SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of October, 2000
Electrocon International Inc.
(Translation of Registrant's name into English)
---------------------------------------------
8/F Blk 8, Prosperity Centre, 77 Container Port Road,
Kwai Chung, N.T. Hong Kong
-----------------------------------------------------
(Address of principal executive offices)
[Indicate by check mark whether the Registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.]
Form 20-F X Form 40-F ______
[Indicate by check mark whether the Registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.]
Yes _____ No X
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ELECTROCON INTERNATIONAL INC.
(Registrant)
Date: October 25, 2000 By: /s/ Henry F. Schlueter
---------------------- --------------------------
Henry F. Schlueter, Assistant Secretary
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 25, 2000
Notice is hereby given that the Annual Meeting (the "Meeting") of the
Shareholders (the "Shareholders") of GETGO MAIL.COM INC., a British Virgin
Islands corporation (the "Company"), will be held at 10:00 a.m., local time, on
October 25, 2000, at The Embassy Suites Hotel, 1881 Curtis Street, Denver,
Colorado 80202, and any adjournments or postponements thereof (the "Annual
Meeting") for the following purposes:
1. To elect the following four (4) persons to serve as directors of the
Company until the next Annual Meeting of Shareholders and thereafter
until their successors shall have been elected and qualified: Derrin
R. Smith, Chris G. Mendrop, Henry F. Schlueter, and Kevin Fallon;
2. To approve and adopt an amendment (the "Name Change Amendment") to the
Company's Memorandum and Articles of Association (the "Memorandum and
Articles") which would effect a change in the name of the Company to
GETGO Inc.;
3. To authorize the Board of Directors of the Company to effect the Name
Change Amendment of the Company's Memorandum and Articles by which the
name of the Company will be changed to GETGO Inc., contingent upon a
determination by the Board of Directors that the effecting of the Name
Change Amendment is in the best interests of the Company and its
Shareholders;
4. To approve and adopt an amendment (the "Stock Amendment") to the
Company's Memorandum of Association which would effect an increase in
the number of authorized shares of Common Stock of the Company from
20,000,000 shares, $0.0001 par value, to 100,000,000 shares of $0.0001
par value, with no effect upon the already authorized, issued, and
outstanding shares of Common Stock, and would create a new class of
securities of the Company consisting of 5,000,000 authorized shares of
Preferred Stock, $1.00 par value, that may issued in series from time
to time by the Company's Board of Directors in their sole discretion
without the approval of the Shareholders of the Company with such
designations, powers, preferences, rights, qualifications,
limitations, and restrictions as have not been fixed in the Company's
Memorandum of Association;
5. To approve and adopt an amendment (the "Quorum Amendment") to the
Company's Articles of Association which would effect a decrease in the
quorum requirement for business to be conducted at any meeting of the
Shareholders from one-half to one-third of the total shares of each
class or series entitled to vote as a class or series and the same
proportion of the votes of the remaining shares entitled to vote
thereon;
6. To approve and adopt an Incentive Stock Option Plan of the Company
pursuant to which options to purchase Common Stock may be granted to
certain personnel of the Company;
7. To ratify the selection of Deloitte Touche Tohmatsu as the independent
public accountants of the Company for the fiscal year ending December
31, 2000; and
<PAGE>
8. To consider and act upon such other business as may properly come
before the Meeting or any adjournments thereof.
Only Shareholders of record at the close of business on September 22, 2000,
shall be entitled to notice of and to vote at the meeting or any adjournments
thereof. All Shareholders are cordially invited to attend the Meeting in person.
By Order of the Board of Directors
October 2, 2000 /s/ Derrin R. Smith
Denver, Colorado --------------------------------
Chairman of the Board
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WISH YOUR SHARES OF COMMON
STOCK TO BE VOTED, YOU ARE REQUESTED TO SIGN AND MAIL PROMPTLY THE ENCLOSED
PROXY WHICH IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. A RETURN
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED
FOR THAT PURPOSE.
2
<PAGE>
GETGO MAIL.COM INC.
4610 South Ulster, Suite 150
Denver, Colorado 80237
PROXY STATEMENT
DATED OCTOBER 2, 2000
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 25, 2000
GENERAL
-------
This Proxy Statement is being furnished to the shareholders of GETGO
MAIL.COM INC., a British Virgin Islands corporation (the "Company"), in
connection with the solicitation of proxies by the Board of Directors of the
Company (the "Board of Directors") from holders (the "Shareholders") of
outstanding shares of common stock, $0.0001 par value, of the Company (the
"Common Stock"), for use at the Annual Meeting of the Shareholders to be held at
10:00 a.m., local time, on October 25, 2000, at The Embassy Suites Hotel, 1881
Curtis Street, Denver, Colorado 80202, and any adjournments or postponements
thereof (the "Annual Meeting"). This Proxy Statement, Notice of Annual Meeting
of Shareholders, and the accompanying Proxy Card are first being mailed to
shareholders on or about October 3, 2000.
VOTING SECURITIES AND VOTE REQUIRED
-----------------------------------
Only Shareholders of record at the close of business on September 22, 2000
(the "Record Date") are entitled to notice of and to vote the shares of Common
Stock of the Company held by them on such date at the Meeting or any and all
adjournments thereof. As of the Record Date, 11,211,718 shares of Common Stock
were outstanding, of which 9,890,918 shares were entitled to vote. There was no
other class of voting securities outstanding at that date.
Each share of Common Stock held by a Shareholder entitles such Shareholder
to one vote on each matter that is voted upon at the Meeting or any adjournments
thereof.
The presence, in person or by proxy, of the holders of one-half of the
outstanding shares of Common Stock is necessary to constitute a quorum at the
Meeting. Assuming that a quorum is present, the affirmative vote of the holders
of a majority of the shares of Common Stock represented at the Meeting in person
or by proxy and entitled to vote will be required to approve each proposal to be
considered at the Meeting and to adopt the resolutions of the Shareholders
corresponding to each proposal.
Abstentions and broker "non-votes" will be counted toward determining the
presence of a quorum for the transaction of business; however, abstentions will
have the effect of a negative vote on the proposals being submitted. Abstentions
may be specified on all proposals. A broker "non-vote" will have no effect on
the outcome of any of the proposals.
If the accompanying proxy is properly signed and returned to the Company
and not revoked, it will be voted in accordance with the instructions contained
therein. Unless contrary instructions are given, the persons designated as proxy
holders in the accompanying Proxy will vote "FOR" each proposal to be considered
by the Shareholders at the Meeting or, if no such recommendation is given, in
their own discretion. The Company's executive officers and directors and Edward
Ting and his affiliates have advised the Company that they intend to vote their
shares (including those shares over which they hold voting power), representing
approximately 39.74% of the outstanding shares of Common Stock, in favor of each
of the proposals above. Each Proxy granted by a Shareholder may be revoked by
3
<PAGE>
such Shareholder at any time thereafter by writing to the Secretary of the
Company prior to the Meeting, or by execution and delivery of a subsequent Proxy
or by attendance and voting in person at the Meeting, except as to any matter or
matters upon which, prior to such revocation, a vote shall have been cast
pursuant to the authority conferred by such Proxy.
The cost of soliciting these Proxies, consisting of the printing, handling,
and mailing of the Proxy and related material, and the actual expense incurred
by brokerage houses, custodians, nominees, and fiduciaries in forwarding proxy
materials to the beneficial owners of the shares of Common Stock, will be paid
by the Company.
In order to assure there is a quorum, it may be necessary for certain
officers, directors, regular employees, and other representatives of the Company
to solicit Proxies by telephone or telegraph or in person. These persons will
receive no extra compensation for their services.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
----------------------------------------
The following table sets forth, as of July 31, 2000, the beneficial
ownership of the Company's Common Stock by each executive officer, director, and
person known by the Company to own beneficially more than 5% of the Common Stock
of the Company outstanding as of such date and by the officers and directors of
the Company as a group. The figures have been adjusted to reflect the issuance
of 333,000 shares of the Company's Common Stock to Kevin Fallon, which had not
been issued as of July 31, 2000. Except as otherwise indicated, all shares are
owned directly.
Identity of Shares Percent of
persons or groups Beneficially Owned Class
----------------- ------------------ -----
Edward Ting 3,713,872(1), (7) 34.50 %
Judah Klausner 800,462 7.83 %
Derrin R. Smith 100,000(2) 0.97 %
Chris F. Mendrop 445,000(3) 4.27 %
Kevin Fallon 393,000(4) 3.82 %
Henry F. Schlueter 399,000(5) 3.77 %
Fred Ko 51,112(6) 0.50 %
Clement Cheung 748,663(7) 7.30 %
Officers and directors
as a group (6 persons) 2,136,775(8) 19.48 %
---------------
(1) Of these shares, 826,250 shares are owned outright by Edward Ting, a
principal shareholder and former officer and director of the Company,
911,250 shares are owned by David Nominees for the benefit of Edward Ting,
305,000 shares are owned by Mr. Ting's wife Viola Ting, and 1,131,372
shares are owned by three entities for which Mr. Ting may be deemed to be a
beneficial owner. Also includes options to acquire 540,000 shares of the
Company's common stock that are immediately exercisable. See "Change in
Control" below for information with respect to 2,903,872 shares that are
subject to a voting trust agreement and 2,613,872 shares that are the
subject of an option.
(2) Includes options to acquire 100,000 shares of the Company's common stock
that are immediately exercisable. Does not include options to acquire
2,000,000 shares of the Company's common stock that are not immediately
exercisable and that will vest on a 250,000 share per quarter basis
beginning on December 31, 2000. See "Change in Control" below for
information with respect 2,903,872 shares that are subject to a voting
trust agreement and 2,613,872 shares that are the subject of an option and
are listed above as beneficially owned by Edward Ting and his affiliates.
4
<PAGE>
(3) Includes 260,000 shares owned by Blake Street Securities LLC ("BSS"). Mr.
Mendrop is a principal owner of the entity that controls BSS. Also includes
options to acquire 185,000 shares of the Company's common stock that are
immediately exercisable. See "Change in Control" below for information with
respect to 2,903,872 shares that are subject to a voting trust agreement
and 2,613,872 shares that are the subject of an option and are listed above
as beneficially owned by Edward Ting and his affiliates.
