<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Auric Metals Corporation
-------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
-------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------------
<PAGE> 2
AURIC METALS CORPORATION
4243 DUNWOODY CLUB DRIVE
ATLANTA, GEORGIA 30350-5206
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 9, 2000
To the Stockholders of Auric Metals Corporation:
Notice is hereby given that the Annual Meeting of Stockholders (together with
any adjournments or postponements thereof, the "Meeting") of Auric Metals
Corporation, a Nevada corporation (the "Company"), will be held at The Barclay,
3530 Piedmont Road, Atlanta, Georgia on Thursday, November 9, 2000 at 2:00
p.m., local time, for the purpose of considering and voting upon the following
matters:
(1) To elect a board of two directors, each to serve a one-year term;
(2) To approve an amendment to the Company's Articles of Incorporation to
change the name of the Company to Brainworks Ventures, Inc.;
(3) To approve the Company's Stock Option Plan;
(4) To transact such other business as may properly come before the
Meeting.
These items are more fully described in the accompanying Proxy Statement, which
is hereby made a part of this Notice of Annual Meeting of Stockholders.
The Board of Directors (the "Board") has fixed the close of business on October
16, 2000 as the record date for the determination of stockholders entitled to
notice of, and to vote at, the Meeting.
A copy of the Company's Annual Report for the fiscal year ended March 31, 2000
is enclosed. The Annual Report is not a part of the proxy soliciting material
enclosed with this Notice.
By Order of the Board,
/s/ Marc Schwartz
--------------------------
Marc Schwartz
Secretary
Atlanta, Georgia
October 19, 2000
================================================================================
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE-PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING.
PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK
OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST BRING TO THE
MEETING A LETTER FROM THE BROKER, BANK OR OTHER NOMINEE CONFIRMING YOUR
BENEFICIAL OWNERSHIP OF THE SHARES. ADDITIONALLY, IN ORDER TO VOTE AT THE
MEETING, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
================================================================================
<PAGE> 3
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS OF
AURIC METALS CORPORATION
NOVEMBER 9, 2000
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
This Proxy Statement (the "Proxy Statement") and the accompanying form
of proxy are being furnished to the stockholders of Auric Metals Corporation
(the "Company") in connection with the solicitation of proxies by the Board of
the Company (the "Board") from holders of its outstanding common stock (the
"Common Stock"), for use at the Annual Meeting of Stockholders of the Company
(together with any adjournments or postponements thereof, the "Meeting") to be
held at The Barclay, 3530 Piedmont Road, Atlanta, Georgia on Thursday, November
9, 2000 at 2:00 p.m., local time. This Proxy Statement, the accompanying form
of proxy and the Annual Report to Stockholders are expected to be mailed to
stockholders of the Company on or about October 19, 2000.
SOLICITATION
The expense of this solicitation will be borne by the Company.
Solicitation will be primarily by use of the mails. Executive officers and
other employees of the Company may solicit proxies, without additional
compensation, personally and by telephone and other means of communication. The
Company will also reimburse brokers and other persons holding Common Stock in
their names or in the names of their nominees for their reasonable expenses in
forwarding proxies and proxy materials to beneficial owners.
VOTING RIGHTS AND OUTSTANDING SHARES
Stockholders of record as of the close of business on October 16, 2000
(the "Record Date") will be entitled to vote at the Meeting. Each share of
outstanding Common Stock is entitled to one vote. As of the Record Date, there
were 954,548 shares of Common Stock outstanding and entitled to vote. The
Company has been advised that certain beneficial owners, directors and executive
officers of the Company, who hold in the aggregate approximately 7.2% of the
outstanding Common Stock, intend to vote their shares in favor of the nominees
and each of the proposals, and in accordance with the recommendations of the
Board.
A majority of the voting power, which includes the voting power that
is present in person or by proxy, regardless of whether the proxy has authority
to vote on all matters, constitutes a quorum for the transaction of business at
the meeting.
Action by the stockholders on a matter other than the election of
directors (Proposal 1) is approved if the number of votes cast in favor of the
action exceeds the number of votes cast in opposition to the action. Directors
of the Company must be elected by a plurality of the votes cast at the
election.
All votes will be tabulated by the inspector of elections appointed
for the Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted for purposes of
determining both the presence or absence of a quorum for the transaction of
business and the total number of votes cast with respect to a particular
matter. Broker non-votes will be counted for purposes of determining the
presence or absence of a quorum for the transaction of business but will not be
counted for or against the particular proposal on which the broker has
expressly not voted. Broker non-votes with respect to proposals set forth in
this Proxy Statement will not be considered votes cast and, accordingly, will
not affect the determination as to whether a majority of votes cast has been
obtained with respect to such matters.
REVOCABILITY OF PROXIES
The shares of Common Stock represented by proxy will be voted as
instructed if received in time for the Meeting. If no instructions are
indicated, such shares will be voted in favor of (FOR) (i) each nominee for
election as a director specified herein, (ii) the amendment of the Articles of
Incorporation to change the name of the Company to Brainworks Ventures, Inc.,
(iii) the adoption of the Company's Stock Option Plan, and (iv) in the
discretion of the proxy holder as to any other matter that may properly come
before the Meeting. Any person signing and mailing the proxy may, nevertheless,
revoke it at any time before it is exercised by written notice to the Company
(Attention: Marc J. Schwartz 4243 Dunwoody Club Drive, Suite 200, Atlanta, GA
30350-5206), or by
<PAGE> 4
attending in person and voting at the Meeting. Attendance at the Meeting,
however, will not itself constitute the revocation of a proxy.
PROPOSAL 1 -- ELECTION OF DIRECTORS
Two directors, constituting the entire Board, are to be elected at the
Meeting and, if elected, will serve until the next Annual Meeting of
Stockholders and until their successors have been elected and qualified. The
Company's Bylaws, as amended, provide that the Board shall consist of a minimum
of 2 and a maximum of 9 members.
The nominees of the Board are set forth below. Both of the current
members of the Board have been nominated to continue to serve as directors of
the Company. In the event either nominee is unable or declines to serve as a
director at the time of the Meeting, the proxies will be voted for any nominee
who shall be designated by the present Board to fill the vacancy. If additional
persons are nominated for election as directors, then the proxy holders intend
to vote all proxies received by them for the nominees listed below unless
instructed otherwise. As of the date of this Proxy Statement, the Company is
unaware of a nominee who is unable to serve as a director or who will decline
to serve as a director, if elected.
Directors of the Company must be elected by a plurality of the votes
cast at the election. Proposal 1 will be approved if a plurality of votes cast
at the election is cast in favor of the action.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE NOMINEES FOR
ELECTION AS DIRECTORS.
NOMINEES FOR ELECTION AS DIRECTORS
Set forth below are the names, ages (at August 1, 2000), positions and
offices held and a brief description of the business experience during the past
five years of each person nominated to serve as a director of the Company.
Donald Ratajczak, age 57, has served as the Chairman of the Board and
President of the Company since May, 2000. From July 1973 to June 2000, he has
served as Director of Economic Forecasting Center, College of Business
Administration at Georgia State University. Dr. Ratajczak also serves as a
director of the following organizations: Morgan, Keegan & Co., a broker/dealer
company; T.B.C. Corporation, a tire distribution company; Ruby Tuesday, Inc., a
food service company; and C.I.M. High Yield, a bond fund company.
