SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by Registrant [X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
SYNAPTIX SYSTEMS CORPORATION
(Name of Registrant as Specified In Its Charter)
................................................................................
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applied:
.......................................................................
2) Aggregate number of securities to which transaction applies:
.......................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was determined):
.......................................................................
4) Proposed maximum aggregate value of transaction:
.......................................................................
5) Total fee paid:
.......................................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
.......................................................................
2) Form, Schedule or Registration Statement No.:
.......................................................................
3) Filing Party:
.......................................................................
4) Date Filed:
.......................................................................
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of
Synaptix Systems Corporation:
Notice is hereby given that the Annual Meeting (the "Meeting") of
Shareholders of Synaptix Systems Corporation doing business as Affiliated
Resources Corporation (the "Company") will be held on Wednesday, December 16,
1998, at the executive offices of the Company, 3050 Post Oak Boulevard, Suite
1080, Houston, Texas 77056, at 10:00 a.m. Central Standard Time, for the
purposes of:
(1) electing a board of directors for the ensuing year;
(2) approving an amendment to the Articles of Incorporation to
change the name of the Company to Affliliated Resources
Corporation;
(3) ratifying the adoption of the Company's 1997 Incentive Stock
Option Plan and Non-Statutory Stock Option Plan;
(4) approving a change in the Company's fiscal year end to December 31;
(5) ratifying the appointment of Weinstein Spira & Company, P.C.
as the Company's independent auditors; and
(6) transacting such other business as may properly come before
the meeting or any adjournment or adjournments thereof.
During the Meeting a report will be given on the operations of the
Company. Directors and executive officers of the Company will be present to
respond to any questions that shareholders may have.
Please fill out, sign, date and return the enclosed Proxy Card
promptly. If you attend the Meeting and wish to vote your shares personally, you
may revoke your proxy at that time. The holders of record of Common Stock at the
close of business on November 3, 1998 will be entitled to vote at the Meeting
and at any adjournments thereof. Proxy soliciting material is first being mailed
or given to shareholders on or about November 16, 1998.
Your interest is very much appreciated.
By Order of the Board of Directors,
Virginia M. Lazar
November 16, 1998 Executive Vice President and Secretary
YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
TO VOTE YOUR SHARES, PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY AND
MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE.
<PAGE>
SYNAPTIX SYSTEMS CORPORATION
3050 Post Oak Boulevard, Suite 1080
Houston, Texas 77056
Telephone: 713/355-8940
Facsimile: 713/355-8949
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on December 16, 1998
PROXY STATEMENT
This Proxy Statement and accompanying Proxy are being furnished in
connection with the solicitation by the Board of Directors of the Company of
proxies to be voted at the Annual Meeting of Shareholders to be held on
Wednesday, December 16, 1998 at 10:00 a.m. at the executive offices of the
Company, 3050 Post Oak Boulevard, Suite 1080, Houston, Texas 77056, and at any
adjournment or postponement thereof, for the purposes set forth in this Proxy
Statement and the accompanying Notice. This Proxy Statement and accompanying
Proxy are being mailed on or about November 16, 1998, to shareholders of record
on November 3, 1998.
SHAREHOLDERS ARE URGED, WHETHER OR NOT THEY EXPECT TO ATTEND THE ANNUAL
MEETING, TO COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN THE
ENCLOSED ENVELOPE. Your executed Proxy may be revoked at any time before it
is exercised by filing with the Secretary of the Company, at the Company's
principal executive offices, a written notice of revocation or a duly executed
Proxy bearing a later date. The execution of the enclosed Proxy will not affect
your right to vote in person, should you find it convenient to attend the
Meeting and desire to vote in person. Attendance at the Meeting will not in and
of itself constitute the revocation of a Proxy.
The purposes of the Meeting are the election of four directors to serve
one-year terms until the next annual meeting; approval of an amendment to the
Company's Articles of Incorporation to change its corporate name to Affiliated
Resources Corporation; ratification of the adoption of the Company's 1997
Incentive Stock Option Plan and Non-Statutory Stock Option Plan; approval of the
change in the fiscal year end of the Company to December 31, and ratification of
the appointment of Weinstein Spira & Company, P.C. as the independent auditors
for the Company.
The Company intends to solicit proxies principally by the use of the
mails and will bear all expenses in connection with such solicitations. In
addition, some of the directors, officers and regular employees of the Company
may, without extra compensation, solicit proxies by telephone, telecopy and in
person. Arrangements have been made with banks, brokerage houses and other
custodians and nominees to forward copies of the Proxy Statement and the
Company's Annual Report for the fiscal year ended June 30, 1998, to persons for
whom they hold stock of the Company and to request authority for the execution
of proxies. The Company will reimburse the foregoing persons for their
reasonable expenses, upon request.
VOTING OF SECURITIES
On November 3, 1998, the record date for the determination of
shareholders entitled to notice of and to vote at the Meeting, 14,589,518 shares
of the Company's Common Stock ("Common Stock") were outstanding. The Common
Stock is the only class of stock of the Company outstanding and entitled to vote
at the Meeting. Shareholders are entitled to one vote per share on all matters
to be considered at the Meeting. In accordance with the Company's Articles of
Incorporation, one-third of the shares entitled to vote,
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represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. Except as otherwise specified by law, if a quorum is present, the
affirmative vote of a majority of the shares represented in person or by proxy
at the Meeting and entitled to vote on the subject matter shall be the act of
the shareholders. Shareholders are not entitled to cumulative voting in the
election of directors. A plurality of the votes of the holders of the
outstanding shares of Common Stock of the Company represented at a meeting at
which a quorum is present may elect directors.
All duly executed proxies will be voted in accordance with the
instructions thereon. If no specification is made in said proxy, the proxy will
be voted "FOR" the nominees and the proposals listed herein. As to any other
business which may properly come before the Meeting, the proxy holders will vote
in accordance with their best judgment. Management of the Company does not
presently know of any other such business.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors proposes the election of four directors, each to
hold office for a term of one year until the 1999 Annual Meeting of Shareholders
and until their respective successors are elected and qualified. The Board of
Directors currently consists of the four nominees for director, each of whom has
consented to serve if elected. Although it is not anticipated that any of the
nominees will decline or be unable to serve, if that should occur, the proxy
holders may, in their discretion, vote for substitute nominees.
Set forth below is certain information concerning the nominees for
election as director of the Company at the Meeting, including all positions and
offices with the Company held by each such person, the business experience of
each during at least the past five years, and the age of each nominee on
November 16, 1998.
Peter C. Vanucci, 50, was elected to serve as Chairman of the Board and
Chief Executive Officer of the Company effective as of February 15, 1998. Since
1990, Mr. Vanucci held the position of President and a Director of Wexford,
Inc., a corporation specializing in business and property evaluation, ad valorem
tax consulting, real estate development and financial consulting.
Edward S. Fleming, 43, has held the position of President since May
1998 and was first elected a director in December 1996. Prior to that time, Mr.
Fleming held the positions of Acting President beginning in October 1997, in
addition to his position as Vice President and Chief Financial Officer to which
he was elected in December 1996. From 1993 to the present, Mr. Fleming has held
the position of Geologic Science Advisor to the Astronaut Office, Johnson Space
Center, and was primarily responsible for the planning, coordination and
evaluation of military and civilian manned space observations of the Earth,
including the management of all Army personnel assigned to the Space Center. He
has an extensive background in systems administration of the SUN and UNIX
programs, as well as experience in a wide variety of sophisticated remote
sensing software packages. Prior to 1993, Mr. Fleming held a succession of
various leadership positions of national and military prominence while serving
as an officer in the United States Army for more than 20 years.
