PRELIMINARY COPY
FOR INFORMATIONAL PURPOSES ONLY
GENISYS RESERVATION SYSTEMS, INC.
2401 MORRIS AVENUE
UNION, NEW JERSEY 07083
Notice of Annual Meeting of Stockholders
To our Stockholders:
The Annual Meeting of Stockholders of Genisys Reservation Systems,
Inc., a New Jersey corporation, will be held on Wednesday, December 17,1997, at
10:30 a.m. local time, at the offices of the Company at 2401 Morris Avenue, 3rd
Floor, Union, New Jersey, 07083, to consider and act upon the following matters.
A proxy card for your use in voting on these matters is also enclosed.
1. Electing six (6) directors for a term expiring in 1998 as
recommended by the Board of Directors.
2. Approval of the Company's 1997 Stock Incentive Plan dated May
12,1997.
3. Ratifying the appointment of independent auditors to examine
and report on the financial statements of the Corporation for
fiscal 1997, as recommended by the Board of Directors.
4. Transacting any other business that may properly come before
the meeting or any adjournment thereof.
Only Common stockholders of record at the close of business on
November 12,1997, are entitled to notice of and to vote at
the meeting.
Dated: November 12, 1997
By Order of the Board of Directors
John H. Wasko
Secretary
- --------------------------------------------------------------
Your Proxy is important no matter how many shares you own. Please mark your
vote, fill in the date, sign and mail it today in the accompanying
self-addressed envelope which requires no postage if mailed in the United
States.
<PAGE>
ANNUAL MEETING OF STOCKHOLDERS
OF
GENISYS RESERVATION SYSTEMS, INC.
December 17, 1997
-----------------
PROXY STATEMENT
-----------------
GENERAL INFORMATION
Proxy Solicitation
This Proxy Statement is furnished to the holders of Common Stock, $.0001 par
value per share ("Common Stock"), of Genisys Reservation Systems, Inc. and
Subsidiaries ("Company") in connection with the solicitation of proxies on
behalf of the Board of Directors of the Company for use at the Annual Meeting of
Stockholders ("Annual Meeting") to be held on December 17, 1997, or at any
continuation or adjournment thereof, pursuant to the accompanying Notice of
Annual Meeting of Stockholders. The purpose of the meeting and the matters to be
acted upon are set forth in the accompanying Notice of Annual Meeting of
Stockholders. The Board of Directors knows of no other business which will come
before the meeting.
Proxies for use at the meeting will be mailed to stockholders on or about
November 12 , 1997 and will be solicited chiefly by mail, but additional
solicitation may be made by telephone, telegram or other means of
telecommunications by directors, officers, consultants or regular employees of
the Company. The Company may enlist the assistance of brokerage houses,
fiduciaries, custodians and other like parties in soliciting proxies. All
solicitation expenses, including costs of preparing, assembling and mailing the
proxy material, will be borne by the Company.
Revocability and Voting of Proxy
A form of proxy for use at the meeting and a return envelope for the proxy are
enclosed. Stockholders may revoke the authority granted by their execution of
proxies at any time before their effective exercise by filing with the Secretary
of the Company a written revocation or duly executed proxy bearing a later date
or by voting in person at the meeting. Shares represented by executed and
unrevoked proxies will be voted in accordance with the choice or instructions
specified thereon. If no specifications are given, the proxies intend to vote
"FOR" each of the nominees for director as described in Proposal No. 1, "FOR"
the ratification of the stock option plan as described in Proposal No. 2 and
"FOR" the appointment of Auditors as described in Proposal No. 3. Proxies marked
as abstaining will be treated as present for purposes of determining a quorum
for
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The Annual Meeting, but will not be counted as voting in respect of any matter
as to which abstinence is indicated. If any other matters properly come before
the meeting or any continuation or adjournment thereof, the proxies intend to
vote in accordance with their best judgment.
Record Date and Voting Rights
Only stockholders of record at the close of business on November 12, 1997 are
entitled to notice of and to vote at the Annual Meeting or any continuation or
adjournment thereof. On that date there were 4,355,594 shares of the Company's
Common Stock outstanding. Each share of Common Stock is entitled to one vote per
share. Any share of Common Stock held of record on November 12, 1997 shall be
assumed, by the Board of Directors, to be owned beneficially by the record
holder thereof for the period shown on the Company's stockholder records. The
affirmative vote of a majority of the stockholders present in person or by proxy
at the meeting is required for the election of the directors to be elected and
to approve the 1997 Stock Incentive Plan. Directors and officers of the Company
holding approximately 46.6 % of the outstanding Common Stock of the Company
intend to vote "FOR" the slate of directors, "FOR" the adoption of the 1997
Stock Incentive Plan and "FOR" the appointment of Auditors.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The By-Laws of the Company provide for a Board of Directors of not less than
three (3) members. The Board of Directors currently consists of seven (7)
members. The Board of Directors has fixed the number of directors at six (6) in
accordance with the provisions of the Company's By-laws. At the meeting, six (6)
directors will be elected to serve until the 1998 Annual Meeting of Stockholders
and until their successors have been elected and qualified. Any vacancy or
vacancies which occur during the year may be filled by the Board of Directors,
and any directors so appointed must stand for reelection at the next annual
meeting of stockholders. .
All nominees have consented to be named and have indicated their intent to serve
if elected. The Company has no reason to believe that any of these nominees are
unavailable for election. However, if any of the nominees become unavailable for
any reason, the persons named as proxies may vote for the election of such
person or persons for such office as the Board of Directors of the Company may
recommend in the place of such nominee or nominees. It is intended that proxies,
unless marked to the contrary, will be voted in favor of the election of the
nominees.
.
The Board of Directors recommends that the stockholders vote "FOR" the election
of the following six nominees (Item No. 1 on the proxy card).