(4) Includes 343,000 shares owned directly by Mr. Fallon, and options to
acquire 50,000 shares of the Company's common stock that are immediately
exercisable.
(5) Includes 49,000 shares owned directly by Mr. Schlueter, and options to
acquire 350,000 shares of the Company's common stock that are immediately
exercisable. See "Change in Control" below for information with respect to
2,903,872 shares that are subject to a voting trust agreement and 2,613,872
shares that are the subject of an option and are listed above as
beneficially owned by Edward Ting and his affiliates.
(6) Includes 21,112 shares owned directly by Mr. Ko, and options to acquire
30,000 shares of the Company's common stock that are immediately
exercisable. Does not include options to acquire 90,000 shares of the
Company's common stock that are not immediately exercisable and that will
vest one-third each year beginning on December 31, 2000.
(7) Includes 53,500 shares owned directly by Mr. Cheung, and 665,163 shares
owned by entities that Mr. Cheung controls with Edward Ting. The 665,163
shares have been included in both Mr. Ting's and Mr. Cheung's beneficial
ownership. Also includes options to acquire 30,000 shares of the Company's
common stock that are immediately exercisable. Does not include options to
acquire 90,000 shares of the Company's common stock that are not
immediately exercisable and that will vest one-third each year beginning on
December 31, 2000.
(8) Includes 665,163 shares owned by entities that Mr. Cheung controls with Mr.
Ting. The 665,163 shares have been included in Mr. Cheung's beneficial
ownership for purposes of this calculation.
CHANGE IN CONTROL AND LOCK-UP
Effective as of August 22, 2000, Edward Ting and certain of his affiliates
entered into a voting trust agreement with Derrin R. Smith, Chris Mendrop and
Henry F. Schlueter. Pursuant to the terms of the voting trust agreement Edward
Ting and certain of his affiliates agreed to transfer 2,903,872 of the shares
under their control to the voting trust for a period of five years. Messrs.
Smith, Mendrop and Schlueter are the trustees of the voting trust and as such
will exercise full voting rights with respect to these shares. As a result,
Messrs. Smith, Mendrop and Schlueter will have voting control over approximately
29.35% of the Company's common stock through the voting trust, and a change in
control of the Company has occurred. In addition, Edward Ting and certain of his
affiliates granted Messrs. Smith, Mendrop and Schlueter options to purchase
2,613,872 shares of the Company's common stock for a five-year period at 80% of
the average closing price of the common stock for the 30 days preceding the
exercise date per share. Further, Mr. Ting and certain of his affiliates have
entered into an agreement under which they have agreed to "lock-up" 2,903,572
shares of the Company's common stock for a twenty-four month period. Under the
lock-up, Mr. Ting and certain of his affiliates have agreed that they will not
sell, pledge, hypothecate, or otherwise dispose of the shares that are the
subject of the lock-up without the written consent of both Chris Mendrop and
Derrin Smith.
BOARD COMMITTEES
On March 2, 1998, the Board of Directors appointed, and has since
maintained, an Independent Audit Committee of the Company. The Committee was
established to (i) review and approve the scope of audit procedures employed by
the Company's independent auditors; (ii) review and approve the audit reports
rendered by the Company's independent auditors; (iii) approve the audit fee
charged by the independent auditors; (iv) report to the Board of Directors with
respect to such matters; (v) recommend the selection of independent auditors;
and (vi) discharge such other responsibilities as may be delegated to it from
time to time by the Board and to discharge such other responsibilities as may be
delegated to it from time to time by the Board of Directors. Chris G. Mendrop,
an independent director of the Company, has served as a member of the
Independent Audit Committee from the date of its inception to the present. James
Tsze Leung Mak, an independent director of the Company, also served as a member
5
<PAGE>
of the Independent Audit Committee from the date of its inception until his
resignation as a director earlier this year. Effective July 19, 2000, Kevin
Fallon was appointed a director of the Company to fill the vacancy created by
Mr. Mak's resignation as a director. Also effective July 19, 2000, Mr. Fallon
was designated an independent director of the Company and appointed a member of
the Independent Audit Committee to fill the vacancy created on that Committee by
the resignation of Mr. Mak.
COMPENSATION OF OFFICERS AND DIRECTORS
The following table sets forth certain information as to each of the
Company's executive officers and directors whose cash compensation exceeded
$60,000 and for all executive officers as a group for the year ended December
31, 1999:
Cash Non-Cash
Name of Individual Capacities in Which Served Compensation Compensation
------------------ -------------------------- ------------ ------------
Edward Y.F. Ting Director(1) $139,000 $23,441(2)
Clement W. K. Cheung Secretary, Treasurer
and Director $52,500 $20,000(3)
All directors and
officers as a group
(4 persons) $191,500 $43,441
---------------------
(1) Mr. Ting served as the President, Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer and Chairman of the Board of Directors
during the entire fiscal year ended December 31, 1999. Mr. Ting
subsequently resigned from those positions as of July 4, 2000.
(2) Reflects the value of housing provided to Mr. Ting during fiscal 1999.
(3) Reflects the value of housing provided to Mr. Cheung during fiscal 1999.
In 1996, the Company instituted a defined contribution retirement plan
which covers the employees of Bothgreat and EPL located in Hong Kong. The plan
provides for annual contributions by the Company of 5% of eligible compensation
of employees based on length of service. The Company and its subsidiaries set
aside $20,666 pursuant to the plan for the fiscal year ended December 31, 1999,
and $26,037 pursuant to the plan for the fiscal year ended December 31, 1998.
As of August 1999, the Company terminated its defined contribution plan and
distributed all its assets to eligible employees.
EMPLOYMENT AGREEMENT
On July 4, 2000, the Company entered into an employment agreement with
Derrin R. Smith. Under the terms of that employment agreement Dr. Smith will be
employed as the Company's President and Chief Executive Officer until October 1,
2002, subject to certain conditions for earlier termination. The Agreement
provides for a salary of $10,000 per month until additional capital has been
infused into the Company at which time Dr. Smith's salary will increase to
$300,000 per year. The Agreement also contains a grant of options to acquire up
to 2,100,000 shares subject to certain vesting provisions, as more fully
described below under "Compensation Pursuant to Options to Purchase Common
Stock."
6
<PAGE>
COMPENSATION PURSUANT TO OPTIONS
TO PURCHASE COMMON STOCK
The Company has granted options to employees and various individuals. A
description of the options granted by the Company is as follows:
In August 1999, the Company granted to various employees and individuals
options to purchase 588,500 shares of common stock of the Company. These options
vest and expire over a four-year period. Twenty-five percent of the options vest
and become exercisable September 1, 1999 at an exercise price of $1.00 per share
and expire on December 31, 2000. Twenty-five percent of the options vest and
become exercisable January 1, 2001, at an exercise price of $1.30 per share and
expire on December 31, 2001. Twenty-five percent of the options vest and become
exercisable January 1, 2002, at an exercise price of $1.65 per share and expire
on December 31, 2002. The final twenty-five percent of the options vest and
become exercisable January 1, 2003, at an exercise price of $2.00 per share and
expire on December 31, 2003. Edward Ting received 160,000 of the options, Fred
Ko received 120,000 of the options, and Clement Cheung received 120,000 of the
options. The right to acquire these shares is cumulative and may not be
assigned. These options expire upon termination of employment with the Company.
In September 1999, the Board of Directors granted Edward Ting an option to
purchase 400,000 shares of the Company's common stock. The options expire
September 20, 2009, and are exercisable at $1.25 per share.
In November 1999, the Board of Directors granted Edward Ting an option to
purchase 100,000 shares of the Company's common stock. The options expire
November 9, 2009, and are exercisable at $1.75 per share.
In November 1999, the Board of Directors granted Chris Mendrop an option to
purchase 50,000 shares of the Company's common stock. The options expire
November 10, 2004, and are exercisable at $2.00 per share. On October 15, 1999,
Chris Mendrop was granted an option to purchase 10,000 shares of the Company's
common stock under the Company's Non-Employee Directors' Stock Option Plan. The
options expire on October 14, 2009, and are exercisable at $2.125 per share.
In connection with a private placement of the Company's common stock in
November 1999, the Board of Directors agreed to grant an option to purchase
50,000 shares of the Company's common stock to designees of Blake Street
Securities, LLC, the placement agent for the Company's recent private placement
of its securities. The options will expire ten years from the date of grant and
will be exercisable at $.50 per share. The Board of Directors has also granted
Chris Mendrop and John Callea options to each purchase 75,000 shares of the
Company's common stock. These options expire August 11, 2009, and are
exercisable at $.50 per share. Mr. Mendrop is a director of the Company and both
Mr. Mendrop and Mr. Callea are principals of Blake Street Securities, LLC.
The Board of Directors has issued 50,000 shares of the Company's common
stock to Henry F. Schlueter and has also granted Mr. Schlueter an option to
purchase an additional 100,000 shares of the Company's common stock, in
connection with his legal work for the Company. The options will expire on
August 11, 2009, and will be exercisable at $.50 per share. In addition, the
Company granted Mr. Schlueter an option to acquire an additional 200,000 shares
of the Company's common stock on August 2, 2000, in connection with his
representation of the Company. These options expire August 1, 2010, and are
exercisable at $1.938 per share. In connection with Mr. Schlueter agreeing to
serve on the Company's Board of Directors, the Company granted Mr. Schlueter an
option to acquire 50,000 shares of the Company's common stock in August 2000 at
$2.00 per share. These options expire five years from the date of issuance. Mr.
Schlueter is counsel for the Company and a nominee for the Board of Directors.
7
<PAGE>
On February 14, 2000, the Board of Directors granted to a former consultant
of the Company an option to purchase 62,500 shares of the Company's common stock
at an exercise price of $1.00 per share. The option is exercisable for a period
of two years.
