SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported): September 13, 1999
VITAFORT INTERNATIONAL CORPORATION
(Exact Name of Registrant as specified in its Charter)
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<S> <C> <C>
Delaware 0-18438 68-0110509
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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Suite 480, 1800 Avenue of the Stars, Los Angeles, California 90067
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number,including area code: (310) 552-6393
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets.
On September 13, 1999, a closing was held pursuant to a Share Exchange
Agreement and Plan of Reorganization (the "Plan") by and among the Registrant,
Guideline Capital Corporation and the Registrant's wholly owned subsidiary
Hollywood Partners, Inc. ("HPI"). Guideline Capital Corporation's common stock
is registered under Section 12(g) of the Exchange Act of 1934, as amended. The
Plan provided for the exchange by the Registrant of all of the shares of HPI for
5,000,000 shares of common stock of Guideline Capital Corporation. In connection
with the Plan, Guideline Capital Corporation undertook a 6 to 1 forward split of
its issued and outstanding common stock, so that prior to the closing of the
transaction and prior to the issuance of 5,000,000 shares to Registrant,
Guideline Capital Corporation had 3,000,000 shares of common stock outstanding.
In connection with the Plan, Guideline Capital Corporation also changed its name
to Hollywood Partners.com, Inc., a Delaware corporation ("HP.com"). The
Registrant now owns approximately 62.5% of HP.com's 8,000,000 shares of common
stock which are now issued and outstanding.
HP.com will operate as an Exchange Act reporting company. HP.com will
conduct all of the Registrant's web commerce activities. The Registrant, in
addition to continuing with its current product line, intends to provide certain
marketing services to HP.com and receive revenues therefrom.
In accordance with the Plan, upon consummation of the transaction, the
management of Registrant selected all of the officers and directors of HP.com.
In connection with the transaction, Terra Healthy Living, Ltd., an overseas
investment company which is the Registrant's largest shareholder ("Terra"), has
agreed to forgive $1.8 million of indebtedness which forgiveness will result in
a gain for Registrant. In addition, Terra has committed to invest $2 million in
HP.com. in exchange for HP.com stock, and has already made $500,000 of such
investment.
The Registrant funded the costs of this transaction, principally
professional fees, from its working capital.
Item 7. Financial Statements, Pro-Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro-Forma Financial Information.
To be filed by amendment on or before November 26, 1999.
(c) Exhibits.
The following exhibits are filed as part of this Current Report:
Number Description
2.1 Share Exchange Agreement and Plan of Reorganization, by and
among Guideline Capital Corporation, the Registrant and
Hollywood Partners, Inc.
2.2 Letter Agreement, dated September 13, 1999 between the Registrant
and Terra.
2.3 Letter Agreement, dated September 13, 1999, between the
Registrant and Hollywood Partners, Inc.
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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.
VITAFORT INTERNATIONAL CORPORATION
By: /s/ Mark Beychock
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Mark Beychok, Chief Executive Officer
Dated: September 28, 1999
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EXHIBIT INDEX
The following exhibits are filed as part of this Current Report:
Number Description
2.1 Share Exchange Agreement and Plan of Reorganization, by and
among Guideline Capital Corporation, the Registrant and
Hollywood Partners, Inc.
2.2 Letter Agreement, dated September 13, 1999 between the Registrant
and Terra.
2.3 Letter Agreement, dated September 13, 1999, between the
Registrant and Hollywood Partners, Inc.
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SHARE EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION
This Share Exchange Agreement and Plan of Reorganization (this
"Agreement"), dated as of the 13th day of September, 1999 by and between
Guideline Capital Corporation ("Public Company"), a publicly held Delaware
corporation, Vitafort International Corporation, a publicly held Delaware
corporation ("Parent") and Hollywood Partners, Inc., a California corporation
("Company") and a subsidiary of Parent.
WITNESSETH:
Whereas Public Company desires to acquire all of the issued and outstanding
capital stock of Company;
Whereas Parent is the sole holder of all Company's capital stock
outstanding and Parent desires to transfer the same to Public Company in
exchange for such consideration as is set forth herein;
Whereas for United States federal income tax purposes the parties intend
that (i) the Share Exchange will qualify as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code")
and (ii) this Agreement shall be, and is hereby, adopted as a plan of
reorganization for purposes of Section 368(a) of the Code; and
Whereas the transactions evidenced hereby are to be submitted for approval
by the boards of directors of each of Public Company, Company and Parent.
Now, Therefore, in consideration of the premises and of the mutual
covenants, terms and conditions set forth herein, and such other and further
consideration, the receipt and sufficiency of which is hereby acknowledged, this
Agreement is adopted as a reorganization pursuant to the Code and the parties
agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF PUBLIC COMPANY
Public Company represents and warrants to Company and Parent as follows:
1.1 Company Profile; Assets and Liabilities. Public Company is not
currently conducting, and has never been engaged in, any business. Other than
the costs associated with the transaction proposed herein, Public Company has no
assets or liabilities of any nature, whether accrued, absolute, contingent,
known or otherwise, except as disclosed in its audited financial statements for
the year ended June 30, 1999.
1.2 Financial Statements. Public Company has delivered audited financial
statements dated, and for the fiscal year ended June 30, 1999, together with all
notes thereto, prepared in reasonable detail in accordance with generally
accepted accounting principles applied on a consistent basis, which financial
statements contain a balance sheet dated June 30, 1999 and the following
statements for the fiscal year then ended: a statement of operations, a
statement of stockholders' equity, and a statement of cash flows.
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1.3 Absence of Certain Changes. Since the date of the most recent financial
statements delivered hereunder, Public Company has not:
(a) Suffered any material and adverse change in its financial condition,
working capital, assets, liabilities, reserves, business, operations or
prospects;
(b) Suffered any loss, damage, destruction or other casualty materially and
adversely affecting any of its properties, assets or business (whether or
not covered by insurance);
(c) Borrowed or agreed to borrow any funds or incurred, or assumed or become
subject to, whether directly or by way of guarantee or otherwise, any
obligation or liability, except as related to the costs associated with the
proposed transaction herein and to its transfer agent;
(d) Paid, discharged or satisfied any claims, liabilities or obligations, other
than in the normal course of its business;
(e) Permitted or allowed any of its property or assets (real, personal or
mixed, tangible or intangible) to be subjected to any mortgage, pledge,
lien, security interest, encumbrance, restriction or charge of any kind;
(f) Canceled any debts or waived any claims or rights of substantial value, or
sold, transferred, or otherwise disposed of any of its properties or assets
(real, personal or mixed, tangible or intangible);
(g) Granted any increase in the compensation of directors, officers or
employees (including any such increase pursuant to any bonus, pension,
profit-sharing or other plan or commitment), or any increase in the
compensation payable or to become payable to any director, officer or
employee;
(h) Made any capital expenditure or commitment outside of its normal course of
business;
(i) Declared, paid or set aside for payment any dividend or other distribution
in respect of its capital stock or, directly or indirectly, redeemed,
purchased or otherwise acquired any shares of its capital stock or other
securities, other than as required hereunder;
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(j) Made any change in any method of accounting or accounting practice;
(k) Paid, loaned or advanced any amount to, or sold, transferred or leased any
properties or assets (real, personal or mixed, tangible or intangible), to,
or entered into any affiliate or associate of any of its directors or
officers, except for directors' fees and compensation to officers at rates
set forth in any Form 10-K or 10-KSB of Public Company filed with the
Securities and Exchange Commission (the "SEC"), none of which shall result
in any liability or indebtedness which shall survive this closing;
(l) Entered into any transaction, contract or commitment;
(m) Been subject to any other event or condition of any character that has or
might reasonably have a material and adverse effect upon the financial
condition, business, assets or properties of Public Company; or
(n) Agreed, whether in writing or otherwise, to take any action described in
the foregoing clauses (a) through (m).
1.4 Affirmative Representations Regarding Action of Public Company between
Date of Financial Statements Delivered and Closing. Between the date of the most
recent financial statements delivered hereunder and the date of this Agreement,
Public Company has conducted no business. Public Company will conduct no
business through the date of Closing, as defined hereinbelow, except as
specifically required in this Agreement.
1.5 Employment Agreements; Benefit Plans. There is not currently any
employment or severance agreement to which Public Company was or is subject, or
by which it was or is bound. Further, no such agreements will arise in the
future as a result of acts which have occurred previous to, or concurrent with,
the date hereof. Further, Public Company is not subject to, nor has it
established, a benefit plan, whether pursuant to the Code or otherwise, other
than disclosed in Public Company's filings with the SEC. No shares of common
stock, options to acquire common stock or other benefits have been issued under,
or pursuant to, any such plan or arrangement.
1.6 Permits and Licenses. The business of Public Company has complied and
currently complies in all material respects with all applicable laws and
regulations. Further, the business of Public Company does not currently require,
and has not in the past required, application to procure any license, permit,
franchise, order or approval.
1.7 Litigation. There is no litigation or proceeding pending or threatened
against or relating to Public Company or its business. There is no factual
basis, whether known or unknown, for any claim or action to be threatened or
asserted against Public Company.
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1.8 Contracts, Agreements and Leases. Other than its agreement with its
legal counsel and transfer agent, Public Company is not a party to any
contracts, agreements, permits, licenses, plans, leases or similar arrangements.
The obligations of Public Company owed to its legal counsel and transfer agent
will be paid in full through closing by Public Company, without exception.
1.9 Principal Stockholders. Attached hereto as Schedule 1.9 is a current
list of its stockholders and as of the date of this Agreement and represents and
warrants that no additional shares have been issued by the Public Company, nor
is issuance of such additional shares contemplated as of the date of this
Agreement, other than as described herein. The stockholder list is accurate and
complete as of the Closing Date (as defined in paragraph 3.1(a)).
1.10 Voting and Notice Requirements.
(a) On September 3, 1999, Public Company transmitted to all holders of record
of securities of Public Company and concurrently filed with the SEC a
Disclosure Statement (the "Disclosure Statement") pursuant to Section 14(f)
of and Rule 14f-1 under the Securities and Exchange Act of 1934, as amended
(the "Exchange Act") relating to the proposed changes in the majority of
the board of directors of Public Company contemplated in connection with
this Agreement.
(b) The affirmative vote by unanimous written consent of the holders of all
outstanding shares of Public Company common stock (the "Public Company
Stockholder Approval") is the only vote of holders of any class or series
of Public Company capital stock necessary to approve and adopt this
Agreement and the transactions contemplated hereby, including the Share
Exchange and the Public Company's Restated and Amended Certificate of
Incorporation. Filing and distribution of an information statement is not
required under Section 14(c) or Rule 14c-2 under the Exchange Act, and the
Public Company Stockholder Approval shall become effective immediately
without Public Company having to file or deliver an information statement
relating to such vote (the "Information Statement") to its stockholders
pursuant to Rule 14c-2 under the Exchange Act.
1.11 Authorization. Public Company has duly taken all corporate action
necessary to authorize the execution and delivery of this Agreement, the
consummation of the transactions evidenced hereby and the performance of its
obligations hereunder.
1.12 State Takeover Statutes. Public Company's board of directors has taken
all action necessary to ensure that Section 203 of the Delaware General
Corporation Law does not apply to this Agreement and the transactions
contemplated hereby by approving the transactions contemplated hereby, including
the Share Exchange, pursuant to Section 203(a)(1) of such Law.
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1.13 Enforceable Obligations. This Agreement is a legal and binding
obligation of Public Company, enforceable in accordance with the terms hereof,
except as limited by bankruptcy, insolvency or other laws of general application
relating to the enforcement of creditors' rights and general equitable
principles.
1.14 No Conflicts or Consents. The execution and delivery by Public Company
of this Agreement and the performance of its obligations have not conflicted and
will not conflict with the Certificate of Incorporation or Bylaws of Public
Company or any provision of law, statute, rule or regulation or any judgment
applicable to or binding upon Public Company, including the laws of the State of
Delaware and federal securities laws, nor will it result in the creation of any
lien, charge or encumbrance. No consent, approval, authorization or order of any
court or governmental authority or third party has been or is required in
connection with the execution and delivery by Public Company of this Agreement
or the consummation of the transactions evidenced hereby. Neither the execution
nor the consummation of this Agreement in accordance with the terms and
conditions set forth herein has conflicted or will conflict with or constitute a
default under or a breach or violation or grounds for termination of or an event
which with the lapse of time or notice and the lapse of time could or would
constitute a default under the Certificate of Incorporation or Bylaws of Public
Company.
1.15 Organization and Good Standing. Public Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all corporate powers required to carry on its business and
enter into and carry out the transactions evidenced herein. Public Company is
not qualified to do business or in good standing as a foreign corporation in any
other jurisdiction. As of the date hereof, Public Company does not have any
subsidiaries or interests in any corporation, partnership, limited partnership
or other business entity.
1.16 Capitalization. Prior to execution of this Agreement, the stockholders
of Public Company have adopted certain resolutions, including ratifying a 6 for
1 forward split of the common stock of Public Company and at the Closing (as
defined in paragraph 3.1(a)) will cause a Certificate of Amendment to Public
Company's Certificate of Incorporation in the form of Exhibit A hereto to be
filed with the Delaware Secretary of State. As a result of the adoption of these
resolutions and amendments, the authorized capital stock of Public Company will
consist of 50,000,000 shares of common stock, $.001 par value, of which
3,000,000 of such shares are issued and outstanding, all fully paid for and
nonassessable, and 5,000,000 shares of preferred stock, $.001 par value per
share, of which no such shares are issued or otherwise outstanding. All
references to the capitalization of Public Company in this Agreement reflect the
changes so authorized by Public Company's stockholders.
Public Company has no other outstanding rights, options, warrants,
contracts, commitments or demands of any character which would require the
issuance (or transfer out of treasury), by Public Company of any shares of its
capital stock. All outstanding securities were issued in accordance with
applicable federal and state securities laws or exemptions therefrom. All such
shares were issued on or about August 31, 1989 pursuant to the exemption from
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registration provided by Regulation D under the Securities Act of 1933, as
amended (the "33 Act"), Rule 504 thereunder and the general provisions of the
'33 Act. Except as set forth in Schedule 1.16 hereto, in connection with such
offering Public Company made all necessary filings with the SEC and all
applicable state securities departments (collectively referred to as "State
Registrations"). All SEC filings and State Registrations complied with all
applicable laws, rules and regulations. No claims or actions have been
threatened or asserted arising out of, or concerning, the offering documents
used in such offering, SEC filings, State Registrations or the sale of
securities of Public Company.
1.17 Filing of Reports. Public Company is presently current in the filing
of all reports required under Section 13 of the Exchange Act, including all
reports on Form 10-QSB, 10-KSB and 8-K. Further, Public Company has filed all
required reports of application of proceeds with the SEC and all applicable
state securities departments on the appropriate forms. All forms, filings and
reports, including but not limited to the offering materials, filed by Public
Company with the SEC and each state securities department were complete and
accurate and no statement contained in any document (including, without
limitation, financial statements), certificate or other writing furnished or to
be furnished by Public Company to Company or Parent pursuant to the provisions
hereof or in connection with the transactions contemplated hereby, contained or
will contain any untrue statement of material facts or omits or will omit to
state any material fact necessary in order to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading..
1.18 Tax Filings. Except as set forth in Schedule 1.18 hereto, Public
Company has duly filed all federal, state, local and foreign tax reports and
returns required to be filed by it and has duly paid all taxes and other charges
due or claimed to be due from it by any federal, state, local or foreign tax
authorities. Further, the reserve for taxes, if any, reflected in the balance
sheet delivered hereunder is adequate and there are no tax liens upon any
property or assets of Public Company. Further, no state of facts exists or has
existed which would constitute grounds for the assessment of any tax liability.
All deficiencies and assessments resulting from an examination of state, local,
federal and foreign tax returns and reports have been paid. There are no
outstanding agreements or waivers extending the statutory period of limitation
applicable to any federal, state, local, or foreign tax return or report for any
period. Public Company is not a "consenting corporation" within the meaning of
Section 341(f)(1) of the Code.
1.19 Compliance With Law. Public Company is in compliance with all laws,
regulations and orders applicable to its business, including but not limited to,
all applicable laws, rules and regulations of the SEC and all applicable state
securities departments. Further, Public Company has not received any
notification that it is in violation of any laws, regulations or orders and, to
the best knowledge of management of Public Company, no such violations exist.
Neither Public Company nor any employee or agent of Public Company has made any
payment to any person which violates any statutes or law required to be
disclosed under applicable disclosure policies of the SEC.
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1.20 Disclosure. No representations or warranties by Public Company in this
Agreement and no statement contained in any document (including, without
limitation, financial statements), certificate or other writing furnished or to
be furnished by Public Company to Company or Parent pursuant to the provisions
hereof or in connection with the transactions contemplated hereby, contained or
will contain any untrue statement of material facts or omits or will omit to
state any material fact necessary in order to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading. There are no facts known to Public Company which, either
individually or in the aggregate, could or would materially and adversely affect
or involve any substantial possibility of having a material and adverse effect
on the condition (financial or otherwise), results of operations, assets,
liabilities or business of Public Company.
1.21 Officers' Certificates. At closing, the President of Public Company
shall provide a certificate, dated as of the Closing Date and certified by the
Secretary of Public Company, to the effect that:
(a) Public Company is not currently conducting, and has never been engaged in,
any business other than in connection with this Agreement.
(b) Public Company has delivered audited financial statements dated, and for
the fiscal year ended, June 30, 1999, together with all notes thereto,
prepared in reasonable detail in accordance with generally accepted
accounting principles applied on a consistent basis, which financial
statements contain a balance sheet dated June 30, 1999, and the following
statements for the fiscal year then ended: a statement of operations, a
statement of stockholders' equity, and a statement of cash flows.
Further, Public Company has delivered, or will deliver upon request of
Company, all books and records, as well as all required substantiating
documentation, to Company, which are necessary to compile financial statements
for periods subsequent to the date of, and the periods covered by, the most
recent financial statements delivered hereunder. Further, Public Company has
delivered, or otherwise made available, true and correct copies of the
Certificate of Incorporation and Bylaws of Public Company, minutes of all
meetings of its directors and stockholders, true and correct copies of all
filings made in respect of Public Company's initial public offering and such
other and further material as has been requested.
(c) Since the date of the most recent financial statements delivered hereunder,
Public Company has not (unless otherwise described herein):
(1) Suffered any material and adverse change in its financial
condition, working capital, assets, liabilities, reserves, business,
operations or prospects;
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(2) Suffered any loss, damage, destruction or other casualty
materially and adversely affecting any of its properties, assets or
business (whether or not covered by insurance);
(3) Borrowed or agreed to borrow any funds or incurred, or assumed or
become subject to, whether directly or by way of guarantee or
otherwise, any obligation or liability;
(4) Paid, discharged or satisfied any claims, liabilities or
obligations, other than in the ordinary course of its business;
(5) Permitted or allowed any of its property or assets (real, personal
or mixed, tangible or intangible) to be subjected to any mortgage,
pledge, lien, security interest, encumbrance, restriction or charge of
any kind;
(6) Canceled any debts or waived any claims or rights of substantial
value, or sold, transferred, or otherwise disposed of any of its
properties or assets (real, personal or mixed, tangible or
intangible);
(7) Granted any increase in the compensation of directors, officers or
employees (including any such increase pursuant to any bonus, pension,
profit-sharing or other plan or commitment) or any increase in the
compensation payable or to become payable to any director, officer or
employee;
(8) Made any capital expenditure or commitment other than in the
normal course of its business or as disclosed herein;
(9) Declared, paid or set aside for payment any dividend or other
distribution in respect of its capital stock or, directly or
indirectly, redeemed, purchased or otherwise acquired any shares of
its capital stock or other securities, other than as required
hereunder to consummate the transaction proposed herein;
(10) Made any change in any method of accounting or accounting
practice;
(11) Paid, loaned or advanced any amount to, or sold, transferred or
leased any properties or assets (real, personal or mixed, tangible or
intangible) to, or entered into any agreement or arrangement with, any
of its directors or officers or any affiliate or associate of any of
its directors or officers;
(12) Entered into any transaction, contract or commitment other than
as otherwise previously described to Parent in writing;
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(13) Been subject to any other event or condition of any character
that has or might reasonably have a material and adverse effect upon
the financial condition, business, assets or properties of Public
Company;
(14) Agreed, whether in writing or otherwise, to take any action
described in this paragraph of the Agreement;
(d) Between the date of the most recent financial statements delivered
hereunder and the date of this Agreement, Public Company has conducted its
business in the same manner as conducted before the date of such financial
statements.
(e) There is not currently any employment or severance agreement to which
Public Company was or is subject, or by which it was or is bound. Further,
no such agreements will arise in the future as a result of acts which have
occurred previous to, or concurrent with, the date hereof.
(f) There is no litigation or proceeding pending or, to Public Company's
knowledge, threatened against or relating to Public Company, or its
business.
(g) Public Company is not a party to any contract, agreement, permit, license,
plan, lease or similar arrangement which will survive closing, other than
its existing agreement with its transfer agent.
(h) The execution and delivery by Public Company of this Agreement and the
performance of its obligations have not conflicted and will not conflict
with any provisions of law, statute, rule or regulation or any judgment
applicable to or binding upon Public Company, nor will it result in the
creation of any lien, charge or encumbrance. No consent, approval,
authorization or order of any court or governmental authority or third
party has been or is required in connection with the execution and delivery
by Public Company of this Agreement or the consummation of the transactions
evidenced hereby. Neither the execution nor the consummation of this
Agreement in accordance with the terms and conditions set forth herein, has
conflicted or will conflict with or constitute a default under or a breach
or violation or grounds for termination of or an event which with the lapse
of time or notice and the lapse of time could or would constitute a default
under the Articles of Incorporation, as amended, or bylaws of Public
Company.
(i) Except as set forth in Schedule 1.18 hereto, Public Company is in
compliance with all laws, regulations and orders applicable to its
business. Further, Public Company has not received any notification that it
is in violation of any laws, regulations or orders and no such violations
exist. Neither Public Company, nor any employee or agent of Public Company,
has made any payment to any person which violates any statutes or law
required to be disclosed under applicable disclosure policies of the SEC.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF COMPANY AND PARENT
Company and Parent represent and warrant to Public Company as follows:
2.1 Organization and Good Standing. Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California and has all corporate powers required to carry on its business.
Company is qualified to do business and is in good standing as a foreign
corporation in all jurisdictions wherein the character of its properties or the
nature of its business makes such qualification necessary.
2.2 Voting Requirements. The affirmative vote of a majority of the board of
directors of Parent at a duly noticed and held meeting of such board (the
"Parent Board Approval") is the only vote of the board or shareholders of Parent
or Company necessary to approve and adopt this Agreement and the transactions
contemplated hereby, including the Share Exchange.
2.3 Authorization. Upon approval of this Agreement by Parent's board of
directors, Parent and the Company shall have duly taken all action necessary to
authorize the execution and delivery of this Agreement and to authorize the
consummation of the transactions evidenced hereby and the performance of its
obligations and the obligations of Company hereunder.
2.4 No Conflicts or Consents. The execution and delivery by Parent of this
Agreement and its performance of those obligations set forth herein have not
conflicted and will not conflict with the certificate or articles of
incorporation or bylaws of Parent or Company or any provision of law, statute,
rule or regulation or of any agreement or judgment applicable to or binding upon
Parent or Company, including the laws of the States of Delaware or California,
as applicable, and federal securities laws, nor will it result in the creation
of any lien, charge or encumbrance upon any of its assets or properties, or upon
those of Company. Other than the approval of Parent's board of directors, no
consent, approval, authorization or order of any court or governmental authority
or third party is required in connection with the execution and delivery by
Company, or by Parent, of this Agreement or the consummation of the transactions
evidenced hereby. Neither the execution of this Agreement nor its consummation
in accordance with its terms has conflicted or will conflict with or constitute
a default under or breach or violation or grounds for termination of or an event
which with the lapse of time or notice and the lapse of time would or could
constitute a default under any note, indenture, mortgage, deed of trust or other
agreement or instrument to which Company or Parent is a party or by which either
or all of them are bound.
2.5 Enforceable Obligations. Subject to the approval of this Agreement by
Parent's board of directors, this Agreement is a legal and binding obligation of
Company and Parent, enforceable in accordance with its terms, except as limited
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by bankruptcy, insolvency or other laws of general application relating to the
enforcement of creditor's rights and general equitable principles.
2.6 Capitalization. The authorized capital stock of Company consists of
1,000,000 shares of common stock, of which 1,000 are issued in outstanding and
fully paid for and nonassessable. Company has no outstanding rights, options,
warrants, contracts, commitments or demands of any character which would require
the issuance (or transfer out of treasury), by Company of any shares of its
capital stock. All outstanding securities were issued in accordance with
applicable federal and state securities laws or exemptions therefrom.
