PROGRESSIVE TELECOMMUNICATIONS CORPORATION
601 Cleveland Street, Suite 930
Clearwater, Florida 33755
________________________
NOTICE OF ANNUAL MEETING
________________________
February 29, 2000
NOTICE IS HEREBY given that the Annual Meeting of the stockholders of
Progressive Telecommunications Corporation (the "Company"), will be held at the
office of BusinessMall.Com, Inc., 18489 US Highway 19 North, Clearwater, Florida
33764, on March 24, 2000 at 2:00 P.M., for the following purposes:
1. To elect a Board of Directors.
2. To approve the Company's 2000 Equity Incentive Plan which is annexed
hereto as Exhibit A.
3. To approve an amendment to the Company's certificate of incorporation to
change the name of the Company to BusinessMall.Com, Inc., which amendment is
annexed hereto as Exhibit B.
4. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on February 21,
2000 as the record date for the determination of stockholders who are entitled
to notice of, and to vote at the 2000 Annual Meeting of stockholders. Only
stockholders of record as of the close of business on February 21, 2000 will be
entitled to notice of and to vote at the annual meeting.
Please sign, date and mail the enclosed proxy promptly in the enclosed
postage-paid envelope so that your shares will be represented at the meeting.
THE COMPANY URGES THAT AS MANY STOCKHOLDERS AS POSSIBLE BE REPRESENTED
AT THE MEETING. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, YOU ARE
URGED TO READ THE ATTACHED PROXY STATEMENT AND THEN FILL IN, DATE, SIGN AND
RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. IF YOU ARE PRESENT
IN PERSON AT THE MEETING, YOU MAY VOTE IN PERSON REGARDLESS OF HAVING SENT IN
YOUR PROXY. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING AND
YOUR PROMPTNESS WILL ASSIST US IN PREPARATIONS FOR THE MEETING.
By Order of the Board of Directors
James C. Watson,Secretary
THIS PAGE INTENTIONALLY LEFT BLANK
PROGRESSIVE TELECOMMUNICATIONS CORPORATION
601 Cleveland Street, Suite 930
Clearwater, Florida 33755
________________________
PROXY STATEMENT
_________________________
February 29, 2000
This proxy statement sets forth certain information with respect to the
accompanying proxy proposed to be used at the 2000 Annual Meeting of
stockholders (the "Meeting") of Progressive Telecommunications Corporation (the
"Company") or at any adjournment thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting. The proxy statement and enclosed form of
proxy are first being mailed to stockholders on or about February 29, 2000. The
Board of Directors of the Company solicits this proxy and urges you to sign the
proxy, fill in the date and return same immediately.
Shares of the Company's common stock, $.001 par value (the "Common
Stock"), represented by valid proxies in the enclosed form, executed and
received in time for the meeting, will be voted as directed, or if no direction
is indicated, will be voted for the election as directors of the nominees
described herein and in favor of proposal Nos. 2 and 3. Proxies are being
solicited by mail, and, in addition, officers and regular employees of the
Company may solicit proxies by telephone or personal interview. As is
customary, the expense of solicitation will be borne by the Company. The
Company will also reimburse brokers for the expenses of forwarding proxy
solicitation material to beneficial owners of shares held of record by such
brokers. Your prompt cooperation is necessary in order to insure a quorum and
to avoid expense and delay.
PROXIES ARE REVOCABLE AT ANY TIME PRIOR TO BEING VOTED EITHER BY WRITTEN
NOTICE DELIVERED TO THE SECRETARY OF THE COMPANY OR BY VOTING AT THE MEETING IN
PERSON.
The mailing address of the principal executive offices of the Company is
601 Cleveland Street, Suite 930, Clearwater, FL 33755. The annual report of the
Company for the fiscal year ended September 30, 1999 ("Fiscal 1999") including
consolidated financial statements, supplementary financial information and
management's discussion and analysis of financial condition and results of
operations, accompanies this proxy statement.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's by-laws provide that the Board of Directors be comprised
of three to nine directors. The Board of Directors have, pursuant to the
by-laws, fixed the number of directors to serve until the next annual meeting of
stockholders at six. Therefore, six directors are to be elected until the next
annual meeting or until their successors have been elected and qualified.
Proxies are solicited in favor of the nominees named below, all of whom, except
Michael Kogan and Charlie Meeks are now serving as directors. In the event one
or more of the nominees is unable to serve as a director, it is intended that
the proxies will be voted for the election of such other person, if any, as
shall be designated by the Board of Directors. The Company is unaware of any
information which would indicate that any of the nominees will be unable to
serve and is not presently considering any additional persons to serve on the
board.
Director
Name Age Since Present Title
Barry L. Shevlin 29 1999 President, CEO and Chairman of
the Board
James C. Watson 44 1999 Executive Vice President, Chief
Technology Officer and Director
Dr. Howard Tackett 56 1999 Vice President,Strategic
Support, Director
James Wallace 51 1999 Director
Michael Kogan 40 N/A Director of Operations
Charlie M. Meeks 44 N/A Director
Barry L. Shevlin, President and Chief Executive Officer: Mr. Shevlin is the
founder of Progressive. In addition to the day-to-day executive
responsibilities, he has the authority for all corporate finance and investor
relations matters. Prior to founding Progressive, he was a contractor to Time
Warner engaged in marketing and satellite services in Florida. While at Time
Warner, he designed marketing programs for the State of Florida. These
programs were among the most successful in the country. Prior to consulting
for Time Warner, Mr. Shevlin served as a consultant to Intellectual
Properties Associates in Florida. Mr.Shevlin played a key role in the
development of software for small business customers. He also gained
extensive experience in the management and administration of small to
mid-sized companies.
James C. (Chris) Watson, Executive Vice President and Chief Technology Officer:
Mr. Watson is responsible for design, development and management of
Progressive's technology and infrastructure, including its network, new service
and billing and support systems. He is a specialist in advanced communications
systems, networks and applications. Mr. Watson has extensive experience in the
operation of interchange carrier platforms, billing systems and facilities. He
was a co-founder and officer of CCC Communications. Prior to CCC
Communications, Mr. Watson owned a telecommunications consulting agency
specializing in the technology, operational and regulatory issues affecting
carriers.
Dr. Howard Tackett, Vice President, Strategic Support: Dr. Tackett has assisted
the Company in the development of its key infrastructure and support systems.
He has also provided the Company with the benefit of his extensive
executive-level management experience. He is a graduate of Palmer College,
Davenport, Iowa with a Doctor of Chiropractic Degree. In 1980, he founded
Tackett Chiropractic Clinics, which grew to become the largest multi-office
group of Chiropractic Clinics in southeastern Virginia. He served as CEO of
Tackett Chiropractic Clinics and has been a member of the Board of Managed Care
of Virginia. Dr. Tackett devoted his time to customer support for Progressive
Telecommunication's plans and programs.
James Wallace, Director: Mr. Wallace was elected to the Board of Progressive
Telecommunications November 4, 1999. Prior to joining Progressive Mr. Wallace
was founder and president of Wallace Insurance Agency, an independent insurance
agency specializing in the administration of Health, Life and Disability
benefits for National and publicly traded companies. In 1975 Mr. Wallace
founded Wallace Development Company, a real estate developing company
specializing in the rental properties. Mr. Wallace still owns and operates both
companies. He was educated at the University of Georgia, majoring in Risk
Management, Insurance and Finance.
Michael H. Kogan, Director of Operations: Mr. Kogan became a consultant to the
Company in September 1999. Mr. Kogan was integrally involved in the development
of BusinessMall. Mr. Kogan became Director of Operations of BusinessMall.com on
December 9, 1999. Mr. Kogan is responsible for the day to day operations of
BusinessMall. From 1995 to the present, Mr. Kogan has been the President of
Penultimate Management Systems Ltd., a company engaged in managing businesses,
residential cooperative corporations, condominium associations, commercial real
estate and rental properties. In 1983, Mr. Kogan founded AK&S Contractors, one
of the first companies to specialize in re-insulation after asbestos removal.
Mr. Kogan remained with this company until 1992. From 1983 to present, Mr.
Kogan has been an independent consultant to approximately (20) small and mid
sized enterprises. Mr. Kogan assisted these enterprises in creating and
implementing operational management software and procedures in such diverse
industries including construction, advertising, transportation, security,
property management, satellite TV and information technology.