Marc J. Schwartz, age 36, has served as Vice-President and
Secretary/Treasurer of the Company since May, 2000. Since April, 1998, he has
served as a registered financial advisor and Vice President of Dunwoody
Brokerage Services, Inc. From February 1995 to April 1998, he served as a
financial consultant with Smith Barney, Inc.
There is no family relationship between Dr. Ratajczak and Mr. Schwartz
and there are no family relationships between Messrs. Ratajczak and Schwartz
and any former member of management. The directors of the Company will serve
until the next annual meeting of the Company's stockholders or shareholders and
until their successors are elected and qualified. The officers will serve until
the next annual meeting of directors and until their successors are elected and
qualified.
SIGNIFICANT EMPLOYEES
Set forth below is the name, age (at August 1, 2000), office held, and
a brief description of the business experience during the last five years of an
individual who is not an executive officer but who is expected by the Company
to make a significant contribution to the business.
Marc W. Wright, age 36, has served as the Chief Operating Officer and
the Director of the Board of Advisors of the Company since June 2000. From
April 1998 to June 2000, he served as a senior consultant of MicroStrategy,
Inc. From December 1994 to March 1998, he served as president and founder of
Marketing Arsenal, Inc.
CERTAIN INFORMATION CONCERNING THE BOARD
The Board is currently comprised of the two individuals set forth
above. During the fiscal year ended March 31, 2000, the Board held one board
meeting, and took action by unanimous consent on two occasions.
2
<PAGE> 5
The Company does not presently have a standing audit, nominating, or
compensation committee of the board of directors, or any committees performing
similar function. There are no executive officers that are not also directors.
BENEFICIAL OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth the number and percentage of the
outstanding shares of Common Stock that, according to the information supplied
to the Company, were beneficially owned as of October 16, 2000 by (i) each
person who is currently a director of the Company, (ii) each executive officer
of the Company, (iii) all current directors and executive officers of the
Company as a group, and (iv) each person who, to the knowledge of the Company,
is the beneficial owner of more than 5% of the outstanding Common Stock. Except
as otherwise indicated, the persons named in the table have sole voting and
dispositive power with respect to all shares beneficially owned, subject to
community property laws where applicable.
Beneficial ownership has been determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934 (the "Exchange Act"). Unless
otherwise noted, the Company believes that all persons named in the table have
sole voting and investment power with respect to all shares of Common Stock
beneficially owned by them.
<TABLE>
<CAPTION>
Name of Person or Group Aggregate Number of Shares of Common Percent of Outstanding Shares of
----------------------- ------------------------------------- -----------------------------------
Stock Beneficially Common Stock
------------------ ------------
Owned
-----
<S> <C> <C>
Donald Ratajczak 183,500(1) 16.6%
1681 Lady Marian Lane
Atlanta, GA 30309
Marc J. Schwartz 335,000(2) 26.7%
70 Old Ivy Road, #55
Atlanta, GA 30342
Gregory L. Hoover 89,208 9.3%
2495 Wood Brook Court
Lawrenceville, GA 30043
All officers and directors as a group 518,500(3) 36.9%
(2 persons)
</TABLE>
(1) Includes an option to acquire 150,000 shares, which is currently
exercisable.
(2) Includes an option to acquire 300,000 shares, which is currently
exercisable.
(3) Includes options to acquire 450,000 shares, which are currently
exercisable.
CHANGE IN CONTROL OF THE REGISTRANT
Prior to Mr. Schwartz's election as Vice President, Secretary/
Treasurer, and Director of the Company, on April 11, 2000, the Company entered
into a Consulting Agreement (the "Consulting Agreement") under the terms of
which Mr. Schwartz was retained to explore a possible new business direction for
the Company. Pursuant to the terms of the Consulting Agreement, the Company
agreed to pay Mr. Schwartz the sum of $120,000 and to grant to him options to
acquire an aggregate of 300,000 shares of Common Stock. Of the shares subject to
this option: a) 100,000 shares are immediately exercisable at an option price of
$1.125 per share (the "Option Price"); b) 100,000 shares are exercisable at the
Option Price when the trading price of the Common Stock reaches and maintains
for 10 days a price of $3.00 per share; and c) 100,000 shares are exercisable at
the Option Price when the trading price of the Common Stock reaches and
maintains for 10 days a price of $5.00 per share. In April, 2000, in
anticipation of the change in the Company's business direction and management,
the board of directors authorized a grant of options to Dr. Ratajczak, entitling
him to purchase a total of 150,000 shares of the Company's Common Stock at a
price of $3.00 per share.
3
<PAGE> 6
In April, 2000, prior to becoming officers and directors of the
Company, Messrs. Schwartz and Ratajczak, along with a number of other
individuals, acquired stock of the Company in private transactions, as
reflected on a Schedule 13D filing dated April 17, 2000. Mr. Schwartz acquired
a total of 35,000 shares, and Mr. Ratajczak acquired a total of 33,500 shares
of common stock.
As a result of the Company decision to change its business direction,
on May 17, 2000, the Company effected a change in management, in order to
acquire the necessary management experience and expertise to implement the
Company's proposed new business endeavors. The Company's board of directors,
consisting of James Fouts, Elizabeth White and Dan Ligino, resigned, seriatim,
and Messrs. Schwartz and Ratajczak, were elected as the new members of the board
of directors of the Company. In addition, Mr. Fouts and Elizabeth Fouts, his
wife, resigned as President and Secretary, respectively, and Mr. Ratajczak was
appointed as President and Chairman of the Board, and Mr. Schwartz was appointed
as the Vice President and Secretary/Treasurer, of the Company.
In May, 2000, Dunwoody Brokerage Services, Inc. ("Dunwoody"), a
broker-dealer firm with which Mr. Schwartz is affiliated, agreed to assist Mr.
Fouts and members of his family, in selling, in private transactions, shares of
common stock of the Company held by them, in exchange for which these sellers
have agreed to pay a fee of $0.07 per share. James Fouts and his family, Alan
Fouts, Donovan Fouts, Elizabeth Fouts, and Elizabeth White, were majority
stockholders of the Company. James Fouts and Elizabeth Fouts, his wife, were
the Chairman/President and Secretary/Treasurer, respectively. Dunwoody has
earned a fee of approximately $24,500, for assisting in finding private
purchasers for the purchase of a total of 350,000 shares of the Company's
common stock held by Elizabeth White, Alan Fouts, and Donovan Fouts. This stock
was purchased from these individuals subject to existing restrictions on the
stock. Mr. Schwartz expects Dunwoody to earn a standard commission in
connection with providing such assistance to the Fouts.
The percentage of voting securities of the Company now beneficially
held by Messrs. Schwartz and Ratajczak is stated in the table above.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
For the last three completed fiscal years the directors were
compensated $500 per year for board membership and were paid $100 per board
meeting attended, plus reasonable expenses for attending such meeting.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth in the prescribed format the
compensation paid to the officers of the Company for services rendered in all
capacities during the Company's last three fiscal years.
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation
awarded or paid by the Company for services rendered during each of the years
in the three year period ended March 31, 2000 to its Chief Executive Officer
and other executive officers whose compensation exceeded $100,000.