In July 2000, the Board of Directors granted Derrin Smith an option to
purchase 100,000 shares of the Company's common stock. The options vest
immediately and expire December 31, 2005, and are exercisable at $2.00 per
share. Also in July 2000, the Board of Directors granted Mr. Smith an additional
option to purchase 2,000,000 shares of the Company's common stock. These
additional options vest as follows: 250,000 vest on December 31, 2000, and are
exercisable at $2.00 per share; 250,000 vest on March 31, 2001, and are
exercisable at $2.00 per share; 250,000 vest on June 30, 2001, and are
exercisable at $3.00 per share; 250,000 vest on September 30, 2001, and are
exercisable at $3.00 per share; 250,000 vest on December 31, 2001, and are
exercisable at $4.00 per share; 250,000 vest on March 31, 2002, and are
exercisable at $4.00 per share; 250,000 vest on June 30, 2002, and are
exercisable at $5.00 per share; and 250,000 vest on September 30, 2002, and are
exercisable at $5.00 per share. These options were granted to Mr. Smith in
connection with his employment with the Company effective July 4, 2000.
In connection with Mr. Fallon agreeing to serve on the Company's Board of
Directors, the Company granted Mr. Fallon an option to acquire 50,000 shares of
the Company's common stock in July 2000 at $2.00 per share. These options expire
five years from the date of issuance.
CERTAIN TRANSACTIONS
Since 1992, the Company has provided Edward Ting with a leased
accommodation in Hong Kong for his use. This property, located on Broadcast
Street in Hong Kong, consists of approximately 1,000 square feet, and the rental
rate is approximately $2,000 per month. The property is leased on a monthly
basis under an oral arrangement.
Since October 1998, the Company has provided Clement Cheung with a leased
accommodation in Hong Kong for his use at a monthly rental of approximately
$1,600. The term of the lease is from October 1, 1998, to September 30, 2000.
The Company leases a residential accommodation from Mr. Cheung that is
located in Shenzhen City, China, at a monthly rent of approximately $2,821. The
lease is renewable on an annual basis. Rental expense amounted to $33,846 in
each of 1999, 1998, and 1997, respectively.
Edward Ting advanced the Company, on an interest free basis, $164,143 in
1999, $134,991 in 1998, and $127,639 in 1997. At December 31, 1999, and 1998,
the Company owed Mr. Ting the amounts of $274,134 and $134,991, respectively.
The loan advances have no fixed repayment terms.
In August 1999, the Board of Directors granted stock bonuses to employees
of the Company in an aggregate amount of 95,500 shares. Of those shares, Edward
Ting received 10,000 shares, Clement Cheung received 13,500 shares, and Fred Ko
received 13,500 shares.
In March 1998, Bothgreat obtained a standby letter of credit for one of its
suppliers from a bank. The letter of credit was collateralized by a security
interest in a $500,000 deposit owned by Glas-Aire Industries Group Ltd.
("Glas-Aire"). At that time, Edward Ting was Chief Executive Officer, Chairman
of the Board of Directors, and a principal shareholder of Glas-Aire, and Chris
G. Mendrop and Clement Cheung were directors of Glas-Aire. As consideration for
Glas-Aire agreeing to provide the security for the letter of credit, the Company
8
<PAGE>
agreed as follows: (i) to issue to Glas-Aire a warrant exercisable for a period
of five years from March 25, 1998 to purchase 250,000 shares of the Company's
Common Stock at an exercise price of $1.00 per share during the first year,
$1.10 per share during the second year, $1.20 per share during the third year,
$1.50 per share during the fourth year and $1.75 per share during the fifth
year; (ii) to pay Glas-Aire a fee in the amount of 1% of the collateral, or
$5,000, payable in advance for the six month period beginning on the date the
letter of credit was issued by the bank and an additional fee of 1%, also
payable in advance, for the six-month period immediately following the initial
six-month period, if the collateral continued to be utilized for the letter of
credit, with the understanding that the collateral would be made available by
Glas-Aire to collateralize the letter of credit for a period not to exceed one
year; and (iii) the pledge to Glas-Aire by Mr. Ting of all shares of Glas-Aire
common stock owned by him, his wife or under his control. The Company recognized
expense of $75,000 in 1998 in respect of this warrant. In November 1998, the
Company defaulted on the letter of credit and $250,000 of the collateral was
seized, resulting in the Company being indebted to Glas-Aire in the amount of
$250,000. In December 1998, Glas-Aire made a loan to the Company in the
principal amount of $500,000, and $250,000 of the loan proceeds was used to
repay Glas-Aire for the seized collateral for the letter of credit. This loan
was evidenced by a promissory note, bore interest at the rate of 10% per annum,
unless a default occurred in which case the interest rate would increase to 12%,
and was payable on demand. The loan was secured by a first priority lien on
212,331 shares of Glas-Aire common stock owned by Mr. Ting and a second priority
lien on the remaining 301,584 shares of Glas-Aire common stock owned by Mr. and
Mrs. Ting which had previously been pledged to secure the letter of credit
arrangement. In April 1999, Mr. Edward Ting purchased the promissory note from
Glas-Aire in order to enable him to sell his Glas-Aire shares which were
encumbered by the debt. In addition, Glas-Aire transferred the warrant to Mr.
Ting. In November 1999, Mr. Ting exercised all of the warrants to purchase
250,000 shares of the Company at $1.10 per share which was settled by the
reduction of the principal amount of the promissory note due to Mr. Ting by
$275,000. The remaining promissory note balance of $225,000 was settled by the
Company by issuing shares to Mr. Ting and by Mr. Ting's receiving the proceeds
from the sale of an unincorporated business.
In August 1999, the Company disposed of its entire investment in Flownet
Irrigation Engineering Services Company to Bright Prospects Holdings Limited, a
company beneficially owned by Mr. Edward Ting. At the time of this transaction,
the obligation to Mr. Ting under the Glas-Aire promissory note was reduced by
$225,000 based upon the following events:
o the $150,000 consideration for the sale of the Flownet assets to be
received by the Company from Bright Prospects Holdings Limited was,
instead, used to offset $150,000 of principal on the promissory note; and
o the Company converted $100,000 of debt due to Mr. Ting into equity and
issued 200,000 shares of the Company's common stock to Mr. Ting as payment
for the debt. A portion of this conversion, $75,000, was used to reduce the
balance of the Glas-Aire promissory note due to Mr. Ting. The remaining
$25,000 of debt converted to equity pertained to short term loans made to
the Company by Mr. Ting.
The Company currently has an oral agreement with Blake Street Group LLC
("Blake Street"), a limited liability corporation of which Chris G. Mendrop, a
director of the Company, is a controlling member, pursuant to which Blake Street
has agreed to assist the Company in the development of long-term strategic
plans, including, but not limited to, the areas of management, marketing, and
finance, and to perform certain other management consulting services for the
Company. As compensation for these services, Blake Street is paid $1,000 per
month.
During 1999, there were no other material transactions, and none are
presently proposed, to which the Company or any of its subsidiaries was or is to
be a party, in which either (i) any director or officer of the Company, or (ii)
any corporation or foreign corporation directly or indirectly owning or
9
<PAGE>
controlling the Company, or (iii) any relative or spouse of any of the
foregoing, or any relative of such spouse, who has the same home as such person
or who is a director or officer of any subsidiary of the Company had or is to
have a direct or indirect material interest.
PROPOSAL 1
ELECTION OF FOUR PERSONS
TO SERVE AS DIRECTORS OF THE COMPANY
The Company's directors are elected annually to serve until the next Annual
Meeting of Shareholders and thereafter until their successors shall have been
elected and qualified. The number of directors presently authorized by the
Articles of Association of the Company shall be not less than one (1) nor more
than seven (7).
Unless otherwise directed by shareholders, the proxy holder will vote all
shares represented by proxies held by them for the election of the following
nominees, all of whom are now members and constitute the Company's Board of
Directors. The Company is advised that all nominees have indicated their
availability and willingness to serve if elected. In the event that any nominee
becomes unavailable or unable to serve as a director of the Company prior to the
voting, the proxy holder will vote for a substitute nominee in the exercise of
his best judgment.
INFORMATION CONCERNING NOMINEES
DERRIN R. SMITH, PH.D. became the President, Chief Executive Officer, Chief
Financial Officer, and a director and Chairman of the Board of the Company on
July 4, 2000. Dr. Smith has over 17 years of experience developing and directing
strategic high technology programs and enterprises. His background includes
domestic and international (Asia, South America, and Middle East) activities for
both government and the private sector. Prior to joining the Company, Dr. Smith
operated his own private company, DRS Sciences, Inc. from 1992 to the present.
DRS Sciences, Inc. is engaged primarily in providing consulting services in the
design and development of computer software, the integration of such software
with the hardware platforms utilized by his clients, and investment banking
services for high technology ventures. In June 1998, Dr. Smith's company entered
into an agreement with CeBourn Ltd., an investment banking firm specializing in
telecommunications, software, and high technology, under which Dr. Smith served
as CeBourn's chief economist. Dr. Smith devoted substantially full time to
CeBourn Ltd. under this agreement from May 1998 to May 2000. Prior to commencing
active operations of his own company, Dr. Smith was employed by M.I.T.R.E.
Corporation in various capacities. Concurrently with the above positions, Dr.
Smith provided consulting services to several companies.
CHRIS G. MENDROP was appointed a director of the Company in March 1998. Mr.
Mendrop is the Chief Executive Officer of Blake Street Group LLC, Blake Street
Securities LLC and Blake Street Advisors LLC (collectively the "Blake Street
Group"). He has served as the Chief Executive Officer of each of the companies
included in the Blake Street Group since those companies were formed in January,
March, and July 1998, respectively. From July 1992 until January 1998, Mr.
Mendrop was Chief Executive Officer of Corporate Development Capital, Inc., an
investment advisory and financial consulting firm located in Denver, Colorado.
Mr. Mendrop holds a Masters of Business Administration degree in Finance from
the University of Colorado.
