockholders may be by proxy or attorney, but all such
proxies and powers of attorney must be in writing.
Section 3. Waiver of Notice. Whenever any notice whatever is required to be
---------------------------
given under the provisions of the statutes, of the Articles of Incorporation or
of these By Laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE IV
Officers
Section 1. Election. The officers of the corporation shall be chosen by the
--------------------
Board of Directors and shall be a President, a Secretary and a Treasurer, none
of whom need be directors. Any person may hold two or more offices. The Board
of Directors may appoint a Chairman of the Board, Vice-Chairman of the Board,
one or more vice presidents, assistant treasurers and assistant secretaries.
Section 2. Chairman of the Board. The Chairman of the Board shall preside at
--------------------------------
meetings of the stockholders and the Board of Directors, and shall see that all
orders and resolutions of the Board of Directors are carried into effect.
Section 3. Vice Chairman of the Board. The Vice-Chairman shall, the absence
--------------------------------------
or disability of the Chairman of the Board, perform the duties and exercise the
powers of the Chairman of the Board and shall perform other duties as the Board
of Directors may from time to time prescribe.
Section 4. President. The President shall be the chief executive officer of
--------------------
the corporation and shall have active management of the business of the
corporation. He shall execute on behalf of the corporation all instruments
requiring such execution except to the extent the signing and execution thereof
shall be expressly designated by the Board of Directors to some other officer or
agent of the corporation.
Section 5. Vice-President. The Vice-President shall act under the direction
-------------------------
of the President and in the absence or disability of the President shall perform
the duties and exercise the powers of the President. They shall perform such
other duties and have such other powers as the President or the Board of
Directors may from time to time prescribe. The Board of Directors may designate
one or more Executive Vice-Presidents or may otherwise specify the order of
seniority of the
53
<PAGE>
Vice-Presidents. The duties and powers of the President shall descend to the
Vice-Presidents in such specified order of seniority.
Section 6. Secretary. The Secretary shall act under the direction of the
--------------------
President. Subject to the direction of the President he shall attend all
meetings of the Board of Directors and all meetings of the stockholders and
record the proceedings. He shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the President or the Board of
Directors.
Section 7. Assistant Secretaries. The Assistant Secretaries shall act under
--------------------------------
the direction of the President. In order of their seniority, unless otherwise
determined by the President or the Board of Directors, they shall, in the
absence or disability of the Secretary, perform the duties and exercise the
powers of the Secretary. They shall perform such other duties and have such
other powers as the President or the Board of Directors may from time to time
prescribe.
Section 8. Treasurer. The Treasurer shall act under the direction of the
--------------------
President. Subject to the direction of the President he shall have custody of
the corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all monies and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered by
the President or the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
corporation.
If required by the Board of Directors he shall give the corporation a bond
in such sum and with such surety or sureties as shall be satisfactory to the
Board of Directors for the faithful performance of the duties of his office and
for the restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the corporation.
Section 9. Assistant Treasurers. The Assistant Treasurers in the order of
-------------------------------
their seniority, unless otherwise determined by the President or the Board of
Directors, shall, in the absence or disability of the Treasurer, perform the
duties and exercise the powers of the Treasurer. They shalt perform such other
duties and have such other powers as the President or the Board of Directors may
from time to time prescribe.
Section 10. Compensation. The salaries and compensation of all officers of
------------------------
the corporation shall be fixed by the Board of Directors.
Section 11. Removal Resignation. The officers of the corporation shall hold
-------------------------------
office at the pleasure of the Board of Directors. Any officer elected or
appointed by the Board of Directors may be
54
<PAGE>
removed at any time by the Board of Directors. Any vacancy occurring in any
office of the corporation by death, resignation, removal or otherwise shall be
filled by the Board of Directors.
ARTICLE V
Capital Stock
Section 1. Certificates. Every stockholder shall be entitled to have a
-----------------------
certificate signed by the President or a Vice-President and the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
corporation, certifying the number of shares owned by him in the corporation. If
the corporation shall be authorized to issue more than one class of stock or
more than one series of any class, the designations, preferences and relative,
participating, optional or other special rights of the various classes of stock
or series thereof and the qualifications, limitations or restrictions of such
rights, shall be set forth in full or summarized on the face or back of the
certificate, which the corporation shall issue to represent such stock.
If a certificate is signed (1) by a transfer agent other than the corporation
or its employees or (2) by a registrar other than the corporation or its
employees, the signatures of the officers of the corporation may be facsimiles.
In case any officer who has signed or whose facsimile signature has been placed
upon a certificate shall cease to be such officer before such certificate is
issued, such certificate may be issued with the same effect as though the person
had not ceased to be such officer. The seal of the corporation, or a facsimile
thereof, may, but need not be, affixed to certificates of stock.
Section 2. Surrendered; Lost or Destroyed Certificates. The Board of
------------------------------------------------------
Directors may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the corporation alleged to
have been lost or destroyed upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost or destroyed.
Section 3. Replacement Certificates. Upon surrender to the corporation or
-----------------------------------
the transfer agent of the corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation, if it is satisfied that all
provisions of the laws and regulations applicable to the corporation regarding
transfer and ownership of shares have been complied with, to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section 4. Record Date. The Board of Directors may fix in advance a date not
----------------------
exceeding sixty (60) days nor less than ten (10) days preceding the date of any
meeting of stockholders, or the date for the payment of any distribution, or the
date for the allotment of rights or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection with
55
<PAGE>
obtaining the consent of stockholders for any purpose, as a record date for the
determination of the stockholders entitled to notice of and to vote at any such
meeting, and any adjournment thereto or entitled to receive payment of any such
distribution, or to give such consent, and in such case, such stockholders, and
only such stockholders as shall be stockholders of record on the date so fixed,
shall be entitled to notice of and to vote at such meeting, or any adjournment
thereof, or to receive payment of such distribution, or to receive such
allotment of rights, or to exercise such rights, or to give such consent, as the
case may be, notwithstanding any transfer of any stock on the books of the
corporation after any such record date fixed as aforesaid.