<TABLE>
<CAPTION>
Name and Principal Position Fiscal Year Salary All Other Compensation
--------------------------- ----------- ------ ----------------------
(ended March 31)
<S> <C> <C> <C>
James F. Fouts 2000 0 $15,000*
President and 1999 0 $ 9,000*
Chief Executive Officer(1) 1998 0 $12,000*
</TABLE>
*Represents amounts paid to Fremont Corporation, an affiliate of James
Fouts, for office and clerical services provided to the Company.
(1) Mr. Fouts resigned as the President and Chief Executive Officer of the
Company in May, 2000.
4
<PAGE> 7
No options were granted by the Company or exercised during the 1999 fiscal
year. Therefore, an Option Grant Table and a Year-End Value Table are not
included in this Proxy Statement.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As a result of the Company's decision to change its business direction,
described above, the Company determined that it would cause its wholly-owned
subsidiary, Auric Minerals Corporation ("AMC"), to sell to Corporation de La
Fonda ("La Fonda"), AMC's minority stock interest in La Fonda. La Fonda is a
closely-held New Mexico corporation which owns a hotel operation known as the
Hotel de La Fonda in Santa Fe, New Mexico. The purpose of this transaction was
to create liquidity for the Company, in order to provide it with capital to
pursue its new business direction. AMC owned a total of 9,200 shares, or
approximately 8.5% of the outstanding stock of La Fonda. As a result of this
decision, and negotiations with La Fonda, AMC entered into an agreement with La
Fonda dated May 19, 2000, providing for the sale of all 9,200 shares of the La
Fonda stock owned by AMC to La Fonda, at a total purchase price of $1,303,548 in
cash, or a price of $141.69 per share, together with other consideration. Prior
to entering into the transaction, the Company determined that La Fonda had
recently purchased shares of its Common Stock from a shareholder, at a price of
$141.69 per share. All previous purchases of La Fonda stock have been at lower
prices, and La Fonda recently granted options for the purchase of stock at a
price of $149 per share. Given these circumstances, and in view of the Company's
new business direction, the Company concluded that the transaction was fair and
reasonable and in the best interest of the Company.
In connection with the transaction with La Fonda, at the end of May,
2000, a family limited liability company owned by James Fouts and his family
members, loaned to La Fonda the sum of $1,200,000 to complete the purchase of
the shares. James Fouts is a director and a holder of 705 shares of La Fonda.
Elizabeth Fouts, his wife, is a director of La Fonda.
In 1999, the Company acquired an 8% interest in Hillcrest Mining for a
cost of $21,600. Also in 1991, the Company acquired a 25% interest in the
"Robbie" gold prospect claims owned by Hi-Tech Exploration as a cost of $3,567.
The Company's former president, James Fouts is also an owner of a 25% interest
in the "Robbie" claims.
See also the information under the caption "Change in Control of the
Registrant" above.
AUDITORS
In the beginning of July, 2000, the Company's accountant, Andersen,
Andersen & Strong, L.L.C. ("AAS"), notified the Company that it would be unable
to audit the Company's financial statements for the fiscal year ended March 31,
2000. The firm of AAS served as the Company's auditor for the fiscal year ended
March 31, 1999. AAS has indicated that they are unable to complete the audit
for the year because one of the two partners of the firm, who would be the
concurring partner, has taken a leave of absence from the firm for health
reasons, and will not return for a lengthy period.
During the years ended March 31, 1999 and 1998, and up to and
including the present, there have been no disagreements between the Company and
AAS on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedures. Furthermore, AAS's report on the
financial statements for the years ended March 31, 1999 and 1998, did not
contain an adverse opinion or disclaimer of opinion, nor were such reports
qualified or modified as to uncertainty, audit scope, or accounting principles.
AAS's report on the financial statements of the Company for the fiscal year
ended March 31, 1999 and 1998, indicated that the Company was able to continue
as a going concern.
5
<PAGE> 8
The Company has engaged Richard A. Eisner & Company, LLP ("Eisner"),
as the Company's auditor for the fiscal year ended March 31, 2000. Prior to the
engagement of Eisner, neither the Company nor anyone on its behalf, has
consulted with Eisner on any financial issue. Eisner has examined the Company's
financial statements since July 2000, and has no relationship with the Company
other than that rising from its appointment as independent auditor.
Representatives of AAS or Eisner are not expected to be present at the Meeting.
The Company currently plans to select Eisner as independent auditors for the
Company for the fiscal year ending March 31, 2001.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's directors, executive officers, and persons who own
beneficially more than 10% of a registered class of the Company's equity
securities, to file with the SEC initial reports of ownership and reports of
changes in ownership of such securities of the Company. Directors, executive
officers and greater than 10% stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) reports they file.
To the Company's knowledge, the Section 16(a) filing requirements
applicable to its directors, executive officers and greater than 10% beneficial
owners were complied with during the fiscal year ended March 31, 2000.
PROPOSAL 2 -- AMENDMENT OF ARTICLES OF INCORPORATION TO CHANGE
THE CORPORATE NAME
The Board believes it is advisable and in the best interest of the
Company to amend the Company's Articles of Incorporation to change the name of
the Company to Brainworks Ventures, Inc. On May 17, 2000, the Board adopted a
resolution approving an amendment to the first article of the Articles of
Incorporation and directing that the amendment be presented to the stockholders
for approval (the "Proposed Amendment"). The Board adopted the resolution to
change the name of the Company because of the change in the Company's business
direction. Your current stock certificates will continue to evidence ownership
of the Company (renamed Brainworks Ventures, Inc.). You do not need to send in
your stock certificates with your proxy.
Proposal 2 will be approved if the number of votes cast in favor of
the action exceeds the number of votes cast in opposition to the action.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE PROPOSED AMENDMENT.
PROPOSAL 3 -- APPROVAL OF STOCK OPTION PLAN
On May 17, 2000, the Board adopted the Auric Metals Corporation Stock
Option Plan (the "Plan"), subject to approval of stockholders at the Meeting.
The principal provisions of the Plan are summarized below. Such
summary does not, however, purport to be complete and is qualified in its
entirety by the terms of the Plan, a copy of which is attached hereto as
Exhibit A and is incorporated herein by reference.
DESCRIPTION OF THE PLAN
The Plan provides for the granting of options to acquire Common Stock,
which may be either incentive stock options (an "ISO") or nonqualified stock
options (an "NSO"). The Plan is administered by the Board, or if so
established, a committee of the Board established for that purpose (the
"Committee"), and all directors, officers and employees of the Company or any
subsidiary and any consultant or adviser providing services to the Company or
any subsidiary whose participation in the Plan is determined by the Board, or
if applicable the Committee, to be in the best interests of the Company are
eligible to receive option grants under the Plan. There is no termination date
under the Plan, but no options may be granted under the Plan after the tenth
anniversary of its adoption by the Board. Receipt of option grants under the
Plan is contingent upon the execution by each prospective option holder of an
agreement in such form as the Board, or if applicable the Committee, may, from
time to time, determine.