Edward F. Feighan, 50, was elected to serve as a director in August
1998. Mr. Feighan is currently the managing Partner of Alliance, Limited, a
Cleveland, Ohio based firm specializing in mergers and acquisitions and merchant
banking services. From November 1996 to December 1997, Mr. Feighan served as the
founding President, CEO and director of Century Business Services, Inc.
("Century"). Throughout most of 1998, Mr. Feighan served as Senior Vice
President of Century, and he continues to provide consulting services to
Century. From 1993 to 1996, Mr. Feighan was a principal in Alliance Holding
Corporation, a privately owned specialty insurance business ("Alliance")which
provided niche market insurance underwriting
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for businesses nationwide. Alliance merged its operating entities into Century
in 1996. Mr. Feighan served 20 consecutive years in elected office beginning in
1972. He served as a State Representative for six years, a Cuyahoga County
Commissioner for four years, and as a member of the United States House of
Representatives for 10 years. Congressman Feighan has been recognized as a
leading authority on foreign policy and international trade and finance.
J. Thomas McManamon, 54, was elected to serve as a director in May
1998. Mr. McManamon has held the position of Director of the Science,
Engineering, Mathematics and Aerospace Academy for the Cuyahoga Community
College since January 1995. From 1992 to 1995, Mr. McManamon was a Financial
Consultant with the firm of Butcher & Singer.
No director serves as a member of the Board of Directors of any other
company with a class of securities registered under the Securities Act of 1934,
as amended, or which is registered as an investment company under the Investment
Company Act of 1940.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE NOMINEES LISTED ABOVE AS DIRECTORS.
Vote Required
Approval of Proposal No. 1 requires a plurality of the votes of the holders
of outstanding shares of the Company's Common Stock present at the Meeting, in
person or by proxy, voting as a single class.
Meetings of the Board of Directors
During the last fiscal year, the Board of Directors of the Company,
which consisted of three directors, held seven meetings. Each director attended
at least 75% of the meetings of the board of directors.
Standing Committees.
In October 1998, the board voted to establish three standing
committees, consisting of an Audit Committee, an Executive Committee and a
Compensation Committee.
The Audit Committee, which is composed of Messrs. Feighan and
McManamom, meets with key management and the independent public accountants to
review the internal controls of the Company and to review its financial
reporting. The Audit Committee also recommends to the Board of Directors the
appointment of the independent public accountants to serve as auditors in
examining the financial statements of the Company. The Audit Committee is
charged with the responsibility of reviewing and overseeing all material
transactions and material proposed transactions between the Company and one or
more of its directors or executive officers, or their affiliates, with a view to
assuring that all such transactions will be (a) on terms no less favorable to
the Company than would be available with unaffiliated third parties and (b)
ratified by a majority of independent directors who have no interest in such
transactions.
The Executive Committee, which is composed of Messrs. Feighan and
Vanucci, has the authority to exercise all powers of the Board of Directors in
the management of the business and affairs of the Company during intervals
between meetings of the board of directors, except that it has no authority to
propose amendments to the Restated Certificate of Incorporation, adopt an
agreement of merger or consolidation,
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recommend to the shareholders the sale, lease or exchange of all or
substantially all of the Company's assets or its dissolution, or amend the
Bylaws.
The Compensation Committee, which is composed of Messrs. Feighan,
McManamon and Vanucci (a) makes recommendations to the Board of Directors
concerning the election of the Company's officers, (b) reviews the employee
compensation and benefit plans and sets the compensation for officers of the
Company, (c) awards bonuses to officers of the Company, (d) assumes
responsibility for all broad-based compensation and benefit programs of the
Company and (e) administers the Employee Stock Option Plan.
Compensation of Directors
In October 1997, two persons then serving as Company directors were
granted options to purchase the Common Stock of the Company at an option price
of $.20 per share. Mr. Fleming was granted an option to purchase up to 350,000
shares of Common Stock, and Mr. Mark F. Walz was granted an option to purchase
up to 200,000 shares of Common Stock. The grant of 200,000 shares of Common
Stock to Mr. Walz was in consideration for services rendered as a non-employee
director for the period December 1996 through October 1997. Mr. Walz resigned in
February 1998. In May 1998, Mr. Fleming was granted an additional option to
purchase up to 150,000 shares of Common Stock at an option price of $.50 per
share.
Non-employee directors will be reimbursed for reasonable expenses
incurred in connection with attendance at any meetings of the board of directors
of the Company.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth certain information regarding the
executive officers of the Company. Each officer serves at the pleasure of the
board of directors.
<TABLE>
<CAPTION>
Year Named to
Name Age Position Held with Company Present Position
- ---- --- -------------------------- ----------------
<S> <C> <C> <C>
Peter C. Vanucci 50 Chairman and Chief Executive Officer March 1998
Edward S. Fleming 43 President October 1997
Virginia M. Lazar(1) 47 Executive Vice President and Corporate May 1998
Secretary
Alan W. Harvey(2) 38 Chairman, President and Chief Executive December 1996 to October
Officer 1997
</TABLE>
(1) From January 1996 until her election as an officer of the Company in
May 1998, Ms. Lazar was the President of Corporate Administrative
Services, Inc., a corporation engaged in providing consulting and
administrative services to public companies. For the prior 17 years,
Ms. Lazar was employed by Petrominerals Corporation and, since 1987,
held the position of Corporate Secretary of that corporation.
(2) Mr. Harvey was elected to serve as Chairman of the Board, President and
Chief Executive Officer effective as of December 23, 1996, and resigned
as a director and officer of the Company on October 17, 1997.
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Summary Compensation Table
The following table sets forth information concerning compensation for
services in all capacities awarded to, earned by, or paid to the Company's
executive officers during the three completed fiscal years.
<TABLE>
<CAPTION>
Annual Compensation
Name and Principal Other Annual All other
Position Year Salary Bonus Compensation Compensation
($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Peter C. Vanucci, 1998 57,292 (1) - - -
Chairman and Chief - - -
Executive Officer
Edward S. Fleming, 1998 - - - -
President (2)
Virginia M. Lazar, 1998 41,250 (3) - - -
Executive Vice President
and Corporate Secretary
Alan W. Harvey, 1998 14,385(4) - - -
Chairman, President and 1997 10,596
Chief Executive Officer
Samuel M. Skipper, 1996 43,348 - - -
Chief Executive Officer
and President (5)
</TABLE>
(1) Mr. Vanucci has accrued his salary for the fiscal year ended June 30,
1998 and for the subsequent period through November 1, 1998. Mr.
Vanucci was granted an option to purchase up to 1,000,000 shares of the
Company's common stock at a price of $.50 per share in May 1998.
(2) Mr. Fleming is not a full-time employee, and therefore no salary is
being accrued for him at this time. Mr. Fleming was granted an option
to purchase up to 350,000 shares of the Company's common stock at a
price of $.20 per share in October 1997, and was granted an additional
option to purchase up to 150,000 shares of the Company's common stock
at a price of $.50 per share in May 1998.
(3) Ms. Lazar has accrued her salary for the fiscal year ended June 30,
1998, and for the subsequent period through November 1, 1998. Ms. Lazar
was granted an option to purchase up to 500,000 shares of the Company's
common stock at a price of $.50 per share in May 1998.
(4) Mr. Harvey terminated his employment in October 1997. Mr. Harvey's
salary is for the period July 1, 1997 through October 31, 1997.
(5) Mr. Skipper served as Chairman of the Board, President and Chief
Executive Officer for the period August 1995 through December 23, 1996.