Charlie M. Meeks, Director: Mr. Meeks, founder of Meeks, Dorman & Company, has
been the auditor for Progressive Telecommunications for the past two years until
his resignation in February of this year. Mr. Meeks founded C.M. Meeks &
Company, P.A. currently known as Meeks, Dorman & Company) in October 1996. Prior
to that, for the past eighteen years, Mr. Meeks has been an independent
accountant, providing accounting services to growing businesses and
individuals. Mr. Meeks has worked in both international and public accounting
firms and in the private sector. During Mr. Meek's tenure in public
accounting, he has worked with clients in various industries such as
wholesale, manufacturing,retail, professional services, agriculture, banking
and construction. In the private sector Mr. Meeks served as controller to a
medium sized manufacturing company. Mr. Meeks received his Bachelor of
Science degree from the University of Central Florida majoring in Business
Administration and minoring in Computer Science. Mr. Meeks is a member of
the American and Florida Institutes of Certified Public Accountants and is
registered with the Florida State Board of Accountancy as a CPA.
PROPOSAL NO. 2
2000 EQUITY INCENTIVE PLAN
On February 10, 2000, the Board of Directors of the Company adopted the
Progressive Telecommunications Corporation 2000 Equity Incentive Plan (the
"Plan") and directed that it be presented to the stockholders for their approval
and adoption. The Incentive Plan designates a Stock Option Committee appointed
by the Board of Directors and authorizes the Stock Option Committee to grant or
award to eligible participants of the Company and its subsidiaries and
affiliates, until February 1, 2010, stock options, stock appreciation rights,
restricted stock or deferred stock awards for up to 2,000,000 shares of the
common stock of the Company. The initial members of the Stock Option Committee
are Barry Shevlin, James Wallace, and Dr. Howard Tackett.
The following is a general description of certain features of the Incentive
Plan:
1. Eligibility. Officers, other key employees and consultants of the
Company, its subsidiaries and its affiliates who are responsible for the
management, growth and profitability of the business of the Company, its
subsidiaries and its affiliates are eligible to be granted stock options,
stock appreciation rights, and restricted or deferred stock awards under the
Plan. Directors are eligible to receive Director Stock Options.
2. Administration. The Incentive Plan is administered by the Stock Option
Committee of the Company. The Stock Option Committee has full power to select,
from among the persons eligible for awards, the individuals to whom awards will
be granted, to make any combination of awards to any participants and to
determine the specific terms of each grant, subject to the provisions of the
Incentive Plan.
3. Stock Options. The Plan permits the granting of non-transferable stock
options that are intended to qualify as incentive stock options ("ISO's") under
section 422 of the Internal Revenue Code of 1986 and stock options that do not
so qualify ("Non-Qualified Stock Options"). The option exercise price for each
share covered by an option shall be determined by the Stock Option Committee but
shall not be less than 100% of the fair market value of a share on the date of
grant. The term of each option will be fixed by the Stock Option Committee,
but may not exceed 10 years from the date of the grant in the case of an ISO or
10 years and two days from the date of the grant in the case of a Non-Qualified
Stock Option.
4. Stock Appreciation Rights. Non-transferable stock appreciation rights
("SAR's") may be granted in conjunction with options, entitling the holder upon
exercise to receive an amount in any combination of cash or unrestricted common
stock of the Company (as determined by the Stock Option Committee), not greater
in value than the increase since the date of grant in the value of the shares
covered by such right. Each SAR will terminate upon the termination of the
related option.
5. Restricted Stock. Restricted shares of the common stock may be
awarded by the Stock Option Committee subject to such conditions and
restrictions as they may determine, which may include the attainment of
performance goals. The Stock Option Committee shall also determine whether a
recipient of restricted shares will pay a purchase price per share or will
receive such restricted shares without, any payment in cash or property.
6. Deferred Stock. Deferred stock awards may also be made under the Plan.
These are non-transferable awards entitling the recipient to receive common
stock of the Company without any payment in cash or property in one or more
installments at a future date or dates, as determined by the Stock Option
Committee. Receipt of deferred stock may be conditioned on such matters as the
Stock Option Committee shall determine, including continued employment or
attainment of performance goals.
7. Loan Provisions. The Incentive Plan authorizes the Company, with the
consent of the Stock Option Committee, to make or arrange for loans to employees
in connection with the exercise of options or the payment of any purchase price
for restricted stock granted under the Plan or the payment of Federal and State
income taxes resulting from the granting or exercising of options or other
awards under the Plan. The Stock Option Committee has full authority to decide
whether to make such loans and to determine the term and provisions of any such
loans including interest charged and repayment terms.
8. Transfer Restrictions. Grants under the Plan are not transferable
except, in the event of death, by will or by the laws of descent and
distribution.
9. Termination of Benefits. In certain circumstances such as death,
disability, and termination without cause, beneficiaries in the Plan may
exercise Options, SAR's and receive the benefits of restricted stock grants
following their termination or their employment or tenure as a Director as the
case may be.
10. Change of Control. The Plan provides that (a) in the event of a "Change
of Control" (as defined in the Plan), unless otherwise determined by the Stock
Option Committee prior to such Change of Control, or (b) to the extent expressly
provided by the Stock Option Committee at or after the time of grant, in the
event of a "Potential Change of Control" (as defined in the Plan), (i) all
stock options and related SAR's (to the extent outstanding for at least six
months) will become immediately exercisable: (ii) the restrictions and deferral
limitations applicable to outstanding restricted stock awards and deferred
stock awards will lapse and the shares in question will be fully vested: and
(iii) the value of such options and awards, to the extent determined by the
Stock Option Committee, will be cashed out on the basis of the highest price
paid (or offered) during the preceding 60-day period, as determined by the
Stock Option Committee. The Change of Control and Potential Change of Control
provisions may serve as a disincentive or impediment to a prospective acquirer
of the Company and, therefore, may adversely affect the market price of the
common stock of the Company.
11. Amendment of the Plan. The Plan may be amended from time to time by
majority vote of the Board of Directors provided as such amendment may affect
outstanding options without the consent of an option holder nor may the plan be
amended to increase the number of shares of common stock subject to the Plan
without stockholder approval.
Stockholder Vote Required
The affirmative vote of a majority of the shares present in person and by proxy
and voting at the meeting is required for the adoption of the above-described
plan.
The Board of Directors recommends a vote FOR the adoption of the 2000 Equity
Incentive Plan.
PROPOSAL NO. 3
AMEND THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION
TO CHANGE THE COMPANY'S NAME TO BUSINESSMALL.COM, INC.
The Company's main business focus has shifted from being solely a provider of
telecommunications products to a business to business e-commerce venture. While
we continue to offer telecommunications products, our business model has become
more diverse and calls for all of our current products to be offered through the
Company e-commerce website, BusinessMall.Com. Accordingly, the Board of
Directors approved an amendment to the Company's Certificate of Incorporation to
change the name of the Company to BusinessMall.Com, Inc. In management's
opinion this new name better reflects the Company's plans for the future.
The change of corporate name will become effective upon the filing with the
Secretary of State of Nevada, an amendment to the Company's Certificate of
Incorporation, which states that, upon the filing of the Certificate of
Amendment, the name of the Corporation will be BusinessMall.Com, Inc.
Stockholder Vote Required
The affirmative vote of the holders of a majority of the shares outstanding on
the record date is required for the adoption of the proposed amendment.
The Board of Directors recommends a vote FOR the adoption of the amendment to
the Company's Restated Certificate of Incorporation.
VOTING SECURITIES AND RECORD DATE
Holders of Common Stock of the Company of record at the close of
business on February 21, 2000 are entitled to notice and to vote at the
Meeting. At the close of business on February 21, 2000, the Company had
11,608,922 shares of Common Stock outstanding, each of which entitled the
holder thereof to one vote.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 21, 2000, the number and
percentage of shares of Common Stock of the Company, owned of record and
beneficially, by each person known by the Company to own 5% or more of such
stock, each director of the Company and by all executive officers and directors
of the Company, as a group:
Percentage of
Outstanding
Amount of Common
Beneficial Ownership (1) Stock
Name of Beneficial Owner
Barry Shevlin 1,104,398(2) 9.4%
Tom Chubokas 1,450,645(3) 12.5%
James C. Watson 796,084 6.9%
Dr. Howard Tackett 232,153 2.0%
James Wallace 1,720,500(4) 13.9%
All directors and executive
Officers as a group (5 persons) 5,303,780(5) 42.5%
____________________
(1) The securities "beneficially owned" by an individual are determined in
accordance with the definition of "beneficial ownership" set forth in
regulations promulgated under the Securities Exchange Act of 1934 and
accordingly may include securities owned by or for, among others, the spouse
and/or minor children of an individual, as well as other securities as to which
the individual has or shares voting or investment power or which each person has
the right to acquire within 60 days of the date hereof through the exercise of
options, or otherwise. Beneficial ownership may be disclaimed as to certain of
the securities. This table has been prepared based on 11,608,922 shares of
common stock outstanding as of February 21, 2000.