2.7 Financial Statements. Company shall deliver audited financial
statements dated, and for the fiscal year ended, December 31, 1998, together
with all notes thereto and unaudited financial statements dated, and for the
six-month period ended June 30, 1999, together with all notes thereto, prepared
in reasonable detail in accordance with generally accepted accounting principles
applied on a consistent basis, and such other financial statements as may be
required by the SEC or NASD Regulation, Inc., to Public Company on, before or
after the Closing Date.
2.8 Compliance With Law. Company is in compliance with all laws,
regulations and orders applicable to its business, including but not limited to,
all applicable laws, rules and regulations of the SEC and all applicable state
securities departments. Further, Company has not received any notification that
it is in violation of any laws, regulations or orders and, to the best knowledge
of management of Company, no such violations exist. Neither Company nor any
employee or agent of Company has made any payment to any person which violates
any statutes or law required to be disclosed under applicable disclosure
policies of the SEC.
2.9 Other Information and Inspections. Company has made or will make
available for inspection and copying all books and records of Company and has
fully and completely furnished or will furnish to Public Company such
information as has been requested.
2.10 Disclosure. No representations or warranties by Company or Parent in
this Agreement and no statement contained in any document, certificate or other
writing furnished or to be furnished by Company or Parent to Public Company
pursuant to the provisions hereof, or in connection with the transaction
contemplated hereby, contained or will contain any untrue statements of material
facts or omits or will omit to state any material fact necessary in order to
make the statements herein or therein, in light of the circumstances under which
they were made, not misleading. There are no facts known to Parent or Company
which, either individually or in the aggregate, could or would materially and
adversely affect or involve any substantial possibility of having a material and
adverse effect on the condition (financial or otherwise), results of operations,
assets, liabilities or business of Parent or Company.
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ARTICLE III
CLOSING AND EXCHANGE OF SHARES
3.1 Terms of the Exchange.
(a) On the date (the "Closing Date") of the closing (the "Closing")
of the transactions contemplated hereby, Public Company shall
cause to be delivered to Parent, in an acceptable form,
certificates for 5,000,000 (post-split) shares of its $.001 par
value voting common stock (the "Exchange Shares"), free and clear
of all mortgages, pledges, claims, liens and other rights and
encumbrances whatsoever. Parent shall not be diluted as a result
of any debt, lien, encumbrance, action or liability, or any cost
or expense related thereto of Public Company, or any breach of
any representation or warranty of Public Company contained herein
("Subsequent Liabilities"). Accordingly, in addition to any other
remedy, either in law or in equity, Parent shall be issued such
additional shares of Common Stock of Public Company as may be
required to off-set any such Subsequent Liabilities. The number
of shares to be issued to Parent shall be determined as follows:
(i) in the event shares are sold by Public Company to pay or
satisfy the Subsequent Liabilities, Public Company shall issue
such number of shares as are necessary to maintain the same
percentage of ownership by Parent as they had before said
issuance; or (ii) in the event Public Company does not issue
additional shares to satisfy the Subsequent Liabilities, shares
equal to the amount of the Subsequent Liabilities, with a per
share value equal to the price per share or nearest equivalent
thereto in the share transaction occurring closest in time to the
Closing Date, will be issued to Parent.
(b) The Exchange Shares shall not be subject to any preemptive
rights, options or similar rights on the part of any stockholder
or creditor of Public Company, or any other person whatever.
(c) Parent shall, in consideration for its receipt of the Exchange
Shares, transfer and deliver to Public Company certificates
representing all 1,000 of the issued and outstanding Company
Shares owned by them. Public Company shall receive good and
merchantable title to the Company Shares, which shall be
transferred to Public Company free and clear of all liens,
mortgages, pledges, claims or other rights or encumbrances
whatever.
3.2 Restrictions on Transfer. The Exchange Shares, when issued and
delivered hereunder, will not be registered under the '33 Act and shall
constitute "restricted securities" within the meaning of the '33 Act; provided,
however, that Public Company hereby grants Parent a demand registration right,
exercisable at any time after 90 days following the Closing Date, to have the
resale of such shares registered under the '33 Act. In addition, Public Company
agrees to cooperate with Parent in connection with any distribution of the
Exchange Shares to Parent's stockholders, including through the preparation and
filing by Public Company or Parent of appropriate registration statements
information statements or other documents with the SEC. Parent shall execute and
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deliver to Public Company an investment letter satisfactory in form and
substance to Public Company's counsel which states, among other things, that the
Exchange Shares have been acquired for investment and with no present intent to
make any resale, assignment, transfer or hypothecation of all or any part
thereof unless registered or exempt from registration under the '33 Act and that
the certificates representing the Exchange Shares will bear a restrictive legend
which states in effect that such shares have not been registered under the '33
Act, and consequently may not be resold, assigned, transferred or hypothecated
unless registered under the '33 Act or, in the opinion of Public Company's
counsel, an exemption from the registration requirements of the '33 Act is
available for any such transaction.
3.3 Changes in Capitalization of Public Company. If, between the date of
the most recent financial statements of Public Company delivered to Company and
Parent and the Closing Date, the outstanding shares of the capital stock of
Public Company are found to have been increased, decreased, changed into or
exchanged for a different number or kind of said shares or securities of Public
Company through reorganization, reclassification, stock dividend stock split,
reverse stock split or similar change in the capitalization of Public Company
other than as contemplated in Exhibit A hereto, Public Company, at the election
of Parent, shall issue and deliver to Parent such number of Public Company
shares as will reflect an equitable adjustment of the Public Company shares
specified in paragraph 3.1 of this Article III on account of any such increase,
decrease, change or exchange. In the event of any such change in the
capitalization of Public Company, all references to the shares herein shall
refer to the number of Public Company shares as thus adjusted. However, it is
specifically acknowledged, agreed and understood that the stockholders of Public
Company have approved a proposal to undertake a "forward split" of the Public
Company common stock, wherein 6 shares of common stock issued and outstanding
will be exchanged for 1 share of common stock, as well as additional matters
more specifically stated in the Disclosure Statement sent by Public Company to
its stockholders, a copy of which is attached hereto as Exhibit B. The sole
condition to the approval of such forward stock split is the successful
consummation of the transaction proposed herein. Public Company shall have no
obligation to issue any additional shares to Parent as described herein as a
result of the aforesaid forward stock split. As part of the Closing, Public
Company will also amend the Certificate of Incorporation to increase the
authorized common stock to 50,000,000 shares, $.001 par value and to authorize
the issuance of 5,000,000 shares of "blank check" preferred stock, $.001 par
value per share pursuant to the filing of the Restated and Amended Certificate
of Incorporation set forth in Exhibit A. As part of the Closing, Public Company
will also adopt, with board of director and stockholder approval, a Stock
Compensation Program, in the form of Exhibit C hereto, authorizing the issuance
of up to 3,000,000 shares of Common Stock, par value $.001, giving effect to the
stock split to be effected in the Certificate of Amendment and adopt, with board
of directors approval the By-Laws in the form of Exhibit D hereto.
3.4 Closing Date/Effective Date. The Closing Date of the transactions
contemplated hereby shall be the business day following the date all of the
conditions to the Closing set forth in paragraph 3.6 shall be satisfied or
waived, and in no event later than October 15, 1999 or such other date as the
parties may mutually agree. All representations of the parties hereto shall
survive the Closing and the representations and warranties shall be made as in
effect on the Closing Date.
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At the Closing, a Restated and Amended Certificate of Incorporation in the
form of Exhibit A shall be executed and acknowledged by authorized officers of
Public Company and filed by Public Company with the Secretary of State of the
State of Delaware as provided by the Delaware General Corporation Law and, upon
completion of such filing, the Share Exchange shall become effective as set
forth herein. The time such filing becomes effective as provided by the Delaware
General Corporation Law is referred to herein as the "Effective Time."
3.5 Closing Documents and Actions.
(a) At the Closing Public Company shall:
(1) Deliver to Parent certificates representing 5,000,000 shares of
common stock issued in the name of Parent;
(2) Deliver to Parent a certified copy of minutes of stockholder and
directors, authorizing this transaction;
(3) Deliver to Parent a certificate of good standing indicating Public
Company's good standing and payment of all franchise taxes in
Delaware;
(4) Deliver to Parent a opinion of legal counsel acceptable to Parent,
which, to the extent it addresses tax matters, shall not be required
to be issued by Bryan Gianesin, Esq.;
(5) Deliver to Parent a certificate of President pursuant to paragraph
1.19;
(6) Deliver to Parent resignation letters of all officers and
directors of Public Company;
(7) Deliver to Parent a letter from Public Company's present
independent certified public accountant, resigning from said position
and further indicating that the basis of their resignation does not
arise from any changes in or disagreements with the management of
Public Company on any issue of accounting practices or procedures;
(8) Deliver to Parent for filing with the Delaware Secretary of State
a duly executed Certificate of Amendment of Public Company's
Certificate of Incorporation in the form of Exhibit A;
(9) File with the SEC and deliver to Public Company's stockholders the
Information Statement or deliver to Parent, Company and Public Company
the opinion described in paragraph 3.6(c); and
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(10) Cause to be filed with NASD Regulation, Inc. a Form 211 relating
to the trading of Public Company's common stock by a NASD member
broker/dealer.
(b) At the Closing, Company or Parent shall deliver to Public Company:
(1) Certificates representing 1,000 shares of Company common stock,
together with an assignment of said shares, separate from certificate;
(2) A certified copy of minutes of the sole shareholder and the board
of directors of Company, authorizing this transaction;
(3) A certificate of good standing and tax clearance certificate
indicating Company's good standing and payment of all franchise taxes
in California;
(4) A legal opinion of counsel, acceptable to Public Company; and
(5) A investment letter from Parent as contemplated in paragraph 3.2
relating to issuance of the Exchange Shares.
3.6 Conditions to All Parties' Obligation to Close. The obligation of all
parties to consummate the Share Exchange is subject to the satisfaction on or
prior to the consummation of the Share Exchange of the following conditions:
(a) The transactions contemplated hereby shall not be subject to or
any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act") relating to
the transactions contemplated by this Agreement shall have
expired or been terminated.
(b) Public Company's Disclosure Statement shall have been transmitted
to all holders of record of securities of Public Company.
(c) Public Company's Information Statement relating to the
transactions contemplated hereby shall have been filed with the
SEC or Parent, Company and Public Company shall have received an
opinion of counsel acceptable to Parent that such filing and the
mailing or sending of such Information Statement to Public
Company's stockholders is not required under Section 14(c) of and
Rule 14c-2 under the Exchange Act and no stop order or similar
order relating to such Information Statement or the transactions
contemplated by this Agreement shall have been issued and no
proceeding for that purpose shall have been initiated by the SEC
or any state securities regulator.
(d) Company and Parent shall have received from Bryan Gianesin, Esq.,
counsel to Public Company, an opinion, dated as of the Closing
Date, in form and substance acceptable to Company and Parent
addressing the outstanding capital stock of Public Company.
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(e) Each of the Public Company Stockholder Approval and the Parent
Board Approval shall have been obtained.
(f) Other than the filings provided for under paragraphs 3.5(a)(8),
(9) and (10) and filings pursuant to the HSR Act, all consents,
approvals and actions of, filings with and notices to any court,
tribunal or administrative, governmental or regulatory body,
agency, commission, division, department, public body or other
authority, whether federal, state, local or foreign
("Governmental Entity") required of Public Company, Company or
Parent to consummate the transactions contemplated hereby shall
have been obtained or made, all in form and substance reasonably
satisfactory to Public Company, Company and Parent.
(g) No judgment, order, decree, statute, law, ordinance, rule or
regulation, entered, enacted, promulgated, enforced or issued by
any Governmental Entity of competent jurisdiction or other legal
restraint or prohibition (collectively, "Restraints") shall be in
effect (i) preventing the consummation of the Share Exchange, or
(ii) which otherwise is reasonably likely to be materially
adverse to the business, assets, results of operations or
financial condition of such any of Public Company, Company or
Parent, except for any events or states of facts relating to (a)
the food products, product licensing or Internet industries in
general, and not relating specifically to the business of Public
Company, Company or Parent, as the case may be, or (b) the
economy of the United States or the world, in general, and not
relating specifically to the business of Public Company, Company
or Parent (any such fact or event with respect to any such party,
a "Material Adverse Effect"); provided that each of the parties
shall have used its reasonable best efforts to prevent the entry
of any such Restraints and to appeal as promptly as possible any
such Restraints that may be entered.
3.7 Conditions to Parent's and Company's Obligation to Close. The
obligation of Parent and Company to consummate the Share Exchange is further
subject to the satisfaction on or prior to the Closing Date of the following
additional conditions:
(a) The representations and warranties of Public Company set forth
herein shall be true and correct both when made and at and as of
the Closing Date, as if made at and as of such date (except to
the extent expressly made as of an earlier date, in which case as
of such date), except where the failure of such representations
and warranties to be so true and correct (without giving effect
to any limitation as to "materiality" or "Material Adverse
Effect" set forth therein) would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect
on Public Company, Company or Parent and Parent shall have
received a certificate of the President of Public Company as to
the satisfaction of this condition.
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(b) Public Company shall, in all material respects, have performed
and complied with all obligations required to be performed or
complied with by it under this Agreement at or prior to the
Effective Time, and Company and Parent have received a
certificate of the President of Public Company as to the
satisfaction of this condition.
(c) Parent shall have received from its independent public
accountants an opinion that the transactions contemplated hereby
will not adversely affect or limit the net operating losses of
Parent, including under Section 382 of the Code.
(d) Public Company's board and stockholders, as necessary or
appropriate, shall have duly approved the Restated and Amended
Certificate of Incorporation and the Bylaws of Public Company in
the Forms of Exhibit A and Exhibit D hereto, respectively;
(e) Warner Bros. Consumer Products shall have consented the
assignment of its contracts with Parent to the Company and, to
the extent necessary, the Share Exchange;
(f) Parent and Company shall have received all of the documents to be
delivered by Public Company under paragraph 3.5(a).
(g) At any time after the date of this Agreement there shall not have
occurred and be continuing as of the Closing Date any Material
Adverse Effect on Public Company.
(h) The Restated and Amended Certificate of Incorporation shall have
been filed as required under Sections 103 and 242 of the Delaware
General Corporation Law.
(i) None of the holders of the outstanding securities of Public
Company shall be entitled to dissenters' rights under Section 262
of the Delaware General Corporation Law.
(j) Parent's nominees to the board of directors of Public Company
pursuant to paragraph 6.1 shall have been duly appointed to
Public Company's board of directors pursuant to Section 223 of
the Delaware General Corporation Law.
3.8 Conditions to Public Company's Obligation to Close. The obligation of
Public Company to consummate the Share Exchange is further subject to the
satisfaction on or prior to the Closing Date of the following additional
conditions:
(a) The respective representations and warranties of Parent and
Company set forth herein shall be true and correct both when made
and at and as of the Closing Date, as if made at and as of such
date (except to the extent expressly made as of an earlier date,
in which case as of such date), except, in the case of
representations and warranties of Parent and Company, where the
failure of such representations and warranties to be so true and
correct (without giving effect to any limitation as to
"materiality" or "Material Adverse Effect" set forth therein)
would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Parent, Company or Public
Company, and Public Company shall have received a certificate of
the President of Company as to the satisfaction of this condition
by Company and a certificate of an executive officer of Parent as
to the satisfaction of this condition by Parent.
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(b) Parent and Company shall, in all material respects, have
performed or complied with all obligations required to be
performed or complied with by it under this Agreement at or prior
to the Closing Date, and Public Company shall have received a
certificate of the President of Company as to the satisfaction of
this condition by Company and a certificate of an executive
officer of Parent as to the satisfaction of this condition by
Parent.
(c) At any time after the date of this Agreement there shall not have
occurred and be continuing as of the Effective Time any Material
Adverse Effect on Parent or Company.
3.9 Frustration of Closing Conditions. None of Public Company, Company or
Parent may rely on the failure of any condition set forth in paragraph 3.6, 3.7,
or 3.8, as the case may be, to be satisfied if such failure was caused by such
party's failure to use reasonable best efforts to consummate the Share Exchange
and the other transactions contemplated by this Agreement, as required by and
subject to Sections 6.4 and 7.1.
ARTICLE IV
COVENANTS OF COMPANY AND PARENT
Parent and, insofar as it has the power to direct Company by ownership of
voting securities or otherwise, Company (Company and Parent being collectively
referred to below as the "Company Parties"), covenant and agree that:
4.1 Transactions. Prior to the Effective Date, the Company Parties will
carry on Company's business diligently and substantially in the same manner as
heretofore conducted and as contemplated by Parent and Company to be modified in
connection with the transactions contemplated hereby (which shall include
pursuing strategic acquisitions), and will not enter into any transactions which
would singly or in the aggregate be materially adverse to Company' business,
prospects or financial condition, taken as a whole.
4.2 Conduct of Business. Prior to the Effective Date:
(a) The Company Parties will not (i) permit or do or cause to be done
anything which Company has represented in Article II not to have
been done, except as otherwise permitted in this Agreement or
consented to by Public Company in advance and in writing; (ii)
make or permit any amendment to Company's Articles of
Incorporation or bylaws; (iii) cause or permit to be declared or
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paid any dividend, stock split, combination (reverse split) or
other recapitalization or distribution in respect of Company's
common stock, nor cause or permit the issuance of any additional
shares of Company's common stock; (iv) to the best ability of the
Company Parties, permit or do any act or omission to act the
effect of which would be to breach or violate any contract or
commitment to which Company is a party; (v) to the best ability
of the Company Parties, permit or cause the waiver of the
provisions of any statute of limitations applicable to the levy
or assessment of any federal, state, municipal or foreign taxes
payable by Company; or (vi) organize any subsidiary of Company,
or acquire or permit the acquisition of any equity interest in
any other business or entity, with the exception of proposed
transactions of the type disclosed herein in Exhibit E.
(b) Prior to the Effective Date: To the best of their ability, the
Company Parties will: (i) maintain Company's books, accounts, and
records as now being maintained, on a consistent basis; (ii)
maintain Company's properties in good repair; (iii) comply with
and not violate any law, rule, regulation, or ordinance whatever
applicable to Company or its business or any license or permit
issued to Company; and (iv) take each and every step necessary to
preserve the charter issued by the State of California, including
timely filing of corporate reports and current payment of all
taxes now and hereafter due and owing.
4.3 Issuance of Additional Securities. Except as contemplated in connection
with the stock compensation program, the form of which is attached hereto as
Exhibit C, prior to the Effective Date, Company shall not issue or permit the
issuance of any common stock of Company or of any warrant, option or other right
to subscribe for or acquire common stock or any other securities whatever of
Company, nor shall any stock option or stock purchase plan, incentive stock
option plan or similar plan be adopted whereby persons could acquire securities
of Company, or any option or similar right to acquire such securities.
4.4 Board Approval. Promptly following the execution and delivery of this
Agreement, Parent shall take all steps required to submit this Agreement and the
transactions contemplated hereby to Parent's board of directors for Parent Board
Approval.
ARTICLE V
COVENANTS OF PUBLIC COMPANY
5.1 Effectuation of this Agreement. Public Company covenants and agrees
that, prior to the Effective Date: Public Company will use its best efforts to
cause this Agreement to become effective, and all transactions herein
contemplated to be consummated, in accordance with their terms, to obtain all
required consents and authorizations of third parties, to make all filings and
give all notices to those regulatory authorities or other third parties which
may be necessary or reasonably required in order to effect the transactions
contemplated in this Agreement, and to comply with all federal and state
securities laws and other laws as may be applicable to the contemplated
transactions.
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5.2 Stockholder Approval. Prior to or promptly following the execution of
this Agreement, Public Company shall take all steps required to obtain the
Public Company Stockholder Approval of this Agreement and all transactions
contemplated hereby and, unless the opinion referred to in paragraph 3.6(c)
shall have been provided at the Closing, file and prosecute the Information
Statement with the SEC so that Public Company may act upon such Public Company
Stockholder Approval. Public Company shall cause the filing of the Information
Statement, if required to be made, to be granted confidential treatment by the
SEC pursuant to Rule 14c-5(d)(2) under the Exchange Act.
5.3 Conduct. Public Company covenants and agrees that, prior to the
Effective Date:
(a) Public Company will not (i) permit or do or cause to be done
anything which Public Company has represented in Article I not to
have been done, except as otherwise permitted in this Agreement,
or consented to by Parent in advance and in writing; (ii) make or
permit any amendment to the Public Company Certificate of
Incorporation or Bylaws, other than those matters included in
Exhibits A or D hereto and such other amendment or restatements
of the Bylaws as Parent shall request, which shall be adopted by
Public Company, effective on the Effective Date; (iii) cause or
permit to be declared or paid any dividend, stock split,
combination (reverse split) or other recapitalization or
distribution in respect of Public Company's capital stock, other
than as disclosed in Exhibit A; (iv) to Public Company's best
ability, permit or cause the waiver of the provisions of any
statute of limitations applicable to the levy or assessment of
any federal, state, municipal or foreign taxes payable by Public
Company.
(b) To the best of its ability, Public Company will: (i) maintain its
books, accounts and records as now being maintained, on a
consistent basis; (ii) comply with and not violate any law, rule,
regulation or ordinance whatsoever applicable to Public Company;
and (iii) take each and every step necessary to preserve the
charter issued by the State of Delaware, including timely filing
of corporate reports and current payment of all taxes now and
hereafter due and owing.
5.4 Access. Public Company agrees that it will allows Company Parties
directors, officers, accountants, attorneys and other representatives full
access, during normal business hours throughout the term or applicability of
this Agreement, to all information whatever concerning its affairs as the
Company Parties may reasonably request. All information provided shall be
furnished strictly subject to the confidentiality provisions of this Agreement.
ARTICLE VI
ADDITIONAL COVENANT
6.1 Public Company Governance after Effective Time. The parties agree that
after the Effective Time, Public Company shall have a corporate governance
structure reflecting that the Company's management prior to the consummation of
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transactions contemplated herein and as intended to be modified by Company as
provided herein shall be instituted. Without the intention to interfere with the
rights and powers of Public Company's stockholders and Public Company's board,
each of the parties will recommend to their respective shareholders and boards,
as applicable, the following:
(a) Public Company's Certificate of Incorporation and By-Laws. The
Certificate of Incorporation of Public Company following the
Effective Time shall be amended and restated as reflected in
Exhibit A hereto and the By-Laws of Public Company following the
Effective Time shall be amended as reflected in Exhibit D hereto,
in each case with such changes as shall be in form and substance
reasonably acceptable to Parent.
(b) Public Company's Board of Directors. The board of directors of
Public Company following the Effective Time shall be composed of
the nominees of Parent made immediately prior to the Effective
Time, who shall be appointed by Public Company's resigning
directors.
6.2 Access to Information; Confidentiality.
(a) Each of Company and Public Company shall afford to the other
party and to the officers, employees, accountants, counsel,
financial advisors and other representatives of such other party,
reasonable access during normal business hours during the period
prior to the Effective Time to all their respective properties,
books, contracts, commitments, personnel and records and, during
such period, each of Company and Public Company shall furnish
promptly to the other party (i) a copy of each report, schedule,
registration statement and other document filed by it during such
period pursuant to the requirements of United States federal or
state securities laws and (ii) all other information concerning
its business, properties and personnel as such other party may
reasonably request. No review pursuant to this paragraph 6.2
shall affect any representation or warranty given by the other
party hereto.
(b) Each of Parent, Company and Public Company will hold and will
cause each of their respective officers, directors, employees,
attorneys, investment bankers and other advisors
("representatives") to hold in strict confidence (unless
compelled to disclose by judicial or administrative process) all
non-public information obtained, whether prior to or after the
date of this Agreement, from or provided on behalf of the other
party, except to the extent that such information can be shown to
have been (i) previously known or independently developed by the
party receiving such information, (ii) in the public domain
through no fault of the receiving party, or (iii) later lawfully
acquired by the receiving party from other sources not known by
the receiving party to be bound by confidentiality obligations
(the "Confidential Information"). Each of Parent, Company and
Public Company will, and will cause each of their respective
representatives to, use the Confidential Information received by
it solely in connection with its evaluation of the transactions
contemplated by this Agreement and in furtherance of the
consummation of such transactions in accordance with the terms of
this Agreement. In the event of the termination of this
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Agreement, each of Parent, Company and Public Company will, and
will cause each of their respective representatives to, (x)
maintain the confidentiality of the Confidential Information, and
(y) return all written Confidential Information promptly upon the
written request of the other party. In addition, each of Parent,
Company and Public Company, as a result of their receipt of
Confidential Information will, and will cause each of their
respective representatives not to, solicit any employee of the
other for employment, provided that each of Parent, Company and
Public Company may engage in general solicitations of employment
not specifically directed to employees of Parent, Company and
Public Company, as the case may be.