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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NOMINEES FOR ELECTION
Name Age Position
Lawrence Burk 56 President, Chief Executive Officer and Director
John H. Wasko 59 Chief Financial Officer,
Secretary, Treasurer
and Director
Mark A. Kenny 44 Director
David W. Sass 61 Director
S. Charles Tabak 65 Director
Warren D. Bagatelle 59 Chairman
</TABLE>
The Company's Audit and Compensation Committees consist of Messrs. Warren D.
Bagatelle, S. Charles Tabak and David W. Sass. All officers of the Company
devote their full time to the Company's business.
Lawrence E. Burk joined the Company on June 23, 1997, as President, Chief
Executive Officer, and Director following a 27 year career with Alexander &
Alexander Services. From 1993 to early 1996, Mr. Burk served as Chairman and CEO
of Alexander & Alexander, Inc., the U.S. Retail Subsidiary of A & A Services,
and from early 1996 until the company's acquisition by AON Corporation in late
1996, Mr. Burk served as President and Chief Operating Officer of A & A
International, the company's global retail operation. Mr. Burk served on the
company's Global Retail Board from 1985; on A & A Services Operations Board from
1989; and on A & A Inc.s' Executive Committee and Operations Board from 1989. A
& A was a NYSE listed Financial Services firm with revenues of over $1.3
billion. Mr. Burk has a B.A. degree in Economics from Southern Illinois
University and is a member of the schools' Advisory Board.
John H. Wasko has served the Company as a Director since April, 1986, as
Secretary since September 1995, and as Treasurer and Chief Financial Officer
since April 1996. Mr. Wasko has also served the Company as President and
Chairman of the Board since its inception to August 1995, and as Treasurer from
April 1986 to September 1987 and from May 1988 to August 1995. Mr. Wasko has
also served as Chairman of the Board, President and Director of JEC Lasers,
Inc., presently an inactive company, since it was organized in September 1977.
He was awarded a bachelor of science degree in physics in 1963 and a master of
science degree in physics (summa cum laude) in 1965 from Fairleigh Dickinson
University.
4
<PAGE>
Mark A. Kenny, currently an employee of the Company, served as the Company's
Executive Vice President from August 1995 to October 1996 and as a Director
since August 1995. He has also served as Executive Vice President of Corporate
Travel Link, Inc. the Company's wholly owned subsidiary ("Travel Link") from
inception, March 1994 to November 1996 and as a Director since inception. From
1974 to November 1996, he was a partner of Country Club Transportation Services,
a provider of limousine services, which he co-founded in 1974. Mr. Kenny is one
of the original members of the New Jersey Business Travel Association and
attended Seton Hall Preparatory School and Seton Hall University. He is also a
member of the Association of Corporate Travel Executives and a charter member of
the New Jersey Limousine Association.
David W. Sass has been a Director since April, 1997 and has been a practicing
attorney in New York City for the past 37 years and is currently a senior
partner in the law firm of McLaughlin & Stern, LLP, securities counsel to the
Company. Mr. Sass is also an officer of Ionic Fuel Technology, Inc., a company
engaged in the sale and distribution of emission control systems, a director of
The Harmat Organization, Inc., a New York based construction company and a
member and Vice Chairman of the Board of Trustees of Ithaca College. Mr. Sass
earned a B.A. from Ithaca College, a J.D. from Temple University School of Law
and an L.L.M. (in taxation) from New York University School of Law.
S. Charles Tabak has been a Director since April, 1997. Since 1991 he has been
the Chief Executive Officer of Arc Medical & Professional, Inc., an employment
agency specializing in placement of scientific, medical and office personnel.
From 1969 to 1990, he was the Executive Vice President and General Counsel for
Channel Home Centers Inc. From 1967 to 1969, he was the Director of Finance of
J.J. Newbury Co. Mr. Tabak is a past member of the Board of Directors of Channel
Home Centers, Inc. and Charge A Plate Group of Greater New York. He is a
graduate of both NYU School of Business and School of Law, and is admitted to
practice law in New York state and before the U.S. Supreme Court.
Warren D. Bagatelle has been a Director and Chairman of the Board of the Company
since August, 1995. He served as Chief Executive Officer of the Company from
December 1996 through June, 1997. Since 1988, he has been a Managing Director at
Loeb Partners Corporation, a New York City investment banking firm. Mr.
Bagatelle is also a director of Energy Research Corporation, a company engaged
in the development and commercialization of electrical storage and power
generation equipment, principally fuel cells and rechargeable storage batteries.
Mr. Bagatelle has a B.A. in economics from Union College and an M.B.A. from
Rutgers University.
During 1997 the Board of Directors held 10 meetings and acted one time on
unanimous written consent.
No directors received compensation for serving as directors during the fiscal
year ended December 31, 1996. It is anticipated that outside directors will
receive $1,000 for each board meeting attended in person and $250 for each
committee meeting attended in person, as compensation for serving in such
capacities during the fiscal year ending December 31, 1997.
5
<PAGE>
PROPOSAL NO. 2
ADOPTION OF THE STOCK OPTION PLAN
The Board of Directors propose the approval and ratification of the Company's
1997 Stock Incentive Plan ("Plan"). The Plan is attached as Exhibit A. The
purpose of the Plan is to further the long-term stability, continuing growth and
financial success of the Company by attracting and retaining key employees,
directors and selected advisors of the Company through the use of stock
incentives, while stimulating the efforts of these individuals upon whose
judgment and interest the Company is and will be largely dependent for the
successful conduct of its business. It is believed that it will strengthen their
desire to remain with the Company and will further the identification of those
persons' interests with those of the Company's stockholders.
The Plan provides that five-year options to purchase up to 500,000 shares of
Common Stock may be issued to the Company's employees and outside directors. All
present and future employees shall be eligible to receive Incentive Awards under
the Plan, and all present and future non-employee Directors shall be eligible to
receive Non-Statutory Options under the Plan. An eligible employee or
non-employee Director shall be notified in writing stating the number of shares
for which Options are granted, the Option price per share, and conditions
surrounding the grant and exercise of the Options.