Section 5. Registered Owner. The corporation shall be entitled to recognize
---------------------------
the person registered on its books as the owner of shares to be the exclusive
owner for all purposes including voting and distribution, and the corporation
shall not be bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by the laws
of Nevada.
ARTICLE VI
General Provisions
Section 1. Registered Office. The registered office of this corporation
-----------------------------
shall be in the County of Clark, State of Nevada. The corporation may also have
offices at such other places both within and without the State of Nevada as the
Board of Directors may from time to time determine or the business of the
corporation may require.
Section 2. Distributions. Distributions upon the capital stock of the
------------------------
corporation, subject to the provisions of the Articles of Incorporation, if any,
may be declared by the Board of Directors at any regular or special meeting,
pursuant to law. Distributions maybe paid in cash, in property or in shares of
the capital stock, subject to the provisions of the Articles of Incorporation.
Section 3. Reserves. Before payment of any distribution, there may be set
-------------------
aside out of any funds of the corporation available for distributions such sum
or sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies or for equalizing
distributions or for repairing or maintaining any property of the corporation or
for such other purpose as the directors shall think conducive to the interest of
the corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
Section 4. Checks; Notes. 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 from time to time designate.
Section 5. Fiscal Year. The fiscal year of the corporation shall be fixed by
----------------------
resolution of the Board of Directors.
Section 6. Corporate Seal. The corporation may or may not have a corporate
-------------------------
seal, as may from time to time be determined by resolution of the Board of
Directors. If a corporate seal is adopted, it shall have inscribed thereon the
name of the corporation and the words "Corporate Seal" and
56
<PAGE>
"Nevada". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any manner reproduced.
ARTICLE VII
Indemnification
Section 1. Indemnification of Officers and Directors, Employees and Other
-------------------------------------------------------------------------
Persons. The corporation may indemnify any person who was or is a party or is
- -------
threatened to be made a party to any threatened, pending or complete action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that such person 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 expenses including attorneys fees,
judgments, fines and amounts paid in settlement actually and reasonable incurred
by such person in connection with the action, suit or proceeding if such person
acted in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interest of the corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, does not of itself, create a presumption that the person did not act
in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interest of the corporation, and that, with respect to any
criminal action or proceeding, such person had reasonable cause to believe that
his conduct was unlawful.
The corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in the
corporation's favor by reason of the fact that such person 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
expenses including amounts paid in settlement and attorneys fees actually and
reasonably incurred by such person in connection with the defense or settlement
of the action or suit if such person acted in good faith and in a manner which
such person reasonably believed to be in or not opposed to the best interests of
the corporation. Indemnification may not be made for any claim, issue or matter
as to which such a person has been adjudged by a court of competent jurisdiction
determining, after exhaustion of all appeals therefrom, to be liable to the
corporation or for amount paid in settlement to the corporation, unless and only
to the extent that the court in which the action or suit was brought or other
court of competent jurisdiction determines upon application that in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
To the extent that a director, officer, employee or agent of a corporation had
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in the paragraphs stated above in this Article VII, or in
defense of any claim, issue or matter therein, the corporation shall indemnify
him against expenses, including attorneys fees, actually and reasonably incurred
by such person in connection with the defense.
57
<PAGE>
The procedure for authorizing the indemnifications listed above of this
Article VII, and the limitations on such indemnification and advancement of
expenses, shall be that set forth in Section 78.751 of the Nevada Revised
Statutes, and shall be amended from time to time as such statute is amended.
Section 2. Insurance. The Board of Directors may cause the corporation to
--------------------
purchase and maintain insurance on behalf of any person who is or was a director
or officer of the corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred in any such
capacity or arising out of such status, whether or not the corporation would
have the power to indemnify such person.
Section 3. Further By Laws. The Board of Directors may from time to time adopt
--------------------------
further By Laws with respect to indemnification and may amend these and such By
Laws to provide at all times the fullest indemnification permitted by the
General Corporation Law of the State of Nevada.
ARTICLE VIII
Amendments
Section 1. Amendments by Stockholders. The By Laws may be amended by a
-------------------------------------
majority vote of all the stock issued and outstanding and entitled to vote for
the election of directors of the stockholders, provided notice of intention to
amend shall have been contained in the notice of the meeting.
Section 2. Amendments by Board of Directors. The Board of Directors by a
-------------------------------------------
majority vote of the whole Board at any meeting may amend these By Laws,
including By Laws adopted, by the stockholders, but the stockholders may from
time to time specify particular provisions of the By Laws which shall not be
amended by the Board of Directors.
APPROVED AND ADOPTED the ___ day of _______________, 2000.
---------------------------------------------
Karl J. Rolls, Jr., Secretary
I hereby certify that I am the Secretary of SYNERGIE HOLDINGS, INC.,
and that the foregoing By Laws, consisting of 12 pages, constitute the code of
By Laws of SYNERGIE HOLDINGS, INC., as duly adopted at a regular meeting of the
Board of Directors of the corporation held ______________, 2000.
IN WITNESS WHEREOF, I have hereunto subscribed my name this _____ day of
___________, 2000.
58
<PAGE>
---------------------------------------------
Karl J. Rolls, Jr., Secretary
Exhibit D
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of this ____ day of
______ 2000, by and between Synergie Holdings, Inc., a Nevada corporation (the
"Company") and __________ ("Indemnitee").
