AMENDED SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE SECURITIES
EXCHANGE ACT OF 1934
Check the appropriate box:
[X] Preliminary information statement [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14c-5(d)(2))
[ ] Definitive information statement
GLOBALNET FINANCIAL.COM, INC.
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(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction.
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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GLOBALNETFINANCIAL.COM, INC.
7280 W. PALMETTO PARK ROAD, SUITE 202
BOCA RATON, FLORIDA 33433
<PAGE>
NOVEMBER 19, 1999
INFORMATION STATEMENT
This Information Statement is being mailed to the stockholders of
GlobalNet Financial.com, Inc. (the "Company") commencing on or about November
19, 1999, in connection with the previous approval by the board of directors
of the Company of the corporate actions referred to below and their subsequent
adoption by the majority of the stockholders of the Company. Accordingly, all
necessary corporate approvals in connection with the matters referred to herein
have been obtained, and this Information Statement is furnished solely for the
purpose of informing stockholders, in the manner required under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), of these corporate
actions before they take effect.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
ACTIONS TAKEN
The Company, as authorized by the necessary approvals of the board of
directors of the Company and the majority of the stockholders of the Company,
have (i) approved the adoption of an amendment (the "Amendment") to the
Company's Certificate of Incorporation, as amended ("Certificate of
Incorporation"), increasing the authorized capital of common stock, par value
$.001 per share ("Common Stock"), of the Company from 16,666,667 shares of
Common Stock to 50,000,000 shares of Common Stock; creating a Class A common
stock, par value $.001 per share (the "Class A Common Stock") and eliminating
the Class B common stock, par value $.001, of which none were issued and
outstanding; and (ii) approved the Company's Amended and Restated 1998 Stock
Option Plan (the "Amended Plan").
A copy of the Amendment is attached hereto as Exhibit A. The section of
the Amendment increasing the number of authorized shares was adopted to
facilitate the raising of additional capital through the public or private sale
of Common Stock, to reserve additional shares of Common Stock for issuance
pursuant to the Amended Plan, and to facilitate the use of additional Common
Stock for future acquisitions. Although management is continually reviewing
potential acquisitions, as of the date hereof there are no contractual
commitments requiring the issuance of Common Stock in connection with an
acquisition. The Amendment will facilitate the Company's ability to consummate
acquisitions or raise capital at times when management deems such actions
beneficial. The section of the Amendment adopted to create the Class A Common
Stock is intended to facilitate the sale and listing of the Company's securities
on the Alternative Investment Market of the London Stock Exchange in an offering
exempt from registration under Section 5 of the Securities Act of 1933, as
amended (the "Securities Act"), by virtue of Regulation S (the "Offering").
The Company has taken all action required under Delaware law to approve
the Amendment. The Company will file the Amendment with the Delaware Secretary
of State thereby making it effective, no earlier than 20 days from the date
hereof.
A copy of the Amended Plan is attached hereto as Exhibit B. The Amended
Plan was adopted to increase the number of shares of Common Stock available for
issuance pursuant to the Amended Plan and to provide for other forms of employee
benefits. The additional shares of Common Stock will be used to provide an
additional incentive to attract, retain and motivate highly qualified and
competent persons who are key to the Company, and upon whose efforts
<PAGE>
and judgment the success of the Company is largely dependent, including key
employees, consultants, independent contractors, advisory board members,
officers and directors, including outside directors.
The consent of the majority of stockholders with respect to the
Amendment, and the Amended Plan, was effective on November ___, 1999.
A complete summary of each of these matters is set forth herein.
NO DISSENTERS' RIGHTS
Pursuant to the Delaware Business Corporation Law, none of the
corporate actions described in this Information Statement will afford to
stockholders the opportunity to dissent from the actions described herein and to
receive an agreed or judicially appraised value for their shares.
STOCKHOLDER APPROVAL PREVIOUSLY OBTAINED
As of November 1, 1999, the Company had 11,306,848 issued and
outstanding shares of Common Stock, each of which is entitled to one vote on any
matter brought to a vote of the Company's stockholders. By written consent in
lieu of a meeting, dated November __, 1999, a majority of stockholders approved
the adoption and implementation of the Amendment and the Amended Plan. Such
action by written consent (i) is sufficient to satisfy the applicable
requirements of Delaware law that any amendment of the Company's Certificate of
Incorporation be approved by the stockholders, and (ii) is sufficient to satisfy
the applicable requirements of Section 16 of the Exchange Act, that material
amendments to a Stock Option Plan be approved by the stockholders. Accordingly,
the stockholders will not be asked to take action on the Amendment or the
Amended Plan at any future meeting.
AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED
SHARES FROM 16,666,667 TO 50,000,000
The Company has adopted the Amendment to increase its authorized
capital stock from 16,666,667 shares of Common Stock to 50,000,000 shares of
Common Stock, par value $.001 per share.
The board of directors of the Company believes that it is advisable and
in the best interests of the Company to have available additional authorized but
unissued shares of Common Stock in an amount adequate to provide for the future
needs of the Company. The additional shares will be available for issuance from
time to time by the Company in the discretion of the board of directors of the
Company, normally without further stockholder action (except as may be required
for a particular transaction by applicable law, requirements of regulatory
agencies or by stock exchange rules), for any proper corporate purpose
including, among other things, future acquisitions of securities of other
corporations, stock dividends, stock splits, convertible debt and equity
financing and reservation of additional shares of Common Stock for issuance
pursuant to the Amended Plan or other employee benefit plans that may be adopted
in the future. No stockholder of the Company would have any preemptive rights
regarding future issuances of any shares of Common Stock.
