SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No.)
[X] Filed by registrant
[ ] Filed by a party other than the registrant
Check the appropriate box:
[X] Preliminary proxy statement [ ] Confidential, For Use of the
[ ] Definitive proxy statement Commission Only
[ ] Definitive additional materials (as permitted by Rule 14a-6(e)(2)
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MEDTECH DIAGNOSTICS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
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4) Date filed:
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MEDTECH DIAGNOSTICS, INC.
900 Third Avenue, Suite 201
New York, New York 10022
April __, 2000
To Our Stockholders:
On behalf of your Company's Board of Directors, I cordially invite you to
attend a Special Meeting of Stockholders to be held on May 11, 2000, at 4:30
P.M., New York City time, at _____________________, ____________________, New
York, New York 10022.
The accompanying Notice of Meeting and Proxy Statement cover the details of
the matters to be presented.
A copy of the 1999 Annual Report on Form 10-KSB for the fiscal year ended
September 30, 1999 and the Quarterly Report on Form 10-QSB for the fiscal
quarter ended December 31, 1999 are included with this mailing.
REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE SPECIAL MEETING, I URGE THAT
YOU PARTICIPATE BY COMPLETING AND RETURNING YOUR PROXY AS SOON AS POSSIBLE. YOUR
VOTE IS IMPORTANT AND WILL BE GREATLY APPRECIATED. IF YOU ATTEND THE SPECIAL
MEETING AND DESIRE TO REVOKE YOUR PROXY AND VOTE IN PERSON YOU MAY DO SO. IN ANY
EVENT YOU CAN REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED BY DELIVERING
WRITTEN NOTICE TO THE COMPANY REVOKING YOUR PROXY.
TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE SPECIAL MEETING,
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
POSTAGE PAID ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL
MEETING. YOU CAN REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED.
Cordially,
MEDTECH DIAGNOSTICS, INC.
Steven N. Bronson, President
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MEDTECH DIAGNOSTICS, INC.
900 Third Avenue, Suite 201
New York, New York 10022
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 11, 2000
To Our Stockholders:
You are cordially invited to attend the Special Meeting of Stockholders, or
any adjournments or postponements thereof (the "Meeting"), of MedTech
Diagnostics, Inc. (the "Company"), which will be held on May 11, 2000 at 4:30
P.M., New York City time, at _____________________, ____________________, New
York, New York 10022, to vote on the following proposals:
PROPOSAL 1
To elect four members to serve on the Board of Directors until the next Annual
Meeting of Stockholders and until their successors are duly elected and
qualified;
PROPOSAL 2
To consider and vote upon a proposal to approve an amendment to the Certificate
of Incorporation to change the name of the Company from MedTech Diagnostics,
Inc. to 4networld.com, Inc.;
PROPOSAL 3
To consider and vote upon a proposal to approve a reverse split of the shares of
the Company's issued and outstanding common stock such that one (1) share of
"new" common stock will be issued in exchange for each fifty (50) shares of
common stock currently issued and outstanding, any fractional shares of common
stock which result from this share exchange will not be issued but will be
rounded up and exchanged for one (1) whole share of the "new" common stock);
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PROPOSAL 4
To consider and vote upon a proposal to approve an amendment to the Certificate
of Incorporation to decrease the shares of capital stock authorized for issuance
from 500,000,000 shares of common stock to 105,000,000 shares of capital stock
consisting of 100,000,000 shares of $.00001 par value common stock and 5,000,000
shares of $.01 par value preferred stock;
PROPOSAL 5
To consider and vote upon a proposal to ratify and approve an amendment to the
By-Laws of the Company to change the size of the Board of Directors from its
current five members to "not less than three (3) members nor greater than eight
(8) members, with the exact number within that range to be fixed by resolution
of the Board of Directors";
PROPOSAL 6
To consider and vote upon a proposal to ratify and approve the 2000 Stock
Incentive Plan of the Company; and
To transact such other business as may properly be brought before the Meeting.
Stockholders of record at the close of business on March 17, 2000 shall be
entitled to notice of and to vote at the Meeting. A copy of the Annual Report on
Form 10-KSB of the Company for the fiscal year ended September 30, 1999 and the
Quarterly Report on Form 10-QSB for the fiscal quarter ended December 31, 1999,
are being mailed to stockholders simultaneously herewith.
YOUR VOTE IS IMPORTANT. TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE
SPECIAL MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL
IT PROMPTLY IN THE POSTAGE PAID ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO
ATTEND THE SPECIAL MEETING. IF YOU ATTEND THE SPECIAL MEETING AND DESIRE TO
REVOKE YOUR PROXY AND VOTE IN PERSON YOU MAY DO SO. IN ANY EVENT YOU CAN REVOKE
YOUR PROXY AT ANY TIME BEFORE IT IS VOTED BY DELIVERING WRITTEN NOTICE TO THE
COMPANY REVOKING YOUR PROXY.
By order of the Board of Directors
Steven N. Bronson, President
April __, 2000
<PAGE>
MEDTECH DIAGNOSTICS, INC.
900 THIRD AVENUE, SUITE 201
NEW YORK, NEW YORK 10022
----------------
PROXY STATEMENT
----------------
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON
MAY 11, 2000
INTRODUCTION
PROXY SOLICITATION AND GENERAL INFORMATION
This Proxy Statement and the enclosed form of proxy (the "Proxy Card") are
being furnished to the holders of common stock, par value $.00001 per share, of
MedTech Diagnostics, Inc., a Delaware corporation (the "Company"), in connection
with the solicitation of proxies by the Board of Directors (the "Board" or
"Board of Directors") of the Company for use at the Special Meeting of
Stockholders to be held on Wednesday, May 11, 2000, at _________________,
____________________, New York, New York 100__, at 4:30 P.M., New York City
time, and at any adjournment or postponement thereof (the "Meeting"). This Proxy
Statement and the Proxy Card are first being sent to stockholders on or about
April __, 2000.
At the Meeting, holders of common stock (the "Stockholders") will be
asked to vote on the following proposals:
PROPOSAL 1
To elect four members to serve on the Board of Directors until the next Annual
Meeting of Stockholders and until their successors are duly elected and
qualified;
PROPOSAL 2
To consider and vote upon a proposal to approve an amendment to the Certificate
of Incorporation to change the name of the Company from MedTech Diagnostics,
Inc. to 4networld.com, Inc.;
PROPOSAL 3
To consider and vote upon a proposal to approve a reverse split of the shares of
the Company's issued and outstanding common stock such that one (1) share of
"new" common stock will be issued in exchange for
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each fifty (50) shares of common stock currently issued and outstanding, any
fractional shares of common stock which result from this share exchange will not
be issued but will be rounded up and exchanged for one (1) whole share of the
"new" common stock);
PROPOSAL 4
To consider and vote upon a proposal to approve an amendment to the Certificate
of Incorporation to decrease the shares of capital stock authorized for issuance
from 500,000,000 shares of common stock to 105,000,000 shares of capital stock
consisting of 100,000,000 shares of $.00001 par value common stock and 5,000,000
shares of $.01 par value preferred stock;
PROPOSAL 5
To consider and vote upon a proposal to ratify and approve an amendment to the
By-Laws of the Company to change the size of the Board of Directors from its
current five members to "not less than three (3) members nor greater than eight
(8) members, with the exact number within that range to be fixed by resolution
of the Board of Directors";
PROPOSAL 6
To consider and vote upon a proposal to ratify and approve the 2000 Stock
Incentive Plan of the Company (the "2000 Plan"); and
To transact such other business as may properly be brought before the Meeting.
The Board of Directors has fixed the close of business on March 17,
2000 as the record date for the determination of Stockholders entitled to notice
of and to vote at the Meeting. Each such Stockholder will be entitled to one
vote for each share of common stock held on all matters to come before the
Meeting and may vote in person or by proxy authorized in writing.
Stockholders are requested to complete, sign, date and promptly return
the Proxy Card in the enclosed envelope. Common stock represented by properly
executed proxies received by the Company and not revoked will be voted at the
Meeting in accordance with instructions contained therein. If the Proxy Card is
signed and returned without instructions, the shares will be voted as follows:
FOR Proposal 1 - the election of each nominee for director named
herein;
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FOR Proposal 2 - the approval of the amendment to the Certificate of
Incorporation to change the name of the Company to
4networld.com, Inc.;
FOR Proposal 3 - the approval of the reverse split of the shares of the
Company's issued and outstanding common stock such
that one (1) share of "new" common stock will be
issued in exchange for each fifty (50) shares of
common stock currently issued and outstanding;
FOR Proposal 4 - the approval of the amendment to the Certificate of
Incorporation to decrease the shares of capital stock
authorized for issuance from 500,000,000 shares of
common stock to 105,000,000 shares of capital stock
consisting of 100,000,000 shares of $.00001 par value
common stock and 5,000,000 shares of $.01 par value
preferred stock;
FOR Proposal 5 - the ratification and approval of the amendment to the
By-Laws to change the size of the Board of Directors
from its current five members to "not less than three
(3) members nor greater than eight (8) members, with
the exact number within that range to be fixed by
resolution of the Board of Directors"; and
FOR Proposal 6 - the ratification and approval of the adoption of the
2000 Plan.
A Stockholder who so desires may revoke his proxy at any time before it
is voted at the Meeting by:(i) delivering written notice to the Company, at
MedTech Diagnostics, Inc., Attention: Steven N. Bronson, 900 Third Avenue, Suite
201, New York, New York 10022; (ii) duly executing a proxy bearing a later date;
or (iii) casting a ballot at the Meeting. Attendance at the Meeting will not in
and of itself constitute a revocation of a proxy.
The Board of Directors knows of no other matters that are to be brought
before the Meeting other than as set forth in the Notice of Meeting. If any
other matters properly come before the Meeting, the persons named in the
enclosed form of proxy or their substitutes will vote in accordance with their
best judgment on such matters.
RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE
Only Stockholders as of the close of business on March 17, 2000 (the
"Record Date") are entitled to notice of and to vote at the Meeting. As of the
Record Date, there were 281,400,000 shares of common stock outstanding,
beneficially owned by approximately 2,740 shareholders, entitled to vote at the
Meeting. Each share of the Company's common stock is entitled to one vote. See
"Security Ownership of Certain Beneficial Owners and Management."
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REQUIRED VOTES
The affirmative vote of a plurality of the votes cast in person or by proxy
is necessary for the election of directors (Proposal 1).
The affirmative vote of a majority of the votes cast in person or by
proxy is necessary: for the approval of the amendment to the Certificate of
Incorporation to change the name of the Company to 4networld.com, Inc. (Proposal
2); for the approval of the reverse split of the shares of the Company's issued
and outstanding common stock such that one (1) share of "new" common stock will
be issued in exchange for each fifty (50) shares of common stock currently
issued and outstanding (Proposal 3); for the approval of the amendment to the
Certificate of Incorporation to decrease the shares of capital stock authorized
for issuance from 500,000,000 shares of common stock to 105,000,000 shares of
capital stock consisting of 100,000,000 shares of $.00001 par value common stock
and 5,000,000 shares of $.01 par value preferred stock (Proposal 4); for the
ratification and approval of the amendment to the By-Laws to change the size of
the Board of Directors from its current five members to "not less than three (3)
members nor greater than eight (8) members, with the exact number within that
range to be fixed by resolution of the Board of Directors" (Proposal 5); and for
the ratification and approval of the adoption of the 2000 Plan (Proposal 6).
Votes at the Meeting will be tabulated by an independent inspector of
election appointed by the Company or the Company's transfer agent. Since the
affirmative vote of a plurality of votes cast is required for the election of
directors, abstentions and "broker non-votes" will have no effect on the outcome
of such election. Since the affirmative vote of a majority of the votes cast is
necessary for the approval of Proposal 2, Proposal 3, and Proposal 4, and for
the ratification and approval of Proposal 5 and Proposal 6, an abstention will
have the same effect as a negative vote, but "broker non-votes" will have no
effect on the outcome of the vote.
Brokers holding shares for beneficial owners must vote those shares
according to the specific instructions they receive from beneficial owners. If
specific instructions are not received, brokers may be precluded from exercising
their discretion, depending on the type of proposal involved. Shares as to which
brokers have not exercised discretionary authority or have not received
instructions from beneficial owners are considered "broker non- votes," and will
be counted for purposes of determining whether there is a quorum, but will not
be deemed to have been voted in favor of such matter.
PROXY SOLICITATION
The Company will bear the costs of the solicitation of proxies for the
Meeting. Directors and officers of the Company may solicit proxies from
Stockholders by mail, telephone, telegram, personal interview or otherwise. Such
directors and officers will not receive additional compensation but may be
reimbursed for out-of-pocket expenses in connection with such solicitation.
Brokers, nominees, fiduciaries and other custodians have been requested to
forward soliciting material to the beneficial owners of common stock held of
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record by them and such custodians will be reimbursed for their reasonable
expenses.
IT IS DESIRABLE THAT AS LARGE A PROPORTION AS POSSIBLE OF THE STOCKHOLDERS'
INTERESTS BE REPRESENTED AT THE MEETING. THEREFORE, EVEN IF YOU INTEND TO BE
PRESENT AT THE MEETING, YOU ARE REQUESTED TO COMPLETE, DATE AND SIGN THE
ENCLOSED PROXY CARD AND TO RETURN IT PROMPTLY IN THE POSTAGE PAID ENVELOPE
PROVIDED TO ENSURE THAT YOUR STOCK WILL BE REPRESENTED. IF YOU ARE PRESENT AT
THE MEETING AND DESIRE TO DO SO, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON
OR YOU MAY WITHDRAW YOUR PROXY AT ANY TIME PRIOR TO THE MEETING BY GIVING
WRITTEN NOTICE TO THE COMPANY ATTN: STEVEN N. BRONSON. PLEASE RETURN YOUR
EXECUTED PROXY PROMPTLY.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 17, 2000 certain information
regarding the beneficial ownership of the common stock outstanding by (i) each
person who is known to the Company to own 5% or more of the common stock, (ii)
each director of the Company, (iii) each executive officer of the Company, and
(iv) all executive officers and directors of the Company as a group. Unless
otherwise indicated, each of the Stockholders shown in the table below has sole
voting and investment power with respect to the shares beneficially owned.
