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 (the "Corporation" or "Company"), will be held on
Wednesday, December 9, 1998, at 11:00 a.m. local time, at the offices of the
Corporation 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 eight (8) directors as recommended by the Board of
Directors.
2. Ratifying the appointment of independent auditors to examine
and report on the financial statements of the Corporation
for fiscal 1998, as recommended by the Board of Directors.
3. Approval of the issuance of 1,100,000 shares of Common Stock
and two Warrants, each in the amount of 800,000 shares to
United Internet Technologies, Inc. (formerly known as United
Leisure Interactive, Inc., as recommended by the Board of
Directors.
4. Approval of an amendment to the Corporation's Certificate of
Incorporation to change the name of the Corporation to
NetCruise Travel, Inc. and to restate the provisions of the
Corporation's authorized Preferred Stock to correct certain
inconsistencies, as recommended by the Board of Directors.
5. Transacting any other business that may properly come before
the meeting or any adjournment thereof.
All stockholders of record at the close of business on October 30,
1998, are entitled to notice of and to vote at the meeting.
Dated: October 30, 1998
By Order of the Board of Directors
John H. Wasko
Secretary
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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.
1
<PAGE>
ANNUAL MEETING OF STOCKHOLDERS
OF
GENISYS RESERVATION SYSTEMS, INC.
December 9, 1998
-----------------
PROXY STATEMENT
-----------------
GENERAL INFORMATION
Proxy Solicitation
This Proxy Statement is furnished to the holders of Common
Stock, $.0001 par value per share ("Common Stock") and Series A Preferred Stock
("Series A Preferred 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 9, 1998, 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 4, 1998 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 appointment of Auditors as described in
Proposal No. 2, "FOR" the approval of the issuance of 1,100,000 shares of Common
Stock and two Warrants, each to purchase 800,000 shares of common stock of the
<PAGE>
Company to United Internet Technologies, Inc. formally known as United Leisure
Interactive, Inc. ("UIT") as described in Proposal No. 3 and "FOR" the approval
of an amendment to the Company's Certificate of Incorporation to change the name
of the Company to NetCruise Travel, Inc. and to amend and restate the provisions
of the Company's authorized Preferred Stock to correct certain inconsistencies
as described in Proposal No. 4. Proxies marked as abstaining will be treated as
present for purposes of determining a quorum for 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
October 30, 1998 are entitled to notice of and to vote at the Annual Meeting or
any continuation or adjournment thereof. On that date there were 5,655,594
shares of the Company's Common Stock and 381,177 shares of the Company's Series
A Preferred Stock outstanding. Each share of Common and Series A Preferred Stock
is entitled to one vote per share. Any share of Common or Series A Preferred
Stock held of record on October 30, 1998 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 ratify the appointment of Auditors, to approve
the issuance of 1,100,000 shares of Common Stock and two Warrants, each to
purchase 800,000 shares of the Company's common stock to UIT and to approve an
amendment to the Company's Articles of Incorporation to change the name of the
Company to NetCruise Travel, Inc. and to restate the provisions of the Company's
authorized Preferred Stock to correct certain inconsistencies. Directors and
officers of the Company and certain other Shareholders holding approximately
22.4% of the outstanding Common Stock and all of the Series A Preferred Stock of
the Company intend to vote "FOR" the slate of directors, "FOR" the ratification
of the appointment of Auditors, and "FOR" the approval of the issuance of
1,100,000 shares of Common Stock and two Warrants, each to purchase 800,000
shares of the Company's common stock to UIT and "FOR" the approval of an
amendment to the Company's Articles of Incorporation to change the name of the
Company to NetCruise Travel, Inc. and to restate the provisions of the Company's
authorized Preferred Stock to correct certain inconsistencies.
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
six (6) members. The Board of Directors has fixed the number of directors at
eight (8) in accordance with the provisions of the Company's Bylaws. At the 1998
Annual Meeting, eight (8) directors will be elected to serve until the 1999
Annual Meeting of Stockholders and until their successors have been elected and
qualified. Any vacancy or
<PAGE>
vacancies which occur during the year may be filled by the Board of Directors,
and any directors so appointed must stand for election 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.