(2) Includes 120,000 shares which may be obtained upon the exercise of
outstanding warrants.
(3) Includes 35,385 shares for which Mr. Chubokas acts as a custodian.
(4) Includes 750,000 shares which may be obtained upon the exercise of
outstanding warrants.
(5) Includes a total of 870,000 shares which may be obtained by officers and
directors upon the exercise of outstanding warrants.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who own more than
ten-percent of a registered class of the Company's equity securities to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended September 30, 1999 all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were complied with.
INFORMATION CONCERNING BOARD OF DIRECTORS AND COMMITTEES
General
During Fiscal 1999, the Company paid no director's fees. All directors
are reimbursed for travel and other expenses relating to attendance at board
meetings. Directors who are officers of the Company receive no additional
compensation for service on the board. During Fiscal 1999, the Board of
Directors met formally thirteen times. All directors attended all of the
meetings.
The Board of Directors expects to establish an Audit Committee. The
primary purposes of the Audit Committee will be (i) to review the scope of the
audit to be performed; (ii) to meet with the Company's independent certified
public accountants to review the results of the audit; (iii) to review with the
Company's independent certified public accountants the Company's internal
auditing proceedings and controls; (iv) to make recommendations regarding the
selection of the Company's independent certified public accountants; and (v) to
review the Company's quarterly financial statements prior to public issuance.
In the absence of a compensation, stock option or special committee
comprised of a majority of independent directors, the Audit Committee will
review any transaction of the Company in which a director or officer has a
material interest.
EXECUTIVE COMPENSATION
The following table sets forth in summary form the compensation earned by our
Chief Executive Officer and our four other highest paid executive officers (the
"Named Officers").
Long-Term
Compensation
Other Securities
Annual Compensation Annual Underlying All Other
Year Salary(1) Bonus(2) Compensation Options Compensation
Name and Principal Position
Barry Shevlin 1999 $156,153(3) -- -- -- --
CEO& President 1998 $110,577 -- -- -- --
Tom Chubokas 1999 $133,970(4) $50,000 -- -- --
Former President 1998 $60,100 -- -- -- --
James C. Watson 1999 $115,492(5) $50,000 -- -- --
Executive Vice
President 1998 $60,100 -- -- -- --
Dr. Howard Tackett1999 $104,039(6) -- -- -- --
Vice President 1998 $60,577 -- -- -- --
________
(1) Includes salaries paid to each person by Progressive Florida or CCC
Communications, which were paid to the respective person prior to the
acquisition by Marquee.
(2) Does not include 50,000 shares of the Company's Common Stock paid each to
Mr. Tom Chubokas and Mr. James C. Watson as a signing bonus to their respective
employment agreements.
(3) Includes $26,923 of accrued salary.
(4) Includes $17,016 of accrued salary.
(5) Includes $8,077 of accrued salary.
(6) Includes $1,346 of accrued salary.
Employment Agreements
The Company entered into an employment agreement with Mr. Shevlin for a
term of five years with an option of additional one-year terms. The agreement
provides for annual compensation of $140,000 during the term of the employment
and entitles Mr. Shevlin to certain fringe benefits, including an automobile
stipend equal to $600 per month, medical insurance, disability benefits and life
insurance coverage. The agreement also provides certain incentive compensation
if the Company achieves certain sales levels. Mr. Shevlin has agreed during the
term of his agreement and one (1) thereafter (unless the agreement is terminated
without cause), he will be subject to non-competition provisions. Upon
termination of employment without cause Mr. Shevlin will be entitled to a lump
sum payment of $75,000 times the number of years of employment by the Company.
The Company entered into an employment agreement with Dr. Tackett for a
term of five years with an option for additional one-year terms. The agreement
provides for annual compensation of $85,000 during the term of the employment
and entitles Dr. Tackett to certain fringe benefits, including medical
insurance, disability benefits and life insurance coverage. the agreement also
provides certain incentive compensation if the Company achieves certain sales
levels. Dr. Tackett has agreed during the term of his agreement and one (1)
thereafter (unless the agreement is terminated without cause), he will be
subject to non-competition provisions. Upon termination of employment without
cause Dr. Tackett will be entitled to a lump sum payment of $50,000 times the
number of years of employment by the Company.
The Company entered into an employment agreement with Mr. Chubokas for a
term of three years with an option for an additional two years. Upon signing,
Mr. Chubokas received a signing bonus of $50,000 and 50,000 shares of the
Company's common stock. The agreement provides for annual compensation of
$140,000 during the term of the employment and entitles Mr. Chubokas to certain
fringe benefits, including an automobile stipend equal to $600 per month,
medical insurance, disability benefits and life insurance coverage. The
agreement also provides certain incentive compensation if the Company achieves
certain sales levels. Mr. Chubokas has agreed during the term of his agreement
and one (1) thereafter (unless the agreement is terminated without cause), he
will be subject to non-competition provisions. Upon termination of employment
without cause Mr. Chubokas will be entitled to a lump sum payment of $75,000
times the number of years of employment by the Company.
The Company entered into an employment agreement with Mr. Watson for a
term of three years with an option for an additional two years. Upon signing,
Mr. Watson received a signing bonus of $50,000 and 50,000 shares of the
Company's common stock. The agreement provides for annual compensation of
$120,000 during the term of the employment and entitles Mr. Watson to certain
fringe benefits, including an automobile stipend equal to $500 per month,
medical insurance, disability benefits and life insurance coverage. The
agreement also provides certain incentive compensation if the Company achieves
certain sales levels. Mr. Watson has agreed during the term of his agreement
and one (1) thereafter (unless the agreement is terminated without cause), he
will be subject to non-competition provisions. Upon termination of employment
without cause Mr. Watson will be entitled to a lump sum payment of $75,000 times
the number of years of employment by the Company.
Board Report on Executive Compensation
The Board of Directors did not, during Fiscal 1999, have a compensation
or similar committee. Accordingly, the full Board of Directors is responsible
for determining and implementing the compensation policies of the Company.
The Board's executive compensation policies are designed to offer competitive
compensation opportunities for all executives which are based on personal
performances, individual initiative and achievement, as well as assisting the
Company in attracting and retaining qualified executives. The Board also
endorses the position that stock ownership by management and stock-based
compensation arrangements are beneficial in aligning management's and
stockholders' interests in the enhancement of stockholder value.
Compensation paid to the Company's executive officers generally consists
of the following elements: base salary, annual bonus and a long-term
compensation in the form of stock options. Compensation levels for executive
officers of the Company is determined by a consideration of each officer's
initiative and contribution to overall corporate performance and the officer's
managerial abilities and performance in any special projects that the officer
may have undertaken. Competitive base salaries that reflect the individual's
level of responsibility are important elements of the Company's executive
compensation philosophy. Subjective considerations of individual performance
are considered in establishing annual bonuses and other incentive compensation.
In addition, the Board considers the Company's financial position and cash flow
in making compensation decisions.
The Company has certain broad-based employee benefit plans in which all
employees, including the named executives, are permitted to participate on the
same terms and conditions relating to eligibility and subject to the same
limitations on amounts that may be contributed.
Certain Relationships and Related Transactions
From October 8, 1999 through December 17, 1999, Mr. James Wallace, a
director of the Company, has funded the Company in the amount of $600,000, which
has been evidenced by five promissory notes bearing interest at the rate of 12%
The notes become due one year from the date of issuance. On February 14, 2000
Mr. Wallace agreed to convert the notes and all interest aggregating
approximately $617,000 into 850,000 shares of the Company's common stock and
850,000 common stock purchase Warrants exercisable at $2.50 per share. The
Warrants expire on February 1, 2002. On February 21, 1999 Mr. Wallace
transferred 100,000 shares of common stock and 100,000 warrants to his daughter,
Jessica Wallace
From February 28, 1998 through March 20, 1998, Mrs. Faith Shevlin loaned
the Company $60,000 which has been evidenced by two promissory notes, bearing
interest at the rate of 9%. Mrs. Shevlin is the mother of Barry Shevlin, the
Company's CEO. On February 8, 2000, the Company paid Mrs. Shevlin the principal
amount of $10,000 plus $10,375 of interest. Simultaneously therewith she
assigned the balance of the notes to Barry Shevlin, the Company's CEO for
value.