RECITALS:
A. Indemnitee is currently serving as director, officer, employee and agent
of the Company and the parties wish Indemnitee to continue in such capacity.
B. The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as directors, officers,
employees and other agents of the Company and to indemnify some of its
directors, officers, employees and other agents so as to provide them with the
maximum protection permitted by law.
C. The Indemnitee may not be willing to continue to serve the Company in the
absence of increased indemnification coverage.
AGREEMENT:
In consideration for his continued service, the Company and Indemnitee hereby
agree as follows:
3. Indemnification.
---------------
(a) Third Party Proceedings. The Company shall indemnify Indemnitee if
-----------------------
Indemnitee is or was a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or other agent of the Company, or any subsidiary of
the Company or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, to the
fullest extent permitted by law, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement (if such settlement is approved
in advance by the Company, which approval shall not be unreasonably withheld)
actually and reasonably incurred by Indemnitee in connection with such action,
suit or proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably
59
<PAGE>
believed to be in or not opposed to the best interests of the Company, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
Indemnitee's 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
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in the best interests of the Company, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that Indemnitee's
conduct was unlawful.
(b) Proceedings By or in the Right of the Company. The Company shall
---------------------------------------------
indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the
right of the Company or any subsidiary of the Company to procure a judgment in
its favor by reason of the fact that Indemnitee is or was a director, officer,
employee or agent of the Company, or any subsidiary of the Company, or by reason
of the fact that Indemnitee is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, to the fullest extent permitted by law,
against expenses (including attorneys' fees) and amounts paid in settlement or
otherwise disposing of a pending action, in each case to the extent actually and
reasonably incurred by Indemnitee in connection with the defense, settlement or
disposition of such action or suit if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in the best interests of the Company
and its shareholders, except that no indemnification shall be made in respect of
any claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Company in the performance of Indemnitee's duty to the Company and
its shareholders unless and only to the extent that the Court in which such
action or suit is or was pending shall determine upon application that, in view
of all the circumstance of the case, Indemnitee is fairly and reasonably
entitled to indemnity for expenses and then only to the extent that the Court
shall determine.
(c) Mandatory Payment of Expenses. To the extent that Indemnitee has been
-----------------------------
successful on the merits in defense of any action, suit or proceeding referred
to in Subsections(a) and (b) of this Section 1 or the defense of any claim,
issue or matter therein, Indemnitee shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by Indemnitee in
connection therewith.
4. Expenses: Indemnification Procedure.
------------------------------------
(a) Advancement of Expenses. The Company shall advance all expenses incurred
-----------------------
by Indemnitee in connection with the investigation, defense, settlement, or
appeal of any civil or criminal action, suit or proceeding referenced in Section
1(a) or (b) hereof (but not amounts actually paid in settlement of any such
action, suit or proceeding), provided Indemnitee undertakes to repay such
amounts advanced if it shall be determined ultimately that Indemnitee is not
entitled to be indemnified by the Company as authorized hereby. The advances to
be made hereunder shall be paid by the Company to Indemnitee within thirty (30)
days following delivery of a written request and undertaking therefor by
Indemnitee to the Company.
60
<PAGE>
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition
--------------------------------
precedent to his right to be indemnified under this Agreement, give the Company
notice in writing as soon as practicable of any claim made against Indemnitee
for which indemnification will or could be sought under this Agreement. Notice
to the Company shall be directed to the Chief Executive Officer of the Company
at the address shown on the signature page of this Agreement (or such other
address as the Company shall designate in writing to Indemnitee). Notice shall
be deemed received three business days after the date postmarked if sent by
domestic certified or registered mail, properly addressed; otherwise notice
shall be deemed received when such notice shall actually be received by the
Company. In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.
(c) Procedure. The obligation for any indemnification and advances with
---------
respect to a particular claim, incident or action provided for in Section 1 and
this Section 2 shall be acknowledged by the Company no later than forty-five
(45) days after receipt of the written request of Indemnitee. Thereafter, each
claim for advance reimbursement by Indemnitee shall be made in writing and shall
be paid by the Company within thirty (30) days of receipt of each such claim.
If a claim under this Agreement, under any statute, or under any provision of
the Company's Articles of Incorporation or Bylaws providing for indemnification,
is not paid in full by the Company within forty-five (45) days after a written
request of payment thereof has first been received by the Company, Indemnitee
may, but need not, at any time thereafter bring an action against the Company to
recover the unpaid amount of the claim and, subject to Section 12 of this
Agreement, Indemnitee shall also be entitled to be paid for the expenses
(including attorneys' fees) of bringing such action. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in connection with any action, suit or proceeding in advance of its
final disposition), that Indemnitee has not met the standards of conduct which
make it permissible under applicable law for the Company to indemnify Indemnitee
for the amount claimed, but the burden of proving such defense shall be on the
Company and Indemnitee shall be entitled to receive interim payments of expenses
pursuant to Subsection 2(a) unless and until such defense may be finally
adjudicated by court order or judgment from which no further right of appeal
exists; provided, however, that such advance shall be paid into an independent
escrow or similar account pending the court's decision, if it is determined by a
majority vote of a quorum of disinterested directors (or by independent legal
counsel, if such a quorum is not obtainable) that the Agent acted in bad faith
or deliberately breached his or her duty to the Company and its shareholders
and, as a result, it is more likely than not that such Agent will not be
entitled to indemnification under the terms of the Indemnity Agreement. It is
the parties' intention that if the Company contests Indemnitee's right to
indemnification, the question of Indemnitee's right to indemnification shall be
for the court to decide, and neither the failure of the Company (including its
Board of Directors, any committee or subgroup of the Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
that indemnification of Indemnitee is proper in the circumstances because
Indemnitee has met the applicable standard of conduct required by applicable
law, nor an actual determination by the Company (including its Board of
Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not
met the applicable standard of conduct.
