SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [ X ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ]Preliminary proxy statement
[ ]Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ]Definitive proxy statement
[ ]Definitive additional materials
[ ]Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
NET LNNX, INC.
(Name of Registrant as Specified in Its Charter)
___________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than 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:
_______________________________________________________________
<PAGE>
NET LNNX, INC.
7700 N.W. 37th AVENUE
MIAMI, FLORIDA 33147
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
ON JULY 26, 1999
The Annual Meeting of Shareholders of Net Lnnx, Inc. (the "Company")
will be held on July 26, 1999 at 7700 N.W. 37th Avenue, Miami, FL 33147 at
10:00 a.m., local time, to consider and act upon the following matters:
1. To approve and adopt an Agreement and Plan of Merger providing for
the merger of the Company into our wholly-owned subsidiary, PrintOnTheNet.com,
Inc. ("POTN") for the purpose of changing the Company's state of incorporation
from Pennsylvania to Delaware (the "Reincorporation"), and in connection with
the Reincorporation approve and increase in the Company's authorized capital
stock from 25,000,000 shares to 50,000,000 shares consisting of 40,000,000
shares of common stock, $.001 par value, and 10,000,000 shares of preferred
stock, $.001 par value;
2. To approve and adopt the Company's 1999 Stock Incentive Plan;
3. To elect four directors to serve for the ensuing year;
4. To ratify the selection by the Board of Directors of Berkowitz Dick
Pollack & Brant as the Company's independent accountants for the current
fiscal year; and
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on July 15, 1999 will be
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. The stock transfer books of the Company will remain open following
the record date.
All shareholders are cordially invited to attend the Annual Meeting.
By Order of the Board of
Directors,
Benjamin Rogatinsky
Chief Executive Officer
Miami, Florida
July 16, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN
ORDER TO ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF
THE PROXY IS MAILED IN THE UNITED STATES.
<PAGE> 1
NET LNNX, INC.
7700 N.W. 37th AVENUE
MIAMI, FLORIDA 33147
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
Dated: July 16, 1999
This Proxy Statement has been prepared and is furnished
by the Board of Directors of Net Lnnx, Inc. (the "Company") in
connection with the solicitation of proxies for the Annual
Meeting of Shareholders of the Company to be held on July 26,
1999, and at any adjournment thereof, for the purposes set
forth in the accompanying Notice of Meeting.
It is anticipated that this Proxy Statement and the
accompanying form of proxy will be mailed to shareholders on
or about July 16, 1999. The Company's Annual Report,
including audited financial statements for the fiscal year
ended December 31, 1998, is being mailed or delivered
concurrently with this Proxy Statement. The Annual Report is
not to be regarded as proxy soliciting material.
Only shareholders of record of the Company's common
stock, no par value (the "Common Stock"), at the close of
business on July 15, 1999, are entitled to vote at the Annual
Meeting. On that date, there were 19,134,102 issued and
outstanding shares of Common Stock entitled to vote on each
matter to be presented at the meeting.
Shares represented by a properly executed proxy received
in time to permit its use at the Annual Meeting or any
adjournment thereof will be voted in accordance with the
instructions indicated therein. If no instructions are
indicated, the shares represented by the proxy will be voted:
* for the approval and adoption of the Agreement and
Plan of Merger resulting in the Reincorporation of the
Company;
* for the approval and adoption of the 1999 Stock
Incentive Plan;
* for the election of all nominees for director;
* for the ratification of the appointment of Berkowitz
Dick Pollack & Brant as the independent certified
public accountants of the Company for the fiscal year
ending December 31, 1999; and
* in the discretion of the proxy holders as to any other
matter which may properly come before the Annual
Meeting.
A shareholder who has given a proxy may revoke it at any
time before it is voted at the Annual Meeting by giving written
notice of revocation to the Secretary of the Company, by
submitting a proxy bearing a later date, or by attending the
Annual Meeting and voting in person.
The expense of soliciting proxies will be borne by the
Company. Proxies will be solicited principally by mail, but
directors, officers and regular employees of the Company may
solicit proxies personally, by telephone or by facsimile
transmission. The Company will reimburse custodians, nominees
or other persons for their out-of-pocket expenses in sending
proxy material to beneficial owners.
Each share of Common Stock entitles the holder thereof to
cast one vote on each matter to be voted upon at the 1999
Annual Meeting. A majority of the outstanding shares will
constitute a quorum at the meeting. Abstentions and broker
non-votes are counted only for purposes of electing directors
in accordance with Proposal Three. None of the actions to be
<PAGE> 2
voted upon at the 1999 Annual Meeting shall create dissenters'
rights under the Pennsylvania General Corporation Law.
You are requested, regardless of the number of shares you
hold, to sign the proxy and return it promptly in the enclosed
envelope.
CERTAIN INFORMATION WITH RESPECT TO DIRECTORS AND
EXECUTIVE OFFICERS
The Board of Directors of the Company did not hold a
meeting during the fiscal year ended December 31, 1998. The
Board currently does not have a standing Audit Committee,
Compensation Committee, or Nominating Committee.
There are four members of the Company's Board of
Directors. The four persons have been nominated by the Board
of Directors to serve as directors for the next year. All are
currently Directors of the Company. Three are the Company's
executive officers in addition to their serving as Directors
of the Company. Set forth below are the names, ages as of May
1, 1999, and business experience of all four:
Benjamin Rogatinsky 31 CEO and Chairman of the
Board of Directors
Samuel Rogatinsky 29 President, Chief Operating
Officer and Director
Paul Lambert 31 Chief Financial Officer
and Director
William R. Colucci 59 Director
Benjamin Rogatinsky has been the Chief Executive Officer
and Chairman of the Board of Directors of the Company since
March 1999. From 1996 to date, Mr. Rogatinsky has been the
President of National Lithographers and Publishers, Inc., a
commercial printing company. From 1997 to date, Mr.
Rogatinsky has also been employed as the President of
PrintAmerica Management Company, Inc. Benjamin Rogatinsky is
the brother of Samuel Rogatinsky. Mr. Rogatinsky practiced
certified public accounting from 1993 to 1996.
Samuel Rogatinsky has been the President, Chief Operating
Officer and a Director of the Company since March 1999. From
1996 to date, Mr. Rogatinsky has served as the Vice President
of National Lithographers and Publishers, Inc., a commercial
printing company. From 1997 to date, Mr. Rogatinsky has also
been the Vice President of PrintAmerica Management Company,
Inc. Samuel Rogatinsky is the brother of Benjamin Rogatinsky.
Mr. Rogatinsky was an attorney in private practice from 1994
to 1996.
Mr. Lambert has been the Chief Financial Officer and a
Director of the Company since March 1999. For the past five
years, Mr. Lambert has also served as the President of Lambert
Advisors, a management consulting company.
Mr. Colucci has been a Director of the Company since
September, 1997. Mr. Colucci is also presently a consultant
with a privately held management firm known as Harbor Town
Management Group, Inc., a Florida corporation, which provides
investment banking and business consulting services. From
June 1996 to May 1997, Mr. Colucci served as Chief Operating
Officer and SEC Compliance officer for Physicians Laser
Services, Inc., a publicly traded Delaware corporation. From
April 1991 to May 1996, Mr. Colucci served as a senior partner
of Decision Dynamics, Inc., a private business and real estate
consulting firm.
DIRECTORS' COMPENSATION
All directors hold office until the next annual meeting
of shareholders and the election and qualification of their
successors. Each person who serves as a director of the
Company is reimbursed up to $500 for travel expenses if the
director must travel to South Florida and is required to
return to South Florida to attend an emergency director's
meeting.
<PAGE> 3
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number of shares,
based on information obtained from the persons named below, of
the Common Stock and the Preferred Stock of the Company
beneficially owned as of May 31, 1999 by:
* owners of more than 5% of the Company's Common
Stock; and
* all officers and directors of the Company
individually and as a group.
<TABLE>
<CAPTION>
Name & Address of Amount & Nature Percent of Amount and Nature Percent of Class
Beneficial Owner(1) of Beneficial Class(3) of Beneficial Assuming Conversion
Owner(2) Ownership Assuming of Preferred Stock
Conversion of into Common Stock
Preferred Stock
into Common Stock(4)
<S> <C> <C> <C> <C>
Benjamin Rogatinsky 7,837,500 40.96% 11,260,825 42.75%
Samuel Rogatinsky 7,837,500 40.96% 11,260,825 42.75%
Paul Lambert 825,000 4.31% 1,185,350 4.50%
William R. Colucci(5) 197,500 1.20% 197,500 *%
All officers and
directors as a
group (4 persons)(5) 16,697,500 87.27% 23,902,000 90.75%
__________________
* Less than 1%
</TABLE>
(1) The address of each of the persons listed above is care
of the Company.
(2) Unless otherwise noted, the Company believes that all
persons named in the table have sole voting and
investment power with respect to all shares of stock
beneficially owned by them.
(3) Based upon 19,134,102 shares of Common Stock outstanding
as of May 31, 1999.
(4) Includes 1,000,000 shares of Preferred Stock that are
convertible into 7,207,000 shares of Common Stock.
(5) Includes the right to purchase up to 75,000 shares of the
Company's Common Stock at any date prior to November 25,
1999.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's directors, officers and persons who own
more than 10% of the Common Stock of the Company ("Reporting
Persons") to file reports of ownership and changes in
ownership with the Securities and Exchange Commission.
Reporting Persons are required by Securities and Exchange
Commission regulations to furnish the Company with copies of
all Section 16(a) reports they file. Based solely upon a
review of (i) copies of section 16(a) filings received by the
Company during or with respect to the 1998 fiscal year and
(ii) certain written representations of its officers and
directors with respect to the filing of annual reports of
changes in beneficial ownership, the Company believes that
each filing required to be made pursuant to Section 16(a) of
the Exchange Act during the 1998 fiscal year has been filed in
a timely manner, except as follows:
<PAGE> 4
Ronald W. Hayes, Jr., a former officer, director and
beneficial owner of more than 10% of the Company's common
stock in July, 1998, failed to timely file a required Form 4
for July 1998 with respect to one transaction. William R.
Colucci, a director, failed to timely file a required Form 4
for July 1998 with respect to one transaction. To the best
knowledge of the Company, Robert & Cyndee Hackney, JTWROS,
beneficial owners of more than 10% of the Company's common
stock during 1998, were delinquent with their Exchange Act
Section 16(a) reporting requirements during the most recent
fiscal year.
COMPENSATION OF EXECUTIVE OFFICERS
Other than indicated in the following table, no
compensation has been paid or accrued for the benefit of any
executive officer or directors of the Company during the
fiscal year ended December 31, 1998.
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------------------------------- ------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Annual Restricted Securities All Other
Name & Compen- Stock Underlying LTIP Compen-
Position Year Salary($) Bonus($) sation Award(s) Options/ Payouts sation
($) Sars(#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald W. Hayes, 1998 10,200(1) -0- -0- -0- -0- -0- 20,000(2)
Jr. Director,
Chairman of the
Board and
President
William R. Colucci 1998 $33,391(3) -0- -0- -0- -0- -0- 5,000(4)
Director
</TABLE>
Notes to table:
(1) In July 1998, Ronald W. Hayes, Jr. was granted 30,000
shares of common stock of the Company as compensation for
serving as the Company's Chairman of the Board of
Directors and President. The per share closing market
price of the Company's common stock on July 14, 1998, the
date of the grant, was $.034.
(2) As part of his compensation for serving as a director of
the Company during 1997, Ronald W. Hayes, Jr. was awarded
options to purchase 100,000 shares of the Company's
common stock at a price of $0.875 per share exercisable,
in whole or in part, at any time on or before January 31,
1999. On January 1, 1998, in connection with the terms
of a contemplated merger which never occurred, the
Company redeemed all such 100,000 options at a per option
price of $0.20 or $20,000 in the aggregate, and such
options were canceled. The per share closing market
price of the Company's common stock on December 31, 1997
was $0.25.
(3) In July 1998, William R. Colucci was granted 98,209
shares of common stock of the Company (an aggregate value
of $33,391) as compensation for serving as a director and
officer of the Company. The per share closing market
price of the Company's common stock on July 14, 1998, the
date of the grant, was $0.34.
(4) As part of his compensation for serving as a director of
the Company during 1997, William R. Colucci was awarded
options to purchase 100,000 shares of the Company's
common stock at a price of $0.687 per share. On January
1, 1998, in connection with the terms of a contemplated
merger which never occurred, the Company redeemed 25,000
options at a per option price of $0.20 or $5,000 in the
aggregate, and such redeemed options were canceled. The
per share closing market price of the Company's common
stock on December 31, 1997 was $0.25.
<PAGE> 5
The Company has no bonus or incentive plans in effect,
nor are there any understandings in place concerning
additional compensation to the Company's officers and
directors, other than the proposed 1999 Stock Incentive Plan
(See Proposal Two).
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except for the issuance of the Company's shares of Common
and Preferred Stock in the acquisition of PrintOnTheNet.com,
Inc., since 1997, no director or executive officer of the
Company, any nominee to election as a director, or any person
known to the Company to own of record or beneficially more
than 5% of the Company's Common Stock or any member of the
immediate family of any of the foregoing persons had, or will
have, any direct or material interest in any transaction or
series of similar transactions to which the Company or any of
its subsidiaries, was or is to be a party, in which the amount
involved exceeds $60,000.
