SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
May 19, 2000
ONE WORLD ONLINE.COM, INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
33-16757 87-0411771
(Commission file number) (IRS employer identification no.)
4778 North 300 West, Suite 200, Provo, Utah 84604
(Address of principal executive offices) (Zip code)
(801) 852-3540
(Registrant's telephone number, including area code)
This document contains a total of 47 pages.
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Item 1. Changes in Control of Registrant
On May 19, 2000, One World Online.Com, Inc. (the "Company") filed a
Certificate of Designation with the Nevada Secretary of State creating Series A
Convertible Preferred Stock (the "Series A Preferred Stock") and designating
300,000 shares as Series A Preferred Stock. On or about May 22, 2000, the
Company issued a total of 100,000 shares of Series A Convertible Preferred Stock
each (300,000 shares total) to an entity controlled by David N. Nemelka,
President and Chief Executive Officer of the Company, an entity controlled by
Kelly M. Thayer, Chairman of the Company and an entity controlled by David R.
Nemelka, the father of David N. Nemelka. The Series A Preferred Stock was issued
in consideration for nine hundred thousand dollars ($900,000). Three hundred
thousand dollars ($300,000) of the subscription price was paid on or before May
22, 2000. The remaining six hundred thousand dollars ($600,000) of the
subscription price is due on or about May 22, 2003, together with interest at
the rate of eight percent (8%) per annum. The funds used by the purchasers to
acquire the Series A Preferred Stock are anticipated to come from personal funds
of the purchasers. The issuance of the Series A Preferred Stock was approved by
written consent of the holders of 8,214,500 of the 15,475,000 outstanding shares
of the Company's common stock on May 10, 2000.
All of the Series A Preferred Stock has been or will be contributed to
the OWOL Founders Voting Trust. The beneficiaries of the OWOL Founders Voting
Trust are David N. Nemelka, Kelly M. Thayer and an entity with which David R.
Nemelka is affiliated and controls. Except as otherwise required by applicable
law, all voting rights of the Company are vested in and exercised by the holders
of the common stock and Series A Preferred Stock, voting as a single group, with
each share of common stock being entitled to one (1) vote and each of the Series
A Preferred shares being entitled to one hundred (100) votes.
As a result, the OWOL Founders Voting Trust effectively has voting
control of the Company with respect to all matters submitted to the vote of the
stockholders. The concentration of voting control may also have the effect of
impeding a non-negotiated change in control which result may or may not benefit
stockholders. In addition, stockholders may be disadvantaged in the event
matters are put to the stockholders for approval and the interests of the
holder(s) of the Series A Preferred Stock are not similar to the interests of
the stockholders generally.
The following table sets forth the percentage of voting securities of
the Company now beneficially owned directly or indirectly by the OWOL Founders
Voting Trust and its beneficiaries. As of May 22, 2000, the Company had
15,775,000 voting securities outstanding, comprised of 15,475,000 shares of
common stock and 300,000 shares of Series A Preferred Stock. The combined common
and Series A Preferred shares outstanding as of May 22, 2000 allowed for a total
of 45,475,000 votes to be cast at a stockholders meeting.
<TABLE>
<CAPTION>
Percentage of Total Votes
Percentage Of Voting Securities Beneficial Owner is Entitled to
Name Of Beneficial Owner Beneficially Owned (1) Cast at Stockholders Meeting (1)
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<S> <C> <C>
OWOL Founders Voting Trust(2) 1.9% 66.0%
Kelly M. Thayer (3) 11.0% 3.8%
David N. Nemelka (4) 12.8% 4.4%
David R. Nemelka (5) 1.7% .6%
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</TABLE>
(1) Beneficial ownership is determined in accordance with SEC rules and
generally includes holding voting and investment power with respect to the
securities. Shares of common stock subject to options, warrants or other
convertible securities that are currently exercisable or convertible, or
exercisable or convertible within 60 days, are deemed outstanding for
computing the percentage of the total number of shares beneficially owned
by the designated person, but are not deemed outstanding for computing the
percentage for any other person.