61
<PAGE>
(d) Notice to Insurers. If, at the time of the receipt of a notice of a
------------------
claim pursuant to Section 2(b) hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies; provided, however, the Company shall
not be relieved of its responsibility to make advances hereunder pending
reimbursement by any such insurance company.
(e) Selection of Counsel. In the event the Company shall be obligated under
--------------------
Section 2(a) hereof to pay the expenses of any proceeding against Indemnitee,
the Company, if appropriate, shall be entitled to assume the defense of such
proceeding, with counsel approved by Indemnitee, upon the delivery to Indemnitee
of written notice of its election so to do. After delivery of such notice,
approval of such counsel by Indemnitee and the retention of such counsel by the
Company, the Company will not be liable to Indemnitee under this Agreement for
any fees of counsel subsequently incurred by Indemnitee with respect to the same
proceeding, provided that (i) Indemnitee shall have the right to employ his
counsel in any such proceeding at Indemnitee's expense; and (ii) if (A) the
employment of counsel by Indemnitee has been previously authorized by the
Company, (B) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and Indemnitee in the conduct of any
such defense, or (C) the Company shall not, in fact, have employed counsel to
assume the defense of such proceeding, then the fees and expenses of
Indemnitee's counsel shall be at the expense of the Company.
5. Additional Indemnification Rights, Nonexclusivity.
-------------------------------------------------
(a) Scope. Notwithstanding any other provision of this Agreement, the Company
-----
hereby does agree to indemnify the Indemnitee to the fullest extent permitted by
law, notwithstanding that such indemnification is not specifically authorized by
the other provisions of this Agreement, the Company's Articles of Incorporation,
the Company's Bylaws or by statute. In the event of any change in any applicable
law, statute or rule which narrows the right of a Nevada corporation to
indemnify an Indemnitee, such changes to the extent not otherwise required by
such law, statute or rule to be applied to this Agreement shall have no effect
on this Agreement or the parties' rights and obligations hereunder.
(b) Nonexclusivity. The indemnification provided by this Agreement shall not
--------------
be deemed exclusive of any rights to which Indemnitee may be entitled under the
Company's Articles of Incorporation, its Bylaws, any agreement, any vote of
stockholders or disinterested directors, the Corporation Law of the State of
Nevada, or otherwise, both as to action in Indemnitee's official capacity and as
to action in another capacity while holding such office. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity even though he may
have ceased to serve in such capacity at the time of any action, suit or other
covered proceeding.
62
<PAGE>
6. Partial Indemnification. If Indemnitee is entitled under any provision of
-----------------------
this Agreement to indemnification by the Company for some or a portion of the
expenses, judgments, fines or penalties actually or reasonably incurred by him
in the investigation, defense, appeal or settlement of any civil or criminal
action, suit or proceeding, but not, however, for the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for such portion of such
expenses, judgments, fines, or penalties to which Indemnitee is entitled.
7. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that in
---------------------
certain instances, Federal law or applicable public policy may prohibit the
Company from indemnifying Indemnitee under this Agreement or otherwise and
Indemnitee understands and acknowledges that the Company has undertaken or may
be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Company's rights under public policy to
indemnify Indemnitee.
8. Officer and Director Liability Insurance. The Company shall, from time to
----------------------------------------
time, make good faith determination whether or not it is practicable for the
Company to maintain a policy or policies of insurance with reputable insurance
companies providing the officers and directors of the Company with coverage for
losses from wrongful acts, or to ensure the Company's performance of its
indemnification obligations under this Agreement. Among other considerations,
the Company will weigh the costs of obtaining such insurance coverage against
the protection afforded by such coverage. Notwithstanding the foregoing, the
Company shall have no obligation to obtain or maintain such insurance if the
Company determines in good faith that such insurance is not reasonably
available, if the premium costs for such insurance are disproportionate to the
amount of coverage provided, if the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit, or if Indemnitee
is covered by similar insurance maintained by a subsidiary or parent of the
Company.
9. Severability. Nothing in this Agreement is intended to require or shall be
------------
construed as requiring the Company to do or fail to do any act in violation of
applicable law. The Company's inability, pursuant to court order, to perform
its obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this Agreement shall be severable as provided in
this Section 7. If this Agreement or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
10. Exceptions. Any other provision herein to the contrary notwithstanding,
----------
the Company shall not be obligated pursuant to the terms of this Agreement:
(a) to indemnify or advance expenses to Indemnitee with respect to proceedings
or claims initiated or brought voluntarily by Indemnitee and not by way of
defense, except with respect to proceedings brought to establish or enforce a
right to indemnification under this Agreement or any other statute or law or
otherwise as required under Section 78:751 of the Nevada General
63
<PAGE>
Corporations laws, but such indemnification or advancement of expenses may be
provided by the Company in specific cases if the Board of Directors has approved
the initiation or bringing of such suit; or
(b) to indemnify Indemnitee for any expenses incurred by the Indemnitee with
respect to any proceeding instituted by Indemnitee to enforce or interpret this
Agreement, if a court of competent jurisdiction determines that each of the
material assertions made by the Indemnitee in such proceeding was not made in
good faith or was frivolous; or
(c) to indemnify Indemnitee for expenses or liabilities of any type whatsoever
(including but not limited to judgments, fines, ERISA excise taxes or penalties,
and amounts paid in settlement) which have been paid directly to Indemnitee by
an insurance carrier under a policy of officers' and directors' liability
insurance maintained by the Company; or
(d) to indemnify Indemnitee for expenses for which Indemnitee is entitled to
indemnity and/or payment by reason of having given notice of any circumstance
which might give rise to a claim under any policy of insurance, the terms of
which have expired prior to the effective date of this Agreement; or
(e) to indemnify Indemnitee for expenses of which Indemnitee is indemnified by
the Company otherwise than pursuant to this Agreement; or
(f) to indemnify Indemnitee for expenses based upon or attributable to
Indemnitee gaining in fact any personal profit or advantage to which he was not
legally entitled; or
(g) to indemnify Indemnitee for expenses brought about or contributed to by
the dishonesty of Indemnitee seeking payment hereunder; however, notwithstanding
the foregoing, Indemnitee shall be protected under this Agreement to the fullest
extent permitted under law as to any claims upon which suit may be brought
against him by reason of any alleged dishonesty on his part, unless a judgment
or other final adjudication thereof adverse to Indemnitee shall establish that
he committed (i) acts of active and deliberate dishonesty, (ii) with actual
dishonest purpose and intent, which acts were material to the cause of action so
adjudicated; or
(h) to indemnify Indemnitee for expenses and the payment of profits arising
from the purchase and sale by Indemnitee of securities in violation of Section
16(b) of the Securities Exchange Act of 1934, as amended, or any similar
successor statute.