6.3 Takeover Statute. Parent, Company and Public Company shall (i) take all
action necessary to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to the this Agreement or any of the
transactions contemplated by this Agreement and (ii) if any state takeover
statute or similar statute or regulation becomes applicable to this Agreement or
any transaction contemplated by this Agreement, take all action necessary to
ensure that the transactions contemplated by this Agreement may be consummated
as promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation on the
transactions contemplated by this Agreement.
6.4 Reasonable Best Efforts. Upon the terms and subject to the conditions
set forth in this Agreement, each of the parties agrees to use reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement,
including (i) the obtaining of all necessary actions or non-actions, waivers,
consents and approvals from governmental entities and the making of all
necessary registrations and filings and the taking of all steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any governmental entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
by this Agreement, including seeking to have any stay or temporary restraining
order entered by any court or other governmental entity vacated or reversed, and
(iv) the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry out the purposes
of, this Agreement.
6.5 Indemnification.
(a) Public Company hereby agrees to indemnify and hold harmless the
Company Parties and each of their respective officers, directors,
managers and members from and after the date of this Agreement
against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever
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reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim
whatsoever), to which it or they may become subject arising out
of or based on any inaccuracy appearing in or misrepresentation
made under Article I of this Agreement or any breach of any
covenants set forth in this Agreement. The indemnification
provided for in this paragraph 6.5(a) shall survive the Closing
and consummation of the transactions contemplated hereby and
termination of this Agreement.
(b) Each of the Company Parties agrees to indemnify Public Company
and each of its officers, directors, managers and members as of
the date of this Agreement against any loss, liability, claim,
damage, or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating,
preparing, or defending against any litigation, commenced or
threatened, or any claim whatsoever), to which it or they may
become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made under Article II of this
Agreement or because of any breach by them of any covenants set
forth in this Agreement. The indemnification provided for in this
paragraph 6.5(b) shall survive the Closing and consummation of
the transactions contemplated hereby and termination of this
Agreement.
(d) If any party entitled to indemnification under this paragraph 6.5
(the "Indemnified Party") shall receive notice or otherwise learn
of the assertion by any other person of any claim or of the
commencement by any such person or any action (a "Third-Party
Claim") with respect to which a party may be obligated to provide
indemnification pursuant to this paragraph 6.5 (the "Indemnifying
Party"), such Indemnified Party shall give written notice thereof
to the Indemnifying Party within ten (10) business days after
becoming aware of such Third-Party Claim (the "Indemnification
Notice"); provided, however, that the failure of any Indemnified
Party to give notice as provided in this Section 6.5 shall not
relieve the Indemnifying Party of its obligations under this
Section 6.5, as the case may be, except to the extent that the
Indemnifying Party actually is prejudiced by such failure to give
notice. Such notice shall describe the Third-Party Claim in
reasonable detail, and shall indicate the amount of the Damages
that has been paid or reasonably expects to pay or incur (in
accordance with GAAP) by such Indemnified Party. Thereafter, such
Indemnified Party shall deliver to the Indemnifying Party within
five (5) business days after the Indemnified Party's receipt
thereof, copies of all notices and documents received by the
Indemnified Party relating to the Third-Party Claim (including
court papers).
(e) If, promptly after receipt by the Indemnifying Party of notice of
any Third-Party Claim as provided in paragraph 6.05(d), the
Indemnifying Party shall give written notice to the Indemnified
Party stating that it intends to assume the defense thereof, at
its own cost, then the defense of such Third-Party Claim,
including selection of counsel reasonably satisfactory to the
Indemnified Party, shall be by the Indemnifying Party and the
Indemnified Party shall make no payment on such Third-Party Claim
as long as the Indemnifying Party is conducting a good faith and
diligent defense. The Indemnified Party shall make available all
information and assistance that the Indemnifying Party may
reasonably request and shall cooperate with the Indemnifying
Party in such defense. Notwithstanding the foregoing, the
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<PAGE>
Indemnified Party shall at all times have the right to fully
participate in such defense at its own expense directly or
through counsel. If no such notice to assume the defense against
a Third-Party Claim is received by the Indemnified Party from the
Indemnifying Party, the Indemnified Party shall, at the expense
of the Indemnifying Party, undertake the defense of such
Third-Party Claim, with counsel selected by the Indemnified
Party, and shall have the right to compromise or settle the same
exercising reasonable judgment.
(f) No Third-Party Claim made against any Indemnified Party shall be
settled without the prior written consent of the Indemnifying
Party.
(g) At the election of Parent, the payment for any indemnification
under this paragraph 6.5 by Public Company may be satisfied
through the issuance of additional shares of Public Company
Common Stock as provided in clause (ii) of paragraph 3.1(a).
6.6 Publicity and Filings. The parties agree that all press releases,
shareholder communications, filings with the SEC or other governmental agency or
body and other information and publicity generated by any party hereto regarding
the transactions contemplated in this Agreement shall be reviewed and approved
by the other parties hereto and their counsel before release or dissemination to
the public or filing with any governmental agency or body whatever. The parties
further agree to cooperate in effecting and promptly mailing or sending to all
security holders of Public Company entitled thereto the Information Statement.
ARTICLE VII
GENERAL PROVISIONS
7.1 Further Assurances. At any time and from time to time after the date of
this Agreement, each and every party hereto shall execute such additional
instruments and take such other and further action as may be reasonably
requested by any other party to carry out the intent and purpose of this
Agreement.
7.2 Waiver.
(a) No failure on the part of any person to exercise any power,
right, privilege or remedy under this Agreement, and no delay on
the part of any person in exercising any power, right, privilege
or remedy under this Agreement, shall operate as a waiver of such
power, right, privilege or remedy; and no single or partial
exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other
power, right, privilege or remedy.
(b) No person shall be deemed to have waived any claim arising out of
this Agreement, or any power, right, privilege or remedy under
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<PAGE>
this Agreement, unless the waiver of such claim, power, right,
privilege or remedy is expressly set forth in a written
instrument duly executed and delivered on behalf of such person;
and any such waiver shall not be applicable or have any effect
except in the specific instance in which it is given.
7.3 Brokers. Each party represents to every other party that no brokers or
finders have acted for it in connection with this Agreement and that no
obligations of Public Company, Company and Parent need to be satisfied as of the
date of this Agreement.
7.4 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent by
prepaid, first class, registered or certified mail, return receipt requested to
the respective addresses set forth on the signature page of this Agreement.
7.5 Entire Agreement. This Agreement, including the Exhibits and Schedules
hereto, constitutes the entire agreement between the parties and supersedes and
cancels any other agreement, representation or communication, whether oral or
written, between the parties and relating to the transactions evidenced hereby
or the subject matter hereof.
7.6 Amendments. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of all the parties hereto.
7.7 Severability. In the event that any provisions of this Agreement, or
the application of any such provision to any person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provisions
to persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.
7.8 Construction.
(a) For purposes of this Agreement, whenever the context requires:
the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders;
the feminine gender shall include the masculine and neuter
genders; and the neuter gender shall include the masculine and
feminine genders.
(b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting
party shall not be applied in the construction or interpretation
of this Agreement.
(c) As used in this Agreement, the words "include" and "including"
and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by words
"without limitation."
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(d) Except as otherwise indicated, all references in this Agreement
to "paragraphs," "Exhibits" and "Schedules" are intended to refer
to paragraphs of this Agreement and Exhibits and Schedules to
this Agreement.
7.9 Fees and Expenses. The fees and expenses of amending and restating
Public Company's Certificate of Incorporation, acquiring a ticker symbol and a
CUSIP number and similar third-party costs not addressed in this paragraph shall
be borne by Company. All other fees and expenses incurred in connection with the
Share Exchange, SEC filings, state securities filings, NASD Regulation, Inc.
filings, this Agreement and the other transactions contemplated by this
Agreement shall be borne by the party incurring such fees or expenses, whether
or not the Share Exchange is consummated, provided, however, that expenses of
Public Company incurred prior to the Effective Time shall not be paid by or
became an obligation of Public Company but shall be paid by Public Company's
stockholders.
7.10 Headings. The article and paragraph headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.11 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware.
7.12 Counterparts; Effectiveness. This Agreement may be executed in two or
more separate counterparts, each of which shall be deemed to be an original but
all of which shall constitute one and the same agreement. This Agreement shall
become effective when each party hereto shall have received counterparts hereof
signed by each of the other parties hereto. Signatures may be exchanged by
telecopy, with original signatures to follow. Each of the parties hereto agrees
that it will be bound by its own telecopied signature and that it accepts the
telecopied signatures of the other parties to this Agreement. The original
signature pages shall be forwarded to Parent or its counsel and Parent and its
counsel will provide all of the parties hereto with a copy of the entire
Agreement.
7.13 Third-Party Beneficiaries. This Agreement is solely between the named
parties hereto and except as specifically provided no director, officer,
stockholder, employee, agent, independent contractor, or any other person shall
be deemed to be a third-party beneficiary of this Agreement.
7.14 Survival of Representations, Warranties and Covenants. The
representations, warranties, covenants and agreements contained herein shall
survive the date and execution of this Agreement.
7.15 Legal Counsel. The parties hereby acknowledge that they have each
consulted independent legal counsel in respect of all matters leading to, and
including, the transactions evidenced hereby.
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In Witness Whereof, the parties hereto have caused this Agreement to be
executed by their duly authorized officers on the date and year first above
written.
GUIDELINE CAPITAL CORPORATION,
a Delaware corporation
By:/s/ Adam R. Stull
---------------------------------
Adam R. Stull, President
HOLLYWOOD PARTNERS, INC.,
a California corporation
By:/s/ Mark Beychok
---------------------------------
Mark Beychok, President
VITAFORT INTERNATIONAL CORPORATION,
a Delaware corporation
By: /s/ Mark Beychok
----------------------------------
Mark Beychok, President
<PAGE>
EXHIBIT A
FORM OF RESTATED AND AMENDED CERTIFICATE OF INCORPORATION
RESTATED AND AMENDED
CERTIFICATE OF INCORPORATION
OF
GUIDELINE CAPITAL CORPORATION
GUIDELINE CAPITAL CORPORATION, a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, was
originally incorporated under the name of Guideline Capital Corporation; the
original date of incorporation was August 31, 1989; this Restated and Amended
Certificate of Incorporation was duly adopted in accordance with Sections 245,
242 and 103 of the Delaware General Corporation Law, and
DOES HEREBY CERTIFY:
FIRST. That by the unanimous written consent of the Board of Directors of
Guideline Capital Corporation, this Restated and Amended Certificate of
Incorporation of Guideline Capital Corporation (the "Certificate") was ratified,
confirmed and approved.
SECOND. That the Board hereby desires to restate and amend the Certificate
of Incorporation of this Corporation in its entirety, as follows:
FIRST. The name of this corporation is:
Hollywood Partners.com, Inc.
SECOND. Its registered office in the State of Delaware is to be
located at 3422 Old Capitol Trail, Suite 700, in the City of Wilmington,
County of New Castle, 19808-6192 and its registered agent at such address
is Delaware Business Incorporators, Inc.
THIRD. The purpose or purposes of this Corporation shall be:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware (the "GCL").
FOURTH: The Corporation is authorized to issue two classes of shares
of stock, common stock and preferred stock. The total number of shares of
stock which the Corporation shall have authority to issue is Fifty-five
Million (55,000,000) shares, consisting of Fifty Million (50,000,000)
shares of common stock, par value $.001 per share, designated as Common
Stock (the "Common Stock") and Five Million (5,000,000) shares of preferred
stock, par value $.001 per share, designated as Preferred Stock (the
"Preferred Stock").
A. Preferred Stock. The Board of Directors of the Corporation
(hereinafter referred to as the "Board of Directors") is hereby
expressly authorized at any time, and from time to time, to
create and provide for the issuance of shares of Preferred Stock
in one or more series and, by filing a certificate pursuant to
the GCL (hereinafter referred to as a "Preferred Stock
Designation"), to establish the number of shares to be included
in each such series, and to fix the designations, preferences and
relative, participating, optional or other special rights of the
shares of each such series and the qualifications, limitations or
restrictions thereof, as shall be stated and expressed in the
resolution or resolutions providing for the issue thereof adopted
by the Board of Directors, including, but not limited to, the
following:
1. the number of shares of any series and the designation to
distinguish the shares of such series from the shares of all
other series;
2. whether dividends, if any, shall be cumulative or
non-cumulative, the dividend rate of such series, and the
dates and preferences of dividends on such series;
3. the redemption provisions, if any, applicable to such
series, including the redemption price or prices to be paid;
4. the terms and amount of any sinking fund provided for the
purchase or redemption of the shares of such series;
5. whether or not the shares of such series shall be
convertible into or exchangeable for shares of any other
class or classes of, any other series of any class or
classes of capital stock of, or any other security of, the
Corporation or any other corporation, and, if provision be
made for any such conversion or exchange, the times, prices,
rates, adjustments and any other terms and conditions of
such conversion or exchange;
6. the voting powers, if any, and whether such voting powers
are full or limited in such series;
7. the restrictions, if any, on the issue or reissue of shares
of the same series or of any other class or series;
8. the amounts payable on and the preferences, if any, of the
shares of such series in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation; and
9. any other relative rights, preferences and limitations of
that series.
B. Common Stock. The Common Stock shall be subject to the express
terms of any series of Preferred Stock set forth in the Preferred
Stock Designation relating thereto. Each holder of Common Stock
shall have one vote in respect of each share of Common Stock held
by such holder of record on the books of the Corporation for the
election of directors and on all other matters on which
stockholders of the Corporation are entitled to vote. The holders
of shares of Common Stock shall be entitled to receive, when and
if declared by the Board of Directors, out of the assets of the
Corporation which are by law available therefor, dividends
payable either in cash, in stock or otherwise. In addition, the
Class A Common Stock shall be subject to the express restrictions
set forth below in this Section B.
C. Stock Split. That, upon the filing date of this Restated and
Amended Certificate of Incorporation (the "Effective Date"), a
six-for-one split of the Corporation's Common Stock shall become
effective, pursuant to which each share of Common Stock
outstanding and held of record by each stockholder of the
Corporation (including treasury shares) immediately prior to the
Effective Date shall be reclassified and divided into six shares
of Common Stock automatically and without any action by the
holder thereof upon the Effective Date and shall represent six
shares of Common Stock from and after the Effective Date.
FIFTH: A. In furtherance, and not in limitation, of the powers
conferred by law, the Board of Directors is expressly authorized and
empowered:
1. to adopt, amend or repeal the Bylaws of the Corporation,
provided, however, that any Bylaws adopted by the Board of
Directors under the powers hereby conferred may be amended
or repealed by the Board of Directors or by the stockholders
having voting power with respect thereto; and
2. from time to time to determine whether and to what extent,
and at what times and places, and under what conditions and
regulations, the accounts and books of the Corporation, or
any of them, shall be open to inspection of stockholders;
and, except as so determined, or as expressly provided in
this Certificate of Incorporation or in any Preferred Stock
Designation, no stockholder shall have any right to inspect
any account, book or document of the Corporation other than
such rights as may be conferred by law.
B. The Corporation may in its Bylaws confer powers upon the Board of
Directors in addition to the foregoing and in addition to the
powers and authorities expressly conferred upon the Board of
Directors by law.
SIXTH: A. Subject to the rights of the holders of any series of
Preferred Stock or any other series or class of stock as set forth in this
Certificate of Incorporation to elect additional directors under specified
circumstances, the number of directors of the Corporation shall not be less
than three nor more than nine and shall be fixed from time to time in the
manner described in the Bylaws.
B. Unless and except to the extent that the Bylaws of the
Corporation shall so require, the election of directors of the
Corporation need not be by written ballot.
C. The directors, other than those who may be elected by the holders
of any series of Preferred Stock or any other series or class of
stock as set forth in this Certificate of Incorporation, shall be
classified with respect to the time for which they severally hold
office into three classes, as nearly equal in number as possible,
and designated as Class I, Class II and Class III, at the first
annual meeting of stockholders after the effective date of this
Certificate of Incorporation under Section 103 of the GCL or, in
the event the Corporation is then subject to Section 2115 of the
California Corporations Code, the date of the first annual
meeting of stockholders hereafter when the Corporation shall have
at least 800 stockholders as determined under Section 2115 of the
California Corporations Code (hereinafter, the "First Meeting").
The Directors first appointed to Class I at the First Meeting
shall hold office for a term expiring at the annual meeting of
the stockholders immediately following the First Meeting; the
Directors first appointed to Class II shall hold office for a
term expiring at the second annual meeting of the stockholders
following the First Meeting; and the Directors first appointed to
Class III shall hold office for a term expiring at the third
annual meeting of the stockholders following the First Meeting.
Members of each class shall hold office until their successors
are elected and qualified. Thereafter, at each succeeding annual
meeting of the stockholders of the Corporation, the successors of
the class of directors whose term expires at that meeting shall
be elected to hold office for a term expiring at the annual
meeting of stockholders held in the third year following the year
of their election, and until their successors are elected and
qualified. Notwithstanding the foregoing, if at the time of any
annual meeting of stockholders, the Corporation is prohibited by
applicable law from having a classified Board of Directors, all
of the Directors shall be elected at such annual meeting for a
one year term only. If at the time of any subsequent annual
meeting of stockholders the Corporation is no longer prohibited
by applicable law from having a classified Board of Directors,
the Board of Directors shall again be classified in accordance
with the first sentence of this paragraph, and at such annual
meeting Directors initially elected shall be elected to serve in
either Class I, Class II or Class III to hold office for a term
expiring at the first, second or third succeeding annual meeting
of the stockholders, respectively; thereafter successors to each
Class shall be elected in the accordance with the fourth sentence
of this paragraph.
D. Subject to the rights of the holders of any series of Preferred
Stock or any other series or class of stock as set forth in this
Certificate of Incorporation to elect additional directors under
specified circumstances, any director may be removed from office
at any time for cause by the affirmative vote of the holders of
at least a majority of the voting power of the then outstanding
Voting Stock, voting together as a single class. For the purposes
of this Certificate of Incorporation, "Voting Stock" shall mean
the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors.
E. Advance notice of stockholder nominations for the election of
directors shall be given in the manner provided in the Bylaws of
the Corporation.
F. Subject to the rights of the holders of any series of Preferred
Stock or any other series or class of stock as set forth in this
Certificate of Incorporation to elect additional directors under
specified circumstances, vacancies resulting from death,
resignation, retirement, disqualification, removal from office or
other cause, and newly created directorships resulting from any
increase in the authorized number of directors, may be filled
only by the affirmative vote of a majority of the remaining
directors, and directors so chosen shall hold office for a term
expiring at the annual meeting of stockholders at which the term
of office of the class to which they have been elected expires
and until such director's successor shall have been duly elected
and qualified. No decrease in the number of authorized directors
constituting the total number of directors which the Corporation
would at the time have if there were no vacancies shall shorten
the term of any incumbent director.
SEVENTH: A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
GCL or (iv) for any transaction from which the director derived an improper
personal benefit. No amendment or repeal of this Article SEVENTH shall
adversely affect any right or protection of a director of the Corporation
existing hereunder in respect of any act or omission occurring prior to
such amendment or repeal.
EIGHTH: Except as may be expressly provided below in this Article
EIGHTH, the Corporation reserves the right at any time and from time to
time to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation or a Preferred Stock Designation, and any
other provisions authorized by the laws of the State of Delaware at the
time in force may be added or inserted, in the manner now or hereafter
prescribed herein or by law, and all powers, preferences and rights of
whatsoever nature conferred upon stockholders, directors or any other
persons whomsoever by and pursuant to this Certificate of Incorporation in
its present form or as hereafter amended are granted subject to the right
reserved in this Article EIGHTH; provided, however, that no Preferred Stock
Designation shall be amended after the issuance of any shares of the series
of Preferred Stock created thereby, except in accordance with the terms of
such Preferred Stock Designation and the requirements of law; and provided,
further, that the affirmative vote of at least 66-2/3 percent of the voting
power of the then outstanding Voting Stock, voting together as a single
class, shall be required to amend, repeal or adopt any provision
inconsistent with the provisions of Article FIFTH, Article SIXTH or Article
EIGHTH of this Certificate of Incorporation, unless such amendments or
changes are approved by a majority of the directors of the Corporation not
affiliated or associated with any person, other than Vitafort International
Corporation, holding (or which has announced an intention to acquire) 20%
or more of the voting power of the then outstanding Voting Stock, voting
together as a single class.
THIRD. That this Certificate was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH. That the capital of said corporation shall not be reduced
under or by reason of the Certificate.
In Witness Whereof, said corporation has caused this Certificate to be
signed by __________, its Secretary, this ___ day of September, 1999.
________________________________
_____________________,Secretary
<PAGE>
EXHIBIT B
DISCLOSURE STATEMENT
INFORMATION STATEMENT
UNDER RULE 15c2-11
OF THE SECURITIES EXCHANGE ACT OF 1934
HOLLYWOOD PARTNERS, INC.
a Delaware Corporation
(formerly known as Guideline Capital Corporation)
1800 Avenue of the Stars, Suite 480
Los Angeles, California 90067
Telephone: 310-552-0555
The date of this Information Statement is September 14, 1999
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TABLE OF CONTENTS
Items required under Rule 15c2-11
<TABLE>
<S> <C>
Item No. Page
Item 15c2-11 (a) (5) (i)............................................................. 3
Item 15c2-11 (a) (5) (ii) ............................................................ 3
Item 15c2-11 (a) (5) (iii) ........................................................... 3
Item 15c2-11 (a) (5) (iv) ........................................................... 3
Item 15c2-11 (a) (5) (v) ............................................................ 3
Item 15c2-11 (a) (5) (vi)........................................................... 3
Item 15c2-11 (a) (5) (vii) ......................................................... 4
Item 15c2-11 (a) (5) (viii)......................................................... 4
Item 15c2-11 (a) (5) (ix) .......................................................... 4
Item 15c2-11 (a) (5) (x) ........................................................... 5
Item 15c2-11 (a) (5) (xi) .......................................................... 5
Item 15c2-11 (a) (5) (xii).......................................................... 5
Item 15c2-11 (a) (5) (xiii) ........................................................ 5
Item 15c2-11 (a) (5) (xiv) ......................................................... 5
Item 15c2-11 (a) (5) (xv) .......................................................... 5
Item 15c2-11 (a) (5) (xvi) ......................................................... 6
Further description of Items ....................................................... 6-12
</TABLE>
The information contained in this Information Statement is provided in response
to the requirements under Rule 15c2-11 under the Securities Act of 1934, as
amended. Such information is provided by Hollywood Partners, Inc., (the
"Company" or "Issuer") and is current in relation to the date set forth on the
cover page of this Information Statement.
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INFORMATION AND DISCLOSURE STATEMENT
All information contained in this Information and disclosure Statement has been
compiled to fulfill the disclosure requirements of Rule 15c2-11 (a) (5)
promulgated by the Securities Exchange Act of 1934, as amended. The enumerated
items and captions contained herein correspond to the format as set forth in the
rule.
Item 15c2-11 (a) (5) (i) Exact name of Issuer:
The exact name of the Issuer is Hollywood Partners, Inc., a Delaware
Corporation (herein after referred to as the "Company" or "Issuer").
Item 15c2-11 (a) (5) (ii) Address of Issuer's principle executive office:
Principle executive office of the Issuer is located at 1800 Avenue of the
Stars, Suite 480, Los Angeles, California 90067.
Item 15c2-11 (a) (5) (iii) Issuer's state of incorporation:
The Issuer was organized under the corporate laws of the State of Delaware
on August 31, 1989 under the name of Guideline Capital Corporation. Attached
hereto is a copy of the Company's Certificate of Incorporation and By-Laws. The
Company's fiscal year end is June 30th.
Item 15c2-11 (a) (5) (iv) Exact title and class of Issuer's securities:
The Issuer has one (1) class of equity securities authorized, issued and
outstanding, that being, Common Stock with full voting rights.
Item 15c2-11 (a) (5) (v) Par or stated value of Issuer's securities.
The Issuer's Common Stock has a par value of $.001 with 50,000,000 shares
authorized. The Issuer's Preferred Stock has a par value of $.001 with 5,000,000
shares authorized.
Item 15c2-11 (a) (5) (vi) Number of shares or total amount of Issuer's
securities outstanding as of September 13, 1999 (not the end of the Issuer's
most recent fiscal year).
The total number of Common Shares outstanding as of September 13, 1999 (as
of merger date) was 8,000,000. As a result of the Share Exchange Agreement and
Plan of Reorganization between the Company and Vitafort International
Corporation, a Delaware corporation and Hollywood Partners, Inc., its subsidiary
("HPI"), a California corporation, effective September 13, 1999, the
shareholders of the Issuer authorized a 6 to 1 forward split of all pre-merger
shares (from 500,000 to 3,000,000) and issued 5,000,000 shares of its restricted
common stock to the shareholders of Issuer in exchange for all of the issued and
outstanding shares of HPI. Accordingly, the Issuer had a total of 8,000,000
common shares of its stock outstanding after concluding the merger.