The exercise price of shares of Company Stock covered by an Incentive Stock
Option shall be not less than 100% of the Fair Market Value of such shares on
the Date of Grant; provided that if an Incentive Stock Option is granted to an
Employee who, at the time of the grant, is a 10% Shareholder, then the exercise
price of the shares covered by the Incentive Stock Option shall be not less than
110 % of the Fair Market Value of such shares on the Date of Grant. The exercise
price of shares covered a Non-statutory Stock Option shall be not less than 85 %
of the Fair Market Value of such shares on the Date of Grant.
The Plan shall be administered by a Committee, which shall be appointed by the
Board, and which shall consist of a minimum of two Board members.
Subject to stockholder approval of the Plan, options have been granted under the
Plan to each of David W. Sass and S. Charles Tabak (10,000 shares at an exercise
price of $6.00 per share); Lawrence E. Burk (200,000 shares at an exercise price
of $6.00 per share), and other employees of the Company at prices ranging from
$6.00 to $8.625 per share.
The Board of Directors recommends that the stockholders vote "FOR"
adoption of the Plan (Item No. 2 on the proxy card).
<PAGE>
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Wiss & Company, LLP as independent
auditors to examine and report on the consolidated financial statements of the
Company for the year ending December 31, 1997, subject to stockholder approval.
During the year ending December 31, 1997, Wiss & Company, LLP provided
the Company with audit services, including examinations of and reporting on the
Company's consolidated financial statements, as well as those of its
subsidiaries. Audit services also included a review of filings with the
Securities and Exchange Commission and the Company's annual report on Form
10-KSB.
Ratification of the appointment of Wiss & Company, LLP as independent
auditors requires the affirmative vote of a majority of the votes cast at the
meeting by holders of the Corporation's Common Stock.
A representative of Wiss & Company, LLP will be present at the Annual
Meeting.
The Board of Directors recommends that the stockholders vote "FOR"
ratification of this appointment (Item No. 3 on the proxy card).
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following tabulation shows the security ownership as of November 12, 1997 of
(i) each person known to the Company to be the beneficial owner of more than 5%
of the Company's outstanding Common Stock, (not including Steven E. Pollan who
is the record owner of 293,216 shares. The Company issued notice of cancellation
of such shares, because of certain disputes it has with Mr. Pollan. See "Certain
Transactions," below ), (ii) each Director and Officer of the Company and (iii)
all Directors and Officers as a group. <TABLE> <CAPTION> <S> <C> <C> <C> <C> <C>
<C>
NUMBER OF PERCENT
NAME & ADDRESS SHARES OWNED OF CLASS
Loeb Holding Corporation
As Escrow Agent (1)
61 Broadway
New York, NY 10006 1,053,679 22.16%
<PAGE>
Warren D. Bagatelle (1)
Loeb Partners Corporation
61 Broadway
New York, NY 10006 1,053,679 22.16%
Joseph Cutrona
82 Kendall Drive
Parlin, New Jersey, 08859 377,350 8.66%
Mark A. Kenny
Genisys Reservation Systems
2401 Morris Avenue
Union, NJ 07083 574,175 13.18%
John H. Wasko (2)
Genisys Reservation Systems
2401 Morris Avenue
Union, NJ 07083 102,046 2.32%
Lawrence E. Burk (3)
Genisys Reservation Systems
2401 Morris Avenue
Union, NJ 07083 205,000 4.50%
S. Charles Tabak (4)
ARC Medical Professional Personnel
36 Route 10W, Suite D
East Hanover, NJ 07936 10,000 *
David W. Sass (4)
McLaughlin & Stern, LLP
260 Madison Ave. 18th Fl.
New York, NY 10016 15,000 *
All Officers and Directors
as a group (7 persons) 2,337,250 46.60%
- ---------------------
* less than 1%
</TABLE>
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<PAGE>
(1) Includes 653,679 shares of Common Stock purchased by Loeb Holding
Corporation, as escrow agent for Warren D. Bagatelle, Managing Director of Loeb
Partners Corp., HSB Capital (of which Warren Bagatelle is a partner), trusts for
the benefit of families of two principals of Loeb Holding Corporation and three
unaffiliated persons and 400,000 shares of Common Stock issuable upon conversion
of two Convertible Notes aggregating $37,500. Loeb Holding Corporation disclaims
any beneficial interest in these shares.
(2) Includes 14,362 shares of Common Stock owned of record by Joan E. Wasko,
John Wasko's wife, of which Mr. Wasko disclaims beneficial ownership, but of
which he may be deemed beneficial owner and a five (5) year option to purchase
35,000 shares of the Company's Common Stock at a price of $2.00 per share
granted to Mr. Wasko by the Company on November 1, 1996 and 5,333 shares of
Common Stock issuable upon conversion of Mr. Wasko's prorata share of a
Convertible Note in the principal amount of $12,500.
(3) Includes a five (5) year option to purchase an aggregate of 200,000 shares
of Common Stock at a price of $6.00 per share issued on September 23, 1997.
(4) Includes a five (5) year option to purchase 10,000 shares of Common Stock at
a price of $6.00 per share issued on September 23, 1997.
Messrs. Cutrona and Kenny may be deemed to be "parents" and "promoters" of the
Company, as those terms are defined in the rules and regulations of the
Securities Act of 1933, as amended.
EXECUTIVE COMPENSATION
No executive officer received aggregate compensation exceeding $100,000
in the fiscal year 1996.
CERTAIN TRANSACTIONS
In August 1994 Joseph Cutrona and Mark A. Kenny each received a total
of 666,433 shares of the Company's common stock for services to be provided to
the Company.
During February 1995, the Company issued 45,765 shares of its Common Stock in
repayment of certain liabilities totaling $251,702. Those liabilities include
notes payable to Saddle Brook Investors of $149,633, note payable plus accrued
interest to an Officer and Director of $34,273 and certain accounts payable of
$67,796.