On March 11, 1999, the Company acquired all of the common
stock of PrintOnTheNet.com, Inc. The acquisition was
accomplished by merging PrintOnTheNet.com, Inc. with a wholly
owned subsidiary of Net Lnnx. PrintOnTheNet.com, Inc. then
became a wholly owned subsidiary of Net Lnnx. Shareholders of
PrintOnTheNet.com, Inc. received 16,500,000 shares of common
stock of Net Lnnx and 1,000,000 shares of preferred stock of
Net Lnnx convertible into an additional 7,207,000 shares of
common stock in exchange for their PrintOnTheNet.com, Inc..
stock. As a result, PrintOnTheNet.com, Inc. shareholders now
own approximately 90% of the common stock of Net Lnnx assuming
the shares of Preferred Stock are converted into shares of Net
Lnnx Common Stock. Immediately following the acquisition, all
but one of the members of Net Lnnx Board of Directors
resigned. William R. Colucci continued to serve as a Director
of Net Lnnx and the former shareholders of PrintOnTheNet.com,
Inc., Benjamin Rogatinsky, Samuel Rogatinsky, and Paul
Lambert, were elected to the Board to fill the vacancies
created by the resignations.
PROPOSAL ONE
APPROVAL OF THE REINCORPORATION OF THE COMPANY
INTO THE STATE OF DELAWARE
The Board of Directors has unanimously approved a
proposal to change the Company's state of incorporation from
Pennsylvania to Delaware (the "Reincorporation"). The Board
of Directors believes this change to be in the best interests
of the Company and its shareholders for several reasons.
* The Reincorporation will allow the Company the
increased flexibility and predictability afforded by
Delaware law.
* Reincorporation will enhance the Company's ability
to attract and retain qualified members of the Company's
Board of Directors as well as encourage directors to
continue to make independent decisions in good faith on
behalf of the Company.
* Reincorporation will enable the Board to more fully
consider any proposed takeover attempt and to better
negotiate terms that maximize the benefit to the Company
and its shareholders.
Predictability of Delaware Law. For many years Delaware
has followed a policy of encouraging incorporation in that
state. As part of that policy, Delaware has adopted
comprehensive corporate laws that are revised regularly to
meet changing business circumstances. The Delaware
legislature is particularly sensitive to issues regarding
corporate law and is especially responsive to developments in
modern corporate law. The Delaware courts have developed
considerable expertise in dealing with corporate issues as
well as a substantial body of case law construing Delaware's
corporate law. As a result of these factors, it is
anticipated that Delaware law will provide greater
predictability in the Company's legal affairs than is
presently available under Pennsylvania law.
<PAGE> 6
Ability to Attract and Retain Directors. In 1986,
Delaware amended its corporate law to allow corporations to
limit the personal monetary liability of its directors for
their conduct as directors under certain circumstances. The
directors have elected to adopt such a provision in the
Restated Certificate of Incorporation that would govern the
Company after the Reincorporation. Delaware law does not
permit a Delaware corporation to limit or eliminate the
liability of its directors for breaches of their fiduciary
duty of loyalty, intentional misconduct, bad faith conduct,
unlawful distributions or any transaction from which the
director derives an improper personal benefit. The Board of
Directors believes that Delaware incorporation, and the
provisions of the Delaware Certificate of Incorporation, will
enhance the Company's ability to recruit and retain directors
in the future. However, the shareholders should be aware that
such a provision inures to the benefit of the directors, and
the interest of the Board of Directors in recommending the
Reincorporation may therefore be in conflict with the
interests of the shareholders. See "Limitations on Director
Liability" and "Indemnification of Officers and Directors"
below for a more complete discussion of these issues.
Hostile Takeovers. Delaware law permits the Company to
take protective measures in order to deter hostile takeover
attempts. A hostile takeover attempt may have a positive or
a negative effect on the Company and its shareholders,
depending on the circumstances surrounding a particular
takeover attempt. Takeover attempts that have not been
negotiated or approved by the board of directors of a
corporation can seriously disrupt the business and management
of a corporation and generally present to the shareholders the
risk of terms which may be less than favorable to all of the
shareholders than would be available in a board approved
transaction. Board approved transactions may be carefully
planned and undertaken at an opportune time in order to obtain
maximum value for the corporation and all of its shareholders
with due consideration to matters such as the recognition or
postponement of gain or loss for tax purposes, the management
and business of the acquiring corporation and maximum
strategic deployment of corporate assets.
The Board of Directors recognizes that hostile takeover
attempts do not always have the unfavorable consequences or
effects described above and may frequently be beneficial to
the shareholders, providing all of the shareholders with
considerable value for their shares. However, the Board of
Directors believes that the potential disadvantages of
unapproved takeover attempts are sufficiently great that
prudent steps may in the future be required to reduce the
likelihood of such takeover attempts, in the best interests of
the Company and its shareholders.
Shareholders should recognize that one of the effects of
the Reincorporation may be to discourage a future attempt to
acquire control of the Company which is not presented to and
approved by the Board of Directors, but which a substantial
number and perhaps even a majority of the Company's
shareholders might believe to be in their best interests or in
which shareholders might receive a substantial premium for
their shares over the current market prices. As a result,
shareholders that might desire to participate in such a
transaction may not have an opportunity to do so.
METHOD OF REINCORPORATION
The proposed Reincorporation would be accomplished by
merging the Company into our sole wholly-owned Delaware
subsidiary, PrintOnTheNet.com, Inc., pursuant to an Agreement
and Plan of Merger, a copy of which is attached as Exhibit A
to this Proxy Statement. Upon the effective date of the
merger, the Delaware corporation's name will be
PrintOnTheNet.com, Inc. The Reincorporation will not result
in any change in the Company's business, assets or
liabilities, will not cause its corporate headquarters to be
moved and will not result in any relocation of management or
other employees.
On the effective date of the proposed Reincorporation,
each outstanding share of the Company's common stock will
automatically convert into one share of common stock of the
Delaware corporation and each outstanding share of the
Company's preferred stock will automatically convert into
7.207 shares of common stock of the Delaware corporation
having the same rights, and shareholders of the Company will
automatically become shareholders of the Delaware corporation.
On the effective date of the Reincorporation, the number of
outstanding shares of common stock of the Delaware corporation
will be equal to the number of shares of common stock of the
Company outstanding immediately prior to the effective date of
the Reincorporation assuming the conversion of the preferred
<PAGE> 7
stock into shares of common stock. In addition, each
outstanding option or right to acquire shares of common stock
of the Company will be converted into an option or right to
acquire an equal number of shares of common stock of the
Delaware corporation, under the same terms and conditions as
the original options or rights. The Company's 1999 Stock
Incentive Plan (if approved by the shareholders at the Annual
Meeting) will be adopted and continued by the Delaware
corporation following the Reincorporation. Shareholders
should recognize that approval of the proposed Reincorporation
will constitute approval of the adoption and assumption of
that plan by the Delaware corporation.
No action need be taken by shareholders to exchange their
stock certificates; this will be accomplished at the time of
the next transfer by the shareholder. Certificates for shares
in the Company will automatically represent an equal number of
shares in the Delaware corporation upon completion of the
merger.
It is anticipated that the Reincorporation, if approved
by the shareholders, would be completed as soon thereafter as
practicable. However, the Reincorporation may be abandoned or
the Agreement and Plan may be amended (with certain
exceptions), either before or after shareholder approval has
been obtained, if in the opinion of the Board of Directors,
circumstances arise that make such action advisable; provided,
that any amendment that would effect a material change from
the charter provisions discussed in this Proxy Statement would
require further approval by the holders of a majority of the
outstanding shares of the common stock.
SIGNIFICANT CHANGES CAUSED BY REINCORPORATION
In general, the Company's corporate affairs are presently
governed by the corporate law of Pennsylvania, the Company's
state of incorporation, the Company's Articles of
Incorporation (the "Pennsylvania Articles") and by the
Company's Bylaws, as amended (the "Pennsylvania Bylaws"),
which have been adopted pursuant to Pennsylvania law. The
Pennsylvania Articles and Pennsylvania Bylaws are available
for inspection during business hours at the principal
executive offices of the Company. In addition, copies may be
obtained by writing to the Company at 7700 N.W. 37th Avenue,
Miami, FL 33417, Attention: Benjamin Rogatinsky.
If the Reincorporation proposal is adopted, the Company
will merge into PrintOnTheNet.com, Inc., and its business will
be continued by PrintOnTheNet.com, Inc. a Delaware
corporation. Following the merger, issues of corporate
governance and control would be controlled by Delaware, rather
than Pennsylvania law. The Pennsylvania Articles and
Pennsylvania Bylaws, will, in effect, be replaced by the
Restated Certificate of Incorporation of PrintOnTheNet.com,
Inc. (the "Delaware Certificate") and the bylaws of
PrintOnTheNet.com, Inc. (the "Delaware Bylaws"), copies of
which are attached as Exhibits B and C to this Proxy
Statement.
Limitations On Director Liability. The Delaware
Certificate eliminates the liability of directors to the
fullest extent permissible under Delaware law, as such law
exists currently or as it may be amended in the future. Under
Delaware law, a corporation may not eliminate or limit
director monetary liability for:
* breaches of the director's duty of loyalty to the
corporation or its shareholders;
* acts or omissions not in good faith or involving
intentional misconduct or knowing violations of law;
* the payment of unlawful dividends or unlawful stock
repurchases or redemptions; or
* transactions in which the director received an
improper personal benefit. A limitation of liability
provision also may not limit director's liability for
violation of, or otherwise relieve the Delaware
corporation or its directors from the necessity of
complying with, federal or state securities laws or
affect the availability of non-monetary remedies such
as injunctive relief or rescission.
The proposed Reincorporation and associated measures are
designed to shield a director from suits by the Delaware
corporation or its shareholders for monetary damages for
negligence or gross negligence by the director in failing to
satisfy the director's duty of care. As a result, an action
for monetary damages against a director predicated on a breach
of the duty of care would be available only if the Delaware
corporation or its shareholders were able to establish that
the director was disloyal in his conduct, failed to act in
good faith, engaged in intentional misconduct, knowingly
<PAGE> 8
violated the law, derived an improper personal benefit or
approved an illegal dividend or stock repurchase.
Consequently, the effect of such measures may be to limit or
eliminate an effective remedy which might otherwise be
available to a shareholder who is dissatisfied with the Board
of Directors' decisions. Although an aggrieved shareholder
could sue to enjoin or rescind an action taken or proposed by
the Board of Directors, such remedies may not be timely or
adequate to prevent or redress injury in all cases.
The Company believes that directors are motivated to
exercise due care in managing the Company's affairs primarily
by concern for the best interests of the Company and its
shareholders rather than by the fear of potential monetary
damage awards. As a result, the Company believes that the
Reincorporation proposal should sustain the Board of
Directors' continued high standard of corporate governance
without any decrease in accountability by directors to the
Company and its shareholders. The Company also believes that
failure to limit director liability as permitted by Delaware
law may discourage highly qualified candidates from becoming
directors of the Company.
Indemnification of Officers and Directors. Delaware law
permits indemnification of officers and directors against
liability incurred in third-party actions if the indemnitee
acted in good faith and he or she reasonably believed the acts
were in or at least not opposed to the best interests of the
Company. Delaware law states that the indemnification
provided by statute shall not be deemed exclusive of any other
rights under any bylaw, agreement, vote of shareholders or
disinterested directors or otherwise. As a result, under
Delaware law, the Delaware corporation is permitted to
indemnify its directors and officers within the limits
established by law and public policy, pursuant to an express
contract, bylaw provision, shareholder vote, vote of
disinterested directors or otherwise, any or all of which
provide broad indemnification rights.
The Board of Directors has recognized in considering this
Reincorporation proposal that the individual directors have a
personal interest in obtaining the application of Delaware law
to such indemnity and limitation of liability issues affecting
them and the Company in the event such issues arise from a
potential future case. The Board of Directors also recognizes
that the application of Delaware law, to the extent that any
director or officer is actually indemnified, would result in
expense to the Company. The Board of Directors believes,
however, that the overall effect of Reincorporation is to
provide a corporate legal environment that enhances the
Company's ability to attract and retain high quality outside
directors and thus benefits the interests of the Company and
its shareholders.
Anti-Takeover Measures. Delaware law has been widely
viewed to permit a corporation greater flexibility in
governing its internal affairs and its relationships with
shareholders and other parties than do the laws of many other
states. In particular, Delaware law permits a corporation to
adopt a number of measures designed to reduce a corporation's
vulnerability to hostile takeover attempts. The Board of
Directors has not adopted or proposed other permitted anti-
takeover measures at this time. However, there can be no
assurance that the Board of Directors will not adopt such
measures in the future.
In addition to permitted anti-takeover measures, for
certain corporations, Section 203 of the Delaware General
Corporation Law ("Section 203") limits the ability of a
potential acquirer to conduct a hostile takeover, as more
fully described below. Section 203 only applies to Delaware
corporations which have a class of voting stock that is (i)
listed on a national securities exchange, (ii) authorized for
quotation on the Nasdaq Stock Market or (iii) held of record
by more than 2,000 shareholders. While the Company does not
currently meet any of these tests, the Company may in the
future meet one of the tests and become subject to Section
203.
Under Section 203, certain "business combinations" by
Delaware corporations with "interested stockholders" are
subject to a three-year moratorium unless specified conditions
are met. Section 203 prohibits a Delaware corporation from
engaging in a "business combination" with an "interested
shareholder" for three years following the date that such
person becomes an interested stockholder.