HENRY F. SCHLUETER is currently the Assistant Secretary of the Company and
U.S. counsel to the Company. Since 1992, Mr. Schlueter has been the managing
director of Schlueter & Associates, P.C., a law firm, practicing in the areas of
securities, mergers and acquisitions, finance, and corporate law. From 1989 to
1991, prior to establishing Schlueter & Associates, P.C., Mr. Schlueter was a
partner in the Denver, Colorado office of Kutak Rock (formerly Kutak, Rock &
10
<PAGE>
Campbell), and from 1984 to 1989, he was a partner in the Denver office of
Nelson & Harding. From 1978 to 1980 Mr. Schlueter was employed in the Division
of Corporation Finance by the United States Securities and Exchange Commission
("SEC"). In July 1980, Mr. Schlueter left the SEC and entered private practice
as an associate in the Denver office of Nelson & Harding. Mr. Schlueter is a
member of the American Institute of Certified Public Accountants, the Colorado
Society of CPA's, the Colorado and Denver Bar Associations, and the Wyoming
State Bar. Mr. Schlueter received his Masters in Business
Administration-Accounting from the University of Wyoming in 1977, and his law
degree from the University of Wyoming College of Law in 1978.
KEVIN FALLON led the quality assurance department for Charles Jacquin et
Cie in Philadelphia in 1972. In 1975, he changed careers and joined Harowe Servo
Controls as a Junior Engineer and worked in the design of guidance systems for
robots and missiles. In 1976, he joined RCA Space Division as a Design Engineer
until 1979, when he joined General Electric as a Sales Engineer for
technology-based products. In 1982, he founded and became employed as President
and Chief Executive Officer of the systems integration firm All Control Systems,
Inc. ("ACS") in Westchester, Pennsylvania. During the early 1990's, he was
instrumental in the creation two new entities, Prometa Consulting, a technology
and business process engineering consulting firm, and Precision Dispensing, a
product distribution firm. In December 1996, Fallon sold ACS and Prometa to
Denver-based TAVA Technologies as part of a national roll-up and served as Chief
Operating Officer and a director for TAVA until July 1999, when the TAVA
management team sold the company to REAL Software, a global company
headquartered in Belgium. Mr. Fallon continued in his position as COO until he
resigned in March 2000 to pursue new entrepreneurial ventures. Mr. Fallon holds
a Bachelor of Science degree in Electrical Engineering from Drexel University
and a Master in Business Administration from the Wharton School of Business,
University of Pennsylvania. He is a member of the Young Presidents Organization
and sits on several fiduciary boards.
No family relationship exists among any of the named directors and
executive officers. Except as described herein, no arrangement or understanding
exists between any such director or officer and any other persons pursuant to
which any director or executive officer was elected as a director or executive
officer of the Company.
Board Recommendation
The Board recommends a vote FOR the election of each of the four nominees
for directors of the Company.
PROPOSAL 2
APPROVAL AND ADOPTION OF NAME CHANGE AMENDMENT
TO CHANGE NAME OF COMPANY
To approve and adopt the Name Change Amendment to the Company's Memorandum
of Association which would effect a change in the name of the Company to GETGO
Inc.
The form of the Name Change Amendment to the Memorandum of Association of
the Company pursuant to which the name of the Company would be changed, and the
resolutions to be adopted by the shareholders in connection therewith if the
Name Change Amendment is approved by the Shareholders, are attached to this
Proxy Statement as Exhibit A.
Purposes of the Proposed Name Change of the Company
As a new course of business, in 1999 the Company acquired certain license
rights under two patent license agreements (the "Patent License Agreements")
with Visual Access Technologies, Inc. ("VAT"). These license agreements grant to
11
<PAGE>
the Company the right to develop, manufacture, use, and sell Getgo Mail(TM)
Cards and enabling software for use by customers of providers of voice, email,
data, and facsimile messaging services. Using the proprietary technology
acquired under these license agreements, the Company intends to complete the
development of and begin manufacturing a credit card-size device that permits a
user to access voice data and store and retrieve the data from the device much
as if it were in standard e-mail format. The Company believes that this
technology will provide the user with substantially more convenience in
retrieving voice-messaging data. The Company's new subsidiary, Getgo Mail USA
Inc. is the entity that conducts operations for this new product. The Company
has completed a working prototype of the Getgo Mail(TM) Card. The Company is in
the process of completing development of the enabling software that will permit
commercial use of the card.
In July 2000, the Company announced a restructuring plan to be implemented
by Dr. Derrin Smith. This plan is far reaching and extends beyond the area of
unified messaging. The new focus required reorganization of GETGO executive and
advisory teams (tasks which are well underway), additional capitalization and
creating new core technology competencies that complement our business model.
Part of the new capitalization plan includes subscription of a private equity
fund, in which a GETGO subsidiary will act as General Partner. The Company's
strategy for growth includes aggressive acquisitions as well as using newly
embedded expertise to build from within. The Company expects that its first
acquisitions will most clearly represent a broadband and convergence technology
focus. From a User perspective, the convergence revolution boils down to three
specific areas of interest: Information, Communications and Entertainment, which
are the "I.C.E." verticals for the Company's new profit centers. Management
believes that shortening the name of the Company to "GETGO Inc." is reflective
of the new broader based focus of the Company. Further, now that the operations
for the Getgo Mail(TM) Card are being conducted by the Company's new subsidiary,
Getgo Mail USA Inc., rather than by the Company itself, the Board of Directors
believes it to be in the best interests of the Company and its Shareholders for
the name of the Company itself to be changed from GETGO MAIL.COM INC. to simply
GETGO Inc. to indicate this change and to avoid confusion on the part of those
who previously associated the name GETGO MAIL.COM with the Getgo Mail(TM) Card.
Approval of the Name Change Amendment requires the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock entitled to
notice of, and to vote at, the Annual Meeting. The Name Change Amendment would
become effective as of the date and time it is filed with the Registrar of
Companies in the British Virgin Islands, the domicile of the Company. Contingent
upon the approval of the Shareholders of (i) the Name Change Amendment as
described in this Proposal 2 and (ii) the authorization of the Board of
Directors of the Company to effect the Name Change Amendment as described in
Proposal 3, and contingent upon a determination by the Board of Directors that
the effecting of the Name Change Amendment is in the best interests of the
Company and its Shareholders, the filing will be made as soon as practicable
following that determination by the Board of Directors.
Unless otherwise directed by shareholders, the proxy holders will vote all
shares represented by proxies held by them for the approval and adoption of a
Name Change Amendment to the Company's Memorandum of Association which would
effect a change in the name of the Company to GETGO Inc.
Board Recommendation
The Board recommends a vote FOR the approval and adoption of the Name
Change Amendment to the Company's Memorandum of Association which would effect a
change in the name of the Company to GETGO Inc.
12
<PAGE>
PROPOSAL 3
AUTHORIZATION OF BOARD OF DIRECTORS TO EFFECT
NAME CHANGE AMENDMENT TO CHANGE NAME OF COMPANY
To authorize the Board of Directors of the Company to effect the Name
Change Amendment to the Memorandum of Association by which the name of the
Company will be changed to GETGO Inc., contingent upon a determination by the
Board of Directors that the effecting of the Amendment is in the best interests
of the Company and its Shareholders.
Purposes of the Authorization of the Board to Effect Name Change of Company
As described above under Proposal 2, the Board of Directors currently
believes it to be in the best interests of the Company and its Shareholders for
the Company to proceed with the change in the business of the Company and with
the corresponding change in the Company's name to GETGO Inc. Management of the
Company is not aware at this time of any information which might indicate that
the proposed change in the business of the Company would not best serve the
interests of the Company and its Shareholders. However, the Board of Directors
believes it to be prudent to request of the Shareholders their authorization for
the Board to effect the subject name change, thereby also delegating to the
Board of Directors the option of not effecting the name change if the Board
should receive information indicating that the interests of the Company and the
Shareholders will not be best served by proceeding as indicated above.
Approval of the authorization of the Board of Directors to effect the Name
Change Amendment to the Memorandum of Association by which the name of the
Company will be changed to GETGO Inc., contingent upon a determination by the
Board of Directors that the effecting of the Amendment is in the best interests
of the Company and its Shareholders. The Name Change Amendment requires the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock entitled to notice of, and to vote at, the Annual Meeting. The Name
Change Amendment would become effective as of the date and time it is filed with
the Registrar of Companies in the British Virgin Islands, the domicile of the
Company. Contingent upon the approval of the Shareholders of (i) the Name Change
Amendment as described in Proposal 2 and (ii) the authorization of the Board of
Directors of the Company to effect the Name Change Amendment as described in
this Proposal 3, and contingent upon a determination by the Board of Directors
that the effecting of the Name Change Amendment is in the best interests of the
Company and its Shareholders, the filing will be made as soon as practicable
following that determination by the Board of Directors.
Unless otherwise directed by shareholders, the proxy holders will vote all
shares represented by proxies held by them to authorize the Board of Directors
of the Company to effect the Name Change Amendment to the Memorandum of
Association by which the name of the Company will be changed to GETGO Inc.,
contingent upon a determination by the Board of Directors that the effecting of
the Amendment is in the best interests of the Company and its Shareholders.
Board Recommendation
The Board recommends a vote FOR the authorization of the Board of Directors
of the Company to effect the Name Change Amendment to the Memorandum of
Association by which the name of the Company will be changed to GETGO Inc.,
contingent upon a determination by the Board of Directors that the effecting of
the Amendment is in the best interests of the Company and its Shareholders.
13
<PAGE>
PROPOSAL 4
PROPOSED STOCK AMENDMENT TO
INCREASE AUTHORIZED SHARES OF COMMON STOCK
AND CREATE PREFERRED STOCK
To approve and adopt the Stock Amendment to the Company's Memorandum of
Association which would effect an increase in the number of authorized shares of
Common Stock of the Company from 20,000,000 shares, $0.0001 par value, to
100,000,000 shares at $0.0001 par value, with no effect upon the already
authorized, issued, and outstanding shares of Common Stock, and would create a
new class of securities of the Company consisting of 5,000,000 authorized shares
of Preferred Stock, $1.00 par value, that may issued in series from time to time
by the Company's Board of Directors in their sole discretion without the
approval of the Shareholders of the Company with such designations, powers,
preferences, rights, qualifications, limitations, and restrictions as have not
been fixed in the Company's Memorandum of Association.
The form of the Stock Amendment to the Memorandum of Association is
attached as Exhibit B, and reference is made to the attached Stock Amendment for
the complete terms thereof.