In February 1995, Loeb Holding Corporation, as escrow agent ("Loeb"), for Warren
D. Bagatelle, HSB Capital, trusts for the benefit of families of two principals
of Loeb Holding Corporation and three unaffiliated individuals, agreed to loan
the Company $500,000 evidenced by
9
<PAGE>
series of Convertible Promissory Notes. In September, 1995, Loeb converted the
Convertible Promissory Notes into 841,455 common shares of the Company and two
Term Promissory Notes, one in the principal amount of $475,000 and the other in
the principal amount of $25,000. The principal amount of the $475,000 Term
Promissory Note is to be repaid in twelve equal quarterly payments commencing
two (2) years from the date of said note. Prepayments may be made at any time
without penalty. Interest is accrued at a rate of 9% per annum and interest
payments are to made quarterly at the end of each calendar quarter, or at such
earlier date that the Term Promissory Note becomes due and payable as a result
of acceleration, prepayment or as otherwise provided therein. Interest began to
run from the date that the monies were advanced to the Company. The Term
Promissory Note in the amount of $25,000 and an additional Note in the amount of
$12,500 issued in December 1995 and discussed below have been modified. Such
Notes provide for accrued interest at the rate of 9% per annum payable quarterly
commencing September 1997 and unless previously converted the principal amount
of each note is to be repaid in twelve equal quarterly installments, commencing
April 1, 1998, or on such earlier date as such notes provide. The notes are
convertible at the sole option of the holder into an aggregate of 400,000 common
shares of the Company. During March 1995, John H. Wasko, then President of the
Company, upon exercise of his own option, acquired 70,520 shares of the Common
Stock of the Company at an exercise price of $0.02145 per share. On March 3,
1995, the Company and JEC Lasers, Inc. ("JEC") signed a purchase agreement
whereby JEC acquired all of the assets, rights and properties relating to the
Company's CO2 laser research and development agreement with LCL, subject to
certain liabilities, in full consideration for the forgiveness of the
indebtedness of the Company to JEC in the amount of $345,593 owed as of February
28, 1995. On August 11, 1995, Robotic Lasers, Inc. acquired Travel Link by
issuing 1,682,924 shares of restricted new Common Stock of the Company in
exchange for the shares of the common stock of Travel Link owned by Joseph
Cutrona, Mark A. Kenny and Steven E. Pollan, which represented all the issued
and outstanding shares of common stock of Travel Link. In August 1995 the
Company granted Mr. Wasko a five (5) year option to purchase 25,000 shares of
Common Stock at a price of $0.60 per share, which option has been exercised. In
November, 1996 the Company granted Mr. Wasko a five (5) year option to purchase
35,000 shares of Common Stock at a price of $2.00 per share. On September 5,
1995 the Company entered into a three year consulting and investment banking
agreement with Loeb Partners Corporation. Under the terms of the agreement the
Company pays Loeb Partners Corporation $3,000 per month. Loeb Partners
Corporation will also receive a fee for arranging private financing and
acquisitions. Mr. Warren D. Bagatelle, a Director and Chairman of the Company,
is a Managing Director of Loeb Partners Corporation.
10
<PAGE>
During December 1995, Loeb agreed to loan the Company $250,000 evidenced by a
series of Convertible Promissory Notes ("Convertible Promissory Notes"). In
November 1996, Loeb converted the Convertible Promissory Notes into (i) two Term
Promissory Notes, one in the principal amount of $237,500 and the other in the
principal amount of $12,500 issued in December 1995 and discussed below and (ii)
420,728 shares of Common Stock of the Company, of which 420,000 shares of Common
Stock are owned by four unaffiliated parties. Loeb Holding Corporation did not
receive any shares of Common Stock in this transaction.
The principal amount of the $237,500 Term Promissory Note is to be repaid in
twelve equal quarterly payments commencing two (2) years from the date thereof.
Prepayments may be made at any time without penalty. Interest is accrued at a
rate of 9% per annum and interest payments are to be made quarterly at the end
of each calendar quarter, or at such earlier date that the Term Promissory Note
becomes due and payable as a result of acceleration, prepayment or as otherwise
provided therein. Interest began to run from the date that the monies were
advanced to the Company.
In August 1996, the Company gave notice to Mr. Pollan that it was canceling the
333,216 shares of Common Stock which had been issued to him in August of 1995.
It is the Company's position that the Common Stock should be canceled for, among
other reasons, Mr. Pollan failed to provide the services to the Company which
were to be the consideration for the issuance of the shares. Mr. Pollan has
commenced an action against the Company and others in the New Jersey Federal
Court which contests the Company's effort to cancel the shares issued to him,
and which seeks monetary damages and other relief. The action is in its
preliminary stages, and no assurance can be given as to its ultimate outcome.
During the quarters ended September 30, 1996 and December 31, 1996, in order to
raise additional working capital for the Company, Joseph Cutrona, former
President of the Company, sold a total of 37,600 shares of restricted Common
Stock of the Company owned by him to nineteen unaffiliated third parties at
prices ranging from $2.00 to $2.50 per share for total proceeds of $76,500 which
Mr. Cutrona remitted to the Company in the form of a capital contribution. In
February 1997 Mr. Cutrona sold an additional 7,850 shares of restricted Common
Stock to five unaffiliated third parties at a price of $2.00 per share for total
proceeds of $15,700, which Mr. Cutrona remitted to the Company in the form of an
additional capital contribution. Mr. Mark A. Kenny has issued 22,450 of his own
shares of restricted Common Stock to Mr. Cutrona as reimbursement for one-half
of the number of shares sold by Mr. Cutrona.