From March 30, 1998 through April 6, 1998, Dr. Howard Tackett, an
officer and director of the Company, loaned the Company $50,000 which has been
evidenced by two promissory notes, bearing interest at the rate of 9%. The
Company paid Dr. Tackett the principal amount of $30,000 and the balance of
$20,000 plus interest of approximately $5,400 on the notes has not been repaid
and is past due.
From time to time the Company has made loans to Mr. Barry Shevlin, the
Company's CEO, aggregating approximately $34,000. As of September 30, 1999 this
loan was forgiven due to the fact that Mr. Shevlin was not compensated by the
Company in 1997.
From April 1999 through September 30, 1999 Mr. Shevlin has loaned the
Company an aggregate of $44,500. The largest amount outstanding at any given
time during that period was $27,500. As of September 30, 1999 the Company was
indebted to Mr. Shevlin in the amount of $27,500. On February 14, 2000, the
total amount due Mr. Shevlin, inclusive of the $50,000 note assigned to him by
Mrs. Faith Shevlin, was $117,470. On February 14, 2000 Mr. Shevlin agreed to
convert an aggregate of $117,470 of indebtedness into 120,000 shares of common
stock and 120,000 common stock purchase Warrants exercisable at $2.50 per
share. The Warrants expire on February 1, 2002.
As of September 30, 1999, the Company had a note payable to
Communications Group of American ("CGA") for $26,000 with interest at 12% per
annum. The note payable was due January 2, 1999 and has been extended. As of
September 30, 1999, all interest due under this note payable has been forgiven.
CGA is a company owned by the wife of Mr. Tom Chubokus, the Company's former
President.
In addition, the Company pays commissions to CGA, which is a
telecommunications sales organization. Commissions paid to CGA for the period
ended September 30, 1999 were $143,101 and accounts payable to CGA was $20,895
as of September 30, 1999.
RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Company's Board of Directors has not yet appointed independent
certified public accountants to serve as auditors for Fiscal 2000. The Board is
continuing to interview accounting firms, however, as of the date of this Proxy
Statement, none had been selected. Meeks, Dorman & Company, P.A. audited the
Company's financial statements for Fiscal 1999.
Meeks, Dorman & Company, P.A. has declined to stand for re-election as
the Company's auditors for Fiscal 2000. Meeks, Dorman advised the Company that
the Company's business has become too large and diverse for it to continue to
act efficiently as the Company's auditors and that it is not equipped to handle
the additional work necessary to complete the Company's audit for Fiscal 2000.
There have been no disagreements between the Company and Meeks, Dorman and they
continue to act as a consultant to the Company.
A representative of the firm of Meeks, Dorman & Company, P.A. is
expected to be present at the meeting and will be available to respond to
appropriate questions. They will be given an opportunity to make a statement if
they desire to do so.
ANNUAL REPORT
The Company's annual report on Form 10-K for Fiscal 1999 is enclosed
herewith.
STOCKHOLDER PROPOSALS
Proposals by Stockholders intended to be presented at the next annual
meeting to be held in 2001 must be received by the Secretary of the Company a
reasonable time before the Company begins to print its proxy materials in order
to be included in the proxy statement for that meeting.
OTHER BUSINESS
There is no matter other than those described above, so far as is known
to the management of the Company, at the date of this proxy statement, to be
acted on at the meeting. It is intended, however, if other matters come up for
action at said meeting or any adjournments thereof, that the persons named in
the enclosed form of proxy shall, in accordance with the terms of the proxy,
have authority in their discretion to vote shares represented by proxies
received by them, in regard to such other matters, as seems to said persons in
the best interests of the Company and its stockholders.
PROGRESSIVE TELECOMMUNICATIONS
CORPORATION
James C. Watson
Secretary
5
15
March 2, 2000
Dear Shareholder:
The attached exhibits are referred to in the Proxy Statement dated
February 29, 2000 and were not available at the time of the initial mailing.
James C. Watson
Secretary
Exhibit A
PROGRESSIVE TELECOMMUNICATIONS CORPORATION
2000 EQUITY INCENTIVE PLAN
1. NAME AND PURPOSE.
The name of this plan is the Progressive Telecommunications 2000 Equity
Incentive Plan (the "Plan"). The purpose of this Plan is to enable Progressive
Telecommunications Corporation (the "Company") and its Subsidiaries and
Affiliates to attract and retain employees, consultants and directors who
contribute to the Company's success by their ability, ingenuity and industry,
and to enable such employees and directors to participate in the long-term
success and growth of the Company through an equity interest in the Company.
2. DEFINITIONS.
For purposes of this Plan, the following terms shall be defined as set
forth below:
"Affiliate" means any corporation (other than a subsidiary),
partnership, joint venture or any other entity in which the Company owns,
directly or indirectly, at least a ten percent (10%) beneficial ownership
interest.
"Board" means the Board of Directors of the Company.
"Cause" means a felony conviction of a participant or the failure of a
participant to contest prosecution for a felony, or a participant's willful
or grossly negligent action which is demonstrably inimical to the interests,
business or reputation of the Company or any Subsidiary or Affiliate.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto.
"Committee" means the Stock Option Committee of the Board, whose
members shall be appointed from time to time by the Board. If at any time no
Committee shall be in existence, the functions of the Committee specified in
this Plan shall be exercised by the Board.
"Commission" means the Securities and Exchange Commission.
"Company" means Progressive Telecommunications Corporation, a
corporation organized under the laws of the State of Nevada (or any successor
corporation).
"Deferred Stock" means an award made pursuant to Section 10 of the right
to receive Stock at the end of a specified deferral period.
"Director Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 7.
"Disability" means total and permanent disability as determined under
the Company's long term disability program.
"Disinterested Person" shall have the meaning set forth in Rule
16b-3(d)(3) as promulgated by the Commission under the Exchange Act, or any
successor definition adopted by the Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor thereto.
"Fair Market Value" means, as of any given date, the closing price of
the Stock on such date on the National Association of Securities Dealers
Automated Quotation System (NASDAQ) National Market System, or if not then
traded or listed on that system, on the securities trading system or stock
exchange on which the Stock is then primarily traded or listed; or if the stock
is not traded or listed on an exchange the average of the reported high and low
price on such date.
"Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Code Section
422.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Normal Retirement," solely for the purpose of this Plan means
retirement from active employment with the Company, any Subsidiary, and any
Affiliate on or after age 65.
"Plan" means this Progressive Telecommunications 2000 Equity Incentive
Plan.
"Restricted Stock" means an award of shares of Stock that are subject
to restrictions under Section 9.
"Retirement" means Normal Retirement.
"Stock" means the common stock of the Company.
"Stock Appreciation Right" means a right granted under Section 8 to
surrender to the Company all or a portion of a Stock Option in exchange for an
amount equal to the difference between (i) the Fair Market Value, as of the
date such Stock Option or such portion thereof is surrendered, of the shares of
Stock covered by such Stock Option or such portion thereof, and (ii) the
aggregate exercise price of such Stock Option or such portion thereof.
"Stock Option" means any option to purchase shares of Stock granted
pursuant to Section 6.
"Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
3. ADMINISTRATION.
This Plan shall be administered by the Committee which shall at all
times consist of not less than three Disinterested Persons (or, if there are
less than three Disinterested Persons then serving on the Board of Directors,
then all of such Disinterested Persons), each of whom shall be members of the
Board of the Directors. The Committee shall have the power and authority to
grant to eligible employees, pursuant to the terms of this Plan: (i) Stock
Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, or (iv)
Deferred Stock. In particular, the Committee shall have the authority to:
3.1 Select the officers, other employees and consultants of the
Company, its Subsidiaries, and its Affiliates to whom Stock Options, Stock
Appreciation Rights, Restricted Stock or Deferred Stock awards, or a
combination of the foregoing from time to time will be granted hereunder;
3.2 Determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock or
Deferred Stock, or a combination of the foregoing are to be granted
hereunder;
3.3 Except as set forth in Section 7 hereof, determine the number of
shares of Stock to be covered by each such award granted hereunder;
3.4 Determine the terms and conditions, not inconsistent with the
terms of this Plan, of any award granted hereunder, including, but not limited
to, any restriction on any Stock Option or other award and/or the shares of
Stock relating thereto based on performance and/or such other factors as the
Committee may determine, in its sole discretion, and any vesting acceleration
features based on performance and/or such other factors as the Committee may
determine, in its sole discretion;
3.5 Determine whether, to what extent, and under what circumstances
Stock and other amounts payable with respect to an award under this Plan shall
be deferred either automatically or at the election of a participant, including
providing for and determining the amount (if any) of deemed earnings on any
deferred amount during any deferral period;
3.6 Adopt, alter, and repeal such administrative rules, guidelines,
and practices governing this Plan as it shall, from time to time, deem
advisable;
3.7 Interpret the terms and provisions of this Plan and any award
issued under this Plan (and any agreements relating thereto); and
3.8 Otherwise supervise the administration of this Plan.
All decisions made by the Committee pursuant to the provisions of this
Plan shall be final and binding on all persons, including the Company and
participants in this Plan.
4. STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for
distribution under this Plan shall be 2,000,000. Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares. If any
shares of Stock that have been optioned cease to be subject to option, or if any
shares subject to any Restricted Stock or Deferred Stock award granted hereunder
are forfeited or such award otherwise terminates, those shares shall again be
available for distribution in connection with future awards under this Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate structure
affecting the Stock, a substitution or adjustment shall be made in the
aggregate number of shares reserved for issuance under this Plan, in the number
and option price of shares subject to outstanding Stock Options and Director
Stock Options granted under this Plan, and in the number of shares subject to
Restricted Stock or Deferred Stock awards granted under this Plan, in such
manner as may be determined to be appropriate by the Committee, in its sole
discretion, provided that the number of shares subject to any award shall
always be a whole number. Such adjusted option price shall also be used to
determine the amount payable by the Company upon the exercise of any Stock
Appreciation Right associated with any Stock Option.
5. ELIGIBILITY.
5.1 Officers, other employees and consultants of the Company, its
Subsidiaries or its Affiliates (but excluding members of the Committee and any
person who serves only as a director) who are responsible for or contribute to
the management, growth, and/or profitability of the business of the Company,
its Subsidiaries, or its Affiliates are eligible to be granted Stock Options,
Stock Appreciation Rights, Restricted Stock or Deferred Stock awards.
5.2 Directors of the Company (other than directors who are also
officers or employees of the Company, its Subsidiaries or its Affiliates) are
eligible to be granted Director Stock Options pursuant to Section 7 of the Plan.
5.3 Except as set forth in Section 7 of the Plan, the optionees and
participants under this Plan shall be selected from time to time by the
Committee, in its sole discretion, from among those eligible, and the Committee
shall determine, in its sole discretion, the number of shares covered by each
award or grant to an optionee or participant.
6. STOCK OPTIONS FOR EMPLOYEES AND CONSULTANTS.
Stock Options may be granted either alone or in addition to other awards
granted under this Plan. Any Stock Option granted under this Plan shall be in
such form as the Committee
from time to time approve, and the provisions of Stock Option awards need not be
the same with respect to each optionee.
The Stock Options granted under this Plan may be of two types: (i)
Incentive Stock Options, or (ii) Non-Qualified Stock Options. The Committee
shall have the authority to grant any optionee Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options (in each case with
or without Stock Appreciation Rights) except that Incentive Stock Options shall
not be granted to employees of an Affiliate. To the extent that any Stock
Option does not qualify as an Incentive Stock Option, it shall constitute a
separate Non-Qualified Stock Option.
Anything in this Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended, or
altered, nor shall any discretion or authority granted under this Plan be so
exercised, so as to disqualify either this Plan or any Incentive Stock Option
under Code Section 422. Notwithstanding the foregoing, in the event an optionee
voluntarily disqualifies an option as an Incentive Stock Option within the
meaning of Code Section 422, the Committee may, but shall not be obligated to,
make such additional grants, awards, or bonuses as the Committee shall deem
appropriate, to reflect the tax savings to the Company which results from such
disqualification.
Stock Options granted under this Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem desirable:
6.1 Option Price. The option price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at the time of grant
but shall not be less than 100% of the Fair Market Value of the Stock on the
date of the grant of the Incentive Stock Option and not less than 80% of the
Fair Market Value on the date of the grant of the Non-Qualified Stock Options.
6.2 Option Term. The term of each Stock Option shall be fixed by
the Committee, but no Incentive Stock Option shall be exercisable later than 10
years after the date such Incentive Stock Option is granted and no
Non-Qualified Stock Option shall be exercisable later than 10 years and two days
after the date such Non-Qualified Stock Option is granted.
6.3 Exercisability. Subject to Section 6.10 with respect to
Incentive Stock Options, Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee at the date of grant; provided, however, that, except as provided
in Sections 6.6, 6.7, and 6.8, unless otherwise determined by the Committee at
grant, no Stock Option shall be exercisable prior to the first anniversary date
of the granting of the option. If the Committee provides, in its discretion,
that any Stock Option is exercisable only in installments, the Committee may
waive such installment exercise provisions at any time in whole or in part based
on performance and/or such other factors as the Committee may determine in its
sole discretion.
6.4 Method of Exercise. Stock Options may be exercised in
whole or in part at any time during the option period, by giving written notice
of exercise to the Company specifying the number of shares to be purchased,
accompanied by payment in full of the purchase price, in cash, by check or such
other instrument or mode of payment as may be acceptable to the Committee. As
determined by the Committee, in its sole discretion, at or after grant, payment
in full or in part may also be made in the form of unrestricted Stock already
owned by the optionee or, in the case of the exercise of a Non-Qualified Stock
Option, Restricted Stock or Deferred Stock subject to an award hereunder (based,
in each case, on the Fair Market Value of the Stock on the date the option is
exercised, as determined by the Committee). If payment of the option exercise
price of a Non-Qualified Stock Option is made in whole or in part in the form of
Restricted Stock or Deferred Stock, the shares received upon the exercise of
such Stock Option shall be restricted or deferred, as the case may be, in
accordance with the original term of the Restricted Stock award or Deferred
Stock award in question, equal to the number of shares of Restricted Stock or
Deferred Stock surrendered upon the exercise of that option. No shares of
unrestricted Stock shall be issued until full payment therefor has been made.
An optionee shall have the right to dividends or other rights of a stockholder
with respect to shares subject to the option when the optionee has given
written notice of exercise and has paid in full for those shares.
6.5 Non-transferability of Options. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee.
6.6 Termination by Death. Unless otherwise determined by the
Committee at grant, if an optionee's employment with the Company, any
Subsidiary, and any Affiliate terminates by reason of his death, the Stock
Option may thereafter be exercised, to the extent then exercisable (or on such
accelerated basis as the Committee shall determine at or after grant), by the
legal representative of the estate or by the legatee of the optionee under the
will of the optionee or by the heir of the optionee under the laws of descent
and distribution, for a period of one year from the date of such death or until
the expiration of the stated term of such Stock Option, whichever period is the
shorter.
6.7 Termination by Reason of Disability. Unless otherwise
determined by the Committee at grant, if an optionee's employment with the
Company, any Subsidiary and any Affiliate terminates by reason of Disability,
any Stock Option held by such optionee may thereafter be exercised to the extent
it was exercisable at the time of termination due to Disability (or on such
accelerated basis as the Committee shall determine at or after grant), but may
not be exercised after one year from the date of such termination of employment
or the expiration of the stated term or such Stock Option, whichever period is
shorter; provided, however, that, if the optionee dies within such one-year
period, any unexercised Stock Option held by such optionee shall thereafter be
exercisable to the extent to which it was exercisable at the time of death for
a period of three months from the date of such death or for the stated term of
such Stock Option, whichever period is the shorter. In the event of termination
of employment by reason of Disability, if an Incentive Stock Option is exercised
after the expiration of the exercise periods that apply for purposes of Code
Section 422, such Stock Option will thereafter be treated as a Non-Qualified
Stock Option.