Purposes of the Proposed Stock Amendment
The Company's Memorandum of Association currently authorizes the issuance
of 20,000,000 shares of Common Stock, $0.0001 value. As of September 22, 2000,
11,211,718 shares of Common Stock were issued and outstanding. The Stock
Amendment will not affect the number of shares of Common Stock issued and
outstanding but will affect only the total number of shares of Common Stock
authorized for issuance by the Company. The Board of Directors believes that the
approval and adoption of the Stock Amendment will increase acceptance of the
Company's Common Stock by the financial community and the investing public and
will, accordingly, enhance shareholder value.
If approved by the Shareholders, the Stock Amendment to the Memorandum of
Association will increase the Company's authorized capital stock from 20,000,000
shares of Common Stock to 100,000,000 shares of Common Stock, and will create a
new class of securities of the Company consisting of 5,000,000 authorized shares
of Preferred Stock, $1.00 par value, that may issued in series from time to time
by the Company's Board of Directors in their sole discretion without the
approval of the Shareholders of the Company with such designations, powers,
preferences, rights, qualifications, limitations, and restrictions as have not
been fixed in the Company's Memorandum of Association.
Approval of the Stock Amendment requires the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock entitled to
notice of, and to vote at, the Annual Meeting. If the Stock Amendment is
approved by the Shareholders, it will become effective as of the date and time
it is filed with the office of the Registrar of Companies in the British Virgin
Islands, the domicile of the Company. The filing will be made as soon as
practicable following the approval of the Stock Amendment by the Shareholders.
Unless otherwise directed by shareholders, the proxy holders will vote all
shares represented by proxies held by them to approve the Stock Amendment to the
Company's Memorandum of Association which would effect an increase in the number
of authorized shares of Common Stock of the Company from 20,000,000 shares,
$0.0001 par value, to 100,000,000 shares $0.0001 par value, with no effect upon
the already authorized, issued, and outstanding shares of Common Stock, and
would create a new class of the securities of the Company consisting of
5,000,000 authorized shares of Preferred Stock, $1.00 par value, that may issued
14
<PAGE>
in series from time to time by the Company's Board of Directors in their sole
discretion without the approval of the Shareholders of the Company with such
designations, powers, preferences, rights, qualifications, limitations, and
restrictions as have not been fixed in the Company's Memorandum of Association.
Board Recommendation
The Board recommends a vote FOR the adoption of the Stock Amendment to the
Company's Memorandum of Association to increase the authorized shares of Common
Stock of the Company from 20,000,000 shares to 100,000,000 shares and to create
a new class of the securities of the Company consisting of 5,000,000 authorized
shares of Preferred Stock, $1.00 par value, that may issued in series from time
to time by the Company's Board of Directors in their sole discretion without the
approval of the Shareholders of the Company with such designations, powers,
preferences, rights, qualifications, limitations, and restrictions as have not
been fixed in the Company's Memorandum of Association, with each of the
Resolutions with respect thereto set forth in Exhibit B hereto.
PROPOSAL 5
PROPOSED QUORUM AMENDMENT TO CHANGE
QUORUM REQUIREMENT FOR MEETINGS OF SHAREHOLDERS
To approve and adopt an amendment (the "Quorum Amendment") to the Company's
Articles of Association which would effect a decrease in the quorum requirement
for business to be conducted at any meeting of the Shareholders from one-half to
one-third of the total shares of each class or series entitled to vote as a
class or series and the same proportion of the votes of the remaining shares
entitled to vote thereon.
The form of the Quorum Amendment to the Articles of Association of the
Company pursuant to which the quorum requirements of the Company would be
changed, and the resolutions to be adopted by the shareholders in connection
therewith if the Quorum Amendment is approved by the Shareholders, are attached
to this Proxy Statement as Exhibit C. The Quorum Amendment would become
effective as of the date and time it is filed with the Registrar of Companies in
the British Virgin Islands, the domicile of the Company. The filing will be made
as soon as practicable following the approval of the Quorum Amendment by the
Shareholders.
Purposes of the Authorization of the Board to Change Quorum Requirement
At its inception in March 1988, at which point the Company was a private
corporation, the Company's quorum requirement for the conducting of business at
any meeting of its Shareholders was set as the presence at that meeting, in
person or by proxy, of at least one-half of the shares entitled to vote at that
meeting. The customary quorum requirement for most publicly-traded corporations
at their meetings of shareholders is one-third of the company's shares which are
entitled to vote at any meeting. On occasion, due to Company's unusually high
quorum requirement, the officers and/or directors of the Company have been
required to vigorously solicit the submission of proxies immediately before the
convening of Shareholders' meetings in order to meet the Company's minimum
quorum requirement to conduct business at meetings of its Shareholders. The
calling and holding of meetings of its Shareholders as required of
publicly-traded companies is expensive for the Company and time-consuming for
its management, and the inability of the Company to meet its current quorum
requirement at any meeting of its Shareholders would result in the Company's
needlessly incurring further expenses to adjourn the meeting and reconvene it at
a later date when a quorum could be obtained. Accordingly, the Board of
Directors believes it to be in the best interests of the Company to amend the
Articles of Association of the Company to provide that the quorum required to
conduct any meeting of its Shareholders shall be one-third, rather than
one-half.
15
<PAGE>
Approval of the Quorum Amendment requires the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock entitled to
notice of, and to vote at, the Annual Meeting. If the Quorum Amendment is
approved by the Shareholders, it will become effective as of the date and time
it is filed with the office of the Registrar of Companies in the British Virgin
Islands, the domicile of the Company. The filing will be made as soon as
practicable following the approval of the Quorum Amendment by the Shareholders.
Unless otherwise directed by shareholders, the proxy holders will vote all
shares represented by proxies held by them to approve the Quorum Amendment to
the Company's Articles of Association which would effect a decrease in the
quorum requirement for business to be conducted at any meeting of the
Shareholders from one-half to one-third of the total shares of each class or
series entitled to vote as a class or series and the same proportion of the
votes of the remaining shares entitled to vote thereon.
Board Recommendation
The Board recommends a vote FOR the Quorum Amendment which would effect a
decrease in the quorum requirement for business to be conducted at any meeting
of the Shareholders from one-half to one-third of the total shares of each class
or series entitled to vote as a class or series and the same proportion of the
votes of the remaining shares entitled to vote thereon.
PROPOSAL 6
APPROVAL AND ADOPTION OF
INCENTIVE STOCK OPTION PLAN
To approve and adopt an Incentive Stock Option Plan of the Company pursuant
to which options to purchase Common Stock may be granted to certain personnel of
the Company.
The form of proposed Incentive Stock Option Plan (the "ISOP") is attached
hereto as Exhibit D. The summary below of the provisions of the ISOP is
qualified in its entirety by express reference to the text of the ISOP attached
as Exhibit D hereto.
Purposes of Approving and Adopting an Incentive Stock Option Plan
The Board of Directors believes that it is in the best interests of the
Company to adopt an ISOP which provides for the granting to members of
management and employees of the Company of incentive stock options (within the
meaning of Section 422 of the Internal Revenue Code) to purchase an aggregate of
not more than 2,500,000 shares of the Common Stock for the purpose of providing
members of management and employees of the Company with a more direct stake in
the future of the Company and to encourage them to remain with the Company. The
following summary of the provisions of the ISOP is qualified in its entirety by
express reference to the text of the ISOP. Terms not otherwise defined in this
summary shall have the meaning given to them in the text of the ISOP.
Eligible Employees and Reservation of Stock. All officers and employees of
the Company shall be eligible to participate in the ISOP. The Board shall
reserve five million (5,000,000) of the authorized but unissued shares of the
Common Stock for issuance upon the exercise of the options. Such number of
shares shall be the aggregate number of shares which may be issued under options
granted pursuant to the ISOP.
16
<PAGE>
Administration. The ISOP shall be administered by a compensation committee
of the Board or any committee of the Board performing similar functions, as
appointed from time to time by the Board (the "Committee"). The Committee shall
administer the ISOP and shall have discretionary authority to (a) determine the
persons to whom options shall be granted, (b) determine the quantity of shares
to be included in each option, (c) interpret the ISOP, and (d) promulgate such
rules and regulations under the ISOP as they may deem necessary and proper.
Decisions made by the Committee within their discretionary authority shall be
final and conclusive as to all parties and shall not be subject to review.
Options, Grants, Term and Exercise. Upon the terms and conditions set forth
in the ISOP, the Committee may grant on behalf of the Company options to
purchase shares of Common Stock to eligible employees ("Optionees"). The
exercise price of each option shall be not less than the fair market value of
the Common Stock on the date of grant; provided, however, that if the amount of
stock owned by the Optionee is more than ten percent (10%) of the total combined
voting power of all classes of capital stock of the Company as of the date of
grant, the exercise price of each such option shall be not less than one hundred
ten percent (110%) of the fair market value of the Common Stock on the date of
grant. Fair market value for purposes of the ISOP shall be defined as the
closing bid price on the date of grant, or if there was no trading on the date
of grant, then the closing bid price on the last trading date prior to the date
of grant, or, if none, then the price of the last sale of stock, or as
determined by the Committee.
The term of an option shall be for a period of no more than ten (10) years
from the date of grant of such option, provided, however, that if the amount of
stock owned by the Optionee is more than ten percent (10%) of the total combined
voting power of all classes of capital stock of the Company as of the date of
grant, the term of an Option shall be for a period of no more than five (5)
years from the date of grant of such Option.
An Option shall be exercisable in whole or in part by written notice
delivered to and received by the Secretary of the Company at its principal
office, any time during the term of the option. In no case, however, may an
option under this ISOP be exercised if there remains on the date of exercise an
incentive stock option which was granted before the granting of such option to
such Optionee to purchase stock in the Company or in a corporation which (at the
time of the granting of such option) is a parent or subsidiary corporation of
the Company, or in a predecessor corporation of any such corporations.