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Incentive Stock Option Plan and Non-Statutory Stock Option Plan
The Company has adopted an Incentive Stock Option Plan and a
Non-Statutory Stock Option Plan (together, the "Option Plan"), under which the
Company may award stock options to employees, including non-employee directors
of the Company. The Company intends to make such awards to employees in order to
induce qualified persons to accept employment with the Company, and to reward
key personnel of the Company in lieu of cash bonuses. A total of seven million
shares of the Company's Common Stock have been reserved for issuance pursuant to
the Option Plan. During the fiscal year ended June 30,1998, a total of two
million two hundred thousand shares were granted to employees and directors.
Five million two hundred thousand of the seven million shares available under
the Plan have been issued.
Employee Stock Compensation Plan
The Company has adopted an Employee Stock Compensation Plan (the
"Compensation Plan"), which provides that the Company may issue stock awards to
employees, including consultants who have provided bona fide services to the
Company not connected to any financing activities. The Company intends to make
such awards to employees and consultants for services rendered on behalf of the
Company, in lieu of cash payments otherwise owing to these individuals, and to
make future awards as the Board of Directors determines in order to induce
qualified persons to accept employment with the Company, and to reward key
personnel of the Company in lieu of cash bonuses. During the fiscal year ended
June 30, 1998, the Company issued 250,000 shares of the Company's Common Stock
to employees, including 96,750 shares to Ms. Lazar who is an executive officer,
pursuant to this plan for services rendered and in repayment of expenses.
Other Compensation of Executive Officers
During fiscal 1998, the Company provided travel and entertainment
expenses to its executive officers and key employees. The aggregate amount of
such compensation, as to any executive officer or key employee, did not exceed
the lesser of $25,000 or 10% of the cash compensation paid to such executive
officer or key employee, nor did the aggregate amount of such other compensation
exceed 10% of the cash compensation paid to all executive officers or key
employees as a group.
Option Grants in Last Fiscal Year
The following table sets forth information with respect to the grant of
options under the Company's 1997 Non-Statutory Stock Option Plan and Incentive
Stock Option Plan during the fiscal year ended June 30, 1998, and subsequent to
fiscal year end.
<TABLE>
<CAPTION>
Percent of
Number of total options
Securities granted to Market Grant
underlying employees in Exercise or Price on Expiration Date
Name options granted fiscal year base price Grant Date Date Value(1)
- ---- ----------------- --------------------------------- ---------- ------------ --------
(#) (%) ($/Share) ($/Share) ($)
<S> <C> <C> <C> <C> <C> <C>
Peter C. Vanucci 1,000,000 43% .50 1.00 5/1/2002 1,000,000
Edward S. Fleming 350,000 22% .20 3.50 5/1/2002 1,225,000
150,000 .50 1.00 5/1/2002 350,000
Virginia M. Lazar 500,000 22% .50 1.00 5/1/2002 500,000
Edward F. Feighan 100,000 4% .50 3.00 5/1/2002 300,000
Mark F. Walz 200,000 9% .20 3.50 5/1/2002 700,000
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and FYE Option Values
<TABLE>
<CAPTION>
Number of securities Value of unexercised
Shares underlying unexercised in-the-money options
acquired Value options at fiscal year-end at fiscal year-end
Name on Exercise Realized Exercisable/unexercisable Exercisable/unexercisable
(#) ($) (#) ($)
<S> <C> <C> <C> <C>
Mark F. Walz 50,000 (1) 134,375 150,000 243,750
</TABLE>
(1) The options shown were exercised in July 1998.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of November 3, 1998 by
each person or entity known to the Company to own beneficially 5% or more.
Unless otherwise indicated in the footnotes below, each person has sole voting
and dispositive power over the shares indicated.
<TABLE>
<CAPTION>
Amount and Percent of Total
Name and Address of Nature of Percent of Outstanding
Title of Class Beneficial Owner Beneficial Interest Class Voting Securities
- ---------------------- ---------------------------- ------------------- ------------- -----------------
<S> <C> <C> <C> <C>
$.003 par value Peter C. Vanucci(1) 1,000,000 6.9% 6.9%
common stock 8221 Brecksville Road
Bldg. 3, Suite 207
Brecksville, Ohio 44141
$.003 par value Flinders Finance Company 1,303,928 8.9% 8.9%
common stock P. O. Box 1360
League City, Texas 77548
$.003 par value Virginia M. Lazar(2) 596,750 4.1% 4.1%
common stock 3050 Post Oak Blvd, Ste 1080
Houston, Texas 77056
$.003 par value Edward S. Fleming(3) 500,000 3.4% 3.4%
common stock 3050 Post Oak Boulevard
Suite 1080
Houston, Texas 77056
$.003 par value Edward F. Feighan(4) 150,000 1.0% 1.0%
common stock 3050 Post Oak Blvd, Ste 1080
Houston, Texas 77056
$.003 par value Tropicana International, Inc. 750,000 5.1% 5.1%
common stock 957 Nasa Road 1 - Suite 113
Houston, Texas 77058
$.003 par value Youngstown Worldwide Ltd. 750,000 5.1% 5.1%
common stock 403 Nasa Road 1 - Suite 293
Webster, Texas 77598
$.003 par value Mark F. Walz (5) 200,000 1.0% 1.0%
common stock 13131 Almeda Road
Houston, Texas 77045
All executive officers 2,146,750 14.7% 14.7%
and directors as a
group(4 persons)
</TABLE>
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(1) Consists of an option to purchase up to 1,000,000 shares of the Company's
Common Stock at a price of $.50 per share.
(2) Includes an option to purchase up to 500,000 shares of the Company's Common
Stock at a price of $.50 per share.
(3) Consists of an option to purchase up to 350,000 shares of the Company's
Common Stock at $.20 per share and an option to purchase an additional
150,000 shares at $.50 per share.
(4) Includes an option to purchase up to 100,000 shares of the Company's Common
Stock at $.50 per share.
(5) Includes an option to purchase up to 150,000 shares of the Company's Common
Stock at $.20 per share.
Certain Relationships and Related Transactions
Since December 1996, Corporate Administrative Services, Inc. has
rendered services to the Company in connection with corporate securities
compliance and corporate governance. Ms. Lazar, as the former President of
Corporate Administrative Services, Inc., received compensation from the Company
in the form of 96,750 shares of Company Common Stock for services rendered. In
addition, that corporation forgave fees due and payable in the amount of $80,000
for the fiscal year ended June 30, 1998.
No executive officer, director, stockholder known to the Company to
own, beneficially or of record, more than 5% of the Company's Common Stock, or
any member of the immediate family of any of those persons, has engaged since
the beginning of the Company's last fiscal year or proposes to engage in the
future, in any transaction or series of similar transactions with the Company,
directly or indirectly through a separate entity, in which the amount involved
exceeded or will exceed $60,000.
No director of the Company has served or currently serves as a partner
or executive officer of any investment banking firm that performed services for
the Company during the last fiscal year or that the Company proposes to have
perform services during the current year. The Company knows of no other
relationship between any director and the Company substantially similar in
nature and scope to those described above.
Section 16(a) Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and persons holding more than 10% of a
registered class of the Company's equity securities to file with the SEC initial
reports of ownership, reports of changes in ownership and annual reports of
ownership of Common Stock and other equity securities of the Company. Such
directors, officers and stockholders are also required to furnish the Company
with copies of all such filed reports.
Based on a review of the copies of such reports furnished to the
Company, the Company believes that all Section 16(a) reporting requirements were
timely fulfilled during 1998, except that Mr. Vanucci filed two months late his
initial report on Form 3 reporting his election as a director and executive
officer in February 1998, Mr. Harvey failed to file his terminating Form 4 or 5
upon his resignation as an executive officer and director in October 1997, and
Mr. McManamon did not timely file his initial report on Form 3 upon his election
as a director in May 1998.