The Company's stockholders do not have preemptive rights to subscribe
for or purchase any of the additional shares of Common Stock to be authorized.
Therefore, the future issuance
<PAGE>
of additional shares of Common Stock, on other than a pro rata basis, may dilute
the ownership of the current stockholders, as well as their proportionate voting
rights. The Amendment could also make it more difficult to acquire control of
the Company and thereby discourage attempts to do so, even though the Company's
stockholders may deem such an acquisition desirable. Issuance of shares of
Common Stock could dilute the ownership interest and voting power of those
Company stockholders who may seek control of the Company. Shares of Common Stock
could also be issued in a private placement to one or more organizations
sympathetic to the Company and opposed to any take-over bid and thereby
discourage attempts to acquire control of the Company. To the extent that it
impedes any such attempts, the Amendment may serve to perpetuate the Company's
management.
AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION
TO CREATE CLASS A COMMON STOCK
To accommodate the sale and listing of the Company's securities on the
Alternative Investment Market of the London Stock Exchange in the Offering, the
Company has created the Class A Common Stock. The new class of securities will
permit the Company to sell the Class A Common Stock in an offering exempt from
registration under Section 5 of the Securities Act by virtue of Regulation S
which, in turn, will augment the Company's growth. As an equity security, the
Class A Common Stock would participate fully from a financial point of view in
any future growth of the Company.
SUMMARY OF NEWLY AUTHORIZED CLASS A COMMON STOCK
The Amendment modifies the Company's capitalization such that, upon filing
the Amendment with the Secretary of State of the State of Delaware, the
Company's authorized capital stock will include 20,000,000 shares of Class A
Common Stock, $.001 par value.
Pursuant to the Amendment, each share of Common Stock will entitle the
holder thereof to one vote in respect of matters submitted for the vote of
holders of Common Stock, whereas each share of Class A Common Stock will entitle
the holder thereof to a one-tenth vote on such matters.
Further, in the event of liquidation, after payment of the debts and other
liabilities of the Company and after making provision for the holders of
Preferred Stock, if any, the remaining assets of the Company will be
distributable ratably among the holders of the Common Stock and Class A Common
Stock with the Class A Common Stock entitled to one-tenth the liquidation
proceeds per share, payable with respect to the Common Stock. Finally, each
issued and outstanding share of Class A Common Stock will be entitled to
one-tenth the dividend declared and paid by the Company on its issued and
outstanding Common Stock.
The Class A Common Stock will not be registered under the Securities Act
nor will it be registered as a class of equity securities under the Exchange
Act, and will not be listed on the NASDAQ National Market System or traded in
any securities market in the United States.
Pursuant to the Amendment, 24 months from the date of issuance, each ten
shares of Class A Common Stock will automatically convert into one share of
Common Stock.
In addition, it is the intention of the Company to permit seven
stockholders to participate in the Offering by selling 250,000 shares of Common
Stock that they currently hold. To facilitate
<PAGE>
their participation in the Offering, the stockholders will exchange their shares
of Common Stock for 2,500,000 shares of Class A Common Stock.
REASON FOR THE TWO CLASS STRUCTURE
The board of directors of the Company believes that the adoption of the
Class A Amendment, is in the best interests of the Company in so much as it will
allow the Company to sell securities on the Alternative Investment Market in a
transaction that will be exempt from registration under the Securities Act by
virtue of Regulation S.
DESCRIPTION OF THE COMMON STOCK
The terms of the Common Stock and the Class A Common Stock are set forth in
full in Article Four of the Amended and Restated Certificate of Incorporation
attached to this Proxy Statement as Exhibit A. The rights of the two classes
will be identical except as otherwise described below.
VOTING. Under the Company's current Certificate of Incorporation, each
share of Common Stock is entitled to one vote per share. Pursuant to the
Amendment, (i) each share of Common Stock will be entitled to one vote per
share, and (ii) each share of Class A Common Stock will be entitled to a
one-tenth vote per share. Except as required by applicable law, holders of
Common Stock and Class A Common Stock will vote together, with each other, and
not as separate classes, on all matters submitted to a vote of the stockholders.
Neither the Common Stock nor the Class A Common Stock will have cumulative
voting rights. The Amendment does not affect the relative voting power of
holders of Common Stock.
DIVIDENDS AND DISTRIBUTIONS. The Amendment provides that, subject to the
rights of the holders of the Company's Preferred Stock, the holders of Common
Stock and Class A Common Stock will be entitled to receive when, as and if
declared by the board of directors of the Company, out of funds legally
available therefor, dividends and other distributions payable in cash, property,
stock (including shares of any class or series of the Company, whether or not
shares of such class or series are already outstanding) or otherwise, except
that each share of Class A Common Stock will receive one-tenth of the dividend
paid on the Common Stock.
CONVERTIBILITY. The Common Stock will not be convertible into another class
of securities of the Company. The Class A Common Stock will automatically be
convertible into Common Stock 24 months after issuance, on the basis of one
share of Common Stock for each 10 shares of Class A Common Stock, with fractions
being settled for cash.
SPLITS OR COMBINATIONS. The Class A Amendment provides that, if the Company
shall in any manner split, subdivide or combine the shares of outstanding Common
Stock or Class A Common Stock, then the outstanding shares of the other such
class shall be proportionately split, subdivided or combined in the same manner
and on the same basis as the outstanding shares of the class that has been
split, subdivided or combined.
MERGERS AND CONSOLIDATIONS. In the event of a merger, consolidation or
combination of the Company with another entity (whether or not the Company is
the surviving entity), the holders of Class A Common Stock will be entitled to
receive one-tenth the per share consideration received by the holders of Common
Stock in that transaction.