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Item 15c2-11 (a) (5) (vii) Name and address of Issuers transfer agent:
The Transfer Agent for the Common shares of the Issuer's Common Stock is
Alpha Tech Stock Transfer, located at 4504 South Wasatch Boulevard, Suite 205,
Salt Lake City, Utah 84124, Phone Number (801) 278-1777.
Item 15c2-11 (a) (5) (viii) Nature of Issuer's business:
In the fall of 1997, the Company was formed to develop market and
distribute licensed snacks to food retailers across the country. The marketing
strategy was to create immediate consumer awareness for its snack foods by
leveraging well-known entertainment licenses. This initiative was executed in
the fourth quarter of 1997, when the Company signed its first licensing
agreement with Universal Studios for the rights to pretzels and popcorn under
"The Lost World: Jurassic Park" brand. In early 1998, the Company signed its
second licensing agreement, this time with Warner Bros. for the rights to the
classic property "The Wizard of Oz." This partnership with Warner Bros. provided
the Company an opportunity to sell gummy candy, lollipops, and marshmallows
under "The Wizard of Oz" brand. Over the first 12 months of the agreement, the
Company sold over $2.6 million of these snacks to thousands of stores throughout
the country, including Wal-Mart, Sam's Club, Albertsons, Safeway, H.E.B.,
Winn-Dixie and many others.
In addition to the Company's current marketing strategy, it has developed a
comprehensive Internet direct marketing business model. The Company will
initiate this plan by leveraging both its entertainment and food industry
expertise and relationships. This will be accomplished by creating synergistic
partnerships with leading food manufacturers and entertainment companies. The
Company's World Wide Web site, "HollywoodPartners.com" will become a destination
site for exciting sweepstakes and giveaways that is integrated with content that
fits the lifestyle of people in the 18-44 year old age group. This will include
links to entertainment content such as digital music and film, animation, and
games. In addition, the Company will drive traffic by sponsoring sweepstakes for
events such as the "Gravity Games," an alternative sports event sponsored by
Peterson Publishing and the NBC network that will appear in time previously held
for NFL football on the NBC television network. In its Internet marketing
strategy, the Company will form partnerships with companies that target young
people who snowboard, skateboard and enjoy an alternative lifestyle. To further
drive web traffic, the Company will promote its Internet sweepstakes on the
packaging of its products. By leveraging its licensed products, the Company will
be able to drive considerable traffic to its web site, giving it both an online
and offline brand presence. The Company will also team up with other consumer
goods manufacturers by creating Internet Promotion for their products. The
consumer will register at the site, providing detailed demographic information
that can later be used to market specific products back to them with their
permission. This will allow the Company to create valuable data bases targeted
at extremely specific markets. The first three sweepstakes have already been
scheduled and are currently under development. In addition to the Gravity Games
sweepstakes, the Company will do a partnership with Warner Bros. that will be
featured in more than 4 million "The Wizard of Oz" videos being distributed and
sold in the upcoming months. "The Wizard of Oz" sweepstakes will run through the
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end of the year. The third event scheduled is tied to the introduction of
"Peanut Squeeze," the first squeezable peanut snack, currently being introduced
by Visionary Brands. This sweepstakes is being promoted through both print media
and point of purchase displays. This strategy will expand in the upcoming months
as the Company continues executing both sweepstakes and giveaways with
retailers, manufacturers, and entertainment companies.
Item 15c2-11 (a) (5) (ix) Nature of Issuer's products or services rendered:
The Issuer develops, markets and distributes snack foods and entertainment
branded food products for a broad consumer audience. It provides promotions and
sweepstakes through its site on the World Wide Web. The Company also provides
entertainment content on its site. The Company provides business customers with
demographic information about the consumers who have registered at the web site.
Item 15c2-11 (a) (5) (x) Nature and extent of Issuer's facilities:
The Issuer currently has its principal executive offices located at 1800
Avenue of the Stars, Suite 480, Los Angeles, California 90067. The Issuer
presently has no manufacturing or warehouse facilities. . Item 15c2-11 (a) (5)
(xi) Chief Executive Officers and members of the Board of Directors:
<TABLE>
<S> <C> <C>
Name: Title: Term of Office:
Mark Beychok Chairman of the Board 3 years
John Coppolino Director 3 years
Eugene Scher Director 3 years
Lee Lambert President, Secretary and Treasurer Until next annual meeting
</TABLE>
The Company's next annual meeting of shareholders is scheduled to be held in
_______.
Item 15c2-11 (a) (5) (xii) Issuer's most recent balance sheet, profit and loss
and retained earnings statement:
The Issuer's (and the merging entities) most recent financial statements
(prior to consolidation) are attached to this Information Statement.
Item 15c2-11 (a) (5) (xiii) Issuer's financial statement for the two years
preceding fiscal years:
The Issuer's Financial Statement for the last two fiscal years, pre-merger,
as well as the Financial Statements of the private company for the last two
fiscal years, pre-merger, and the Issuer's Form 10-KSB dated June 30, 1999 are
attached to this Information Statement.
5
<PAGE>
Item 15c2-11 (a) (5) (xiv) Disclosure whether the broker or dealer or any
associated person is affiliated, directly or indirectly, with the Issuer:
To the knowledge of the Issuer, the Broker or Dealer with which this
Information Statement has been deposited is not affiliated directly or
indirectly with the Issuer.
Item 15c2-11 (a) (5) (xv) Disclosure whether the quotation is being published or
submitted on behalf of any of the brokers or dealers:
There is no such broker or dealer.
Item 15c2-11 (a) (5) (xvi) Disclosure whether the quotation is being submitted
or published directly or indirectly on behalf of the Issuer, or any director,
officer or any person, directly or indirectly the beneficial owner of more than
10 percent of the outstanding units or shares of any equity security of the
Issuer:
To the best of Issuer's knowledge, information and belief, quotations with
respect to the Issuer's stock are not being submitted or published directly or
indirectly on behalf of the Issuer or a director, officer or beneficial owner of
more than 10% of any class of its issued and outstanding securities. Item
15c2-11 (a) (5) (xvii) Disclosure of Other Matters:
To the best of Issuer's knowledge, no other information need be disclosed.
COPIES OF THIS INFORMATION AND DISCLOSURE STATEMENT ARE AVAILABLE FROM THE
ISSUER UPON REQUEST.
The undersigned has read all of the items set forth above and hereby
certify this information to be true and complete to the best of my knowledge.
Hollywood Partners, Inc.
BY:/s/ Lee Lambert
-------------------------
Lee Lambert, President
6
<PAGE>
INFORMATION STATEMENT
Pursuant to Rule 15c2-11
The information contained in the Information Statement is submitted under
requirement of Rule 15c2-11 of the securities Exchange Commission under the
Securities Exchange Act of 1934. The effective date of this information
contained herein is current as of any subsequent date. The effective date of
this Information Statement is September 13, 1999, and no inference can be drawn
that the information contained herein is current as of any subsequent date. The
Company has announced its intention to provide supplemental information to its
stockholders and other interested parties from time to time; and in all cases,
the information contained herein must be read in light of subsequent information
which may be issued, including but not limited to more recent financial
statements. The information statements herein contained are current as of their
date, and are presumed to be current for a period of six months after the date,
barring extraordinary circumstance. No inference can be drawn that the financial
condition of the Issuer has not changed since the effective date of any
financial statement contained herein.
ITEM 1. BUSINESS
The business was originally organized in the State of Delaware on August
31, 1989 under the name Guideline Capital Corporation. On or about January 1999,
the Securities and Exchange Commission had no further comment with regard to the
Issuer's Form 10-SB which authorized the Issuer to become a reporting company
under the Securities and Exchange Act of 1934, as amended. On September 13,
1999, the shareholders of the Issuer and HPI approved the terms of the Share
Exchange Agreement and Plan of Reorganization between the two entities. As a
result of the merger, the total number of Common Shares outstanding as of
September 13, 1999 STOP (as of merger date) was 8,000,000. As a result of the
Share Exchange Agreement and Plan of Reorganization between the Company and
Hollywood Partners, Inc., a California corporation ("HPI"), effective September
13, 1999, the shareholders of the Issuer authorized a 6 to 1 forward split of
all pre-merger shares (from 500,000 to 3,000,000) and issued 5,000,000 shares of
its restricted common stock to the shareholders of Issuer in exchange for all of
the issued and outstanding shares of HPI. Accordingly, the Issuer had a total of
8,000,000 common shares of its stock outstanding after concluding the merger.
ITEM 2. PROPERTIES
The Company at present owns no properties but has its operations at 1800
Avenue of the Stars, Suite 480, Los Angeles, California 90067.
ITEM 3. SUBSIDIARIES
None.
ITEM 4. PRINCIPAL SECURITIES HOLDERS AND HOLDINGS OF MANAGEMENT
Management currently does not own any securities. However, the Company
anticipates that it will grant stock option agreements and other executive and
director compensation which may be in the form of cash or stock.
7
<PAGE>
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
(A) The directors and officers of the Company are as follows:
Name Age Position
Mark Beychok 42 Chairman of the Board
John Coppolino 39 Director
Eugene Scher 51 Director
Lee Lambert 44 President, Secretary
and Treasurer
(B) No executive Officer or Director of the Company has been the subject of any
Order, Judgement or Decree of any court of competent jurisdiction, of any
regulatory agency enjoining him from acting as an investment advisor,
underwriter, broker or dealer in the securities, or as an affiliate person,
director or employee of an investment company, bank savings and loan
association, or insurance company or from engaging in or continuing any
conduct or practice in connection with any activity or in connection with
the purchase or sale of any securities nor has any such person been the
subject of any Order of a state authority barring or suspending for more
than sixty (60) days, the right of such person to be engaged in such
activities or to be associated with such activities. No Executive Officer
or Director of the Company has been convicted in any criminal proceedings
or is subject of a criminal proceeding which is presently pending.
(C) Resumes:
ITEM 6. REMUNERATION OF OFFICERS AND DIRECTORS
(A) Compensation
For the period since inception, no officer or director of the Company
received remuneration other than common stock valued at less than $10,000. The
Company is currently negotiating employment agreements, stock option agreements
and other executive and director compensation which may be in the form of cash
or stock. In any event, it is likely that the issuance of stock will further
substantially dilute the present shareholders.
8
<PAGE>
In addition, the Company may award stock options to key employees, members
of management, directors and consultants under stock option programs. However,
as of the date of this information statement, no such plans have been adopted by
the Company.
(B) There are currently no annuity, pension or retirement benefits proposed to
be paid to officers, directors or employees of the Company in the event of
retirement at normal retirement date pursuant to any presently existing
plan provided or contributed to by the Company or any of its subsidiaries;
however, such a plan may be implemented in the future.
(C) No remuneration other than that reported in paragraph (A) of this item is
proposed to be in the future directly or indirectly by the corporation to
any officer or director under any plan which is presently existing.
ITEM 7. MANAGEMENT OPTIONS TO PURCHASE SECURITIES
A plan is in place. Ted or Bryan, please describe.
ITEM 8. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
None.
ITEM 9. PENDING LEGAL PROCEEDINGS
None.
ITEM 10. NUMBER OF EQUITIES, SECURITIES HOLDERS
(1) (2)
Title of Class Number of shareholders
Common Approx. __
ITEM 11. NATURE OF TRADING MARKET
The Company's securities are not presently trading in any recognized public
market. However in the near distant future, the Company intends to make
arrangements with an undetermined market maker to make a market in these
securities that will have a copy of this Disclosure Statement on file.
ITEM 12. RECENT SALES OF UNREGISTERED SECURITIES
None.
9
<PAGE>
ITEM 13. CAPITAL STOCK
The capital stock of the corporation is one class of stock, Common Stock,
having a par value of $ .001 per share.
ITEM 14. DEBT SECURITIES COVERED BY THIS FILING
None.
ITEM 15. OTHER SECURITIES COVERED BY THIS FILING
None.
ITEM 16. INDEMNIFICATION OF DIRECTORS AND OFFICERS
There are charter provisions, bylaws, contracts, arrangements and statutes
under which the Officers and Directors of the Company is insured or indemnified
in any manner against liability which he may incur in his (her) capacity as a
corporate Officer or Director.
ITEM 17. EXHIBITS
The exhibits covered by this statement are as follows:
A. Certificate of Incorporation, Bylaws and Certificate of Amendment of
Certificate of Incorporation
B. Audited Financial Statements of Hollywood Partners, Inc. from Inception to
December 30, 1998, and Unaudited Financial Statements through June 30, 1999
C. Shareholder List
D. Form 10-KSB dated June 30, 1999
E. Form 8-K dated September 14, 1999
10
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Corporation has duly caused this disclosure statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date: September 14, 1999 Hollywood Partners, Inc.
(a Delaware Corporation)
By: /s/ Lee Lambert
--------------------------
Lee Lambert, President
11
<PAGE>
EXHIBIT C
FORM OF STOCK COMPENSATION PROGRAM
HOLLYWOOD PARTNERS.COM, INC.
1999 STOCK COMPENSATION PROGRAM
1. Purpose. This 1999 Stock Compensation Program (the "Program") is
intended to secure for Hollywood Partners.com, Inc., a Delaware corporation (the
"Company"), its subsidiaries, and its stockholders the benefits arising from
ownership of the Company's common stock (the "Common Stock") by those selected
individuals of the Company and its subsidiaries, who will be responsible for the
future growth of such corporations. The Program is designed to help attract and
retain superior personnel for positions of substantial responsibility with the
Company and its subsidiaries, and to provide individuals with an additional
incentive to contribute to the success of the corporations. Nothing contained
herein shall be construed to amend or terminate any existing options, whether
pursuant to any existing plans or otherwise granted by the Company.
2. Elements of the Program. In order to maintain flexibility in the award
of stock benefits, the Program is composed of seven parts. The first part is the
Incentive Stock Option Plan (the "Incentive Plan") under which are granted
incentive stock options (the "Incentive Options"). The second part is the
Non-Qualified Stock Option Plan (the "Nonqualified Plan") under which are
granted nonqualified stock options (the "Nonqualified Options"). The third part
is the Restricted Share Plan (the "Restricted Plan") under which are granted
restricted shares of Common Stock. The fourth part is the Employee Stock
Purchase Plan (the "Stock Purchase Plan"). The fifth part is the Non-Employee
Director Stock Option Plan (the "Directors Plan") under which grants of options
to purchase shares of Common Stock may be made to non-employee directors of the
Company. The sixth part is the Stock Appreciation Rights Plan (the "SAR Plan")
under which SARs (as defined therein) are granted. The seventh part is the Other
Stock Rights Plan (the "Stock Rights Plan") under which (i) units representing
the equivalent of shares of Common Stock (the "Performance Shares") are granted;
(ii) payments of compensation in the form of shares of Common Stock (the "Stock
Payments") are granted; and (iii) rights to receive cash or shares of Common
Stock based on the value of dividends paid with respect to a share of Common
Stock (the "Dividend Equivalent Rights") are granted. The Incentive Plan, the
Nonqualified Plan, the Restricted Plan, the Stock Purchase Plan, the Directors
Plan, the SAR Plan and the Stock Rights Plan are included herein as Part I, Part
II, Part III, Part IV, Part V, Part VI and Part VII, respectively, and are
collectively referred to herein as the "Plans." The grant of an option, SAR or
restricted share or rights to purchase shares under one of the Plans shall not
be construed to prohibit the grant of an option, SAR or restricted share or
rights to purchase shares under any of the other Plans.
3. Applicability of General Provisions. Unless any Plan specifically
indicates to the contrary, all Plans shall be subject to the General Provisions
of the Program set forth below.
4. Administration of the Plans. The Plans shall be administered, construed,
governed, and amended in accordance with their respective terms.
<PAGE>
GENERAL PROVISIONS OF STOCK COMPENSATION PROGRAM
Article 1. Administration. The Program shall be administered by the
Company's Board of Directors (the "Board"). If an award under the Program is to
be made to an "Executive Officer" as defined in the Exchange Act (as hereinafter
defined), it must be approved if the Company has a class of equity securities
registered under Section 12 or 15(d) of the Exchange Act, by the Board or by a
committee of the Board, that is composed solely of two or more directors who are
"Non-Employee Directors" within the meaning of Rule 16b-3 promulgated pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
members of the Board, such committee of the Board or such other persons
appointed to administer the Program, when acting to administer the Program, are
herein collectively referred to as the "Program Administrators." To the extent
permitted under the Exchange Act, the Internal Revenue Code of 1986, as amended
(the "Code") or any other applicable law, the Program Administrators, shall have
the authority to delegate any and all power and authority to administer and
operate the Program hereunder to such person or persons as the Program
Administrators deems appropriate which if formed may be referred to by such
title specified by the Board. Subject to the foregoing limitations, as
applicable, the Board may from time to time remove members from the committee,
fill all vacancies on the committee, however caused, and may select one of the
members of the committee as its Chairman.
The Program Administrators shall hold meetings at such times and places as
they may determine and as necessary to approve all grants and other transactions
under the Program as required under Rule 16b-3(d) under the Exchange Act, shall
keep minutes of their meetings, and shall adopt, amend, and revoke such rules
and procedures as they may deem proper with respect to the Program. Any action
of the Program Administrators shall be taken by majority vote or the unanimous
written consent of the Program Administrators.
Article 2. Authority of Program Administrators. Subject to the other
provisions of this Program, and with a view to effecting its purpose, the
Program Administrators shall have sole authority, in their sole and absolute
discretion, (a) to construe and interpret the Program; (b) to define the terms
used herein; (c) to determine the individuals to whom options and restricted
shares and rights to purchase shares shall be granted under the Program; (d) to
determine the time or times at which options and restricted shares, rights to
purchase shares or other awards shall be granted under the Program; (e) to
determine the number and type of shares or securities subject to each option,
restricted share, purchase right or other award, the duration of each award
granted under the Program, and the price of any share purchase; (f) to determine
all of the other terms and conditions of options, restricted shares, purchase
rights and other awards granted under the Program; and (g) to make all other
determinations necessary or advisable for the administration of the Program and
to do everything necessary or appropriate to administer the Program; provided,
however, that the Board shall establish the price for all shares issued
hereunder. All decisions, determinations, and interpretations made by the
Program Administrators shall be binding and conclusive on all participants in
the Program (the "Plan Participants") and on their legal representatives, heirs
and beneficiaries.
Article 3. Maximum Number of Shares Subject to the Program. Subject to the
provisions of Article 7, the maximum aggregate number of shares of Common Stock
subject to the Program shall be 3,000,000 shares. Subject to the limitation
contained in Section 2 of Part 1, the maximum number of shares of Common Stock
issuable pursuant to the Program to any single Program Participant in any given
fiscal year shall be 500,000. shares. The Board of Directors of the Company
shall make recommendations to the Program Administrators from time to time with
respect to the allocation of the shares reserved under the Program for the
directors, officers, employees and agents of the Company and its subsidiaries.
The shares of Common Stock issued under the Program may be authorized but
unissued shares, shares issued and reacquired by the Company or shares purchased
by the Company on the open market. If any of the options granted under the
Program expire or terminate for any reason before they have been exercised in
full, the unpurchased shares subject to those expired or terminated options
shall cease to reduce the number of shares available for purposes of the
Program. If the conditions associated with the grant of restricted shares are
not achieved within the period specified for satisfaction of the applicable
conditions, or if the restricted share grant terminates for any reason before
the date on which the conditions must be satisfied, the shares of Common Stock
associated with such restricted shares shall cease to reduce the number of
shares available for purposes of the Program.
The proceeds received by the Company from the sale of its Common Stock
pursuant to the exercise of options, transfer of restricted shares or issuance
of stock purchased under the Program, if in the form of cash, shall be added to
the Company's general funds and used for general corporate purposes.
Notwithstanding anything to the contrary in this Program, at no time that
the Program is subject to qualification under the California Corporations Code
shall the total number of shares issuable upon exercise of all outstanding
options and the total number of shares provided for under any stock bonus or
similar plan of the Company exceed the applicable percentage as calculated in
accordance with the conditions and exclusions of Rule 260.140.45 of the
California Code of Regulations, based on the number of shares of the Company
which are outstanding at the time the calculation is made, unless such
limitation is approved in accordance with such Rule.
Article 4. Eligibility and Participation. Officers, employees, directors
(whether employee directors or non-employee directors), and independent
contractors or agents of the Company or its subsidiaries who are responsible for
or contribute to the management, growth or profitability of the business of the
Company or its subsidiaries shall be eligible for selection by the Program
Administrators to participate in the Program. However, awards of Incentive
Options under the Incentive Plan may be granted only to employees of the Company
or its subsidiaries. An employee may be granted Nonqualified Options under the
Program; provided, however, that the grant of Nonqualified Options and Incentive
Options to an employee shall be the grant of separate options and each
Nonqualified Option and each Incentive Option shall be specifically designated
as such in accordance with applicable provisions of the Treasury Regulations.
Employees of the Company or its subsidiaries whose customary employment for tax
purposes is at least twenty (20) hours per week and more than five (5)
consecutive months in any calendar year, and who own less than 5% of the Common
Stock, shall be eligible to participate in the Employee Stock Purchase Plan.
Consultants or advisors of the Company or its subsidiaries shall be eligible to
receive awards under the Program, provided that such awards would be exempt from
registration under Rule 701 of the Securities Act of 1933, during such time that
offers of securities by the Company are eligible for exemption under Rule 701,
or that such award would be eligible for registration on Form S-8, during such
time that offers of securities to employees under an employee benefit plan of
the Company are eligible for registration on Form S-8.
The term "subsidiary" as used herein means any company, other than the
Company, in an unbroken chain of companies, beginning with the Company if, at
the time of any grant hereunder, each of the companies, other than the last
company in the unbroken chain, owns stock possessing more than 50% of the total
combined voting power of all classes of stock in one of the other companies in
such chain.
Article 5. Effective Date and Term of Program. The Program shall become
effective upon its adoption by the Board of Directors of the Company subject to
approval of the Program by a majority of the voting shares of the Company voting
in person or by proxy at a meeting of stockholders, in either case following
adoption of the Program by the Board of Directors, which vote shall be taken or
consent granted within 12 months of adoption of the Program by the Company's
Board of Directors. The Program shall continue in effect for a term of 10 years
unless sooner terminated under Article 8 of these General Provisions.
Article 6. Fair Market Value. As used in the Program, "Fair Market Value"
shall mean, as of any date, the value of the Common Stock determined by the
Program Administrators on the basis of such factors as they deem appropriate;
provided, however, that, if the Common Stock is traded on a national securities
exchange or a national market system, Fair Market Value on any day shall be
deemed to be the closing sales price (or, if no reported sale takes place on
such day, the mean of the reported bid and asked prices) of the Common Stock on
such day on the principal such exchange, or, if the stock is included on the
composite tape, the composite tape. In each case, the Program Administrators'
determination of Fair Market Value shall be conclusive and binding on the
Company and the Plan Participants.
Article 7. Adjustments. If the outstanding shares of Common Stock are
increased, decreased, changed into, or exchanged for a different number or kind
of shares or securities through merger, consolidation, combination, exchange of
shares, other reorganization, recapitalization, reclassification, stock
dividend, stock split or reverse stock split, an appropriate and proportionate
adjustment shall be made in the maximum number and kind of shares as to which
options and restricted shares may be granted under this Program. A corresponding
adjustment changing the number and kind of shares allocated to unexercised
options, restricted shares, or portions thereof, which shall have been granted
prior to any such change, shall likewise be made. Any such adjustment in
outstanding options shall be made without change in the aggregate purchase price
applicable to the unexercised portion of the option, but with a corresponding
adjustment in the price for each share or other unit of any security covered by
the option.
Article 8. Termination and Amendment of Program. The Program shall
terminate ten (10) years from the date the Program is adopted by the Board of
Directors, or, if applicable, the date a particular Plan is approved by the
stockholders, whichever is earlier, or shall terminate at such earlier time as
the Board of Directors may so determine. No options or restricted shares shall
be granted and no stock shall be sold and purchased under the Program after that
date. Subject to the limitation contained in Article 9 of these General
Provisions, the Program Administrators may at any time amend or revise the terms
of the Program, including the form and substance of the option, restricted share
and stock purchase agreements to be used hereunder; provided, however, that
without approval by the stockholders of the Company representing a majority of
the voting power (as contained in Article 5 of these General Provisions) no
amendment or revision shall (a) increase the maximum aggregate number of shares
that may be sold or distributed pursuant to options granted or stock sold and
purchased under Part I or Part IV, except as permitted under Article 7 of these
General Provisions; (b) change the minimum purchase price for shares under
Section 4 of Part I or the Purchase Price for shares under Part IV; (c) increase
the maximum term established under Parts I or IV for any option or restricted
share; (d) permit the granting of an option, or right to purchase shares under
Parts I or IV to anyone other than as provided in Article 4 of the General
Provisions; (e) change the term of Parts I or IV described in Article 5 of these
General Provisions; or (f) materially increase the benefits accruing to Plan
Participants under Parts I or IV of the Program.