The Plan provides for the grant of options to purchase up to 5,000,000
shares of Common Stock. On October 11, 2000, the last sale price of Common Stock
was quoted at $5.50 as reported by Standard & Poor's ComStock, Inc. The purchase
price per share of Common Stock subject to an option is fixed by the Board, or
if applicable the Committee, when the option is granted. In the case of any ISO,
such exercise price shall be no less than the fair market value of the Common
Stock at the time of grant or 110% of such value, in the case of any shareholder
owning directly or indirectly more than 10% of the total voting power of the
Company, as determined by the Board, or if applicable the Committee, under
procedures
6
<PAGE> 9
prescribed in the Plan. Additional terms of options granted under the Plan,
including the vesting provisions of such options, will be also established at
the time of grant. The Board, or if applicable the Committee, in its sole
discretion, may rescind, modify or waive any limitation or condition on the
exercise of an option contained in any option agreement so as to accelerate the
time at which an option may be exercised or extend the period during which the
option may be exercised. In addition to the requirement requiring minimum
exercise price described above, the terms of an option agreement for an ISO
must meet other requirements of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). For example, any ISOs granted under the Plan
would not be transferable except by will or by the laws of descent and
distribution upon the death of the option holder.
Payment for shares purchased under the Plan may be made: (i) in cash;
(ii) by surrender of all or part of an option (including the option being
exercised); (iii) by exchanging shares of Common Stock with a fair market value
equal to the total option price; (iv) by delivery of other property rights and
credits deemed acceptable by the Board, or if applicable the Committee,
including the optionee's promissory note; or (v) any combination of the above
payment methods. Notwithstanding the foregoing, payment other than in cash may
be made only with the consent of the Board, or if applicable the Committee, or
if and to the extent provided for in the option agreement governing such
exercise.
In the event of any stock split, stock dividend, spin-off, split-up,
spin-out, recapitalization or similar transaction, the Plan provides that the
Board, or if applicable the Committee, shall make appropriate adjustments to
the number of shares available for issuance under the Plan and to the number
and price of options previously granted. In the event of any merger,
consolidation or share exchange with another corporation, whether or not the
Company is the surviving corporation, or if substantially all of the assets or
all of the shares of Common Stock are acquired by another corporation, or in
the event of a separation, reorganization or liquidation of the Company (each a
"Significant Transaction"), the Board or the board of directors of the
corporation that assumes the Company's obligations shall make appropriate
provisions with respect to any outstanding options by substitution on an
equitable basis of appropriate capital stock of the Company of the surviving or
successor corporation, provided that the difference between the aggregate fair
market value of the shares so substituted and the exercise price thereof is not
greater that the difference between the aggregate fair market value of the
Common Stock subject to such options prior to substitution and the exercise
price thereof. Notwithstanding the foregoing, if a Significant Transaction
occurs, the Board or the board of directors of the surviving or successor
corporation may, upon written notice to the holder of any such option, require
that such option be exercised within sixty (60) days of the date of such notice
or such option will be terminated.
The Plan may be amended or terminated at any time by the Board, or if
applicable the Committee, except that any such amendment must be approved by
the stockholders if required under Section 422 of the Code. The Board, or if
applicable the Committee, may, in its discretion, postpone the issuance or
delivery of shares following exercise of an option until the completion of a
registration, or other qualification or exemption of such shares, under
applicable state or federal laws. If the Plan is approved by the stockholders,
the Company may, at such time as the Board may determine, register the shares
of Common Stock issuable under the Plan under appropriate provisions of the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
FEDERAL INCOME TAX CONSEQUENCE
Incentive Stock Options. Neither the grant nor the exercise of an ISO
will result in a taxable event to the option holder, and any gain realized upon
a disposition of shares of Common Stock received upon exercise of an ISO will
be taxed as long-term capital gain if the optionee holds the shares for at
least both two years after the date the ISO was granted and one year after the
date the ISO was exercised (the "holding period requirement"). The Company is
not entitled to any business expense deduction when an ISO is exercised, except
as discussed below.
For the exercise of an ISO to qualify for the foregoing tax treatment,
the optionee must be an employee of the Company or a subsidiary from the date
that the ISO is granted through a date within three months before the date of
exercise. If an optionee is disabled, he or she has one year to exercise an ISO
following termination for disability. If the optionee dies, both the holding
period requirement and the three-month exercise period are waived.
If all of the foregoing requirements are met except the holding period
requirement (a "Disqualifying Disposition"), the optionee will recognize
ordinary income upon the disposition of the stock generally equal to the
difference between the fair market value of the stock at the time the ISO was
exercised and the option exercise price, but in no event shall such amount
exceed the gain realized upon sale of such stock. The balance of any gain
realized, if any, will be treated as a capital gain. The Company will be
allowed a business expense deduction in such cases to the extent that the
optionee recognizes ordinary income, subject to Section 162(m) of the Code as
discussed below.
7
<PAGE> 10
If an optionee exercises an ISO by tendering shares of Common Stock
with a fair market value equal to part or all of the option exercise price, the
exchange of shares will be treated as a nontaxable exchange (unless the tender
of such shares would be a Disqualifying Disposition). If the exercise is a
tax-free exchange, the optionee would have no taxable income from the exchange
and exercise, and the tax basis of the shares surrendered would be treated as
the carryover basis for an equivalent number of option shares received, with
the additional option shares received taking a tax basis equal to the amount of
cash, if any, paid to exercise the ISO. If the optionee makes a Disqualifying
Disposition in the exercise of an ISO, the exchange would be treated as a
taxable event with respect to the surrendered shares as described above, with a
number of option shares equivalent in number to the surrendered shares taking a
tax basis equal to fair market value, and the remaining option shares taking a
tax basis equal to the amount of cash, if any, paid to exercise the ISO.
If, pursuant to the terms of an option agreement, the Company
withholds shares in payment of the exercise price for an ISO, the transaction
generally should be treated as if the withheld shares had been sold in a
Disqualifying Disposition after exercise of the option, so that the optionee
will realize ordinary income with respect to such shares. The tax basis of the
option shares generally would be determined in the same manner as described
above where the optionee physically surrenders ISO shares in a Disqualifying
Disposition.
Non-Qualified Options. The grant of an NSO will not be a taxable event
for the optionee or the Company. Upon exercising a NSO, an optionee will
recognize ordinary income generally equal to the difference between the
exercise price and the fair market value of the stock on the date of exercise
(except that, if the optionee is subject to certain restrictions imposed by the
securities laws, the measurement date will be deferred, unless the optionee
makes a special tax election within 30 days after exercise). Upon a subsequent
sale or exchange of shares acquired pursuant to the exercise of a NSO, the
optionee will have taxable gain or loss measured by the difference between the
amount realized on the disposition and the tax basis of the shares (generally,
the amount paid for the shares plus the amount treated as ordinary income at
the time the option was exercised).
If the Company complies with applicable reporting requirements and
with the restrictions of Section 162(m) of the Code, it generally will be
entitled to a business expense deduction in the same amount and at the same
time as the optionee recognizes ordinary income. Under Section 162(m) of the
Code, if the optionee is one of certain specified executive officers, then,
unless certain exceptions apply, the Company is not entitled to deduct
compensation with respect to the optionee, including compensation related to
the exercise of stock options, to the extent such compensation in the aggregate
exceeds $1 million for the taxable year.
If the optionee surrenders shares of Common Stock in payment of part
or all of the exercise price for NSOs, no gain or loss will be recognized with
respect to the shares surrendered (regardless of whether the shares were
acquired pursuant to the exercise of an ISO) and the optionee will be treated
as receiving an equivalent number of shares pursuant to the exercise of the
option in a nontaxable exchange. The tax basis of the shares surrendered will
be treated as the carryover basis for an equivalent number of option shares
received, with such option shares being treated as having been held for the
same holding period as had expired with respect to the surrendered shares. The
fair market value of the additional option shares received will constitute
ordinary compensation income to the optionee, with such additional shares
taking a tax basis in that amount.