With certain exceptions, an interested stockholder is a
person or group who or which owns 15% or more of the
corporation's outstanding voting stock (including any rights
to acquire stock pursuant to an option, warrant, agreement,
arrangement or understanding, or upon the exercise of
conversion or exchange rights, and stock with respect to which
<PAGE> 9
the person has voting rights only), or is an affiliate or
associate of the corporation and was the owner of 15% or more
of such voting stock at any time within the previous three
years. For purposes of Section 203, the term "business
combination" is defined broadly to include mergers with or
caused by the interested stockholder; sales or other
dispositions to the interested stockholder (except
proportionately with the corporation's other stockholders) of
assets of the corporation or a subsidiary equal to ten percent
or more of the aggregate market value of the corporation's
consolidated assets or its outstanding stock; the issuance or
transfer by the corporation or a subsidiary of stock of the
corporation or such subsidiary to the interested stockholder
(except for transfers in a conversion or exchange or a pro
rata distribution or certain other transactions, none of which
increase the interested stockholder's proportionate ownership
of any class or series of the corporation's or such
subsidiary's stock); or receipt by the interested stockholder
(except proportionately as a stockholder), directly or
indirectly, of any loans, advances, guarantees, pledges or
other financial benefits provided by or through the
corporation or a subsidiary.
The three year moratorium imposed on business
combinations by Section 203 does not apply if: (i) prior to
the date on which such stockholder becomes an interested
stockholder the board of directors approves either the
business combination or the transaction which resulted in the
person becoming an interested stockholder; (ii) the interested
stockholder owns 85% of the corporation's voting stock upon
consummation of the transaction which made him or her an
interested stockholder (excluding from the 85% calculation
shares owned by directors who are also officers of the target
corporation and shares held by employee stock plans which do
not permit employees to decide confidentially whether to
accept a tender or exchange offer); or (iii) on or after the
date such person becomes an interested stockholder, the board
approves the business combination and it is also approved at
a stockholder meeting by sixty-six and two-thirds percent (66
2/3%) of the voting stock not owned by the interested
stockholder.
A Delaware corporation may elect not to be governed by
Section 203 by a provision in its original certificate of
incorporation or an amendment thereto or to the bylaws, which
amendment must be approved by majority stockholder vote and
may not be further amended by the board of directors.
PrintOnTheNet.com, Inc.. does not intend to elect not to be
governed by Section 203.
The constitutionality of Section 203 is challenged from
time to time in lawsuits arising out of ongoing takeover
disputes, and it is not yet clear whether and to what extent
its constitutionality will be upheld by the courts. The
Company believes that so long as the constitutionality of
Section 203 is upheld, Section 203 will encourage any
potential acquirer to negotiate with PrintOnTheNet.com, Inc.'s
Board of Directors. Section 203 also has the effect of
limiting the ability of a potential Delaware acquirer to make
a two-tiered bid for the Delaware corporation in which all
stockholders would not be treated equally. Shareholders
should note that the application of Section 203 to the
Delaware corporation will confer upon the Board the power to
reject a proposed business combination, even though a
potential acquirer may be offering a substantial premium for
PrintOnTheNet.com, Inc.'s shares over the then current market
price (assuming the stock is then publicly traded).
There can be no assurance that the Board of Directors
would not adopt any further anti-takeover measures available
under Delaware law. Moreover, the availability of such
measures under Delaware law, whether or not implemented, may
have the effect of discouraging a future takeover attempt
which a majority of PrintOnTheNet.com, Inc.'s shareholders may
deem to be in their best interests or in which shareholders
may receive a premium for their shares over then current
market prices. As a result, shareholders who might desire to
participate in such transactions may not have the opportunity
to do so. Shareholders should recognize that, if adopted, the
effect of such measures, along with the possibility of
discouraging takeover attempts, may be to limit in certain
respects the rights of shareholders of PrintOnTheNet.com,
Inc.. compared with the rights of shareholders of the Company.
The Board of Directors recognizes that hostile takeover
attempts do not always have the unfavorable consequences or
effects described above and may frequently be beneficial to
the shareholders, providing all of the shareholders with
considerable value for their shares. However, the Board of
Directors believes that the potential disadvantages of
unapproved takeover attempts (such as disruption of the
Company's business and the possibility of terms which may be
less than favorable to all of the shareholders than would be
available in a board-approved transaction) are sufficiently
<PAGE> 10
great such that prudent steps to reduce the likelihood of such
takeover attempts and to enable the Board of Directors to
fully consider the proposed takeover attempt and actively
negotiate its terms are in the best interests of the
corporation and its shareholders.
The Delaware Certificate would increase the number of
shares of common stock the Company is authorized to issue from
25,000,000 shares to 50,000,000 shares consisting of
40,000,000 shares of common stock, $.001 par value, and
10,000,000 shares of preferred stock, $.001 par value. The
additional 40,000,000 shares of common stock would be a part
of the existing class of common stock and, if and when issued,
would have the same rights and privileges as the shares of
common stock presently issued and outstanding. At May 31,
1999, 19, 134,102 shares of common stock were outstanding.
The Board of Directors believes it is desirable to increase
the number of shares of common stock the Company is authorized
to issue to provide the Company with adequate flexibility in
the future. The Company has no present commitments,
agreements, or intent to issue additional shares of common
stock, other than with respect to currently reserved shares,
in connection with transactions in the ordinary course of the
Company's business, or shares which may be issued under the
Company's proposed 1999 Stock Incentive Plan (See Proposal
Two).
The Board believes it is prudent for the Company to have
this flexibility. The holders of the Company's common stock
are not entitled to preemptive rights. Accordingly, the
issuance of additional shares of common stock might dilute,
under certain circumstances, the ownership and voting rights
of shareholders. The proposed increase in the number of
shares of common stock the Company is authorized to issue is
not intended to inhibit a change in control of the Company.
The availability for issuance of additional shares of common
stock could discourage, or make more difficult, efforts to
obtain control of the Company. For example, the issuance of
shares of common stock in a public or private sale, merger, or
similar transaction would increase the number of outstanding
shares, thereby possibly diluting the interest of a party
attempting to obtain control of the Company. The Company is
not aware of any pending or threatened efforts to acquire
control of the Company.
EFFECT OF AUTHORIZATION OF PREFERRED STOCK
The Board of Directors also believes it is advisable to
authorize the issuance up to 10,000,000 shares of preferred
stock, par value $.001 per share. The additional preferred
stock would be available to the Company for issuance in one or
more series as determined in the future by the Board of
Directors. The Board would be empowered to fix, among other
things, the designation of and number of shares to comprise
each series and the relative rights, preferences and
privileges of shares of each series, including the dividends
payable thereon, voting rights, conversion rights, the price
and terms on which shares may be redeemed, the amounts payable
upon such shares in the event of voluntary of involuntary
liquidation and any sinking fund provisions for redemption or
purchases of such shares. The authorized shares of preferred
stock would provide the Company with additional flexibility
concerning possible future acquisitions and financing and
enable it to quickly capitalize on company opportunities.
In casting votes on this Proposal, stockholders should be
aware that the Board of Directors, without further stockholder
approval, may issue preferred stock with voting or conversion
rights which could adversely affect the voting power of the
holders of the common stock, or which could be used as a
defensive measure in connection with an attempted hostile
takeover of the Company. Such shares could be privately
placed with purchasers who might align themselves with the
Board of Directors in opposing a hostile takeover bid. In
addition, the Board could authorize holders of series of
preferred stock to vote as a class, either separately or with
the holders of common stock, or any merger, sale or exchange
of assets by the Company or any other extraordinary corporate
transaction. The Board could also issue preferred stock having
terms that could discourage an acquisition attempt or other
transaction that some stockholders might believe to be in
their best interest or in which stockholders might receive
premium for their stock over the then current market price of
such stock. The Company, however, has no plans or arrangement
to issue any shares of preferred stock.
The affirmative vote of a majority of the shares of
common stock of the Company outstanding as of the Record Date
will be required to approve this Proposal.
<PAGE> 11
Messrs. Ben Rogatinsky, Sam Rogatinsky and Paul Lambert
have indicated they intend to vote for Proposal One.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
REINCORPORATION OF THE COMPANY IN DELAWARE
PROPOSAL TWO
APPROVAL OF THE 1999 STOCK INCENTIVE PLAN
The Board of Directors believes that attracting and
retaining highly qualified key employees and directors is
essential to the Company's growth and success. The Board of
Directors also believes that important advantages to the
Company are gained by a comprehensive compensation program
that includes different types of incentives for motivating
such individuals and rewards for outstanding service. Stock
options will be an important element of the Company's
compensation program because stock options enable employees
and directors to acquire or increase their proprietary
interest in the Company promoting a close identity of
interests between such individuals and the Company's
shareholders. Stock options also provide to employees and
directors an increased incentive to expend their maximum
efforts for the success of the Company's business.
On May 20, 1999 the Board of Directors adopted, subject
to stockholder approval, the PrintOnTheNet.com, Inc. 1999
Stock Incentive Plan. In authorizing grants of options, the
1999 Stock Incentive Plan is intended to give the Company
greater flexibility to respond to rapidly changing business,
economic and regulatory requirements and conditions. In
addition, such flexibility will enhance the ability of the
Company to closely link compensation to performance. The 1999
Stock Incentive Plan will not become effective unless approved
by the holders of a majority of the shares of common stock
present or represented and voting thereon at the Annual
Meeting.
The following discussion of the material features of the
1999 Stock Incentive Plan is qualified by reference to the
text of the 1999 Stock Incentive Plan which is set forth in
Exhibit D hereto.
Administration. The Stock Incentive Plan shall be
administered by the Board, or in the Board's sole discretion
by the Compensation Committee of the Board (the "Committee,"
and with the Board "the Administrator") or such other
committee as may be specified by the Board to perform the
functions and duties of the Committee under the Stock
Incentive Plan. Subject to the provisions of the Stock
Incentive Plan, the Administrator shall determine, from those
eligible to be Participants, the persons to be granted stock
options, stock appreciation rights and restricted stock, the
amount of stock or rights to be optioned or granted to each
such person, and the terms and conditions of any stock option,
stock appreciation rights and restricted stock. Subject to
the provisions of the Stock Incentive Plan, the Administrator
is authorized to interpret the Stock Incentive Plan, to make,
amend and rescind rules and regulations relating to the Stock
Incentive Plan and to make all the determinations necessary or
advisable for the Stock Incentive Plan's administration.
Participants. The Participants in the Stock Incentive
Plan are those employees, consultants and advisors of the
Company who in the judgment of the Administrator are or will
become responsible for the direction and financial success of
the Company. Employees include officers and directors who are
also employees of the Company.
Shares Subject to Plan. The maximum number of shares
with respect to which stock options or stock appreciation
rights may be granted or which may be awarded as restricted
stock under the Stock Incentive Plan is 4,000,000 shares of
Common Stock. Shares covered by expired or terminated stock
options or stock appreciation rights or forfeited restricted
stock awards will again become available for grant or award
under the Stock Incentive Plan. The number of shares subject
to each outstanding stock option, stock appreciation right or
restricted stock award, the option price with respect to
outstanding stock options, the grant value with respect to
<PAGE> 12
outstanding stock appreciation rights and the aggregate number
of shares remaining available under the Stock Incentive Plan
will be subject to such adjustment as the Administrator, in
its discretion, deems appropriate to reflect such events as
stock dividends, stock splits, recapitalizations, mergers,
consolidations or reorganizations of, or by, the Company.
Stock Options and Stock Appreciation Rights. Subject to
the terms of the Stock Incentive Plan, the Administrator may
grant to Participants either Incentive Options meeting the
definition of an incentive stock option under Section 422 of
the Code or Nonqualified Options not meeting such definition,
or any combination thereof. The exercise price for an
Incentive Option may not be less than 100% of the fair market
value of the stock on the date of grant; however, the exercise
price for an Incentive Option granted to an employee who owns
more than 10% of the voting stock of the Company or any
subsidiary may not be less than 110% of the fair market value
of the stock on the date of grant.
Subject to the terms of the Stock Incentive Plan, the
Administrator may grant stock appreciation rights to
Participants either in conjunction with, or independently of,
any stock options. Stock appreciation rights may be granted in
conjunction with stock options as an alternative right or as
an additional right. Upon exercise of a stock appreciation
right, a Participant will generally be entitled to receive an
amount equal to the difference between the fair market value
of the shares at the time of grant and the fair market value
of the shares at the time of exercise. This amount may be
payable in cash, shares of Common Stock or a promissory note
from the Participant, or any combination thereof, as
determined in the discretion of the Administrator.
The exercise period for stock options and stock
appreciation rights will be determined by the Administrator,
but no stock option or stock appreciation right may be
exercisable prior to the expiration of six months from the
date of grant or after 10 years from the date of grant,
subject to certain conditions and limitations.
Incentive options and related stock appreciation rights
are not transferable by a Participant other than by will or by
the laws of descent and distribution, and incentive options
and related stock appreciation rights are exercisable, during
the lifetime of the Participant, only by the Participant.
If the employment or consultancy of a Participant by the
Company terminates, the Administrator may, in its discretion,
permit the exercise of stock options and stock appreciation
rights granted to such Participant (i) for a period not to
exceed three months following termination of employment with
respect to Incentive Options or related stock appreciation
rights if termination of employment is not due to death or
permanent disability of the Participant, (ii) for a period not
to exceed one year following termination of employment with
respect to Incentive Options or related stock appreciation
rights if termination of employment is due to the death or
permanent disability of the Participant, and (iii) for a
period not to extend beyond the expiration date with respect
to Nonqualified Options or related or independently granted
stock appreciation rights.
Restricted Stock Awards. Subject to the terms of the
Stock Incentive Plan, the Administrator may award shares of
restricted stock to Participants. All shares of restricted
stock will be subject to the following terms and conditions,
among others: (i) at the time of each award of restricted
shares, a restricted period of no less than six months and no
greater than five years, will be established for the shares.