11. Construction of Certain Phrases.
-------------------------------
(a) For purposes of this Agreement, references to the "Company" shall include,
in addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that if
Indemnitee is or was a director, officer, employee or agent of such constituent
corporation, or is or
64
<PAGE>
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, Indemnitee shall stand in the same position under the
provisions of this Agreement with respect to the resulting or surviving
corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.
(b) For purposes of this Agreement, references to "other enterprises" shall
include employee benefit plans, references to "fines" shall include any excise
taxes assessed on Indemnitee with respect to an employee benefit plan, and
references to "serving at the request of the Company" shall include any service
as a director, officer, employee or agent of the Company which imposes duties
on, or involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants, or beneficiaries, and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the interest of the participant and beneficiaries of an employee benefit
plan, Indemnitee shall be deemed to have acted in a manner "not opposed to the
best interest of the Company" as referred to in this Agreement.
12. Counterparts. This Agreement may be executed in one or more counterparts
------------
each of which shall constitute an original.
13. Successors and Assigns. This Agreement shall be binding upon the Company
----------------------
and its successors and assigns, and shall inure to the benefit of Indemnitee and
Indemnitee's estate, heirs, legal representatives and assigns.
14. Attorneys' Fees. In the event any action is instituted by Indemnitee
---------------
under this Agreement to enforce or interpret any of the terms hereof, Indemnitee
shall be entitled to be paid all court costs and expenses, including reasonable
attorneys' fees, incurred by Indemnitee with respect to such action, unless as a
part of such action, the court of competent jurisdiction determines that each of
the material assertions made by Indemnitee as a basis for such action were not
made in good faith or were frivolous. In the event of an action instituted by
or in the name of the Company under this Agreement or to enforce or interpret
any of the terms of this Agreement, Indemnitee shall be entitled to be paid all
court costs and expenses, including attorneys' fees, incurred by Indemnitee in
defense of such action (including with respect to Indemnitee's counterclaims and
cross-claims made in such action), unless as a part of such action the court
determines that each of Indemnitee's material defenses to such action were made
in bad faith or were frivolous.
15. Notice. All notices, requests, demands and other communications under this
------
Agreement shall be in writing and shall be deemed duly given (i) if delivered by
hand and receipted for by the party addressee, on the date of such receipt, or
(ii) if mailed by domestic certified or registered mail with postage prepaid, on
the third business day after the date postmarked. Addresses for notice to either
party are as shown on the signature page of this Agreement, or as subsequently
modified by written notice.
16. Consent to Jurisdiction. The Company and Indemnitee each hereby
-----------------------
irrevocably consent to the jurisdiction of the courts of the State of California
for all purposes in connection with any action or
65
<PAGE>
proceeding which arises out of or relates to this Agreement and agree that any
action instituted under this Agreement shall be brought only in the state courts
of the State of California.
17. Choice of Law. This Agreement shall be governed by and its provisions
-------------
construed in accordance with the laws of the State of Nevada as applied to
contracts between Nevada residents entered into and to be performed entirely
within Nevada.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
Synergie Holdings, Inc. AGREED TO AND ACCEPTED:
A Nevada corporation
INDEMNITEE:
By: By:
----------------------- -----------------------
Title:
Exhibit E
Sections 607.1301, 607, 1302 and 607.1320 of the Florida Business Corporation
Act
607.1301 Dissenters' rights; definitions.
The following definitions apply to ss. 607.1302 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.
607.1302 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:
66
<PAGE>
(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.
607.1104, and the shareholders would have been entitled to vote on action taken,
except for the applicability of s. 607.1104;
(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;
(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 shareholder'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 her shares, or making any of his or
her 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
67
<PAGE>
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.
(6) Any and all actions which may have been taken pursuant to the provisions of
s. 607.0732(2)(a), Florida Statutes, as it existed on May 15, 1993, subsequent
to said date and prior to the effective date of this act are hereby ratified and
confirmed, and shall be regarded as having the same status and authority as if
this act had been in effect.
607-1320 Procedure for exercise of dissenters' rights(1) (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. (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
68
<PAGE>
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 the 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 filing 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 or her shares shall cease, and the shareholder shall be
reinstated to have all his or her rights as a shareholder as of thefiling 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
69
<PAGE>
such 12-month period, for the portion thereof during which it was in
existence.(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) If the corporation fails to
make such offer within the period specified therefor in subsection (6) 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 jurisdiction 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 within 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
70
<PAGE>
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.