<PAGE>
LIQUIDATION. In the event of liquidation, after payment of the debts and
other liabilities of the Company and after making provision for the holders of
Preferred Stock, if any, the remaining assets of the Company will be
distributable among the holders of the Common Stock and the Class A Common Stock
with each share of Class A Common Stock entitled to one-tenth the liquidation
proceeds per share of the Common Stock.
PREEMPTIVE RIGHTS. Neither the Common Stock nor the Class A Common Stock
will carry any preemptive rights enabling a holder to subscribe for or receive
shares of the Company of any class or any other securities convertible into any
class of the Company's stock.
SALES AND REPURCHASES. The board of directors of the Company is permitted
to authorize the sale of shares of either the Common Stock or the Class A Common
Stock even though a higher price could be obtained by selling shares of the
other class due to differing values and market prices for such classes. The
board of directors of the Company is also permitted to authorize the repurchase
of shares of either the Common Stock or the Class A Common Stock without regard
to whether a lesser price could be paid for the same number of shares of the
other class.
STOCKHOLDER INFORMATION. The Company will deliver to the holders of Common
Stock and Class A Common Stock the same proxy statements, annual reports and
other information reports.
AMENDED AND RESTATED 1998 STOCK OPTION PLAN
THE 1998 STOCK OPTION PLAN
Under the 1998 Stock Option Plan (the "Stock Option Plan"), options to
purchase an aggregate of not more than 1,666,666 shares of common stock may be
granted from time to time to key employees (including officers), consultants and
directors. Options shall be designated as Incentive Stock Options ("ISOs") or
Nonqualified Stock Options ("NQSOs"). The Stock Option Plan is administered by a
committee consisting of Mr. Bulent Gultekin and Mr. Christopher D. Jennings,
both outside directors of the Company (the "Committee"). The Committee is
generally empowered to interpret the Stock Option Plan; to prescribe rules and
regulations relating thereto; to determine the terms of the option agreements;
to amend the option agreements with the consent of the optionee; to determine
the key employees and directors to whom options are to be granted; and to
determine the number of shares subject to each option and the exercise price
thereof. The per share exercise price of options granted under the Stock Option
Plan will be not less than 100% (110% for ISOs if the optionee owns more than
10% of the common stock) of the fair market value per share of common stock on
the date the options are granted.
Options will be exercisable for a term that will not be greater than
ten years from the date of grant (five years from the date of grant of an ISO if
the optionee owns more than 10% of the common stock). In the event of the
termination of the relationship between the option holder and the Company for
cause (as defined in the Stock Option Plan), all options granted to that option
holder terminate immediately. Options may be exercised during the option
holder's lifetime only by the option holder or his or her guardian or legal
representative.
Options granted pursuant to the Stock Option Plan which are ISOs are
intended to enjoy the attendant tax benefits provided under Sections 421 and 422
of the Internal Revenue Code of 1986, as amended. Accordingly, the Stock Option
Plan provides that the aggregate fair market value (determined at the time an
ISO is granted) of the common stock subject to ISOs
<PAGE>
exercisable for the first time by an option holder during any calendar year
(under all plans of the Company) may not exceed $100,000. The board of directors
of the Company may modify, suspend or terminate the Stock Option Plan; provided,
however, that certain material modifications affecting the Stock Option Plan
must be approved by the stockholders, and any change in the Stock Option Plan
that may adversely affect an option holder's rights under an option previously
granted under the Stock Option Plan requires the consent of the option holder.
THE AMENDED PLAN The Amended Plan makes the following changes:
(1) Increases the Shares reserved for issuance to 3,000,000;
(2) Provides for the issuance of stock appreciation rights at the
discretion of the Committee;
(3) Provides for the issuance of restricted stock awards at the discretion
of the Committee.
The board of directors of the Company believes that the Amended Plan reserves
sufficient additional shares to provide for additional grants to employees in
the near future in order to attract and retain such key personnel. The Amended
Plan also provides for additional types of grants that can be used by the
Committee in its discretion and will therefore give the Amended Plan greater
flexibility.
MATERIAL INCORPORATED BY REFERENCE
The audited balance sheets of the Company as of December 31, 1998, 1997
and 1996 and the related statements of operations, shareholders' equity
(deficit) and cash flows for the three years ended December 31, 1998, are
incorporated herein by reference to the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1998. The Company's unaudited
consolidated balance sheets as of September 30, June 30 and March 31, 1999, are
incorporated herein by reference to the Company's Quarterly Report on Form
10-QSB for the quarter ended September 30, 1999, June 30, 1999 and March 31,
1999 respectively.
By Order of the Board of Directors
----------------------------------------
Ronald B. Koenig, Chairman of the Board
November __, 1999
<PAGE>
EXHIBIT A
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
GLOBALNET FINANCIAL.COM, INC.
GlobalNet Financial.com, Inc., a Delaware corporation (the
"Corporation"), pursuant to Section 242 of the Delaware General Corporation Law,
hereby files this Certificate of Amendment to its Certificate of Incorporation:
1. The name of the corporation (hereinafter called the "Corporation")
is GLOBALNET FINANCIAL.COM, INC.
2. The Certificate of Incorporation of the Corporation is hereby
amended by deleting Article Fourth and restating it as follows:
FOURTH: The authorized capital stock of GlobalNet
Financial.com, Inc. consists of (a) 50,000,000 shares of common stock,
par value $.001; (b) 20,000,000 shares of Class A common stock, par
value $.001; and (c) 20,000,000 shares of preferred stock, $.001 par
value.