The restricted period may differ among Participants and may
have different expiration dates with respect to portions of
shares covered by the same award; (ii) shares of restricted
stock awarded to Participants may not be sold, assigned,
transferred, pledged, hypothecated or otherwise encumbered
during the restricted period applicable to such shares. Except
for such restrictions on transfer, a Participant will have all
of the rights of a shareholder in respect to restricted shares
awarded to him or her including the right to receive any
dividends on, and the right to vote, the shares; and (iii) if
a Participant ceases to be an employee or consultant of the
Company for any reason other than death or permanent
disability, all shares theretofore awarded to the Participant
which are still subject to the restrictions imposed by
provision (ii) above will upon such termination of employment
or consultancy be forfeited and transferred back to the
Company. If such employment or consultancy is terminated by
action of the Company without cause or by agreement between
the Company and the Participant, the Administrator may, in its
discretion, release some or all of the shares from the
restrictions; (iv) if a Participant ceases to be an employee
or consultant of the Company by reason of death or permanent
disability, the restrictions will lapse with respect to shares
then subject to such restrictions, unless otherwise determined
by the Administrator.
<PAGE> 13
Termination, Duration and Amendments of Plan. The Stock
Incentive Plan may be abandoned or terminated at any time by
the Board. Unless sooner terminated, the Stock Incentive Plan
will terminate on the date ten years after its adoption by the
Board. The termination of the Stock Incentive Plan will not
affect the validity of any stock option, stock appreciation
right or restricted stock outstanding on the date of
termination.
For the purpose of conforming to any changes in
applicable law or governmental regulation, or for any other
lawful purpose, the Board will have the right, with or without
approval of the shareholders of the Company, to amend or
revise the terms of the Stock Incentive Plan at any time;
however, no such amendment or revision will, without the
consent of the holder thereof, change the stock option price
(other than anti-dilution adjustments) or alter or impair any
stock option, stock appreciation right or restricted stock
which has been previously granted or awarded under the Stock
Incentive Plan.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
ADOPTION OF THE 1999 STOCK INCENTIVE PLAN
PROPOSAL THREE
ELECTION OF DIRECTORS
The persons named in the accompanying form of proxy
intend to vote all valid proxies received in favor of the
election of each of the persons named below as nominees for
director unless authority is withheld. Directors elected at
the Annual Meeting will serve until the next Annual Meeting of
Shareholders and until their successors are elected and
qualified, subject to the election and qualification of their
successors and to their earlier death, resignation or removal.
If any nominee is unable or unwilling to serve, the persons
named in the accompanying form of proxy can vote for
substitute nominees. Management does not anticipate that this
will happen. Each director shall be elected by a plurality of
the votes cast.
NOMINEES FOR DIRECTOR
The Company's Board of Directors consists of four
persons. The following four persons have been nominated by
the Board of Directors to fill such positions. All are
currently Directors of the Company. Three are the Company's
executive officers in addition to their positions as Directors
of the Company. Set forth below are the names, ages as of May
31, 1999, and positions currently held of all four:
NAME AGE POSITION
Benjamin Rogatinsky 31 CEO and Chairman of
the Board of Directors
Samuel Rogatinsky 29 President, Chief Operating
Officer and Director
Paul Lambert 31 Chief Financial
Officer and Director
William R. Colucci 59 Director
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" ALL NOMINEES FOR DIRECTOR.
<PAGE> 14
PROPOSAL FOUR
RATIFICATION OF APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has appointed the firm of
Berkowitz Dick Pollack & Brant to continue as independent
certified public accountants for the Company for the fiscal
year ending December 31, 1999. Berkowitz Dick Pollack & Brant
has been acting as independent certified public accountants of
the Company since March 25, 1999. Unless otherwise indicated,
properly executed proxies will be voted for the ratification
of the appointment of Berkowitz Dick Pollack & Brant,
independent certified public accountants, to audit the books
and accounts of the Company for the fiscal year ending
December 31, 1999.
Representatives of Berkowitz Dick Pollack & Brant are
expected to be present at the Annual Meeting, will be given an
opportunity to make a statement if they desire to do so, and
will also be available to respond to appropriate questions
from shareholders.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" THE RATIFICATION OF THE APPOINTMENT OF
Berkowitz Dick Pollack & Brant AS INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999.
SHAREHOLDER PROPOSALS
Shareholders who intend to submit proposals to the
Company's shareholders at the 2000 Annual Meeting of
Shareholders must submit such proposals to the Company no
later than January 30, 2000 in order to be considered for
inclusion in the Proxy Statement and Proxy to be distributed
by the Board of Directors in connection with that meeting.
Shareholder proposals should be submitted to Benjamin
Rogatinsky, Chief Executive Officer, PrintOnTheNet.com, Inc.,
7700 N.W. 37th Avenue, Miami, Florida 33147.
ADDITIONAL INFORMATION
The Board of Directors is not aware of any matters to be
presented at the meeting other than the matters described
herein and does not intend to bring any other matters before
the meeting. However, if any other matters should come before
the meeting, or any adjournment thereof, the persons
soliciting the proxies will have discretionary authority to
vote all proxies in accordance with their best judgment.
If you do not plan to attend the meeting, in order that
your shares may be represented and in order to assure the
required quorum, please sign, date and return your proxy
promptly. In the event you are able to attend the meeting, at
your request, the Company will cancel any proxy executed by
you.
FINANCIAL MATTERS
Detailed financial information of the Company for the
fiscal year ended December 31, 1998 is included in the
Company's Annual Report to Stockholders, a copy of which is
enclosed herewith.
REPORT TO STOCKHOLDERS
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR
THE FISCAL YEAR ENDED DECEMBER 31, 1998 AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES THERETO, WILL BE FURNISHED WITHOUT
CHARGE TO ANY SHAREHOLDER UPON WRITTEN REQUEST TO THE COMPANY
AT PrintOnTheNet.com, Inc., 7700 N.W. 37th AVENUE, MIAMI, FLORIDA
33147, ATTENTION: CHIEF EXECUTIVE OFFICER.
<PAGE> 15
EXPENSES OF SOLICITATION
The Company will bear the cost of soliciting proxies from
its shareholders and will enlist the help of banks and
brokerage houses in soliciting proxies from their customers.
The Company will reimburse these institutions for out-of-
pocket expenses incurred thereby. In addition to being
solicited through the mails, proxies may also be solicited
personally or by telephone by the directors, officers and
employees of the Company.
Kindly date, sign and return the enclosed proxy card.
By Order of the Board of
Directors
/s/ Benjamin Rogantinsky
BENJAMIN ROGATINSKY
Chairman and Chief Executive
Officer
<PAGE> 16
NET LNNX, INC.
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JULY 26, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY
The undersigned, revoking all prior proxies, hereby
appoint(s) Benjamin Rogatinsky and Samuel Rogatinsky, and each
of them, with full power of substitution, as proxies to
represent and vote, as designated herein, all shares of stock
of NET LNNX, INC. (the "Company"), which the undersigned would
be entitled to vote if personally present at the Annual
Meeting of Shareholders of the Company to be held on July 26,
1999 at 7700 N.W. 37th Avenue, Miami, FL 33147 at 10:00 a.m.
local time, and at any adjournment thereof (the "Meeting").
In their discretion, the proxies are authorized to vote
upon such other matters as may properly come before the
meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the
manner directed herein by the undersigned stockholder. If no
direction is given, this proxy will be voted FOR all
proposals. Attendance of the undersigned at the meeting or at
any adjournment thereof, will not be deemed to revoke this
proxy unless the undersigned shall revoke this proxy in
writing or shall deliver a subsequently dated proxy to the
Chief Executive Officer of the Company or shall vote in person
at the Meeting.
PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID RETURN ENVELOPE.
1. To approve and adopt the Agreement and Plan of Merger
resulting in the Reincorporation of the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. To approve and adopt the Company's 1999 Stock Incentive
Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To elect the following four (4) directors (except as
marked below) for the ensuing year.
NOMINEES: Benjamin Rogatinsky; Samuel Rogatinsky; Paul
Lambert; and William R. Colucci.
[ ] FOR all nominees (except as marked below)
[ ] WITHHOLD authority to vote for all nominees
For all nominees except the following nominee(s):
___________________________________________________________
(CONTINUED AND TO BE SIGNED, ON REVERSE SIDE)
<PAGE> 17
4. To ratify the selection by the Board of Directors of
Berkowitz Dick Pollack & Brant as the Company's
independent accountants for the fiscal year ending
December 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Dated: _______________ , 1999
_________________________
Signature
_________________________
Print name
_________________________
Signature if held jointly
_________________________
Print name
Please sign exactly as name appears hereon. If the stock is
registered in the names of two or more persons, each should
sign. Executors, administrators, trustees, guardians,
attorneys and corporate officers should add their titles.
<PAGE> 18
EXHIBIT "A"
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
NET LNNX, INC.
(a Pennsylvania corporation)
AND
PrintOnTheNet.Com, inc.
(a Delaware corporation)
THIS AGREEMENT AND PLAN OF MERGER is made and entered
into as of the ____ day of July, 1999 by and between Net Lnnx,
Inc., a business corporation organized under the laws of the
State of Pennsylvania, and PrintOnTheNet.Com, Inc., a
corporation organized under the laws of the State of Delaware.
The Agreement and Plan was adopted on July __, 1999 by
resolution of the Board of Directors of Net Lnnx, Inc., a
Pennsylvania corporation, and adopted on July __, 1999 by
resolution of the Board of Directors of PrintOnTheNet.Com,
Inc., a Delaware corporation. The names of the corporations
planning to merge are Net Lnnx, Inc., a Pennsylvania
corporation, and PrintOnTheNet.Com, Inc., a Delaware
corporation. The name of the surviving corporation into which
Net Lnnx, Inc., a Pennsylvania corporation, plans to merge is
PrintOnTheNet.Com, Inc., a Delaware corporation.
1. Net Lnnx, Inc., a Pennsylvania corporation, and
PrintOnTheNet.Com, Inc., a Delaware corporation, shall,
pursuant to the provisions of the Business Corporation Law of
the State of Pennsylvania Act and the provisions of the
General Corporation Law of the State of Delaware, be merged
with and into a single corporation, to wit, PrintOnTheNet.Com,
Inc., a Delaware corporation, which shall be the surviving
corporation upon the effective time and date of the merger and
which is sometimes hereinafter referred to as the "surviving
corporation", and which shall continue to exist as surviving
corporation under its present name, PrintOnTheNet.Com, Inc.
pursuant to the provisions of the General Corporation Law of
the State of Delaware. The separate existence of Net Lnnx,
Inc., a Pennsylvania corporation, which is sometimes
hereinafter referred to as the "disappearing corporation",
shall cease at the effective time and date of the merger in
accordance with the provisions of the Business Corporation Law
of the State of Pennsylvania.
2. The Certificate of Incorporation of the surviving
corporation at the effective time and date of the merger in
the State of Delaware shall be the Certificate of
Incorporation of said surviving corporation and said
Certificate of Incorporation shall continue in full force and
effect until amended and changed in the manner prescribed by
the provisions of the General Corporation Law of the State of
Delaware.
3. The Bylaws of the surviving corporation at the
effective time and date of the merger in the State of Delaware
shall be the Bylaws of said surviving corporation and will
continue in full force and effect until changed, altered, or
amended as therein provided and in the manner prescribed by
the provisions of the General Corporation Law of the State of
Delaware.
<PAGE> A-1
4. The directors and officers in office of the
surviving corporation at the effective time and date of the
merger in the State of Delaware shall be the first members of
the Board of Directors and the first officers of the surviving
corporation, all of whom shall hold their directorships and
offices until the election and qualification of their
respective successors or until their tenure is otherwise
terminated in accordance with the Bylaws of the surviving
corporation.
5. Each issued share of common stock of the
disappearing corporation and each right to purchase a share of
common stock in the disappearing corporation immediately prior
to the effective time and date of the merger shall, at the
effective time and date of the merger, be converted into one
share of common stock of the surviving corporation or the
right to purchase one share of common stock of the surviving
corporation on the same terms and conditions. Each issued
share of preferred stock of the disappearing corporation and
each right to purchase a share of preferred stock in the
disappearing corporation immediately prior to the effective
time and date of the merger shall, at the effective time and
date of the merger, be converted into 7.207 shares of common
stock of the surviving corporation or the right to purchase
7.207 shares of common stock of the surviving corporation on
the same terms and conditions. The issued shares of the
surviving corporation shall not be converted or exchanged in
any manner and each said share which is issued at the
effective time and date of the merger shall be returned and
cancelled by the surviving corporation and shall be of no
value.
6. The Agreement and Plan of Merger has been submitted
to the shareholders of the disappearing corporation for their
approval in the manner prescribed by the provisions of the
Business Corporation Law of the State of Pennsylvania, and the
merger of the disappearing corporation with and into the
surviving corporation has been authorized in the manner
prescribed by the General Corporation Law of the State of
Delaware.
7. The disappearing corporation and the surviving
corporation hereby stipulate that they will cause to be
executed and filed and/or recorded any document or documents
prescribed by the laws of the State of Pennsylvania and of the
State of Delaware, and that they will cause to be performed
all necessary acts therein and elsewhere to effectuate the
merger.
8. The Board of Directors and the proper officers of
the disappearing corporation and the surviving corporation,
respectively, are hereby authorized, empowered, and directed
to do any and all acts and things, and to make, execute,
deliver, file, and/or record any and all instruments, papers,
and documents which shall be or become necessary, proper, or
convenient to carry out or put into effect any of the
provisions of this Plan and Agreement of Merger or of the
merger herein provided for.
9. The merger shall become effective on the time and
date on which the Articles of Merger have been filed with the
Department of State of the State of Pennsylvania and the
Certificate of Merger has been filed with the Secretary of
State of the State of Delaware.