Exhibit F
THE HYDROGIENE CORPORATION
2000 STOCK OPTION PLAN
1. The Plan
--------
The Hydrogiene Corporation, a Florida corporation (hereinafter called the
"Company"), may grant, in the manner and upon the terms and conditions set forth
in this document (the "Plan"), Incentive Stock Options or Nonstatutory Stock
Options to purchase shares of the Common Stock of the Company to eligible
employees, directors and consultants of the Company, as determined in accordance
with Section 4 hereof. All Options shall be separately designated Incentive
Stock Options or Nonstatutory Stock Options at the time of grant, and in such
form as issued pursuant to this Plan, and a separate certificate will be issued
for shares purchased on exercise of each type of option.
2. Administration of the Plan
--------------------------
The Plan shall be administered by the Board of Directors of the Company (the
"Board") unless and until the Board delegates administration to a Stock Option
Committee ("Committee"), pursuant to this Section. The Board shall have the
exclusive right to interpret the provisions of the Plan, such interpretations to
be binding and conclusive upon all persons. The Board may promulgate, amend and
rescind rules and regulations for the administration of the Plan. The Board
shall also have the exclusive right to determine which of the eligible
employees, directors or consultants are to be granted Options and the number of
shares of stock to be allocated to each.
The Board, in its discretion, may delegate administration of the Plan to a
Committee composed of not fewer than two (2) members, of which not fewer than
one (1) shall be a non-employee Director. If administration is delegated to a
Committee, the Committee shall have the powers theretofore possessed by the
Board, subject, however, to such resolutions, not inconsistent with provisions
of the Plan, as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the administration of
the plan.
71
<PAGE>
3. Stock Subject to Plan
---------------------
The shares of stock with respect to which stock options may be granted under
the Plan shall be shares of the Company's Common Stock, and may consist in whole
or in part of shares of authorized but unissued Common Stock or shares of
authorized and issued Common Stock reacquired and held by the Company in its
treasury. The Board may from time to time set aside an aggregate of not more
than 7,500,000/37,500,000 [15% of the authorized shares of the Company upon
approval of the shareholders] of such shares which shall be the maximum number
of shares which may be issued upon the exercise of stock options granted under
the Plan, such number to be appropriately adjusted in the event of any capital
adjustment referred to in Section 13 below. In the event any outstanding stock
Option under the Plan expires or for any reason is surrendered or terminated,
the shares of Common Stock allocable to the unexercised portion of such Option
may again be made subject to stock Options under the Plan.
4. To Whom Option May be Granted
-----------------------------
Incentive Stock Options may be granted to, and only to, any regular employees
of the Company. Nonstatutory Stock Options may be granted to any regular
employees of the Company, Directors, or Consultants. No Option shall be granted
to any person who, at the time such Option is granted, owns (within the meaning
of Section 424(d) of the Code) stock possessing more than 10 percent of the
total combined voting power of all classes of stock of the Company or any of its
Affiliates (hereinafter a "10-percent shareholder"), unless such Option provides
that the Option price is at least 110 percent of the fair market value of the
stock subject to the option at the time of grant and further provides that such
Option is not exercisable after the expiration of five (5) years from the date
such Option is granted.
5. Limitation on Grant of Options
------------------------------
To the extent the aggregate fair market value (determined as of the time of
grant) of the stock with respect to which Incentive Stock options are
exercisable for the first time by any Optionee during any calendar year under
all plans of the Company and its Affiliates exceed $100,000, the options or
portions thereof which exceed such limit (according to the order in which they
were granted) shall be treated as Nonstatutory Stock Options.
6. Circumstances Under Which Options May Be Granted
------------------------------------------------
Options may be granted at any time and from time to time on or after the date
on which this Plan is adopted by the Board of Directors of the Company and
before the close of business on April __, 2010. Each Option so granted shall be
evidenced by a written Stock Option Agreement in such form and containing such
provisions not inconsistent with the provisions of the Plan as the Board, from
time to time, shall approve. No Option shall be granted unless, at the time
such Option is granted, the Company shall have available at least the number of
shares of stock covered by such option and by all other Options then outstanding
under this Plan.
72
<PAGE>
7. Option Price
------------
The exercise price for each Incentive Stock Option granted under the Plan
shall be not less than one hundred percent (100%) of the fair market value at
the date of grant. The exercise price for each Nonstatutory Stock Option
granted under the Plan shall be not less than eighty-five percent (85%) of the
fair market value at the date of grant. For purposes of determining fair market
value, the price per share of Common Stock shall be determined as follows:
(a) If the Common Stock is listed on any established stock exchange or
national market system, the fair market value shall be the closing sales price
for such stock as quoted on such system or exchange on the last market trading
day prior to the date of determination.
(b) In the absence of an established market for the Common Stock, the fair
market value shall be determined in good faith by the Board, not less often than
annually.
8. Non-Transferability of Option
-----------------------------
An Incentive Stock Option granted under the Plan shall provide that it is not
transferable by the person to whom it is granted, other than by will or the laws
of descent and distribution, and shall be exercisable, during the lifetime of
such Optionee, only by the Option holder. A Nonstatutory Stock Option granted
under the Plan may provide that it is transferable by the person to whom it is
granted, so long as the option has a readily ascertainable market value as
determined by an accepted valuation model.
9. Term of Option
--------------
Any person (other than a 10-percent shareholder) to whom an Option has been
granted may exercise the same, subject to the provisions of Section 12 hereof,
for the full amount, or for any portion or part thereof, during such time as the
Board may determine in granting such option, provided exercise occurs before the
expiration of ten (10) years from the date the option was granted or before the
expiration of such shorter term as may be determined by the Board at the time of
grant.