6.8 Termination by Reason of Retirement. Unless otherwise
determined by the Committee at grant, if an optionee's employment with the
Company, any Subsidiary and any Affiliate terminates by reason of Normal
Retirement, any Stock Option held by such optionee may thereafter be exercised
to the extent it was exercisable at the time of such Retirement (or on such
accelerated basis as the Committee shall determine at or after grant), but may
not be exercised after one year from the date of such termination of employment
or the expiration of the stated term of such Stock Option, whichever period is
the shorter; provided, however, that, if the optionee dies within such one-year
period any unexercised Stock Option held by such optionee shall thereafter be
exercisable, to the extent to which it was exercisable at the time of death,
for a period of three months from the date of such death or for the stated term
of the Stock Option, whichever period is the shorter. Notwithstanding the
foregoing, the tax treatment available pursuant to Section 422 of the Internal
Revenue Code of 1986 upon the exercise of an Incentive Stock Option will not
be available to an optionee who exercises any Incentive Stock Options more than
(i) 12 months after the date of termination of employment due to permanent
disability or (ii) three months after the date of termination of employment
due to retirement.
6.9 Other Termination. Unless otherwise determined by the
Committee at grant, if an optionee's employment with the Company, any Subsidiary
and any Affiliate terminates for any reason other than death, Disability or
Normal Retirement, any Stock Option held by such optionee shall thereupon
terminate, except that such Stock Option may be exercised for the lesser of
three months from the date of termination or the balance of such Stock Option's
term if the optionee's employment with the Company, any Subsidiary and any
Affiliate is involuntarily terminated by the optionee's employer without Cause.
6.10 Limit on Value of Incentive Stock Option First Exercisable
Annually. The aggregate Fair Market Value (determined at the time of grant) of
the Stock for which "incentive stock options" within the meaning of Code
Section 422 are exercisable for the first time by an optionee during any
calendar year under this Plan (and/or any other stock option plans of the
Company, any Subsidiary and any Affiliate) shall not exceed $100,000.
7. DIRECTOR STOCK OPTIONS.
Director Stock Options granted under this Plan shall be Non-Qualified
Stock Options which are not intended to be "incentive stock options" within the
meaning of Code Section 422. Director Stock Options granted under this Plan
shall be in such form as the Committee may from time to time approve, and the
provisions of Director Stock Options need not be the same with respect to each
optionee.
Director Stock Options granted under the Plan shall be evidenced by a
written agreement in such form as the Committee shall from time to time approve,
which agreements shall comply with and be subject to the following terms and
conditions:
7.1 Option Price. The option price per share of Stock purchasable
under a Director Stock Option shall be not less than 75% of the Fair Market
Value of the Stock on the date of the grant of the Director Stock Option.
7.2 Option Term. Each Director Stock Option shall be exercisable
for 10 years and two days after the date such Director Stock Option is granted
(subject to prior termination as hereinafter provided).
7.3 Exercisability. Director Stock Options shall be exercisable at
such time or times and subject to such terms and conditions as shall be
determined by the Committee at the date of grant. If the Committee provides,
in its discretion, that any Director Stock Option is exercisable only in
installments, the Committee may waive such installment exercise provisions at
any time in whole or in part based on performance and/or such other factors as
the Committee may determine in its sole discretion; provided, however, that in
the event of a "Change of Control" (as defined in Section 14 below), the value
of all outstanding Director Stock Options that have been outstanding for at
least six months shall be cashed out on the basis of the "Change of Control
Price" (as defined in Section 14 below) as of the date the Change of Control
occurs, and all Director Stock Options that have not been outstanding for at
least six months shall be immediately exercisable.
7.4 Method of Exercise. Director Stock Options may be exercised
in whole or in part at any time during the option period, by giving written
notice of exercise to the Company specifying the number of shares to be
purchased, accompanied by payment in full of the purchase price, in cash, by
check or such other instrument or mode of payment as may, be acceptable to the
Committee. Payment in full or in part may also be made in the form of Stock
already owned by the optionee (based on the Fair Market value of the Stock on
the date the option is exercised). No shares of Stock shall be issued until
full payment therefor has been made. An optionee shall have the rights to
dividends or other rights of a stockholder with respect to shares subject to the
option when the optionee has given written notice of exercise and has paid in
full for such shares.
7.5 Non-transferability of Options. No Director Stock Option shall
be transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and all Director Stock Options shall be exercisable, during
the optionee's lifetime, only by the optionee.
7.6 Termination by Disability or Death. Upon an optionee's
termination of service as a director by reason of disability or death, any
Director Stock Options held by such optionee may thereafter be immediately
exercised by the optionee or, in the case of death, by the legal representative
or the estate or by the legatee of the optionee under the will of the optionee,
until the expiration of the stated term of such Director Stock Options.
7.7 Other Termination. Upon an optionee's termination of
service as a director with the Company for any reason other than disability or
death, any Director Stock Options held by such optionee may thereafter be
exercised, to the extent exercisable at termination, until the expiration of the
stated term of such Director Stock Options.
8. STOCK APPRECIATION RIGHTS.
8.1 Grant and Exercise. Stock Appreciation Rights may be granted
in conjunction with all or part of any Stock Option granted under this Plan.
In the case of a Non-Qualified Stock Option, such rights may be granted either
at or after the time of the grant of such Non-Qualified Stock Option. In the
case of an Incentive Stock Option, such rights may be granted only at the time
of the grant of such Incentive Stock Option.
A Stock Appreciation Right or applicable portion thereof granted with
respect to a given Stock Option shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option, except that,
unless otherwise provided by the Committee at the time of grant, a Stock
Appreciation Right granted with respect to less than the full number of shares
covered by a related Stock Option shall only be reduced if and to the extent
that the number of shares covered by the exercise or termination of the related
Stock Option exceeds the number of shares not covered by the Stock Appreciation
Right.
A Stock Appreciation Right may be exercised by an optionee, in
accordance with Section 8.2, by surrendering the applicable portion of the
related Stock Option. Upon such exercise and surrender, the optionee shall be
entitled to receive amount determined in the manner prescribed in Section 8.2.
Stock Options having been so surrendered, in whole or in part, shall no longer
be exercisable to the extent the related Stock Appreciation Rights have been
exercised.
8.2 Terms and Conditions. Stock Appreciation Rights shall be
subject to such terms and conditions, not inconsistent with the provisions of
this Plan, as shall be determined from time to time by the Committee, including
the following:
(a) Stock Appreciation Rights shall be exercisable only at such time or
times and to the extent that the Stock Options to which they relate shall be
exercisable in accordance with the provisions of Section 6 and this Section;
provided, however, that any Stock Appreciation Right granted subsequent to the
grant of the related Stock Option shall not be exercisable during the first six
months of the term of the Stock Appreciation Right, except that this additional
limitation shall not apply in the event of death or Disability of the optionee
prior to the expiration of the six-month period.
(b) Upon the exercise of a Stock Appreciation Right, an optionee shall be
entitled to receive up to, but not more than, an amount in cash or shares of
Stock equal in value to the excess of the Fair Market Value of one share of
Stock over the option price per share specified in the related Stock Option
multiplied by the number of shares with respect to which the Stock Appreciation
Right shall have been exercised, with the Committee having the sole and
exclusive right to determine the form of payment.
(c) Stock Appreciation Rights shall be transferable only when and to the
extent that the underlying Stock Option would be transferable under Section 6.5.
(d) Upon the exercise of a Stock Appreciation Right, the Stock Option or
part thereof to which such Stock Appreciation Right is related shall be deemed
to have been
exercised for the purpose of the limitation set forth in Section 4 on the
number of shares of Stock to be issued under this Plan.
(e) A Stock Appreciation Right granted in connection with an Incentive Stock
Option may be exercised only if and when the market price of the Stock subject
to the Incentive Stock Option exceeds the exercise price of such Stock Option.
(f) In its sole discretion, the Committee may provide, at the time of grant
of a Stock Appreciation Right under this Section, that such Stock Appreciation
Right can be exercised only in the event of a "Change of Control" and/or a
"Potential Change of Control" (as defined in Section 14).
(g) The Committee, in its sole discretion, may also provide that, in the
event of a "Change of Control" and/or a "Potential Change of Control" (as
defined in Section 14), the amount to be paid upon the exercise of a Stock
Appreciation Right shall be based on the "Change of Control Price" (as defined
in Section 14).
9. RESTRICTED STOCK.
9.1 Administration. Shares of Restricted Stock may be issued either alone
or in addition to other awards granted under this Plan. The Committee shall
determine the consultants, officers and key employees of the Company and its
Subsidiaries and Affiliates to whom, and the time or times at which, grants of
Restricted Stock will be made, the number of shares to be awarded, the price, if
any, to be paid by the recipient of Restricted Stock (subject to Section 9.2,
the time or times within which such awards may be subject to forfeiture, and all
other conditions of the awards. The Committee may also condition the grant of
Restricted Stock upon the attainment of specified performance goals, or such
other criteria as the Committee may determine, in its sole discretion. The
provisions of Restricted Stock awards need not be the same with respect to each
recipient.