Voting. Each share of Common Stock will be entitled to one
vote per share, and each share of Class A Common Stock will be entitled
to a one-tenth vote per share. Except as required by applicable law,
holders of Common Stock and Class A Common Stock will vote together,
with each other, and not as separate classes, on all matters submitted
to a vote of the stockholders. Neither the Common Stock nor the Class A
Common Stock will have cumulative voting rights.
Dividends and Distributions. Subject to the rights of the
holders of the Corporation's Preferred Stock, the holders of Common
Stock and Class A Common Stock will be entitled to receive when, as and
if declared by the Board of Directors, out of funds legally available
therefor, dividends and other distributions payable in cash, property,
stock (including shares of any class or series of the Corporation,
whether or not shares of such class or series are already outstanding)
or otherwise, except that each share of Class A Common Stock will
receive one-tenth of the dividend paid on the Common Stock.
Convertibility. The Common Stock will not be convertible into
another class of securities of the Corporation. The Class A Common
Stock will automatically be convertible into Common Stock 24 months
after issuance on the basis of one share of Common Stock for each 10
shares of Class A Common Stock, with fractions being settled for cash.
A-1
<PAGE>
Splits or Combinations. If the Corporation shall in any manner
split, subdivide or combine the shares of outstanding Common Stock or
Class A Common Stock, then the outstanding shares of the other such
class shall be proportionately split, subdivided or combined in the
same manner and on the same basis as the outstanding shares of the
class that has been split, subdivided or combined.
Mergers and Consolidations. In the event of a merger,
consolidation or combination of the Corporation with another entity
(whether or not the Corporation is the surviving entity), the holders
of Class A Common Stock will be entitled to receive one-tenth the per
share consideration received by the holders of Common Stock in that
transaction.
Liquidation. In the event of liquidation, after payment of the
debts and other liabilities of the Corporation and after making
provision for the holders of Preferred Stock, if any, the remaining
assets of the Corporation will be distributable among the holders of
the Common Stock and the Class A Common Stock with each share of Class
A Common Stock entitled to one-tenth the liquidation proceeds per share
of the Common Stock.
Preemptive Rights. Neither the Common Stock nor the Class A
Common Stock will carry any preemptive rights enabling a holder to
subscribe for or receive shares of the Corporation of any class or any
other securities convertible into any class of the Corporation's stock.
Sales and Repurchases. The Board of Directors is permitted to
authorize the sale of shares of either the Common Stock or the Class A
Common Stock even though a higher price could be obtained by selling
shares of the other class due to differing values and market prices for
such classes. The Board of Directors is also permitted to authorize the
repurchase of shares of either the Common Stock or the Class A Common
Stock without regard to whether a lesser price could be paid for the
same number of shares of the other class.
3. The foregoing amendment to the Certificate of Incorporation has been
duly adopted by written consent of the shareholders and in accordance with the
provisions of Sections 228 and 242 of the General Corporation Law of the State
of Delaware.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Amendment as of the ____day of ________1999.
----------------------------------------
Stanley Hollander, President
----------------------------------------
Michael S. Jacobs, Secretary
A-2
<PAGE>
EXHIBIT B
--------------------------------------
AMENDED AND RESTATED
GLOBALNET FINANCIAL.COM, INC.
1998 STOCK OPTION PLAN
--------------------------------------
1. PURPOSE. The purpose of this Plan is to advance the interests of
GLOBALNET FINANCIAL.COM, INC., a Delaware corporation (the "Company"), by
providing an additional incentive to attract, retain and motivate highly
qualified and competent persons who are key to the Company, including key
employees, consultants, independent contractors, Officers and Directors, and
upon whose efforts and judgment the success of the Company and its Subsidiaries
is largely dependent, by authorizing the grant of options to purchase Common
Stock of the Company and other related benefits to persons who are eligible to
participate hereunder, thereby encouraging stock ownership in the Company by
such persons, all upon and subject to the terms and conditions of this Plan.
2. DEFINITIONS. As used herein, the following terms shall have the
meanings indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Cause" shall mean any of the following:
(i) a determination by the Company that there has been a
willful, reckless or grossly negligent failure by the Optionee to perform his or
her duties as an employee of the Company;
(ii) a determination by the Company that there has been a
willful breach by the Optionee of any of the material terms or provisions of any
employment agreement between such Optionee and the Company;
(iii) any conduct by the Optionee that either results in his or
her conviction of a felony under the laws of the United States of America or any
state thereof, or of an equivalent crime under the laws of any other
jurisdiction;
(iv) a determination by the Company that the Optionee has
committed an act or acts involving fraud, embezzlement, misappropriation, theft,
breach of fiduciary duty or material dishonesty against the Company, its
properties or personnel;
(v) any act by the Optionee that the Company determines to be in
willful or wanton disregard of the Company's best interests, or which results,
or is intended to result, directly or indirectly, in improper gain or personal
enrichment of the Optionee at the expense of the Company;
(vi) a determination by the Company that there has been a
willful, reckless or grossly negligent failure by the Optionee to comply with
any rules, regulations,
B-1
<PAGE>
policies or procedures of the Company, or that the Optionee has engaged in any
act, behavior or conduct demonstrating a deliberate and material violation or
disregard of standards of behavior that the Company has a right to expect of its
employees; or
(vii) if the Optionee, while employed by the Company and for two
years thereafter, violates a confidentiality and/or noncompete agreement with
the Company, or fails to safeguard, divulges, communicates, uses to the
detriment of the Company or for the benefit of any person or persons, or misuses
in any way, any Confidential Information; PROVIDED, HOWEVER, that, if the
Optionee has entered into a written employment agreement with the Company which
remains effective and which expressly provides for a termination of such
Optionee's employment for "cause," the term "Cause" as used herein shall have
the meaning as set forth in the Optionee's employment agreement in lieu of the
definition of "Cause" set forth in this Section 2(b).