Unless otherwise indicated, the address of each person named in the table below
is c/o MedTech Diagnostics, Inc., 900 Third Avenue, Suite 201, New York, New
York 10022.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1)
Number of Percent
Name and Address Shares owned of class
- ----------------- ------------ --------
Steven N. Bronson 138,190,000 49.1%
Estate of Jeffrey Wenig
9 Dickens Avenue
Dix Hills, NY 20,000,000 7.10%
All directors and executive officers
as a group (4 persons) (2) 138,190,000 49.1%
(1) As used in this table, a beneficial owner of a security includes any
person who, directly or indirectly, through contract, arrangement,
understanding, relationship or otherwise has or shares (a) the power to
vote, or direct the voting of, such security or (b) investment power
which includes the power to dispose, or to direct the disposition of,
such security. In addition, a person is deemed to be the beneficial
owner of a security if that person has the right to acquire beneficial
ownership of such security within 60 days.
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(2) Mr. Bronson was the Sole Officer and Director of the Company during
fiscal 1999. On March 17, 2000, Justin Model, Alan Rosenberg and
Leonard Hagan were appointed to the Board of Directors under the
By-Laws of the Company to fill vacancies on the Board. Messrs. Model,
Rosenberg and Hagan do not beneficially own any common stock of the
Company. However, if the Stockholders approve and ratify the 2000 Plan,
then pursuant to the 2000 Plan, Messrs. Model, Rosenberg and Hagan will
each receive an automatic grant of options to purchase 10,000 shares of
the Company's common stock, with an exercise price equal to the Fair
Market Value of the Company's common stock on the date of the grant.
LEGAL PROCEEDINGS
The Company is not aware of any material proceedings to which any director,
executive officer or affiliate of the Company or any security holder, including
any owner of record or beneficially of more than 5% of any class of the
Company's voting securities, is a party adverse to the Company or has a material
interest adverse to the Company.
On or about August 3, 1999, in connection with an agreement with a
third party, who was a potential merger candidate, the Company made unsecured
loans to the third party totaling $170,000, which bear interest at the rate of
10% per annum. The agreement, as amended, between the Company and the third
party is annexed as an Exhibit to the Company's Form 10-KSB for the year ended
September 30, 1999 and is expressly incorporated herein by reference. The merger
negotiations between the Company and the third-party have been cancelled and the
third party has failed to repay the loans as required by the agreement. On or
about November 22, 1999, the Company commenced a lawsuit to recover the $170,000
loaned to the third party. The action is entitled: MedTech Diagnostics, Inc. v.
Abtech Industries, Inc. and is pending in the New York State Supreme Court, New
York County and has been assigned Index No. 99-605288. The Company has entered
into a settlement agreement whereby Abtech Industries, Inc. has agree to pay the
Company $170,000, plus interest at a rate of 10% on that sum from August 3,
1999, on or before April 30, 2000. The settlement agreement is secured by a
confession of judgment executed by Abtech Industries, Inc. There is no assurance
that the Company will be able to recover any of the moneys loaned to the third
party. The Company is not aware of any other material pending legal proceedings,
to which the Company is a party.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
On December 8, 1999, the Company dismissed Grant Thornton LLP as its
independent accountants. The reports of Grant Thornton LLP on the financial
statements of the Company for the fiscal years ended September 30, 1998 and
September 30, 1997 contained no adverse opinion or disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope or accounting
principles, however, the opinions included an explanatory paragraph stating that
there were conditions that raised substantial doubt about the registrant's
ability to continue as a going concern.
In connection with Grant Thornton LLP's audits of the Company for the
fiscal years ended September 30, 1998 and September 30, 1997 and through
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December 8, 1999, there have been no disagreements with Grant Thornton LLP on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of Grant Thornton LLP would have caused them to make a
reference thereto in their report on the financial statements for such periods.
During the fiscal years ended September 30, 1998 and September 30, 1997
and through December 8, 1999, there have been no reportable events (as defined
in Regulation S-K Item 304(a)(1)(v)).
The Company engaged Kaufman, Rossin & Co. as its new independent
accountants, as of December 8, 1999, to audit the Company's financial statements
for the fiscal year ended September 30, 1999. During the fiscal years ended
September 30, 1998 and September 30, 1997 and through December 8, 1999, the
Company has not consulted Kaufman, Rossin & Co. regarding the application of
accounting principles to a specified transaction, either completed or proposed;
or the type of audit opinion that might be rendered on the financial statements
of the Company, and either a written report was provided to the Company or oral
advice was provided that Kaufman, Rossin & Co. concluded was an important factor
considered by the Company in reaching a decision as to the accounting, auditing,
or financial reporting issue.
During the fiscal years ended September 30, 1998 and September 30, 1997
and through December 8, 1999, the Company has not consulted Kaufman, Rossin &
Co. regarding any matter that was either the subject of a disagreement, as that
term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related
instructions to Item 304 of Regulation S-K, or a reportable event, as that term
is defined in Item 304(a)(1)(iv) of Regulation S-K.
PROPOSAL 1
ELECTION OF DIRECTORS
As set forth in greater detail in Proposal 5 of this Proxy Statement, on
March 17, 2000, the Board approved an amendment to the By-Laws of the Company to
change the size of the Board from five members to "not less than three (3)
members nor greater than eight (8) members, with the exact number within that
range to be fixed by resolution of the Board of Directors." On that date the
Board set the number of directors at four. Therefore, in the event of the
ratification and approval of Proposal 5 by the Stockholders at the Meeting, the
By-Laws of the Company shall provide that the Company have four directors.
Directors of the Company are elected annually at the Annual Meeting of
Stockholders. Their respective terms of office continue until the next Annual
Meeting of Stockholders and until their successors have been duly elected and
qualified in accordance with the Company's By-Laws. There are no family
relationships among any of the directors or executive officers of the Company.
The Company's Certificate of Incorporation provides that no director
shall be liable to the corporation or any of its stockholders for monetary
damages, for breach of fiduciary duty as a director, except with respect to
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(1) a breach of the director's duty of loyalty to the corporation or its
stockholders, (2) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (3) liability under
Section 174 of the Delaware General Corporation Law or (4) a transaction from
which the director derived an improper personal benefit. The Company has agreed
to indemnify to the fullest extent permitted by Sections 102(b)(7) and 145 of
the Delaware General Corporation Law, as amended from time to time, each person
that such Sections grant the Company the power to indemnify .
Unless otherwise specified, each proxy received will be voted for the
election as directors of the four nominees named below to serve until the next
Annual Meeting of Stockholders and until their successors shall have been duly
elected and qualified. Each of the nominees has consented to be named a nominee
in the Proxy Statement and to serve as a director if elected. Should any nominee
become unable or unwilling to accept a nomination or election, the persons named
in the enclosed proxy will vote for the election of a nominee designated by the
Board of Directors or will vote for such lesser number of directors as may be
prescribed by the Board of Directors in accordance with the By-Laws of the
Company.
The following persons have been nominated as directors:
STEVEN N. BRONSON, 34, has served as a director of the Company since June
1996 and has been the sole officer of the Company since September 1998. From
September 1998 to March 17, 2000, Mr. Bronson was also the sole director of
the Company. Mr. Bronson is also the President of Catalyst Financial LLC, a
privately held full service securities brokerage and investment banking firm.
Mr. Bronson has held that position since September 24, 1998. During the period
of 1991 through September 23, 1998, Mr. Bronson was President of Barber &
Bronson Incorporated, a full service securities brokerage and investment
banking firm. In addition, Mr. Bronson is the Chairman of the Board of
Directors of Mikron Instrument Company, Inc., a publicly traded corporation.
Mr. Bronson is also an officer and director of Bio-Medical Automation, Inc., a
publicly traded corporation.
JUSTIN MODEL, 30 years old, has served as a director of the Company since
March 17, 2000. Mr. Model has been the Director of Business Development at
Predict It.com, a publicly traded company, since December 1999. Predict It.com
is a provider and distributor of user-generated prediction content on the
Internet. Mr. Model is responsible for creating and establishing strategic
relationships and partnerships with sports, finance, news, portal, and community
content sites. From 1996 to 1999, Mr. Model served as Vice President for
Business Development at the New York City Economic Development Corporation (EDC)
under the auspices of Mayor Rudolph Giuliani. The EDC is New York City's primary
vehicle for economic development services. At EDC, Mr. Model was responsible for
promoting New York City as a business center and facilitating the entry and
retention of businesses in that city. Mr. Model received his Bachelors of Arts
from Skidmore College in 1991 and a Masters of Business Administration from
Fordham University, with honors, in 1992.
ALAN ROSENBERG, 30 years old, has served as a director of the Company
since March 17, 2000. Mr. Rosenberg has served as the Deputy Director of the
Management Information Systems division of the New York City Mayor's Office
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since 1998. As Deputy Director, Mr. Rosenberg oversees the day-to-day operations
as well as the development of Information Technology strategies and policies.
For the period 1994 through 1998, Mr. Rosenberg served as Director of
Procurement for the New York City Mayor's Office where he managed and
administered a budget of $2.8 billion. Prior to that position, he assisted the
New York City Deputy Mayor for Economic Development in coordinating and
overseeing several city agencies. Mr. Rosenberg received his Bachelors of Arts
from Ohio State University in 1992.
LEONARD HAGAN, 48 years old, has served as a director of the Company
since March 17, 2000. Mr. Hagan is a certified public accountant who since
______ has been a partner at Hagan & Burns CPA's, PC, an accounting firm, in
New York, New York. From _______ to ______ Mr. Hagan was _________. Mr. Hagan
received his Bachelors of Arts from Ithaca College in 1974, and a Masters of
Business Administration from Cornell University in 1976. Mr. Hagen is also a
director of Bio-Medical Automation, Inc., a publicly traded corporation.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF THE ABOVE-NAMED
DIRECTOR NOMINEES.
INFORMATION CONCERNING MEETINGS OF THE BOARD OF DIRECTORS AND BOARD
COMMITTEES AND DIRECTOR COMPENSATION
During fiscal 1999, Mr. Bronson was the sole member of the Board of
Directors of the Company and all Board action during fiscal 1999 was carried out
by unanimous written consent. There were no standing Board Committees during
fiscal 1999.
During fiscal 1999, the Company did not have a standing Audit
Committee. All functions typically taken by an audit committee, including the
review of the accuracy and sufficiency of the Company's financial disclosure,
were carried out by the Board of Directors.
COMPENSATION OF DIRECTORS
In 1999, no compensation was paid to directors of the Company for their
services as directors. In the event of the ratification and approval of the 2000
Plan by the Stockholders at the Meeting, Directors who are not employees of the
Company, Messrs. Model, Rosenberg, and Hagan (collectively the "Non- Employee
Directors" and individually the "Non-Employee Director") will be compensated for
their services as directors through their participation in the 2000 Plan. The
2000 Plan contains an automatic stock option grant provision pursuant to which
non-qualified options to acquire 10,000 shares of common stock are automatically
granted to each Non-Employee Director on the date of his or her initial
appointment or election to the Board of Directors or the Stockholders'
ratification and approval of the 2000 Plan, whichever is later, in consideration
for service as a director. The exercise price for all 10,000 options granted to
each Non-Employee Director under the 2000 Plan is the closing price of the
common stock on the date of the grant as quoted on such exchange as the common
stock may then be trading. See "SUMMARY OF 2000 STOCK INCENTIVE PLAN," below,
and Appendix C attached hereto.
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INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
Except as hereinafter provided, no director, director nominee, executive
officer, promoter or control person has, within the last five years: (i) had a
bankruptcy petition filed by or against any business of which such person was a
general partner or executive officer either at the time of the bankruptcy or
within two years prior to that time; (ii) been convicted in a criminal
proceeding or is currently subject to a pending criminal proceeding (excluding
traffic violations or similar misdemeanors); (iii) been subject to any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of business,
securities or banking activities; (iv) been found by a court of competent
jurisdiction (in a civil action), the Securities and Exchange Commission (the
"Commission") or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the name, age and position of each of the
executive officers of the Company as of March 17, 2000. The executive officers
of the Company are appointed by and serve at the discretion of the Board of
Directors of the Company.
NAME AGE POSITION
- ------------------------------------------------------------------------------
Steven N. Bronson 34 Director and Sole Officer
See the table of nominees for election as directors for biographical data
with respect to Mr. Bronson.
EXECUTIVE COMPENSATION
Due to the reduced level of the Company's operations, no compensation
was awarded to, earned by, or paid to, any of the Company's executive officers
during the fiscal years ended September 30, 1999, and September 30, 1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Steven N. Bronson is the President of Catalyst Financial LLC
("Catalyst"), a full service securities brokerage and investment banking firm.
Since September, 1998, the Company has utilized a portion of the premises
occupied by Catalyst as its executive offices. Due to the reduced level of the
Company's operations, Catalyst has, until further notice, waived the payment of
rent by the Company. No rent was paid by the Company during the fiscal years
ended September 30, 1999 and September 30, 1998. The Company currently has no
agreements with Catalyst, however, the Company may engage Catalyst in the future
for investment banking or financial advisory services.
PROPOSAL 2
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APPROVAL OF THE AMENDMENT TO THE CERTIFICATE
OF INCORPORATION TO CHANGE THE NAME OF THE COMPANY
The Board of Directors has deemed it advisable to amend the Certificate
of Incorporation to change the name of the Company to 4networld.com, Inc. The
Board of Directors has adopted the appropriate resolution to carry out such
amendment to the Certificate of Incorporation and is presently seeking
Stockholder approval to change the name of our Company from MedTech Diagnostics,
Inc. to 4networld.com, Inc. The Board believes a change in our corporate name is
desirable in view of the new business strategy of our Company. The Company's new
business strategy is to acquire, market and fund Internet and technology related
companies in their early stages of development and to act as an incubator for
those companies. The new business strategy will focus on acquiring, marketing
and funding Internet and technology companies whose primary market is
business-to-business services or products. In this respect, our Board of
Directors believes that the name change will promote our new corporate image in
the marketplace and thereby enhance the marketability of our services.