If pursuant to an option agreement, the Company withholds shares in
payment of the option price for NSOs or in payment of tax withholding, the
transaction should generally be treated as if the withheld shares had been
physically surrendered as described above.
OTHER OUTSTANDING OPTIONS
On April 11, 2000, the Company entered into the Consulting Agreement
with Marc Schwartz. Pursuant to the Consulting Agreement, the Company granted
options to Mr. Schwartz to acquire shares of Common Stock as follows: a)
100,000 shares immediately exercisable at an option price of $1.125 per share
(the "Option Price"); b) 100,000 shares are exercisable when the trading price
of the Common Shares reaches and maintains for 10 trading days a price of $3.00
per share; and c) 100,000 shares at the Option Price when the stock price of
the Company (based on the market price) reaches and maintains for 10 trading
days a price of $5.00 per share. In addition, the Company has granted
immediately exercisable options to Donald Ratajczak to purchase a total of
150,000 shares of the Company's common stock at a price of $3.00 per share.
8
<PAGE> 11
AWARDS UNDER THE PLAN
Since the granting of options under the Plan will be determined by the
Board, or a committee of the Board established for that purpose, the exact
number or amounts of options to be granted under the Plan has not been
determined at this time.
REASONS FOR OBTAINING STOCKHOLDER APPROVAL
Since directors and officers are eligible to receive options under the
Plan, the Board acknowledges that current and future directors and officers may
be deemed to have a material interest in the approval of the Plan. The Board
believes the Plan is in the best interests of the Company and has approved the
Plan subject to stockholder approval at the Meeting. The Company is submitting
the Plan for stockholder approval at the Meeting because such approval is
required to qualify the Plan under Section 422 of the Code relating to the
grant of ISOs and also to permit the Company to make stock option grants to
eligible participants without the need for stockholder ratification or approval
of each such grant pursuant to the rules and regulations of any exchange upon
which shares of the Common Stock may be listed.
Proposal 3 will be approved if the number of votes cast in favor of
the action exceeds the number of votes cast in opposition to the action.
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE PLAN
OTHER MATTERS
The Board does not know of any other matters that may come before the
Meeting. If any other matters are properly presented to the Meeting, it is the
intention of the persons named in the accompanying proxy to vote, or otherwise
to act, in accordance with their best judgment on such matters.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the Company's
Meeting of Stockholders for fiscal year ending March 31, 2000 must be received
by the Company no later than July 1, 2001, in order to be included in the proxy
statement and proxy relating to that annual meeting.
Whether or not you plan to attend, you are urged to complete, sign and
return the enclosed proxy in the accompanying envelope. A prompt response will
greatly facilitate arrangements for the Meeting, and your cooperation will be
appreciated. Stockholders who attend the Meeting may vote their shares
personally even though they have sent in their proxies.
ANNUAL REPORT
The Company's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 2000, as filed with the Securities and Exchange Commission, exclusive
of documents filed as exhibits or incorporated by reference (the "2000 Annual
Report on Form 10-KSB"), is enclosed with this Proxy Statement. The 2000 Annual
Report on Form 10-KSB is not a part of the proxy soliciting material.
Additional copies of the 2000 Annual Report on Form 10-KSB are available to
shareholders without charge upon written request to Auric Metals Corporation,
4243 Dunwoody Club Drive, Atlanta, Georgia 30350.
By Order of the Board,
/s/ Marc Schwartz
---------------------------
Marc Schwartz
Secretary
Atlanta, Georgia
October 19, 2000
9
<PAGE> 12
EXHIBIT A
AURIC METALS CORPORATION
STOCK OPTION PLAN
ARTICLE 1
NAME AND PURPOSE
1.1 Name. The name of this Plan is the "Auric Metals Corporation Stock
Option Plan."
1.2 Purpose. The purpose of the Plan is to enhance the profitability and
value of the Company for the benefit of its stockholders by providing
equity ownership opportunities to better align the interests of
officers, key employees and valued directors, consultants, independent
contractors and other agents with those of the Company's stockholders.
The Plan is also designed to enhance the profitability and value of
the Company for the benefit of its stockholders by providing stock
options to attract, retain and motivate officers, key employees and
valued directors, consultants, independent contractors and other
agents who make important contributions to the success of the Company.
ARTICLE 2
DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION
2.1 General Definitions. The following words and phrases, when used in the
Plan, unless otherwise specifically defined or unless the context
clearly otherwise requires, shall have the following respective
meanings:
(a) Affiliate. A Parent or Subsidiary or any other entity
designated by the Committee in which the Company owns at
least a 50% interest (including, but not limited to,
partnerships and joint ventures).
(b) Board. The Board of Directors of the Company.
(c) Code. The Internal Revenue Code of 1986, as amended. Any
reference to the Code includes the regulations promulgated
thereunder.
(d) Company. Auric Metals Corporation, a Nevada corporation.
(e) Committee. The Board, or to the extent authorized by the
Board, the Company's Compensation Committee or its
successors.
(f) Common Stock. The common stock, $.01 par value, of the
Company.
(g) Consultant. Any person engaged by the Company or any
Affiliate to provide consulting services to the Company or
any Affiliate as an Independent Contractor and not as an
Employee.
(h) Directors. A duly-elected member of the Board.
(i) Effective Date. The date that the Plan is approved by the
stockholders of the Company, which must occur within 12
months after adoption by the Board. Any grants of Options
prior to the approval by the stockholders of the Company
shall be void if such approval is not obtained.
(j) Employee. Any individual employed by the Employer.
(k) Employer. The Company and all Affiliates.
(l) Exchange Act. The Securities Exchange Act of 1934, as
amended.
<PAGE> 13
(m) Fair Market Value. For so long as the Common Stock of the
Company is listed or admitted to unlisted trading privileges
on a national securities exchange or designated as a national
market systems security on an interdealer quotation system by
the National Association of Securities Dealers, Inc. ("NASD")
or if sales or bid and offer quotations are reported for the
Common Stock in the automated quotation system ("NASDAQ")
operated by the NASD ("publicly traded"), "Fair Market Value"
shall mean the closing price of the Common Stock as of the
day in question, or if such day is not a trading day in the
principal securities market or markets for such stock, on the
nearest preceding trading day, as reported with respect to
the market (or the composite of markets, if more than one) in
which shares of such stock are then traded, or if no such
closing prices are reported, on the basis of the mean between
the high bid and low asked prices that day on the principal
market or quotation system on which shares of such stock are
then quoted, or if not so quoted, as furnished by a
professional securities dealer making a market in such stock
selected by the Board. If the Common Stock is no publicly
traded, "Fair Market Value" means with respect to shares of
Common Stock, the amount that a willing buyer would pay for
such shares to a willing seller, neither being under any
compulsion to buy or to sell and both having reasonable
knowledge of all relevant factors, as such amount is
determined by the Board in good faith using any reasonable
valuation method as of the date of any grant of an ISO (or on
any other relevant valuation date specified herein).
(n) Fiscal Year. The taxable year of the Company, which ends
March 31 of each year.