(2) Comprised of 300,000 shares of Series A Preferred Stock.
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(3) Comprised of 1,731,167 shares of common stock. This total includes 214,500
shares of common stock that are owned by Mr. Thayer's wife, 16,667 shares
of common stock owned by an affiliate of Mr. Thayer that are issuable upon
conversion of an outstanding promissory note and 1,500,000 of 3,000,000
shares that are owned by D.K. Enterprises, LLC, a Utah limited liability
company ("DKE") which is owned one-half by Mr. Thayer and one-half by David
N. Nemelka. The 3,000,000 shares owned by DKE are subject to an agreement
whereby 750,000 shares shall be distributed to Mr. Thayer and 750,000
shares shall be distributed to David N. Nemelka on June 1, 2000, subject to
them remaining as either an officer or director of the Company, and the
balance of the shares to be distributed in like manner on June 1, 2001,
subject to the same condition. Does not include shares owned by OWOL
Founders Voting Trust that are reported separately in the table.
(4) Comprised of 2,020,333 shares of common stock. This total includes 500,000
shares that are owned by Mr. Nemelka's wife, 2,000 shares of common stock
that are held by an affiliate of Mr. Nemelka and 18,333 shares of common
stock owned by Mr. Nemelka and an affiliate of Mr. Nemelka that are
issuable upon conversion of an outstanding promissory note. Also includes
1,500,000 shares that are owned by DKE, as described in note 2 above. Does
not include shares of common stock owned by OWOL Founders Voting Trust that
are reported separately in the table. Does not include shares for which Mr.
Nemelka disclaims beneficial ownership that are held by Bateman Dynasty,
LC. The Bateman Dynasty, LC, is a private limited liability company owned
by the Bateman Dynasty Trust, of which Brenda M. Hall is the trustee. Lynn
Bateman, the father-in-law of David N. Nemelka, is the sole manager of the
Bateman Dynasty, LC that is deemed to have sole voting and dispositive
powers with respect the shares of common stock it holds. The children of
David N. Nemelka are the beneficiaries of the trust.
(5) Comprised of 267,500 shares of common stock that are owned by Mr. David R.
Nemelka's wife and children. Does not include shares owned by OWOL Founders
Voting Trust that are reported separately in the table. Does not include
1,500,000 shares of common stock held by the One World Online Charitable
Foundation; 1,525,000 shares of common stock owned by the One World Thru
Youth Foundation or 500,000 shares of common stock owned by the One World
Online University for which organizations Mr. Nemelka acts as a trustee,
but disclaims beneficial ownership.
The holders of the Series A Preferred Stock do not have preemptive
rights with respect to any shares of capital stock of the Company or any other
securities of the Company convertible into or carrying rights or options to
purchase any such shares. The Series A Preferred Stock is not be subject to any
sinking fund or other obligations of the Company to redeem or retire the Series
A Preferred Stock. No dividends will be paid or accrue on the Series A Preferred
Stock, unless declared by the Board of Directors.
The Series A Preferred Stock ranks, with respect to rights on
liquidation, on parity with the common stock and with all future series of
preferred stock established on or after the date hereof by the Board of
Directors which does not expressly provide that it ranks senior to or junior to
the Series A Preferred Stock as to rights on liquidations, winding-up and
dissolution. Neither the sale or transfer of all or substantially all the assets
of the Company, nor the merger or consolidation of the Company into or with any
other corporation or a merger of any other corporation with or into the Company,
will be deemed to be a liquidation, dissolution or winding up of the Company.
The Series A Preferred Stock is convertible into common stock at the
option of the holder in whole or in part at any time. The Series A Preferred
Stock is convertible into common stock at a conversion rate of one share of
Series A Preferred Stock for one share of common stock, subject to certain
adjustments.