The name change will be effected by the filing with the Secretary of
State of Delaware of a Certificate of Amendment to the Certificate of
Incorporation in substantially the form attached as Appendix A to this Proxy
Statement. The name change will become effective on the date of filing, unless
the Company specifies otherwise. Assuming Stockholder approval of this proposal
is obtained, the Company plans to file the Certificate of Amendment at a time to
be determined by the officers of the Company, but in any event not later than
ten (10) business days after the Meeting.
The affirmative vote of a majority of the shares of our common stock
outstanding will be required to approve Proposal 2. Unless otherwise indicated,
properly executed Proxies will be voted in favor of Proposal 2.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.
PROPOSAL 3
APPROVAL OF REVERSE SPLIT
GENERAL
The Board of Directors has deemed it advisable to amend the Certificate
of Incorporation to effect a fifty (50) shares for (1) share stock exchange. The
Board of Directors has adopted the appropriate resolution to carry out such
amendment to the Certificate of Incorporation and is presently seeking
Stockholder approval of an amendment to the Company's Certificate of
Incorporation to effect a reverse stock split of the Company's outstanding
common stock, pursuant to which each fifty (50) shares of outstanding common
stock will automatically be combined and changed into one (1) share of "new"
common stock (the "Reverse Stock Split").
PURPOSES OF THE REVERSE STOCK SPLIT
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The Company believes that the Reverse Stock Split could increase the
acceptance of the common stock by the financial community and the investing
public.
The Company's common stock is traded on NASDAQ's over-the-counter
bulletin board. On March 17, 2000, the bid price for the common stock as
reported by the National Quotation Bureau was [____] per share. The Company's
common stock is considered to be a "penny stock" and as such is more difficult
to trade and will not qualify for margin accounts at most if not all brokerage
firms. The Reverse Stock Split would decrease the number of shares outstanding
and presumably increase the per share market price of the common stock. However,
the share price of the common stock may also be based on Company performance and
other factors, some of which may be unrelated to the number of shares
outstanding. Accordingly, there can be no assurance that the price of the common
stock after the Reverse Split would actually increase in an amount proportionate
to the decrease in the number of outstanding shares.
Although the Company believes that the Reverse Stock Split will have no
detrimental effect on the total value of the Company's common stock, there can
be no assurance that the total value of the Company's common stock after the
Reverse Stock Split will be the same as before. However, to the extent that a
Stockholder's holding is reduced by reason of the Reverse Stock split to less
than 100 shares of common stock, the brokerage fees for the sale of his or her
shares will in all likelihood be higher than the brokerage fees applicable to
the sale of round lots of shares.
CERTAIN OTHER EFFECTS OF THE REVERSE STOCK SPLIT
On March 17, 2000, there were 281,400,000 shares of common stock
outstanding. Consummation of the Reverse Stock Split would decrease the number
of outstanding shares of common stock to 5,628,000 shares. The par value of the
common stock will remain $.00001 per share following consummation of the Reverse
Stock Split. Following consummation of the Reverse Stock Split and assuming the
approval of Proposal 4 (Decrease in the Number of Authorized Shares), discussed
below, there will be 94,372,000 authorized shares of common stock $.00001 par
value will be available for future issuance by the Company from time to time.
Subject to the provisions for elimination of fractional shares as
described below, consummation of the Reverse Stock Split will not result in a
change in the relative equity position or voting power of the holders of common
stock.
MANNER OF EFFECTING THE REVERSE STOCK SPLIT;
EXCHANGE OF CERTIFICATES AND ELIMINATION OF FRACTIONAL SHARE INTERESTS
The Reverse Stock Split will be effected by the filing with the
Secretary of State of Delaware of a Certificate of Amendment in substantially
the form attached as Appendix A to this Proxy Statement. The Reverse Stock Split
will become effective on the date of filing, unless the Company specifies
otherwise (the "Effective Date"). Assuming Stockholder approval of this proposal
is obtained, the Company plans to file the Certificate of
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Amendment at a time to be determined by the officers of the Company, but in any
event not later than ten (10) business days after the Meeting.
On the Effective Date, each fifty (50) shares of "old" common stock
will automatically be combined and changed into one (1) share of "new" common
stock. No additional action on the part of the Company or any Stockholder will
be required in order to effect the Reverse Stock Split. Stockholders will be
requested to exchange their certificates representing shares of common stock
held prior to the Reverse Stock Split for new certificates representing shares
of common stock issued as a result of the Reverse Stock Split. Stockholders will
be furnished the necessary materials and instructions to effect such exchange
promptly following the Effective Date by the Company's transfer agent.
Certificates representing shares of "old" common stock subsequently presented
for transfer will not be transferred on the books and records of the Company
until the certificates representing the shares of "old " common stock have been
exchanged for certificates representing shares of "new" common stock.
Stockholders should not submit any certificates until requested to do so. In the
event any certificate representing shares of "old" common stock is not presented
for exchange upon request by the Company, any dividends that may be declared
after the Effective Date with respect to the common stock represented by such
certificate will be withheld by the Company until such certificate has been
properly presented for exchange, at which time all such withheld dividends which
have not yet been paid to the public official pursuant to relevant abandoned
property laws, will be paid to the holder thereof or his designee, without
interest.
No fractional shares of "new" common stock will be issued to any
Stockholder. Any fractional shares of common stock which would result from this
share exchange will not be issued but will be rounded up and exchanged for one
(1) whole share of the "new" common stock. Accordingly, Stockholders of record
who would otherwise be entitled to receive fractional shares of "new" common
stock, will, upon surrender of their certificates representing "old" shares of
common stock, receive one (1) share of "new" common stock.
EXAMPLE 1: Shareholder A owns 25,000 shares of the Company's
common stock on May 11, 2000.
Assuming that Proposal 3 is approved at the Meeting
on May 11, 2000, by the Stockholders, then:
On May 12, 2000 Shareholder A will own 500 shares of the
Company's common stock. [25,000 divided by 50 equals 500]
EXAMPLE 2: Shareholder B owns 15,287 shares of the Company's
common stock on May 11, 2000.
Assuming that Proposal 3 is approved at the Meeting
on May 11, 2000, by the Stockholders, then:
On May 12, 2000 Shareholder B will own 306 shares of the
Company's common stock. [15,287 divided by 50 equals
305.74. The 74/100 share of common stock is rounded up
to 1 full
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share. Thus, after the Reverse Stock Split
Shareholder B owns 306 shares of the Company's common
stock].
FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT
The following description of federal income tax consequences is based
on the Internal Revenue Code of 1986, as amended, and applicable Treasury
regulations promulgated thereunder, judicial authority and current
administrative rulings and practices as in effect on the date of this Proxy
Statement. This discussion should not be considered tax or investment advice,
and the tax consequences of the Reverse Stock Split may not be the same for all
Stockholders. In particular, this discussion does not address the tax treatment
of special classes of Stockholders, such as banks, insurance companies,
tax-exempt entities, and foreign persons. Stockholders desiring to know their
individual federal, state, local and foreign tax consequences should consult
their own tax advisors.
The combination and change of each fifty (50) shares of "old" common
stock into one share of "new" common stock will be a tax-free transaction, and
the holding period and tax basis of the "old" common stock will be transferred
to the "new" common stock received in exchange therefor.
The affirmative vote of a majority of the shares of our common stock
outstanding will be required to approve Proposal 3. Unless otherwise indicated,
properly executed Proxies will be voted in favor of Proposal 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 3.
PROPOSAL 4
APPROVAL OF THE AMENDMENT TO THE CERTIFICATE
OF INCORPORATION TO DECREASE THE NUMBER OF AUTHORIZED SHARES
The Board of Directors has deemed it advisable to amend the Certificate
of Incorporation to decrease the number of authorized shares of capital stock of
the Company from 500,000,000 shares consisting solely of common stock par value
$.00001 per share to 105,000,000 shares of capital stock consisting of
100,000,000 shares of $.00001 par value common stock and 5,000,000 shares of
$.01 par value preferred stock. The Board of Directors has adopted the
appropriate resolution to carry out such amendment to the Certificate of
Incorporation and is presently seeking Stockholder approval of such amendment to
the Certificate of Incorporation.
The Certificate of Incorporation of the Company presently authorizes
the issuance of a total of 500,000,000 shares of capital stock, all of which is
common stock, par value $.00001 per share. On March 17, 2000, the Board of
Directors adopted a resolution proposing and declaring the advisability of an
amendment to the Company's Certificate of Incorporation decreasing the
authorized number of shares of capital stock for issuance from 500,000,000
shares to 105,000,000 shares consisting of 100,000,000 shares of $.00001 par
value common stock and 5,000,000 shares of $.01 par value preferred stock. With
respect to the preferred stock, the proposed amendment to the Certificate
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of Incorporation authorizes the Board of Directors, subject to limitations
prescribed by law, to provide for the issuance of the shares of preferred stock
in series, and by filing a certificate pursuant to the applicable law of the
State of Delaware, to establish from time to time the number of shares to be
included in each such series, and to fix the designation, powers, preferences
and rights of the shares of each such series and the qualifications, limitations
or restrictions thereof. A form of the proposed Certificate of Amendment to the
Certificate of Incorporation is attached as Appendix A to this Proxy Statement.
Below is a description of the change in the number of shares and types
of capital stock authorized for issuance by the Company if Proposal No. 4 is
approved by the Stockholders:
Currently the Certificate of Incorporation for the Company authorizes
for issuance 500,000,000 shares of capital stock consisting of:
Number of Shares Class Par Value
- ---------------- ----- ---------
500,000,000 Common Stock $.00001
If a majority of the issued and outstanding shares of the Company's
Common Stock are voted in favor of Proposal No. 4, then the Company will be
authorized to issue 105,000,000 shares of capital stock consisting of:
Number of Shares Class Par Value
- ---------------- ----- ---------
100,000,000 Common Stock $.00001
5,000,000 Preferred Stock $.01
The Board of Directors believes that this reduction in the number of
shares of common stock authorized for issuance and the creation of a preferred
stock are advisable to give the Company a more attractive and flexible capital
structure to assist the Company in consummating any future merger, acquisition,
reorganization, or other transaction. Also, the reduction in authorized shares
of capital stock may allow the Company to reduce certain future franchise tax
expenses. The Company is a Delaware corporation and is subject to an annual
franchise tax payment under Delaware law. Delaware's annual franchise tax
payment is calculated by one of two methods - the authorized number of shares
method or the assumed capital method. Between the two methods the lesser tax is
payable. A reduction in authorized shares would, ipso facto, reduce the amount
of tax due as calculated by the authorized shares method.
MANNER OF EFFECTING THE DECREASE IN AUTHORIZED SHARES
The decrease in authorized shares of the Company's common stock will be
effected by the filing with the Secretary of State of Delaware of a certificate
of Amendment in substantially the form attached as Appendix A to
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this Proxy Statement. The decrease in authorized shares of the Company's common
stock will become effective on the date of filing, unless the Company specifies
otherwise. Assuming Stockholder approval of this proposal is obtained, the
Company plans to file the Certificate of Amendment at a time to be determined by
the officers of the Company, but in any event not later than ten (10) business
days after the Meeting.
The Directors believe that following the approval of the reduction in
the authorized capital stock of the Company, there will be sufficient authorized
but unissued shares of both common and preferred stock to provide the Company
with the flexibility it might need in the future.
The affirmative vote of a majority of the shares of our common stock
outstanding will be required to approve this Proposal 4. Unless otherwise
indicated, properly executed Proxies will be voted in favor of Proposal 4.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL 4.
PROPOSAL 5
RATIFICATION AND APPROVAL OF THE AMENDMENT TO THE BY-LAWS
TO CHANGE THE SIZE OF THE BOARD OF DIRECTORS
The Board of Directors has deemed it advisable to amend Article III,
Section 1 of the By-Laws of the Company to change the size of the Board of
Directors from its current five members to "not less than three (3) members nor
greater than eight (8) members, with the exact number within that range to be
fixed by resolution of the Board of Directors." The Board has taken action to
adopt such amendment to the By-Laws of the Company and is presently seeking
Stockholder approval and ratification of the amendment to the Company's By-
Laws.
Prior to March 17, 2000, Article III, Section 1 of the By-Laws of the
Company provided that the authorized number of directors shall be five (5). On
March 17, 2000, pursuant to the Company's By-Laws, the Board of Directors
amended Article III, Section 1 of the By-Laws of the Company to change the size
of the Board of Directors from its current five members to "not less than three
(3) members nor greater than eight (8) members, with the exact number within
that range to be fixed by resolution of the Board of Directors", and fixed the
exact number of directors within the proposed range at four (4). The Board is
presently seeking Stockholder approval and ratification of the amendment to
Article III, Section 1 of the By-Laws. A copy of the Amended and Restated
By-Laws of the Company is attached hereto as Appendix B.
The purpose of this amendment to the By-Laws is to provide greater
flexibility to the Board with respect to determining the number of directors on
the Board. With the ability to fix the number of directors at a number between
three and eight, the Company would have the flexibility in future merger,
acquisition, reorganization or other negotiations to retain additional directors
whose skill and experience would benefit the Company and the conduct and
operations of the Board without subjecting the Company or its Stockholders
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to the additional expense and effort required to amend the By-Laws each time the
Company wishes to add a new director.
The affirmative vote of a majority of the shares of our common stock
outstanding will be required to approve this Proposal 5. Unless otherwise
indicated, properly executed Proxies will be voted in favor of Proposal 5.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL 5.
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PROPOSAL 6
ADOPTION OF THE 2000 STOCK INCENTIVE PLAN
The Board of Directors has deemed it advisable to adopt the 2000 Plan.
The Board has taken action to adopt the 2000 Plan and is presently seeking
Stockholder approval and ratification of the 2000 Plan.
The 2000 Plan was adopted by the Board of Directors on March 17, 2000,
and will become effective on May 12, 2000, subject to approval by the
Stockholders at the Meeting. The purpose of the 2000 Plan is to attract and
retain the best available personnel for positions of substantial responsibility
and to provide additional incentives to employees, officers, directors,
consultants, independent contractors and advisors to promote the growth and
success of the Company's business. Plans such as the 2000 Plan have become
particularly important for the Company to be able to retain and attract key
management and directors because of the competitive nature of the market in
which the Company operates.