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PROPOSAL 2
CHANGE IN CORPORATE NAME
The Board of Directors of the Company has adopted resolutions approving
and recommending to the shareholders of the Company for their approval an
amendment to the Restated Articles of Incorporation of the Company changing the
corporate name to Affiliated Resources Corporation. If the corporate name change
is approved by the requisite vote of the Company's shareholders, it will become
effective at the time of the filing of the Amendment with the Colorado
Corporation Commission. The form of amendment is set forth in Exhibit A hereto.
Each holder of certificates bearing the name Synaptix Systems
Corporation (the "Synaptix certificates") will be entitled, upon surrender of
such Synaptix certificates to the Company or any transfer or exchange agent for
cancellation, to receive a new certificate bearing the name Affiliated Resources
Corporation (the "Affiliated certificates") representing the same number of
fully paid and nonassessable shares. Until so presented and surrendered,
Synaptix certificates will be deemed for all purposes to evidence the ownership
of fully paid and nonassessable shares of Affiliated. After the effective date
of the name change, shareholders will be asked to surrender all Synaptix
certificates in accordance with the procedures set forth in a letter of
transmittal to be sent by the Company. Shareholders should not submit their
Synaptix certificates until requested to do so.
Reasons for the Corporate Name Change
Until March 1997, the Company operated under the name Basic Natural
Resources, Inc. and was primarily engaged in the oil and gas industry. At that
time the corporate name was changed to Synaptix Systems Corporation to reflect a
shift in emphasis to the development and marketing of computer software
equipment Although the Company acquired software assets and anticipated that it
would be able to provide related systems integration and networking services in
connection with the license of those software assets, the Company lacked the
resources and funding to deliver the product to market in a timely manner. For
that reason, and in connection with a management change in March 1998, the
Company sold its software assets and was repositioned to engage in the business
services and natural resources industries. Management's current business plan is
for a diversified company focusing on the acquisition of those companies whose
products or services are technically innovative and market proven, but whose
market penetration can be significantly expanded through enhanced marketing or
additional capitalization. The Board believes that a change in the corporate
name to Affiliated Resources Corporation more accurately reflects the business
of the Company.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL AND ADOPTION OF THE
CORPORATE NAME CHANGE PROPOSAL AND URGES EACH SHAREHOLDER TO VOTE
"FOR" THE ADOPTION OF THIS PROPOSAL.
Vote Required
Approval of Proposal No. 2 requires the affirmative vote of the holders of
a majority of the shares of the Company's Common Stock present at the Meeting,
in person or by proxy, voting as a single class.
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PROPOSAL 3
APPROVAL OF ADOPTION OF STOCK OPTION PLANS
On November 5, 1997, the Board of Directors adopted the 1997 Synaptix
Systems Corporation Incentive Stock Option Plan and Non-Statutory Stock Option
Plan (the "Plans"), to be effective as of May 1, 1997. The Board of Directors
has recommended to the shareholders of the Company ratification of the adoption
of those Plans. The Plans allow for the issuance of up to seven million shares
of the Company's Common Stock to employees and directors of the Company. The
persons to receive options, and the number of options to be received, will be at
the discretion of the Board of Directors. There are five people currently
eligible to receive options under the Plans, consisting of all the executive
officers and directors of the Company. As of August 1998, there are an aggregate
of one million seven hundred thousand shares available for grant under the
Plans. See "Executive Compensation and Other Information - Option Grants in Last
Fiscal Year". The 1997 Affiliated Resources Corporation Incentive Stock Option
Plan and the 1997 Affiliated Resources Corporation Non-Statutory Stock Option
Plan are attached hereto as Exhibit "B".
THE BOARD OF DIRECTORS RECOMMENDS RATIFICATION OF THE ADOPTION OF THE
1997 AFFILIATED RESOURCES CORPORATION INCENTIVE STOCK OPTION PLAN AND THE 1997
AFFILIATED RESOURCES NON-STATUTORY STOCK OPTION PLAN AND URGES EACH SHAREHOLDER
TO VOTE "FOR" THIS PROPOSAL.
Vote Required
Approval of Proposal No. 3 requires the affirmative vote of the holders of
a majority of the shares of the Company's Common Stock present at the Meeting,
in person or by proxy, voting as a single class.
PROPOSAL 4
APPROVAL OF CHANGE IN FISCAL YEAR END
The Board of Directors has adopted resolutions to change the Company's
fiscal year end reporting period from June 30 to December 31, and requests
shareholder ratification of its actions. The change was made to simplify the
budgeting and accounting processes by conforming the Company's fiscal year to a
calendar year. As a result of this change the Company will prepare and file with
the SEC and the Internal Revenue Service stub period financials for the six
month period ending December 31, 1998. A meeting of the shareholders will be
held in the spring of 1999 and thereafter, after the end of the new fiscal year.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE CHANGE IN THE
FISCAL YEAR END TO DECEMBER 31.
Vote Required
Approval of Proposal No. 4 requires the affirmative vote of the holders of
a majority of the shares of the Company's Common Stock present at the Meeting,
in person or by proxy, voting as a single class.
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PROPOSAL 5
RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of Weinstein Spira &
Company, P.C., independent public accountants, as the Company's auditors for the
fiscal year ending June 30, 1998, and for the subsequent period ending December
31, subject to the approval of the change in fiscal year end to December 31 by
the shareholders. Weinstein Spira & Company, P.C. has served as the Company's
auditors since August 1998. Smith & Company served as the Company's auditors for
the fiscal years ended June 30, 1995, 1996 and 1997. The Company expects to have
a representative of Weinstein Spira & Company, P.C. in attendance at the 1998
Annual Meeting of Shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF WEINSTEIN SPIRA & COMPANY, P.C.
Vote Required
Ratification of the appointment of Weinstein Spira & Company, P.C. as
the independent auditors of the Company requires the affirmative vote of the
holders of a majority of the shares of the Company's Common Stock present at the
meeting, in person or by proxy, voting as a single class.
SHAREHOLDER PROPOSALS FOR ANNUAL MEETING
From time to time the shareholders of the Company submit proposals
which they believe should be voted upon by the shareholders. The SEC has adopted
regulations which govern the inclusion of such proposals in the Company's annual
proxy materials. All such proposals must be submitted to the Corporate Secretary
not later than February 15, 1999 in order to be considered for inclusion in the
proxy materials for the Company's Annual Meeting of Shareholders to be held in
May 1999.
OTHER BUSINESS
The Company does not intend to present any other business for action at
the Meeting and does not know of any other business intended to be presented by
others. Should any other matters come before the meeting, the proxies will be
voted by the persons authorized therein, or their substitutes, in accordance
with their best judgment on such matters.
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ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K for the fiscal year ended June
30, 1998, as filed with the SEC, is being mailed concurrently with the mailing
of this Proxy Statement to shareholders of record on November 3, 1998. The cost
of furnishing such Annual Report on Form 10-K and of making this proxy
solicitation will be borne by the Company. Copies of exhibits to the Annual
Report on Form 10-K are available, but a reasonable handling fee will be charged
to the requesting shareholder. Each written request must set forth a good faith
representation that, as of the record date, the person making the request is a
beneficial owner of the Company's Common Stock and entitled to vote at the
Meeting. Shareholders should direct their written request to the Company,
Attention: Secretary, 3050 Post Oak Boulevard, Suite 1080, Houston, Texas 77056.