(c) "Change of Control" shall mean the acquisition by any person or
group (as that term is defined in the Exchange Act, and the rules promulgated
pursuant to that act) in a single transaction or a series of transactions of
thirty percent (30%) or more in voting power of the outstanding stock of the
Company and a change of the composition of the Board of Directors so that,
within two years after the acquisition took place, a majority of the members of
the Board of Directors of the Company, or of any corporation with which the
Company may be consolidated or merged, are persons who were not directors or
officers of the Company or one of its Subsidiaries immediately prior to the
acquisition, or to the first of a series of transactions which resulted in the
acquisition of thirty percent (30%) or more in voting power of the outstanding
stock of the Company.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(e) "Committee" shall mean the stock option committee appointed by
the Board or, if not appointed, the Board.
(f) "Common Stock" shall mean the Company's Common Stock, par value
$.001 per share.
(g) "Director" shall mean a member of the Board.
(h) "Employee" shall mean any person, including officers, directors,
consultants and independent contractors employed by the Company or any parent or
Subsidiary of the Company within the meaning of Section 3401(c) of the
regulators promulgated thereunder.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(j) "Fair Market Value" of a Share on any date of reference shall be
the Closing Price of a share of Common Stock on the business day immediately
preceding such date, unless the Committee in its sole discretion shall determine
otherwise in a fair and uniform manner. For this purpose, the "Closing Price" of
the Common Stock on any business day shall
B-2
<PAGE>
be (i) if the Common Stock is listed or admitted for trading on any United
States national securities exchange, or if actual transactions are otherwise
reported on a consolidated transaction reporting system, the last reported sale
price of the Common Stock on such exchange or reporting system, as reported in
any newspaper of general circulation, (ii) if the Common Stock is quoted on The
Nasdaq Stock Market ("Nasdaq"), or any similar system of automated dissemination
of quotations of securities prices in common use, the mean between the closing
high bid and low asked quotations for such day of the Common Stock on such
system, or (iii) if neither clause (i) nor (ii) is applicable, the mean between
the high bid and low asked quotations for the Common Stock as reported by the
National Quotation Bureau, Incorporated if at least two securities dealers have
inserted both bid and asked quotations for the Common Stock on at least five of
the 10 preceding days. If the information set forth in clauses (i) through (iii)
above is unavailable or inapplicable to the Company (e.g., if the Company's
Common Stock is not then publicly traded or quoted), then the "Fair Market
Value" of a Share shall be the fair market value (i.e., the price at which a
willing seller would sell a Share to a willing buyer when neither is acting
under compulsion and when both have reasonable knowledge of all relevant facts)
of a share of the Common Stock on the business day immediately preceding such
date as the Committee in its sole and absolute discretion shall determine in a
fair and uniform manner.
(k) "Incentive Stock Option" shall mean an incentive stock option as
defined in Section 422 of the Code.
(l) "Non-Statutory Stock Option" or "Nonqualified Stock Option"
shall mean an Option which is not an Incentive Stock Option.
(m) "Officer" shall mean the Company's chairman, president,
principal financial officer, principal accounting officer (or, if there is no
such accounting officer, the controller), any vice-president of the Company in
charge of a principal business unit, division or function (such as sales,
administration or finance), any other officer who performs a policy-making
function, or any other person who performs similar policy-making functions for
the Company. Officers of Subsidiaries shall be deemed Officers of the Company if
they perform such policy-making functions for the Company. As used in this
paragraph, the phrase "policy-making function" does not include policy-making
functions that are not significant. Unless specified otherwise in a resolution
by the Board, an "executive officer" pursuant to Item 401(b) of Regulation S-K
(17 C.F.R. ss. 229.401(b)) shall be only such person designated as an "Officer"
pursuant to the foregoing provisions of this paragraph.
(n) "Option" (when capitalized) shall mean any stock option granted
under this Plan.
(o) "Optionee" shall mean a person to whom an Option is granted
under this Plan or any person who succeeds to the rights of such person under
this Plan by reason of the death of such person.
(p) "Plan" shall mean this Amended and Restated 1998 Stock Option
Plan of the Company, which Plan shall be effective upon approval by the Board,
subject to approval,
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within 12 months of the date thereof by holders of a majority of the Company's
issued and outstanding Common Stock of the Company.
(q) "Share" or "Shares" shall mean a share or shares, as the case
may be, of the Common Stock, as adjusted in accordance with Section 10 of this
Plan.
(r) "Subsidiary" shall mean any corporation (other than the Company)
in any unbroken chain of corporations beginning with the Company if, at the time
of the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
3. SHARES AND OPTIONS. Subject to adjustment in accordance with Section
10 hereof, the Company may issue up to three million (3,000,000) Shares from
Shares held in the Company's treasury or from authorized and unissued Shares
through the exercise of Options issued pursuant to the provisions of this Plan.
If any Option granted under this Plan shall terminate, expire, or be canceled,
forfeited or surrendered as to any Shares, the Shares relating to such lapsed
Option shall be available for issuance pursuant to new Options subsequently
granted under this Plan. Upon the grant of any Option hereunder, the authorized
and unissued Shares to which such Option relates shall be reserved for issuance
to permit exercise under this Plan. Subject to the provisions of Section 14
hereof, an Option granted hereunder shall be either an Incentive Stock Option or
a Non-Statutory Stock Option as determined by the Committee at the time of grant
of such Option and shall clearly state whether it is an Incentive Stock Option
or Non-Statutory Stock Option. All Incentive Stock Options shall be granted
within 10 years from the effective date of this Plan.