(o) Independent Contractor. A Person engaged to provide services
to the Company or any Affiliate on an independent basis and
not as an Employee.
(p) ISO. An Incentive Stock Option as defined in Section 422 of
the Code.
(q) NQSO. A Non-Qualified Stock Option, which is an Option that
does not meet the statutory requirements of an ISO.
(r) Option. An option to purchase Shares granted under the Plan.
(s) Option Agreement. The document which evidences the grant of
an Option under the Plan and which sets forth the terms,
conditions and provisions of, and restrictions relating to,
such Option.
(t) Parent. Any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if,
at the time of the grant of an Option, each of the
corporations (other than the Company or a Subsidiary) owns
stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other
corporations in such chain.
(u) Participant. An Employee, Director, Consultant, Independent
Contractor or other agent who is granted an Option under the
Plan.
(v) Person. An individual, corporation, partnership, limited
liability company, joint venture, association, syndicate,
trust, unincorporated organization or other entity.
(w) Plan. The Auric Metals Corporation Stock Option Plan and all
amendments and supplements to it.
(x) Shares. A share of Common Stock reserved for issuance upon
the exercise of options.
(y) Subsidiary. Any corporation (other than the Company), in an
unbroken chain of corporations, beginning with the Company,
if, at the time of grant of an Option, each of such
corporation, other than the last such corporation in the
unbroken chain, owns stock or other equity interests
possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such
chain.
2.2 Other Definitions. In addition to the above definitions, certain words
and phrases used in the Plan and any Option Agreement may be defined
in other portions of the Plan or in such Option Agreement.
2
<PAGE> 14
2.3 Conflicts in Plan. In the case of any conflict in the terms of the
Plan, or between the Plan and an Option Agreement, relating to an
Option, the provisions in the article of the Plan which specifically
grants such Option shall control those in a different article or in
such Option Agreement.
ARTICLE 3
COMMON STOCK
3.1 Numbers of Shares. The number of Shares for which Options may be
granted under the Plan shall be 5,000,000. Such Shares may be
authorized but unissued Shares, reacquired Shares, or any combination
thereof.
3.2 Reusage. If an Option expires or is terminated, surrendered or
canceled without having been fully exercised, the unused Shares
covered by any such Option shall again be available for grant under
the Plan to any Participant.
3.3 Adjustments. If there is any change in the Common Stock by reason of
any stock split, stock dividend, spin-off, split-up, spin-out or
recapitalization, or any other similar transactions, the number of
Shares under the Plan or subject to or granted pursuant to an Option
and the price thereof, as applicable, shall be appropriately adjusted
by the Committee.
3.4 Reorganization. If the Company is merged, consolidated or effects a
share exchange with another corporation (whether or not the Company is
the surviving corporation), or if substantially all of the assets or
all of the shares of Common Stock are acquired by another corporation,
or in the event of a separation, reorganization or liquidation of the
Company, the Board or the board of directors of any corporation
assuming the obligations of the Company hereunder, shall make
appropriate provision for the protection of any outstanding Options by
the substitution on an equitable basis of appropriate capital stock of
the Company, or of the merged, consolidated or otherwise reorganized
corporation which will be issuable in respect to the Shares, provided
only that the excess of the aggregate Fair Market Value of the Shares
subject to the Options immediately after such substitution over the
exercise price thereof is not more than the excess of the aggregate
Fair Market Value of the Shares subject to the Options immediately
before such substitution over the exercise price thereof.
Notwithstanding the preceding sentence, if the Company is merged,
consolidated or effects a share exchange with another corporation or
if substantially all of the assets or all of the shares of Common
Stock of the Company are acquired by another corporation, or in the
event of a separation, reorganization or liquidation of the Company,
the Board or the board of directors of any corporation assuming the
obligations of the Company hereunder may, upon written notice to the
holder of any outstanding Option, provide that such Option must be
exercised within sixty (60) days of the date of such notice or it will
be terminated.
ARTICLE 4
ELIGIBILITY
4.1 Determined By Committee. The Participants and the Options they receive
under the Plan shall be determined by the Committee in its sole
discretion. In making its determinations, the Committee shall consider
past, present and expected future contributions of Participants and
potential Participants to the Company.
ARTICLE 5
ADMINISTRATION
5.1 Committee. The Plan shall be administered by the Committee.
5.2 Authority. Subject to the terms of the Plan, the Committee shall have
sole discretionary authority to:
(a) determine the individuals to whom Options are granted, the
type and amounts of Options to be granted and the date of
issuance and duration of all such grants;
(b) determine the terms conditions and provisions of, and
restrictions relating to, each Option granted;
(c) interpret and construe the Plan and all Option Agreements;
3
<PAGE> 15
(d) prescribe, amend and rescind rules and regulations relating
to the Plan;
(e) determine the content and form of all Option Agreements;
(f) determine all questions relating to Options under the Plan;
(g) maintain accounts, records and ledgers relating to Options;
(h) maintain records concerning the Committee's decisions and
proceedings;
(i) employ agents, attorneys, accountants or other Persons for
such purposes as the Committee considers necessary or
desirable under the Plan; and
(j) do and perform all acts which it may deem necessary or
appropriate for the administration of the Plan and to carry
out the purposes of the Plan.
5.3 Delegation. The Committee may delegate all or any part of its
authority under the Plan to any Employee or committee of Employees.
5.4 Decisions of Committee and its Delegates. All decisions made by the
Committee, or (unless the Committee has specified an appeal process to
the contrary) any other Person to whom the Committee has delegated
authority, pursuant to the provisions hereof shall be final and
binding on all Persons.
5.5 Indemnification of the Board and the Committee. In addition to such
other rights of indemnification as they may have as Directors, the
Directors and members of the Committee shall be indemnified by the
Company as and to the fullest extent permitted by law, including,
without limitation, indemnification against the reasonable expenses,
including attorneys' fees, actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in
connection with any appeal thereof, to which they or any of them may
be a party by reason of any action taken or failure to act under or in
connection with this Plan, or any Options granted hereunder, and
against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the
Company), or paid by them in satisfaction of a judgment in any such
action, suit or proceeding except in relation to matters as to which
it shall be adjudged in such action, suit or proceeding that such
Director or Committee member is liable for gross negligence, bad faith
or affirmative misconduct in his duties.
ARTICLE 6
AMENDMENT OF PLAN
6.1 Power of Committee. The Committee shall have the sole right and power
to amend the Plan at any time and from time to time, provided,
however, that the Committee may not amend the Plan without approval of
the stockholders of the Company if such stockholder approval is
required under Section 422 of the Code or if directed by the Board.
ARTICLE 7
TERM AND TERMINATION OF PLAN
7.1 Term. The Plan shall be effective as of the Effective Date. No Option
shall be granted pursuant to the Plan on or after the tenth (10th)
anniversary date of the adoption of the Plan by the Board, but Options
granted prior to such tenth anniversary may extend beyond that date to
the date(s) specified in the Option Agreement(s) covering such
Options.
7.2 Termination. Subject to Article 8 hereof, the Plan may be terminated
at any time by the Committee.
ARTICLE 8
MODIFICATION OR TERMINATION OF OPTIONS
8.1 General. Subject to the provisions of Section 8.2, the amendment or
termination of the Plan shall not adversely affect a Participant's
rights to or under any Option granted prior to such amendment or
termination.