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EXHIBIT A
Article I of the Restated Articles of Incorporation is to be deleted in
its entirety to change the name of the Company from SYNAPTIX SYSTEMS
CORPORATION, and in its place shall be substituted the following:
FIRST: The name of the corporation is AFFILIATED RESOURCES CORPORATION.
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EXHIBIT B
SYNAPTIX SYSTEMS CORPORATION
dba
AFFILIATED RESOURCES CORPORATION
1997 INCENTIVE STOCK OPTION PLAN
AND
1997 NON-STATUTORY STOCK OPTION PLAN
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SYNAPTIX SYSTEMS CORPORATION
dba
AFFILIATED RESOURCES CORPORATION
1997 INCENTIVE STOCK OPTION PLAN
AND
1997 NON-STATUTORY STOCK OPTION PLAN
1. Plan Names and Purposes
(a) This Plan document is intended to implement and govern two separate
Stock Option Plans of Synaptix Systems Corporation, a Colorado
corporation doing business as Affiliated Resources Corporation (the
"Company"): the Synaptix Systems Corporation dba Affiliated Resources
Corporation 1997 Incentive Stock Option Plan ("Plan A") and the
Synaptix Systems Corporation dba Affiliated Resources Corporation 1997
Non-Statutory Stock Option Plan ("Plan B"; Plan A and Plan B are
sometimes collectively referred to herein as the "Plans"). Plan A
provides for the granting of options that are intended to qualify as
incentive stock options ("Incentive Stock Options") within the meaning
of Section 422(b) of the Code. Plan B provides for the granting of
options that are not intended to so qualify. Unless specified
otherwise, all the provisions of this Plan document relate equally to
both Plan A and Plan B, and are reflected in one Plan document solely
for purposes of administrative convenience and are not intended to
constitute tandem plans.
(b) The purpose of the Plans is to promote the growth and general
prosperity of the Company and its Affiliated Companies, by permitting
the Company, through the grant of option(s) ("Option(s)") to purchase
shares of its common stock ("Common Stock"), to attract and retain the
best available persons for positions of substantial responsibility,
and to provide certain key employees with an additional incentive to
contribute to the success of the Company and its Affiliated Companies.
2. Administration
(a) The Plans shall be administered by the Board.
(b) The Board shall have sole authority, in its absolute discretion, to
determine which of the eligible persons (the "Optionees") of the
Company and its Affiliated Companies shall receive Options. Subject to
the express provisions and restrictions of the Plans, the Board shall
have sole authority, in its absolute discretion, to determine the time
when Options shall be granted, the terms and conditions of an Option,
other than those terms and conditions fixed under the Plans, the
number of shares which may be issued upon exercise of an Option and
the means of payment for such shares. In addition, the Board shall
have authority to do everything necessary or appropriate to administer
the Plans, including but not limited to (i) setting different terms
and conditions for different Options and (ii) interpreting the Plans.
All decisions, determinations and interpretations of the Board shall
be final and binding upon all Optionees.
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(c) The Board shall have the authority to delegate some or all of the
powers granted to it pursuant to this Section 2 to a Committee (the
"Committee") appointed by the Board and consisting of not fewer than
three (3) members of the Board. The Board may, from time to time,
remove members from, or add members to, the Committee, and vacancies
on the Committee shall be filled by the Board. In addition, the Board
may at any time, by resolution, abolish the Committee and revest in
the Board the administration of the Plans. All decisions,
determinations and interpretations of the Committee shall be final and
binding on all Optionees, unless otherwise determined by the Board.
(d) The Committee, if appointed pursuant to Subsection (c), shall report
to the Board the names of employees and other eligible persons granted
Options(s), the number of shares covered by each Option, and the terms
and conditions of each such Option.
(e) Definitions.
(i) Affiliated Companies: For purposes of the Plans, the term
"Affiliated Companies" shall mean any component member of a
controlled group of corporations, as defined under Section 1563
of the Code, in which the Company is also a component member.
(ii) Code: The Internal Revenue Code of 1986, as amended.
(iii)Officer: The President, Chief Executive Officer, Chief
Administrative Officer, Chief Operating Officer, Secretary, Chief
Financial Officer, any Vice President in charge of a principal
business function (such as Sales, Operations, Administration or
Finance) and any other person who performs similar policy making
functions for the Company.
(iv) Parent Corporation: A corporation as defined in Section 424(e) of
the Code.
(v) Restricted Shareholder: An individual who, at the time an Option
is granted under Plan A, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the
employer corporation or of its Parent Corporation or Subsidiary
Corporation, with stock ownership to be determined in accordance
with the attribution rules set forth in Section 424(d) of the
Code.
(vi) Subsidiary Corporation: A corporation as defined in Section
424(f) of the Code.
3. Eligibility. The following persons shall be eligible for the grant of
options:
(a) in the case of Plan A, any Officer or key employee of the
Company, Parent Corporation or any Subsidiary Corporation of
the Company who renders services which tend to contribute
materially to the success of the Company, Parent Corporation
or Subsidiary Corporation; and
(b) in the case of Plan B, any Officer or key employee described
in Subsection 3(a) above and any non-employee Directors of the
Company, Parent Corporation or Subsidiary Corporation who
renders services which tend to contribute materially to the
success of the Company, Parent Corporation or Subsidiary
Corporation.
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The determination as to whether an employee is eligible to receive
Options hereunder shall be made by the Board (or the Committee, if so
authorized) in its sole discretion, and the decision of the Board (or
Committee) shall be binding and final. Such Options may be granted to
one or more eligible persons without being granted to other such
persons, as the Board or Committee may deem fit.
4. Maximum Number of Shares to be Optioned; Limitation on Shares to Directors.
(a) The maximum aggregate number of shares which may be optioned
under Plan A and Plan B is seven million shares of the
authorized Common Stock of the Company.
(b) All shares to be optioned under either Plan A or Plan B may be
either authorized but unissued shares or shares held in the
treasury. Shares of Common Stock that (i) are repurchased by
the Company after being issued hereunder pursuant to the
exercise of an Option or (ii) remain unissued as the result of
the lapse or expiration of an option, shall not be included in
the above-described maximum number of shares which may be
optioned hereunder.
(c) Notwithstanding anything to the contrary contained herein, no
Option may be granted hereunder if the aggregate of the shares
of stock subject to such Option and the number of shares of
Common Stock subject to outstanding Options previously granted
hereunder or under any other stock option plan of the Company
would exceed 10% of the total shares of voting stock of all
classes outstanding at such time.
(d) No more than seven fiscal year end million shares of the
maximum aggregate number of shares of Common Stock described
in Section 4(a) above may be optioned and sold to non-employee
Directors of the Company under Plan A and Plan B considered in
the aggregate.
5. Option Price.
(a) Plan A. The Option Price for shares of Common Stock to be
issued under Plan A shall be greater than or equal to the Fair
Market Value of such shares on the date on which the Option
covering such shares is granted by the Board (or the
Committee, if so authorized by the Board), except that if on
the date on which such Option is granted the Optionee is a
Restricted Shareholder, then such Option Price shall be
greater than or equal to 110% of the Fair Market Value of the
shares of Common Stock subject to the Option on the date such
Option is granted by the Board (or the Committee, if so
authorized by the Board).
(b) Plan B. The Option Price for shares of Common Stock to be
issued under Plan B shall be determined by the Board (or the
Committee, if so authorized by the Board) as of the date on
which the Option covering such shares is granted.