A ten-percent shareholder to whom an option has been granted may exercise the
same, subject to the provisions of Section 12 hereof, for the full amount, or
any portion or part thereof, during such time as the Board may determine in
granting such Option, provided such exercise occurs before the expiration of
five (5) years from the date the option was granted or before the expiration of
such shorter term as may be determined by the Board at the time of grant.
73
<PAGE>
10. Vesting
-------
The vesting provisions of individual options may vary but in each case will
provide for vesting of at least twenty percent (20%) per year of the total
number of shares subject to the Option. Notwithstanding anything to the contrary
contained in the Plan or in any Option Agreement issued pursuant hereto, all
Options granted under the Plan shall be deemed immediately exercisable and fully
vested upon the consummation of any merger or consolidation in which the Company
is acquired or disappears, or the transfer of all or substantially all of the
assets of the Company.
11. Exercise of Option
------------------
Each exercise of an Option or portion or part thereof shall be evidenced by a
notice in writing to the Company, in a form satisfactory to the Board,
specifying the number of shares with respect to which the option is being
exercised. At the time of giving such notice, such person shall pay, or cause
to be paid, to the Company the purchase price of such shares. As soon as
practicable thereafter, the Company shall cause a certificate or certificates
for such shares to be registered in the name of such person, in such
denominations as such person may direct, and shall deliver said certificate or
certificates to or upon the order of such person. The Company shall file such
information returns with respect to the transfer of such shares as are required
by Section 6039 of the Code.
The Company may require an optionee, or any person to whom an Option has been
transferred, as a condition of exercising any such Option, (1) to give written
assurances satisfactory to the Company as to the Optionee's knowledge and
experience in financial and business matters, and that the Optionee is capable
of evaluating the merits and risks of exercising the Option; and (2) to give
written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the Option for such person's own account and not
with any present intention of selling or otherwise distributing the stock. The
Company may place legends on stock certificates issued under the Plan as the
Company deems necessary and appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the stock.
12. Termination of Employment or Relationships as a Director or Consultant
----------------------------------------------------------------------
In the event an optionee's continuous status as an Employee, Director, or
Consultant terminates, other than by Optionee's death or disability, the
optionee may exercise their vested portion of the Option as of the date of
termination, but only within such period of time ending on the earlier of (a)
the date three (3) months after termination, or such longer or shorter period
specified in the Option Agreement (which in no event will be less than thirty
(30) days), or (b) the expiration of the term of the Option as set forth in the
Option Agreement.
13. Disability of Optionee
----------------------
74
<PAGE>
In the event an Optionee's Continuous Status as an Employee, Director or
Consultant terminates as a result of the Optionee's disability, the Optionee may
exercise their vested portion of the Option as of the date of termination, but
only within such period of time ending on the earlier of (a) the date twelve
(12) months after termination, or such longer or shorter period specified in the
Option Agreement (which in no event will be less than six (6) months), or (b)
the expiration of the term of the Option as set forth in the Option Agreement.
14. Death of Optionee
-----------------
In the event the person to whom an Option is granted pursuant to the Plan
shall die owning but without having fully exercised such option, the estate or
any person who acquires the right to exercise such Option by bequest or
inheritance or by reason of the death of the optionee may, subject to the
provisions of Section 13 hereof, exercise such option, or a portion thereof,
within one (1) year after the date of such death (or after such shorter period
as may be provided in the option), but only if the person so exercising the
Option shall have furnished the Company with evidence satisfactory to the
Company of such person's right to exercise the Option and of payment or
provision for the payment of any estate, transfer, inheritance or death taxes
payable with respect to such option or the shares to which it relates. Any such
exercise shall be effected in the manner described in Section 11 hereof.
15. Right of Repurchase
-------------------
The Option may include a provision whereby the Company can elect to repurchase
all or any part of the vested shares exercised pursuant to the Option; provided,
however, that (a) such repurchase right shall be exercisable only within (I) the
time period allowed after the termination of the Employee, Director or
Consultant but before expiration, or (ii) such longer period as may be agreed to
by the Company and the Optionee, and (b) such right shall be exercisable only
for cash or cancellation of purchase money indebtedness for the shares at a
repurchase price equal to the greater of (I) the stock's fair market value at
the time of termination, calculated in accordance with Section 7 hereof, or (ii)
the original purchase price paid for such shares by the Optionee.
16. Adjustment of Number or Kinds of Shares
---------------------------------------
If the Company shall effect one or more stock splits, stock dividends,
subdivisions, combinations, exchanges of shares or similar capital adjustments,
the Board of Directors shall appropriately adjust the aggregate number and kind
of shares with respect to which Options may be granted under this Plan. Every
Option granted under this Plan shall provide that, in the event of any such
capital adjustments, the number and kind of the shares with respect to which it
may be exercised, and the Option price, shall be appropriately adjusted.
17. Amendment
---------
75
<PAGE>
The Plan may be amended from time to time by the Board of Directors of the
Company. However, no amendment which would alter the Plan in any of the
following respects shall be effective unless the same shall be approved, within
twelve (12) months before or after the Board of Directors adopts such amendment,
by the stockholders of the Company entitled to vote thereon at a meeting duly
called and held for that purpose and among other things: (a) increase the
maximum number of shares as to which granted, except as provided in Section 16
hereof; or (b) change the employees or classes of employees eligible to receive
such options, to the extent such modification requires stockholder approval in
order for the Plan to satisfy the requirements of Section 422 of the Code.
The Board may from time to time amend the terms of any one or more options,
provided, however, that the rights and obligations under any Option shall not be
impaired by such amendment unless the Company requests and receives the written
consent of the person to whom the Option was granted.