Election of the directors requires the affirmative vote of a majority
of the votes cast at the meeting by holders of the Company's Common and Series A
Preferred Stock.
The Board of Directors recommends that the stockholders vote "FOR" the
election of the following eight nominees (Item No. 1 on the proxy card).
NOMINEES FOR ELECTION
Name Age Position
Lawrence E. Burk 57 President, Chief Executive Officer
and Director
John H. Wasko 60 Chief Financial Officer,
Secretary, Treasurer and Director
Mark A. Kenny 45 Director
David W. Sass 62 Director
S. Charles Tabak 66 Director
Warren D. Bagatelle 60 Chairman
Harry Shuster 63 Director
Brian Shuster 40 Director
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.
<PAGE>
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.
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 38 years and is currently a
senior partner in the law firm of McLaughlin & Stern, LLP, securities counsel to
the Company. Mr. Sass is also a director of Pallet Management Systems, Inc., a
company engaged in the manufacture and repair of wooden pallets and other
packaging services and 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
<PAGE>
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.
Harry Shuster is currently Chairman of the Board of NetCruise
Interactive, Inc., ("NetCruise"), a wholly owned subsidiary of the Company. Mr.
Shuster served as Chairman of the Board, President and Chief Executive Officer
of United Leisure Corporation ("ULC"), a public company, since April, 1975. Mr.
Shuster is also the Chairman of he Board, President and Chief Executive Officer
of Grand Havana Enterprise, Inc., a publicly traded company primarily engaged in
the business of ownership and operation of private membership restaurants and
cigar clubs. Mr. Shuster is also the Chairman of the Board of United Film
Distributors, Inc., a privately held independent motion picture production
corporation and the General Partner of HEP II, Inc., a limited partnership
engaged in the motion picture production business. Mr. Shuster is the father of
Mr. Brian Shuster.
Brian Shuster is currently President of NetCruise. He has served as
Chief Executive Officer, President and a director of United Film Distributors,
Inc. since its inception in May, 1995. Since he has been with the United Film
Distributors, Inc. he has served as the producer of seven films. Prior to
joining United Film Distributors, Inc., he served as President of Beverly Hills
Producers Group, a private production company, where he produced one motion
picture, served as executive producer of another motion picture, and oversaw
production of three other films. From 1990 until 1993 Mr. Shuster served as Vice
President of Worldwide Entertainment Group, where he also produced three motion
pictures. He is also currently a director of ULC and President of UIT and
NetCruise, Inc. Mr. Shuster is the son of Mr. Harry Shuster.
Messrs. Harry Shuster and Brian Shuster are currently directors of UIT. The
Company recently acquired certain assets and a technology license from UIT,
which is a wholly owned subsidiary of ULC, as more fully described in Proposal
No. 3. Messrs. Harry Shuster and Brian Shuster were elected as directors of the
Company following this transaction pursuant to the acquisition agreement and
will so serve for three (3) years, if so elected. In connection with this
transaction, Mr. Brian Shuster received two warrants, each entitling him to
purchase 200,000 shares of the Common Stock of the Company. One warrant is
exercisable for 200,000 shares at $2.50 per share and may be exercised between
April 1, 2002 and June 30, 2002, but only if NetCruise achieves profits equal to
or exceeding $5,000,000 for the years 1999, 2000 and 2001. The other Warrant is
exercisable for 200,000 shares at $6.00 per share and may be exercised between
April 1, 2002 and June 30, 2002.
<PAGE>
but only if NetCruise achieves profits equal to or exceeding $10,000,000 for the
years 1999, 2000 and 2001.
During 1998 the Board of Directors held four meetings and acted one
time by unanimous written consent.
Outside directors 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, 1998.
PROPOSAL NO. 2
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, 1998, subject to stockholder
ratification.
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 Company's Common and Series A Preferred 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. 2 on the proxy card).
PROPOSAL NO. 3
APPROVAL OF ISSUANCE OF COMMON STOCK AND WARRANTS TO UNITED
INTERNET TECHNOLOGIES, INC.