The following summary of the 2000 Plan is qualified in its entirety by
reference to the text of the 2000 Plan as set forth in Appendix C hereto.
SUMMARY OF THE 2000 STOCK INCENTIVE PLAN
ADMINISTRATION AND ELIGIBILITY. The 2000 Plan authorizes the issuance of up
to 1,100,000 shares of common stock (after giving effect to the fifty (50) for
one (1) reverse stock split described in Proposal 2) upon the exercise of stock
options or in connection with the issuance of restricted stock and stock
bonuses. The 2000 Plan authorizes the granting of (i) stock options, restricted
stock and stock bonuses to employees, officers, directors and consultants,
independent contractors and advisors of the Company and its subsidiaries
provided such consultants, independent contractors and advisors render bona fide
services not in connection with the offer and sale of securities in a
capital-raising transaction and (ii) a non-discretionary automatic award of
stock options to each of the non-employee directors of the Company. The 2000
Plan provides for its administration by either a committee of two or more
outside directors or the Board of Directors (the "Administrator"). In general,
the Administrator, in its sole discretion, determines which eligible employees,
officers, directors, consultants, independent contractors and advisors of the
Company and its subsidiaries may participate in the 2000 Plan and the type,
extent and terms of the equity- based awards to be granted to them.
The 2000 Plan provides for the grant of both incentive stock options
("ISOs") that qualify under Section 422 of the Code, and non-qualified stock
options ("NQSOs"). ISOs may be granted only to employees of the Company or of a
parent or subsidiary of the Company. NQSOs (and all other awards other than
ISOs) may be granted to employees, officers, directors and consultants,
independent contractors and advisors that render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. The exercise price of ISOs must be at least equal to the fair
market value of the Company's common stock on the date of grant. The exercise
price of ISOs granted to 10% Stockholders must be at least equal to 110% of
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that value. The exercise price of NQSOs must be at least equal to 65% of the
fair market value of the Company's common stock on the date of grant. The
maximum term of options granted under the 2000 Plan is ten years. Awards granted
under the 2000 Plan may not be transferred in any manner other than by will or
by the laws of descent and distribution and may be exercised during the lifetime
of the optionee only by the optionee (unless otherwise determined by the
Administrator and set forth in the award agreement with respect to awards that
are NQSOs). Options granted under the 2000 Plan generally expire three months
after the termination of the optionee's service to the Company or a parent or
subsidiary of the Company, except in the case of death or disability, in which
case the options generally may be exercised up to 12 months following the date
of death or termination of service. Options will generally terminate immediately
upon termination for cause. In the event of the Company's dissolution or
liquidation or a "change in control" transaction, outstanding awards may be
assumed or substituted by the successor corporation (if any). In the discretion
of the Administrator the vesting of such awards may accelerate upon such
transaction.
RESTRICTED STOCK. The Administrator may make grants of restricted stock for
cash or other consideration, as the Administrator determines. The number of
shares of common stock granted to each grantee will be determined by the
Administrator. Grants of restricted stock will be made subject to such
restrictions and conditions as the Administrator may determine in its sole
discretion, including periods of restriction on transferability during which
time the grant may be required to be deposited with an escrow agent, if the
Administrator so determines.
STOCK BONUSES. A stock bonus is an award of Shares (which may consist of
Restricted Stock) for services rendered to the Company or any subsidiary of the
Company for past or future services. Stock bonuses and the criteria they are
based upon will be determined by the Administrator.
AUTOMATIC GRANTS TO NON-EMPLOYEE DIRECTORS. The 2000 Plan provides for the
automatic grant of NQSOs to each of the Company's non-employee directors to
purchase 10,000 shares of common stock of the Company, after giving effect to
the May 11, 2000 fifty (50) shares for one (1) share reverse stock split (the
"Automatic Director Stock Options"). Under the 2000 Plan each non- employee
director of the Company shall receive the Automatic Director Stock Options on
the day of their appointment to the Board under the By-Laws of the Company or
their election to the Board at the annual meeting of stockholders of the Company
or at a special meeting of stockholders of the Company, whichever date is first
to occur. However, with respect to the current non- employee directors of the
Company, Messrs. Model, Rosenberg and Hagan, such non-employee directors will
not receive their Automatic Director Stock Options until the Stockholders of the
Company ratify and approve the 2000 Plan at the Meeting, currently scheduled for
May 11, 2000. The Automatic Director Stock Options will have an exercise price
per share equal to the fair market value thereof on the date of grant and will
be exercisable for a period of ten years from the date of grant. All of such
Automatic Director Stock Options will vest immediately upon the date of grant.
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AMENDMENT. The Board has the right to amend, suspend or terminate the 2000
Plan at any time, provided, however, that no amendment or change in the 2000
Plan that requires Stockholder approval will be effective without such approval.
CERTAIN TAX CONSEQUENCES. No taxable income is realized by an optionee upon
the grant or exercise of an ISO. If common stock is issued to an optionee
pursuant to the exercise of an ISO, and if no disqualifying disposition of such
shares is made by such optionee within two years after the date of grant or
within one year after the transfer of such shares to such optionee, then (i)upon
sale of such shares, any amount realized in excess of the option price will be
taxed to such optionee as a long-term capital gain and any loss sustained will
be a long-term capital loss, and (ii) no deduction will be allowed to the
optionee's employer for Federal income tax purposes. If common stock acquired
upon the exercise of an ISO is disposed of prior to the expiration of either
holding period described above, generally (i) the optionee will realize ordinary
income in the year of disposition in an amount equal to the excess (if any) of
the fair market value of such shares at exercise (or, if less, the amount
realized on the disposition of such shares) over the option price paid for such
shares, and (ii) the optionee's employer will be entitled to deduct such amount
for Federal income tax purposes if the amount represents an ordinary and
necessary business expense. Any further gain (or loss) realized by the optionee
upon the sale of the common stock will be taxed as short-term or long-term
capital gain (or loss), depending on how long the shares have been held, and
will not result in any deduction by the employer. Subject to certain exceptions
for disability or death, if an ISO is exercised more than three months following
termination of employment, the exercise of the option will generally be taxed as
the exercise of a non-ISO. For purposes of determining whether an optionee is
subject to any alternative minimum tax liability, an optionee who exercises an
ISO generally would be required to increase his or her alternative minimum
taxable income, and compute the tax basis in the stock so acquired, in the same
manner as if the optionee had exercised a non-ISO. Each optionee is potentially
subject to the alternative minimum tax. In substance, a taxpayer is required to
pay the higher of his/her alternative minimum tax liability or his/her "regular"
income tax liability. As a result, a taxpayer has to determine his/her potential
liability under the alternative minimum tax.
With respect to non-ISOs (i) no income is realized by the optionee at the
time the option is granted; (ii) generally, at exercise, ordinary income is
realized by the optionee in an amount equal to the difference between the option
price paid for the shares and the fair market value of the shares, if
unrestricted, on the date of exercise, and the optionee's employer is generally
entitled to a tax deduction in the same amount subject to applicable tax
withholding requirements; and (iii) at sale, appreciation (or depreciation)
after the date of exercise is treated as either short-term or long-term capital
gain (or loss) depending on how long the shares have been held. Individuals
subject to Section 16(b) of the Exchange Act will recognize ordinary income at
the time of exercise of a non-ISO as noted above, provided at least six months
have elapsed from the date of grant to the date of exercise. In the event that
less than six months have elapsed, such individual will recognize ordinary
income at the time such six month period elapses in an
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amount equal to the excess of the fair market value of the shares on such date
over the exercise price.
The granting of an award of restricted stock does not result in taxable
income to the recipient unless the recipient elects to report the award as
taxable income under Section 83(b) of the Internal Revenue Code. Absent such an
election, the value of the award is considered taxable income once it is vested
and distributed. Dividends are paid concurrent with, and in an amount equal to,
ordinary dividends and are taxable as paid. If a Section 83(b) election is made,
the recipient recognizes ordinary income in the amount of the total value on the
date of grant and the Company receives a corresponding tax deduction. Any gain
or loss subsequently experienced will be a capital gain or loss to the recipient
and the Company does not receive an additional tax deduction.
NEW PLAN BENEFITS. The grant of options under the 2000 Plan is within the
discretion of the Administrator, except that non-employee directors of the
Company will receive an automatic grant of NQSOs, as noted above. The Company
cannot forecast the extent of option grants that will be made in the future.
Information with respect to compensation paid and other benefits, including
options, granted in respect of the 1999 fiscal year to the Executive Officer is
set forth above. During fiscal 1999, no stock options were granted to any of the
officers or directors of the Company.
The affirmative vote of a majority of the shares of our common stock
outstanding will be required to approve this Proposal 6. Unless otherwise
indicated, properly executed Proxies will be voted in favor of Proposal 6.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL 6.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
intend to present any other matter for action at the Meeting other than as set
forth in the Notice of Special Meeting and this Proxy Statement. If any other
matters properly come before the Meeting, it is intended that the shares
represented by the proxies will be voted, in the absence of contrary
instructions, in the discretion of the persons named in the proxy.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and any persons who own more than
10% of the Company's capital stock to file with the Commission (and, if such
security is listed on a national securities exchange, with such exchange),
various reports as to ownership of such capital stock. Such persons are required
by Commission regulations to furnish the Company with copies of all Section
16(a) forms they file.
Based solely upon reports and representations submitted by the directors,
executive officers and holders of more than 10% of the Company's capital stock,
all Forms 3, 4 and 5 showing ownership of and changes of ownership in
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the Company's capital stock during the 1999 fiscal year were timely filed with
the Commission and the National Association of Securities Dealers.
FORMS 10-KSB AND 10-QSB
A copy of the Company's 1999 Annual Report on Form 10-KSB for the year
ended September 30, 1999, including the financial statements and schedules, and
its Quarterly Report on Form 10-QSB for the fiscal quarter ended December 31,
1999, both as filed with the Commission, accompany this Proxy Statement. Any
Stockholder who has not received a copy of such 1999 Annual Report on Form
10-KSB or Quarterly Report on Form 10-QSB and wishes to do so should direct a
written request to the Company's Corporate Secretary by mail at 900 Third
Avenue, Suite 201, New York, New York 10022 or by telephone at (212) 610-2778.
FOR THE BOARD OF DIRECTORS
STEVEN N. BRONSON, President
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Appendix A
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
MEDTECH DIAGNOSTICS, INC.
MEDTECH DIAGNOSTICS, INC., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
FIRST: That the Board of Directors of MEDTECH DIAGNOSTICS, INC. duly
adopted resolutions setting forth proposed amendments to the
Certificate of Incorporation of the Corporation, declaring said
amendments to be advisable and calling a meeting of the
stockholders of the Corporation for consideration thereof.
SECOND: That the Certificate of Incorporation of the Corporation is hereby
amended by changing the Article thereof numbered FIRST so that, as
amended, said Article shall be and read as follows:
FIRST: The name of the corporation is: 4networld.com, Inc.
THIRD: That the Certificate of Incorporation of the Corporation is hereby
amended by changing the Article thereof numbered FOURTH so that,
as amended, said Article shall be and read as follows:
FOURTH: The corporation shall be authorized to issue the
following shares:
Class Number of Shares Par Value
----- ---------------- ---------
Common Stock 100,000,000 $.00001
Preferred Stock 5,000,000 $.01
Common Stock
Each share of Common Stock currently issued and
outstanding or issued and held in the treasury of the
Corporation as of the close of business on the date
on which this Certificate of Amendment of the
Certificate of Incorporation of the Corporation
adding this paragraph shall become effective (the
"Effective Date"), is hereby automatically and
without further action reclassified, converted and
changed to provide that one (1) "new" share of common
stock of the Corporation will be exchanged for each
fifty (50) shares of currently issued and outstanding
common stock of the Corporation, any fractional
shares of common stock which
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result from this share exchange will not be issued
but will be rounded up and exchanged for one (1)
whole share of the "new" common stock. The "new"
common stock issued in this exchange will have the
same rights and preferences as the currently
outstanding shares of common stock of the Company.
Preferred Stock
Subject to the provisions of this Certificate of
Incorporation, the Board of Directors is authorized,
subject to limitations prescribed by law, to provide
for the issuance of the shares of preferred stock in
series, and by filing a certificate pursuant to the
applicable law of the State of Delaware, to establish
from time to time the number of shares to be included
in each such series, and to fix the designation,
powers, preferences and rights of the shares of each
such series and the qualifications, limitations or
restrictions thereof. The authority of the Board of
Directors with respect to each series shall include,
but not be limited to, determination of the
following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate on the shares of that series,
whether dividends shall be cumulative, and, if so,
from which date or dates, and the relative rights of
priority, if any, of payment of dividends on shares
of that series;
(c) Whether that series shall have voting rights, in
addition to the voting rights provided by law, and if
so, the terms of such voting rights;
(d) Whether that series shall have conversion
privileges, and, if so, the terms and conditions of
such conversion, including provision for adjustment
of the conversion rate in such events as the Board of
Directors shall determine;
(e) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of
such redemption, including the date or date upon or
after which they shall be redeemable, and the amount
per share payable in case of redemption, which amount
may vary under different conditions and at different
redemption dates;
(f) Whether that series shall have a sinking fund for
the redemption or purchase of shares of that series,
and, if so, the terms and amount of such sinking
fund; and
(g) The rights of the shares of that series in the event
of voluntary or involuntary liquidation, dissolution or
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winding up of the Corporation, and the relative
rights of priority, if any, of payment of shares of
that series."
FOURTH: That thereafter, pursuant to resolution of its Board of
Directors, a special meeting of the stockholders of said
corporation was duly called and held, upon notice in
accordance with Section 222 of the General Corporation Law of
the State of Delaware at which meeting the necessary number of
shares as required by statute were voted in favor of the
amendment.
FIFTH: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the
State of Delaware.
SIXTH: That the capital of said corporation shall not be reduced under or
by reason of said amendment.
IN WITNESS WHEREOF, said Corporation has caused this certificate to be signed by
Steven N. Bronson, its President, this day of May, 2000.