4. LIMITATIONS. Options otherwise qualifying as Incentive Stock Options
hereunder will not be treated as Incentive Stock Options to the extent that the
aggregate Fair Market Value (determined at the time the Option is granted) of
the Shares, with respect to which Options meeting the requirements of Code
Section 422(b) are exercisable for the first time by any individual during any
calendar year (under all stock option or similar plans of the Company and any
Subsidiary), exceeds $100,000.
5. CONDITIONS FOR GRANT OF OPTIONS.
(a) Each Option shall be evidenced by an option agreement that may
contain any term deemed necessary or desirable by the Committee, provided such
terms are not inconsistent with this Plan or any applicable law. Optionees shall
be those persons selected by the Committee from the class of all regular
Employees of the Company or its Subsidiaries, including Employee Directors and
Officers who are regular or former regular employees of the Company, Directors
who are not regular employees of the Company, as well as consultants to the
Company. Any person who files with the Committee, in a form satisfactory to the
Committee, a written waiver of eligibility to receive any Option under this Plan
shall not be eligible to receive any Option under this Plan for the duration of
such waiver.
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(b) In granting Options, the Committee shall take into consideration
the contribution the person has made, or is expected to make, to the success of
the Company or its Subsidiaries and such other factors as the Committee shall
determine. The Committee shall also have the authority to consult with and
receive recommendations from Officers and other personnel of the Company and its
Subsidiaries with regard to these matters. The Committee may from time to time
in granting Options under this Plan prescribe such terms and conditions
concerning such Options as it deems appropriate, provided that such terms and
conditions are not more favorable to an Optionee than those expressly permitted
herein; provided further, however, that to the extent not cancelled pursuant to
Section 9(b) hereof, upon a Change in Control, any Options that have not yet
vested, may, in the sole discretion of the Committee, vest upon such Change in
Control.
(c) The Options granted to employees under this Plan shall be in
addition to regular salaries, pension, life insurance or other benefits related
to their employment with the Company or its Subsidiaries. Neither this Plan nor
any Option granted under this Plan shall confer upon any person any right to
employment or continuance of employment (or related salary and benefits) by the
Company or its Subsidiaries.
6. EXERCISE PRICE. The exercise price per Share of any Option shall be
any price determined by the Committee but shall not be less than the par value
per Share; provided, however, that in no event shall the exercise price per
Share of any Incentive Stock Option be less than the Fair Market Value of the
Shares underlying such Option on the date such Option is granted and, in the
case of an Incentive Stock Option granted to a 10% stockholder, the per Share
exercise price will not be less than 110% of the Fair Market Value in accordance
with Section 14 of this Plan. Re-granted Options, or Options which are canceled
and then re-granted covering such canceled Options, will, for purposes of this
Section 6, be deemed to have been granted on the date of the re-granting.
7. EXERCISE OF OPTIONS.
(a) An Option shall be deemed exercised when (i) the Company has
received written notice of such exercise in accordance with the terms of the
Option, (ii) full payment of the aggregate option price of the Shares as to
which the Option is exercised has been made, (iii) the Optionee has agreed to be
bound by the terms, provisions and conditions of any applicable stockholders'
agreement, and (iv) arrangements that are satisfactory to the Committee in its
sole discretion have been made for the Optionee's payment to the Company of the
amount that is necessary for the Company or the Subsidiary employing the
Optionee to withhold in accordance with applicable Federal or state tax
withholding requirements. Unless further limited by the Committee in any Option,
the exercise price of any Shares purchased pursuant to the exercise of such
Option shall be paid in cash, by certified or official bank check, by money
order, with Shares or by a combination of the above; provided, however, that the
Committee in its sole discretion may accept a personal check in full or partial
payment of any Shares. The Company in its sole discretion may, on an individual
basis or pursuant to a general program established by the Committee in
connection with this Plan, lend money to an Optionee to exercise all or a
portion of the Option granted hereunder. If the exercise price is paid in whole
or part with the Optionee's promissory note, such note shall (i) provide for
full recourse to the maker, (ii) be
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collateralized by the pledge of the Shares that the Optionee purchases upon
exercise of such Option, (iii) bear interest at a rate no less than the rate of
interest payable by the Company to its principal lender, and (iv) contain such
other terms as the Committee in its sole discretion shall require.
(b) No Optionee shall be deemed to be a holder of any Shares subject
to an Option unless and until a stock certificate or certificates for such
Shares are issued to such person(s) under the terms of this Plan. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as
expressly provided in Section 10 hereof.
(c) Any Option may, in the discretion of the Committee, be exercised
pursuant to a "cashless" or "net issue" exercise. In lieu of exercising the
Option as specified in subsection (a) above, the Optionee may pay in whole or in
part with Shares, the number of which shall be determined by dividing (a) the
aggregate Fair Value of such Shares otherwise issuable upon exercise of the
Option minus the aggregate Exercise Price of such Option by (b) the Fair Value
of one such Share, or the Optionee may pay in whole or in part through a
reduction in the number of Shares received through the exercise of the Option
equal to the quotient of the (a) aggregate Fair Value of all the Shares issuable
upon exercise of the Option minus the aggregate Exercise Price of such Option
(b) divided by the Fair Value of one such share. If the exercise price is paid
in whole or in part with Shares, the value of the Shares surrendered shall be
their Fair Market Value on the date the Option is exercised.
8. EXERCISABILITY OF OPTIONS. Any Option shall become exercisable in
such amounts, at such intervals, upon such events or occurrences and upon such
other terms and conditions as shall be provided in an individual Option
agreement evidencing such Option, except as otherwise provided in Section 5(b)
or this Section 8.
(a) The expiration date(s) of an Option shall be determined by the
Committee at the time of grant, but in no event shall an Option be exercisable
after the expiration of 10 years from the date of grant of the Option.