On June 30, 1998 NetCruise acquired assets and a technology license
from UIT in consideration of 2,000,000 shares of the Company's Common Stock and
two warrants ("Warrants"), each entitling the holder to purchase 800,000 shares
of the Common Stock of the Company. One warrant is exercisable for 800,000
shares at $2.50 per share and may be exercised
<PAGE>
between April 1, 2002 and June 30, 2002, but only if NetCruise achieves profits
equal to or exceeding $5,000,000 for the years 1999, 2000 and 2001. The other
Warrant is exercisable for 800,000 shares at $6.00 per share and may be
exercised between April 1, 2002 and June 30, 2002, but only if NetCruise
achieves profits equal to or exceeding $10,000,000 for the years 1999, 2000 and
2001. The Company has been advised that the issuance of such securities has
caused the Company to inadvertently be in violation of a Nasdaq MarketPlace Rule
because the issuance of the shares and Warrants amounted to more than 20% of the
issued and outstanding shares of the Company and were not approved by
Shareholders as required by such Rule. Nasdaq has advised the Company that the
Company's Common Stock will be delisted unless the Company obtains Shareholder
approval for these issuance to the extent that they violate the Rule. The
Company and UIT have restructured the transaction by UIT returning to the
Company 1,100,000 shares of Common Stock (retaining 900,000 shares) and the
Warrants. The Company will issue to UIT 1,100,000 shares of Convertible Series B
Preferred Stock (the "Series B Preferred Stock"), which Series B Preferred Stock
is automatically convertible into 1,100,000 shares of the Company's Common Stock
upon Shareholder approval of the issuance of the 1,100,000 shares of Common
Stock and the Warrants. The Series B Preferred Stock carries a mandatory
dividend of $275,000, payable on September 30, 1999 and a mandatory quarterly
dividend at the rate of $68,750 commencing with the quarter ended December 31,
1999. No dividend will be payable if the Shareholders approve the issuance of
the Common Stock and Warrants prior to the time that the dividend is payable.
As a result of the transaction the Company acquired the Travel Web site
called "Netcruise" and the license for "Parallel Addressing Video Technology"
for all travel related applications, along with all of the software, computer
systems and intellectual properties related to the travel business. The Company
formed NetCruise as a wholly owned subsidiary for the purpose of operating an
Internet travel agency featuring the technology obtained through this
acquisition. Harry Shuster has been appointed Chairman and Brian Shuster the
President of NetCruise. Pursuant to the acquisition agreement, Mr. Brian Shuster
will receive $5,000 per month for his services as a consultant to the Company.
In addition, Messrs. Harry Shuster and Brian Shuster have been serving as
directors of the Company since the transaction closed and both have been
nominated for election as directors of the Company.
Approval of the issuance of 1,100,000 shares of Common Stock of the
Company and Warrants to UIT requires the affirmative vote of a majority of the
votes cast at the meeting by holders of the Company's Common and Series A
Preferred Stock.
IN THE EVENT SHAREHOLDERS DO NOT APPROVE THE ISSUANCE, THE
COMPANY'S SHARES OF COMMON STOCK WILL BE DELISTED FROM THE
NASDAQ SMALL CAP MARKET.
The Board of Directors recommends that the stockholders vote "FOR" approval of
the issuance of Common Stock and Warrants to UIT. (Item No. 3 on the proxy
card).
<PAGE>
PROPOSAL NO. 4
TO AMEND ARTICLE FIRST AND FOURTH OF THE COMPANY'S CERTIFICATE
OF INCORPORATION
The Board of Directors of the Company has unanimously adopted, subject
to stockholder approval, a resolution to amend Articles FIRST and FOURTH of the
Company's Certificate of Incorporation to (i) change the name of the Company
from Gayness Reservation Systems, Inc. to NetCruise Travel, Inc. and (ii)
restate the provisions of the Company's authorized Preferred Stock to correct
certain inconsistencies.
Reasons for the Proposal
With the acquisition of certain assets and the technology license from
UIT, the Company expanded its travel business such that the current name is no
longer descriptive of the Company's business. Management is of the opinion that
the proposed new name is more descriptive. Through NetCruise the Company plans
to become a provider of Internet travel services and the Board of Directors has
determined that it is in the Company's best interest to change its name to be
more identified with that of the operating subsidiary, and has adopted a
resolution amending Article FIRST of the Certificate of Incorporation to reflect
this change.