Article 9. Prior Rights and Obligations. No amendment, suspension, or
termination of the Program shall, without the consent of the individual who has
received an option or restricted share or who has purchased a specified share or
shares under Part IV, alter or impair any of that individual's rights or
obligations under any option or restricted share granted or shares sold and
purchased under the Program prior to that amendment, suspension, or termination.
Article 10. Privileges of Stock Ownership. Notwithstanding the exercise of
any option granted pursuant to the terms of this Program, the achievement of any
conditions specified in any restricted share granted pursuant to the terms of
this Program or the election to purchase any shares pursuant to the terms of
this Program, no individual shall have any of the rights or privileges of a
stockholder of the Company in respect of any shares of stock issuable upon the
exercise of his or her option, the satisfaction of his or her restricted share
conditions or the sale, purchase and issuance of such purchased shares until
certificates representing the shares have been issued and delivered. No shares
shall be required to be issued and delivered upon exercise of any option,
satisfaction of any conditions with respect to a restricted share or a purchaser
under Part IV unless and until all of the requirements of law and of all
regulatory agencies having jurisdiction over the issuance and delivery of the
securities shall have been fully complied with.
Article 11. Reservation of Shares of Common Stock. The Company, during the
term of this Program, will at all times reserve and keep available such number
of shares of its Common Stock as shall be sufficient to satisfy the requirements
of the Program. In addition, the Company will from time to time, as is necessary
to accomplish the purposes of this Program, seek or obtain from any regulatory
agency having jurisdiction any requisite authority in order to issue and sell
shares of Common Stock hereunder. The inability of the Company to obtain from
any regulatory agency having jurisdiction the authority deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any shares of its
stock hereunder shall relieve the Company of any liability in respect of the
nonissuance or sale of the stock as to which the requisite authority shall not
have been obtained.
Article 12. Tax Withholding. The exercise of any option or restricted share
granted or the sale and issuance of any shares to be purchased under this
Program are subject to the condition that if at any time the Company shall
determine, in its discretion, that the satisfaction of withholding tax or other
withholding liabilities under any state or federal law is necessary or desirable
as a condition of, or in connection with, such exercise or the delivery or
purchase of shares pursuant thereto, then in such event, the exercise of the
option or restricted share or the sale and issuance of any shares to be
purchased shall not be effective unless such withholding shall have been
effected or obtained in a manner acceptable to the Company. At the Company's
sole and absolute discretion, the Company may, from time to time, accept shares
of the Company's Common Stock subject to one of the Plans as the source of
payment for such liabilities.
Article 13. Compliance with Law. It is the express intent of the Company
that this Program complies in all respect with all applicable provisions of
state and federal law, including without limitation Section 25102(o) of the
California Corporations Code to the extent such Section is applicable to the
Company. It is the express intent of the Company that when any equity security
of the Company is registered pursuant to Section 12 of the Exchange Act, this
Program shall comply in all respects with applicable provisions of the Rule
16b-3 or Rule 16a-1(c)(3) under the Exchange Act in connection with any grant of
awards to, or other transaction by, a Plan Participant who is subject to Section
16 of the Exchange Act (except for transactions exempted under alternative
Exchange Act rules). Accordingly, if any provision of the Program or any
agreement relating to any award thereunder does not comply with Rule 16b-3 or
Rule 16a-1(c)(3) or Section 25102(o) of the California Corporations Code as then
applicable to any such transaction, such provision will be construed or deemed
amended to the extent necessary to conform to the applicable requirements of
Rule 16b-3 or Rule 16a-1(c)(3) or Section 25102(o) of the California
Corporations Code so that such Plan Participant shall avoid liability under
Section 16(b) and the Program shall comply with Section 25102(o) as then
applicable to any such transaction. Unless otherwise provided in any grant or
award to any person who is or may thereafter be subject to Section 16 of the
Exchange Act, the approval of such grant or award shall include the approval of
the disposition of the Company of Company equity securities for the purposes of
satisfying the payment of the exercise or purchase price or tax withholding
obligations related to such grant or award within the meaning of Rules
16a-1(c)(3) and 16b-3(e).
Article 14. Indemnification. No Program Administrator, as that term is
defined in the Program, or any officer or employee of the Company or an
affiliate acting at the direction or on behalf of the Program Administrator
shall be personally liable for any action or determination taken or made in good
faith with respect to the Program, and shall, to the extent permitted by law, be
fully indemnified and protected by the Company with respect to any such action
or determination.
Article 15. Performance-Based Awards.
(a) Each agreement for the grant of Performance Shares shall specify
the number of Performance Shares subject to such agreement, the
Performance Period and the Performance Objective (each as defined
below), and each agreement for the grant of any other award that
the Program Administrators determine to make subject to a
Performance Objective similarly shall specify the applicable
number of shares of Common Stock, the period for measuring
performance and the Performance Objective. As used herein,
"Performance Objective" means a performance objective specified
in the agreement for a Performance Share, or for any other award
which the Program Administrators determine to make subject to a
Performance Objective, upon which the vesting or settlement of
such award is conditioned, and "Performance Period" means the
period of time specified in an agreement over which Performance
Shares, or another award which the Program Administrators
determine to make subject to a Performance Objective, are to be
earned. Each agreement for a performance-based grant shall
specify in respect of a Performance Objective the minimum level
of performance below which no payment will be made, shall
describe the method for determining the amount of any payment to
be made if performance is at or above the minimum acceptable
level, but falls short of full achievement of the Performance
Objective, and shall specify the maximum percentage payout under
the agreement. Such maximum percentage in no event shall exceed
one hundred percent (100%) in the case of performance-based
restricted shares and two hundred percent (200%) in the case of
Performance Shares or performance-based Dividend Equivalent
Rights.
(b) The Program Administrators shall determine and specify, in their
discretion, the Performance Objective in the agreement for a
Performance Share or for any other performance-based award, which
Performance Objective shall consist of: (i) one or more business
criteria, including (except as limited under subparagraph (c)
below for awards to Covered Employees (as defined below))
financial, service level and individual performance criteria; and
(ii) a targeted level or levels of performance with respect to
such criteria. Performance Objectives may differ between Plan
Participants and between types of awards from year to year.
(c) The Performance Objective for Performance Shares and any other
performance-based award granted to a Covered Employee, if deemed
appropriate by the Program Administrators, shall be objective and
shall otherwise meet the requirements of Section 162(m)(4)(C) of
the Code, and shall be based upon one or more of the following
performance-based business criteria, either on a business unit or
Company-specific basis or in comparison with peer group
performance: net sales; gross sales; return on net assets; return
on assets; return on equity; return on capital; return on
revenues; cash flow; book value; share price performance
(including options and SARs tied solely to appreciation in the
Fair Market Value of the shares); earnings per share; stock price
earnings ratio; earnings before interest, taxes, depreciation and
amortization expenses ("EBITDA"); earnings before interest and
taxes ("EBIT"); or EBITDA, EBIT or earnings before taxes and
unusual or nonrecurring items as measured either against the
annual budget or as a ratio to revenue. Achievement of any such
Performance Objective shall be measured over a period of years
not to exceed ten (10) as specified by the Program Administrators
in the agreement for the performance-based award. No business
criterion other than those named above in this Article 15(c) may
be used in establishing the Performance Objective for an award to
a Covered Employee under this Article 15. For each such award
relating to a Covered Employee, the Program Administrators shall
establish the targeted level or levels of performance for each
such business criterion. The Program Administrators may, in their
discretion, reduce the amount of a payout otherwise to be made in
connection with an award under this Article 15(c), but may not
exercise discretion to increase such amount, and the Program
Administrators may consider other performance criteria in
exercising such discretion. All determinations by the Program
Administrators as to the achievement of Performance Objectives
under this Article 15(c) shall be made in writing. The Program
Administrators may not delegate any responsibility under this
Article 15(c). As used herein, "Covered Employee" shall mean,
with respect to any grant of an award, an executive of the
Company or any subsidiary who is a member of the executive
compensation group under the Company's compensation practices
(not necessarily an executive officer) whom the Program
Administrators deem may be or become a covered employee as
defined in Section 162(m)(3) of the Code for any year that such
award may result in remuneration over $1 million which would not
be deductible under Section 162(m) of the Code but for the
provisions of the Program and any other "qualified
performance-based compensation" plan (as defined under Section
162(m) of the Code) of the Company; provided, however, that the
Program Administrators may determine that a Plan Participant has
ceased to be a Covered Employee prior to the settlement of any
award.
(d) The Program Administrators, in their sole and absolute
discretion, may require that one or more award agreements contain
provisions which provide that, in the event Section 162(m) of the
Code, or any successor provision relating to excessive employee
remuneration, would operate to disallow a deduction by the
Company with respect to all or part of any award under the
Program, a Plan Participant's receipt of the benefit relating to
such award that would not be deductible by the Company shall be
deferred until the next succeeding year or years in which the
Plan Participant's remuneration does not exceed the limit set
forth in such provisions of the Code.
Article 16. Death Beneficiaries. In the event of a Plan Participant's
death, all of such person's outstanding awards, including his or her rights to
receive any accrued but unpaid Stock Payments, will transfer to the maximum
extent permitted by law to such person's beneficiary (except to the extent a
permitted transfer of a Nonqualified Option or SAR was previously made pursuant
hereto). Each Plan Participant may name, from time to time, any beneficiary or
beneficiaries (which may be named contingently or successively) as his or her
beneficiary for purposes of this Program. Each designation shall be on a form
prescribed by the Program Administrators, will be effective only when delivered
to the Company, and when effective will revoke all prior designations by the
Plan Participant. If a Plan Participant dies with no such beneficiary
designation in effect, such person's beneficiary shall be his or her estate and
such person's awards will be transferable by will or pursuant to laws of descent
and distribution applicable to such person.
Article 17. Unfunded Program. The Program shall be unfunded and the Company
shall not be required to segregate any assets that may at any time be
represented by awards under the Program. Neither the Company, its affiliates,
the Program Administrators, nor the Board shall be deemed to be a trustee of any
amounts to be paid under the Program nor shall anything contained in the Program
or any action taken pursuant to its provisions create or be construed to create
a fiduciary relationship between any such party and a Plan Participant or anyone
claiming on his or her behalf. To the extent a Plan Participant or any other
person acquires a right to receive payment pursuant to an award under the
Program, such right shall be no greater than the right of an unsecured general
creditor of the Company.
Article 18. Choice of Law and Venue. The Program and all related documents
shall be governed by, and construed in accordance with, the laws of the State of
Delaware. Acceptance of an award shall be deemed to constitute consent to the
jurisdiction and venue of the state and federal courts located in Los Angeles
County, State of California for all purposes in connection with any suit, action
or other proceeding relating to such award, including the enforcement of any
rights under the Program or any agreement or other document, and shall be deemed
to constitute consent to any process or notice of motion in connection with such
proceeding being served by certified or registered mail or personal service
within or without the State of California, provided a reasonable time for
appearance is allowed.
Article 19. Arbitration. Any disputes involving the Program will be
resolved by arbitration in Los Angeles County, California before one (1)
arbitrator in accordance with the Commercial Arbitration Rules of the American
Arbitration Association.
Article 20. Program Administrators' Right. Except as may be provided in an
award agreement, the Program Administrators may, in their discretion, waive any
restrictions or conditions applicable to, extend or modify any period (including
any period in which an option or other exercisable award may be exercised,
subject to the requirements of the Code) applicable to, or accelerate the
vesting of, any award (other than the right to purchase shares pursuant to the
Stock Purchase Plan).
Article 21. Termination of Benefits Under Certain Conditions. The Program
Administrators, in their sole and absolute discretion, may cancel any unexpired,
unpaid or deferred award (other than a right to purchase shares pursuant to the
Stock Purchase Plan) at any time if the Plan Participant is not in compliance
with all applicable provisions of the Program or any award agreement or if the
Plan Participant, whether or not he or she is currently employed by the Company
or one of its subsidiaries, acts in a manner contrary to the best interests of
the Company and its subsidiaries.
Article 22. Conflicts in Program. In case of any conflict in the terms of
the Program, or between the Program and an award agreement, the provisions in
the Program which specifically grant such award shall control, and the
provisions in the Program shall control over the provisions in any award
agreement.
Article 23. Optional Deferral. The right to receive any award under the
Program (other than the right to purchase shares pursuant to the Stock Purchase
Plan) may, at the request of the Plan Participant, be deferred to such period
and upon such terms and conditions as the Program Administrators shall, in their
discretion, determine, which may include crediting of interest on deferrals of
cash and crediting of dividends on deferrals denominated in shares of Common
Stock.
Article 24. Information to Plan Participants. To the extent required by
applicable law, the Company shall provide Plan Participants with the Company's
financial statements at least annually.
Article 25. Company's Right of Repurchase. In the event that a Plan
Participant's employment with or service to the Company is terminated for any
reason or any of its subsidiaries, the Company shall have the right, unless
waived by the Program Administrators at the time of any award or thereafter, to
repurchase all, but not less than all of the securities that such Plan
Participant has purchased or has been awarded under the Program on the following
terms:
(a) Upon a Plan Participant's termination of employment with or
service to the Company or any of its subsidiaries, the Company
shall have the right for a period of ninety (90) days form the
last day of employment or service to repurchase all, but not less
than all of the securities awarded to or purchased by the Plan
Participant under the Program.
(b) The Company shall notify the Plan Participant within ninety (90)
days of the last day of employment or service regarding the
exercise of its right of repurchase.
(c) If the Company exercises its right of repurchase, the Company
will purchase the securities within thirty (30) days of delivery
of the notice of its election to purchase at the higher of (i)
the Fair Market Value on the Plan Participant's date of
termination, or (ii) the Fair Market Value of such securities on
the date of the Company's notification of election to repurchase.
Article 26. Lock-Up. To the extent requested by any managing underwriter to
the Company, the Plan Participants shall enter into such market lock-up, escrow
or other agreements as may be requested by such underwriter in connection with
any public offering of the Company's securities.
<PAGE>
PART I
HOLLYWOOD PARTNERS.COM, INC.
INCENTIVE STOCK OPTION PLAN
Section 1. Purpose. The purpose of this Hollywood Partners.com, Inc.
Incentive Stock Option Plan (the "Incentive Plan" is to promote the growth and
general prosperity of the Company by permitting the Company to grant options to
purchase shares of its Common Stock. The Incentive Plan is designed to help
attract and retain superior personnel for positions of substantial
responsibility with the Company and its subsidiaries, and to provide individuals
with an additional incentive to contribute to the success of the Company. The
Company intends that options granted pursuant to the provisions of the Incentive
Plan will qualify as "incentive stock options" within the meaning of Section 422
of the Code. This Incentive Plan is Part I of the Program. Unless any provision
herein indicates to the contrary, this Incentive Plan shall be subject to the
General Provisions of the Program, and terms used but not defined in this
Incentive Plan shall have the meanings, if any, ascribed thereto in the General
Provisions of the Program.
Section 2. Maximum Number of Shares; Option Terms and Conditions. The
maximum aggregate number of shares of Common Stock subject to the Incentive Plan
shall be 2,000,000. The terms and conditions of options granted under the
Incentive Plan may differ from one another as the Program Administrators shall,
in their discretion, determine as long as all options granted under the
Incentive Plan satisfy the requirements of the Incentive Plan.
Section 3. Duration of Options. Each option and all rights thereunder
granted pursuant to the terms of the Incentive Plan shall expire on the date
determined by the Program Administrators, but in no event shall any option
granted under the Incentive Plan expire later than ten (10) years from the date
on which the option is granted. However, notwithstanding the above portion of
this Section 3, if at the time the option is granted the Optionee (the
"Optionee") owns or would be considered to own by reason of Code Section 424(d)
more than 10% of the total combined voting power of all classes of stock of the
Company or its subsidiaries, such option shall expire not more than 5 years from
the date the option is granted. In addition, each option shall be subject to
early termination as provided in the Incentive Plan.
Section 4. Purchase Price. The purchase price for shares acquired pursuant
to the exercise, in whole or in part, of any option shall not be less than the
Fair Market Value of the shares at the time of the grant of the option.
Notwithstanding the preceding sentence, if at the time an option is granted the
Optionee owns or would be considered to own by reason of Code Section 424(d)
more than 10% of the total combined voting power of all classes of stock of the
Company or its subsidiaries, the purchase price of the shares covered by such
option shall not be less than 110% of the Fair Market Value of a share of Common
Stock on the date the option is granted.
Section 5. Maximum Amount of Options Exercisable in Any Calendar Year.
Notwithstanding any other provision of this Incentive Plan, to the extent that
the aggregate Fair Market Value of stock with respect to which options
(determined without regard to this Section 5) are exercisable for the first time
by any Optionee during any calendar year under all stock option plans of the
Company and its subsidiaries exceeds $100,000, such options shall be treated as
options which are not incentive stock options within the meaning of Section 422
of the Code. The Program Administrators may provide in any option grant that the
aggregate Fair Market Value of the Common Stock with respect to which options
granted under the Incentive Plan become exercisable for the first time by any
Optionee during any calendar year under all stock option plans of the Company
and its subsidiaries shall not exceed $100,000.
Section 6. Exercise of Options. Each option shall be exercisable in one or
more installments during its term as determined by the Program Administrators,
and the right to exercise may be cumulative as determined by the Program
Administrators. Each option, other than options granted to officers, directors
or consultants, shall be exercisable at a rate of at least twenty percent (20%)
per year over five (5) years from the date the option is granted, subject to
such reasonable conditions as determined by the Program Administrators;
provided, that such limitation shall only apply so long as the Program is
subject to qualification under Section 25101(o) of the California Corporations
Code. No option may be exercised for a fraction of a share of Common Stock. The
purchase price of any shares purchased shall be paid in full in cash or by
certified or cashier's check payable to the order of the Company or by shares of
Common Stock, if permitted by the Program Administrators, or by a combination of
cash, check, or shares of Common Stock, at the time of exercise of the option.
If any portion of the purchase price is paid in shares of Common Stock, those
shares shall be tendered at their then Fair Market Value as determined by the
Program Administrators in accordance with Article 6 under the General Provisions
of the Program Payment in shares of Common Stock includes the automatic
application of shares of Common Stock received upon exercise of an option to
satisfy the exercise price for additional options.
Section 7. Reorganization. In the event of the dissolution or liquidation
of the Company, any option granted under the Incentive Plan shall terminate as
of a date to be fixed by the Program Administrators; provided that not less than
30 days' written notice of the date so fixed shall be given to each Optionee and
each such Optionee shall have the right during such period (unless such option
shall have previously expired) to exercise any option, including any option that
would not otherwise be exercisable by reason of an insufficient lapse of time.
In the event of a Reorganization (as defined below) in which the Company is
not the surviving or acquiring company, or in which the Company is or becomes a
subsidiary of another company after the effective date of the Reorganization,
then:
(a) if there is no plan or agreement respecting the Reorganization
(the "Reorganization Agreement") or if the Reorganization
Agreement does not specifically provide for the change,
conversion or exchange of the outstanding options for options of
another corporation, then exercise and termination provisions
equivalent to those described in the first paragraph of this
Section 7 shall apply (which shall include the right to receive
upon exercise the consideration that would be received by a
holder of a number of shares of Common Stock issuable upon
exercise of the option immediately prior to the consummation of
the Reorganization); or
(b) if there is a Reorganization Agreement and if the Reorganization
Agreement specifically provides for the change, conversion, or
exchange of the outstanding options for options of another
corporation, then the Program Administrators shall adjust the
outstanding unexercised options (and shall adjust the options
remaining under the Incentive Plan which have not yet been
granted if the Reorganization Agreement makes specific provision
for such an adjustment) in a manner consistent with the
applicable provisions of the Reorganization Agreement.
The term "Reorganization" as used in this Section 7 shall mean any statutory
merger, statutory consolidation, sale of all or substantially all of the assets
of the Company or a sale of the Common Stock pursuant to which the Company is or
becomes a subsidiary of another company after the effective date of the
Reorganization.
Adjustments and determinations under this Section 7 shall be made by the
Program Administrators, whose decisions as to such adjustments or determinations
shall be final, binding, and conclusive.
Section 8. Written Notice Required. Any option granted pursuant to the
terms of the Incentive Plan shall be exercised when written notice of that
exercise has been given to the Company at its principal office by the person
entitled to exercise the option and full payment for the shares with respect to
which the option is exercised, together with payment of applicable income taxes,
has been received by the Company.
Section 9. Compliance with Securities Laws. Shares shall not be issued with
respect to any option granted under the Incentive Plan, unless the exercise of
that option and the issuance and delivery of the shares pursuant to that
exercise shall comply with all applicable provisions of foreign, state and
federal law including, without limitation, the Securities Act of 1933, as
amended, and the Exchange Act, and the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance. The Program Administrators may also
require an Optionee to furnish evidence satisfactory to the Company, including a
written and signed representation letter and consent to be bound by any transfer
restriction imposed by law, legend, condition, or otherwise, that the shares are
being purchased only for investment and without any present intention to sell or
distribute the shares in violation of any state or federal law, rule, or
regulation. Further, each Optionee shall consent to the imposition of a legend
on the shares of Common Stock subject to his or her option and the imposition of
stop-transfer instructions restricting their transferability as required by law
or by this Section 9.
Section 10. Employment of Optionee. Each Optionee, if requested by the
Program Administrators, must agree in writing as a condition of receiving his or
her option, that he or she will remain in the employment of the Company or its
subsidiary corporations following the date of the granting of that option for a
period specified by the Program Administrators. Nothing in the Incentive Plan or
in any option granted hereunder shall confer upon any Optionee any right to
continued employment by the Company or its subsidiary corporations or limit in
any way the right of the Company or its subsidiary corporations at any time to
terminate or alter the terms of that employment.
Section 11. Option Rights Upon Termination of Employment. If an Optionee
ceases to be employed by the Company or any subsidiary corporation for any
reason other than death or disability, his or her option shall terminate thirty
(30) days after the date of termination of employment (unless sooner terminated
in accordance with its terms); provided, however, that in the event employment
is terminated for cause as defined by applicable law, his or her option shall
terminate immediately, provided, further, however, that the Program
Administrators may, in their sole and absolute discretion, allow the option to
be exercised (to the extent exercisable on the date of termination of
employment) at any time within ninety (90) days after the date of termination of
employment, unless either the option or the Incentive Plan otherwise provides
for earlier termination.
Section 12. Option Rights Upon Disability. If an Optionee becomes disabled
within the meaning of Code Section 422(e)(3) while employed by the Company or
any subsidiary corporation, his or her option shall terminate six months after
the date of termination of employment due to disability (unless sooner
terminated in accordance with its terms); provided, however, that the Program
Administrators may, in their sole and absolute discretion, allow the option to
be exercised (to the extent exercisable on the date of termination of
employment) at any time within one year after the date of termination of
employment due to disability, unless either the option or the Incentive Plan
otherwise provides for earlier termination.
Section 13. Option Rights Upon Death of Optionee. Except as otherwise
limited by the Program Administrators at the time of the grant of an option, if
an Optionee dies while employed by the Company or any subsidiary corporation,
his or her option shall expire six months after the date of death (unless sooner
terminated in accordance with its terms); provided, however, that the Program
Administrators may, in their sole and absolute discretion, allow the option to
be exercised (to the extent exercisable on the date of termination of
employment) at any time within one year after the date of death, unless either
the option or the Incentive Plan otherwise provides for earlier termination.
During this one-year or shorter period, the option may be exercised, to the
extent that it remains unexercised on the date of death, by the person or
persons to whom the Optionee's rights under the option shall pass by will or by
the laws of descent and distribution, but only to the extent that the Optionee
is entitled to exercise the option at the date of death.
Section 14. Options Not Transferable. Options granted pursuant to the terms
of the Incentive Plan may not be sold, pledged, assigned, or transferred in any
manner otherwise than by will or the laws of descent or distribution and may be
exercised during the lifetime of an Optionee only by that Optionee. No such
options shall be pledged or hypothecated in any way nor shall they be subject to
execution, attachment, or similar process.
Section 15. Adjustments to Number and Purchase Price of Optioned Shares.
All options granted pursuant to the terms of this Incentive Plan shall be
adjusted in the manner prescribed by Article 7 of the General Provisions of this
Program.
I-
<PAGE>
HOLLYWOOD PARTNERS.COM, INC.