<PAGE> A-2
IN WITNESS WHEREOF, this Plan and Agreement of Merger is
hereby executed upon behalf of the disappearing corporation
and the surviving corporation.
NET LNNX, INC., a Pennsylvania
corporation
By:______________________________
Ben Rogatinsky, Chairman
and CEO
PrintOnTheNet.Com, Inc, a Delaware
corporation
By:_______________________________
Ben Rogatinsky, Chairman
and CEO
<PAGE> A-3
EXHIBIT "B"
RESTATED CERTIFICATE OF INCORPORATION
OF
PRINTONTHENET.COM, INC.
It is hereby certified that:
1. The present name of the corporation (hereinafter called
the "Corporation") is PrintOnTheNet.Com, Inc., which is the name
under which the Corporation was originally incorporated; and the
date of filing the original Certificate of Incorporation of the
Corporation with the Secretary of State of the State of Delaware
is January 27, 1999.
2. The Certificate of Incorporation of the Corporation is
hereby amended in its entirety and replaced by substituting in
lieu thereof the Restated Certificate of Incorporation hereinafter
provided for.
3. The provisions of the Certificate of Incorporation of
the Corporation as herein amended, are hereby restated and
integrated in the single instrument which is hereinafter set
forth, and which is entitled the Restated Certificate of
Incorporation of PrintOnTheNet.Com, Inc., without any further
amendments other than the amendments herein certified.
4. The amendments and the restatement of the Certificate of
Incorporation herein certified have been duly adopted by the
stockholders in accordance with the provisions of Sections 228,
242, and 245 of the General Corporation Law of the State of
Delaware.
<PAGE> B-1
5. The Certificate of Incorporation of the Corporation, as
amended and restated herein, shall read as follows:
ARTICLE FIRST
NAME
The name of the corporation (hereinafter called the
"Corporation") is PrintOnTheNet.Com, Inc.
ARTICLE SECOND
REGISTERED OFFICE
The address of the registered office of the Corporation in
the State of Delaware is 1013 Centre Road, Wilmington, DE, 19805,
County of New Castle. The name of the registered agent of the
Corporation at such address is Corporation Service Company.
ARTICLE THIRD
PURPOSE
The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
ARTICLE FOURTH
CAPITAL STOCK
The total number of shares of all classes of stock that the
Corporation shall have the authority to issue is 50,000,000
shares, consisting of:
(a) 40,000,000 shares of common stock (the "Common Stock"),
par value $.001 per share;
(b) 10,000,000 shares of preferred stock (the "Preferred
Stock"), par value $.001 per share.
<PAGE> B-2
The designations, powers, preferences and relative
participating, optional or other special rights, and the
qualifications, limitations and restrictions thereof in respect of
the Preferred Stock and the Common Stock are as follows:
A. COMMON STOCK
1. Voting.Except as otherwise expressly provided by law,
and subject to the voting rights provided to the holders of
Preferred Stock by this Certificate of Incorporation, the Common
Stock shall have exclusive voting rights on all matters requiring
a vote of stockholders, voting together with the holders of
Preferred Stock, as one class.
2. Other Rights. Each share of Common Stock issued and
outstanding shall be identical in all respects one with the other,
and no dividends shall be paid on any shares of Common Stock
unless the same is paid on all shares of Common Stock outstanding
at the time of such payment. Except for and subject to those
rights expressly granted to the holders of the Preferred Stock, or
except as may be provided by the laws of the State of Delaware,
the holders of Common Stock shall have exclusively all other
rights of stockholders.
B. PREFERRED STOCK
1. Issuance.The Preferred Stock may be issued from time to
time in one or more series. Subject to the limitations set forth
herein and any limitations prescribed by law, the Board of
Directors is expressly authorized, prior to issuance of any series
of Preferred Stock, to fix by resolution or resolutions providing
for the issue of any series the number of shares included in such
series and the designations, relative powers, preferences and
rights, and the qualifications, limitations or restrictions of
such series. Pursuant to the foregoing general authority vested
in the Board of Directors, but not in limitation of the powers
conferred on the Board of Directors thereby and by the General
Corporation Law of the State of Delaware, the Board of Directors
is expressly authorized to determine with respect to each series
of Preferred Stock:
(a) the designation or designations of such series and
the number of shares (which number from time to time may be
decreased by the Board of Directors, but not below the number of
such shares then outstanding, or may be increased by the Board of
Directors unless otherwise provided in creating such series)
constituting such series;
(b) the rate or amount and times at which, and the
preferences and conditions under which, dividends shall be payable
on shares of such series, the status of such dividends as
cumulative or noncumulative, the date or dates from which
dividends, if cumulative, shall accumulate, and the status of such
<PAGE> B-3
shares as participating or nonparticipating after the payment of
dividends as to which such shares are entitled to any preference;
(c) the rights and preferences, if any, of the holders
of shares of such series upon the liquidation, dissolution or
winding up of the affairs of, or upon any distribution of the
assets of, the corporation, which amount may vary depending upon
whether such liquidation, dissolution or winding up is voluntary
or involuntary and, if voluntary, may vary at different dates, and
the status of the shares of such series as participating or
nonparticipating after the satisfaction of any such rights and
preferences;
(d) the full or limited voting rights, if any, to be
provided for shares of such series, in addition to the voting
rights provided by law;
(e) the times, terms and conditions, if any, upon which
shares of such series shall be subject to redemption, including
the amount the holders of shares of such series shall be entitled
to receive upon redemption (which amount may vary under different
conditions or at different redemption dates) and the amount,
terms, conditions and manner of operation of any purchase,
retirement or sinking fund to be provided for the shares of such
series;
(f) the rights, if any, of holders of shares of such
series to convert such shares into, or to exchange such shares
for, shares of any other class or classes or of any other series
of the same class, the prices or rates of conversion or exchange,
and adjustments thereto, and any other terms and conditions
applicable to such conversion or exchange;
(g) the limitations, if any, applicable while such
series is outstanding on the payment of dividends or making of
distributions on, or the acquisition or redemption of, Common
Stock or any other class of shares ranking junior, either as to
dividends or upon liquidation, to the shares of such series;
(h) the conditions or restrictions, if any, upon the
issue of any additional shares (including additional shares of
such series or any other series or of any other class) ranking on
a parity with or prior to the shares of such series either as to
dividends or upon liquidation; and
(i) any other relative powers, preferences and
participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of shares of
such series; in each case, so far as not inconsistent with the
provisions of this Certificate of Incorporation or the General
Corporation Law of the State of Delaware as then in effect.
<PAGE> B-4
ARTICLE SIXTH
DURATION
The Corporation shall have perpetual existence.
ARTICLE SEVENTH
POWERS OF BOARD OF DIRECTORS
For the management of the business and for the conduct of the
affairs of the Corporation, and in further definition, limitation
and regulation of the powers of the Corporation and of its
directors and stockholders, it is further provided:
(a) In furtherance and not in limitation of the powers
conferred by the laws of the State of Delaware, the Board of
Directors is expressly authorized and empowered:
(i) to make, alter, amend or repeal the By-laws in any
manner not inconsistent with the laws of the State of
Delaware or this Certificate of Incorporation;
(ii) without the assent or vote of the stockholders, to
authorize and issue securities and obligations of the
Corporation, secured or unsecured, and to include
therein such provisions as to redemption, conversion or
other terms thereof as the Board of Directors in its
sole discretion may determine, and to authorize the
mortgaging or pledging, as security therefor, of any
property of the corporation, real or personal, including
after-acquired property;
(iii) to determine whether any, and if any, what
part, of the net profits of the Corporation or of its
surplus shall be declared in dividends and paid to the
stockholders, and to direct and determine the use and
disposition of any such net profits or such surplus; and
(iv) to fix from time to time the amount of net profits
of the Corporation or of its surplus to be reserved as
working capital or for any other lawful purpose.
<PAGE> B-5
In addition to the powers and authorities
herein or by statute expressly conferred upon it, the
Board of Directors may exercise all such powers and do
all such acts and things as may be exercised or done by
the Corporation, subject, nevertheless, to the
provisions of the laws of the State of Delaware, of this
Certificate of Incorporation and of the By-laws of the
Corporation.
(b) Any director or any officer elected or appointed by the
stockholders or by the Board of Directors may be removed at
any time in such manner as shall be provided in the By-laws
of the Corporation.
(c) From time to time any of the provisions of this
Certificate of Incorporation may be altered, amended or
repealed, and other provisions authorized by the laws of the
State of Delaware at the time in force may be added or
inserted, in the manner and at the time prescribed by said
laws, and all rights at any time conferred upon the
stockholders of the Corporation by this Certificate of
Incorporation are granted subject to the provisions of this
paragraph (c).
ARTICLE EIGHTH
LIMITATION ON LIABILITY
A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (iii) pursuant to Section 174 of the Delaware
General Corporation Law, or (iv) for any transaction from which
the director derived an improper personal benefit. If the
Delaware General Corporation Law is amended after the date of
incorporation of the Corporation to authorize corporate action
further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law, as so amended. No amendment
to or repeal or modification of this Article Eighth shall apply to
or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or
omissions of such director prior to such amendment, repeal, or
modification.
<PAGE> B-6
ARTICLE NINTH
INDEMNIFICATION
The Corporation shall, to the fullest extent permitted by the
provisions of Section 145 of the General Corporation Law of the
State of Delaware, as the same may be amended and supplemented,
indemnify any and all persons whom it shall have the power to
indemnify under said Section from and against any and all of the
expenses, liabilities, or other matters referred to in or covered
by said 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 such person's 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 person."
Signed on this 27 day of May, 1999.
/s/Benjamin Rogatinsky
Benjamin Rogatinsky, Chairman and
CEO
<PAGE> B-7
EXHIBIT "C"
BYLAWS
OF
PRINTONTHENET.COM, INC.
(a Delaware corporation)
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Certificates
representing stock in the corporation shall be signed by, or in
the name of, the corporation by the Chairman or Vice-Chairman of
the Board of Directors, if any, or by the President or a Vice-
President and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the corporation. Any or
all the signatures on any such certificate may be a facsimile.
In case any officer, transfer agent, or registrar who has signed
or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent, or
registrar before such certificate is issued, it may be issued by
the corporation with the same effect as if he were such officer,
transfer agent, or registrar at the date of issue.
Whenever the corporation shall be authorized to issue
more than one class of stock or more than one series of any class
of stock, and whenever the corporation shall issue any shares of
its stock as partly paid stock, the certificates representing
shares of any such class or series or of any such partly paid
stock shall set forth thereon the statements prescribed by the
General Corporation Law. Any restrictions on the transfer or
registration of transfer of any shares of stock of any class or
series shall be noted conspicuously on the certificate
representing such shares.
The corporation may issue a new certificate of stock or
uncertificated shares in place of any certificate theretofore
issued by it, alleged to have been lost, stolen, or destroyed,
and the Board of Directors may require the owner of the lost,
stolen, or destroyed certificate, or his legal representative, to
give the corporation a bond sufficient to indemnify the
corporation against any claim that may be made against it on
account of the alleged loss, theft, or destruction of any such
certificate or the issuance of any such new certificate or
uncertificated shares.
2. UNCERTIFICATED SHARES. Subject to any conditions
imposed by the General Corporation Law, the Board of Directors of
the corporation may provide by resolution or resolutions that
some or all of any or all classes or series of the stock of the
corporation shall be uncertificated shares. Within a reasonable
<PAGE> C-1
time after the issuance or transfer of any uncertificated shares,
the corporation shall send to the registered owner thereof any
written notice prescribed by the General Corporation Law.
3. FRACTIONAL SHARE INTERESTS. The corporation may, but
shall not be required to, issue fractions of a share. If the
corporation does not issue fractions of a share, it shall (1)
arrange for the disposition of fractional interests by those
entitled thereto, (2) pay in cash the fair value of fractions of
a share as of the time when those entitled to receive such
fractions are determined, or (3) issue scrip or warrants in
registered form (either represented by a certificate or
uncertificated) or bearer form (represented by a certificate)
which shall entitle the holder to receive a full share upon the
surrender of such scrip or warrants aggregating a full share. A
certificate for a fractional share or an uncertificated
fractional share shall, but scrip or warrants shall not unless
otherwise provided therein, entitle the holder to exercise voting
rights, to receive dividends thereon, and to participate in any
of the assets of the corporation in the event of liquidation.
The Board of Directors may cause scrip or warrants to be issued
subject to the conditions that they shall become void if not
exchanged for certificates representing the full shares or
uncertificated full shares before a specified date, or subject to
the conditions that the shares for which scrip or warrants are
exchangeable may be sold by the corporation and the proceeds
thereof distributed to the holders of scrip or warrants, or
subject to any other conditions which the Board of Directors may
impose.
4. STOCK TRANSFERS. Upon compliance with provisions
restricting the transfer or registration of transfer of shares of
stock, if any, transfers or registration of transfers of shares
of stock of the corporation shall be made only on the stock
ledger of the corporation by the registered holder thereof, or by
his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the corporation or with
a transfer agent or a registrar, if any, and, in the case of
shares represented by certificates, on surrender of the
certificate or certificates for such shares of stock properly
endorsed and the payment of all taxes due thereon.