By:
----------------------------
Steven N. Bronson, President
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Appendix B
AMENDED
AND RESTATED
BY-LAWS
OF
MEDTECH DIAGNOSTICS, INC.
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The registered office shall be established
and maintained at c/o United Corporate Services, Inc., 410 South State Street,
Dover, Delaware 19901 and United Corporate Services, Inc. shall be the
registered agent of this corporation in charge thereof.
SECTION 2. OTHER OFFICES. - The corporation may have other offices, either
within or without the State of Delaware, at such place or places as the Board of
Directors may from time to time appoint or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. Annual meetings of stockholders for the
election of directors and for such other business as may be stated in the notice
of the meeting, shall be held at such place, either within or without the State
of Delaware, and at such time and date as the Board of Directors, by resolution,
shall determine and as set forth in the notice of meeting. In the event the
Board of Directors fails to so determine the time, date and place of meeting,
the annual meeting of stockholders shall be held at the registered office of the
corporation in Delaware.
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If the date of the annual meeting shall fall upon a legal holiday, the
meeting shall be held on the next succeeding business day. At each annual
meeting, the stockholders entitled to vote shall elect a Board of Directors and
they may transact such other corporate business as shall be stated in the notice
of that meeting.
SECTION 2. OTHER MEETINGS. Meetings of stockholders for any purpose other
than the election of directors may be held at such time and place, within or
without the State of Delaware, as shall be stated in the notice of the meeting.
SECTION 3. VOTING. Each stockholder entitled to vote in accordance with
the terms of the Certificate of Incorporation and in accordance with the
provisions of these By-Laws shall be entitled to one vote, in person or by
proxy, for each share of stock entitled to vote held by such stockholder, but no
proxy shall be voted after three years from its date unless such proxy provides
for a longer period. Upon the demand of any stockholder, the vote for directors
and the vote upon any question before the meeting, shall be by ballot. All
elections for directors shall be decided by plurality vote; all other questions
shall be decided by majority vote except as otherwise provided by the
Certificate of Incorporation or the laws of the State of Delaware.
A complete list of the stockholders entitled to vote at the ensuing
election, arranged in alphabetical order, with the address of each, and the
number of shares held by each, 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, 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
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the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
SECTION 4. QUORUM. Except as otherwise required by law, by the Certificate
of Incorporation or by these By-Laws, the presence, in person or by proxy, of
stockholders holding a majority of the stock of the corporation entitled to vote
shall constitute a quorum at all meetings of the stockholders. In case a quorum
shall not be present at any meeting, a majority in interest of the stockholders
entitled to vote thereat, present in person or by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until the requisite amount of stock entitled to vote shall be
present. At any such adjourned meeting at which the requisite amount of stock
entitled to vote shall be represented, any business may be transacted which
might have been transacted at the meeting as originally noticed; but only those
stockholders entitled to vote at the meeting at originally noticed shall be
entitled to vote at any adjournment or adjournments thereof.
SECTION 5. SPECIAL MEETINGS. Special meetings of the stockholders for any
purpose or purposes may be called by the President or Secretary, or by
resolution of the directors.
SECTION 6. NOTICE OF MEETINGS. Written notice, stating the place, date and
time of the meeting, and the general nature of the business to be considered,
shall be given to each stockholder entitled to vote thereat at his address as it
appears on the records of the corporation, not less than ten nor more than fifty
days before the date of the meeting. No business other than that stated in the
notice shall be transacted at any meeting without the unanimous consent of all
the stockholders entitled to vote thereat.
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SECTION 7. ACTION WITHOUT MEETING. Unless otherwise provided by the
Certificate of Incorporation, any action required to be taken at any annual or
special meeting of stockholders, or any action which may be taken at any annual
or special meeting, 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.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER AND TERM. The number of directors shall be not less that
three (3) members nor greater that eight (8), with the exact number within that
range to be fixed by resolution of the Board of Directors. The directors shall
be elected at the annual meeting of the stockholders and each director shall be
elected to serve until his successor shall be elected and shall qualify. A
director need not be a stockholder.
SECTION 2. RESIGNATIONS. Any director, member of a committee or other
office may resign at any time. Such resignation shall be made in writing, and
shall take effect at the time specified therein, and if no time be specified, at
the time of its receipt by the President or Secretary. The acceptance of a
resignation shall not be necessary to make it effective.
SECTION 3. VACANCIES. If the office of any director, member of a committee
or other officer becomes vacant, the remaining directors in office, though less
than a quorum by a majority vote, may appoint any qualified person
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to fill such vacancy, who shall hold office for the unexpired term and until his
successor shall be duly chosen.
SECTION 4. REMOVAL. Any director or directors may be removed either for or
without cause at any time by the affirmative vote of the holders of a majority
of all the shares of stock outstanding and entitled to vote, at a special
meeting of the stockholders called for the purpose and the vacancies thus
created may be filled, at the meeting held for the purpose of removal, by the
affirmative vote of a majority in interest of the stockholders entitled to vote.
SECTION 5. INCREASE OF NUMBER. The number of directors may be increased by
amendment of these By-Laws by the affirmative vote of a majority of the
directors, though less than a quorum, or, by the affirmative vote of a majority
in interest of the stockholders, at the annual meeting or at a special meeting
called for that purpose, and by like vote the additional directors may be chosen
at such meeting to hold office until the next annual election and until their
successors are elected and qualify.
SECTION 6. POWERS. The Board of Directors shall exercise all of the powers
of the corporation except such as are by law, or by the Certificate of
Incorporation of the corporation or by these By-Laws conferred upon or reserved
to the stockholders.
SECTION 7. COMMITTEES. The Board of Directors may, by resolution or
resolutions passed by a majority of the whole board, designate one or more
committees, each committee to consist of two 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
such committee or committees, the member or members, thereof present at any
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such meeting and not disqualified from voting, whether 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
of Directors, or in these By-Laws, shall have and may exercise all the powers
and authority of the Board of Directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all papers which may require it; but no such committee shall have the
power of authority in reference to amending the Certificate of Incorporation,
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
By-Laws of the corporation; and unless the resolution, these By-Laws, or the
Certificate of Incorporation expressly so provide, no such committee shall have
the power or authority to declare a dividend or to authorize the issuance cf
stock.
SECTION 8. MEETINGS. The newly elected Board of Directors may hold their
first meeting for the purpose of organization and the transaction of business,
if a quorum be present, immediately after the annual meeting of the
stockholders; or the time and place of such meeting may be fixed by consent, in
writing, of all the directors.
Unless restricted by the incorporation document or elsewhere in these
By-laws, members of the Board of Directors or any committee designated by such
Board may participate in a meeting of such Board or committee by means of
conference telephone or similar communications equipment allowing all persons
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participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at such meeting. Regular
meetings of the Board of Directors may be scheduled by a resolution adopted by
the Board. The Chairman of the Board or the President or Secretary may call, and
if requested by any two directors, must call special meeting of the Board and
give five days notice by mail, or two days notice personally or by telegraph or
cable to each director. The Board Of Directors may hold an annual meeting,
without notice, immediately after the annual meeting of shareholders.
SECTION 9. QUORUM. A majority of the directors shall constitute a quorum
for the transaction of business. If at any meeting of the board there shall be
less than a quorum present, a majority of those present may adjourn the meeting
from time to time until a quorum is obtained, and no further notice thereof need
be given other than by announcement at the meeting which shall be so adjourned.
SECTION 10. COMPENSATION. Directors shall not receive any stated salary for
their services as directors or as members of committees, but by resolution of
the board a fixed fee and expenses of attendance may be allowed for attendance
at each meeting. Nothing herein contained shall be construed to preclude any
director from serving the corporation in any other capacity as an officer, agent
or otherwise, and receiving compensation therefor.
SECTION 11. ACTION WITHOUT MEETING. Any action required or permitted to be
taken at any meeting of the Board of Directors, or of any committee thereof, may
be taken without a meeting, if prior to such action a written consent thereto is
signed by all members of the board, or of such committee as the case may be, and
such written consent is filed with the minutes of proceedings of the board or
committee.
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ARTICLE IV
OFFICERS
SECTION 1. OFFICERS. The officers of the corporation shall be a President,
a Treasurer, and a Secretary, all of whom shall be elected by the Board of
Directors and who shall hold office until their successors are elected and
qualified. In addition. the Board of Directors may elect a Chairman, one or more
Vice-Presidents and such Assistant Secretaries and Assistant Treasurers as they
may deem proper. None of the officers of the corporation need be directors. The
officers shall be elected at the first meeting of the Board of Directors after
each annual meeting. More than two offices may be held by the same person.
SECTION 2. OTHER OFFICERS AND AGENTS. The Board of Directors may appoint
such other officers and agents as it may deem advisable, who shall hold their
office for such terms and shall exercise such powers and perform such duties as
shall be determined from time to time by the Board of Directors.
SECTION 3. CHAIRMAN. The Chairman of the Board of Directors, if one be
elected, shall preside at all meetings of the Board of Directors and he shall
have and perform such other duties as from time to time may be assigned to him
by the Board of Directors.
SECTION 4. PRESIDENT. The President shall be the chief executive officer of
the corporation and shall have the general powers and duties of supervision and
management usually vested in the office of President of a corporation. He shall
preside at all meetings of the stockholders if present thereat, and in the
absence or non-election of the Chairman of the Board of Directors, at all
meetings of the Board of Directors, and shall have general supervision,
direction and control of the business of the corporation . Except
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as the Board of Directors shall authorize the execution thereof in some other
manner, he shall execute bonds, mortgages and other contracts in behalf of the
corporation, and shall cause the seal to be affixed to any instrument requiring
it and when so affixed the seal shall be attested by the signature of the
Secretary or the Treasurer or Assistant Secretary or an Assistant Treasurer.
SECTION 5. VICE-PRESIDENT. Each Vice-President shall have such powers and
shall perform such duties as shall be assigned to him by the directors.
SECTION 6. TREASURER. The Treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate account of receipts and
disbursements in books belonging to the corporation. He shall deposit all moneys
and other valuables in the name and to the credit of the corporation in such
depositories as may be designated by the Board of Directors. The Treasurer shall
disburse the funds of the corporation as may be ordered by the Board of
Directors, or the President, taking proper vouchers for such disbursements. He
shall render to the President and Board of Directors at the regular meetings of
the Board of Directors, or whenever they may request it, an account of all his
transactions as Treasurer and of the financial condition of the corporation. If
required by the Board of Directors, he shall give the corporation a bond for the
faithful discharge of his duties in such amount and with such surety as the
board shall prescribe,
SECTION 7. SECRETARY. The Secretary shall give, or cause to be given,
notice of all meetings of stockholders and directors, and all other notices
required by the law or by these By-Laws, and in case of his absence or refusal
or neglect so to do, any such notice may be given by any person thereunto
directed by the President, or by the directors, or stockholders, upon whose
requisition the meeting is called as provided in these by-Laws. He shall
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record all the proceedings of the meetings of the corporation and of the
directors in a book to be kept for that purpose, and shall perform such other
duties as may be assigned to him by the directors or the President. He shall
have the custody of the seal of the corporation and shall affix the same to all
instruments requiring it, when authorized by the directors or the President, and
attest the same.
SECTION 8. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. Assistant
Treasurers and Assistant Secretaries, if any, shall be elected and shall have
such powers and shall perform such duties as shall be assigned to them,
respectively, by the directors.
ARTICLE V
MISCELLANEOUS
SECTION 1. CERTIFICATES OF STOCK. A certificate of stock, signed by the
Chairman or Vice-Chairman of the Board of Directors, if they be elected,
President or Vice-President, and the Treasurer or an Assistant Treasurer, or
Secretary or Assistant Secretary, shall be issued to each stockholder certifying
the number of shares owned by him in the Corporation. When such certificates are
countersigned (1) by a transfer agent other than the corporation or its
employee, or, (2) by a registrar other than the corporation or its employee, the
signatures of such officers may be facsimiles.
SECTION 2. LOST CERTIFICATES. A new certificate of stock may be issued in
the place of any certificate theretofore issued by the corporation, alleged to
have been lost or destroyed, and the directors may, in their discretion, require
the owner of the lost or destroyed certificate, or his legal representatives, to
give the corporation a bond, in such sum as they may direct, not exceeding
double the value of the stock, to indemnify the corporation against any claim
that may be made against it on account of the
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alleged loss of any such certificate, or the issuance of any such new
certificate.
SECTION 3. TRANSFER OF SHARES. The shares of stock of the corporation shall
be transferrable only upon its books by the holders thereof in person or by
their duly authorized attorneys or legal representatives, and upon such transfer
the old certificate shall be surrendered to the corporation by the delivery
thereof to the person in charge of the stock and transfer books and ledgers, or
to such other person as the directors may designate, by whom they shall be
cancelled, and new certificates shall thereupon be issued. A record shall be
made of each transfer and whenever a transfer shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of the
transfer.
SECTION 4. STOCKHOLDERS RECORD DATE. 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, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any date, which shall not be more than sixty nor less than
ten days before the date of such meeting, nor more than sixty days prior to any
other action. 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 adjournment meeting.
SECTION 5. DIVIDENDS. Subject to the provisions of the Certificate of
Incorporation, the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring any
dividend there may be set apart out of any funds of the corporation available
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for dividends, such sum or sums as the directors from time to time in their
discretion deem proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
directors shall deem conducive to the interests of the corporation.
SECTION 6. SEAL. The corporate seal shall be circular in form and shall
contain the name of the corporation, the year of its creation and the words
"Corporate Seal, Delaware. 1986". Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
SECTION 7. FISCAL YEAR. The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.