(c) The Fair Market Value of shares of Common Stock for all purposes
of both Plan A and Plan B shall be, if the Common Stock is listed
or admitted to trading on any major stock exchange, the mean
between the lowest and highest reported sale price on such day on
the principal stock exchange on which the Common Stock is listed
or admitted to trading, or if no sale takes place on such
principal stock exchange, then the closing asked price of the
Common Stock on such exchange on such day. If the Fair Market
Value of any shares of Common Stock cannot be determined under
the foregoing method, then the Fair Market Value of such shares
shall be determined by an outside third party hired by the Board
or set by the Board (or the Committee, if so applicable) in its
sole discretion, exercised in good faith.
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<PAGE>
6. Exercise of Option. Subject to the restrictions, conditions and
limitations set forth in this Plan document and/or any applicable Stock
Option Agreement entered into hereunder, the Options granted under the
Plans shall be exercisable in accordance with the following rules:
(a) Subject to the specific provisions of this Section 6, Options
shall become exercisable at such times and in such installments
(which may be cumulative) as the Board shall provide in the terms
of each individual Option; provided, however, that by a
resolution adopted after an Option is granted, the Board may, on
such terms and conditions as it may determine to be appropriate
and subject to the specific provisions of this Section 6,
accelerate the time at which such Option or installment thereof
may be exercised. For purposes of the Plans, any currently
exercisable installment of an Option granted hereunder shall be
referred to as an "Accrued Installment".
(b) Subject to the provisions of Subsections 6(c), (d) or (e), an
Option may be exercised at any time prior to the Fifth
Anniversary Date, subject to the restrictions contained in this
Section 6 and in the applicable Stock Option Agreement. In no
event shall any Option be exercised subsequent to the day prior
to the Fifth Anniversary Date of such Option, regardless of the
circumstances then existing (including but not limited to, the
death or termination of employment of the Optionee). As used
herein, the term "Fifth Anniversary Date" shall mean the fifth
anniversary of date on which the Option was granted hereunder.
(c) Notwithstanding the foregoing provisions of this Section 6, in
the event the Company or the shareholders of the Company enter
into an agreement to dispose of all or substantially all of the
assets or stock of the Company by means of a sale, merger,
consolidation, reorganization, liquidation, or otherwise, an
Option shall become immediately exercisable with respect to the
full number of shares subject to that Option during the period
commencing as of the date of execution of such agreement and
ending as of the earlier of (i) the applicable expiration date
for such Option, as provided for in the Stock Option Agreement,
or (ii) the day prior to the Fifth Anniversary Date, or (iii) the
date on which the disposition of assets or stock contemplated by
the agreement is consummated. Upon the consummation of any such
disposition of assets or stock, the Plans and any unexercised
Options issued hereunder (or any unexercised portion thereof)
shall terminate and cease to be effective, unless provision is
made in connection with such transaction for assumption of
Options previously granted or the substitution for such Options
of new Options covering the securities of a successor corporation
or an affiliate thereof, with appropriate adjustments as to the
number and kind of securities and prices. Any change or
adjustment made pursuant to the terms of this Subsection 6(c)
with respect to Incentive Stock Options (Plan A) shall be made in
such manner so as not to constitute a "modification" as defined
in Section 424(h) of the Code, and so as not to cause any
Incentive Stock Option issued under Plan A to fail to continue to
qualify as an Incentive Stock Option, as defined in Section
422(b) of the Code. Notwithstanding the foregoing, in the event
that any such agreement shall be terminated without consummating
the disposition of said stock or assets, any unexercised
unaccrued installments that had become exercisable solely by
reason of the provisions of this Subsection 7(c) shall again
become unaccrued and unexercisable as of said termination of such
agreement, subject, however, to such installments accruing
pursuant to the normal accrual schedule provided in the terms
under which such Option was granted. Any exercise of an
installment prior to said termination of said agreement shall
remain effective notwithstanding that such installment became
exercisable solely by reason of the Company entering into said
agreement to dispose of the stock or assets of the Company.
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<PAGE>
(d) Subject to the provisions of Subsection 6(e) below, as of the
effective date of the termination of continuous employment or
Directorship of an Optionee with the Company (or Affiliated
Company) for any reason other than death or disability for more
than one year (the "Termination Date"), any unexercised Options
or Accrued Installments of Options granted hereunder to such
terminated Optionee shall expire and become unexercisable as of
the earlier of (i) the applicable expiration date with respect to
such Accrued Installments as provided for in the Stock Option
Agreement, (ii) the applicable Fifth Anniversary Date, or (iii)
thirty (30) days following said Termination Date; provided,
however, that the Board may extend such thirty (30) day period in
the case of an Option under Plan A for the period not to exceed
three (3) months following the Termination Date and in the case
of Options under Plan B for a period not to exceed one (1) year
following the Termination Date, but in no event, beyond the
Expiration Date provided for in the Stock Option Agreement or
applicable Fifth Anniversary Date, whichever is earlier. Any
installments under said Option which have not accrued as of said
Termination Date shall expire and become unexercisable as of said
Termination Date. Any portion of an Option that expires hereunder
shall remain unexercisable and be of no effect whatsoever after
such expiration, notwithstanding that such Optionee may be
reemployed by, or again become a Director of, the Company or an
Affiliated Company. The Board or Committee shall determine the
effect of approved leaves of absence and all other matters
relating to "continuous employment."
(e) Notwithstanding the foregoing provisions of this Section 7, in
the event of the death of an Optionee while an employee or
Director of the Company (or an Affiliated Company), or in the
event of the termination of employment or directorship by reason
of the Optionee's permanent and total disability, any unexercised
Options or Accrued Installments of Options granted hereunder to
such Optionee shall expire and become unexercisable as of the
earlier of (i) the applicable expiration date with respect to
such Accrued Installments as provided for in the Stock Option
Agreement, (ii) the applicable Fifth Anniversary Date, (iii) the
first anniversary of the date of death of such Optionee (if
applicable), or (iv) the first anniversary of the date of the
termination of employment or directorship by reason of permanent
and total disability (if applicable). Any such Accrued
Installments of a deceased Optionee may be exercised prior to
their expiration by (and only by) the person or persons to whom
the Optionee's Option rights shall pass by will or by the laws of
descent and distribution, if applicable, subject, however, to all
of the terms and conditions of the Plans and the applicable Stock
Option Agreement governing the exercise of Options granted
hereunder. Any installments under such a deceased or disabled
Optionee's Option that have not accrued as of the date of his
death or termination of employment or directorship due to
permanent and total disability, as the case may be, shall expire
and become unexercisable as of said date of death or termination
of employment or directorship. For purposes of this Subsection
7(e), an Optionee shall be deemed employed by the Company (or
Affiliated Company) during any period of leave of absence from
active employment, as authorized by the Company (or Affiliated
Company). For purposes of the Plans, the term "permanent and
total disability" shall be defined under Section 72(m)(7) of the
Code.
(f) An Option shall be deemed exercised when written notice of
such exercise has been given to the Company at its principal
business office by the person entitled to exercise the Option
and full payment in cash or cash equivalents (or with shares
of Common Stock, pursuant to Section 10) for the shares with
respect to which the Option is exercised has been received by
the Company. Until the issuance of the stock certificates, no
right to vote or receive dividends or any other rights as a
stockholder, shall exist with respect to optioned shares,
notwithstanding the exercise of the Option. No adjustment will
be made for a dividend or
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<PAGE>
other rights for which the record date is prior to the date
the stock certificate is issued, except as provided in Section
20.
(g) An Option may be exercised in accordance with this Section 7
as to all or any portion of the shares covered by an Accrued
Installment of the Option, from time to time, during the
applicable Option Period, but shall not be exercisable with
respect to fractions of a share. The Board or Committee may
prescribe the minimum number of shares in which an Option is
exercisable.