5. RECORD DATE FOR STOCKHOLDERS. In order that the
corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment
thereof, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than sixty nor less than ten
days before the date of such meeting. If no record date is fixed
by the Board of Directors, the record date for determining
stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is
waived, at the close of business on the day next preceding the
day on which the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a
new record date for the adjourned meeting. In order that the
corporation may determine the stockholders entitled to consent to
<PAGE> C-2
corporate action in writing without a meeting, the Board of
Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which date shall not be
more than ten days after the date upon which the resolution
fixing the record date is adopted by the Board of Directors. If
no record date has been fixed by the Board of Directors, the
record date for determining the stockholders entitled to consent
to corporate action in writing without a meeting, when no prior
action by the Board of Directors is required by the General
Corporation Law, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be
taken is delivered to the corporation by delivery to its
registered office in the State of Delaware, its principal place
of business, or an officer or agent of the corporation having
custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the corporation's
registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed
by the Board of Directors and prior action by the Board of
Directors is required by the General Corporation Law, the record
date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the
close of business on the day on which the Board of Directors
adopts the resolution taking such prior action. In order that the
corporation may determine the stockholders entitled to receive
payment of any dividend or other distribution or allotment of any
rights or the stockholders entitled to exercise any rights in
respect of any change, conversion, or exchange of stock, or for
the purpose of any other lawful action, the Board of Directors
may fix a record date, which record date shall not precede the
date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to
such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the
close of business on the day on which the Board of Directors
adopts the resolution relating thereto.
6. MEANING OF CERTAIN TERMS. As used herein in respect of
the right to notice of a meeting of stockholders or a waiver
thereof or to participate or vote thereat or to consent or
dissent in writing in lieu of a meeting, as the case may be, the
term "share" or "shares" or "share of stock" or "shares of stock"
or "stockholder" or "stockholders" refers to an outstanding share
or shares of stock and to a holder or holders of record of
outstanding shares of stock when the corporation is authorized to
issue only one class of shares of stock, and said reference is
also intended to include any outstanding share or shares of stock
and any holder or holders of record of outstanding shares of
stock of any class upon which or upon whom the certificate of
incorporation confers such rights where there are two or more
classes or series of shares of stock or upon which or upon whom
the General Corporation Law confers such rights notwithstanding
that the certificate of incorporation may provide for more than
one class or series of shares of stock, one or more of which are
limited or denied such rights thereunder; provided, however, that
no such right shall vest in the event of an increase or a
decrease in the authorized number of shares of stock of any class
or series which is otherwise denied voting rights under the
provisions of the certificate of incorporation, except as any
provision of law may otherwise require.
<PAGE> C-3
7. STOCKHOLDER MEETINGS.
- TIME. The annual meeting shall be held on the
date and at the time fixed, from time to time, by the directors,
provided, that the first annual meeting shall be held on a date
within thirteen months after the organization of the corporation,
and each successive annual meeting shall be held on a date within
thirteen months after the date of the preceding annual meeting.
A special meeting shall be held on the date and at the time fixed
by the directors.
- PLACE. Annual meetings and special meetings shall
be held at such place, within or without the State of Delaware,
as the directors may, from time to time, fix. Whenever the
directors shall fail to fix such place, the meeting shall be held
at the registered office of the corporation in the State of
Delaware.
- CALL. Annual meetings and special meetings may be
called by the directors or by any officer instructed by the
directors to call the meeting.
- NOTICE OR WAIVER OF NOTICE. Written notice of all
meetings shall be given, stating the place, date, and hour of the
meeting and stating the place within the city or other
municipality or community at which the list of stockholders of
the corporation may be examined. The notice of an annual meeting
shall state that the meeting is called for the election of
directors and for the transaction of other business which may
properly come before the meeting, and shall (if any other action
which could be taken at a special meeting is to be taken at such
annual meeting) state the purpose or purposes. The notice of a
special meeting shall in all instances state the purpose or
purposes for which the meeting is called. The notice of any
meeting shall also include, or be accompanied by, any additional
statements, information, or documents prescribed by the General
Corporation Law. Except as otherwise provided by the General
Corporation Law, a copy of the notice of any meeting shall be
given, personally or by mail, not less than ten days nor more
than sixty days before the date of the meeting, unless the lapse
of the prescribed period of time shall have been waived, and
directed to each stockholder at his record address or at such
other address which he may have furnished by request in writing
to the Secretary of the corporation. Notice by mail shall be
deemed to be given when deposited, with postage thereon prepaid,
in the United States Mail. If a meeting is adjourned to another
time, not more than thirty days hence, and/or to another place,
and if an announcement of the adjourned time and/or place is made
at the meeting, it shall not be necessary to give notice of the
adjourned meeting unless the directors, after adjournment, fix a
new record date for the adjourned meeting. Notice need not be
given to any stockholder who submits a written waiver of notice
signed by him before or after the time stated therein.
Attendance of a stockholder at a meeting of stockholders shall
constitute a waiver of notice of such meeting, except when the
stockholder attends the meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the
<PAGE> C-4
purpose of, any regular or special meeting of the stockholders
need be specified in any written waiver of notice.
- STOCKHOLDER LIST. The officer who has charge of
the stock ledger of the corporation shall prepare and make, at
least ten days before every meeting of stockholders, a complete
list of the stockholders, arranged in alphabetical order, and
showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a
place within the city or other municipality or community where
the meeting is to be held, which place shall be specified in the
notice of the meeting, or if not so specified, at the place where
the meeting is to be held. The list shall also be produced and
kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list
required by this section or the books of the corporation, or to
vote at any meeting of stockholders.
- CONDUCT OF MEETING. Meetings of the stockholders
shall be presided over by one of the following officers in the
order of seniority and if present and acting - the Chairman of
the Board, if any, the Vice-Chairman of the Board, if any, the
President, a Vice-President, or, if none of the foregoing is in
office and present and acting, by a chairman to be chosen by the
stockholders. The Secretary of the corporation, or in his
absence, an Assistant Secretary, shall act as secretary of every
meeting, but if neither the Secretary nor an Assistant Secretary
is present the Chairman of the meeting shall appoint a secretary
of the meeting.
- PROXY REPRESENTATION. Every stockholder may
authorize another person or persons to act for him by proxy in
all matters in which a stockholder is entitled to participate,
whether by waiving notice of any meeting, voting or participating
at a meeting, or expressing consent or dissent without a meeting.
Every proxy must be signed by the stockholder or by his attorney-
in-fact. No proxy shall be voted or acted upon after three years
from its date unless such proxy provides for a longer period. A
duly executed proxy shall be irrevocable if it states that it is
irrevocable and, if, and only as long as, it is coupled with an
interest sufficient in law to support an irrevocable power. A
proxy may be made irrevocable regardless of whether the interest
with which it is coupled is an interest in the stock itself or an
interest in the corporation generally.
- INSPECTORS. The directors, in advance of any
meeting, may, but need not, appoint one or more inspectors of
election to act at the meeting or any adjournment thereof. If an
inspector or inspectors are not appointed, the person presiding
at the meeting may, but need not, appoint one or more inspectors.
In case any person who may be appointed as an inspector fails to
appear or act, the vacancy may be filled by appointment made by
the directors in advance of the meeting or at the meeting by the
<PAGE> C-5
person presiding thereat. Each inspector, if any, before
entering upon the discharge of his duties, shall take and sign an
oath faithfully to execute the duties of inspectors at such
meeting with strict impartiality and according to the best of his
ability. The inspectors, if any, shall determine the number of
shares of stock outstanding and the voting power of each, the
shares of stock represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive
votes, ballots, or consents, hear and determine all challenges
and questions arising in connection with the right to vote, count
and tabulate all votes, ballots, or consents, determine the
result, and do such acts as are proper to conduct the election or
vote with fairness to all stockholders. On request of the person
presiding at the meeting, the inspector or inspectors, if any,
shall make a report in writing of any challenge, question, or
matter determined by him or them and execute a certificate of any
fact found by him or them. Except as otherwise required by
subsection (e) of Section 231 of the General Corporation Law, the
provisions of that Section shall not apply to the corporation.
- QUORUM. The holders of a majority of the
outstanding shares of stock shall constitute a quorum at a
meeting of stockholders for the transaction of any business. The
stockholders present may adjourn the meeting despite the absence
of a quorum.
- VOTING. Each share of stock shall entitle the
holders thereof to one vote. Directors shall be elected by a
plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the
election of directors. Any other action shall be authorized by a
majority of the votes cast except where the General Corporation
Law prescribes a different percentage of votes and/or a different
exercise of voting power, and except as may be otherwise
prescribed by the provisions of the certificate of incorporation
and these Bylaws. In the election of directors, and for any
other action, voting need not be by ballot.
8. STOCKHOLDER ACTION WITHOUT MEETINGS. Any action
required by the General Corporation Law to be taken at any annual
or special meeting of stockholders, or any action which may be
taken at any annual or special meeting of stockholders, may be
taken without a meeting, without prior notice and without a vote,
if a consent in writing, setting forth the action so taken, shall
be signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice
of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those
stockholders who have not consented in writing. Action taken
pursuant to this paragraph shall be subject to the provisions of
Section 228 of the General Corporation Law.
<PAGE> C-6
ARTICLE II
DIRECTORS
9. FUNCTIONS AND DEFINITION. The business and affairs of
the corporation shall be managed by or under the direction of the
Board of Directors of the corporation. The Board of Directors
shall have the authority to fix the compensation of the members
thereof. The use of the phrase "whole board" herein refers to
the total number of directors which the corporation would have if
there were no vacancies.
10. QUALIFICATIONS AND NUMBER. A director need not be a
stockholder, a citizen of the United States, or a resident of the
State of Delaware. The initial Board of Directors shall consist
of three (3) persons. Thereafter the number of directors
constituting the whole board shall be at least one. Subject to
the foregoing limitation and except for the first Board of
Directors, such number may be fixed from time to time by action
of the stockholders or of the directors, or, if the number is not
fixed, the number shall be one (1). The number of directors may
be increased or decreased by action of the stockholders or of the
directors.
11. ELECTION AND TERM. The first Board of Directors,
unless the members thereof shall have been named in the
certificate of incorporation, shall be elected by the
incorporator or incorporators and shall hold office until the
first annual meeting of stockholders and until their successors
are elected and qualified or until their earlier resignation or
removal. Any director may resign at any time upon written notice
to the corporation. Thereafter, directors who are elected at an
annual meeting of stockholders, and directors who are elected in
the interim to fill vacancies and newly created directorships,
shall hold office until the next annual meeting of stockholders
and until their successors are elected and qualified or until
their earlier resignation or removal. Except as the General
Corporation Law may otherwise require, in the interim between
annual meetings of stockholders or of special meetings of
stockholders called for the election of directors and/or for the
removal of one or more directors and for the filling of any
vacancy in that connection, newly created directorships and any
vacancies in the Board of Directors, including unfilled vacancies
resulting from the removal of directors for cause or without
cause, may be filled by the vote of a majority of the remaining
directors then in office, although less than a quorum, or by the
sole remaining director.
12. MEETINGS.
- TIME. Meetings shall be held at such time as the
Board shall fix, except that the first meeting of a newly elected
Board shall be held as soon after its election as the directors
may conveniently assemble.
- PLACE. Meetings shall be held at such place
within or without the State of Delaware as shall be fixed by the
Board.
- CALL. No call shall be required for regular
meetings for which the time and place have been fixed. Special
meetings may be called by or at the direction of the Chairman of
the Board, if any, the Vice-Chairman of the Board, if any, of the
President, or of a majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No
notice shall be required for regular meetings for which the time
and place have been fixed. Written, oral, or any other mode of
notice of the time and place shall be given for special meetings
in sufficient time for the convenient assembly of the directors
thereat. Notice need not be given to any director or to any
<PAGE> C-8
member of a committee of directors who submits a written waiver
of notice signed by him before or after the time stated therein.
Attendance of any such person at a meeting shall constitute a
waiver of notice of such meeting, except when he attends a
meeting for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business
to be transacted at, nor the purpose of, any regular or special
meeting of the directors need be specified in any written waiver
of notice.
- QUORUM AND ACTION. A majority of the whole Board
shall constitute a quorum except when a vacancy or vacancies
prevents such majority, whereupon a majority of the directors in
office shall constitute a quorum, provided, that such majority
shall constitute at least one-third of the whole Board. A
majority of the directors present, whether or not a quorum is
present, may adjourn a meeting to another time and place. Except
as herein otherwise provided, and except as otherwise provided by
the General Corporation Law, the vote of the majority of the
directors present at a meeting at which a quorum is present shall
be the act of the Board. The quorum and voting provisions herein
stated shall not be construed as conflicting with any provisions
of the General Corporation Law and these Bylaws which govern a
meeting of directors held to fill vacancies and newly created
directorships in the Board or action of disinterested directors.
Any member or members of the Board of Directors or
of any committee designated by the Board, may participate in a
meeting of the Board, or any such committee, as the case may be,
by means of conference telephone or similar communications
equipment by means of which all persons participating in the
meeting can hear each other.
- CHAIRMAN OF THE MEETING. The Chairman of the
Board, if any and if present and acting, shall preside at all
meetings. Otherwise, the Vice-Chairman of the Board, if any and
if present and acting, or the President, if present and acting,
or any other director chosen by the Board, shall preside.
13. REMOVAL OF DIRECTORS. Except as may otherwise be
provided by the General Corporation Law, any director or the
entire Board of Directors may be removed, with or without cause,
by the holders of a majority of the shares then entitled to vote
at an election of directors.
14. COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more
committees, each committee to consist of one or more of the
directors of the corporation. The Board may designate one or
more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of any member of
any such committee or committees, the member or members thereof
present at any meeting and not disqualified from voting, whether
<PAGE> C-9
or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in
the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board,
shall have and may exercise the powers and authority of the Board
of Directors in the management of the business and affairs of the
corporation with the exception of any authority the delegation of
which is prohibited by Section 141 of the General Corporation
Law, and may authorize the seal of the corporation to be affixed
to all papers which may require it.
15. WRITTEN ACTION. Any action required or permitted to be
taken at any meeting of the Board of Directors or any committee
thereof may be taken without a meeting if all members of the
Board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes
of proceedings of the Board or committee.