SECTION 8. CHECKS. All checks, drafts or other orders for the payment of
money, notes or other evidences of indebtedness issued in the name of the
corporation shall be signed by such officer or officers, agent or agents of the
corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
SECTION 9. NOTICE AND WAIVER OF NOTICE. Whenever any notice is required by
these By-Laws to be given personal notice is not meant unless expressly so
stated, and any notice so required shall be deemed to be sufficient if given by
depositing the same in the United States mail, postage, prepaid, addressed to
the person entitled thereto at his address as it appears on the records of the
corporation, and such notice shall be deemed to have been given on the day of
such mailing. Stockholders not entitled to vote shall not be entitled to receive
notice of any meetings except as otherwise provided by Statute. Whenever any
notice whatever is required to be given under the provisions of any law, or
under the provisions of the Certificate of Incorporation of the corporation on
these By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
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ARTICLE VI
AMENDMENTS
These By-Laws may be altered or repealed and By-Laws may be made at any
annual meeting of the stockholders or at any special meeting thereof if notice
of the proposed alteration or repeal of By-Law or By-Laws to be made be
contained in the notice of such special meeting, by the affirmative vote of a
majority of the stock issued and outstanding and entitled to vote thereat, or by
the affirmative vote of a majority of the Board of Directors, at any regular
meeting of the Board of Directors, or at any special meeting of the Board of
Directors, if notice of the proposed alteration or repeal of By-Law or By-Laws
to be made, be contained in the notice of such special meeting.
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Appendix C
4networld.com, Inc.
2000 STOCK INCENTIVE PLAN
1. Purpose. The purpose of the 4networld.com, Inc. 2000 Stock
Incentive Plan (the "Plan") is to provide a means through which the Company and
its Subsidiaries and Affiliates may attract able persons to enter and remain in
the employ of the Company and its Subsidiaries and Affiliates and to provide a
means whereby eligible persons can acquire and maintain Common Stock ownership,
or be paid incentive compensation measured by reference to the value of Common
Stock, thereby strengthening their commitment to the welfare of the Company and
its Subsidiaries and Affiliates and promoting an identity of interest between
stockholders and these eligible persons.
So that the appropriate incentive can be provided, the Plan
provides for granting Incentive Stock Options, Nonqualified Stock Options,
Restricted Stock Awards and Stock Bonuses, or any combination of the foregoing.
Capitalized terms not defined in the text are defined in Section 25.
2. Shares Subject to The Plan. Subject to Section 18, the
total number of Shares reserved and available for grant and issuance pursuant to
this Plan will be 1,100,000 Shares of the Company's authorized but unissued
shares of common stock, after giving effect to the May 11, 2000 one (1) for
fifty (50) share exchange, plus Shares that are subject to: (a) issuance upon
exercise of an Option but cease to be subject to such Option for any reason
other than exercise of such Option; (b) an Award granted hereunder but are
forfeited or are repurchased by the Company at the original issue price; and (c)
an Award that otherwise terminates without Shares being issued. At all times the
Company shall reserve and keep available a sufficient number of Shares as shall
be required to satisfy the requirements of all outstanding Options granted under
this Plan and all other outstanding but unvested Awards granted under this Plan.
3. Eligibility. ISOs (as defined in Section 5 below) may be
granted only to employees (including officers and directors who are also
employees) of the Company or of a Parent or Subsidiary of the Company. All other
Awards may be granted to employees, officers, directors, consultants,
independent contractors and advisors of the Company or any Parent, Affiliate or
Subsidiary of the Company; provided such consultants, contractors and advisors
render bona fide services not in connection with the offer and sale of
securities in a capital-raising transaction.
4. Administration.
4.1 Committee Authority. This Plan will be
administered by the Committee or by the Board. Subject to the general purposes,
terms and conditions of this Plan, and to the direction of the Board, the
Committee will have full power to implement and carry out this Plan. Without
limitation, the Committee will have the authority to:
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a. select persons to receive Awards;
b. determine the nature, extent, form and terms of Awards
and the number of Shares or other consideration subject
to Awards;
c. determine the vesting, exercisability and payment of
Awards;
d. correct any defect, supply any omission or reconcile
any inconsistency in this Plan, any Award or any Award
Agreement;
e. determine whether Awards will be granted singly, in
combination with, in tandem with, in replacement of, or
as alternatives to, other Awards under this Plan or any
other incentive or compensation plan of the Company or
any Parent or Subsidiary of the Company;
f. prescribe, amend and rescind rules and regulations
relating to this Plan or any Award;
g. construe and interpret this Plan, any Award Agreement
and any other agreement or document executed pursuant
to this Plan;
h. grant waivers of Plan or Award conditions;
i. determine whether an Award has been earned; and
j. make all other determinations necessary or advisable
for the administration of this Plan.
The Committee shall have the authority, subject to the
provisions of the Plan, to establish, adopt, or revise such rules and
regulations and to make all such determinations relating to the Plan as it may
deem necessary or advisable for the administration of the Plan. The Committee's
interpretation of the Plan or any documents evidencing Awards granted pursuant
thereto and all decisions and determinations by the Committee with respect to
the Plan shall be final, binding, and conclusive on all parties unless otherwise
determined by the Board.
4.2 Committee Discretion. Any determination made by
the Committee with respect to any Award will be made in its sole discretion at
the time of grant of the Award or, unless in contravention of any express term
of this Plan or Award, at any later time, and such determination will be final
and binding on the Company and on all persons having an interest in any Award
under this Plan.
5. Options. The Committee may grant Options to eligible
persons and will determine whether such Options will be intended to be Incentive
Stock Options within the meaning of the Code ("ISO") or Nonqualified Stock
Options ("NQSOs"), the number of Shares subject to the Option, the Exercise
Price of the Option, the period during which the Option may be exercised, and
all other terms and conditions of the Option, subject to the following:
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5.1 Form of Option Grant. Each Option granted under
this Plan will be evidenced by an Award Agreement ("Stock Option Agreement"),
which will expressly identify the Option as an ISO or a NQSO, and will be in
such form and contain such provisions (which need not be the same for each
Participant) as the Committee may from time to time approve, and which will
comply with and be subject to the terms and conditions of this Plan.
5.2 Exercise Period. Options may be exercisable
within the times or upon the events determined by the Committee as set forth in
the Stock Option Agreement governing such Option; provided, however, that no
Option will be exercisable after the expiration of ten (10) years from the date
the Option is granted; and provided further that no ISO granted to a person who
directly or by attribution owns more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of any Parent or
Subsidiary of the Company ("Ten Percent Stockholder") will be exercisable after
the expiration of five (5) years from the date the ISO is granted. The Committee
also may provide for Options to become exercisable at one time or from time to
time, periodically or otherwise, in such number of Shares or percentage of
Shares as the Committee determines.
5.3 Exercise Price. The Exercise Price of an Option
will be determined by the Committee when the Option is granted and may be not
less than sixty-five percent (65%) of the Fair Market Value of the Shares on the
date of grant; provided that: (i) the Exercise Price of an ISO will be not less
than 100% of the Fair Market Value of the Shares on the date of grant; and (ii)
the Exercise Price of any ISO granted to a Ten Percent Stockholder will not be
less than one hundred and ten percent (110%) of the Fair Market Value of the
Shares on the date of grant. Payment for the Shares purchased may be made in
accordance with Section 8 of this Plan.
5.4 Date of Grant. The date of grant of an Option
will be the date on which the Committee makes the determination to grant such
Option, unless otherwise specified by the Committee. The Stock Option Agreement
and a copy of this Plan will be delivered to the Participant within a reasonable
time after the granting of the Option.
5.5 Method of Exercise. Options may be exercised
only by delivery to the Company of a written stock option exercise agreement
(the "Exercise Agreement") in a form approved by the Committee (which need not
be the same for each Participant), stating the number of Shares being purchased,
the restrictions imposed on the Shares purchased under such Exercise Agreement,
if any, and such representations and agreements regarding Participant's
investment intent and access to information and other matters, if any, as may be
required or desirable by the Company to comply with applicable securities laws,
together with payment in full of the Exercise Price for the number of Shares
being purchased.
5.6 Termination. Notwithstanding the exercise
periods set forth in the Stock Option Agreement, exercise of an Option will
always be subject to the following:
a. If the Participant is Terminated for any reason except
death or Disability, then the Participant may exercise
such Participant's Options only to the extent that such
Options would have been exercisable upon the
Termination Date no later than three (3) months after
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the Termination Date (or such shorter or longer time
period not exceeding five (5) years as may be
determined by the Committee, with any exercise beyond
three (3) months after the Termination Date deemed to
be a NQSO), but in any event, no later than the
expiration date of the Options.
b. If the Participant is Terminated because of
Participant's death or Disability (or the Participant
dies within three (3) months after a Termination other
than for Cause or because of Participant's Disability),
then Participant's Options may be exercised only to the
extent that such Options would have been exercisable by
Participant on the Termination Date and must be
exercised by Participant (or Participant's legal
representative or authorized assignee) no later than
twelve (12) months after the Termination Date (or such
shorter or longer time period not exceeding five (5)
years as may be determined by the Committee, with any
such exercise beyond (a) three (3) months after the
Termination Date when the Termination is for any reason
other than the Participant's death or Disability, or
(b) twelve (12) months after the Termination Date when
the Termination is for Participant's death or
Disability, deemed to be a NQSO), but in any event no
later than the expiration date of the Options.
c. Notwithstanding the provisions in paragraph 5.6(a)
above, if a Participant is terminated for Cause,
neither the Participant, the Participant's estate nor
such other person who may then hold the Option shall be
entitled to exercise any Option with respect to any
Shares whatsoever, after termination of service,
whether or not after termination of service the
Participant may receive payment from the Company or
Subsidiary for vacation pay, for services rendered
prior to termination, for services rendered for the day
on which termination occurs, for salary in lieu of
notice, or for any other benefits. In making such
determination, the Board shall give the Participant an
opportunity to present to the Board evidence on his
behalf. For the purpose of this paragraph, termination
of service shall be deemed to occur on the date when
the Company dispatches notice or advice to the
Participant that his service is terminated.
5.7 Limitations on ISO. The aggregate Fair Market
Value (determined as of the date of grant) of Shares with respect to which ISO
are exercisable for the first time by a Participant during any calendar year
(under this Plan or under any other incentive stock option plan of the Company,
Parent or Subsidiary of the Company) will not exceed $100,000. If the Fair
Market Value of Shares on the date of grant with respect to which ISO are
exercisable for the first time by a Participant during any calendar year exceeds
$100,000, then the Options for the first $100,000 worth of Shares to become
exercisable in such calendar year will be ISO and the Options for the amount in
excess of $100,000 that become exercisable in that calendar year will be NQSOs.
In the event that the Code or the regulations promulgated
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thereunder are amended after the Effective Date of this Plan to provide for a
different limit on the Fair Market Value of Shares permitted to be subject to
ISO, such different limit will be automatically incorporated herein and will
apply to any Options granted after the effective date of such amendment.
5.8 Modification, Extension or Renewal. The
Committee may modify, extend or renew outstanding Options and authorize the
grant of new Options in substitution therefor, provided that any such action may
not, without the written consent of a Participant, impair any of such
Participant's rights under any Option previously granted. Any outstanding ISO
that is modified, extended, renewed or otherwise altered will be treated in
accordance with Section 424(h) of the Code. The Committee may reduce the
Exercise Price of outstanding Options without the consent of Participants
affected by a written notice to them; provided, however, that the Exercise Price
may not be reduced below the minimum Exercise Price that would be permitted
under Section 5.3 of this Plan for Options granted on the date the action is
taken to reduce the Exercise Price.
5.9 Limitations on Exercise. The Committee may
specify a reasonable minimum number of Shares that may be purchased on any
exercise of an Option, provided that such minimum number will not prevent
Participant from exercising the Option for the full number of Shares for which
it is then exercisable.
5.10 No Disqualification. Notwithstanding any other
provision in this Plan, no term of this Plan relating to ISO will be
interpreted, amended or altered, nor will any discretion or authority granted
under this Plan be exercised, so as to disqualify this Plan under Section 422 of
the Code or, without the consent of the Participant affected, to disqualify any
ISO under Section 422 of the Code.
6. Restricted Stock. A Restricted Stock Award is an offer by
the Company to sell to an eligible person Shares that are subject to
restrictions. The Committee will determine to whom an offer will be made, the
number of Shares the person may purchase, the price to be paid (the "Purchase
Price"), the restrictions to which the Shares will be subject, and all other
terms and conditions of the Restricted Stock Award, subject to the following:
6.1 Form of Restricted Stock Award. All purchases
under a Restricted Stock Award made pursuant to this Plan will be evidenced by
an Award Agreement ("Restricted Stock Purchase Agreement") that will be in such
form (which need not be the same for each Participant) as the Committee will
from time to time approve, and will comply with and be subject to the terms and
conditions of this Plan. The offer of Restricted Stock will be accepted by the
Participant's execution and delivery of the Restricted Stock Purchase Agreement
and full payment for the Shares to the Company within thirty (30) days from the
date the Restricted Stock Purchase Agreement is delivered to the person. If such
person does not execute and deliver the Restricted Stock Purchase Agreement
along with full payment for the Shares to the Company within thirty (30) days,
then the offer will terminate, unless otherwise determined by the Committee.
6.2 Purchase Price. The Purchase Price of Shares
sold pursuant to a Restricted Stock Award will be determined by the Committee on
the date the Restricted Stock Award is granted, except in the case of a sale to
a Ten Percent Stockholder, in which case the Purchase Price will be 100% of
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the Fair Market Value. Payment of the Purchase Price may be made in
accordance with Section 8 of this Plan.
6.3 Terms of Restricted Stock Awards. Restricted
Stock Awards shall be subject to such restrictions as the Committee may impose.
These restrictions may be based upon completion of a specified number of years
of service with the Company or upon completion of the performance goals as set
out in advance in the Participant's individual Restricted Stock Purchase
Agreement. Restricted Stock Awards may vary from Participant to Participant and
between groups of Participants. Prior to the grant of a Restricted Stock Award,
the Committee shall: (a) determine the nature, length and starting date of any
Performance Period for the Restricted Stock Award; (b) select from among the
Performance Factors to be used to measure performance goals, if any; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to
the payment of any Restricted Stock Award, the Committee shall determine the
extent to which such Restricted Stock Award has been earned. Performance Periods
may overlap and Participants may participate simultaneously with respect to
Restricted Stock Awards that are subject to different Performance Periods and
having different performance goals and other criteria.
6.4 Stock Restrictions. Each certificate
representing Restricted Stock awarded under the Plan shall bear the following
legend until the lapse of all restrictions with respect to such Stock:
"Transfer of this certificate and the shares represented
hereby is restricted pursuant to the terms of a Restricted Stock
Agreement, dated as of _______, between 4networld.com, Inc. and
____________. A copy of such Agreement is on file at the Principal
executive offices of the Company."