(h) As soon as practicable after any proper exercise of an Option in
accordance with the provisions of the Plans, the Company shall,
without transfer or issue tax to the Optionee, deliver to the
Optionee at the main office of the Company, or such other place
as shall be mutually acceptable, a certificate or certificates
representing the shares of Common Stock as to which the Option
has been exercised. The time of issuance and delivery of the
Common Stock may be postponed by the Company for such period as
may be required for it, with reasonable diligence, to comply with
any applicable listing requirements of any national or regional
securities exchange and any law or regulation applicable to the
issuance and delivery of such shares.
8. Authorization to Issue Options and Shareholder Approval. Options granted
under the Plans shall be conditioned upon the Company obtaining any
required permit from the California Department of Corporations and/or other
appropriate governmental agencies, free of any conditions not acceptable to
the Board, authorizing the Company to issue such Options; provided,
however, such condition shall lapse as of the effective date of issuance of
such permit(s) in a form to which the Company does not object within sixty
(60) days. The grant of Option(s) under the Plans shall also be upon the
condition that no shares shall be issued upon exercise of any Option prior
to the approval of the Plans by the vote or written consent of the holders
of a majority of the outstanding shares of the Company's Common Stock.
9. Limit on Incentive Stock Option Grants.
(a) The aggregate Fair Market Value (determined as of the Option
Grant Date) of the shares of Common Stock, with respect to
which Incentive Stock Options are exercisable for the first
time by any employee of the Company during any calendar year
under all Incentive Stock Option Plans of the Company, and any
Parent or Subsidiary Corporation of the Company shall not
exceed Five Million $10,000,000 Dollars ($5,000,000) based on
the fair market value thereof at the date of the grant.
(c) The limitation imposed by this Section 9 shall not apply with
respect to Non-Statutory Stock Options granted under Plan B.
10. Payment of Exercise Price with Company Stock. The Board or the Committee,
if so authorized, may provide that, upon exercise of the Option, the
Optionee may elect to pay for all or some of the shares of Common Stock
underlying the Option with shares of Common Stock of the Company previously
acquired and owned at the time of exercise by the Optionee, provided that
the Optionee will make representations and warranties satisfactory to the
Company regarding his title to the shares used to effect the purchase,
including, without limitation, representations and warranties that the
Optionee has good and marketable title to such shares, free and clear of
any and all liens, encumbrances, charges, equities, claims, security
interests, options or restrictions, and has full power to deliver such
shares without obtaining the consent or approval of any person or
governmental authority, other than those which have already given consent
or approval in a form satisfactory to the Company. The equivalent
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<PAGE>
dollar value of the shares used to effect the purchase shall be the
Fair Market Value of the shares as of the date of exercise of the
Option determined pursuant to Section 5(c) above.
11. Stock Option Agreement. The terms and conditions of Options granted
under the Plans shall be evidenced by a Stock Option Agreement
(hereinafter referred to as the "Agreement") executed by the Company
and the person to whom the Option is granted. Each Agreement shall
contain the following provisions approved by the Board (or the
Committee):
(a) A provision fixing the number of shares which may be issued upon
exercise of the Option;
(b) A provision establishing the Option Price per share;
(c) A provision establishing the times and the installments in which
Options may be exercised;
(d) A provision incorporating therein this Plan document by reference;
(e) A provision clarifying which Options are intended to be Incentive
Stock Options under Plan A, and which are intended to be Non-Statutory
Stock Options under Plan B;
(f) A provision fixing the maximum duration of the Option as not more than
five (5) years from the Option Grant Date;
(g) Such representations and warranties by the employee as may be required
by Section 21 of this Plan document, or as may be required by the
Board (or the Committee) in its discretion;
(h) Any other restrictions (in addition to those established under the
Plans) as may be established by the Board (or the Committee) with
respect to the exercise of the Option, the transfer of the Option,
and/or the transfer of the shares purchased by exercise of the Option,
provided that such restrictions are not in conflict with the Plans;
and
(i) Such other terms and conditions not inconsistent with the Plans as may
be established by the Board (or the Committee).
12. Taxes, Fees and Expenses. The Company shall pay all original issue and
transfer taxes (but not income taxes, if any) with respect to the grant
of Options and/or the issue and transfer of shares pursuant to the
exercise of such Options, and all other fees and expenses necessarily
incurred by the Company in connection therewith, and will, from time to
time, use its best efforts to comply with all of the laws and
regulations which, in the opinion of counsel for the Company, shall be
applicable thereto.
13. Withholding of Taxes. The grant of Options hereunder and the issuance
of Common Stock pursuant to the exercise of such Options is conditioned
upon the Company's reservation of the right to withhold, in accordance
with any applicable law, from any compensation payable to the Optionee,
any taxes required to be withheld by Federal, State or local law, as a
result of the grant or exercise of any such Option. Alternatively, the
Optionee may elect to satisfy the Company's withholding obligation by
directing the Company to withhold exercisable shares of Common Stock,
or by delivering shares of Common Stock owned by the Optionee;
provided, however, that any such election shall:
(a) Be made prior to the date that the amount of tax to be withheld is to
be determined (the "Tax Date");
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(b) Be irrevocable;
(c) Be subject to the disapproval of the Committee;
(d) For Officers and Directors of the Company, be made at least
six (6) months after the grant of the Stock Option (except
that this limitation shall not apply in the event that death
or disability of the Optionee occurs prior to the expiration
of the six-month period); and
(e) For Officers and Directors of the Company, be made either six
(6) months prior to the Tax Date, or in a ten (10) day "window
period" beginning on the third day following the release of
the Company's quarterly statement of sales or earnings.
14. Amendment or Termination of the Plan. The Board may modify, suspend,
discontinue, amend, terminate, revise and/or change the Plans at any
time; provided, however, that except as provided in Section 20 below,
the Board shall not amend the Plans in any of the following respects
without shareholder approval:
(a) To increase the maximum number of shares subject to the Plans;
(b) To change the designation of class of employees eligible to receive
Incentive Stock Options under the Plans;
(c) To extend the term of the Plans, or the maximum Option exercise
period; or
(d) To decrease the minimum price at which shares may be optioned under
the Plans, except as provided in Section 20 below.
Furthermore, the Plans may not, without the approval of the
shareholders, be amended in any manner that would cause Incentive Stock
Options issued under Plan A to fail to qualify as Incentive Stock
Options, as defined in Section 422(b) of the Code. Notwithstanding the
foregoing, no modification, amendment, revision, termination or change
of the Plans shall adversely affect Options granted on or prior to the
date thereof, as evidenced by the execution of an Option Agreement by
both the Company and the Optionee, without the consent of such
Optionee.
15. Options Not Transferable. Options granted under the Plans may not be
sold, pledged, hypothecated, assigned, encumbered, gifted or otherwise
transferred or alienated in any manner, either voluntarily or
involuntarily by operation of law, otherwise than by will or the laws
of descent or distribution and may be exercised during the lifetime of
an Optionee only by such Optionee.
16. Restrictions on Transfer of Stock. The transfer of stock received
pursuant to the exercise of an Option granted under the Plans
(hereinafter "Optioned Stock") is prohibited unless such transfer is
exempt from registration under the Securities Act of 1933, as amended,
or a Rule or Regulation of the Securities and Exchange Commission
thereunder, or unless a Registration Statement covering such transfer
is in effect at the time the transfer is to occur. The certificate
evidencing said stock shall bear an appropriate legend on the face
thereof evidencing such restrictions, as provided in Section 23 below.
17. Reservation of Shares of Common Stock. The Company, during the term of
the Plans, will at all times reserve and keep available such number of
shares of its Common Stock as shall be sufficient to satisfy the
requirements of the Plans.