On October 10, 1996, the Company, Joseph Cutrona, Mark A. Kenny and Prosoft,
Inc. signed an agreement whereby Mr. Cutrona and Mr. Kenny each agreed to
transfer 14,533 shares of restricted Common Stock owned by them to Prosoft,
Inc., or its designees, upon completion of the design and satisfactory
development of the Genisys Payment System. Prosoft agreed to accept the 29,066
shares at a negotiated price of $3.75 per share in satisfaction of $108,997.50
which would be owed to Prosoft, Inc. by the Company upon completion of the
Genisys Payment System. This transfer has been completed. The Company has agreed
to issue an equal number of new shares of restricted Common Stock to Messrs.
Cutrona and Kenny in six equal installments if the Company meets certain
performance criteria on six specified dates.
11
<PAGE>
In October and November 1996, and February 1997 Joseph Cutrona, in recognition
of extensive valuable services rendered to the Company by three employees of the
Company, made gifts aggregating 35,000 shares of restricted Common Stock owned
by him to the three employees, including a gift of 20,000 shares of restricted
Common Stock to John H. Wasko. During November and December 1996, the Company
and Loeb Holding Corporation signed four eighteen (18) month Promissory Notes
whereby Loeb Holding Corporation loaned the Company the sums of $75,000,
$30,000, $10,000 and $95,000 (totaling $210,00). The Promissory Notes which bear
interest at 10%, mature on May 11, 1998, May 25, 1998, June 2, 1998 and June 9,
1998. The Company believes that each of these transactions was entered into on
terms at least as favorable to the Company as could have been obtained from
unaffiliated third parties. The transactions described above involve actual or
potential conflicts of interest between the Company and its officers or
directors. In order to reduce the potential for conflicts of interest between
the Company and its officers and directors, prior to entering into any
transaction in which a potential material conflict of interest might exist, the
Company's policy has been and will continue to be, that the Company does not
enter into transactions with officers, directors or other affiliates unless the
terms of the transaction are at least as favorable to the Company as those which
would have been obtainable from an unaffiliated source. As of the date hereof,
the Company has no plans to enter into any additional transactions which involve
actual or potential conflicts of interest between the Company and its officers
or directors. Should the Company enter into any such transaction in the future,
it will not do so without first obtaining at least one fairness opinion from,
depending on the nature of the transaction, either its own independent directors
or from an independent investment banking firm.
OTHER BUSINESS TO BE TRANSACTED
As of the date of this Proxy Statement, the Board of Directors knows of no other
business to be presented for action at the Annual Meeting of Stockholders. As
for any business that may properly come before the Annual Meeting or any
continuation or adjournment thereof, the Proxies confer discretionary authority
to the person named therein. These persons will vote or act in accordance with
their best judgment with respect thereto.
ANNUAL REPORT TO STOCKHOLDERS
The Annual Report on Form 10-KSB for the year ended December 31, 1996,
is being mailed to Stockholders with this Proxy Statement.
12
<PAGE>
STOCKHOLDER PROPOSAL - 1998 ANNUAL MEETING
Any stockholder proposals to be considered by the Company for inclusion in the
proxy material for the 1998 Annual Meeting of Stockholders must be received by
the Company at its principal executive offices by April 30, 1998.
The prompt return of your proxy is appreciated and will be helpful in obtaining
the necessary vote. Therefore, whether or not you expect to attend the meeting,
please sign the proxy and return it in the enclosed envelope.
BY ORDER OF
THE BOARD OF DIRECTORS
JOHN H. WASKO, Secretary
New York, New York
November 12, 1997
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<PAGE>
EXHIBIT A
GENISYS RESERVATION SYSTEMS, INC,
1997 STOCK INCENTIVE PLAN
Effective as of May 12, 1997
<PAGE>
Table of Contents
Page
Purpose................................................................3
Definitions............................................................3
General................................................................5
Stock..................................................................5
Eligibility............................................................5
Stock Options for Employees. . . . . . . . . . . . . . . .. . . . . . .6
Method of Exercise of Options. . . . . . . . . . . . . . . . . . . . . 7
Nontransferability of Incentive Awards.................................8
Effective Date of the Plan.............................................8
Termination, Modification, Change......................................8
Change in Capital Structure............................................9
Administration of the Plan.............................................9
Notice.................................................................10
Interpretation.........................................................11
2
<PAGE>
GENISYS RESERVATION SYSTEMS, INC,
1997 STOCK INCENTIVE PLAN
1. Purpose. The purpose of the Genisys Reservation Systems, Inc. 1997
Stock Incentive Plan (the "Plan") is to further the long-term stability,
continuing growth and financial success of Genisys Reservation Systems, Inc.
(the "Company") by attracting and retaining key employees, directors and
selected advisors of the Company through the use of stock incentives. It is
believed that ownership of Company Stock will. stimulate the efforts of those
employees, directors and selected advisors upon whose judgment and interest the
Company is and will be largely dependent for the successful conduct of its
business. It is also believed that Incentive Awards granted to eligible persons
under this Plan will strengthen their desire to remain with the Company and will
further the identification of those persons' interests with those of the
Company's shareholders.
2. Definitions. As used in the Plan, the following terms have the
meanings indicated:
(a) "Act" means the Securities Exchange Act of 1934, as
amended.
(b) "Applicable Withholding Taxes" means the aggregate amounts of
federal, state and local income and payroll taxes that the Company is required
to withhold .
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the committee appointed by the Board as described
under Section 15.
(f) "Company" means Genisys Reservation Systems, Inc., a New
Jersey corporation.
(g) "Company Stock" means shares of voting common stock of the Company
subject to adjustment as provided in Section 14.
(h) "Date of Grant" means the date on which an Incentive Award is
granted by the Committee.
(i) "Disability" or "Disabled" means, as to an Incentive Stock
Option, a
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Disability within the meaning of Code section 22(e)(3). As to all other forms of
Incentive Awards, the Committee shall determine whether a Disability exists and
such determination shall be conclusive.
(j) "Employee" means an employee of the Company, or of any
Parent or Subsidiary of the Company.