The resolution approved by the Board of Directors amending Article
FIRST is as follows:
"FIRST: The name of the Corporation is NetCruise Travel, Inc."
The Board of Directors adopted the resolution amending and restating
Article FOURTH of the Company's Certificate of Incorporation to amend and
restate the provisions of the Company's authorized Preferred Stock to correct
certain inconsistencies in such provisions as they now exist. Such corrections
are technical in nature and not deemed material.
The resolution approved by the Board of Directors amending and
restating Article FOURTH is as follows:
"FOURTH: The total number of shares of stock which the Corporation
shall be authorized to issue shall be 100,000,000 shares consisting of
75,000,000 shares of Common Stock with a par value per share of $.000l
("Common Stock"), and 25,000,000 shares of Preferred Stock with a par
value per share of $.0001 ("Preferred Stock"). The following is a
statement of the designations and the powers, privileges, rights,
qualifications, limitations or restrictions in respect of each class of
capital stock of the Corporation:
(a) The voting, dividend, liquidation and other rights and privileges
of the holders of the Common Stock are subject to and qualified by any and all
rights and privileges of the holders of Preferred Stock of any series as may be
designated by the Board of Directors upon any issuance of the Preferred Stock of
any series. The holders of Common Stock are entitled to one
<PAGE>
vote for each share of Common Stock held at all meetings of stockholders (and
written actions in lieu of meetings). There shall be no cumulative voting of
shares of the Common Stock. Dividends shall be declared and paid on the Common
Stock from funds legally available therefor when, as and if declared by the
Board of Directors of the Corporation. Upon the dissolution or liquidation of
the Corporation, all assets of the Company available for distribution to the
holders of Common Stock shall be distributed ratably among the holders of the
Preferred Stock, if any, and the holders of the Common Stock, subject to any
preferential rights of any then outstanding Preferred Stock.
(b) Preferred Stock may be issued at any time from time to time in one
or more series, each of such series to have such powers, designations,
preferences, rights, qualifications, limitations or restrictions as provided in
this Certificate of Incorporation or by law or in the resolution or resolutions
providing for the issuance of such series adopted by the Board of Directors of
the Corporation as hereinafter provided. Authority is hereby granted to the
Board of Directors from time to time to issue the Preferred Stock in one or more
series, and in connection with the creation of any such series, by resolution or
resolutions providing for the issuance of' the shares thereof, to determine and
fix such voting powers, full or limited, or no voting powers, and such
designations, preferences, powers and relative participating, optional or other
special rights and qualifications, limitations or restrictions thereof,
including, without limitation, dividend rights, conversion rights, redemption
privileges and liquidation preferences, as shall be stated and expressed in such
resolution or resolutions, all to the full extent now or hereafter permitted by
law. Without limiting the generality of the foregoing, the resolutions providing
for issuance of any series of Preferred Stock may provide that such series shall
be superior or rank equally or be junior to the Preferred Stock of any other
series to the extent permitted by law. The resolutions providing for issuance of
any series of Preferred Stock may provide that such resolutions may be amended
by subsequent resolutions adopted in the same manner as the preceding
resolutions. All shares of Preferred Stock of the same series shall be identical
with each other in all respects.
Approval of the amendment to Articles FIRST and FOURTH of the Company's
Certificate of Incorporation requires the affirmative vote of a majority of the
votes cast at the meeting by holders of the Company's Common and Series A
Preferred Stock.
The Board of Directors recommends that the stockholders vote "FOR" approval of
this Proposal No. 4.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following tabulation shows the security ownership as of October 30, 1998 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 contends it has the right to
cancel 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.