INCENTIVE STOCK OPTION PLAN
GRANT OF OPTION
Date of Grant: ____________________, ____
THIS GRANT, dated as of the date of grant first stated above (the "Date of
Grant") , is delivered by Hollywood Partners.com, Inc., a Delaware corporation
(the "Company"), to ____________________ (the "Optionee"), who is an employee of
the Company or one of its subsidiaries (the Optionee's employer is sometimes
referred to herein as the "Employer").
WHEREAS, the Board of Directors of the Company (the "Board") on September
13, 1999 adopted, with subsequent stockholder approval, the Hollywood
Partners.com, Inc. Incentive Stock Option (the "Plan");
WHEREAS, the Plan provides for the granting of incentive stock options by
the Board or Program Administrators to employees of the Company or any
subsidiary of the Company to purchase, or to exercise certain rights with
respect to, shares of the Common Stock of the Company, no par value (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Program Administrators consider the Optionee to be a person
who is eligible for a grant of incentive stock options under the Plan, and have
determined that it would be in the best interest of the Company to grant the
incentive stock options documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth, the Company,
with the approval and at the direction of the Program Administrators, hereby
grants to the Optionee, as of the Date of Grant, an option to purchase up to
_____ shares of Stock at a price of $_____ per share, the Fair Market Value as
defined in Article 6 under General Provisions of the Program (or, with respect
to 10% stockholders, 110% of Fair Market Value) on the Date of Grant. Such
option is hereinafter referred to as the "Option" and the shares of stock
purchasable upon exercise of the Option are hereinafter sometimes referred to as
the "Option Shares." The Option is intended by the parties hereto to be, and
shall be treated as, an incentive stock option (as such term is defined under
Section 422 of the Internal Revenue Code of 1986).
2. Installment Exercise.
Subject to such further limitations as are provided herein, the Option
shall become exercisable in __________ installments, the Optionee having the
right hereunder to purchase from the Company the following number of Option
Shares upon exercise of the Option, on and after the following dates, in
cumulative fashion as determined by the Program Administrators:
Option Shares Exercisable Date
_______________________________ ______________
_______________________________ ______________
_______________________________ ______________
3. Termination of Option.
(a) Subject to the other provisions of this Grant, the Option and all
rights hereunder with respect thereto, to the extent such rights shall not have
been exercised, shall terminate and become null and void after the expiration of
_____ years from the Date of Grant (the "Option Term").
(b) Upon the occurrence of the Optionee ceasing for any reason to be
employed by the Employer (such occurrence being a "termination of the Optionee's
employment"), the Option, to the extent not previously exercised, shall
terminate and become null and void within thirty (30) days after the date of
such termination of the Optionee's employment, except (1) in the event
employment is terminated for cause as defined by applicable law, in which case
Optionee's Option shall terminate and become null and void immediately or (2) in
a case where the Program Administrators may otherwise determine in their sole
and absolute discretion for up to ninety (90) days following the termination of
employment. Upon a termination of the Optionee's employment by reason of
disability or death, the Option may be exercised, but only to the extent that
the Option was outstanding and exercisable on such date of disability or death,
up to a six-month period following the date of such termination of the
Optionee's employment, unless extended for a period of up to one year, at the
sole and absolute discretion of the Program Administrators.
(c) In the event of the death of the Optionee, the Option may be exercised
by the Optionee's legal representative, but only to the extent that the option
would otherwise have been exercisable by the Optionee.
(d) A transfer of the Optionee's employment between the Company and any
subsidiary of the Company, or between any subsidiaries of the Company, shall not
be deemed to be a termination of the Optionee's employment.
4. Exercise of Option.
(a) The Optionee may exercise the option with respect to all or any part of
the number of Option Shares then exercisable hereunder by giving the Secretary
of the Company written notice of intent to exercise. The notice of exercise
shall specify the number of Option Shares as to which the Option is to be
exercised and the date of exercise thereof.
(b) Full payment (in U.S. dollars) by the Optionee of the option price for
the Option Shares purchased shall be made on or before the exercise date
specified in the notice of exercise in cash, or, with the prior written consent
of the Program Administrators, in whole or in part through the surrender of
shares of Stock at their Fair Market Value on the exercise date. The Optionee
shall also pay any required income tax withholding taxes which may be payable in
U.S. dollars or Option Shares if acceptable to the Company.
(c) On the exercise date specified in the Optionee's notice or as soon
thereafter as is practicable, the Company shall cause to be delivered to the
Optionee, a certificate or certificates for the Option Shares then being
purchased (out of theretofore unissued stock or reacquired Stock, as the Company
may elect) upon full payment for such option Shares. However, if (i) the
Optionee is subject to Section 16 of the Securities Exchange Act of 1934 and
(ii) the Optionee exercises the Option before six months have passed from the
Date of Grant, the Company shall be permitted if required to comply with the
exemptive provisions of Section 16 of the Securities Exchange Act of 1934 to
hold in its custody any stock certificate arising from such exercise until six
months has passed from the Date of Grant. The obligation of the Company to
deliver Stock shall, however, be subject to the condition that if at any time
the Program Administrators shall determine in their discretion that the listing,
registration or qualification of the Option or the Option Shares upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the Option or the issuance or purchase of
Stock thereunder, the Option may not be exercised in whole or in part unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Program
Administrators.
(d) If the Optionee fails to pay for any of the Option Shares specified in
such notice or fails to accept delivery thereof, the Optionee's right to
purchase such Option Shares may be terminated by the Company. The date specified
in the Optionee's notice as the date of exercise shall be deemed the date of
exercise of the Option, provided that payment in full for the Option Shares to
be purchased upon such exercise shall have been received by such date.
5. Adjustment of and Changes in Stock of the Company.
In the event of a reorganization, recapitalization, change of shares, stock
split, spin-off, stock dividend, reclassification, subdivision or combination of
shares, merger, consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of the Company, the Program
Administrators shall make such adjustment as may be required under the
applicable reorganization agreement in the number and kind of shares of Stock
subject to the Option or in the option price; provided, however, that no such
adjustment shall give the Optionee any additional benefits under the Option. If
there is no provision for the treatment of the Option under an applicable
reorganization agreement, the Option may terminate on a date determined by the
Program Administrators following at least 30 days written notice to the
Optionee.
6. No Rights of Stockholders.
Neither the Optionee nor any personal representative shall be, or shall
have any of the rights and privileges of, a stockholder of the Company with
respect to any shares of Stock purchasable or issuable upon the exercise of the
Option, in whole or in part, prior to the date of exercise of the Option.
7. Non-Transferability of Option.
During the Optionee's lifetime, the Option hereunder shall be exercisable
only by the Optionee or any guardian or legal representative of the Optionee,
and the Option shall not be transferable except, in case of the death of the
Optionee, by will or the laws of descent and distribution, nor shall the Option
be subject to attachment, execution or other similar process. In the event of
(a) any attempt by the Optionee to alienate, assign, pledge, hypothecate or
otherwise dispose of the option, except as provided for herein, or (b) the levy
of any attachment, execution or similar process upon the rights or interest
hereby conferred, the Company may terminate the Option by notice to the Optionee
and it shall thereupon become null and void.
8. Restriction on Exercise.
The Option may not be exercised if the issuance of the Option Shares upon
such exercise would constitute a violation of any applicable federal or State
securities or other law or valid regulation. As a condition to the exercise of
the Option, the Company may require the Optionee exercising the Option to make
any representation or warranty to the Company as may be required by any
applicable law or regulation and, specifically, may require the Optionee to
provide evidence satisfactory to the Company that the Option Shares are being
acquired only for investment purposes and without any present intention to sell
or distribute the shares in violation of any federal or State securities or
other law or valid regulation.
7. Employment Not Affected.
The granting of the Option or its exercise shall not be construed as
granting to the Optionee any right with respect to continuance of employment of
the Employer. Except as may otherwise be limited by a written agreement between
the Employer and the Optionee, the right of the Employer to terminate at will
the Optionee's employment with it at any time (whether by dismissal, discharge,
retirement or otherwise) is specifically reserved by the Company, as the
Employer or on behalf of the Employer (whichever the case may be), and
acknowledged by the Optionee.
8. Amendment of Option.
The Option may be amended by the Program Administrators at any time (i) if
the Program Administrators determine, in their sole and absolute discretion,
that amendment is necessary or advisable in the light of any addition to or
change in the Internal Revenue Code of 1986 or in the regulations issued
thereunder, or any federal or state securities law or other law or regulation,
which change occurs after the Date of Grant and by its terms applies to the
Option; or (ii) other than in the circumstances described in clause (i), with
the consent of the Optionee.
9. Notice.
All notices, requests, demands, and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally
or by certified mail, return receipt requested, as follows:
To Company: Hollywood Partners.com, Inc.
1800 Avenue of the Stars, Suite 480
Los Angeles, CA 90067
Attn: Secretary
To Optionee: ______________________________
______________________________
______________________________
______________________________
10. Incorporation of Plan by Reference.
The Option is granted pursuant to the terms of the Plan, the terms of which
are incorporated herein by reference, and the Option shall in all respects be
interpreted in accordance with, and shall be subject to, the Plan. The Program
Administrators shall interpret and construe the Plan and this instrument, and
its interpretations and determinations shall be conclusive and binding on the
parties hereto and any other person claiming an interest hereunder, with respect
to any issue arising hereunder or thereunder.
11. Governing Law.
The validity, construction, interpretation and effect of this instrument
shall exclusively be governed by and determined in accordance with the law of
the State of Delaware, except to the extent preempted by federal law, which
shall to the extent govern.
In Witness Whereof, the Company has caused its duly authorized officers to
execute this Grant of Option, and to apply the corporate seal hereto, and the
Optionee has placed his or her signature hereon, effective as of the Date of
Grant.
HOLLYWOOD PARTNERS.COM, INC.
a Delaware corporation
By:______________________________________
Name:
Title:
ACCEPTED AND AGREED TO:
________________________________________
[Optionee]
By:_____________________________________
Name:
<PAGE>
PART II
HOLLYWOOD PARTNERS.COM, INC.
NON-QUALIFIED STOCK OPTION PLAN
Section 1. Purpose. The purpose of this Hollywood Partners.com, Inc.
Non-Qualified Stock Option Plan (the "Nonqualified Plan") is to permit the
Company to grant options to purchase shares of its Common Stock. The
Nonqualified Plan is designed to help attract and retain superior personnel for
positions of substantial responsibility with the Company and its subsidiaries,
and to provide individuals with an additional incentive to contribute to the
success of the Company. Any option granted pursuant to the Nonqualified Plan
shall be clearly and specifically designated as not being an incentive stock
option, as defined in Section 422 of the Code. This Nonqualified Plan is Part II
of the Program. Unless any provision herein indicates to the contrary, the
Nonqualified Plan shall be subject to the General Provisions of the Program, and
terms used but not defined in this Nonqualified Plan shall have the meanings, if
any, ascribed thereto in the General Provisions of the Program.
Section 2. Option Terms and Conditions. The terms and conditions of options
granted under the Nonqualified Plan may differ from one another as the Program
Administrators shall in their discretion determine as long as all options
granted under the Nonqualified Plan satisfy the requirements of the Nonqualified
Plan.
Section 3. Duration of Options. Each option and all rights thereunder
granted pursuant to the terms of the Nonqualified Plan shall expire on the date
determined by the Program Administrators, but in no event shall any option
granted under the Nonqualified Plan expire later than ten (10) years from the
date on which the option is granted. In addition, each option shall be subject
to early termination as provided in the Nonqualified Plan.
Section 4. Purchase Price. The purchase price for shares acquired pursuant
to the exercise, in whole or in part, of any option shall not be less than 85%
of the Fair Market Value of the shares at the time of the grant of the option.
Notwithstanding the preceding sentence, if at the time the option is granted or
at the time the option is exercised, the Optionee owns more than 10% of the
total combined voting power of all classes of stock of the Company or its
subsidiaries, the Purchase Price shall not be less than 100% of the Fair Market
Value.
Section 5. Exercise of Options. Each option shall be exercisable in one or
more installments during its term and the right to exercise may be cumulative as
determined by the Program Administrators. Each option, other than options
granted to officers, directors or consultants, shall be exercisable a rate of at
least twenty percent (20%) per year over five (5) years from the date the option
is granted, subject to such reasonable conditions as determined by the Program
Administrators; provided, that such limitation shall only apply so long as the
Program is subject to qualification under Section 25101(o) of the California
Corporations Code. No option may be exercised for a fraction of a share of
Common Stock. The purchase price of any shares purchased shall be paid in full
in cash or by certified or cashier's check payable to the order of the Company
or by shares of Common Stock, if permitted by the Program Administrators, or by
a combination of cash, check, or shares of Common Stock, at the time of exercise
of the option. If any portion of the purchase price is paid in shares of Common
Stock, those shares shall be tendered at their then Fair Market Value as
determined by Article 6 under General Provisions of the Program. Payment in
shares of Common Stock includes the automatic application of shares of Common
Stock received upon exercise of an option to satisfy the exercise price for
additional options.
Section 6. Reorganization. In the event of the dissolution or liquidation
of the Company, any option granted under the Nonqualified Plan shall terminate
as of a date to be fixed by the Program Administrators; provided that not less
than 30 days' written notice of the date so fixed shall be given to each
Optionee and each such Optionee shall have the right during such period (unless
such option shall have previously expired) to exercise any option, including any
option that would not otherwise be exercisable by reason of an insufficient
lapse of time.
In the event of a Reorganization (as defined below) in which the Company is
not the surviving or acquiring company, or in which the Company is or becomes a
subsidiary of another company after the effective date of the Reorganization,
then:
(a) if there is no plan or agreement respecting the Reorganization
(the "Reorganization Agreement") or if the Reorganization
Agreement does not specifically provide for the change,
conversion or exchange of the outstanding options for options of
another corporation, then exercise and termination provisions
equivalent to those described in the first paragraph of this
Section 6 shall apply (which shall include the right to receive
upon exercise the consideration that would be received by a
holder of a number of shares of Common Stock issuable upon
exercise of the option immediately prior to the consummation of
the Reorganization); or
(b) if there is a Reorganization Agreement and if the Reorganization
Agreement specifically provides for the change, conversion, or
exchange of the outstanding options for options of another
corporation, then the Program Administrators shall adjust the
outstanding unexercised options (and shall adjust the options
remaining under the Nonqualified Plan which have not yet been
granted if the Reorganization Agreement makes specific provision
for such an adjustment) in a manner consistent with the
applicable provisions of the Reorganization Agreement.
The term "Reorganization" as used in this Section 6 shall mean any
statutory merger, statutory consolidation, sale of all or substantially all of
the assets of the Company or a sale of the Common Stock pursuant to which the
Company is or becomes a subsidiary of another company after the effective date
of the Reorganization.
Adjustments and determinations under this Section 6 shall be made by the
Program Administrators, whose decisions as to such adjustments or determinations
shall be final, binding, and conclusive.
Section 7. Written Notice Required. Any option granted pursuant to the
terms of this Nonqualified Plan shall be exercised when written notice of that
exercise has been given to the Company at its principal office by the person
entitled to exercise the option and full payment for the shares with respect to
which the option is exercised has been received by the Company.
Section 8. Compliance with Securities Laws. Shares shall not be issued with
respect to any option granted under the Nonqualified Plan, unless the exercise
of that option and the issuance and delivery of the shares pursuant thereto
shall comply with all applicable provisions of foreign, state and federal law,
including, without limitation, the Securities Act of 1933, as amended, and the
Exchange Act, and the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance. The Program Administrators may also require an Optionee to
furnish evidence satisfactory to the Company, including a written and signed
representation letter and consent to be bound by any transfer restrictions
imposed by law, legend, condition, or otherwise, that the shares are being
purchased only for investment purposes and without any present intention to sell
or distribute the shares in violation of any state or federal law, rule, or
regulation. Further, each Optionee shall consent to the imposition of a legend
on the shares of Common Stock subject to his or her option and the imposition of
stop-transfer instructions restricting their transferability as required by law
or by this Section 8.
Section 9. Continued Employment or Service. Each Optionee, if requested by
the Program Administrators, must agree in writing as a condition of receiving
his or her option, to remain in the employment of, or service to, the Company or
any of its subsidiaries following the date of the granting of that option for a
period specified by the Program Administrators. Nothing in this Nonqualified
Plan or in any option granted hereunder shall confer upon any Optionee any right
to continued employment by, or service to, the Company or any of its
subsidiaries, or limit in any way the right of the Company or any subsidiary at
any time to terminate or alter the terms of that employment or service
arrangement.
Section 10. Option Rights Upon Termination of Employment or Service. If an
Optionee ceases to be employed by, or ceases to serve, the Company or any
subsidiary corporation for any reason other than death or disability, his or her
option shall terminate thirty (30) days after the date of termination of
employment or service (unless sooner terminated in accordance with its terms);
provided, however, that in the event employment or service is terminated for
cause as defined by applicable law, his or her option shall terminate
immediately, provided, further, however, that the Program Administrators may, in
their sole and absolute discretion, allow the option to be exercised (to the
extent exercisable on the date of termination of employment) at any time within
ninety (90) days after the date of termination of employment or service, unless
either the option or the Incentive Plan otherwise provides for earlier
termination.
Section 11. Option Rights Upon Disability. If an Optionee becomes disabled
within the meaning of Code Section 422(e)(3) while employed by the Company or
any subsidiary corporation, his or her option shall terminate six months after
the date of termination of employment due to disability (unless sooner
terminated in accordance with its terms); provided, however, that the Program
Administrators may, in their sole and absolute discretion, allow the option to
be exercised (to the extent exercisable on the date of termination of
employment) at any time within one year after the date of termination of
employment due to disability, unless either the option or the Incentive Plan
otherwise provides for earlier termination.
Section 12. Option Rights Upon Death of Optionee. Except as otherwise
limited by the Program Administrators at the time of the grant of an option, if
an Optionee dies while employed by, or providing services to, the Company or any
of its subsidiaries, his or her option shall expire six months after the date of
death (unless sooner terminated in accordance with its terms); provided,
however, that the Program Administrators may, in their sole and absolute
discretion, allow the option to be exercised (to the extent exercisable on the
date of death) at any time within one year after the date of death, unless
either the option or the Incentive Plan otherwise provides for earlier
termination. During this one-year or shorter period, the option may be
exercised, to the extent that it remains unexercised on the date of death, by
the person or persons to whom the Optionee's rights under the option shall pass
by will or by the laws of descent and distribution, but only to the extent that
the Optionee is entitled to exercise the option at the date of death.
Section 13. Options Not Transferable. Options granted pursuant to the terms
of this Nonqualified Plan may not be sold, pledged, assigned, or transferred in
any manner otherwise than by will or the laws of descent or distribution and may
be exercised during the lifetime of an Optionee only by that Optionee. No such
options shall be pledged or hypothecated in any way nor shall they be subject to
execution, attachment, or similar process.
Section 14. Adjustments to Number and Purchase Price of Optioned Shares.
All options granted pursuant to the terms of this Nonqualified Plan shall be
adjusted in a manner prescribed by Article 7 of the General Provisions of the
Program.
<PAGE>
HOLLYWOOD PARTNERS.COM, INC.
NON-QUALIFIED STOCK OPTION PLAN
GRANT OF OPTION
Date of Grant: __________, ____
THIS GRANT, dated as of the date of grant first stated above (the "Date of
Grant"), is delivered by Hollywood Partners.com, Inc. a Delaware corporation
(the "Company"), to __________________ (the "Optionee"), who is an employee or
non-employee of the Company or one of its subsidiaries (the Optionee's employer
is sometimes referred to herein as the ("Employer").
WHEREAS, the Board of Directors of the Company (the "Board") on September
13, 1999 adopted, with subsequent stockholder approval, the Hollywood
Partners.com, Inc. Non-Qualified Stock Option (the "Plan");
WHEREAS, the Plan provides for the granting of stock options by the Board
or the Program Administrators to employees or non-employees of the Company or
any subsidiary of the Company to purchase, or to exercise certain rights with
respect to, shares of the Common Stock of the Company, no par value (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Program Administrators consider the Optionee to be a person
who is eligible for a grant of non-qualified stock options under the Plan, and
has determined that it would be in the best interest of the Company to grant the
non-qualified stock options documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth, the Company,
with the approval and at the direction of the Program Administrators, hereby
grants to the Optionee, as of the Date of Grant, an option to purchase up to
__________ shares of Stock at a price of $__________ per share, the [Fair Market
Value/ ___% (__%) of the Fair Market Value].
Such option is hereinafter referred to as the "Option" and the shares of
stock purchasable upon exercise of the Option are hereinafter sometimes referred
to as the "Option Shares." The Option is intended by the parties hereto to be,
and shall be treated as, an option not qualified as an incentive stock option
(as such term is defined under Section 422 of the Internal Revenue Code of
1986).
2. Installment Exercise.
Subject to such further limitations as are provided herein, the Option
shall become exercisable in __________ installments, the Optionee having the
right hereunder to purchase from the Company the following number of Option
Shares upon exercise of the Option, on and after the following dates, in
cumulative fashion as determined by the Program Administrators:
Option Shares Exercisable Date
_______________________________ ______________
_______________________________ ______________
_______________________________ ______________
3. Termination of Option.
(a) Subject to the other provisions of this Grant, the Option and all
rights hereunder with respect thereto, to the extent such rights
shall not have been exercised, shall terminate and become null
and void after the expiration of __________ years from the Date
of Grant (the "Option Term").
(b) Upon the occurrence of the Optionee's ceasing for any reason to
be employed by, or to serve, the Company (such occurrence being a
"termination of the Optionee's employment"), the Option, to the
extent not previously exercised, shall terminate and become null
and void within thirty (30) days after the date of such
termination of the Optionee's employment, except (1) in the event
employment is terminated for cause as defined by applicable law,
in which case Optionee's Option shall terminate and become null
and void immediately or (2) in a case where the Program
Administrators may otherwise determine in their sole and absolute
discretion for up to ninety (90) days following the termination
of employment or service. Upon a termination of the Optionee's
employment by reason of disability or death, the Option may be
exercised, but only to the extent that the Option was outstanding
and exercisable on such date of disability or death, up to a
six-month period following the date of such termination of the
Optionee's employment, unless extended for a period of up to one
year, at the sole and absolute discretion of the Program
Administrators.
(c) In the event of the death of the Optionee, the Option may be
exercised by the Optionee's legal representative, but only to the
extent that the Option would otherwise have been exercisable by
the Optionee.
(d) A transfer of the Optionee's employment between the Company and
any subsidiary of the Company, or between any subsidiaries of the
Company, shall not be deemed to be a termination of the
Optionee's employment.
4. Exercise of Options.
(a) The Optionee may exercise the Option with respect to all or any
part of the number of Option Shares then exercisable hereunder by
giving the Secretary of the Company written notice of intent to
exercise. The notice of exercise shall specify the number of
Option Shares as to which the Option is to be exercised and the
date of exercise thereof.
(b) Full payment (in U.S. dollars) by the Optionee of the option
price for the Option Shares purchased shall be made on or before
the exercise date specified in the notice of exercise in cash,
or, with the prior written consent of the Program Administrators,
in whole or in part through the surrender of shares of Stock at
their Fair Market Value as defined under Article 6 of the General
Provisions of the Program on the exercise date. The Optionee
shall also pay any required income tax withholding taxes which
may be payable in U.S. dollars or Option Shares if acceptable to
the Company.
(c) On the exercise date specified in the Optionee's notice or as
soon thereafter as is practicable, the Company shall cause to be
delivered to the Optionee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued
stock or reacquired Stock, as the Company may elect) upon full
payment for such option Shares. However, if (i) the Optionee is
subject to Section 16 of the Securities Exchange Act of 1934 and
(ii) the Optionee exercises the Option before six months have
passed from the Date of Grant, the Company shall be permitted if
required to comply with the exemptive provisions of Section 16 of
the Securities Exchange Act of 1934 to hold in its custody any
stock certificate arising from such exercise until six months has
passed from the Date of Grant. The obligation of the Company to
deliver Stock shall, however, be subject to the condition that if
at any time the Program Administrators shall determine in their
discretion that the listing, registration or qualification of the
Option or the Option Shares upon any securities exchange or under
any state or federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the Option or the issuance
or purchase of Stock thereunder, the Option may not be exercised
in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Program
Administrators.
(d) If the Optionee fails to pay for any of the Option Shares
specified in such notice or fails to accept delivery thereof, the
Optionee's right to purchase such Option Shares may be terminated
by the Company. The date specified in the Optionee's notice as
the date of exercise shall be deemed the date of exercise of the
Option, provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such
date.
5. Adjustment of and Changes in Stock of the Company.
In the event of a reorganization, recapitalization, change of shares, stock
split, spin-off, stock dividend, reclassification, subdivision or combination of
shares, merger, consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of the Company, the Program
Administrators shall make such adjustment as may be required under the
applicable reorganization agreement in the number and kind of shares of Stock
subject to the Option or in the option price; provided, however, that no such
adjustment shall give the Optionee any additional benefits under the Option. If
there is no provision for the treatment of the Option under an applicable
reorganization agreement, the Option may terminate on a date determined by the
Program Administrators following at least 30 days written notice to the
Optionee.