Stop transfer orders shall be entered with the Company's
transfer agent and registrar against the transfer of legended securities.
6.5 Termination During Performance Period. If a
Participant is Terminated during a Performance Period for any reason, then such
Participant will be entitled to payment (whether in Shares, cash or otherwise)
with respect to the Restricted Stock Award only to the extent earned as of the
date of Termination in accordance with the Restricted Stock Purchase Agreement,
unless the Committee will determine otherwise.
7. Stock Bonuses.
7.1 Awards of Stock Bonuses. A Stock Bonus is an
award of Shares (which may consist of Restricted Stock) for services rendered to
the Company or any Parent or Subsidiary of the Company. A Stock Bonus may be
awarded for past services already rendered to the Company, or any Parent or
Subsidiary of the Company pursuant to an Award Agreement (the "Stock Bonus
Agreement") that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will comply
with and be subject to the terms and conditions of this Plan. A Stock Bonus may
be awarded upon satisfaction of such performance goals as are set out in advance
in the Participant's individual Award Agreement (the "Performance Stock Bonus
Agreement") that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will comply
with and be subject to the terms and conditions of this Plan. Stock Bonuses may
vary from Participant to Participant and between groups of
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Participants, and may be based upon the achievement of the Company, Parent or
Subsidiary and/or individual performance factors or upon such other criteria as
the Committee may determine.
7.2 Terms of Stock Bonuses. The Committee will
determine the number of Shares to be awarded to the Participant. If the Stock
Bonus is being earned upon the satisfaction of performance goals pursuant to a
Performance Stock Bonus Agreement, then the Committee will: (a) determine the
nature, length and starting date of any Performance Period for each Stock Bonus;
(b) select from among the Performance Factors to be used to measure the
performance, if any; and (c) determine the number of Shares that may be awarded
to the Participant. Prior to the payment of any Stock Bonus, the Committee shall
determine the extent to which such Stock Bonuses have been earned. Performance
Periods may overlap and Participants may participate simultaneously with respect
to Stock Bonuses that are subject to different Performance Periods and different
performance goals and other criteria. The number of Shares may be fixed or may
vary in accordance with such performance goals and criteria as may be determined
by the Committee. The Committee may adjust the performance goals applicable to
the Stock Bonuses to take into account changes in law and accounting or tax
rules and to make such adjustments as the Committee deems necessary or
appropriate to reflect the impact of extraordinary or unusual items, events or
circumstances to avoid windfalls or hardships.
7.3 Form of Payment. The earned portion of a Stock
Bonus may be paid currently or on a deferred basis with such interest or
dividend equivalent, if any, as the Committee may determine. Payment may be made
in the form of cash or whole Shares or a combination thereof, either in a lump
sum payment or in installments, all as the Committee will determine.
8. Payment For Share Purchases.
8.1 Payment. Payment for Shares purchased pursuant to
this Plan may be made in cash (by check) or, where expressly approved for the
Participant by the Committee and where permitted by law:
a. by cancellation of indebtedness of the Company to the
Participant;
b. by surrender of shares that either: (1) have been owned
by Participant for more than six (6) months and have
been paid for within the meaning of SEC Rule 144 (and,
if such shares were purchased from the Company by use
of a promissory note, such note has been fully paid
with respect to such shares); or (2) were obtained by
Participant in the public market;
c. by tender of a full recourse promissory note having
such terms as may be approved by the Committee and
bearing interest at a rate sufficient to avoid
imputation of income under Sections 483 and 1274 of the
Code; provided, however, that Participants who are not
employees or directors of the Company will not be
entitled to purchase Shares with a promissory note
unless the note is adequately secured by collateral
other than the Shares;
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d. by waiver of compensation due or accrued to the
Participant for services rendered;
e. with respect only to purchases upon exercise of an
Option, and provided that a public market for the
Company's stock exists:
(1) through a "same day sale" commitment from the
Participant and a broker-dealer that is a member of the
National Association of Securities Dealers (an "NASD
Dealer") whereby the Participant irrevocably elects to
exercise the Option and to sell a portion of the Shares
so purchased to pay for the Exercise Price, and whereby
the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the Exercise Price directly to
the Company; or
(2) through a "margin" commitment from the Participant and
a NASD Dealer whereby the Participant irrevocably
elects to exercise the Option and to pledge the Shares
so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount
of the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company; or
f. by any combination of the foregoing.
8.2 Loan Guarantees. The Committee may help the
Participant pay for Shares purchased under this Plan by authorizing a guarantee
by the Company of a third-party loan to the Participant.
9. Withholding Taxes.
9.1 Withholding Generally. Whenever Shares are to be
issued in satisfaction of Awards granted under this Plan, the Company may
require the Participant to remit to the Company an amount sufficient to satisfy
federal, state and local withholding tax requirements prior to the delivery of
any certificate or certificates for such Shares. Whenever, under this Plan,
payments in satisfaction of Awards are to be made in cash, such payment will be
net of an amount sufficient to satisfy federal, state, and local withholding tax
requirements.
9.2 Stock Withholding. When, under applicable tax
laws, a Participant incurs tax liability in connection with the exercise or
vesting of any Award that is subject to tax withholding and the Participant is
obligated to pay the Company the amount required to be withheld, the Committee
may in its sole discretion allow the Participant to satisfy the minimum
withholding tax obligation by electing to have the Company withhold from the
Shares to be issued that number of Shares having a Fair Market Value equal to
the minimum amount required to be withheld, determined on the date that the
amount of tax to be withheld is to be determined. All elections by a Participant
to have Shares withheld for this purpose will be made in accordance with the
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requirements established by the Committee and be in writing in a form
acceptable to the Committee.
10. Privileges of Stock Ownership. No Participant will have
any of the rights of a stockholder with respect to any Shares until the Shares
are issued to the Participant. After Shares are issued to the Participant, the
Participant will be a stockholder and have all the rights of a stockholder with
respect to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares; provided, that if
such Shares are Restricted Stock, then any new, additional or different
securities the Participant may become entitled to receive with respect to such
Shares by virtue of a stock dividend, stock split or any other change in the
corporate or capital structure of the Company will be subject to the same
restrictions as the Restricted Stock; provided, further, that the Participant
will have no right to retain such stock dividends or stock distributions with
respect to Shares that are repurchased at the Participant's Purchase Price or
Exercise Price pursuant to Section 12.
11. Transferability. Awards granted under this Plan, and any
interest therein, will not be transferable or assignable by Participant, and may
not be made subject to execution, attachment or similar process, otherwise than
by will or by the laws of descent and distribution or as determined by the
Committee and set forth in the Award Agreement with respect to Awards that are
not ISOs. During the lifetime of the Participant an Award will be exercisable
only by the Participant, and any elections with respect to an Award may be made
only by the Participant unless otherwise determined by the Committee and set
forth in the Award Agreement with respect to Awards that are not ISOs.
12. Restrictions on Shares. At the discretion of the
Committee, the Company may reserve to itself and/or its assignee(s) in the Award
Agreement a right to repurchase a portion of or all Unvested Shares held by a
Participant following such Participant's Termination at any time within ninety
(90) days after the later of Participant's Termination Date and the date
Participant purchases Shares under this Plan, for cash and/or cancellation of
purchase money indebtedness, at the Participant's Exercise Price or Purchase
Price, as the case may be.
13. Certificates. All certificates for Shares or other
securities delivered under this Plan will be subject to such stock transfer
orders, legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or foreign
securities law, or any rules, regulations and other requirements of the SEC or
any stock exchange or automated quotation system upon which the Shares may be
listed or quoted.
14. Escrow; Pledge of Shares. To enforce any restrictions on
a Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory
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note as partial or full consideration for the purchase of Shares under this Plan
will be required to pledge and deposit with the Company all or part of the
Shares so purchased as collateral to secure the payment of Participant's
obligation to the Company under the promissory note; provided, however, that the
Committee may require or accept other or additional forms of collateral to
secure the payment of such obligation and, in any event, the Company will have
full recourse against the Participant under the promissory note notwithstanding
any pledge of the Participant's Shares or other collateral. In connection with
any pledge of the Shares, Participant will be required to execute and deliver a
written pledge agreement in such form as the Committee will from time to time
approve. The Shares purchased with the promissory note may be released from the
pledge on a pro rata basis as the promissory note is paid.
15. Exchange And Buyout of Awards. The Committee may, at any
time or from time to time, authorize the Company, with the consent of the
respective Participants, to issue new Awards in exchange for the surrender and
cancellation of any or all outstanding Awards. The Committee may at any time buy
from a Participant an Award previously granted with payment in cash, Shares
(including Restricted Stock) or other consideration, based on such terms and
conditions as the Committee and the Participant may agree.
16. Securities Law And Other Regulatory Compliance. An Award
will not be effective unless such Award is in compliance with all applicable
federal and state securities laws, rules and regulations of any governmental
body, and the requirements of any stock exchange or automated quotation system
upon which the Shares may then be listed or quoted, as they are in effect on the
date of grant of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver certificates for Shares under this Plan prior to:
(a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and/or (b) completion of any registration
or other qualification of such Shares under any state or federal law or ruling
of any governmental body that the Company determines to be necessary or
advisable. The Company will be under no obligation to register the Shares with
the SEC or to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or automated quotation
system, and the Company will have no liability for any inability or failure to
do so.
17. No Obligation to Employ. Nothing in this Plan or any Award
granted under this Plan will confer or be deemed to confer on any Participant
any right to continue in the employ of, or to continue any other relationship
with, the Company or any Parent or Subsidiary of the Company or limit in any way
the right of the Company or any Parent or Subsidiary of the Company to terminate
Participant's employment or other relationship at any time, with or without
cause.
18. Corporate Transactions.
18.1 Assumption or Replacement of Awards by
Successor. In the event of (a) a dissolution or liquidation of the Company, (b)
a merger or consolidation in which the Company is not the surviving corporation
(other than a merger or consolidation with a wholly-owned subsidiary, a
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reincorporation of the Company in a different jurisdiction, or other transaction
in which there is no substantial change in the stockholders of the Company or
their relative stock holdings and the Awards granted under this Plan are
assumed, converted or replaced by the successor corporation, which assumption
will be binding on all Participants), (c) a merger in which the Company is the
surviving corporation but after which the stockholders of the Company
immediately prior to such merger (other than any stockholder that merges, or
which owns or controls another corporation that merges, with the Company in such
merger) cease to own their shares or other equity interest in the Company, (d)
the sale of substantially all of the assets of the Company, or (e) the
acquisition, sale, or transfer of more than 50% of the outstanding shares of the
Company by tender offer or similar transaction, any or all outstanding Awards
may be assumed, converted or replaced by the successor corporation (if any),
which assumption, conversion or replacement will be binding on all Participants.
In the alternative, the successor corporation may substitute equivalent Awards
or provide substantially similar consideration to Participants as was provided
to stockholders (after taking into account the existing provisions of the
Awards). The successor corporation may also issue, in place of outstanding
Shares of the Company held by the Participant, substantially similar shares or
other property subject to repurchase restrictions no less favorable to the
Participant. In the event such successor corporation (if any) refuses to assume
or substitute Awards, as provided above, pursuant to a transaction described in
this Subsection 18.1, such Awards will expire on such transaction at such time
and on such conditions as the Committee will determine. Notwithstanding anything
in this Plan to the contrary, the Committee may, in its sole discretion, provide
that the vesting of any or all Awards granted pursuant to this Plan will
accelerate upon a transaction described in this Section 18 or otherwise. If the
Committee exercises such discretion with respect to Options, such Options will
become exercisable in full prior to the consummation of such event at such time
and on such conditions as the Committee determines, and if such Options are not
exercised prior to the consummation of the corporate transaction, they shall
terminate at such time as determined by the Committee.
18.2 Other Treatment of Awards. Subject to any
greater rights granted to Participants under the foregoing provisions of this
Section 18, in the event of the occurrence of any transaction described in
Section 18.1, any outstanding Awards will be treated as provided in the
applicable agreement or plan of merger, consolidation, dissolution, liquidation,
or sale of assets.
18.3 Assumption of Awards by the Company. The
Company, from time to time, also may substitute or assume outstanding awards
granted by another company, whether in connection with an acquisition of such
other company or otherwise, by either; (a) granting an Award under this Plan in
substitution of such other company's award; or (b) assuming such award as if it
had been granted under this Plan if the terms of such assumed award could be
applied to an Award granted under this Plan. Such substitution or assumption
will be permissible if the holder of the substituted or assumed award would have
been eligible to be granted an Award under this Plan if the other company had
applied the rules of this Plan to such grant. In the event the Company assumes
an award granted by another company, the terms and conditions of such award will
remain unchanged (except that the exercise price and the number and nature of
Shares issuable upon exercise of any such option will be adjusted appropriately
pursuant to Section 424(a) of the Code). In the event the Company elects to
grant a new Option rather than assuming an existing option, such new Option may
be granted with a similarly adjusted Exercise Price.
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18.4 Adjustment of Shares. In the event that the
number of outstanding shares is changed by a stock dividend, recapitalization,
stock split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration,
then (a) the number of Shares reserved for issuance under this Plan, (b) the
Exercise Prices of and number of Shares subject to outstanding Options, and (c)
the number of Shares subject to other outstanding Awards will be proportionately
adjusted, subject to any required action by the Board or the stockholders of the
Company and compliance with applicable securities laws; provided, however, that
fractions of a Share will not be issued but will either be replaced by a cash
payment equal to the Fair Market Value of such fraction of a Share or will be
rounded up to the nearest whole Share, as determined by the Committee.
19. Automatic Grants of Stock Options to Directors. Each non-
employee director of the Company shall be automatically granted a NQSO to
purchase 10,000 shares of Common Stock on the day of their appointment to the
Board under the By-Laws of the Company or their election to the Board at the
annual meeting of stockholders of the Company or at a special meeting of
stockholders of the Company, whichever date is first to occur. With respect to
the current non-employee directors of the Company, such non-employee directors
will not receive their NQSO to purchase 10,000 shares of Common Stock until the
Stockholders of the Company ratify and approve the Plan. All such Options
granted to the non-employee directors shall hereinafter be referred to as
Director Stock Options.