<PAGE>
NUMBER OF PERCENT
NAME & ADDRESS SHARES OWNED OF CLASS
Loeb Holding Corporation
As Escrow Agent (1)
61 Broadway
New York, NY 10006 1,188,973 21.02%
Loeb Holding Corporation (2)
61 Broadway
New York, NY 10006 98,824 1.75%
United Internet Technologies, Inc. (3)
18081 Magnolia Avenue
Fountain Valley, CA 92708 900,000 15.91%
Warren D. Bagatelle (1)(2)
Loeb Partners Corporation
61 Broadway
New York, NY 10006 1,287,797 22.77%
Mark A. Kenny
Genisys Reservation Systems
2401 Morris Avenue
Union, NJ 07083 324,175 5.73%
John H. Wasko (4)
Genisys Reservation Systems
2401 Morris Avenue
Union, NJ 07083 137,046 2.42%
Lawrence E. Burk (5)
Genisys Reservation Systems
2401 Morris Avenue
Union, NJ 07083 205,000 3.62%
S. Charles Tabak (6)
ARC Medical Professional Personnel
36 Route 10W, Suite D
East Hanover, NJ 07936 17,000 *
David W. Sass (6)
McLaughlin & Stern, LLP
260 Madison Ave. 18th Fl.
New York, NY 10016 15,000 *
<PAGE>
Harry Shuster
United Internet Technologies, Inc.
18081 Magnolia Avenue
Fountain Valley, CA 92708 0 *
Brian Shuster
United Internet Technologies, Inc.
18081 Magnolia Avenue
Fountain Valley, CA 92708 0 *
All Officers and Directors
as a group (6 persons) 2,886,018 51.03%
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* less than 1%
(1) Includes 853,679 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, 282,353 shares of Common Stock issuable upon conversion of
282,353 shares of Series A Preferred Stock of the Company and 52,941 shares of
Common Stock issuable upon conversion of two Convertible Notes aggregating
$112,500. Loeb Holding Corporation disclaims any beneficial interest in these
shares.
(2) Includes 98,824 shares of Common Stock issuable upon conversion of
98,824 shares of Series A Preferred Stock of the Company.
(3) UIT will receive 1,100,000 shares of Series B Preferred Stock,
convertible into 1,100,000 shares of Common Stock if Shareholders approve the
issuance of 1,100,000 shares of Common Stock and two Warrants, each entitling
the holder to purchase 800,000 shares of Common Stock. One warrant is
exercisable for 800,000 shares at $2.50 per share and may be exercised between
April 1, 2002 and June 30, 2002, but only if NetCruise achieves profits equal to
or exceeding $5,000,000 for the years 1999, 2000 and 2001. The other Warrant is
exercisable for 800,000 shares at $6.00 per share and may be exercised between
April 1, 2002 and June 30, 2002, but only if NetCruise achieves profits equal to
or exceeding $10,000,000 for the years 1999, 2000 and 2001.
(4) 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, 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, a five (5) year option
to purchase an aggregate of 25,000 shares of Common Stock at a price of $6.00
per share granted on January 1, 1998 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.
(5) 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 granted on September 23,
1997.
<PAGE>
(6) Includes a five (5) year option to purchase 10,000 shares of Common
Stock at a price of $6.00 per share granted on September 23, 1997.
EXECUTIVE COMPENSATION
The following tabulation shows the total compensation paid by the
Company for services in all capacities in fiscal years 1995, 1996 and 1997 to
the officers of the Company.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Name and Principal Year Salary Bonus Other Annual
Position Compensation
Lawrence E. Burk 1997 $75,000 (1) $0 $0
President & Chief 1996 $0 $0 $0
Executive Officer 1995 $0 $0 $0
Joseph Cutrona (2) 1997 $41,639 $0 $6,667
1996 $73,500 $0 $5,000
1995 $45,000 $0 $3,840
Mark A. Kenny(3) 1997 $64,231 $0 $28,967
1996 $42,000 $0 $16,250
1995 $44,795 $0 $ 3,840
John H. Wasko 1997 $81,247 $0 $20,000
Chief Financial Officer, 1996 $10,000 $0 $49,500
Secretary & Treasurer 1995 $0 $0 $ 2,500
Warren D. Bagatelle 1997 $0 $0 $59,500 (4)
Chairman 1996 $0 $0 $36,000 (5)
1995 $0 $0 $0
</TABLE>
(1) Salary paid to Mr. Burk for the period June 23, 1997 thru December 31, 1997.
Mr. Burk's Annual salary is $150,000.