4
<PAGE> 16
8.2 Committee's Right. Except as may be provided in an Option Agreement,
any Option granted may be converted, modified, forfeited or canceled,
prospectively or retroactively in whole or in part, by the Committee
in its sole discretion; provided, however, that, subject to Section
8.3, no such action may impair the rights of any Participant without
his or her consent. Except as may be provided in an Option Agreement,
the Committee may, in its sole discretion, in whole or in part, waive
any restrictions or conditions applicable to, or may accelerate the
vesting of, any Option.
8.3 Termination of Options under Certain Conditions. The Committee, in its
sole discretion, may cancel any unexpired or deferred Options at any
time if the Participant is not in compliance with all applicable
provisions of this Plan or with any Option Agreement or if the
Participant, whether or not he or she is then an Employee, Director,
Consultant, Independent Contractor or other agent, acts in a manner
contrary to the best interests of the Company or any Affiliate.
ARTICLE 9
OPTION AGREEMENTS; LIMITATIONS
9.1 Grant Evidenced by Option Agreement. The grant of any Option under the
Plan shall be evidenced by an Option Agreement which shall describe
the Option granted and the terms and conditions thereof. The granting
of any Option shall be subject to, and conditioned upon, the
recipient's execution of an Option Agreement with respect thereto. All
capitalized terms used in both the Option Agreement and the Plan shall
have the same meaning as in the Plan, and the Option Agreement shall
be subject to all of the terms of the Plan.
9.2 Provisions of Option Agreement. Each Option Agreement shall contain
such provisions as the Committee shall determine in its sole
discretion to be necessary, desirable and appropriate for the Option
granted, which may include, without limitation, the following:
description of the type of Option; the Option's duration; its
transferability; exercise price, exercise period and the Person or
Persons who may exercise; the manner in which any withholding tax
obligation of the Company or any Affiliate arising as the result of
such exercise will be satisfied; the effect upon such Option of the
Participant's death, disability, change of duties or termination of
employment; the Option's conditions; subject to the provisions of
Article 10, when, if, and how any Option may be forfeited, converted
into another Option, modified, exchanged for another Option, or
replaced; and the restrictions on any Shares purchased under the Plan.
9.3 Limitations on Right to Exercise ISO's. No ISO may be exercised after
the expiration of three (3) months after the earlier of the date the
employment of an Employee terminates with the Company or the date an
Employee is given written notice of his or her discharge from such
employment. The expiration period described in the preceding sentence
shall be waived in the event such termination occurs because of death
or because of disability within the meaning of Code Section 22(e)(3)
("Disability"); provided, however, that no ISO may be exercised after
the expiration of one (1) year after the earlier of the date the
employment of the Employee terminates with the Company or the date the
Employee is given written notice of his or her discharge from such
employment because of Disability. Absence or leave approved by the
Company, to the extent permitted by the applicable provisions of the
Code, shall not be considered an interruption of employment for any
purpose under this Plan.
9.4 Limitations on Transfer of ISO. No ISO shall be transferable otherwise
than by will or the laws of descent and distribution and, during the
lifetime of the Employee to whom such ISO was granted, no ISO may be
exercised or other rights or benefits claimed under the Plan by any
Person other than such Employee (other than the Employee's guardian or
legal representative). After the death of such original grantee, the
"holder" of the ISO shall be deemed to be the Person to whom the
original grantee's rights shall pass under the original grantee's will
or under the laws of descent and distribution. Notwithstanding the
foregoing, no transfer of an ISO by will or the laws of descent or
distribution will be binding on the Company unless the Board is
furnished with sufficient proof establishing the validity of such
transfer.
9.5 Additional Limitations on Issuance of Shares. The transfer or issuance
of Shares upon the exercise of any Option granted under the Plan will
be contingent upon the advice of counsel to the Company that the
Shares to be issued pursuant thereto have been duly registered or are
exempt from registration under the applicable securities laws.
5
<PAGE> 17
ARTICLE 10
SURRENDER AND REISSUANCE OF OPTIONS
10.1 Cancellation and Reissuance of Options. With the prior written consent
of any affected grantee of Options hereunder, the Committee may grant
to one or more such grantees, in exchange for their surrender and the
cancellation of such Options, new Options which may have different
exercise prices than the exercise prices provided in the Options so
surrendered and canceled and containing such other terms and
conditions consistent with the Plan as the Committee may deem
appropriate.
ARTICLE 11
TERMS OF OPTIONS
11.1 Types of Options. It is intended that both ISOs and NQSOs may be
granted by the Committee under the Plan.
11.2 Option Price. The purchase price for Shares under any ISO shall be no
less than the Fair Market Value of the Common Stock at the time the
Option is granted, (or in the case of a ten-percent-or-greater
stockholder under Section 422(b)(6) of the Code, 110 percent of Fair
Market Value).
11.3 Other Requirements for ISOs. The terms of each Option which is
intended to qualify as an ISO shall meet all requirements of Section
422 of the Code or any successor statute in effect from time to time,
including, without limitation the requirement that the grantee be an
Employee.
11.4 NQSOs. The terms of each NQSO shall provide that such Option will not
be treated as an ISO. The purchase price for Shares under any NQSO
shall be established by the Committee, in its sole discretion, at the
time of granting such NQSO.
11.5 Determination by Committee. Except as otherwise provided in Sections
11.2 through Section 11.4, the terms of all Options shall be
determined by the Committee.
ARTICLE 12
PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING
12.1 Payment. Upon the exercise of an Option, the amount due the Company is
to be paid:
(a) in cash;
(b) by the surrender of all or part of an Option (including the
Option being exercised);
(c) by the tender to the Company of shares of Common Stock owned
by the Participant and registered in his or her name having a
Fair Market Value equal to the amount due to the Company;
(d) in other property, rights and credits, deemed acceptable by
the Committee, including the Participant's promissory note;
or
(e) by any combination of the payment methods specified in (a)
through (d) above.
Notwithstanding the foregoing, any method of payment other
than in cash may be used only with the consent of the Committee or if
and to the extent so provided in an Option Agreement. The proceeds of
the sale of Shares purchased pursuant to an Option shall be added to
the general funds of the Company or to the reacquired Shares held by
the Company, as the case may be, and used for the corporate purposes
of the Company as the Board shall determine.
12.2 Withholding. The Company may, at the time any Option is exercised,
withhold from such exercise of an Option, any amount necessary to
satisfy federal, state and local withholding requirements with respect
to such exercise of such Option. Such withholding may be satisfied, at
the Company's option, either by cash or the Company's withholding of
Shares.
6
<PAGE> 18
ARTICLE 13
MISCELLANEOUS PROVISIONS
13.1 Unfunded Status of the Plan. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect
to any payments or deliveries of Shares not yet made to a Participant
by the Company, nothing contained herein shall give any rights that
are greater than those of a general creditor of the Company. No
provision of the Plan shall require or permit the Company, for the
purpose of satisfying any obligations under the Plan, to purchase
assets or place any assets in a trust or other entity to which
contributions are made or otherwise to segregate any assets, nor shall
the Company maintain separate bank accounts, books, records or other
evidence of the existence of a segregated or separately maintained or
administered fund for such purposes.
13.2 Underscored References. The underscored references contained in the
Plan and in any Option Agreement are included only for convenience,
and they shall not be construed as a part of the Plan or Option
Agreement or in any respect affecting or modifying its provisions.