9.2 Awards and Certificates. The prospective recipient of an award of
shares of Restricted Stock shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing the award
(a "Restricted Stock Award Agreement") and has delivered a fully executed copy
thereof to the Company, and has otherwise complied with the then applicable
terms and conditions.
(a) Awards of Restricted Stock must be accepted within a period of 90 days
(or such shorter period as the Committee may specify) after the award date by
executing a Restricted Stock Award Agreement and paying whatever price, if any,
is required.
(b) Each participant who is awarded Restricted Stock shall be issued a stock
certificate with respect to those shares of Restricted Stock. The certificate
shall be registered in the name of the participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such award, substantially in the following form:
"The transferability of this certificate and the shares of stock represented
hereby are subject to the terms and conditions (including forfeiture) of the
Progressive Telecommunications 2000 Equity Incentive Plan and a Restricted Stock
Award Agreement entered into between the registered owner and Progressive
Telecommunications Corporation. Copies of the Plan and the Agreement are on
file in the offices of Progressive Telecommunications Corporation, 601 Cleveland
Street, Suite 930, Clearwater, Florida 33755"
(c) The Committee shall require that the stock certificates evidencing such
shares will be held in custody by the Company until the restrictions thereon
shall have lapsed, and that, as a condition of any Restricted Stock award, the
participant shall have delivered a stock power to the Company, endorsed in
blank, relating to the Stock covered by such award.
9.3 Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Section shall be subject to the following restrictions and
conditions:
(a) Subject to the provisions of this Plan and the Restricted Stock Award
Agreements, during such period as may be set by the Committee commencing on the
grant date (the "Restriction Period"), the participant shall not be permitted to
sell, transfer, pledge or assign shares of Restricted Stock awarded under this
Plan. Within these limits, the Committee may, in its sole discretion, provide
for the lapse of such restrictions in installments and may accelerate or waive
such restrictions in whole or in part based on performance and/or such other
factors as the Committee may determine, in its sole discretion.
(b) Except as provided in Section 9.3(a), the participant shall have, with
respect to the shares of Restricted Stock, all of the rights of a stockholder of
the Company, including the right to receive any dividends. Dividends paid in
stock of the Company or stock received in connection with a stock split with
respect to Restricted Stock shall be subject to the same restrictions as on such
Restricted Stock. Certificates for shares of unrestricted Stock shall be
delivered to the participant promptly after, and only after, the period of
forfeiture shall expire without forfeiture in respect of such shares of
Restricted Stock.
(c) Subject to the provisions of the Restricted Stock Award Agreement and
this Section, upon the participant's termination of employment for any reason
during the Restriction Period, all shares still subject to restriction shall be
forfeited by the participant, and the participant shall only receive the amount,
if any, paid by the participant for such forfeited Restricted Stock.
(d) In the event of special hardship circumstances of a participant whose
employment is involuntarily terminated (other than for Cause), the Committee
may, in its sole discretion, waive in whole or in part any or all remaining
restrictions with respect to such participant's shares of Restricted Stock.
10. DEFERRED STOCK AWARDS.
10.1 Administration. Deferred Stock may be awarded either alone or in
addition to other awards granted under this Plan. The Committee shall determine
the consultants, officers and key employees of the Company, its Subsidiaries and
Affiliates to whom, and the time or times at which, Deferred Stock shall be
awarded, the number of shares of Deferred Stock to be awarded to any
participant, the duration of the period (the "Deferral Period") during which,
and the conditions under which, receipt of the Stock will be deferred and the
terms and conditions of the award in addition to those set forth in Section
10.2. The Committee may also condition the grant of Deferred Stock upon the
attainment of specified performance goals, or such other criteria as the
Committee shall determine, in its sole discretion. The provisions of Deferred
Stock awards need not be the same with respect to each recipient.
10.2 Terms and Conditions. The shares of Deferred Stock awarded pursuant to
this Section shall be subject to the following terms and conditions:
(a) Subject to the provisions of this Plan and the award agreement, Deferred
Stock awards may not be sold, assigned, transferred, pledged, or otherwise
encumbered during the Deferral Period. At the expiration of the Deferral
Period (or Elective Deferral Period, where applicable), share certificates shall
be delivered to the participant, or his legal representative, in a number equal
to the shares covered by the Deferred Stock award.
(b) At the time of the award, the Committee may, in its sole discretion,
determine that amounts equal to any dividends declared during the Deferral
Period with respect to the number of shares covered by a Deferred Stock award
will be: (a) paid to the participant currently, (b) deferred and deemed to be
reinvested, or (c) forfeited because the participant has no rights with respect
thereto.
(c) Subject to the provisions of the award agreement and this Section, upon
termination of employment for any reason during the Deferral Period for a given
award, the Deferred Stock in question including any deferred and reinvested
dividends thereon shall be forfeited by the participant.
(d) Based on performance and/or such other criteria as the Committee may
determine, the Committee may, at or after the grant, accelerate the vesting of
all or any part of any Deferred Stock award and/or waive the deferral
limitations for all or any part of such award.
(e) In the event of special hardship circumstances of a participant whose
employment is involuntarily terminated (other than for Cause), the Committee
may, in its sole discretion, waive in whole or in part any or all of the
remaining deferral limitations imposed hereunder with respect to any or all of
the participant's Deferred Stock.
(f) A participant may elect to defer further receipt of the award for a
specified period or until a specified event (the "Elective Deferral Period"),
subject in each case to the Committee's approval and to such terms as are
determined by the Committee, all in its sole discretion. Subject to any
exceptions adopted by the Committee, such election must be made at least six
months prior to the completion of the Deferral Period for a Deferred Stock award
(or for an installment of such an award).
(g) Each award shall be confirmed by, and subject to the terms of, a
Deferred Stock award agreement executed by the Company and the participant.
11. LOAN PROVISIONS.
With the consent of the Committee, the Company may make, guarantee, or
arrange for, a loan or loans to a Plan participant with respect to the exercise
of any Stock Option granted under this Plan and/or with respect to the payment
of the purchase price, if any, of any Restricted Stock awarded hereunder and/or
with respect to the payment by optionee of any or all federal and/or state
income taxes due on account of the granting or exercise of any stock option or
other awards hereunder. The Committee shall have full authority to decide
whether to make a loan or loans hereunder and to determine the amount, terms and
provisions of any such loan or loans, including the interest rate to be charged
in respect of any such loan or loans, whether the loan or loans are to be with
or without recourse against the borrower, the terms on which the loan is to be
repaid and the conditions, if any, under which the loan or loans may be
forgiven.
12. AMENDMENTS AND TERMINATION.
The Board may amend, alter, or discontinue this Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the right of an
optionee or participant under a Stock Option, Director Stock Option, Stock
Appreciation Right, Restricted Stock or Deferred Stock award theretofore
granted, without the optionee's or participant's consent, or which without the
approval of the stockholders would:
12.1 Except as expressly provided in this Plan, increase the total number of
shares reserved for the purpose of this Plan;
12.2 Extend the maximum option period under Section 6.2 or 7.2 of the Plan.
The Committee may amend the terms of any award or option (other than Director
Stock Options) theretofore granted, prospectively or retroactively, but no such
amendment shall impair the rights of any holder without his consent. The
Committee may also substitute new Stock Options for previously granted Stock
Options having higher option prices.
13. UNFUNDED STATUS OF PLAN.
This Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant or optionee by the Company, nothing set forth herein shall give any
such participant or optionee any rights that are greater than those of an
unsecured, general creditor of the Company. In its sole discretion, the
Committee may authorize the creation of trusts or other arrangements to meet the
obligations created under this Plan to deliver Stock or payments in lieu of or
with respect to awards hereunder; provided, however, that the existence of such
trusts or other arrangements is consistent with the unfunded status of this
Plan.