(k) "Fair Market Value" means, as of a relevant date, (i) if the
Company Stock is traded on an exchange, the closing price of the Company Stock
on such day on the exchange on which it generally has the greatest trading
volume, (ii) if the Company Stock is traded on the over-the-counter market, the
average between the closing bid and asked prices on such day as reported by
NASDAQ, or (iii) if sales prices or bid and asked prices are not available for
such day, the fair market value shall be determined by the Committee using any
reasonable method in good faith.
(l) "Incentive Award" means the award of an Option under the Plan.
(m) "Incentive Stock Option" means an Option intended to meet the
requirements of, and qualify for favorable federal income tax treatment under,
Code section 422.
(n) "Insider" means a person subject to section 16 of the Act.
(o) "Non-Employee Director" means a member of the Board who is
not an Employee.
(p) "Nonstatatory Stock Option" means an Option that does not meet the
requirements of Code section 422 or, evan if meeting the requirements of Code
section 422, is not intended to be an Incentive Stock Option and is so
designated.
(q) "Option" means a right to purchase Company Stock granted under the
Plan, at a price determined in accordance with the Plan.
(r) "Parent" means, with respect to any corporation, a parent of that
corporation within the meaning of Code section 424(e).
(s) "Participant" means any Employee or Non-Employee Director who
receives an Incentive Award under the Plan.
(t) "Rule 16b-3" means Rule 16b-3 adopted pursuant to section 16(b) of
the Act. A reference in the Plan to Rule 16b-3 shall include a reference to any
corresponding rule (or number
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redesignation) of any amendments to Rule 16b-3 adopted after the effective date
of the Plan's adoption.
(u) "Subsidiary" means, with respect to any corporation, a
subsidiary of that corporation within the meaning of Code section 424(f).
(v) "10% Shareholder" means a person who owns, directly or
indirectly, stock possessing more than 10 % of the total combined voting power
of all classes of stock of the Company or any Parent or Subsidiary of the
Company. Indirect ownership of stock shall be determined in accordance with Code
section 424(d).
3. General. Incentive Awards may be granted under the Plan in the form
of Options. The provisions of the Plan referring to Insiders or Rule 16b-3 shall
apply only to Participants who are subject to section 16 of the Act.
4. Stock. Subject to Section 14 of the Plan, there shall be reserved
for Issuance under the Plan an aggregate of 500,000 shares of Company Stock,
which shall be authorized but unissued shares. Shares that have not been issued
under this Plan and that are allocable to Incentive Awards or portions thereof
that expire or otherwise terminate unexercised may again be subjected to an
Incentive Award under this Plan.
5. Eligibility.
(a) All present and future Employees shall be eligible to
receive Incentive Awards under the Plan. The Committee shall have the power and
complete discretion, as provided in Section 12, to select which Employees shall
receive Incentive Awards and to determine for each such Participant the terms,
conditions and nature of the award, and the number of shares to be allocated to
each Participant as part of each Incentive Award.
(b) All present and future Non-Employee Directors shall be
eligible to receive Non-Statutory Options under the Plan. Non-Employee Directors
shall not be entitled to receive any other form of Incentive Award under the
Plan.
(c) The grant of an Incentive Award shall not obligate the
Company or any Parent or Subsidiary of the Company to pay a Participant any
particular amount of remuneration, to continue the employment or other service
relationship of the Participant after the grant, or to make further grants to
the Participant at any time thereafter.
<PAGE>
6. Stock Options for Employees .
(a) Whenever the Committee deems it appropriate to grant Options,
notice shall be given to the eligible Employee or Non Employee Director stating
the number of shares for which Options are granted, the Option price per share,
whether the Options are Incentive Stock Options or Nonstatutory Stock Options
and the conditions to which the grant and exercise of the Options are subject.
This notice, when duly accepted in writing by the Participant, shall become a
stock option agreement between the Company and the Participant.
(b) Incentive Stock Options may only be awarded to Employees of the
Company. The exercise price of shares of Company Stock covered by an Incentive
Stock Option shall be not less than 100% of the Fair Market Value of such shares
on the Date of Grant; provided that if an Incentive Stock Option is granted to
an Employee who, at the time of the grant, is a 10% Shareholder, then the
exercise price of the shares covered by the Incentive Stock Option shall be not
less than 110 % of the Fair Market Value of such shares on the Date of Grant.
c) The exercise price of shares of Company Stock covered by a
Nonstatutory Stock Option shall be not less than 85 % of the Fair Market Value
of such shares on the Date of Grant. Notwithstanding the foregoing, Nonstatutory
Stock Options shall not be less than 100% of the Fair Market Value of such
shares on the Date of Grant if the Committee intends for such Options to qualify
under Code section 162(m).
(d) Options may be exercised in whole or in part at such times as may
be specified by the Committee in the Participant's stock option agreement;
provided that the exercise provisions for Incentive Stock Options shall in all
events not be more liberal than the following provisions:
(i) No Incentive Stock Option may be exercised after
the first to occur of:
(x) Five years from the Date of Grant,
(y) Three months following the date of
the Participant's termination of employment with the Company and any Parent or
Subsidiary of the Company for reasons other than death or Disability; or
(z) One year following the date of the Participant's
termination of employment by reason of death or Disability.
(ii) Except as otherwise provided in this paragraph, no
Incentive Stock Option may be exercised unless the Participant is employed by
the Company or a Parent or Subsidiary of the Company at the time of the exercise
and has been so employed at all times since the Date of Grant. If a
Participant's employment is terminated other than by reason of death or
Disability at a time when the Participant holds an Incentive Stock Option that
is exercisable (in whole or in part), the Participant may exercise any or all of
the exercisable portion of the Incentive Stock Option (to the extent exercisable
on the date of such termination) within three months after the Participant's
termination of employment. If a Participant's employment is terminated by reason
of his Disability
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<PAGE>
at a time when the Participant holds an Incentive Stock Option that is
exercisable (in whole or in part), the Participant may exercise any or all of
the exercisable portion of the Incentive Stock Option (to the extent exercisable
on the date of Disability) within one year after the Participant's termination
of employment. If a Participant's employment is terminated by reason of his
death at a time when the Participant holds an Incentive Stock Option that is
Exercisable (in whole or in part), the Incentive Stock Option may be exercised
(to the extent exercisable on the date of death) within one year after the
Participant's death by the person to whom the Participant's rights under the
Incentive Stock Option shall have passed by will or by the laws of descent and
distribution.