13.3 Number and Gender. The masculine, feminine and neuter, wherever used
in the Plan or in any Option Agreement, shall refer to either the
masculine, feminine or neuter; and, unless the context otherwise
requires, the singular shall include the plural and the plural the
singular.
13.4 Governing Law. The place of administration of the Plan and each Option
Agreement shall be in the State of Georgia, and this Plan and each
Option Agreement shall be construed and administered in accordance
with the laws of the State of Nevada, without giving effect to
principles relating to conflicts of laws, including, without
limitation, issues related to the validity and issuance of the Shares.
13.5 Purchase for Investment. The Committee may require each Person
purchasing the Shares pursuant to an Option to represent to and agree
with the Company in writing that such Person is acquiring the Shares
for investment and without a view to distribution or resale. The
certificates for such Shares may include any legend which the
Committee deems appropriate to reflect the restrictions on transfer
set forth in this Plan. All certificates for the Shares delivered
under the Plan shall be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under all
applicable laws, rules and regulations, and the Committee may cause a
legend or legends to be put on any such certificates to make
appropriate references to such restrictions.
13.6 No Employment or Service Contract. Neither the adoption of the Plan
nor any Option granted hereunder shall confer upon any Employee,
Director, Consultant, Independent Contractor or other agent any right
to continued employment with or services to the Company or any
Affiliate, nor shall the Plan or any Option interfere in any way with
the right of the Company or any Affiliate to terminate the employment
or services of any of its Employees, Directors, Consultants,
Independent Contractors or other agents at any time.
13.7 No Effect on Other Benefits. The receipt of Options under the Plan
shall have no effect on any benefits to which a Participant may be
entitled from the Company or any Affiliate under another plan or
otherwise, or preclude a Participant from receiving any such benefits.
13.8 Registration of Shares. The Committee, in its discretion, may postpone
the issuance and/or delivery of the Shares issuable upon any exercise
of an Option until completion of any registration, or other
qualification or exemption of such Shares under applicable state
and/or federal laws, rules or regulations as the Committee considers
appropriate, and may require any grantee to make such representations
and furnish such information as it may consider appropriate in
connection with the issuance or delivery of the Shares in compliance
with applicable laws, rules and regulations.
13.9 Rights as a Stockholder. Any recipient of an Option shall have no
rights as a stockholder with respect to any Shares related thereto
until the issuance of a stock certificate for such Shares following
the exercise of such Option. Except as otherwise provided for in
Sections 3.3 and 3.4 hereof, no adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities, or other
property) or distributions or other rights for which the record date
is prior to the date such stock certificate is issued.
13.10 Plan Financing. The Company may extend and maintain, or arrange for
the extension and maintenance of, financing to any grantee (including
a grantee who is a Director) to purchase Shares pursuant to exercise
of an Option granted hereunder on such terms as may be approved by the
Committee in its sole discretion. In
7
<PAGE> 19
considering the terms for extension or maintenance of credit by the
Company, the Committee shall, among other factors, consider the cost
to the Company of any financing extended by the Company.
13.11 ERISA. The Plan is not an employee benefit plan which is subject to
the provisions of the Employee Retirement Income Security Act of 1974,
and the provisions of Code Section 401(a) are not applicable to the
Plan.
8
<PAGE> 20
To: Auric Metals Corporation
4243 Dunwoody Club Drive, Suite 200
Atlanta, Georgia 30350-5201
Pursuant to the Stock Option Plan (herein called the "Plan"),
dated as of _________, by and between Auric Metals Corporation (the "Company")
and me, I hereby give notice that I elect to exercise the stock option granted
under the Plan with respect to ____ shares of the common stock of the Company
as of the date on which this notice is delivered to the Company, and
accordingly I hereby agreed to purchase such shares at the price and on the
terms established under the Plan. Full payment for such shares is enclosed.
Such payment consists of:
____________ Cash
____________ Check
____________ shares of the Company's common stock, _____ of which
are previously owned.
I hereby represent and warrant that I am purchasing such shares for
investment purposes only and not with a view to distribution or resale.
I hereby agree that the stock option granted under the Plan shall be
deemed to have been exercised to the extent specified in this notice on the
exercise date below my signature, and I hereby warrant that on such date this
notice was delivered to the Company.
Sincerely,
--------------------------------
(Sign Name)
--------------------------------
(Print Name)
DATED:
----------------------------
9
<PAGE> 21
[PROXY]
AURIC METALS CORPORATION
4243 DUNWOODY CLUB DRIVE, SUITE 200
ATLANTA, GEORGIA 30350-5206
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 9, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF AURIC METALS CORPORATION
The undersigned holder of shares of Common Stock of AURIC METALS
CORPORATION, a Nevada corporation, (the "Company"), hereby appoints Marc J.
Schwartz and Donald Ratajczak, and each of them, with full power of
substitution, the proxies and attorneys of the undersigned, to vote as specified
hereon at the Annual Meeting of Stockholders (the "Annual Meeting") of the
Company to be held at The Barclay, 3530 Piedmont Road, Atlanta, Georgia, on
November 9, 2000 at 2:00 P.M., local time, and at any adjournments or
postponements thereof, with all powers (other than the power to revoke the proxy
or vote the proxy in a manner not authorized by the executed form of proxy on
the reverse side hereof) that the undersigned would have if personally present
at the Annual Meeting, to act in their discretion upon any other matter or
matters that may properly be brought before the Annual Meeting and to appear and
vote all the shares of Common Stock of the Company that the undersigned may be
entitled to vote. The undersigned hereby acknowledges receipt of the
accompanying Proxy Statement and Annual Report to Stockholders, and hereby
revokes any proxy or proxies heretofore given by the undersigned relating to the
Annual Meeting.
This proxy may be revoked at any time prior to the voting thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH PROPOSAL.
(Continued and to be signed on the other side)
<PAGE> 22
The Board of Directors recommends a vote FOR the following proposals:
1. To elect the two nominees listed below to the Board of Directors of
the Company.
___FOR all nominees (except as marked below) ___WITHHOLD authority to
vote for all nominees
NOMINEES: Marc J. Schwartz
Donald Ratajczak
INSTRUCTIONS: To withhold authority to vote for any nominee, enter the name
of such nominee in the space provided below:
2. To approve the Amendment to the Company's Articles of Incorporation to
change the name of the Company to be Brainworks Ventures, Inc.
___FOR ____AGAINST ____ABSTAIN
3. To approve the Company's Stock Option Plan.
___FOR ____AGAINST ____ABSTAIN
UNLESS OTHERWISE MARKED, THIS PROXY WILL BE VOTED AS IF MARKED FOR THE
PROPOSALS ABOVE.
Signature
-----------------------------
Signature if
jointly held
-----------------------------
Dated: , 2000
-----------------------
PLEASE DATE AND SIGN AS NAME APPEARS
HEREON. WHEN SIGNING AS EXECUTOR,
ADMINISTRATOR, TRUSTEE, GUARDIAN OR
ATTORNEY, PLEASE GIVE FULL TITLE AS SUCH.
IF A CORPORATION, PLEASE SIGN IN FULL
CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED CORPORATE OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP
NAME BY AUTHORIZED PERSON. JOINT OWNERS
SHOULD EACH SIGN.
2