14. CHANGE OF CONTROL.
The following acceleration and valuation provisions shall apply in the event of
a "Change of Control" or "Potential Change of Control," as defined in this
Section:
14.1 In the event of a "Change of Control," as defined in Section 14.2,
unless otherwise determined by the Committee or the Board in writing at or after
grant, but prior to the occurrence of the Change of Control, or, if and to the
extent so determined by the Committee or the Board in writing at or after grant
(subject to any right of approval expressly reserved by the Committee or the
Board at the time of such determination) in the event of a "Potential Change of
Control," as defined in Section 14(c):
(a) Any Stock Appreciation Rights outstanding for at least six (6) months
and any Stock Options awarded under this Plan not previously exercisable and
vested shall become fully exercisable and vested;
(b) The restrictions and deferral limitations applicable to any Restricted
Stock and preferred Stock awards under this Plan shall lapse and such shares
and awards shall be deemed fully vested; and
(c) All outstanding Stock Options, Stock Appreciation Rights, Restricted
Stock and Deferred Stock awards, shall, to the extent determined by the
Committee at or after grant, be canceled and the holder thereof shall be paid in
cash therefor on the basis of the "Change of Control Price" (as defined in
Section 14.4) as of the date that the Change of Control occurs or Potential
Change of Control is determined to have occurred, or such other date as the
Committee may determine prior to the Change of Control or Potential Change of
Control.
14.2 For Purposes of Section 14.2, a "Change of Control" means the happening
of any of the following:
(a) When any "person" as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than the Company, or any Company employee benefit plan,
including its trustee) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly of securities of the
Company representing 30 percent or more of the combined voting power of the
Company's then outstanding securities;
(b) The occurrence of any transaction or event relating to the Company
required to be described pursuant to the requirements of Item 6(e) of Schedule
14A of Regulation 14A of the Commission under the Exchange Act;
(c) The occurrence of a transaction requiring stockholder approval for the
acquisition of the company by an entity other than the Company or a Subsidiary,
through purchase of assets, or by merger, or otherwise;
(d) The dissolution of the Company; or
(e) The sale by the Company of substantially all of its assets.
14.3 For purposes of Section 14.1, a "Potential Change of Control" means the
happening of any of the following:
(a) The entering into an agreement by the Company, the consummation of which
would result in a Change of Control of the Company as defined in Section 14.2;
(b) The adoption by the Board of Directors of a resolution to the effect
that a Potential Change of Control of the Company has occurred for purposes of
this Plan.
14.4 For purposes of this Section, "Change of Control Price" means the
highest price based upon the Fair Market Value per share or the price paid or
offered in any transaction related to a potential or actual Change of Control of
the Company at any time during the preceding sixty day period as determined by
the Committee, except that (i) in the case of Incentive Stock Options and Stock
Appreciation Rights relating to Incentive Stock Options, such price shall be
based only on transactions reported for the date on which the Committee decides
to cash out such options, and (ii) in the case of Director Stock Options, the
sixty day period shall be the period immediately prior to the Change of Control.
15. GENERAL PROVISIONS.
15.1 All certificates for shares of Stock delivered under this Plan shall be
subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Commission or the National Association of Securities Dealers, Inc., any stock
exchange upon which the Stock is then listed, and any applicable federal or
state securities law, and the Committee may cause a legend or legends to be
placed on any such certificates to make appropriate reference to such
restrictions.
15.2 Nothing set forth in this Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of this Plan
shall not confer upon any employee of the Company, any Subsidiary or any
Affiliate, any right to continued employment (or, in the case of a director,
continued retention as a director) with the Company, a Subsidiary or an
Affiliate, as the case may be, nor shall it interfere in any way with the right
of the Company, a Subsidiary or an Affiliate to terminate the employment of any
of its employees at any time.
15.3 Each participant shall, no later than the date as of which the value of
an award first becomes includable in the gross income of the participant for
federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any federal, state, or local
taxes of any kind required by law to be withheld with respect to the award. The
obligations of the Company under this Plan shall be conditioned on such payment
or arrangements and the Company (and, where applicable, its Subsidiaries and
Affiliates) shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the participant. If
permitted by the Committee, a participant may irrevocably elect to have the
withholding tax obligation or, in the case of all awards hereunder except Stock
Options which have related Stock Appreciation Rights, if the Committee so
determines, any additional tax obligation with respect to awards hereunder by
(a) having the Company withhold shares of Stock otherwise deliverable to the
participant with respect to the award, or (b) delivering to the Company shares
of unrestricted Stock; provided, however, that any such election shall be made
either (i) during one of the "window" periods described in section (e) (3) (iii)
of Rule 16b-3 promulgated under the Exchange Act, or (ii) at least six months
prior to the date income is recognized with respect to the award.
15.4 At the time of grant or purchase, the Committee may provide in
connection with any grant or purchase made under this Plan that the shares of
Stock received as a result of such grant or purchase shall be subject to a right
of first refusal, pursuant to which the participant shall be required to offer
to the Company any shares that the participant wishes to sell, with the price
being the then Fair Market Value of the Stock, subject to the provisions of
Section 14 and to such other terms and conditions as the Committee may specify
at the time of grant.
15.5 No member of the Board or the Committee, nor any officer or employee of
the Company acting on behalf of the Board or the Committee, shall be personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to this Plan, and all members of the Board or the Committee
and each and any officer or employee of the Company acting on their behalf
shall, to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action, determination or interpretation.
16. EFFECTIVE DATE OF PLAN.
This Plan shall be effective on the date it is approved by a majority of the
votes of stockholders either in writing or cast at a duly held stockholders'
meeting at which a quorum representing a majority of all outstanding voting
stock is, either in person or by proxy, present and voting on the Plan.
17. TERM OF PLAN.
No Stock Option, Director Stock Option, Stock Appreciation Right, Restricted
Stock or Deferred Stock award shall be granted pursuant to this Plan on or after
February 28, 2010, but awards theretofore granted may extend beyond that date.
CERTIFICATION OF ADOPTION
I, ____________________, Secretary of Progressive Telecommunications
Corporation, hereby certify that the foregoing is a true and correct copy of the
2000 Equity Incentive Plan of the Company as adopted by the Board of Directors
of the Company at a special meeting held on __________________ and adopted by
the holders of a majority of outstanding shares on___________________.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of
the Company this _________________, 2000.
James C. Watson, Secretary
2000 equity plan 2
Exhibit B
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PROGRESSIVE TELECOMMUNICATIONS CORPORATION
(Pursuant to Section 78.207 of the General Corporation Law of the State of
Nevada)
PROGRESSIVE TELECOMMUNICATIONS CORPORATION, a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Nevada, DOES HEREBY CERTIFY:
FIRST, that the Board of Directors of said corporation, at meeting duly convened
and held, adopted the following resolutions:
RESOLVED, that the Board of Directors hereby declares it advisable and
in the best interest of the Corporation that Article First of the Certificate of
Incorporation be amended to read as follows:
FIRST: The name of the corporation shall be:
"BUSINESSMALL.COM, INC."
SECOND, that the said amendment has been consented to and authorized by the
holders of a majority of the issued and outstanding stock entitled to vote by
written consent given in accordance with the provisions of the General
Corporation Law of the State of Nevada.
IN WITNESS WHEREOF, said corporation has caused this Certificate to be
signed by Barry Shevlin, its CEO and attested to by James C. Watson, its
Secretary, this _____ day of March, 2000.
______________________________
Barry L. Shevlin, CEO
James C. Watson, Secretary
M9716136 2
Cert of Amendment for BMALL
PROXY
PROGRESSIVE TELECOMMUNICATIONS CORPORATION
601 Cleveland Street, Suite 930
Clearwater, FL 33755
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints Barry Shevlin and James C. Watson as
proxies, each with the power to appoint his substitute, and hereby authorizes
them to vote, as designated on the reverse side, all of the shares of common
stock of Progressive Telecommunications Corporation held of record by the
undersigned on February 21, 2000, at the annual meeting of stockholders to be
held on March 24, 2000 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 Proposal 1 through 5, inclusive.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
1. ELECTION OF DIRECTORS
Nominees: Barry Shevlin, James C. Watson, Dr. Howard Tackett, James
Wallace, Michael Kogan, Charlie M. Meeks
FOR WITHHELD
all nominees from all nominees
FOR, except vote withheld from the following nominee(s):
2. To approve the Company's 2000 Equity Incentive Plan
For [ ]
Against [ ] Abstain [ ]
3. To approve an amendment to the Company's Certificate of Incorporation to
change the name of the Company to BusinessMall.Com, Inc. For [ ]
Against [ ] Abstain [ ]
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name appears hereon. When shares are by joint tenants,
both should sign. When signing as attorney, executor, trustee, administrator or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
Signature Date
Signature Date
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