18. Termination
-----------
The Plan shall terminate upon the first of the following dates or events to
occur:
(a) the close of business on the day twelve (12) months after the date on
which the Plan was adopted by the Board of Directors, unless prior thereto the
Plan has been approved by the holders of a majority of the outstanding shares of
Common Stock of the Company entitled to vote thereon at a meeting duly called
and held for that purpose;
(b) by vote of the Board of Directors, so long as the rights and obligations
under any Option granted while the Plan is in effect are not impaired without
the written consent of the person to whom the Option was granted;
(c) within ten (10) years from the earlier of the date the Plan is adopted by
the Board or approved by the holders of a majority of the outstanding shares of
Common Stock of the Company.
Adopted by the Board of Directors of the Company on March 29, 2000.
Adopted by the Shareholders of the Company on ___________________________.
________________________________________
Charles W. Kallmann, Chief Executive Officer
76
<PAGE>
HYDROGIENE CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Karl J.Rolls, Jr. with full power of
substitution, to represent the undersigned and to vote all of the shares of
stock in The Hydrogiene Corporation (the "Company") which the undersigned is
entitled to vote at the Annual Meeting of the Stockholders of the Company to be
held at The Monte Carlo Hotel, 3770 Las Vegas Boulevard South, Las Vegas, Nevada
89109 on Monday, May 22, 2000 at 1:00 a.m. local time, and at any adjournment
thereof (1) as hereinafter specified upon the proposals listed on the reverse
side and as more particularly described in the Proxy Statement of the Company
dated May __, 2000 (the "Proxy Statement"), receipt of which is hereby
acknowledged, and (2) in their discretion, upon such other matters as may
properly come before the meeting. The undersigned hereby acknowledges receipt of
the Company's Annual Report for the year ended December 31, 1999.
THE SHARES REPRESENTED HEREBY SHALL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, SUCH SHARES SHALL BE VOTED FOR PROPOSALS 1 THROUGH 7.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE
1. ELECTION OF DIRECTORS.
Nominees:
FOR WITHHELD
Charles H. Kallmann / / / /
Michael Brette / / / /
John Aguero / / / /
Arden E. Roney / / / /
George J. Grosek / / / /
Norman Arikawa / / / /
Joseph Cerbone / / / /
<PAGE>
MARK HERE IF YOU PLAN TO ATTEND THE MEETING / /
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW / /
2. PROPOSAL TO APPROVE A CHANGE IN THE COMPANY'S STATE OF INCORPORATION FROM
Florida TO Nevada, AND THEREBY TO EFFECT THE FOLLOWING CHANGES TO THE COMPANY:
THE ELIMINATION OF THE RIGHT OF SHAREHOLDERS TO CALL A SPECIAL MEETING AND TO
ACT BY WRITTEN CONSENT, THE ADDITION OF ADVANCE NOTICE REQUIREMENTS FOR DIRECTOR
NOMINEES AND BUSINESS ITEMS PROPOSED BY SHAREHOLDERS, AND THE ELIMINATION OF THE
RIGHT TO REMOVE DIRECTORS WITHOUT CAUSE.
FOR AGAINST ABSTAIN
/ / / / / /
3. PROPOSAL TO CHANGE THE NAME OF THE COMPANY FROM "THE HYDROGIENE CORPORATION"
TO "SYNERGIE HOLDINGS."
4. PROPOSAL TO APPROVE AN INCREASE IN THE NUMBER OF AUTHORIZED SHARES OF COMMON
STOCK OF THE COMPANY TO 250,000,000.
5. PROPOSAL TO APPROVE THE FORM OF INDEMNIFICATION AGREEMENT BETWEEN THE COMPANY
AND ITS DIRECTORS AND OFFICERS (TO BE IMPLEMENTED IF APPROVED AND IF PROPOSAL
TWO ABOVE IS APPROVED AND AFTER THE PROPOSED REINCORPORATION IN Nevada).
FOR AGAINST ABSTAIN
/ / / / / /
6. PROPOSAL TO APPROVE AND ADOPT THE COMPANY'S 2000 STOCK OPTION PLAN AND
RESERVING 15% OF THE AUTHORIZED SHARES OF THE COMPANY FOR ISSUANCE THEREUNDER.
FOR AGAINST ABSTAIN
/ / / / / /
7. PROPOSAL TO RATIFY THE APPOINTMENT OF WEINBERG & COMPANY AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000.
FOR AGAINST ABSTAIN
/ / / / / /
AND IN THEIR DISCRETION, UPON SUCH OTHER MATTER, OR MATTERS, WHICH MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF.
<PAGE>
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO SIGN
AND PROMPTLY MAIL THIS PROXY IN THE RETURN ENVELOPE SO THAT YOUR STOCK MAY BE
REPRESENTED AT THE MEETING.
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE CHANGE IN THE COMPANY'S
STATE OF INCORPORATION FROM Florida TO Nevada, FOR THE CHANGE FO THE COMPANY'S
NAME TO SYNERGIE HOLDINGS, FOR AN INCREASE IN THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK OF THE COMPANY, FOR THE APPROVAL OF THE FORM OF INDEMNIFICATION
AGREEMENT TO BE ENTERED INTO BETWEEN THE COMPANY AND ITS DIRECTORS AND OFFICERS,
FOR THE ADOPTION OF THE COMPANY'S 2000 STOCK OPTION PLAN, FOR THE RATIFICATION
OF THE APPOINTMENT OF WEINBERG & COMPANY AS INDEPENDENT ACCOUNTANTS AND AS SAID
PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING.
Signature: ________________________________ Date ____________
Signature: ________________________________ Date ____________