ARTICLE III
OFFICERS
The officers of the corporation shall consist of a
President, a Chief Executive Officer, a Chief Financial Officer,
and, if deemed necessary, expedient, or desirable by the Board of
Directors, a Chairman of the Board, and such other officers with
such titles as the resolution of the Board of Directors choosing
them shall designate. Except as may otherwise be provided in the
resolution of the Board of Directors choosing him, no officer
other than the Chairman or Vice-Chairman of the Board, if any,
need be a director. Any number of offices may be held by the
same person, as the directors may determine.
Unless otherwise provided in the resolution choosing him,
each officer shall be chosen for a term which shall continue
until the meeting of the Board of Directors following the next
annual meeting of stockholders and until his successor shall have
been chosen and qualified.
All officers of the corporation shall have such authority
and perform such duties in the management and operation of the
corporation as shall be prescribed in the resolutions of the
Board of Directors designating and choosing such officers and
prescribing their authority and duties, and shall have such
additional authority and duties as are incident to their office
except to the extent that such resolutions may be inconsistent
therewith. The proper officer of the corporation shall record
all of the proceedings of all meetings and actions in writing of
stockholders, directors, and committees of directors, and shall
exercise such additional authority and perform such additional
duties as the Board shall assign to him. Any officer may be
removed, with or without cause, by the Board of Directors. Any
vacancy in any office may be filled by the Board of Directors.
<PAGE> C-10
ARTICLE IV
CORPORATE SEAL
The corporate seal shall be in such form as the Board of
Directors shall prescribe.
ARTICLE V
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall
be subject to change, by the Board of Directors.
ARTICLE VI
CONTROL OVER BYLAWS
Subject to the provisions of the certificate of
incorporation and the provisions of the General Corporation Law,
the power to amend, alter, or repeal these Bylaws and to adopt
new Bylaws may be exercised by the Board of Directors or by the
stockholders.
<PAGE> C-11
EXHIBIT "D"
PrintOnTheNet.Com, Inc.
1999 STOCK INCENTIVE PLAN
1. DEFINITIONS: As used herein, the following
definitions shall apply:
(a) "Administrator" shall mean the Board of Directors or
the Committee if the Board of Directors, in its sole
discretion, designates the Committee to administer the
Plan.
(b) "Board of Directors" shall mean the Board of
Directors of the Corporation.
(c) "Committee" shall mean the Compensation Committee
designated by the Board of Directors of the Corporation,
or such other committee as shall be specified by the
Board of Directors to perform the functions and duties of
the Committee under the Plan; provided, however, that the
Committee shall comply with the requirements of (i) Rule
16b-3 of the Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"),
and (ii) Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), and the regulations
thereunder.
(d) "Corporation" shall mean PrintOnTheNet.Com, Inc., a
Delaware corporation, or any successor there
(e) "Discretion" shall mean in the sole discretion of
the Administrator, with no requirement whatsoever that
the Administrator follow past practices, act in a manner
consistent with past practices, or treat a key employee,
consultant or advisor in a manner consistent with the
treatment afforded other key employees, consultants or
advisors with respect to the Plan.
(f) "Incentive Option" shall mean an option to purchase
Common Stock of the Corporation which meets the
requirements set forth in the Plan and also meets the
definition of an incentive stock option within the
meaning of Section 422 of the Code; provided, however,
that Incentive Options may only be granted to persons who
are employees of the Corporation or of a subsidiary
corporation in which the Corporation owns, directly or
indirectly, 50% or more of the combined voting power of
all classes of stock of the subsidiary corporation. The
stock option agreement for an Incentive Option shall
state that the option is intended to be an Incentive Option.
(g) "Nonqualified Option" shall mean an option to
purchase Common Stock of the Corporation which meets the
requirements set forth in the Plan but does not meet the
definition of an incentive stock option within the
meaning of Section 422 of the Code. The stock option
agreement for a Nonqualified Option shall state that the
option is intended to be a Nonqualified Option.
(h) "Participant" shall mean any individual designated
by the Administrator under Paragraph 6 for participation
in the Plan.
<PAGE> D-1
(i) "Plan" shall mean this PrintOnTheNet.Com, Inc.
1999 Stock Incentive Plan.
(j) "Restricted stock award" shall mean a grant of
Common Stock of the Corporation which is subject to
forfeiture, restrictions against transfer, and such other
terms and conditions determined by the Administrator, as
provided in Paragraph 18.
(k) "Stock appreciation right" shall mean a right to
receive the appreciation in value, or a portion of the
appreciation in value, of a specified number of shares
of the Common Stock of the Corporation, as provided in
Paragraph 12.
(l) "Subsidiary" shall mean any corporation or similar
entity in which the Corporation owns, directly or
indirectly, stock or other equity interest ("Stock")
possessing more than 25% of the combined voting power of
all classes of Stock; provided, however, that an
Incentive Option may be granted to an employee of a
Subsidiary only if the Subsidiary is a corporation and
the Corporation owns, directly or indirectly, 50% or more
of the total combined voting power of all classes of
Stock of the Subsidiary.
2. PURPOSE OF PLAN: The purpose of the Plan is to
provide employees (including officers and directors who are
also employees), consultants and advisors of the Corporation
and its Subsidiaries with an increased incentive to make
significant and extraordinary contributions to the long-term
performance and growth of the Corporation and its
Subsidiaries, to join the interests of employees, consultants
and advisors with the interests of the shareholders of the
Corporation, and to facilitate attracting and retaining
employees, consultants and advisors of exceptional ability.
3. ADMINISTRATION: The Plan shall be administered by
the Administrator. Subject to the provisions of the Plan, the
Administrator shall determine, from those eligible to be
Participants under the Plan, the persons to be granted stock
options, stock appreciation rights and restricted stock, the
amount of stock or rights to be optioned or granted to each
such person, and the terms and conditions of any stock
options, stock appreciation rights and restricted stock.
Subject to the provisions of the Plan, the Administrator is
authorized to interpret the Plan, to make, amend and rescind
rules and regulations relating to the Plan and to make all
other determinations necessary or advisable for the Plan's
administration. Interpretation and construction of any
provision of the Plan by the Administrator shall, unless
otherwise determined by the Board of Directors in cases where
the Committee is the Administrator, be final and conclusive.
A majority of the Administrator shall constitute a quorum, and
the acts approved by a majority of the members present at any
meeting at which a quorum is present, or acts approved in
writing by a majority of the Administrator, shall be the acts
of the Administrator.
4. INDEMNIFICATION OF THE BOARD OF DIRECTORS AND
COMMITTEE MEMBERS: In addition to such other rights of
indemnification as they may have, the members of the Board of
Directors and the Committee shall be indemnified by the
Corporation in connection with any claim, action, suit or
proceeding relating to any action taken or failure to act
under or in connection with the Plan or any option, stock
appreciation right or restricted stock granted hereunder to
the full extent provided for under the Corporation's Bylaws
with respect to indemnification of directors of the
Corporation.
5. MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN: The
maximum number of shares with respect to which stock options
or stock appreciation rights may be granted or which may be
<PAGE> D-2
awarded as restricted stock under the Plan shall be 4,000,000
shares in the aggregate of Common Stock of the Corporation.
The number of shares with respect to which a stock
appreciation right is granted, but not the number of shares
which the Corporation delivers or could deliver to a
Participant upon exercise of a stock appreciation right, shall
be charged against the aggregate number of shares remaining
available under the Plan; provided, however, that in the case
of a stock appreciation right granted in conjunction with a
stock option under circumstances in which the exercise of the
stock appreciation right results in termination of the stock
option and vice versa, only the number of shares subject to
the stock option shall be charged against the aggregate number
of shares remaining available under the Plan. If a stock
option or stock appreciation right expires or terminates for
any reason (other than termination as a result of the exercise
of a related right) without having been fully exercised, or if
shares of restricted stock are forfeited, the number of shares
with respect to which the stock option or stock appreciation
right was not exercised at the time of its expiration or
termination, and the number of forfeited shares of restricted
stock, shall again become available for the grant of stock
options or stock appreciation rights, or the award of
restricted stock, under the Plan, unless the Plan shall have
been terminated.
The number of shares subject to each outstanding stock
option, stock appreciation right or restricted stock award,
the option price with respect to outstanding stock options,
the grant value with respect to outstanding stock appreciation
rights and the aggregate number of shares remaining available
under the Plan shall be subject to such adjustment as the
Administrator, in its Discretion, deems appropriate to reflect
such events as stock dividends, stock splits,
recapitalizations, mergers, consolidations or reorganizations
of or by the Corporation; provided, however, that no
fractional shares shall be issued pursuant to the Plan, no
rights may be granted under the Plan with respect to
fractional shares, and any fractional shares resulting from
such adjustments shall be eliminated from any outstanding
stock option, stock appreciation right, or restricted stock
award.
6. PARTICIPANTS: The Administrator shall determine and
designate from time to time, in its Discretion, those
employees, consultants or advisors of the Corporation or any
Subsidiary to receive stock options, stock appreciation
rights, or restricted stock who, in the judgment of the
Administrator, are or will become responsible for the
direction and financial success of the Corporation or any
Subsidiary; provided, however, that Incentive Options may be
granted only to persons who are employees of the Corporation
or a Subsidiary, and in the case of a Subsidiary only if (i)
the Corporation owns, directly or indirectly, 50% or more of
the total combined voting power of all classes of Stock of the
Subsidiary and (ii) the Subsidiary is a corporation. For the
purposes of the Plan, eligible employees shall include
officers and directors who are also employees of the
Corporation or any Subsidiary.
7. WRITTEN AGREEMENT: Each stock option, stock
appreciation right and restricted stock award shall be
evidenced by a written agreement (each a "Corporation-
Participant Agreement") containing such provisions as may be
approved by the Administrator. Each such Corporation-
Participant Agreement shall constitute a binding contract
between the Corporation and the Participant and every
Participant, upon acceptance of such Agreement, shall be bound
by the terms and restrictions of the Plan and of such
Agreement. The terms of each such Corporation-Participant
Agreement shall be in accordance with the Plan, but each
Agreement may include such additional provisions and
restrictions determined by the Administrator, in its
Discretion, provided that such additional provisions and
restrictions are not inconsistent with the terms of the Plan.
8. ALLOTMENT OF SHARES: Subject to the terms of the
Plan, the Administrator shall determine and fix, in its
Discretion, the number of shares of Common Stock with respect
<PAGE> D-3
to which a Participant may be granted stock options and stock
appreciation rights and the number of shares of restricted
stock which a Participant may be awarded.
9. STOCK OPTIONS: Subject to the terms of the Plan,
the Administrator, in its Discretion, may grant to
Participants either Incentive Options or Nonqualified Options
or any combination thereof. Each option granted under the
Plan shall designate the number of shares covered thereby, if
any, with respect to which the option is an Incentive Option,
and the number of shares covered thereby, if any, with respect
to which the option is a Nonqualified Option.
10. STOCK OPTION PRICE: Subject to the rules set forth
in this Paragraph 10, at the time any stock option is granted,
the Administrator, in its Discretion, shall establish the
price per share for which the shares covered by the option may
be purchased. With respect to an Incentive Option, such
option price shall not be less than 100% of the fair market
value of the stock on the date on which such option is
granted; provided, however, that with respect to an Incentive
Option granted to an employee who at the time of the grant
owns (after applying the attribution rules of Section 424(d)
of the Code) more than 10% of the total combined voting stock
of the Corporation or of any parent or subsidiary, the option
price shall not be less than 110% of the fair market value of
the stock on the date such option is granted. Fair market
value of a share shall be determined by the Administrator and
may be determined by taking the mean between the highest and
lowest quoted selling prices of the Corporation's Common Stock
on any exchange or other market on which the shares of Common
Stock of the Corporation shall be traded on such date, or if
there are no sales on such date, on the next following day on
which there are sales. The option price shall be subject to
adjustment in accordance with the provisions of paragraph 5 of
the Plan.
11. PAYMENT OF STOCK OPTION PRICE: To exercise in whole
or in part any stock option granted hereunder, payment of the
option price in full in cash or, with the consent of the
Administrator, in Common Stock of the Corporation or by a
promissory note payable to the order of the Corporation in a
form acceptable to the Administrator, shall be made by the
Participant for all shares so purchased. Such payment may,
with the consent of the Administrator, also consist of a cash
down payment and delivery of such promissory note in the
amount of the unpaid exercise price. In the Discretion of and
subject to such conditions as may be established by the
Administrator, payment of the option price may also be made by
the Corporation retaining from the shares to be delivered upon
exercise of the stock option that number of shares having a
fair market value on the date of exercise equal to the option
price of the number of shares with respect to which the
Participant exercises the stock option. Such payment may
also be made in such other manner as the Administrator
determines is appropriate, in its Discretion. No Participant
shall have any of the rights of a shareholder of the
Corporation under any stock option until the actual issuance
of shares to said Participant, and prior to such issuance no
adjustment shall be made for dividends, distributions or other
rights in respect of such shares, except as provided in
Paragraph 5.
12. STOCK APPRECIATION RIGHTS: Subject to the terms of
the Plan, the Administrator may grant stock appreciation
rights to Participants either in conjunction with, or
independently of, any stock options granted under the Plan.