The notice shall among other things state the number of shares with respect
to which the option is being exercised, and shall be signed by the Optionee. The
option price shall be paid in cash, cash equivalents, or secured notes
acceptable to the Committee, by arrangement with a broker which is acceptable to
the Committee where payment of the option price is made pursuant to an
irrevocable direction to the broker to deliver all or part of the proceeds from
the sale of the option shares to the Company, by the surrender of shares of
common stock owned by the Optionee exercising the option and having a fair
market value on the date of exercise equal to the option price, or by the
surrender of options to purchase Common Stock having a fair market value on the
date of exercise equal to the option price or in any combination of the
foregoing.
In the event the Company or the shareholders of the Company enter into an
agreement to dispose of all or substantially all of the assets or stock of the
Company by means of a sale, reorganization or liquidation, or otherwise, an
option shall become immediately exercisable with respect to the full number of
shares subject to that option, during the period commencing as of the date of
such agreement and ending when the disposition of assets or stock contemplated
by the agreement is consummated or the agreement is terminated. The Company
shall seek to notify Optionees in writing of any event which may constitute such
sale, reorganization, liquidation, or otherwise.
17
<PAGE>
The option shall not be exercised at any time when its exercise, or the
delivery of shares referred to in the notice, would, in the opinion of the
Company, constitute the violation of any law, governmental regulation, or
ruling. During the Optionee's lifetime, the option shall be exercisable only by
the Optionee or, in the event of the Optionee's incapacity, by his guardian or
other legal representative.
The exercise price of all incentive stock options granted under the ISOP
must be equal to the fair market value of such shares on the date of grant as
determined by the Committee, based on guidelines set forth in the ISOP. The
exercise price may be paid in cash or (if the ISOP shall meet the requirements
of rules adopted under the Securities Exchange Act of 1934) in Common Stock or a
combination of cash and Common Stock. The term of each option and the manner in
which it may be exercised will be determined by the Committee, subject to the
requirement that no option may be exercisable more than 10 years after the date
of grant. With respect to an incentive stock option granted to a participant who
owns more than 10% of the voting rights of the Company's outstanding capital
stock on the date of grant, the exercise price of the option must be at least
equal to 110% of the fair market value on the date of grant and the option may
not be exercisable more than five years after the date of grant.
Options not Transferable. No option may be assigned or transferred other
than by will or under the laws of descent and distribution, and no option shall
be pledged or otherwise encumbered or subject to execution, attachment, or
similar legal process. In the event of the death of an Optionee, his option may
be exercised during its term by the person designated in the will of the
Optionee, or, if no testamentary disposition was made, by the legal
representative of the Optionee, within one (1) year following his death;
provided, however, such option shall only be exercisable if it was exercisable
according to the terms hereof on the date of the Optionee's death. Any attempted
assignment, transfer, pledge, hypothecation, or other disposition of the option
contrary to the provisions of this Agreement, or the levy of any execution,
attachment, or similar process upon the option, shall void the option.
Certain Federal Income Tax Consequences
The following summary generally describes the principal federal (and not
state and local) income tax consequences of options granted under the ISOP. It
is general in nature and is not intended to cover all tax consequences that may
apply to an ISOP participant or to the Company. The provisions of the Code and
the regulations thereunder relating to these matters ("Treasury Regulations")
are complex, and their impact in any case may depend upon the particular
circumstances. Each holder of an option under the ISOP should consult the
holder's own accountant, legal counsel or other financial advisor regarding the
tax consequences of participation in the ISOP. This discussion is based on the
Code as currently in effect.
If an option under the ISOP is granted to a participant in accordance with
the terms of the ISOP, no income will be recognized by such participant at the
time the option is granted.
Generally, on exercise of a non-statutory option, the amount by which the
fair market value of the shares of the Common Stock on the date of exercise
exceeds the purchase price of such shares will be taxable to the participant as
ordinary income, and, in the case of any employee, the Company will be required
to withhold tax on the amount of income recognized by the employee upon exercise
of a non-statutory option. Such amount will be deductible for tax purposes by
the Company in the year in which the participant recognizes the ordinary income.
The disposition of shares acquired upon exercise of a non-statutory option will
result in capital gain or loss (long-term or short-term depending on the
applicable holding period) in an amount equal to the difference between the
amount realized on such disposition and the sum of the purchase price and the
amount of ordinary income recognized in connection with the exercise of the
non-statutory option.
18
<PAGE>
Generally, on exercise of an option granted under the ISOP, an employee
will not recognize any income and the Company will not be entitled to a
deduction for tax purposes. However, the difference between the purchase price
and the fair market value of the shares of Common Stock received ("ISO shares")
on the date of exercise will be treated as a positive adjustment in determining
alternative minimum taxable income, which may subject the employee to the
alternative minimum tax ("AMT"). Upon the disposition of the ISO shares, the
employee will recognize long-term or short-term capital gain or loss (depending
on the applicable holding period) in an amount equal to the difference between
the amount realized on such disposition and the purchase price of such shares.
Generally, however, if the employee disposes of the ISO shares within two years
after the date of option grant or within one year after the date of option
exercise (a "disqualifying disposition"), the employee will recognize ordinary
income, and the Company will be entitled to a deduction for tax purposes for the
taxable year in which the disqualifying disposition occurs, in the amount of the
excess of the fair market value of the shares on the date of exercise over the
purchase price (or, if less, the amount of the gain on sale). Any excess of the
amount realized by the holder on the disqualifying disposition over the fair
market value of the shares on the date of exercise of the ISO will ordinarily
constitute capital gain. If an option is exercised through the use of Common
Stock previously owned by the employee, such exercise generally will not be
considered a taxable disposition of the previously owned shares and, thus, no
gain or loss will be recognized with respect to such shares upon such exercise.
However, proposed Treasury Regulations would provide that, if the previously
owned shares are ISO shares and the holding period requirement for those shares
was not satisfied at the time they were used to exercise an option, such use
would constitute a disqualifying disposition of such previously owned ISO
shares, resulting in the recognition of ordinary income (but not any additional
capital gain) in the amount described above. If an otherwise qualifying ISO
first becomes executable in any one year for shares having a fair market value,
determined as of the date of the grant, in excess of $100,000, the portion of
the option in respect of such excess shares will be treated as a non-statutory
option.
As of the date of this Proxy Statement, no options have been granted under
the ISOP.
Approval of the ISOP requires the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock entitled to notice of, and to
vote at, the Annual Meeting. If the ISOP is approved by the Shareholders, it
will become effective as of October 25, 2000, the date of this Annual Meeting.
Unless otherwise directed by shareholders, the proxy holders will vote all
shares represented by proxies held by them to approve the ISOP.
Board Recommendation
The Board recommends a vote FOR the adoption of the ISOP.
PROPOSAL 7
RATIFICATION OF SELECTION OF
DELOITTE TOUCHE TOHMATSU AS INDEPENDENT
PUBLIC ACCOUNTANTS OF COMPANY
The Board of Directors has selected Deloitte Touche Tohmatsu as independent
public accountants of the Company for the fiscal year ending December 31, 2000,
and has further directed that the Company submit the selection of independent
public accountants for ratification by shareholders at the Annual Meeting of
Shareholders.
19
<PAGE>
Unless otherwise directed by shareholders, the proxy holders will vote all
shares represented by proxies held by them to ratify the selection of Deloitte
Touche Tohmatsu as independent public accountants of the Company for the fiscal
year ending December 31, 2000.
Board Recommendation
The Board recommends a vote FOR the ratification of the selection of
Deloitte Touche Tohmatsu as independent public accountants of the Company for
the fiscal year ending December 31, 2000.
GENERAL
Other Matters
The Board of Directors does not know of any matters that are to be
presented at the Annual Meeting of Shareholders other than those stated in the
Notice of Annual Meeting and referred to in this Proxy Statement. If any other
matters should properly come before the Meeting, it is intended that the proxies
in the accompanying form will be voted as the persons named therein may
determine in their discretion.
By Order of the Board of Directors
/s/ Derrin R. Smith
----------------------------------
Chairman of the Board
20
<PAGE>
EXHIBIT A
---------
THE NAME CHANGE AMENDMENT
-------------------------
INTERNATIONAL BUSINESS COMPANIES ACT, 1984
(as amended)
Section 16(2)
Notice of Amendment of Memorandum/Articles of Association
---------------------------------------------------------
To: The Registrar of Companies
RE: GETGO MAIL.COM INC.
IBC NO. 5557
We, HWR SERVICES LIMITED of Craigmuir Chambers, P.O. Box 71, Road Town,
Tortola, British Virgin Islands, registered agent of the above Company, hereby
certify that the document annexed hereto is a true copy of the Resolutions of
the Members adopted on the 25th day of October, 2000, amending the Memorandum of
Association of the above Company.
Dated this ______ day of _________________, 2000.
HWR SERVICES LIMITED
Sgd:
Our Ref. No. ____________
________________________________________________________________________________
For official use
21
<PAGE>
GETGO MAIL.COM INC.
CERTIFIED TRUE COPY OF THE RESOLUTIONS
ADOPTED BY THE MEMBERS OF THE COMPANY
ON OCTOBER 25, 2000
------------------
1. RESOLVED, that subject to the approval of the Registrar of Companies in the
British Virgin Islands, the Memorandum of Association of the Company be
amended to change the name of the Company from GETGO MAIL.COM INC. to GETGO
Inc.
2. FURTHER RESOLVED, that the registered agent of the Company be and hereby is
authorized to register a copy of the foregoing resolutions with the
Registrar of Companies in the British Virgin Islands.
22
<PAGE>
EXHIBIT B
---------
STOCK AMENDMENT
---------------
INTERNATIONAL BUSINESS COMPANIES ACT, 1984
(as amended)
Section 16(2)
Notice of Amendment of Memorandum/Articles of Association
---------------------------------------------------------
To: The Registrar of Companies
RE: GETGO MAIL.COM INC.
IBC NO. 5557
We, HWR SERVICES LIMITED of Craigmuir Chambers, P.O. Box 71, Road Town,
Tortola, British Virgin Islands, registered agent of the above Company, hereby
certify that the document annexed hereto is a true copy of the Resolutions of
the Members adopted on the 25th day of October, 2000, amending the Memorandum of
Association of the above Company.
Dated this ______ day of _________________, 2000.