(b) Unless otherwise expressly provided in any Option as approved by
the Committee, notwithstanding the exercise schedule set forth in any Option,
each outstanding Option, may, in the sole discretion of the Committee, become
fully exercisable upon the date of the occurrence of any Change of Control, but,
unless otherwise expressly provided in any Option, no earlier than six months
after the date of grant, and if and only if Optionee is in the employ of the
Company on such date.
(c) The Committee may in its sole discretion accelerate the date on
which any Option may be exercised and may accelerate the vesting of any Shares
subject to any Option or previously acquired by the exercise of any Option.
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9. TERMINATION OF OPTION PERIOD.
(a) Unless otherwise expressly provided in any Option, the
unexercised portion of any Option shall automatically and without notice
immediately terminate and become forfeited, null and void at the time of the
earliest to occur of the following:
(i) three months after the date on which the Optionee's
employment is terminated for any reason other than by reason of (A) Cause, (B)
the termination of the Optionee's employment with the Company by such Optionee
following less than 60 days' prior written notice to the Company of such
termination (an "Improper Termination"), (C) a mental or physical disability
(within the meaning of Section 22(e) of the Code) as determined by a medical
doctor satisfactory to the Committee, or (D) death;
(ii) immediately upon (A) the termination by the Company of the
Optionee's employment for Cause, or (B) an Improper Termination;
(iii) one year after the date on which the Optionee's employment
is terminated by reason of a mental or physical disability (within the meaning
of Code Section 22(e)) as determined by a medical doctor satisfactory to the
Committee or the later of three months after the date on which the Optionee
shall die if such death shall occur during the one-year period specified herein;
or
(iv) the later of (a) one year after the date of termination of
the Optionee's employment by reason of death of the employee, or (b) three
months after the date on which the Optionee shall die if such death shall occur
during the one year period specified in Subsection 9(a) (iii) hereof.
(b) The Committee in its sole discretion may, by giving written
notice ("cancellation notice"), cancel effective upon the date of the
consummation of any corporate transaction described in Subsection 10(d) hereof,
any Option that remains unexercised on such date. Such cancellation notice shall
be given a reasonable period of time prior to the proposed date of such
cancellation and may be given either before or after approval of such corporate
transaction.
(c) Upon termination of Optionee's employment as described in this
Section 9, or otherwise, any Option (or portion thereof) not previously vested
or not yet exercisable pursuant to Section 8 of this Plan or the vesting
schedule set forth in such Option shall be immediately canceled.
10. ADJUSTMENT OF SHARES.
(a) If at any time while this Plan is in effect or unexercised
Options are outstanding, there shall be any increase or decrease in the number
of issued and outstanding Shares through the declaration of a stock dividend or
through any recapitalization resulting in a stock split, combination or exchange
of Shares (other than any such exchange or issuance of
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Shares through which Shares are issued to effect an acquisition of another
business or entity or the Company's purchase of Shares to exercise a "call"
purchase option), then and in such event:
(i) appropriate adjustment shall be made in the maximum number
of Shares available for grant under this Plan, so that the same percentage of
the Company's issued and outstanding Shares shall continue to be subject to
being so optioned;
(ii) appropriate adjustment shall be made in the number of
Shares and the exercise price per Share thereof then subject to any outstanding
Option, so that the same percentage of the Company's issued and outstanding
Shares shall remain subject to purchase at the same aggregate exercise price;
and
(iii) such adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive.
(b) Subject to the specific terms of any Option, the Committee may
change the terms of Options outstanding under this Plan, with respect to the
option price or the number of Shares subject to the Options, or both, when, in
the Committee's sole discretion, such adjustments become appropriate by reason
of a corporate transaction described in Subsection 10(d) hereof, or otherwise.
(c) Except as otherwise expressly provided herein, the issuance by
the Company of shares of its capital stock of any class, or securities
convertible into or exchangeable for shares of its capital stock of any class,
either in connection with a direct or underwritten sale, or upon the exercise of
rights or warrants to subscribe therefor or purchase such Shares, or upon
conversion of obligations of the Company into such Shares or other securities,
shall not affect, and no adjustment by reason thereof shall be made with respect
to the number of or exercise price of Shares then subject to outstanding Options
granted under this Plan.
(d) Without limiting the generality of the foregoing, the existence
of outstanding Options granted under this Plan shall not affect in any manner
the right or power of the Company to make, authorize or consummate (i) any or
all adjustments, reclassifications, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business; (ii) any merger or
consolidation of the Company or to which the Company is a party; (iii) any
issuance by the Company of debt securities, or preferred or preference stock
that would rank senior to or above the Shares subject to outstanding Options;
(iv) any purchase or issuance by the Company of Shares or other classes of
common stock or common equity securities; (v) the dissolution or liquidation of
the Company; (vi) any sale, transfer, encumbrance, pledge or assignment of all
or any part of the assets or business of the Company; or (vii) any other
corporate act or proceeding, whether of a similar character or otherwise.
(e) The Optionee shall receive written notice within a reasonable
time prior to the consummation of such action advising the Optionee of any of
the foregoing. The Committee may, in the exercise of its sole discretion, in
such instances declare that any Option shall terminate as of a date fixed by the
Board and give each Optionee the right to exercise his or her Option.
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11. TRANSFERABILITY. No Option or stock appreciation right granted
hereunder shall be sold, pledged, assigned, hypothecated, disposed or otherwise
transferred by the Optionee other than by will or the laws of descent and
distribution, unless otherwise authorized by the Board, and no Option or stock
appreciation right shall be exercisable during the Optionee's lifetime by any
person other than the Optionee.