(2) As of May 12, 1997, Mr. Cutrona was no longer an employee, Officer or
Director of the Company.
(3) Mr. Kenny formerly was the Company's Executive Vice President and is
currently an employee and a Director of the Company, but not an Officer
of the Company.
(4) Includes $51,000 of consulting fees paid to Loeb Partners Corporation of
which Warren D. Bagatelle is the Managing Director.
(5) Represents consulting fees paid to Loeb Partners Corporation.
<PAGE>
CERTAIN TRANSACTIONS
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 a series of
Convertible Promissory Notes ("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.
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, and in January 1998 the Company granted Mr. Wasko a five (5)
year option to purchase an aggregate of 25,000 shares of Common Stock at a price
of $6.00 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. This banking agreement has been extended by the
Company for three (3) years. Mr. Warren D. Bagatelle, a Director and Chairman of
the Company, is a Managing Director of Loeb Partners Corporation.
During December 1995, Loeb agreed to loan the Company $250,000
evidenced by a series of 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.
In March 1998 the holder of two Term Convertible Promissory Notes in
the principal amounts of $475,000 and $237,500, converted $400,000 of the
principal amount of the former note and $200,000 of the principal amount of the
latter note into 188,235 shares and 94,118 shares respectively of the Series A
Preferred Stock of the Company at a price of $2.125 per share.
The Term Promissory Note in the amount of $25,000 and the Term
Promissory Note in the amount of $12,500 issued in December 1995 were converted
in March 1998 into 400,000 shares of the Common Stock of the Company at a price
of $0.09375 per share.
<PAGE>
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 because, 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 November and December 1996, the Company and Loeb Holding
Corporation signed four eighteen (18) month Convertible 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%, matured on May 11, 1998, May 25, 1998, June 2, 1998 and June 9, 1998. In
March 1998, Loeb, converted the total principal amount of the four Convertible
Promissory Notes ($210,000) into 98,824 shares of the Series A Preferred Stock
of the Company at a price of $2.125 per share.
In connection with the acquisition of the assets and technology license
from UIT by NetCruise, Mr. Brian Shuster received two warrants, each entitling
him to purchase 200,000 shares of the Common Stock of the Company. One warrant
is exercisable for 200,000 shares at $2.50 per share and may be exercised
between April 1, 2002 and June 30, 2002, but only if NetCruise achieves profits
equal to or exceeding $5,000,000 for the years 1999, 2000 and 2001. The other
Warrant is exercisable for 200,000 shares at $6.00 per share and may be
exercised between April 1, 2002 and June 30, 2002, but only if NetCruise
achieves profits equal to or exceeding $10,000,000 for the years 1999, 2000 and
2001.
For the year ended December 31, 1997 the Company paid to the firm of
McLaughlin & Stern, LLP the sum of $145,762 for legal services. Mr. Sass, a
director of the Company, is a member of said firm.
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.
<PAGE>
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, 1997,
is being mailed to Stockholders with this Proxy Statement.
STOCKHOLDER PROPOSAL - 1999 ANNUAL MEETING
Any stockholder proposals to be considered by the Company for inclusion
in the proxy material for the 1999 Annual Meeting of Stockholders must be
received by the Company at its principal executive offices by April 30, 1999.
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
October 30, 1998
<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 and preferred stock of Genisys Reservations Systems, Inc. held of
record by the undersigned on October 30, 1998, at the Annual Meeting of
Stockholders to be held on December 9, 1998, 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,
Warren D. Bagatelle, Harry Shuster and Brian Shuster.
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. APPROVAL OF THE ISSUANCE OF 1,100,00 SHARES OF COMMON STOCK AND
TWO WARRANTS EACH IN THE AMOUNT OF 800,000 SHARES TO UNITED
INTERNET TECHNOLOGIES, INC.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. APPROVAL OF AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
TO CHANGE THE NAME OF THE CORPORATION TO NETCRUSE TRAVEL, INC. AND TO
RESTATE THE PROVISIONS RELATING TO THE CORPORATION'S AUTHORIZED
PREFERRED STOCK.
5. 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, 3 AND 4.
<PAGE>
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: , 1998
Signature
Signature, if held jointly
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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