6. No Rights of Stockholders.
Neither the Optionee nor any personal representative shall be, or shall
have any of the rights and privileges of, a stockholder of the Company with
respect to any shares of Stock purchasable or issuable upon the exercise of the
Option, in whole or in part, prior to the date of exercise of the Option.
7. Non-Transferability of Option.
During the Optionee's lifetime, the Option hereunder shall be exercisable
only by the Optionee or any guardian or legal representative of the Optionee,
and the Option shall not be transferable except, in case of the death of the
Optionee, by will or the laws of descent and distribution, nor shall the Option
be subject to attachment, execution or other similar process. In the event of
(a) any attempt by the Optionee to alienate, assign, pledge, hypothecate or
otherwise dispose of the Option, except as provided for herein, or (b) the levy
of any attachment, execution or similar process upon the rights or interest
hereby conferred, the Company may terminate the Option by notice to the Optionee
and it shall thereupon become null and void.
8. Restriction on Exercise.
The Option may not be exercised if the issuance of the Option Shares upon
such exercise would constitute a violation of any applicable federal or state
securities or other law or valid regulation. As a condition to the exercise of
the Option, the Company may require the Optionee exercising the Option to make
any representation or warranty to the Company as may be required by any
applicable law or regulation and, specifically, may require the Optionee to
provide evidence satisfactory to the Company that the Option Shares are being
acquired only for investment purposes and without any present intention to sell
or distribute the shares in violation of any federal or state securities or
other law or valid regulation.
9. Employment or Service Not Affected.
The granting of the Option or its exercise shall not be construed as
granting to the Optionee any right with respect to continuance of employment by
or service relationship with the Employer. Except as may otherwise be limited by
a written agreement between the Employer and the Optionee, the right of the
Employer to terminate at will the Optionee's employment or service relationship
with it at any time (whether by dismissal, discharge, retirement or otherwise)
is specifically reserved by the Company, as the Employer or on behalf of the
Employer (whichever the case may be), and acknowledged by the Optionee.
10. Amendment of Option.
The Option may be amended by the Program Administrators at any time (i) if
the Program Administrators determine, in their sole and absolute discretion,
that amendment is necessary or advisable in the light of any addition to or
change in the Internal Revenue Code of 1986 or in the regulations issued
thereunder, or any federal or state securities law or other law or regulation,
which change occurs after the Date of Grant and by its terms applies to the
Option; or (ii) other than in the circumstances described in clause (i), with
the consent of the Optionee.
11. Notice.
All notices, requests, demands, and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally
or by certified mail, return receipt requested, as follows:
To Company: Hollywood Partners.com, Inc.
1800 Avenue of the Stars, Suite 480
Los Angeles, CA 90067
Attn: Secretary
To Optionee: ____________________
____________________
____________________
12. Incorporation of Plan by Reference.
The Option is granted pursuant to the terms of the Plan, the terms of which
are incorporated herein by reference, and the Option shall in all respects be
interpreted in accordance with, and shall be subject to, the Plan. The Program
Administrators shall interpret and construe the Plan and this instrument, and
its interpretations and determinations shall be conclusive and binding on the
parties hereto and any other person claiming an interest hereunder, with respect
to any issue arising hereunder or thereunder.
13. Governing Law.
The validity, construction, interpretation and effect of this instrument
shall exclusively be governed by and determined in accordance with the law of
the State of Delaware, except to the extent preempted by federal law, which
shall to the extent govern.
IN WITNESS WHEREOF, the Company has caused its duly authorized officers to
execute this Grant of Option, and to apply the corporate seal hereto, and the
Optionee has placed his or her signature hereon, effective as of the Date of
Grant.
HOLLYWOOD PARTNERS.COM, INC.,
a Delaware corporation
By: _______________________________
Name:
Title:
ACCEPTED AND AGREED TO:
_____________________________________
[Optionee]
By: ______________________________
Name:
<PAGE>
PART III
HOLLYWOOD PARTNERS.COM, INC.
RESTRICTED SHARE PLAN
Section 1. Purpose. The purpose of this Hollywood Partners.com, Inc.
Restricted Share Plan (the "Restricted Plan") is to promote the growth and
general prosperity of the Company by permitting the Company to grant restricted
shares to help attract and retain superior personnel for positions of
substantial responsibility with the Company and its subsidiaries and to provide
individuals with an additional incentive to contribute to the success of the
Company. The Restricted Plan is Part III of the Program. Unless any provision
herein indicates to the contrary, the Restricted Plan shall be subject to the
General Provisions of the Program and terms used but not defined in this
Restricted Plan shall have the meanings, if any, ascribed thereto in the General
Provisions of the Program.
Section 2. Terms and Conditions. The terms and conditions of restricted
shares granted under the Restricted Plan may differ from one another as the
Program Administrators shall, in their discretion, determine as long as all
restricted shares granted under the Restricted Plan satisfy the requirements of
the Restricted Plan.
Each restricted share grant shall provide to the recipient (the "Holder")
the transfer of a specified number of shares of Common Stock of the Company that
shall become nonforfeitable upon the achievement of specified service or
performance conditions within a specified period or periods (the "Restriction
Period") as determined by the Program Administrators. At the time that the
restricted share is granted, the Program Administrators shall specify the
service or performance conditions and the period of duration over which the
conditions apply.
The Holder of restricted shares shall not have any rights with respect to
such award, unless and until such Holder has executed an agreement evidencing
the terms and conditions of the award (the "Restricted Share Award Agreement").
Each individual who is awarded restricted shares shall be issued a stock
certificate in respect of such shares. Such certificate shall be registered in
the name of the Holder and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such award, substantially in
the following form:
The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the Hollywood Partners.com, Inc. Restricted Share Plan
and the Restricted Share Award Agreement entered into between the
registered owner and Hollywood Partners.com, Inc. Copies of such Plan
and Agreement are on file in the offices of Hollywood Partners.com,
Inc.
The Program Administrators shall require that the stock certificates
evidencing such shares be held in the custody of the Company until the
restrictions thereon shall have lapsed, and that, as a condition of any
restricted share award, the Holder shall have delivered a stock power, endorsed
in blank, relating to the stock covered by such award. At the expiration of each
Restriction Period, the Company shall redeliver to the Holder certificates held
by the Company representing the shares with respect to which the applicable
conditions have been satisfied.
Section 3. Nontransferable. Subject to the provisions of the Restricted
Plan and the Restricted Share Award Agreements, during the Restriction Period as
may be set by the Program Administrators commencing on the grant date, the
Holder shall not be permitted to sell, transfer, pledge, or assign shares of
restricted shares awarded under the Restricted Plan.
Section 4. Restricted Share Rights Upon Employment or Service. If a Holder
terminates employment or service with the company prior to the expiration of the
Restriction Period, any restricted shares granted to him subject to such
Restriction Period shall be forfeited by the Holder and shall be transferred to
the Company. The Program Administrators may, in their sole and absolute
discretion, accelerate the lapsing of or waive such restrictions in whole or in
part based upon such factors and such circumstances as the Program
Administrators may determine, in their sole and absolute discretion, including,
but not limited to, the Plan Participant's retirement, death, or disability.
Section 5. Stockholder Rights. The Holder shall have, with respect to the
restricted shares granted, all of the rights of a stockholder of the Company,
including the right to vote the shares, and the right to receive any dividends
thereon. Certificates for shares of unrestricted stock shall be delivered to the
Optionee promptly after, and only after, the Restriction Period shall expire
without forfeiture in respect of such restricted shares.
Section 6. Compliance with Securities Laws. Shares shall not be issued
under the Restricted Plan unless the issuance and delivery of the shares
pursuant thereto shall comply with all relevant provisions of foreign, state and
federal law, including, without limitation, the Securities Act of 1933, as
amended, and the Exchange Act, and the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance. The Program Administrators may also
require a Holder to furnish evidence satisfactory to the Company, including a
written and signed representation letter and consent to be bound by any transfer
restrictions imposed by law, legend, condition, or otherwise, that the shares
are being purchased only for investment purposes and without any present
intention to sell or distribute the shares in violation of any state or federal
law, rule, or regulation. Further, each Holder shall consent to the imposition
of a legend on the shares of Common Stock issued pursuant to the Restricted
Share Plan and the imposition of stop-transfer instructions restricting their
transferability as required by law or by this Section 6.
Section 7. Continued Employment or Service. Each Holder, if requested by
the Program Administrators, must agree in writing as a condition of the granting
of his or her restricted shares, to remain in the employment of, or service to,
the Company or any of its subsidiaries following the date of the granting of
that restricted share for a period specified by the Program Administrators.
Nothing in the Restricted Plan or in any restricted share granted hereunder
shall confer upon any Holder any right to continued employment by, or service
to, the Company or any of its subsidiaries, or limit in any way the right of the
Company or any subsidiary at any time to terminate or alter the terms of that
employment or service arrangement.
<PAGE>
HOLLYWOOD PARTNERS.COM, INC.
RESTRICTED SHARES PLAN
RESTRICTED SHARE AWARD AGREEMENT
THIS AGREEMENT is made as of __________, _____, by and between Hollywood
Partners.com, Inc. a Delaware corporation (the "Company"), and
______________________ ("Holder"):
WHEREAS, the Company maintains the Hollywood Partners.com, Inc. Restricted
Shares Plan ("Restricted Shares Plan") under which the Program Administrators
may award shares of the Company's common stock, no par value ("Common Stock") to
employees and non-employees as the Program Administrators may determine, subject
to terms, conditions, or restrictions as they may deem appropriate; and
WHEREAS, pursuant to the Restricted Shares Plan, the Program Administrators
have awarded to Holder a restricted stock award conditioned upon the execution
by the Company and Holder of a Restricted Share Award Agreement setting forth
all the terms and conditions applicable to such award.
NOW, THEREFORE, in consideration of the mutual promise and covenant
contained herein, it is hereby agreed as follows:
1. Award of Shares.
Under the terms of the Restricted Shares Plan, the Program Administrators
hereby award and transfer to Holder a restricted stock award on
__________________ ("Grant Date"), covering shares of Common Stock ("Shares")
subject to the terms, conditions, and restrictions set forth in this Agreement.
This transfer of Shares shall constitute a transfer of such property in
connection with Holder's performance of service to the Company (which transfer
is intended to constitute a "transfer" for purposes of Section 83 of the
Internal Revenue Code).
2. Share Restrictions.
During the period beginning on the Grant Date and ending on the date(s)
specified by the Program Administrators (the "Restriction Period"), Holder's
ownership of the Shares shall be subject to a risk of forfeiture (which risk is
intended to constitute a "substantial risk of forfeiture" for purposes of
Section 83 of the Internal Revenue Code). Specifically, if Holder's employment
or service with the Company is terminated for any reason, including Holder's
death, disability, or retirement at any time before the Restriction Period ends,
Holder shall forfeit his or her ownership in the Shares. However, in the event
of Holder's termination of employment or service, the Program Administrators
may, in their sole and absolute discretion, based upon relevant circumstances
such as the Holder's death, disability, or retirement, waive the minimum
employment or service requirement and provide Holder with a nonforfeitable right
to the Shares as of the date of such termination of employment or service.
3. Stock Certificates.
A stock certificate evidencing the Shares shall be issued in the name of
Holder as of the Grant Date. Holder shall thereupon be the shareholder of all
the Shares represented by the stock certificate. As such, Holder shall be
entitled to all rights of a stockholder of the Company, including the right to
vote the Shares and receive dividends and/or other distributions declared on
such Shares.
Physical possession or custody of the stock certificate shall be retained
by the Company until such time as the Restriction Period lapses without the
occurrence of any forfeiture of the Shares in a manner described in the above
Paragraph 2. Upon the expiration of the Restriction Period without the
occurrence of such a forfeiture, the Company shall cause the stock certificate
covering the Shares to be delivered to Holder. In the event that Holder's
employment or service with the Company is terminated prior to the lapse of the
Restriction Period and there occurs a forfeiture of the Shares, the stock
certificate representing such Shares shall be then canceled and revert to the
Company.
4. Nontransferable.
During the Restriction Period, the Shares covered by the restricted stock
award shall not be transferable by Holder by means of sale, assignment, sale,
pledge, encumbrance, or otherwise. During the Restriction Period, the Company
shall place a legend on the stock certificate restricting the transferability of
such certificate and referring to the terms and conditions applicable to the
Shares pursuant to the Restricted Share Plan and this Agreement.
Upon the lapse of the Restriction Period, the Shares shall not be delivered
to Holder if such delivery would constitute a violation of any applicable
federal or state securities or other law or valid regulation. As a condition to
the delivery of the Shares to Holder, the Company may require Holder to make any
representation or warranty as may be required by any applicable law or
regulation and, specifically, may require Holder to provide evidence
satisfactory to the Company that the Shares are being acquired only for
investment purposes and without any present intention to sell or distribute the
shares in violation of any federal or state securities or other law or valid
regulation.
5. Administration.
The Program Administrators shall have full authority and discretion
(subject only to the express provisions of the Restricted Share Plan) to decide
all matters relating to the administration and interpretation of the Restricted
Share Plan and this Agreement. All such Program Administrators determinations
shall be final, conclusive, and binding upon the Company, Holder, and any and
all interested parties.
6. Right to Continued Employment or Service.
Nothing in the Restricted Share Plan or this Agreement shall confer on
Holder any right to continue in the employ of or service to the Company or,
except as may otherwise be limited by a written agreement between the Company
and Holder, in any way affect the Company's right to terminate Holder's
employment or service, at will, at any time without prior notice at any time for
any or no reason (whether by dismissal, discharge, retirement or otherwise).
7. Amendment.
This Agreement shall be subject to the terms of the Restricted Share Plan
as amended, the terms of which are incorporated herein by reference. However,
the restricted stock award that is the subject of this Agreement may not in any
way be restricted or limited by any Restricted Share Plan amendment or
termination approved after the date of the award without Holder's written
consent.
8. Force and Effect.
The various provisions of this Agreement are severable in their entirety.
Any determination of invalidity or unenforceability of any one provision shall
have no effect on the continuing force and effect of the remaining provisions.
9. Governing Law.
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware.
10. Successors.
This Agreement shall be binding upon and inure to the benefit of the
successors, assigns, and heirs of the respective parties.
11. Notice.
All notices, requests, demands, and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally
or by certified mail, return receipt requested, as follows:
To Company: Hollywood Partners.com, Inc.
1800 Avenue of the Stars, Suite 480
Los Angeles, CA 90067
Attn: Secretary
To Holder: ______________________________
______________________________
______________________________
______________________________
12. Incorporation of Plan by Reference.
The Shares are awarded pursuant to the terms of the Plan, the terms of
which are incorporated herein by reference, and the Share award shall in all
respects be interpreted in accordance with the Plan. The Program Administrators
shall interpret and construe the Plan and this instrument, and its
interpretations and determinations shall be conclusive and binding on the
parties hereto and any other person claiming an interest hereunder, with respect
to any issue arising hereunder or thereunder.
In Witness Whereof, the parties hereto have signed this Agreement as of the
date hereof.
HOLLYWOOD PARTNERS.COM, INC.,
a Delaware corporation ________________________________
[Optionee]
By: ____________________________ ________________________________
Name: Name:
Title:
<PAGE>
PART IV
HOLLYWOOD PARTNERS.COM, INC.
EMPLOYEE STOCK PURCHASE PLAN
Section 1. Purpose. The purpose of the Hollywood Partners.com, Inc.
Employee Stock Purchase Plan (the "Stock Purchase Plan") is to promote the
growth and general prosperity of the Company by permitting the Company to sell
to employees of the Company and its subsidiaries shares of the Company's stock
in accordance with Section 423 of the Code ("Section 423"), and it is the
intention of the Company to have the Stock Purchase Plan qualify as an Employee
Stock Purchase Plan in accordance with Section 423, and the Stock Purchase Plan
shall be construed to administer stock purchases and to extend and limit
participation consistent with the requirements of Section 423. The Stock
Purchase Plan will be administered by the Program Administrators, and terms used
but not defined in this Stock Purchase Plan shall have the meanings, if any,
ascribed thereto in the General Provisions of the Program.
Section 2. Maximum Number of Shares; Terms and Conditions. The maximum
aggregate number of shares of Common Stock subject to the Stock Purchase Plan
shall be 1,000,000. The terms and conditions of shares to be offered to be sold
to employees of the Company and its subsidiaries under the Stock Purchase Plan
shall comply with Section 423.
Section 3. Offering Periods and Participation. The Stock Purchase Plan
shall be implemented through a series of consecutive six (6) month periods
commencing on the first trading day on or after January 1 or July 1 of each year
and terminating on the last trading day ending approximately six (6) months
later(the "Offering Periods"). Any employee who shall be employed by the Company
or one of its subsidiaries on a given Enrollment Date (defined below) whose
customary employment for tax purposes is at least twenty (20) hours per week and
more than five (5) consecutive months in any calendar year, and who own less
than 5% of the Common Stock, is eligible to participate in the Stock Purchase
Plan (an "Eligible Employee") An Eligible Employees may become a participant in
the Stock Purchase Plan by completing and delivering to the Company's payroll
office an agreement authorizing payroll deductions and evidencing the terms and
conditions of the stock subscription in a form prescribed by the Program
Administrators (the "Subscription Agreement") prior to the first day of each
Offering Period. The first day of each Offering Period will be the "Enrollment
Date" and the last day of each period will be the "Exercise Date." The Program
Administrators shall have the power to change the duration of Offering Periods
(including the commencement date thereof) with respect to future offerings
without stockholder approval if such change is announced at least five (5) days
prior to the scheduled beginning of the first Offering Period to be affected
thereafter. Under this Stock Purchase Plan, "Purchase Period" shall mean an
approximately six (6) month period commencing after one Exercise Date and ending
with the next Exercise Date.
Section 4. Purchase Price. The "Purchase Price" means an amount as
determined by the Program Administrators that is the lesser of: (a) the Purchase
Price Discount (as defined below) from the Fair Market Value of a share of
Common Stock on the Enrollment Date, or (b) the Purchase Price Discount from the
Fair Market Value of a share of Common Stock on the Exercise Date. The "Purchase
Price Discount" shall mean the amount of the discount from the Fair Market Value
granted to Plan Participants not to exceed fifteen percent (15%) of the Fair
Market Value.
Section 5. Grants.
(a) Grants. On the Enrollment Date of each Offering Period, each
Eligible Employee participating in such Offering Period shall be
granted an option to purchase on each Exercise Date during such
Offering Period (at the applicable Purchase Price) shares of
Common Stock in an amount from time to time specified by the
Program Administrators as set forth in Section 5(b) below. The
Program Administrators will also establish the Purchase Price
Discount and the maximum number or value of shares that may be
purchased by any Plan Participant (the "Periodic Exercise
Limit"), which in no event shall exceed the lowest amount
provided under Section 5(b)(i) through (iii) below (the
"Statutory Maximum"), and if no Periodic Exercise Limit is
specified by the Program Administrators, shall equal the
Statutory Maximum. The right to purchase shall expire immediately
after the last Exercise Date of the Offering Period.
(b) Grant Limitations. Any provisions of the Stock Purchase Plan to
the contrary notwithstanding, no Plan Participant shall be
granted a right to purchase under the Stock Purchase Plan:
(i) if, immediately after the grant, such Plan Participant would
own stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of
the Company or of any subsidiary (applying the constructive
ownership rules of Section 424(d) of the Code and treating
stock that a Plan Participant may acquire under outstanding
options as stock owned by the Plan Participant);
(ii) that permits such Plan Participant's rights to purchase
stock under all employee stock purchase plans of the Company
and its subsidiaries to accrue at a rate that exceeds
Twenty-Five Thousand Dollars ($25,000) worth of stock
(determined at the Fair Market Value of the shares at the
time such option is granted) for each calendar year in which
such option is outstanding at any time (computed utilizing
the rules of Section 423(b)(8) of the Code);
(iii)that permits a Plan Participant to purchase Stock in excess
of twenty percent (20%) of his or her compensation, which
shall include the gross base salary or hourly compensation
paid to a Plan Participant and the gross amount of any
targeted bonus, without reduction for contributions to any
401(k) plan sponsored by the Company; or
(iv) that exceeds the Periodic Exercise Limit.
(c) No Rights in Respect of Underlying Stock. The Plan Participant
will have no interest or voting right in shares covered by a
right to purchase until such purchase has been completed.
(d) Plan Account. The Company shall maintain a plan account (a "Plan
Account") for the Plan Participants in the Stock Purchase Plan,
to which are credited the payroll deductions made for such Plan
Participant pursuant to Section 6 and from which are debited
amounts paid for the purchase of shares.
Section 6. Payroll Deductions/Direct Purchases.
(a) Plan Participant Designations. The Subscription Agreement
applicable to an Offering Period shall designate payroll
deductions to be made on each payday during the Offering Period
as a whole number percentage specified by the Program
Administrators of such Eligible Employee's compensation for the
pay period preceding such payday. Direct purchases may be
permitted on such terms specified by the Program Administrators.
(b) Plan Account Balances. The Company shall make payroll deductions
as specified in each Plan Participant's Subscription Agreement on
each payday during the Offering Period and credit such payroll
deductions to such Plan Participant's Plan Account. A Plan
Participant may not make any additional payments into such Plan
Account. No interest will accrue on any payroll deductions. All
payroll deductions received or held by the Company under the
Stock Purchase Plan may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate such
payroll deductions.
(c) Plan Participant Changes. A Plan Participant may discontinue his
or her participation in the Stock Purchase Plan as provided in
Section 9, or may increase or decrease (subject to such limits as
the Program Administrators may impose) the rate of his or her
payroll deductions during any Offering Period by filing with the
Company a new Subscription Agreement authorizing such a change in
the payroll deduction rate. The change in rate shall be effective
with the first full payroll period following five (5) business
days after the Company's receipt of the new Subscription
Agreement, unless the Company elects to process a given change in
participation more quickly. A Plan Participant's Subscription
Agreement shall remain in effect for successive Offering Periods
unless terminated sooner as provided by Section 9 hereof.
(d) Decreases. Notwithstanding the foregoing, to the extent necessary
to comply with Section 423(b)(8) of the Code and Section 5(b)
herein, a Plan Participant's payroll deductions shall be
decreased to zero percent at such time during any Purchase Period
that is scheduled to end during the current calendar year (the
"Current Purchase Period") when the aggregate of all payroll
deductions previously used to purchase stock under the Stock
Purchase Plan in a prior Purchase Period which ended during that
calendar year plus all payroll deductions accumulated with
respect to the Current Purchase Period equal to the maximum
permitted by Section 423(b)(8) of the Code. Payroll deductions
shall recommence at the rate provided in such Plan Participant's
Subscription Agreement at the beginning of the first Purchase
Period that is scheduled to end in the following calendar year,
unless terminated by the Plan Participant as provided in Section
9.
(e) Tax Obligations. At the time of the option is exercised, and at
the time any Common Stock issued under the Stock Purchase Plan to
a Plan Participant is disposed of, the Plan Participant must
adequately provide for the Company's federal, state or other tax
withholding obligations, if any, that arise upon the purchase of
shares or the disposition of the Common Stock. At any time, the
Company may, but will not be obligated to, withhold from the Plan
Participant's compensation the amount necessary for the Company
to meet applicable withholding obligations, including, but not
limited to, any withholding required to make available to the
Company any tax deductions or benefit attributable to sale or
early disposition of Common Stock by the Eligible Employee.
(f) Statements of Account. The Company shall maintain each Plan
Participant's Plan Account and shall give each Plan Participant a
statement of account at least annually. Such statements will set
forth the amounts of payroll deductions, the Purchase Price
applicable to the Common Stock purchased, the number of shares
purchased, the remaining cash balance and the dividends received,
if any, for the period covered.
Section 7. Exercise of Option.
(a) Automatic Exercise on Exercise Dates. Unless a Plan Participant
withdraws as provided in Section 9 below, his or her option for
the purchase of shares will be exercised automatically on the
Exercise Date and the maximum whole number of shares of Common
Stock as can then be purchased at the applicable Purchase Price
with the payroll deductions accumulated in such Plan
Participant's Plan Account and not yet applied to the purchase of
shares under the Stock Purchase Plan, subject to the Periodic
Exercise Limit. Any payroll deductions accumulated in a Plan
Participant's Plan Account which are not sufficient to purchase a
full share shall be retained in the Plan Participant's Plan
Account for the subsequent Purchase Period, subject to earlier
withdrawal by the Plan Participant as provided in Section 9
hereof. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange
delivery to each participant, as appropriate, of a certificate
representing the shares purchased upon exercise of his or her
option. During a Plan Participant's lifetime, a Plan
Participant's options to purchase shares under the Stock Purchase
Plan shall be exercisable only by the Plan Participant.