12. ISSUANCE OF SHARES. As a condition of any sale or issuance of
Shares upon exercise of any Option, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to assure
compliance with any such law or regulation including, but not limited to, the
following:
(i) a representation and warranty by the Optionee to the
Company, at the time any Option is exercised, that he is acquiring the Shares to
be issued to him for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares; and
(ii) an agreement and undertaking to comply with all of the
terms, restrictions and provisions set forth in any then applicable
stockholders' agreement relating to the Shares, including, without limitation,
any restrictions on transferability, any rights of first refusal and any option
of the Company to "call" or purchase such Shares under then applicable
agreements, and
(iii) any restrictive legend or legends, to be embossed or
imprinted on Share certificates, that are, in the discretion of the Committee,
necessary or appropriate to comply with the provisions of any securities law or
other restriction applicable to the issuance of the Shares.
13. STOCK APPRECIATION RIGHTS. The Committee may grant stock
appreciation rights to Employees, either or tandem with Options that have been
or are granted under the Plan or with respect to a number of Shares on which an
Option is not granted. A stock appreciation right shall entitle the holder to
receive, with respect to each Share as to which the right is exercised, payment
in an amount equal to the excess of the Share's Fair Market Value on the date
the right is exercised over its Fair Market Value on the date the right was
granted. Such payment may be made in cash or in Shares valued at the Fair Market
Value as of the date of surrender, or partly in cash and partly in Shares, as
determined by the Committee in its sole discretion. The Committee may establish
a maximum appreciation value payable for stock appreciation rights.
14. RESTRICTED STOCK AWARDS. The Committee may grant restricted stock
awards under the Plan in Shares or denominated in units of Shares. The
Committee, in its sole discretion, may make such awards subject to conditions
and restrictions, as set forth in the instrument evidencing the award, which may
be based on continuous service with the Company or the attainment of certain
performance goals related to profits, profit growth, cash-flow or shareholder
returns, where such goals may be stated in absolute terms or relative to
comparison companies or indices to be achieved during a period of time.
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15. ADMINISTRATION OF THIS PLAN.
(a) This Plan shall be administered by the Committee, which shall
consist of not less than two Directors. The Committee shall have all of the
powers of the Board with respect to this Plan. Any member of the Committee may
be removed at any time, with or without cause, by resolution of the Board and
any vacancy occurring in the membership of the Committee may be filled by
appointment by the Board.
(b) Subject to the provisions of this Plan, the Committee shall have
the authority, in its sole discretion, to: (i) grant Options, (ii) determine the
exercise price per Share at which Options may be exercised, (iii) determine the
Optionees to whom, and time or times at which, Options shall be granted, (iv)
determine the number of Shares to be represented by each Option, (v) determine
the terms, conditions and provisions of each Option granted (which need not be
identical) and, with the consent of the holder thereof, modify or amend each
Option, (vi) defer (with the consent of the Optionee) or accelerate the exercise
date of any Option, and (vii) make all other determinations deemed necessary or
advisable for the administration of this Plan, including re-pricing, canceling
and regranting Options.
(c) The Committee, from time to time, may adopt rules and
regulations for carrying out the purposes of this Plan. The Committee's
determinations and its interpretation and construction of any provision of this
Plan shall be final, conclusive and binding upon all Optionees and any holders
of any Options granted under this Plan.
(d) Any and all decisions or determinations of the Committee shall
be made either (i) by a majority vote of the members of the Committee at a
meeting of the Committee or (ii) without a meeting by the unanimous written
approval of the members of the Committee.
(e) No member of the Committee, or any Officer or Director of the
Company or its Subsidiaries, shall be personally liable for any act or omission
made in good faith in connection with this Plan.
16. INCENTIVE OPTIONS FOR 10% STOCKHOLDERS. Notwithstanding any other
provisions of this Plan to the contrary, an Incentive Stock Option shall not be
granted to any person owning directly or indirectly (through attribution under
Section 424(d) of the Code) at the date of grant, stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company (or of
its Subsidiary) at the date of grant unless the exercise price of such Option is
at least 110% of the Fair Market Value of the Shares subject to such Option on
the date the Option is granted, and such Option by its terms is not exercisable
after the expiration of 10 years from the date such Option is granted.
17. INTERPRETATION.
(a) This Plan shall be administered and interpreted so that all
Incentive Stock Options granted under this Plan will qualify as Incentive Stock
Options under Section 422 of the Code. If any provision of this Plan should be
held invalid for the granting of Incentive Stock Options or illegal for any
reason, such determination shall not affect the remaining provisions
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hereof, and this Plan shall be construed and enforced as if such provision had
never been included in this Plan.
(b) This Plan shall be governed by the laws of the State of Florida.
(c) Headings contained in this Plan are for convenience only and
shall in no manner be construed as part of this Plan or affect the meaning or
interpretation of any part of this Plan.
(d) Any reference to the masculine, feminine, or neuter gender shall
be a reference to such other gender as is appropriate.
(e) Time shall be of the essence with respect to all time periods
specified for the giving of notices to the company hereunder, as well as all
time periods for the expiration and termination of Options in accordance with
Section 9 hereof (or as otherwise set forth in an option agreement).
18. AMENDMENT AND DISCONTINUATION OF THIS PLAN. Either the Board or the
Committee may from time to time amend this Plan or any Option without the
consent or approval of the stockholders of the Company; provided, however, that,
except to the extent provided in Section 9, no amendment or suspension of this
Plan or any Option issued hereunder shall substantially impair any Option
previously granted to any Optionee without the consent of such Optionee.
19. TERMINATION DATE. This Plan shall terminate ten years after the
date of adoption by the Board of Directors.
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