(iii) An Incentive Stock Option, by its terms, shall be
exercisable in any calendar year only to the extent that the aggregate Fair
Market Value (determined at the Date of Grant) of the Company Stock with respect
to which Incentive Stock Options are exercisable by the Participant for the
first time during the calendar year does not exceed $100,000 (the "Limitation
Amount"). The foregoing Limitation Amount shall be adjusted to the extent
required by any amendment to or modification of Code section 422. Incentive
Stock Options granted after December 31, 1986 under the Plan and all other plans
of the Company and any Parent or Subsidiary of the Company shall be aggregated
for purposes of determining whether the Limitation Amount has been exceeded. The
Committee may impose such conditions as it deems appropriate on an Incentive
Stock Option to ensure that the foregoing requirement is met. If Incentive Stock
Options exercisable by the Participant for the first time during any calendar
year exceed the Limitation Amount, the excess Options will be treated as
Nonstatutory Stock Options to the extent permitted by law.
(e) The Committee may, in its discretion, provide that an Option
granted to an Insider will not be exercisable by the Insider within the first
six months after it is granted.
(f) The Committee may, in its discretion, grant Options that by their
terms become fully exercisable upon a Change of Control notwithstanding other
conditions or, exercisability in the stock option agreement, and, in such event,
paragraph (e) shall not apply.
7. Method of Exercise of Options .
(a) Options may be exercised by the Participant giving written notice
of the exercise to the Company stating the number of shares the Participant has
elected to purchase under the Option . ln the case of a purchase of shares under
an Option, such notice shall be effective only if accompanied by the exercise
price in full paid in cash; provided that, if the terms of an Option so permit,
the Participant may (i) deliver shares of Company Stock (valued at their Fair
Market Value on the date of exercise) in satisfaction of all or any part of the
exercise price, (ii) deliver a properly executed exercise notice together with
irrevocable instructions to a broker to deliver promptly to the Company, from
the sale proceeds with respect to the sale of Company Stock , the amount
necessary to pay the exercise price and, if required by the Committee,
Applicable Withholding, Taxes.
7
<PAGE>
(b) The Company may place on any certificate representing Company
Stock issued upon the exercise of an Option any legend deemed desirable by the
Company's counsel to comply with federal or state securities laws, and the
Company may require of the Participant a customary written indication of his
investment intent. Until the Participant has made any required payment,
including any Applicable Withholding Taxes, and has had issued to him a
certificate for the shares of Company Stock acquired, he shall possess no
shareholder rights with respect to the shares.
(c) As an alternative to making a cash payment to the Company to
satisfy Applicable Withholding Taxes, the Committee may establish procedures
permitting the Participant to elect to (a) deliver shares of already owned
Company Stock or (b) have the Company retain that number of shares of Company
Stock that would satisfy all or a specified portion of the Applicable
Withholding Taxes of the Participant arising in the year the Incentive Award
becomes subject to tax. Any such election shall be made only in accordance with
procedures established by the Committee. The Committee has the express authority
to change any election procedure it establishes at any time.
(d) Notwithstanding anything herein to the contrary, if the Company
is subject to section 16 of the Act, Options shall always be granted and
exercised in such a manner as necessary to conform to the provisions of Rule
16b-3.
8. Nontransferability of Incentive Awards. Incentive Awards shall not
be transferrable unless so provided in the award agreement or an amendment to
the award agreement.
9. Effective Date of the Plan. This Plan shall be effective as of May
12, 1997 and shall be submitted to the shareholders of the Company for approval.
No Option shall be exercisable and no Company Stock shall be issued under the
Plan until (i) the Plan has been approved by the Company's shareholders, (ii)
shares issuable under the Plan have been registered with the Securities and
Exchange Commission or an appropriate exemption from the registration
requirement is available, and (iii) the requirements of any applicable state
securities laws have been met.
10. Termination, Modification, Change. If not sooner terminated by
the Board, this Plan shall terminate at the close of business on May 11,2007. No
Incentive Awards shall be granted under the Plan after its termination. The
Board may terminate the Plan or may amend the Plan in such respects as it shall
deem advisable. The Board may unilaterally amend the Plan and Incentive Awards
as it deems appropriate to ensure compliance with Rule 16b-3 and to cause
Incentive Awards to meet the requirements of the Code, including Code section
422, and regulations thereunder. Except as provided, in the preceding sentence,
a termination or amendment of the Plan shall not, without the consent of the
Participant, adversely affect a Participant's rights under an Incentive Award
previously granted to him.
<PAGE>
11. Change in Capital Structure.
(a) The number of shares reserved for issuance under the Plan,
the terms of Incentive Awards, and all computations under the Plan shall be
appropriately adjusted by the Committee should the Company effect one or more
stock dividends, stock splits, subdivisions or consolidations of shares, or
other similar changes in capitalization, or if the par value of Company Stock is
altered. If the adjustment would produce fractional shares with respect to any
unexercised Option, the Committee may adjust appropriately the number of shares
covered by the Option so as to eliminate the fractional shares.
(b) If the Company is a party to a consolidation or merger in
which the Company is not the surviving corporation, a transaction that results
in the acquisition of substantially all of the Company's outstanding stock by a
single person or entity, or a sale or transfer of substantially all of the
Company's assets, the Committee may take such actions with respect to
outstanding Incentive Awards as the Committee deems appropriate.