HWR SERVICES LIMITED
Sgd:
Our Ref. No. ______________
________________________________________________________________________________
For official use
23
<PAGE>
GETGO MAIL.COM INC.
CERTIFIED TRUE COPY OF THE RESOLUTIONS
ADOPTED BY THE MEMBERS OF THE COMPANY
ON OCTOBER 25, 2000
------------------
1. RESOLVED, that subject to the approval of the Registrar of Companies in the
British Virgin Islands, the Memorandum of Association of the Company be
amended by deleting clauses 8 and 9 and substituting therefor the following
new clauses 8 and 9:
"8. The Company shall have an authorized capital of U.S.$5,010,000 divided
into 100,000,000 shares of common stock with a par value of
U.S.$0.0001 per share, and 5,000,000 shares of preferred stock with a
par value of U.S.$1.00 per share.
9. The Company shall have two classes of shares comprising 100,000,000
shares of common stock, U.S.$0.0001 par value, and 5,000,000 shares of
preferred stock, U.S.$1.00 par value.
The designations, powers, preferences, rights, qualifications,
limitations and restrictions of the shares of each class of stock are
as follows:
PREFERRED STOCK
The Preferred Stock may be issued from time to time by the Board
of Directors in their sole discretion without the approval of the
members in one or more series. The description of shares of each
series of Preferred Stock, including designations, powers,
preferences, rights, qualifications, limitations, restrictions,
conversion and other rights, voting powers, limitations as to
distributions, qualifications, and terms and conditions of redemption
shall be as fixed in resolutions adopted by the Board of Directors and
filed with the Registrar of Companies as required by law from time to
time prior to the issuance of any shares of such series.
The Board of Directors is expressly authorized, prior to
issuances, by adopting resolutions providing for the issuances of, or
providing for a change in the number of, shares of any particular
series of Preferred Stock and, if and to the extent from time to time
required by law, by filing Amendments to the Memorandum of Association
to state the terms of each series of Preferred Shares or change the
number of shares to be included in each series of Preferred Stock and
to set or change in any one or more respect the designations, powers,
preferences, rights, qualifications, limitations, restrictions,
24
<PAGE>
conversion and other rights, voting powers, limitations as to
distributions, qualifications, and terms and conditions of redemption
relating to the shares of each such series. Notwithstanding the
foregoing, the Board of Directors shall not be authorized to change
the right of the Common Stock of the Company to vote one vote per
share on all matters submitted for stockholder action. The authority
of the Board of Directors with respect to each series of Preferred
Stock shall include, but not be limited to, setting or changing the
following:
(a) the distinctive serial designation of such series and the
number of shares constituting such series (provided that the aggregate
number of shares constituting all series of Preferred Stock shall not
exceed 5,000,000);
(b) the annual distribution rate on shares of such series,
whether distributions shall be cumulative and, if so, from which date
or dates;
(c) whether the shares of such series shall be redeemable and, if
so, the terms and conditions of such redemption, including the date or
dates upon and after which such shares shall be redeemable, and the
amount per share payable in case of redemption, which amount may vary
under different conditions and at different redemption dates;
(d) the obligation, if any, of the Company to redeem or
repurchase shares of such series pursuant to a sinking fund;
(e) whether shares of such series shall be convertible into, or
exchangeable for, shares of stock of any other class or classes and,
if so, the terms and conditions of such conversion or exchange,
including the price or prices or the rate or rates of conversion or
exchange and the terms of adjustment, if any;
(f) whether the shares of such series shall have voting rights,
in addition to the voting rights provided by law, and if so, the terms
of such voting rights;
(g) the rights of the shares of such series in the event of
voluntary or involuntary liquidation, dissolution or winding-up of the
Company; and
(h) any other relative rights, powers, preferences,
qualifications, limitations or restrictions thereof relating to such
series which may authorized under the International Companies Business
Ordinance.
The shares of Preferred Stock of any one series shall be
identical with each other in all respects except as to the dates from
and after which dividends thereon shall cumulate, if cumulative.
COMMON STOCK
Subject to all of the rights of the Preferred Stock as expressly
provided herein, by law or by the Board of Directors pursuant to this
Clause, the Common Stock of the Company shall possess all such rights
25
<PAGE>
and privileges as are afforded to capital stock by applicable law in
the absence of any express grant of rights or privileges in this
Memorandum of Association including, but not limited to, the following
rights and privileges:
(a) distributions may be declared and paid or set apart for
payment upon the Common Stock out of any assets or funds of the
Company legally available for the payment of distributions;
(b) the holders of Common Stock shall have the right to vote for
the election of directors and on all other matters requiring
stockholder action, each share being entitled to one vote; and
(c) upon the voluntary or involuntary liquidation, dissolution or
winding up of the Company, the net assets of the Company shall be
distributed pro rata to the holders of the Common Stock in accordance
with their respective rights and interests."
2. FURTHER RESOLVED, that the registered agent of the Company be and hereby is
authorized to register a copy of the foregoing resolutions with the
Registrar of Companies in the British Virgin Islands.
26
<PAGE>
EXHIBIT C
---------
THE QUORUM AMENDMENT
--------------------
INTERNATIONAL BUSINESS COMPANIES ACT, 1984
(as amended)
Section 16(2)
Notice of Amendment of Memorandum/Articles of Association
---------------------------------------------------------
To: The Registrar of Companies
RE: GETGO MAIL.COM INC.
IBC NO. 5557
We, HWR SERVICES LIMITED of Craigmuir Chambers, P.O. Box 71, Road Town,
Tortola, British Virgin Islands, registered agent of the above Company, hereby
certify that the document annexed hereto is a true copy of the Resolutions of
the Members adopted on the 25th day of October, 2000, amending the Articles of
Association of the above Company.
Dated this ______ day of _________________, 2000.
HWR SERVICES LIMITED
Sgd:
Our Ref. No. ____________
________________________________________________________________________________
For official use
27
<PAGE>
GETGO MAIL.COM INC.
CERTIFIED TRUE COPY OF THE RESOLUTIONS
ADOPTED BY THE MEMBERS OF THE COMPANY
ON OCTOBER 25, 2000
------------------
1. RESOLVED, that subject to the approval of the Registrar of Companies in the
British Virgin Islands, the Articles of Association of the Company be
amended by deleting clause 34 and substituting therefor the following new
clause 34:
"34. No business shall be transacted at any meeting of members unless a
quorum of members is present at the time when the meeting proceeds to
business. A quorum shall consist of one or more members present in
person or by proxy representing at least one-third of the votes of the
shares of each class or series of shares entitled to vote as a class
or series and the same proportion of the votes of the remaining shares
entitled to vote thereon."
2. FURTHER RESOLVED, that the registered agent of the Company be and hereby is
authorized to register a copy of the foregoing resolutions with the
Registrar of Companies in the British Virgin Islands.
28
<PAGE>
EXHIBIT D
---------
THE ISOP ADOPTION PROPOSAL
--------------------------
RESOLVED, that the Incentive Stock Option Plan in the form set forth
hereinbelow be, and it hereby is, adopted as the Incentive Stock Option Plan of
the Company:
GETGO MAIL.COM INC.
INCENTIVE STOCK OPTION PLAN
1. Purpose of the Plan. The GETGO MAIL.COM INC. Incentive Stock Option Plan
(the "Plan") is intended to provide additional incentive to key employees of
GETGO MAIL.COM INC. (the "Company") and encourage their stock ownership.
2. Eligible Employees. All officers and employees of the Company shall be
eligible to participate in the Plan.
3. Reservation of Option Stock. The Board of Directors of the Company (the
"Board") shall reserve five million (5,000,000) of the authorized but unissued
shares of the Company's common stock, $0.0001 par value (the "Common Stock"),
for issuance upon the exercise of the options (the "Option Stock"). Such number
of shares shall be the aggregate number of shares which may be issued under
Options granted pursuant to this Plan.
4. Administration and Operation of the Plan. The Plan shall be administered
by a compensation committee of the Board or any committee of the Board
performing similar functions, as appointed from time to time by the Board (the
"Committee"). The Committee shall administer the Plan, and shall have
discretionary authority to (a) determine the persons to whom Options shall be
granted, (b) determine the quantity of shares to be included in each Option, (c)
interpret the Plan, and (d) promulgate such rules and regulations under the Plan
as they may deem necessary and proper. Decisions made by the Committee within
their discretionary authority shall be final and conclusive as to all parties
and shall not be subject to review.
5. Options. Upon the terms and conditions hereinafter set forth, the
Committee may grant on behalf of the Company options (the "Options" or,
individually, an "Option") to purchase shares of Common Stock to eligible
employees (the "Optionees" or, individually, the "Optionee"). The Options shall
be substantially in form and substance as set forth in Exhibit A.
6. Exercise Price. The exercise price of each Option shall be not less than
the fair market value of the Common Stock on the date of grant; provided,
however, that if the amount of stock owned by the Optionee is more than ten
percent (10%) of the total combined voting power of all classes of capital stock
of the Company as of the date of grant, the exercise price of each Option shall
be not less than one hundred ten percent (110%) of the fair market value of the
Common Stock on the date of grant. Fair market value for purposes of this
Section 6 shall be defined as the closing bid price on the date of grant, or if
there was no trading on the date of grant, then the closing bid price on the
last trading date prior to the date of grant, or, if none, then the price of the
last sale of stock, or as determined by the Committee.
7. Terms of Options. The term of an Option shall be for a period of no more
than ten (10) years from the date of grant of such Option, provided, however,
that if the amount of stock owned by the Optionee is more than ten percent (10%)
of the total combined voting power of all classes of capital stock of the
Company as of the date of grant the term of an Option shall be for a period of
no more than five (5) years from the date of grant of such Option.
29
<PAGE>
8. Exercise of Options. Subject to Section 14 hereof, an Option shall be
exercisable in whole or in part by written notice delivered to and received by
the Secretary of the Company at its principal office, any time during the term
of the Option. In no case, however, may an Option under this Plan be exercised
if there remains on the date of exercise an incentive stock option which was
granted before the granting of such Option to such Optionee to purchase stock in
the Company or in a corporation which (at the time of the granting of such
option) is a parent or subsidiary corporation of the Company, or in a
predecessor corporation of any such corporations.