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18. Restrictions on Issuance of Shares. The Company, during the term of the
Plans, will use its best efforts to seek to obtain from the appropriate
regulatory agencies (other than the Securities and Exchange Commission) any
requisite authorization in order to issue and sell such number of shares of
its Common Stock as shall be sufficient to satisfy the requirements of the
Plans. Nothing herein shall require the Company to register shares of its
Common Stock under the Securities Act of 1933. The inability of the Company
to obtain from any such regulatory agency having jurisdiction thereover the
authorization deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any shares of its stock hereunder, or the Company's
unwillingness to register its shares under the Securities Act of 1933, if
deemed necessary by the Company's counsel, shall relieve the Company of any
liability in respect of the non-issuance or sale of such stock as to which
such requisite authorization shall not have been obtained.
19. Notices. Any notice to be given to the Company pursuant to the provisions
of the Plans shall be addressed to the Company in care of the Secretary at
its principal office, and any notice to be given to an employee to whom an
Option is granted hereunder shall be addressed to him at the address given
beneath his signature on his Stock Option Agreement, or at such other
address as such employee or his transferee (upon the transfer of optioned
stock) may hereafter designate in writing to the Company. Any such notice
shall be deemed duly given when enclosed in a properly sealed envelope or
wrapper, addressed as aforesaid, registered or certified and deposited,
postage and registry or certification fee prepaid, in a post office or
branch post office regularly maintained by the United States Postal
Service. It shall be the obligation of each Optionee and each transferee
holding optioned stock to provide the Secretary of the Company, by letter
mailed as provided hereinabove, with written notice of his correct mailing
address.
20. Adjustments Upon Changes in Capitalization. If the outstanding shares of
Common Stock of the Company are increased, decreased, changed into or
exchanged for a different number or kind of shares of stock of the Company
through reorganization, recapitalization, reclassification, stock dividend,
stock split or reverse stock split, upon proper authorization of the Board,
an appropriate and proportionate adjustment shall be made in the total
number of shares which may be optioned under the Plans, the number of
shares which may be optioned to Directors and Officers of the Company under
the Plans, and the number or kind of shares, and the per-share Option Price
thereof, which may be issued upon exercise of Options granted under the
Plans; provided, however, that no such adjustment need be made if, upon the
advice of counsel, the Board determines that such adjustment may result in
the receipt of federally taxable income to holders of Options granted
hereunder or the holders of Common Stock or other classes of the Company's
securities. If any Option granted under the Plans shall terminate for any
reason or expire before such Option is exercised in full, the securities
which might otherwise have been issued upon exercise of such Option shall
again become available for purposes of the Plans.
21. Representations and Warranties. As a condition to the exercise of any
portion of an Option, the Company may require the person exercising
such Option to make any representation or warranty to the Company as
may, in the judgment of counsel to the Company, be required under any
applicable law or regulation, including, but not limited to, a
representation and warranty that the shares are being acquired only for
investment and without any present intention to sell or distribute such
shares if such a representation is required under the Securities Act of
1933, or any other applicable law, regulation or rule of any
governmental agency.
22
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22. No Enlargement of Employee Rights. The Plans are purely voluntary on
the part of the Company, and the continuance of the Plans shall not be
deemed to constitute a contract between the Company and any employee,
or to be consideration for or a condition of the employment of any
employee. Nothing contained in the Plans shall be deemed to give any
employee the right to be retained in the employ of the Company or its
Affiliated Companies, or to interfere with the right of the Company or
an Affiliated Company to discharge any employee thereof at any time.
23. Legends on Stock Certificates. Unless an appropriate registration
statement is filed pursuant to the Securities Act of 1933, as amended,
with respect to the shares of Common Stock issuable under the Plans,
each certificate representing such Common Stock shall be endorsed on
its face with the following legend or its equivalent:
(a) "The shares represented by this Certificate have not been
registered under the federal Securities Act of 1933, as
amended (the "Act"). Transfer or sale of such securities or
any interest therein is unlawful except after registration, or
pursuant to an exemption from the registration requirements,
as provided in the Act and the Regulations thereunder."
(b) Any other legend(s) required by the California Commissioner of
Corporations.
24. Invalid Provisions. In the event that any provision of this Plan
document is found to be invalid or otherwise unenforceable under any
applicable law, such invalidity or unenforceability shall not be
construed as rendering any other provisions contained herein invalid or
unenforceable, and all such other provisions shall be given full force
and effect to the same extent as though the invalid or unenforceable
provision were not contained herein.
25. Applicable Law. The Plans shall be governed by and construed in
accordance with the laws of the State of California.
26. Successors and Assigns. The Plans shall be binding on and inure to the
benefit of the Company and each employee to whom an Option is granted
hereunder, and their respective, heirs, executors, administrators,
legatees, personal representatives, assignees, successors and
transferees.
26. Term of Plans. The Plans shall be effective as of May 1, 1997, and
shall continue in effect until May 1, 2002, unless terminated earlier
by action of the Board. No Option hereunder may be granted after five
years from the effective date.
IN WITNESS WHEREOF, pursuant to the due authorization and adoption of
the Plans by the Board on November 5, 1997, the Company has caused the Plans to
be executed by its duly authorized Officers, effective as of May 1, 1997, with
respect to Options granted on or after that date.
SYNAPTIX SYSTEMS CORPORATION
dba AFFILIATED RESOURCES CORPORATION
By:
Edward S. Fleming , Acting President
& Director
By:
Mark F. Walz, Director
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<PAGE>
SYNAPTIX SYSTEMS CORPORATION
3050 Post Oak Boulevard, Suite 1080
Houston, Texas 77056
VOTING BALLOT
The undersigned hereby appoints Peter C. Vanucci and Virginia M. Lazar
as Proxies, each with power to appoint his substitute, to represent and to vote
on behalf of the undersigned all shares of Common Stock which the undersigned is
entitled to vote at the Annual Meeting of Shareholders scheduled to be held at
the executive offices of Synaptix Systems Corporation, Houston, Texas, on
Wednesday, December 16, 1998, and to any and all adjournments thereof, with all
powers the undersigned would possess if personally present and particularly with
respect to Proposals 1,2,3, 4 and 5, in their discretion, and upon such other
business as may properly come before the meeting. This proxy, when properly
executed, will be voted in the manner directed herein by the undersigned
shareholder. If no direction is made, this proxy will be voted "FOR" Proposals
1, 2, 3, 4 and 5, and in accordance with the best judgment of the proxies on any
other matters which may properly come before the meeting.
1. ELECTION OF DIRECTORS
NOMINEES: Peter C. Vanucci, Edward F. Feighan, Edward S. Fleming and
J.Thomas McManamon
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below.)
[ ] FOR all nominees listed, except [ ] WITHHOLD AUTHORITY
as marked to the contrary to vote for all nominees listed
2. APPROVAL OF AN AMENDMENT TO THE ARTICLES OF INCORPORATION TO CHANGE THE
NAME OF THE COMPANY TO AFFILIATED RESOURCES CORPORATION
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. RATIFICATION OF THE ADOPTION OF THE COMPANY'S INCENTIVE STOCK OPTION PLAN
AND NON-STATUTORY STOCK OPTION PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. APPROVAL OF THE CHANGE IN THE FISCAL YEAR END OF THE COMPANY TO DECEMBER 31
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. RATIFICATION OF THE APPOINTMENT OF WEINSTEIN SPIRA & COMPANY, P.C. AS THE
COMPANY'S INDEPENDENT AUDITORS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR
ANY ADJOURNMENT OF THE MEETING.
DATED:
(Signature)
(Signature if held jointly)
Please sign exactly as name appears in type. When the shares are held for
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
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