(c) Any determination made or action taken under this Section
11 by the Committee shall be final and conclusive and may be made or taken
without the consent of any Participant
.
12. Administration of the Plan. The Plan shall be administered by a
Committee, which shall be appointed by the Board, and which shall consist of not
less than two such members of the Board. Each member of the Committee shall
qualify as a "non-employee director" for purposes of Rule 16b-3 and as an
"outside director" for purposes of Code section 162(m) and the regulations
thereunder. The Committee shall have general authority to construe and interpret
the terms of the Plan and the respective award agreements under the Plan, to
impose any limitation or condition upon an Incentive Award that the Committee
deems appropriate to achieve the objectives of the Incentive Award and the Plan.
The determination of the Committee with respect to any matter under the Plan to
be acted upon by the Committee shall be conclusive and binding. Without
limitation and in addition to powers set forth elsewhere in the Plan, the
Committee shall have the following specific authority:
(a) The Committee shall have the power and complete discretion
to determine (i) which eligible Employees shall receive an Incentive Award and
the nature of the Incentive Award, (ii) the number of shares of Company Stock to
be covered by each Incentive Award, (iii) whether Options shall be Incentive
Stock Options or Nonstatutory Stock Options, (iv) the Fair Market Value of
Company Stock, (v) the time or times when an Incentive Award shall be granted,
(vi) whether an Incentive Award shall become vested over a period of time and
when it shall be fully vested, (vii) when Options may be exercised, (viii)
whether a Disability exists, (ix) the manner in which payment will be made upon
the exercise of Options , (x) conditions relating to the length of time before
disposition of Company Stock received upon the exercise of Options is permitted,
(xi) procedures for the withholding or delivery of Company Stock to satisfy
Applicable Withholding Taxes, (xii) notice provisions relating to the sale of
Company Stock acquired under the Plan, and (xiii) any additional requirements
relating to Incentive Awards that the Committee deems appropriate. The Committee
shall have the power to amend the terms of previously
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<PAGE>
granted Incentive Awards so long as the terms as amended are consistent with the
terms of the Plan and provided that the consent of the Participant is obtained
with respect to any amendment that would be detrimental to the Participant,
except that such consent will not be required if such amendment is for the
purpose of complying with Rule 16b-3 or any requirement of the Code applicable
to the Incentive Award.
(b) The Committee may adopt rules and regulations for carrying
out the Plan. The interpretation and construction of any rules or regulations
adopted by the Committee shall be final and conclusive. The Committee may
consult with counsel, who may be counsel to the Company, and shall not incur any
liability for any action taken in good faith in reliance upon the advice of
counsel.
(c) The Committee may delegate to the officers or employees of
the Company and deliver such instruments and documents, to do all such acts and
things, and to take all such other steps deemed necessary, advisable or
convenient for the effective administration of the Plan in accordance with its
terms and purpose, except that the Committee may not delegate any discretionary
authority with respect to substantive decisions or functions regarding the Plan,
nor as to Incentive Awards thereunder as those relate to Insiders, including but
not limited to decisions regarding the timing, eligibility, pricing, amount or
other material term of such Awards.
(d) A majority of the members of the Committee shall
constitute a quorum, and all actions of the Committee shall be taken by a
majority of the members present Any action may be taken by a written instrument
signed by all of the members, and any action so taken shall be fully effective
as if it had been taken at a meeting (e) The Board from time to time may appoint
members previously appointed and may fill vacancies, however caused, in the
Committee.
Notwithstanding this Section 12 or any other provision of the
Plan to the contrary, any action required or permitted to be performed by the
Committee may be performed by the entire Board to the extent necessary or
appropriate to satisfy Rule 16b-3, as determined in the discretion of the Board.
13. Notice. All notices and other communications required or permitted
to be given under this Plan shall be in writing and shall be deemed to have been
duly given if delivered personally or mailed first class, postage prepaid, as
follows:
(a) if to the Company - at its principal business
address to the attention of the Secretary;
(b) if to any Participant - at the last address of the
Participant known to the sender at the time the notice or other communication is
sent.
14. Interpretation. The terms of this Plan are subject to all present
and future regulations and rulings of the Secretary of the Treasury or his
delegate relating to the qualification
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<PAGE>
of Incentive Stock Options under the Code. If any provision of the Plan
conflicts with any such regulation or ruling, then that provision of the Plan
shall be void and of no effect. As to all Incentive Stock Options and all
Nonstatutory Stock Options with an exercise price of at least 100% of Fair
Market Value of the Company Stock on the Date of Grant, this Plan shall be
interpreted for such Options to be excluded from applicable employee
remuneration for purposes of Code section 162(m).
IN WITNESS WHEREOF, the Company has caused the Plan to be executed
this 12th day of May, 1997.
GENISYS RESERVATION SYSTEMS, INC.
By:
<PAGE>
GENISYS RESERVATION SYSTEMS, INC.
P R O X Y
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Lawrence E. Burk and Warren D. Bagatelle as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of the common
stock of Genisys Reservations Systems, Inc. held of record by the undersigned on
November 12, 1997, at the Annual Meeting of Stockholders to be held on December
17, 1997, or any adjournment thereof.
1. ELECTION OF DIRECTORS
For all nominees listed below Withhold Authority to
(Except as Marked to the Vote All Nominees Listed
Contrary) ___ Below
Lawrence E. Burk, John H. Wasko, Mark A. Kenny, David W. Sass, S. Charles Tabak,
and Warren D. Bagatelle.
2. RATIFICATION OF STOCK OPTION PLAN
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. In their discretion, the proxies are authorized to vote 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 STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" PROPOSALS 1, 2 AND 3.
Please sign name exactly as appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as 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.
Dated: , 1997
Signature
Signature, if held jointly
<PAGE>
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY USING THE ENCLOSED
ENVELOPE
If you have had a change of address, please print or type your new address(s) on
the line below.
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