The notice shall state the number of shares with respect to which the
Option is being exercised, shall contain a representation and agreement by the
Optionee substantially in the form and substance as set forth in the investment
letter attached hereto as Exhibit B, and shall be signed by the Optionee. The
option price shall be paid in cash, cash equivalents or secured notes acceptable
to the Committee, by arrangement with a broker which is acceptable to the
Committee where payment of the option price is made pursuant to an irrevocable
direction to the broker to deliver all or part of the proceeds form the sale of
the option shares to the Company by the surrender of shares of common stock
owned by the Optionee exercising the Option and having a fair market value on
the date of exercise equal to the option price, or by the surrender of options
to purchase common stock having a fair market value on the date of exercise
equal to the option price or in any combination of the foregoing.
In the event the Company or the shareholders of the Company enter into an
agreement to dispose of all or substantially all of the assets or stock of the
Company by means of a sale, reorganization or liquidation, or otherwise, an
Option shall become immediately exercisable with respect to the full number of
shares subject to that Option, notwithstanding the preceding provisions of this
Section 8, during the period commencing as of the date of such agreement and
ending when the disposition of assets or stock contemplated by the agreement is
consummated or the agreement is terminated. The Company shall seek to notify
Optionees in writing of any event which may constitute such sale,
reorganization, liquidation or otherwise.
The Option shall not be exercised at any time when its exercise, or the
delivery of shares referred to in the notice, would, in the opinion of the
Company, constitute the violation of any law, governmental regulation or ruling.
During the Optionee's lifetime, the Option shall be exercisable only by the
Optionee or, in the event of the Optionee's incapacity, by his guardian or other
legal representative.
9. Securities to be Unregistered. The Company shall be under no obligation
to register or assist the Optionee in registering either the Options or the
Option Stock under the federal securities law or any state securities law and
both the Options and all Option Stock shall be "restricted securities" as
defined in Rule 144 of the General Rules and Regulations of the Securities Act
of 1933 (the "Act"), and may not be offered for sale, sold or otherwise
transferred except pursuant to an effective registration statement under the
Act, or pursuant to an exemption from registration under the Act, the
availability of which is to be established to the satisfaction of the Company.
Accordingly, all certificates evidencing shares covered by the Option, and any
securities issued and replaced or exchanged therefor, shall bear a restrictive
legend to this effect.
10. Assignment or Transfer. No Option may be assigned or transferred other
than by will or under the laws of descent and distribution, and no Option shall
be pledged or otherwise encumbered or subject to execution, attachment or
similar legal process. In the event of the death of an Optionee, his Option may
be exercised during its term by the person designated in the will of the
Optionee, or, if no testamentary disposition was made, by the legal
representative of the Optionee, within one (1) year following his death;
provided, however, such Option shall only be exercisable if it was exercisable
according to the terms hereof on the date of the Optionee's death. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of the Option,
contrary to the provisions of this Agreement, or the levy of any execution,
attachment or similar process upon the Option, shall void the Option.
30
<PAGE>
11. Optionee as Shareholder. An Optionee shall have no rights as a
shareholder of the Company with respect to the shares of Option Stock covered by
an Option until the date of the issuance of stock certificate(s) to him. No
adjustment will be made for dividends or other rights with respect to which the
record date is prior to the date of such stock certificate or certificates.
12. Adjustment for Changes in Capital Structure. In the event of a change
in the capital structure of the Company as a result of any stock dividend, stock
split, combination or reclassification of shares, recapitalization, merger,
consolidation or reorganization, the number of shares covered by the Options
granted pursuant to this Plan shall be appropriately adjusted by the Committee,
whose determination shall be final.
13. Employment of Optionee. Except as otherwise provided in this Agreement,
the Optionee may not exercise any Option unless the Optionee has been
continuously employed with the Company, a parent or subsidiary, from the date of
grant to and including the later of the date of exercise or three months
following the termination of the employee's employment.
The existence of this Plan shall not impose or be construed as imposing
upon the Company, or any parent or subsidiary of the Company, any obligation to
employ the Optionee for any period of time, and shall not supersede or in any
way increase the obligations of the Company, or any parent or subsidiary of the
Company, under any employment contract now or hereafter existing with any
Optionee.
14. Termination. The Plan may be terminated at any time by action of the
Committee, but in all events this Plan shall terminate ten (10) years from the
date of its approval by the shareholders of the Company, or from its adoption by
the Board, whichever is earlier, and no Options shall be granted under the Plan
after such termination, although Options granted prior to such termination may
continue to be exercised after such date in accordance with the terms hereof.
The Plan shall also terminate upon (a) the merger or consolidation of the
Company with one or more other corporations in which the Company is not the
surviving corporation, (b) the dissolution or liquidation of the Company, (c)
the appointment of a receiver for all, or substantially all, of the assets or
business of the Company, (d) the appointment of a trustee for the Company after
a petition has been filed for the Company's liquidation under applicable
statutes, (e) the filing of a petition in bankruptcy on behalf of the Company
under applicable statutes, or (f) the sale, lease or exchange of all, or
substantially all, of the assets or business of the Company. The Company shall
notify an Optionee in writing thirty (30) days prior to the happening of any of
the events described in clauses (a) through (f) of the preceding sentence.
15. Limitation. The aggregate fair market value (determined on the date the
Option is granted) of stock subject to an Option granted to an Optionee in any
calendar year shall not exceed $100,000.
16. Amendment. No material change or modification of this Plan shall be
valid unless in writing and approved by the Committee, the Company's
shareholders and each Optionee affected by such change.
31
<PAGE>
17. Governing Law. This Plan shall be governed and construed in accordance
with the laws of the British Virgin Islands.
IN WITNESS WHEREOF, the shareholders of GETGO MAIL.COM INC. have adopted
this Plan the 25th day of October, 2000.
GETGO MAIL.COM INC.
(The "Company")
By:______________________________________
Derrin R. Smith, Chairman of the Board
ATTEST:
_________________________________
[_______________], Secretary
32
<PAGE>
EXHIBIT A
TO INCENTIVE STOCK OPTION PLAN
OF
GETGO MAIL.COM INC.
STOCK OPTION GRANT FORM
GETGO MAIL.COM INC., a British Virgin Islands corporation (the "Company"),
hereby grants to ______________________ the right and option to purchase
______________________ (_________) shares of the Common Stock, $0.0001 par
value, of the Company at the exercise price of $_________ per share. This option
is granted as of the date set forth below and shall expire _______ (____) years
from such date. This Option is subject to all the terms and conditions of the
GETGO MAIL.COM INC. Incentive Stock Option Plan, which are incorporated herein
by this reference, and may not be assigned or transferred except as provided
therein.
Common Stock acquired pursuant to this Option may be subject to special tax
treatment under Internal Revenue Code Section 422 if held for at least two years
from the date set forth below and for at least one year from the date of
exercise of this Option.
Dated:______________________, 20___.
GETGO MAIL.COM INC.
(The "Company")
By:______________________________________
Derrin R. Smith, Chairman of the Board
ATTEST:
_________________________________
[______________], Secretary
The option represented by this certificate and the shares of common stock
underlying this option have not been registered under the Securities Act of
1933 (the "Act") and are "restricted securities" as that term is defined in
Rule 144 under the Act. Neither the option nor the shares underlying the
option may be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act, or pursuant
to an exemption from registration under the Act, the availability of which
is to be established to the satisfaction of the Company.
33
<PAGE>
EXHIBIT B
TO
INCENTIVE STOCK OPTION PLAN
OF
GETGO MAIL.COM INC.
OPTION EXERCISE FORM
GETGO MAIL.COM INC.
Gentlemen:
I hereby elect to exercise Options to purchase _____________ shares of
Common Stock, $0.0001 par value (the "Securities"), of GETGO MAIL.COM INC. (the
"Company") pursuant to the Company's Incentive Stock Option Plan dated October
25, 2000, and as subsequently amended.
I acknowledge to the Company that (1) the Securities to be issued to me are
being acquired for investment and not with a view to the distribution thereof,
(2) I will not offer, sell, transfer or otherwise dispose of the Securities
except in a transaction which does not violate the Securities Act of 1933, as
amended (the "Act"), and (3) the Securities are "restricted securities" as that
term is defined in Rule 144 of the General Rules and Regulations under the Act.
I acknowledge and understand that the Securities are unregistered and must
be held indefinitely unless they are subsequently registered under the Act or an
exemption from such registration is available. I also understand that the
Company is the only person which may register its securities under the Act.
Furthermore, the Company has not made any representations, warranties or
covenants to me regarding the registration of the Securities or compliance with
Regulation A or some other exemption under the Act.
I further acknowledge that I am fully aware of the applicable limitations
on the resale of the Securities. Rule 144 permits sales of "restricted
securities" upon compliance with certain requirements. If Rule 144 is available
for the resale of the securities, I may resell the Securities only in accordance
with its limitations.
I acknowledge that I am liable for all withholding taxes if the shares
issued pursuant to this Option are disposed of within one year of issuance or
two years of the date of grant of the Option.
Any and all certificates representing the Securities, and any securities
issued in replacement or exchange therefor, shall bear substantially the
following legend, which I have read and understood.
The shares represented by this certificate have not been registered
under the Securities Act of 1933 (the "Act") and are "restricted
securities" as that term is defined in Rule 144 under the Act. The
shares may not be offered for sale, sold or otherwise transferred
except pursuant to an effective registration statement under the Act,
or pursuant to an exemption from registration under the Act, the
availability of which is to be established to the satisfaction of the
Company.
I further agree that the Company shall have the right to issue stop
transfer instructions to its transfer agent to bar the transfer or for failure
to pay necessary withholding taxes in the case of disposition of the shares
34
<PAGE>
within one year of issuance of the shares or two years of the date of grant of
the Option of any of my certificates except in accordance with the Act. I
acknowledge that the Company has informed me of its intention to issue such
instructions.
Dated: ______________________, 20____.
Very truly yours,
_________________________________
Optionee
_________________________________
(Please print or type name)
35