A stock appreciation right granted in conjunction with a stock
option may be an alternative right wherein the exercise of the
stock option terminates the stock appreciation right to the
extent of the number of shares purchased upon exercise of the
stock option and, correspondingly, the exercise of the stock
appreciation right terminates the stock option to the extent
of the number of shares with respect to which the stock
<PAGE> D-4
appreciation right is exercised. Alternatively, a stock
appreciation right granted in conjunction with a stock option
may be an additional right wherein both the stock appreciation
right and the stock option may be exercised. A stock
appreciation right may not be granted in conjunction with an
Incentive Option under circumstances in which the exercise of
the stock appreciation right affects the right to exercise the
Incentive Option or vice versa, unless the stock appreciation
right, by its terms, meets all of the following requirements:
(a) the stock appreciation right will expire no
later than the Incentive Option;
(b) the stock appreciation right may be for no
more than the difference between the option price
of the Incentive Option and the fair market value
of the shares subject to the Incentive Option at
the time the stock appreciation right is exercised;
(c) the stock appreciation right is transferable
only when the Incentive Option is transferable, and
under the same conditions;
(d) the stock appreciation right may be exercised
only when the Incentive Option is eligible to be
exercised; and
(e) the stock appreciation right may be exercised
only when the fair market value of the shares
subject to the Incentive Option exceeds the option
price of the Incentive Option.
Upon exercise of a stock appreciation right, a
Participant shall be entitled to receive, without payment to
the Corporation (except for applicable withholding taxes), an
amount equal to the excess of or, in the Discretion of the
Administrator if provided in the Corporation-Participant
Agreement, a portion of the excess of (i) the then aggregate
fair market value of the number of shares with respect to
which the Participant exercises the stock appreciation right,
over (ii) the aggregate fair market value of such number of
shares at the time the stock appreciation right was granted.
This amount shall be payable by the Corporation, in the
Discretion of the Administrator, in cash or in shares of
Common Stock of the Corporation or any combination thereof.
13. GRANTING AND EXERCISING OF STOCK OPTIONS AND STOCK
APPRECIATION RIGHTS: Subject to the provisions of this
Paragraph 13, each stock option and stock appreciation right
granted hereunder shall be exercisable at any such time or
times or in any such installments as may be determined by the
Administrator at the time of the grants; provided, however, no
stock option or stock appreciation right may be exercisable
prior to the expiration of six months from the date of grant
unless the Participant dies or becomes disabled prior thereto.
In addition, the aggregate fair market value (determined at
the time the option is granted) of the Common Stock with
respect to which Incentive Options are exercisable for the
first time by a Participant during any calendar year under any
plan maintained by the Corporation (or any parent or
subsidiary corporation of the Corporation) shall not exceed
$100,000.
A Participant may exercise a stock option or stock
appreciation right, if then exercisable, in whole or in part
by delivery to the Corporation of written notice of the
exercise, in such form as the Administrator may prescribe,
accompanied, in the case of a stock option, by (i) payment for
the shares with respect to which the stock option is exercised
in accordance with Paragraph 11, or (ii) in the Discretion of
the Administrator, irrevocable instructions to a stock broker
to promptly deliver to the Corporation full payment for the
<PAGE> D-5
shares with respect to which the stock option is exercised
from the proceeds of the stock broker's sale of or loan
against the shares. Except as provided in Paragraph 17 or as
provided in any applicable Corporation-Participant Agreement,
stock options and stock appreciation rights granted to a
Participant may be exercised only while the Participant is an
employee or consultant of the Corporation or a Subsidiary.
Successive stock options and stock appreciation rights
may be granted to the same Participant, whether or not the
stock option(s) and stock appreciation right(s) previously
granted to such Participant remain unexercised. A Participant
may exercise a stock option or a stock appreciation right, if
then exercisable, notwithstanding that stock options and stock
appreciation rights previously granted to such Participant
remain unexercised.
14. NON-TRANSFERABILITY OF INCENTIVE STOCK OPTIONS: No
Incentive Stock Option granted under the Plan to a Participant
shall be transferable by such Participant otherwise than by
will or by the laws of descent and distribution, and Incentive
Stock Options shall be exercisable, during the lifetime of the
Participant, only by the Participant.
15. TERM OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS:
If not sooner terminated, each stock option and stock
appreciation right granted hereunder shall expire not more
than 10 years from the date of the granting thereof; provided,
however, that with respect to an Incentive Option or a related
stock appreciation right granted to a Participant who, at the
time of the grant, owns (after applying the attribution rules
of Section 424(d) of the Code) more than 10% of the total
combined voting stock of all classes of stock of the
Corporation or of any parent or subsidiary, such option and
stock appreciation right shall expire not more than five (5)
years after the date of granting thereof.
16. CONTINUATION OF EMPLOYMENT: The Administrator may
require, in its Discretion, that any Participant under the
Plan to whom a stock option or stock appreciation right shall
be granted shall agree in writing as a condition of the
granting of such stock option or stock appreciation right to
remain in the employ of the Corporation or a Subsidiary as an
employee, consultant or advisor for a designed minimum period
from the date of the granting of such stock option or stock
appreciation right as shall be fixed by the Administrator.
17. TERMINATION OF EMPLOYMENT: If the employment or
consultancy of a Participant by the Corporation or a
Subsidiary shall terminate, the Administrator may, in its
Discretion, permit the exercise of stock options and stock
appreciation rights granted to such Participant (i) for a
period not to exceed three months following termination of
employment with respect to Incentive Options or related stock
appreciation rights if termination of employment is not due to
death or permanent disability of the Participant, (ii) for a
period not to exceed one year following termination of
employment with respect to Incentive Options or related stock
appreciation rights if termination of employment is due to the
<PAGE> D-6
death or permanent disability of the Participant, and (iii)
for a period not to extend beyond the expiration date with
respect to Nonqualified Options or related or independently
granted stock appreciation rights. In no event, however,
shall a stock option or stock appreciation right be
exercisable subsequent to its expiration date and,
furthermore, unless the Administrator in its Discretion
determine otherwise, a stock option or stock appreciation
right may only be exercised after termination of a
Participant's employment or consultancy to the extent
exercisable on the date of such termination or to the extent
exercisable as a result of the reason for such termination.
The period of time, if any, a Participant shall have to
exercise stock options or stock appreciation rights upon
termination of employment or consultancy shall be set forth in
the Corporation-Participant Agreement, subject to extension of
such time period by the Administrator in its Discretion.
18. RESTRICTED STOCK AWARDS: Subject to the terms of
the Plan, the Administrator may award shares of restricted
stock to Participants. All shares of restricted stock granted
to Participants under the Plan shall be subject to the
following terms and conditions (and to such other terms and
conditions prescribed by the Administrator):
(a) At the time of each award of restricted shares,
there shall be established for the shares a restricted
period, which shall be no less than six months and no
greater than five years. Such restricted period may
differ among Participants and may have different
expiration dates with respect to portions of shares
covered by the same award.
(b) Shares of restricted stock awarded to
Participants may not be sold, assigned, transferred,
pledged, hypothecated or otherwise encumbered during the
restricted period applicable to such shares. Except for
such restrictions on transfer, a Participant shall have
all of the rights of a shareholder in respect of
restricted shares awarded to him or her including, but
not limited to, the right to receive any dividends on,
and the right to vote, the shares.
(c) If the employment of a Participant as an
employee, consultant or advisor of the Corporation or a
Subsidiary terminates for any reason (voluntary or
involuntary, and with or without cause) other than death
or permanent disability, all shares theretofore awarded
to the Participant which are still subject to the
restrictions imposed by Paragraph 18(b) shall upon such
termination of employment be forfeited and transferred
back to the Corporation, without payment of any
consideration by the Corporation. In the event such
employment is terminated by action of the Corporation or
a Subsidiary without cause or by agreement between the
Corporation or a Subsidiary and the Participant, however,
the Administrator may, in its Discretion, release some or
all of the shares from the restrictions.
(d) If the employment of a Participant as an
employee, consultant or advisor of the Corporation or a
Subsidiary terminates by reason of death or permanent
disability, the restrictions imposed by Paragraph 18(b)
shall lapse with respect to shares then subject to such
restrictions, unless otherwise determined by the
Administrator.
(e) Stock certificates shall be issued in respect
of shares of restricted stock awarded hereunder and shall
be registered in the name of the Participant. Such
certificates shall be deposited with the Corporation or
its designee, together with a stock power endorsed in
blank, and, in the Discretion of the Administrator, a
legend shall be placed upon such certificates reflecting
that the shares represented thereby are subject to
restrictions against transfer and forfeiture.
(f) At the expiration of the restricted period
applicable to the shares, the Corporation shall deliver
to the Participant or the legal representative of the
Participant's estate the stock certificates deposited
with it or its designee and as to which the restricted
period has expired. If a legend has been placed on such
certificates, the Corporation shall cause such
certificates to be reissued without the legend.
<PAGE> D-7
In the case of events such as stock dividends, stock
splits, recapitalizations, mergers, consolidations or
reorganizations of or by the Corporation, any stock,
securities or other property which a Participant receives or
is entitled to receive by reason of his or her ownership of
restricted shares shall, unless otherwise determined by the
Administrator, be subject to the same restrictions applicable
to the restricted shares and shall be deposited with the
Corporation or its designee.
19. INVESTMENT PURPOSE: If the Administrator in its
Discretion determines that as a matter of law such procedure
is or may be desirable, it may require a Participant, upon any
acquisition of Common Stock hereunder (whether by reason of
the exercise of stock options or stock appreciation rights or
the award of restricted stock) and as a condition to the
Corporation's obligation to issue or deliver certificates
representing such shares, to execute and deliver to the
Corporation a written statement, in form satisfactory to the
Administrator, representing and warranting that the
Participant's acquisition of shares of stock shall be for such
person's own account, for investment and not with a view to
the resale or distribution thereof and that any subsequent
offer for sale or sale of any such shares shall be made either
pursuant to (a) a registration statement on an appropriate
form under the Securities Act of 1933, as amended (the
"Securities Act"), which registration statement has become
effective and is current with respect to the shares being
offered and sold, or (b) a specific exemption from the
registration requirements of the Securities Act, but in
claiming such exemption the Participant shall, prior to any
offer for sale or sale of such shares, obtain a favorable
written opinion from counsel for or approved by the
Corporation as to the availability of such exemption. The
Corporation may endorse an appropriate legend referring to the
foregoing restriction upon the certificate or certificates
representing any shares issued or transferred to a Participant
under the Plan.
20. RIGHTS TO CONTINUED EMPLOYMENT: Nothing contained
in the Plan or in any stock option, stock appreciation right
or restricted stock granted or awarded pursuant to the Plan,
nor any action taken by the Administrator hereunder, shall
confer upon any Participant any right with respect to
continuation of employment as an employee, consultant or
advisor of the Corporation or a Subsidiary nor interfere in
any way with the right of the Corporation or a Subsidiary to
terminate such person's employment at any time.
21. WITHHOLDING PAYMENTS: If upon the exercise of a
Nonqualified Option or stock appreciation right, or upon the
award of restricted stock or the expiration of restrictions
applicable to restricted stock, or upon a disqualifying
disposition (within the meaning of Section 422 of the Code) of
shares acquired upon exercise of an Incentive Option, there
shall be payable by the Corporation or a Subsidiary any amount
for income tax withholding, in the Administrator's Discretion,
either the Corporation shall appropriately reduce the amount
of Common Stock or cash to be delivered or paid to the
Participant or the Participant shall pay such amount to the
Corporation or Subsidiary to reimburse it for such income tax
withholding. The Administrator may, in its Discretion, permit
Participants to satisfy such withholding obligations, in whole
or in part, by electing to have the amount of Common Stock
delivered or deliverable by the Corporation upon exercise of
a stock option or stock appreciation right or upon award of
restricted stock appropriately reduced, or by electing to
tender Common Stock back to the Corporation subsequent to
exercise of a stock option or stock appreciation right or
award of restricted stock, to reimburse the Corporation or a
Subsidiary for such income tax withholding (any such election
being irrevocable), subject to such rules and regulations as
the Administrator may adopt, including such rules as it
determines appropriate with respect to Participants subject to
the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to
effect such tax withholding in compliance with the Rules
established by the Securities and Exchange Commission (the
<PAGE> D-8
"Commission") under Section 16 to the Exchange Act and the
positions of the staff of the Commission thereunder expressed
in no-action letters exempting such tax withholding from
liability under Section 16(b) of the Exchange Act. The
Administrator may make such other arrangements with respect to
income tax withholding as it shall determine.
22. EFFECTIVENESS OF PLAN: The Plan shall be effective
on the date the Board of Directors of the Corporation adopts
the Plan, provided that the shareholders of the Corporation
approve the Plan within 12 months of its adoption by the Board
of Directors. Stock options, stock appreciation rights and
restricted stock may be granted or awarded prior to
shareholder approval of the Plan, but each such stock option,
stock appreciation right or restricted stock grant or award
shall be subject to shareholder approval of the Plan. No
stock option or stock appreciation right may be exercised
prior to shareholder approval, and any restricted stock
awarded is subject to forfeiture if such shareholder approval
is not obtained.
23. TERMINATION, DURATION AND AMENDMENTS OF PLAN: The
Plan may be abandoned or terminated at any time by the Board
of Directors of the Corporation. Unless sooner terminated,
the Plan shall terminate on the date ten years after its
adoption by the Board of Directors, and no stock options,
stock appreciation rights or restricted stock may be granted
or awarded thereafter. The termination of the Plan shall not
affect the validity of any stock option, stock appreciation
right or restricted stock outstanding on the date of
termination.
For the purpose of conforming to any changes in
applicable law or governmental regulations, or for any other
lawful purpose, the Board of Directors shall have the right,
with or without approval of the shareholders of the
Corporation, to amend or revise the terms of the Plan at any
time, however, no such amendment or revision will, without the
consent of the holder thereof, change the stock option price
(other than anti-dilution adjustment) or alter or impair any
stock option, stock appreciation right or restricted stock
which has been previously granted or awarded under the Plan.
As adopted by the Board of Directors on May 20, 1999.
<PAGE> D-9