19.1 Option Price; Term. All Director Stock Options
shall have an Exercise Price per share equal to the Fair Market Value of the
Shares on the date of grant. Each of the options granted pursuant to this
Section 19 shall vest immediately and become immediately exercisable. The term
of each Director Stock Option ("Term"), after which each such Option shall
expire, shall be ten years from the date of Grant.
19.2 Expiration. If prior to the expiration of the
Term of a Director Stock Option, the non-employee director shall cease to be a
member of the Board for any reason other than his death, the Director Stock
Option shall expire on the earlier of the expiration of the Term or the date
that is three months after the date of such cessation. If prior to the
expiration of the Term of a Director Stock Option, a non-employee director shall
cease to be a member of the Board by reason of his death, the Director Stock
Option shall expire on the earlier of the expiration of the Term or the date
that is one year after the date of such cessation. In the event a non- employee
director ceases to be a member of the Board for any reason, any unexpired
Director Stock Options shall thereafter be exercisable until their expiration
only to the extent that such Director Stock Options were exercisable at the time
of such cessation.
19.3 Director Stock Option Agreement. Each Director
Stock Option shall be evidenced by an Award Agreement, which shall contain such
provisions as may be determined by the Committee; provided, however, that such
provisions shall not be inconsistent with the provisions of Rule 16b-3 pursuant
to the Exchange Act.
19.4 Nontransferability; Exclusive Grant. Subject
to the terms hereof, Director Stock Options shall not be transferable except by
will or the laws of descent and distribution and shall be exercisable during the
non-employee director's lifetime only by him. Non-employee directors are
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eligible to receive Awards under this Plan in addition to (and not in lieu of)
any Awards pursuant to this Section 19.
20. Adoption And Stockholder Approval. This Plan will become
effective on the date that this Plan is approved by the stockholders of the
Company, consistent with applicable laws (the "Effective Date").
21. Term of Plan. Unless earlier terminated as provided
herein, this Plan will terminate ten (10) years from the date this Plan is
adopted by the Board or, if earlier, the date of stockholder approval.
22. Amendment or Termination of Plan. The Board may at any
time terminate or amend this Plan in any respect, including without limitation
amendment of any form of Award Agreement or instrument to be executed pursuant
to this Plan; provided, however, that the Board will not, without the approval
of the stockholders of the Company, amend this Plan in any manner that requires
such stockholder approval.
23. Effect of Section 162(m) of the Code. The Plan, and all
Awards issued thereunder, are intended to be exempt from the application of
Section 162(m) of the Code, which restricts under certain circumstances the
Federal income tax deduction for compensation paid by a public company to named
executives in excess of $1 million per year. The exemption is based on Treasury
Regulation Section 1.162-27(f) as in effect on the effective date of the Plan,
with the understanding that such regulation generally exempts from the
application of Section 162(m) of the Code compensation paid pursuant to a plan
that existed before a company becomes publicly held. The Committee may, without
stockholder approval (unless otherwise required to comply with Rule 16b-3 under
the Exchange Act), amend the Plan retroactively and/or prospectively to the
extent it determines necessary in order to comply with any subsequent
clarification of Section 162(m) of the Code required to preserve the Company's
Federal income tax deduction for compensation paid pursuant to the Plan. To the
extent that the Committee determines as of the Date of Grant of an Award that
(i) the Award is intended to comply with Section 162(m) of the Code and (ii) the
exemption described above is no longer available with respect to such Award,
such Award shall not be effective until any stockholder approval required under
Section 162(m) of the Code has been obtained.
24. General.
24.1 Additional Provisions of an Award. Awards
under the Plan also may be subject to such other provisions (whether or not
applicable to the benefit awarded to any other Participant) as the Committee
determines appropriate including, without limitation, provisions to assist the
Participant in financing the purchase of Stock upon the exercise of Options,
provisions for the forfeiture of or restrictions on resale or other disposition
of shares of Stock acquired under any Award, provisions giving the Company the
right to repurchase shares of Stock acquired under any Award in the event the
Participant elects to dispose of such shares, and provisions to comply with
Federal and state securities laws and Federal and state tax withholding
requirements. Any such provisions shall be reflected in the applicable Award
agreement.
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24.2. Claim to Awards and Employment Rights. No
employee or other person shall have any claim or right to be granted an Award
under the Plan or, having been selected for the grant of an Award, to be
selected for a grant of any other Award. Neither the Plan nor any action taken
hereunder shall be construed as giving any Participant any right to be retained
in the employ or service of the Company, a Subsidiary or an Affiliate.
24.3. Designation and Change of Beneficiary. Each
Participant shall file with the Committee a written designation of one or more
persons as the beneficiary who shall be entitled to receive the amounts payable
with respect to an Award of Restricted Stock, if any, due under the Plan upon
his death. A Participant may, from time to time, revoke or change his
beneficiary designation without the consent of any prior beneficiary by filing a
new designation with the Committee. The last such designation received by the
Committee shall be controlling; provided, however, that no designation, or
change or revocation thereof, shall be effective unless received by the
Committee prior to the Participant's death, and in no event shall it be
effective as of a date prior to such receipt. If no beneficiary designation is
filed by the Participant, the beneficiary shall be deemed to be his or her
spouse or, if the Participant is unmarried at the time of death, his or her
estate.
24.4. Payments to Persons Other Than Participants.
If the Committee shall find that any person to whom any amount is payable under
the Plan is unable to care for his affairs because of illness or accident, or is
a minor, or has died, then any payment due to such person or his estate (unless
a prior claim therefor has been made by a duly appointed legal representative)
may, if the Committee so directs the Company, be paid to his spouse, child,
relative, an institution maintaining or having custody of such person, or any
other person deemed by the Committee to be a proper recipient on behalf of such
person otherwise entitled to payment. Any such payment shall be a complete
discharge of the liability of the Committee and the Company therefor.
24.5. No Liability of Committee Members. No member
of the Committee shall be personally liable by reason of any contract or other
instrument executed by such member or on his behalf in his capacity as a member
of the Committee nor for any mistake of judgment made in good faith, and the
Company shall indemnify and hold harmless each member of the Committee and each
other employee, officer or director of the Company to whom any duty or power
relating to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan unless arising out of such person's
own fraud or willful bad faith; provided, however, that approval of the Board
shall be required for the payment of any amount in settlement of a claim against
any such person. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Company's Articles of Incorporation or By-Laws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.
24.6. Governing law. The Plan and all agreements
hereunder shall be governed by and construed in accordance with the internal
laws of the State of Delaware without regard to the principles of conflicts of
law thereof.
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24.7. Funding. No provision of the Plan shall require
the Company, for the purpose of satisfying any obligations under the Plan, to
purchase assets or place any assets in a trust or other entity to which
contributions are made or otherwise to segregate any assets, nor shall the
Company maintain separate bank accounts, books, records or other evidence of the
existence of a segregated or separately maintained or administered fund for such
purposes. Participants shall have no rights under the Plan other than as
unsecured general creditors of the Company, except that insofar as they may have
become entitled to payment of additional compensation by performance of
services, they shall have the same rights as other employees under general law.
24.8. Reliance on Reports. Each member of the
Committee and each member of the Board shall be fully justified in relying,
acting or failing to act, and shall not be liable for having so relied, acted or
failed to act in good faith, upon any report made by the independent public
accountant of the Company and its Subsidiaries and Affiliates and upon any other
information furnished in connection with the Plan by any person or persons other
than himself.
24.9. Relationship to Other Benefits. No payment
under the Plan shall be taken into account in determining any benefits under any
pension, retirement, profit sharing, group insurance or other benefit plan of
the Company or any Subsidiary except as otherwise specifically provided in such
other plan.
24.10. Expenses. The expenses of administering the
Plan shall be borne by the Company and its Subsidiaries and Affiliates.
24.11. Pronouns. Masculine pronouns and other words
of masculine gender shall refer to both men and women.
24.12. Titles and Headings. The titles and headings
of the sections in the Plan are for convenience of reference only, and in the
event of any conflict, the text of the Plan, rather than such titles or headings
shall control.
24.13. Termination of Employment. For all purposes
herein, a person who transfers from employment or service with the Company to
employment or service with a Subsidiary or Affiliate or vice versa shall not be
deemed to have terminated employment or service with the Company, a Subsidiary
or Affiliate.
24.14 Nonexclusivity of The Plan. Neither the
adoption of this Plan by the Board, the submission of this Plan to the
stockholders of the Company for approval, nor any provision of this Plan will be
construed as creating any limitations on the power of the Board to adopt such
incentive arrangements as it may deem desirable, including, without limitation,
the granting of stock options and bonuses otherwise than under this Plan, and
such arrangements may be either generally applicable or applicable only in
specific cases.
25. Definitions. As used in this Plan, the following terms
will have the following meanings:
"Affiliate" means any affiliate of the Company within the
meaning of 17 CFR ss. 230.405.
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"Award" means any award under this Plan, including any
Option, Restricted Stock or Stock Bonus.
"Award Agreement" means, with respect to each Award, the
signed written agreement between the Company and the
Participant setting forth the terms and conditions of the
Award.
"Board" means the Board of Directors of the Company.
"Cause" means the Company, a Subsidiary or Affiliate having
cause to terminate a Participant's employment or service
under any existing employment, consulting or any other
agreement between the Participant and the Company or a
Subsidiary or Affiliate or, in the absence of such an
employment, consulting or other agreement, upon (i) the
determination by the Committee that the Participant has
ceased to perform his duties to the Company, a Subsidiary or
Affiliate (other than as a result of his incapacity due to
physical or mental illness or injury), which failure amounts
to an intentional and extended neglect of his duties to such
party, (ii) the Committee's determination that the
Participant has engaged or is about to engage in conduct
materially injurious to the Company, a Subsidiary or
Affiliate or (iii) the Participant having been convicted of
a felony.
"Code" means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be
deemed to include any amendments or successor provisions to
such section and any regulations under such section.
"Committee" means the Stock Option Committee or such other
committee appointed by the Board consisting of two or more
Outside Directors or the Board.
"Company" means 4networld.com, Inc. or any successor
corporation.
"Disability" means a disability, whether temporary or
permanent, partial or total, as determined by the Committee.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exercise Price" means the price at which a holder of an
Option may purchase the Shares issuable upon exercise of the
Option.
"Fair Market Value" means, as of any date, the value of a
share of the Company's Common Stock determined as follows:
a. if such Common Stock is then quoted on the NASDAQ
National Market, its closing price on the NASDAQ
National Market on the date of determination as
reported in The Wall Street Journal;
b. if such Common Stock is publicly traded and is then
listed on a national securities exchange, its closing
price on the date of determination on the principal
national securities exchange on which the Common Stock
is listed or admitted to trading as reported in The
Wall Street Journal;
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c. if such Common Stock is publicly traded but is not
quoted on the NASDAQ National Market nor listed or
admitted to trading on a national securities exchange,
the average of the closing bid and asked prices on the
date of determination as reported in The Wall Street
Journal;
d. if none of the foregoing is applicable, by the
Committee in good faith.
"Insider" means an officer or director of the Company or any
other person whose transactions in the Company's Common
Stock are subject to Section 16 of the Exchange Act.
"Option" means an award of an option to purchase Shares
pursuant to Section 5.
"Outside Director" means a person who is (i) a "nonemployee
director" within the meaning of Rule 16b-3 under the
Exchange Act, or any successor rule or regulation and (ii)
an "outside director" within the meaning of Section 162(m)
of the Code.
"Parent" means any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company if
each of such corporations other than the Company owns stock
possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in
such chain.
"Participant" means a person who receives an Award under
this Plan.
"Performance Factors" means the factors selected by the
Committee from among the following measures to determine
whether the performance goals established by the Committee
and applicable to Awards have been satisfied:
a. Net revenue and/or net revenue growth;
b. Earnings before income taxes and amortization and/or
earnings before income taxes and amortization growth;
c. Operating income and/or operating income growth;
d. Net income and/or net income growth;
e. Earnings per share and/or earnings per share growth;
f. Total stockholder return and/or total stockholder
return growth;
g. Return on equity;
h. Operating cash flow return on income;
i. Adjusted operating cash flow return on income;
j. Economic value added; and
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k. Individual confidential business objectives.
"Performance Period" means the period of service determined
by the Committee, not to exceed five years, during which
years of service or performance is to be measured for
Restricted Stock Awards or Stock Bonuses.
"Plan" means this 4networld.com, Inc. 2000 Stock Incentive
Plan, as amended from time to time.
"Restricted Stock Award" means an award of Shares pursuant
to Section 6.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended.
"Shares" means shares of the Company's Common Stock reserved
for issuance under this Plan, as adjusted pursuant to
Sections 2 and 18, and any successor security.
"Stock Bonus" means an award of Shares, or cash in lieu of
Shares, pursuant to Section 7.
"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 such chain.
"Termination" or "Terminated" means, for purposes of this
Plan with respect to a Participant, that the Participant has
for any reason ceased to provide services as an employee,
officer, director, consultant, independent contractor, or
advisor to the Company or a Parent or Subsidiary of the
Company. An employee will not be deemed to have ceased to
provide services in the case of (i) sick leave, (ii)
military leave, or (iii) any other leave of absence approved
by the Committee, provided, that such leave is for a period
of not more than 90 days, unless reemployment upon the
expiration of such leave is guaranteed by contract or
statute or unless provided otherwise pursuant to formal
policy adopted from time to time by the Company and issued
and promulgated to employees in writing. In the case of any
employee on an approved leave of absence, the Committee may
make such provisions respecting suspension of vesting of the
Award while on leave from the employ of the Company or a
Subsidiary as it may deem appropriate, except that in no
event may an Option be exercised after the expiration of the
term set forth in the Option agreement. The Committee will
have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which
the Participant ceased to provide services (the "Termination
Date").
"Unvested Shares" means "Unvested Shares" as defined in the
Award Agreement.
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"Vested Shares" means "Vested Shares" as defined in the
Award Agreement.
As adopted by the Board of Directors of 4networld.com, Inc. as of March 17,
2000.
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