If any transaction shall occur, including without limitations (i) any
recapitalization or reclassifications of shares of common stock (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination of the common stock),
(ii) any consolidation or merger of the Company with or into another entity or
any merger of another entity into the Company (other than a merger that does not
result in a reclassifications, conversion, exchange or cancellation of common
stock), (iii) any sale or transfer of all of the assets of the Company, or (iv)
any compulsory share exchange, pursuant to which any holders of common stock
shall be entitled to receive other securities, cash or other property, then
appropriate provisions shall be made so that the holder of each share of Series
A Preferred Stock then outstanding shall have the right thereafter to convert
such shares only into the kind and amount of the
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securities, cash or other property that would have been receivable upon such
recapitalization, reclassification, consolidation, merger, sale, transfer, or
share exchange by a holders of the number of shares of common stock issuable
upon conversion of such Series A Preferred Stock immediately prior to such
recapitalization, reclassification, consolidation, merger, sale, transfer or
share exchange.
The Registrant is not aware of any arrangements, the operation of which
may, at a subsequent date, result in a change in control of the Registrant.
Item 5. Other Events.
On or about May 22, 2000, the Company entered into employment
agreements with Mr. David N. Nemelka, the Company's President and CEO, and Mr.
Kelly M. Thayer, the Company's Chairman, (collectively, the "Senior
Executives"). In general terms these agreements provide that (i) the Senior
Executives are employed on an "at will" basis; (ii) the Senior Executives each
receive a salary of $144,000 per year; (iii) Mr. Nemelka receive a $144,000
signing bonus in cash or stock at his discretion; (iv) the Senior Executives are
each entitled to a quarterly bonus equal to (a) One and One-Half percent (1.5%)
of Shared Revenue as that term is defined in the Company's IMC Compensation
Plan, plus (b) Two Percent (2%) of all funds received by the Company as payment
for community account membership renewal fees which bonuses, if any, shall be
(y) reduced by the amount of the base salary to which the Senior Executive was
entitled during the quarterly period in question and (z) payable only to the
extent that during the quarterly period in question the Company has positive
cash flow from operating activities both before and after the payment of the
bonus; (v) the Senior Executives shall be included to the extent eligible
thereunder in any and all plans pursuant to which the Company may provide
general benefits for the Company's employees; (vi) the Senior Executives will be
reimbursed for all reasonable and necessary out-of-pocket expenses incurred by
the Senior Executive in the performance of his Company duties; (vii) the Senior
Executives receive severance pay in the event of termination that is not "for
cause," as set forth in the employment agreements (including payments for life
in the event of termination as a result of a disability); and (viii) that the
Senior Executives are subject to various provisions restricting use of
confidential information, vesting, ownership rights to certain proprietary
information in the Company, and restricting competition with to Company or
solicitation of Company customers or employees.
The Company has also entered into a Consulting Agreement with David R.
Nemelka that is substantially similar to the employment arrangements with the
Senior Executives, except that he did not receive a signing bonus on execution
of the consulting agreement. Mr. David R. Nemelka has represented to the Company
that it is his intention to assign the economic benefits of the consulting
agreement to one or more charitable organizations.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
a. Financial Statements of Businesses Acquired.
Not applicable.
b. Pro Forma Financial Information.
Not applicable.
c. Exhibits.
Number Description
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3(i) Certificate of Designation of Series A Convertible Preferred
Stock
10.1 Form of Subscription Agreement Used in Connection with Series
A Convertible Preferred Stock Sales
10.2 Co-Founder Executive Employment Agreement with David N.
Nemelka
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10.3 Co-Founder Executive Employment Agreement with Kelly M. Thayer
10.4 Co-Founder Consulting Agreement with David R. Nemelka
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ONE WORLD ONLINE.COM, INC.
Date: May 26, 2000 By /s/ David N. Nemelka
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David N. Nemelka
President, Chief Executive
Officer and Director
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