(b) Compliance With Securities Law. Shares of Common Stock shall not
be issued with respect to any purchase of shares granted under
the Stock Purchase Plan, unless the purchase of shares and the
issuance and delivery of those shares pursuant to that exercise
comply with all applicable provisions of foreign, state and
federal law including, without limitation, the Securities Act of
1933, as amended and the Exchange Act, and the rules and
regulations promulgated thereunder, and the requirements of any
stock exchange upon which the shares may then be listed, and
shall be further subject to the approval of counsel for the
Company with respect to such compliance. The Program
Administrators may also require a Plan Participant to furnish
evidence satisfactory to the Company, including a written and
signed representation letter and consent to be bound by any
transfer restrictions imposed by law, legend, condition, or
otherwise, that the shares are being purchased only for
investment purposes and without any present intention to sell or
distribute the shares in violation of any state or federal law,
rule, or regulation. Further, each Plan Participant shall consent
to the imposition of a legend on the shares of Common Stock
purchased and the imposition of stop-transfer instructions
restricting their transferability as required by law or by this
Section 7.
(c) Excess Plan Account Balances. If, due to application of the
Periodic Exercise Limit or otherwise, there remains in a Plan
Participant's Plan Account immediately following exercise of such
Plan Participant's option to purchase shares on an Exercise Date
any cash accumulated immediately preceding such Exercise Date and
not applied to the purchase of shares under the Stock Purchase
Plan, such cash shall be retained in the Plan Participant's Plan
Account for the subsequent Purchase Period, subject to earlier
withdrawal by the Plan Participant as provided in Section 9
hereof.
Section 8. Holding Period. The Program Administrators may establish, as a
condition to participation, a holding period of up to one (1) year.
Section 9. Withdrawal; Termination of Employment.
(a) Voluntary Withdrawal. A Plan Participant may withdraw from an
Offering Period by giving written notice to the Company's payroll
office at least ten (10) business days prior to the next Exercise
Date. Such withdrawal shall be effective ten (10) business days
after receipt by the Company's payroll office of notice thereof.
On or promptly following the effective date of any withdrawal,
all (but not less than all) of the withdrawing Plan Participant's
payroll deductions credited to his or her Plan Account and not
yet applied to the purchase of shares under the Stock Purchase
Plan will be paid to such Plan Participant, and on the effective
date of such withdrawal such Plan Participant's option to
purchase shares for the Offering Period will be automatically
terminated and no further payroll deductions for the purchase of
shares will be made during the Offering Period. If a Plan
Participant withdraws from an Offering Period, payroll deductions
will not resume at the beginning of any succeeding Offering
Period, unless the Plan Participant delivers to the Company a new
Subscription Agreement with respect thereto.
(b) Termination of Employment. Promptly after a Plan Participant's
ceasing to be an employee for any reason the payroll deductions
credited to such Plan Participant's Plan Account and not yet
applied to the purchase of shares under the Stock Purchase Plan
will be returned to such Plan Participant or, in the case of his
or her death, to the person or persons entitled thereto, and such
Plan Participant's option to purchase shares will be
automatically terminated, provided that, if the Company does not
learn of such death more than ten (10) business days prior to an
Exercise Date, payroll deductions credited to such Plan
Participant's Plan Account may be applied to the purchase of
shares under the Stock Purchase Plan on such Exercise Date.
Section 10. Non-transferability. Neither payroll deductions credited to a
Plan Participant's Plan Account nor any rights with regard to the exercise of a
purchase of shares or to receive shares under the Stock Purchase Plan may be
assigned, transferred, pledged or otherwise disposed of by the Plan Participant
in any way other than by will or the laws of descent and distribution, and any
purchase of shares by a Plan Participant shall, during such Plan Participant's
lifetime, be exercisable only by such Plan Participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Program Administrator may treat such act as an election to
withdraw from an Offering Period in accordance with Section 9.
Section 11. Compliance with Securities Laws. Shares shall not be issued
with respect to the Stock Purchase Plan, unless the issuance and delivery of the
shares pursuant thereto shall comply with all applicable provisions of foreign,
state and federal law, including, without limitation, the Securities Act of
1933, as amended, and the Exchange Act, and the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance. The Program
Administrators may also require a Plan Participant to furnish evidence
satisfactory to the Company, including a written and signed representation
letter and consent to be bound by any transfer restrictions imposed by law,
legend, condition, or otherwise, that the shares are being purchased only for
investment purposes and without any present intention to sell or distribute the
shares in violation of any state or federal law, rule, or regulation. Further,
each Plan Participant shall consent to the imposition of a legend on the shares
of Common Stock subject to his or her option and the imposition of stop-transfer
instructions restricting their transferability as required by law or by this
Section 11.
Section 12. Continued Employment or Service. Each Plan Participant, if
requested by the Program Administrators, must agree in writing, to remain in the
employment of, or service to, the Company or any of its subsidiaries following
the date of the granting of the option to purchase shares for a period specified
by the Program Administrators. Nothing in this Stock Purchase Plan shall confer
upon any Plan Participant any right to continued employment by, or service to,
the Company or any of its subsidiaries, or limit in any way the right of the
Company or any subsidiary at any time to terminate or alter the terms of that
employment or service arrangement.
<PAGE>
PART V
HOLLYWOOD PARTNERS.COM, INC.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
Section 1. Purpose; Plan. The purpose of this Hollywood Partners.com, Inc.
Non-Employee Director Stock Option Plan (the "Directors Plan") is to permit the
Company to grant options to purchase shares of its Common Stock to non-employee
directors of the Company. Any option granted pursuant to the Directors Plan
shall be clearly and specifically designated as not being an incentive stock
option, as defined in Section 422 of the Code. This Directors Plan is Part V of
the Program. Unless any provision herein indicates to the contrary, the
Directors Plan shall be subject to the General Provisions of the Program, and
terms used but not defined in this Directors Plan shall have the meanings, if
any, ascribed thereto in the General Provisions of the Program.
Section 2. Option Terms and Conditions. On the next to last business day of
each fiscal year of the Company, the Company shall grant to each non-employee
director of the Company options to purchase that number of shares of Common
Stock as determined annually by the Program Administrators. The terms and
conditions of options granted under the Directors Plan shall be in duration,
form and substance as the Program Administrators shall in their discretion
determine, but in no event shall any option granted under the Directors Plan
expire later than ten (10) years from the date on which the option is granted.
Section 3. Compliance with Securities Laws. Shares of Common Stock shall
not be issued with respect to any option granted under the Directors Plan,
unless the exercise of that option and the issuance and delivery of the shares
pursuant thereto shall comply with all applicable provisions of foreign, state
and federal law, including, without limitation, the Securities Act of 1933, as
amended, and the Exchange Act, and the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance. The Program Administrators may also
require an Optionee to furnish evidence satisfactory to the Company, including a
written and signed representation letter and consent to be bound by any transfer
restrictions imposed by law, legend, condition, or otherwise, that the shares
are being purchased only for investment purposes and without any present
intention to sell or distribute the shares in violation of any state or federal
law, rule, or regulation. Further, each Optionee shall consent to the imposition
of a legend on the shares of Common Stock subject to his or her option and the
imposition of stop-transfer instructions restricting their transferability as
required by law or by this Section 2.
Section 4. Adjustments to Number and Purchase Price of Optioned Shares. All
options granted pursuant to the terms of this Directors Plan shall be adjusted
in a manner prescribed by Article 7 of the General Provisions of the Program.
Section 5. Purchase Price. The purchase price for shares acquired pursuant
to the exercise, in whole or in part, of any option shall not be less than the
Fair Market Value of the shares at the time of the grant of the option.
Section 6. Exercise of Options. . Each option shall be exercisable in one
or more installments during its term and the right to exercise may be cumulative
as determined by the Program Administrators. No option may be exercised for a
fraction of a share of Common Stock. The purchase price of any shares purchased
shall be paid in full in cash or by certified or cashier's check payable to the
order of the Company or, if permitted by the Program Administrators, by shares
of Common Stock or by a combination of cash, check, or, if permitted by the
Program Administrators, shares of Common Stock, at the time of exercise of the
option. If any portion of the purchase price is paid in shares of Common Stock,
those shares shall be tendered at their then Fair Market Value as determined by
Article 6 under General Provisions of the Program. Payment in shares of Common
Stock includes the automatic application of shares of Common Stock received upon
exercise of an option to satisfy the exercise price for additional options.
Section 7. Reorganization. In the event of the dissolution or liquidation
of the Company, any option granted under the Directors Plan shall terminate as
of a date to be fixed by the Program Administrators; provided that not less than
30 days' written notice of the date so fixed shall be given to each Optionee and
each such Optionee shall have the right during such period (unless such option
shall have previously expired) to exercise any option, including any option that
would not otherwise be exercisable by reason of an insufficient lapse of time.
In the event of a Reorganization (as defined below) in which the Company is
not the surviving or acquiring company, or in which the Company is or becomes a
subsidiary of another company after the effective date of the Reorganization,
then:
(a) if there is no plan or agreement respecting the Reorganization
(the "Reorganization Agreement") or if the Reorganization
Agreement does not specifically provide for the change,
conversion or exchange of the outstanding options for options of
another corporation, then exercise and termination provisions
equivalent to those described in the first paragraph of this
Section 7 shall apply (which shall include the right to receive
upon exercise the consideration that would be received by a
holder of a number of shares of Common Stock issuable upon
exercise of the option immediately prior to the consummation of
the Reorganization); or
(b) if there is a Reorganization Agreement and if the Reorganization
Agreement specifically provides for the change, conversion, or
exchange of the outstanding options for options of another
corporation, then the Program Administrators shall adjust the
outstanding unexercised options (and shall adjust the options
remaining under the Directors Plan which have not yet been
granted if the Reorganization Agreement makes specific provision
for such an adjustment) in a manner consistent with the
applicable provisions of the Reorganization Agreement.
The term "Reorganization" as used in this Section 7 shall mean any
statutory merger, statutory consolidation, sale of all or substantially all of
the assets of the Company or a sale of the Common Stock pursuant to which the
Company is or becomes a subsidiary of another company after the effective date
of the Reorganization.
Adjustments and determinations under this Section 7 shall be made by the
Program Administrators, whose decisions as to such adjustments or determinations
shall be final, binding, and conclusive.
Section 8. Written Notice Required. Any option granted pursuant to the
terms of this Directors Plan shall be exercised when written notice of that
exercise has been given to the Company at its principal office by the person
entitled to exercise the option and full payment for the shares with respect to
which the option is exercised has been received by the Company.
Section 9. Option Rights Upon Termination of Director Status. To the extent
not exercised, any option granted to a non-employee director under this
Directors Plan will terminate ninety (90) days from the date on which the
non-employee directors is no longer a member of the Board of Directors for any
reason other than death or disability.
Section 10. Option Rights Upon Disability. If an non-employee director
becomes disabled within the meaning of Code Section 422(e)(3) while serving as a
Board member to the Company or any subsidiary corporation, the Program
Administrators, in their discretion, may allow the option to be exercised, to
the extent exercisable on the date of termination of employment, at any time
within one year after the date of termination of non-employee director status
due to disability, unless either the option or the Directors Plan otherwise
provides for earlier termination.
Section 11. Option Rights Upon Death.. Except as otherwise limited by the
Program Administrators at the time of the grant of an option, if a non-employee
director dies while serving as a Board member to the Company or any of its
subsidiaries, his or her option shall expire six months after the date of death
unless by its terms it expires sooner. During this six-month or shorter period,
the option may be exercised, to the extent that it remains unexercised on the
date of death, by the person or persons to whom the non-employee director's
rights under the option shall pass by will or by the laws of descent and
distribution, but only to the extent that the non-employee director is entitled
to exercise the option at the date of death.
Section 12. Options Not Transferable. Options granted pursuant to the terms
of this Directors Plan may not be sold, pledged, assigned, or transferred in any
manner otherwise than by will or the laws of descent or distribution and may be
exercised during the lifetime of a non-employee director only by that director.
No such options shall be pledged or hypothecated in any way nor shall they be
subject to execution, attachment, or similar process.
<PAGE>
PART VI
HOLLYWOOD PARTNERS.COM, INC.
STOCK APPRECIATION RIGHTS PLAN
Section 1. SAR Terms and Conditions. The purpose of this Hollywood
Partners.com, Inc. Stock Appreciation Rights Plan (the "SAR Plan") is to promote
the growth and general prosperity of the Company by permitting the Company to
grant stock appreciation rights ("SARs") to help attract and retain superior
personnel for positions of substantial responsibility with the Company and its
subsidiaries and to provide individuals with an additional incentive to
contribute to the success of the Company. The terms and conditions of SARs
granted under the SAR Plan may differ from one another as the Program
Administrators shall, in their discretion, determine in each SAR agreement (the
"SAR Agreement"). Unless any provision herein indicates to the contrary, this
SAR Plan shall be subject to the General Provisions of the Program, and terms
used but not defined in this SAR Plan shall have the meanings, if any, ascribed
thereto in the General Provisions of the Program.
Section 2. Duration of SARs. Each SAR and all rights thereunder granted
pursuant to the terms of the SAR Plan shall expire on the date determined by the
Program Administrators as evidenced by the SAR Agreement, but in no event shall
any SAR expire later than ten (10) years from the date on which the SAR is
granted. In addition, each SAR shall be subject to early termination as provided
in the SAR Plan.
Section 3. Grant. Subject to the terms and conditions of the SAR Agreement,
the Program Administrators may grant the right to receive a payment upon the
exercise of a SAR which reflects the appreciation in the Fair Market Value of
the number of shares of Common Stock for which such SAR was granted to any
person who is eligible to receive awards either: (i) in tandem with the grant of
an Incentive Option; (ii) in tandem with the grant of a Nonqualified Option; or
(iii) independent of the grant of an Incentive Option or Nonqualified Option.
Each grant of a SAR which is in tandem with the grant of an Incentive Option or
Nonqualified Option shall be evidenced by the same agreement as the Incentive
Option or Nonqualified Option which is granted in tandem with such SAR and such
SAR shall relate to the same number of shares of Common Stock to which such
Option shall relate and such other terms and conditions as the Program
Administrators, in their sole and absolute discretion, deem are not inconsistent
with the terms of the SAR Plan, including conditions on the exercise of such SAR
which relate to the employment of the Plan Participant or any requirement that
the Plan Participant exchange a prior outstanding option and/or SAR.
Section 4. Payment at Exercise. Upon the settlement of a SAR in accordance
with the terms of the SAR Agreement, the Plan Participant shall (subject to the
terms and conditions of the SAR Plan and SAR Agreement) receive a payment equal
to the excess, if any, of the SAR Exercise Price (as defined below) for the
number of shares of the SAR being exercised at that time over the SAR Grant
Price (as defined below) for such shares. Such payment may be paid in cash or in
shares of the Company's Common Stock or by a combination of the foregoing, at
the time of exercise of the SAR, specified by the Program Administrators in the
SAR Agreement. If any portion of the payment is paid in shares of the Company's
Common Stock, such shares shall be valued for this purpose at the SAR Exercise
Price on the date the SAR is exercised and any payment in shares which calls for
a payment in a fractional share shall automatically be paid in cash based on
such valuation. As used herein, "SAR Exercise Date" shall mean the date on which
the exercise of a SAR occurs under the SAR Agreement, "SAR Exercise Price" shall
mean the Fair Market Value of a share of Common Stock on a SAR Exercise Date and
"SAR Grant Price" shall mean the price which would have been the option exercise
price for one share of Common Stock if the SAR had been granted as an option, or
if the SAR was granted in tandem with an option, the option exercise price per
share for the related option.
Section 5. Special Terms and Conditions. Each SAR Agreement which evidences
the grant of a SAR shall incorporate such terms and conditions as the Program
Administrators in their sole and absolute discretion deem are not inconsistent
with the terms of the SAR Plan and the agreement for Incentive Option or
Nonqualified Option, if any, granted in tandem with such SAR except that: (i) if
a SAR is granted in tandem with an Incentive Option or Nonqualified Option, the
SAR shall be exercisable only when the related Incentive Option or Nonqualified
Option is exercisable; and (ii) the Plan Participant's right to exercise a SAR
granted in tandem with an Incentive Option or Nonqualified Option shall be
forfeited to the extent that the Plan Participant exercises the related
Incentive Option or Nonqualified Option and the Plan Participant's right to
exercise the Incentive Option or Nonqualified Option shall be forfeited to the
extent the Plan Participant exercises the related SAR, but any such forfeiture
shall not count as a forfeiture for purposes of making the shares subject to
such option or SAR again available for use under the General Provisions of the
Plan.
Section 6. Compliance with Securities Laws. SARs shall not be granted and
shares shall not be issued with respect to any SAR granted under the SAR Plan
unless the grant of that SAR or the exercise of that SAR and the issuance and
delivery of the shares pursuant thereto shall comply with all applicable
provisions of foreign, state and federal law, including, without limitation, the
Securities Act of 1933, as amended, and the Exchange Act, and the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance. The Program
Administrators may also require a Plan Participant to furnish evidence
satisfactory to the Company, including a written and signed representation
letter and consent to be bound by any transfer restrictions imposed by law,
legend, condition, or otherwise, that any securities are being acquired only for
investment purposes and without any present intention to sell or distribute the
securities in violation of any state or federal law, rule, or regulation.
Further, each Plan Participant shall consent to the imposition of a legend on
securities and the imposition of stop-transfer instructions restricting their
transferability as required by law or by this Section 6.
Section 7. Continued Employment or Service. Each Plan Participant, if
requested by the Program Administrators, must agree in writing as a condition of
receiving his or her SAR or any shares as a result thereof, to remain in the
employment of, or service to, the Company or any of its subsidiaries following
the date of the granting of that SAR or the issuance of such shares for a period
specified by the Program Administrators. Nothing in this SAR Plan or in any SAR
Agreement shall confer upon any Plan Participant any right to continued
employment by, or service to, the Company or any of its subsidiaries, or limit
in any way the right of the Company or any subsidiary at any time to terminate
or alter the terms of that employment or service arrangement.
Section 8. SAR Rights Upon Termination of Employment or Service. If a Plan
Participant under this SAR Plan ceases to be employed by, or provide services
to, the Company or any of its subsidiaries for any reason other than death or
disability, his or her SAR shall terminate thirty (30) days after the date of
termination of employment (unless sooner terminated in accordance with its
terms); provided, however, that in the event employment is terminated for cause
as defined by applicable law, his or her option shall terminate immediately,
provided, further, however, that the Program Administrators may, in their sole
and absolute discretion, allow the SAR to be exercised, to the extent
exercisable on the date of termination of employment or service, at any time
within ninety (90) days after the date of termination of employment or service,
unless either the SAR Agreement or this SAR Plan otherwise provides for earlier
termination.
Section 9. Rights Upon Disability. If a Plan Participant becomes disabled
within the meaning of Code Section 422(e)(3) while employed by or providing
service to the Company or any subsidiary corporation, his or her SAR shall
terminate six months after the date of termination of employment or service due
to disability (unless sooner terminated in accordance with its terms); provided,
however, that the Program Administrators may, in their sole and absolute
discretion, allow the SAR to be exercised (to the extent exercisable on the date
of termination of employment or service) at any time within one year after the
date of termination of employment due to disability, unless either the SAR
Agreement or the SAR Plan otherwise provides for earlier termination.
Section 10. Rights Upon Death. Except as otherwise limited by the Program
Administrators at the time of the grant of a SAR, if an a Plan Participant under
the SAR Plan dies while employed by, or providing services to, the Company or
any of its subsidiaries, his or her SAR shall expire six months after the date
of death unless by its terms it expires sooner; provided, however, that the
Program Administrators may, in their sole and absolute discretion, allow the SAR
to be exercised (to the extent exercisable on the date of death) at any time
within one year after the date of death, under the SAR Agreement or the SAR Plan
otherwise provides for earlier termination. During this six-month or shorter
period, the SAR may be exercised, to the extent that it remains unexercised on
the date of death, by the person or persons to whom the a Plan Participant's
rights under the SAR shall pass by will or by the laws of descent and
distribution, but only to the extent that the Plan Participant is entitled to
exercise the SAR at the date of death.
<PAGE>
PART VII
HOLLYWOOD PARTNERS.COM, INC.
OTHER STOCK RIGHTS PLAN
Section 1. Terms and Conditions. The purpose of the Hollywood Partners.com,
Inc. Other Stock Rights Plan (the "Stock Rights Plan") is to promote the growth
and general prosperity of the Company by permitting the Company to grant
restricted shares to help attract and retain superior personnel for positions of
substantial responsibility with the Company and its subsidiaries to provide
individuals with an additional incentive to the success of the Company. The
terms and conditions of Performance Shares, Stock Payments or Dividend
Equivalent Rights granted under the Stock Rights Plan may differ from one
another as the Program Administrators shall, in their discretion, determine in
each stock rights agreement (the "Stock Rights Agreement"). Unless any provision
herein indicates to the contrary, this Stock Rights Plan shall be subject to the
General Provisions of the Program, and terms used but not defined in this Stock
Rights Plan shall have the meanings, if any, ascribed thereto in the General
Provisions of the Program.
Section 2. Duration. Each Performance Share or Dividend Equivalent Right
and all rights thereunder granted pursuant to the terms of the Stock Rights Plan
shall expire on the date determined by the Program Administrators as evidenced
by the Stock Rights Agreement, but in no event shall any Performance Shares or
Dividend Equivalent Rights expire later than ten (10) years from the date on
which the Performance Shares or Dividend Equivalent Rights are granted. In
addition, each Performance Share, Stock Payment or Dividend Equivalent Right
shall be subject to early termination as provided in the Stock Rights Plan.
Section 3. Grant. Subject to the terms and conditions of the Stock Rights
Agreement, the Program Administrators may grant Performance Shares, Stock
Payments or Dividend Equivalent Rights as provided under the Stock Rights Plan.
Each grant of Performance Shares, Dividend Equivalent Rights or Stock Payments
shall be evidenced by a Stock Rights Agreement, which shall state the terms and
conditions of each as the Program Administrators, in their sole and absolute
discretion, deem are not inconsistent with the terms of the Stock Rights Plan.
Section 4. Performance Shares. Performance Shares shall become payable to a
Plan Participant based upon the achievement of specified Performance Objectives
and upon such other terms and conditions as the Program Administrators may
determine and specify in the Stock Rights Agreement evidencing such Performance
Shares. Each grant shall satisfy the conditions for performance-based awards
hereunder and under the General Provisions of the Program. A grant may provide
for the forfeiture of Performance Shares in the event of termination of
employment or other events, subject to exceptions for death, disability,
retirement or other events, all as the Program Administrators may determine and
specify in the Stock Rights Agreement for such grant. Payment may be made for
the Performance Shares at such time and in such form as the Program
Administrators shall determine and specify in the Stock Rights Agreement and
payment for any Performance Shares may be made in full in cash or by certified
cashier's check payable to the order of the Company or, if permitted by the
Program Administrators, by shares of the Company's Common Stock or by the
surrender of all or part of an award, or in other property, rights or credits
deemed acceptable by the Program Administrators or, if permitted by the Program
Administrators, by a combination of the foregoing. If any portion of the
purchase price is paid in shares of the Company's Common Stock, those shares
shall be tendered at their then Fair Market Value. Payment in shares of Common
Stock includes the automatic application of shares of Common Stock received upon
the exercise or settlement of Performance Shares or other option or award to
satisfy the exercise or settlement price.
Section 5. Stock Payments. The Program Administrators may grant Stock
Payments to a person eligible to receive the same as a bonus or additional
compensation or in lieu of the obligation of the Company or a subsidiary to pay
cash compensation under other compensatory arrangements, with or without the
election of the eligible person, provided that the Plan Participant will be
required to pay an amount equal to the aggregate par value of any newly issued
Stock Payments. A Plan Participant shall have all the voting, dividend,
liquidation and other rights with respect to shares of Common Stock issued to
the Plan Participant as a Stock Payment upon the Plan Participant becoming
holder of record of such shares of Common Stock; provided, however, the Program
Administrators may impose such restrictions on the assignment or transfer of
such shares of Common Stock as they deem appropriate and as are evidenced in the
Stock Rights Agreement for such Stock Payment.
Section 6. Dividend Equivalent Rights. The Program Administrators may grant
Dividend Equivalent Rights in tandem with the grant of Incentive Options or
Nonqualified Options, SARs, Restricted Shares or Performance Shares that
otherwise do not provide for the payment of dividends on the shares of Common
Stock subject to such awards for the period of time to which such Dividend
Equivalent Rights apply, or may grant Dividend Equivalent Rights that are
independent of any other such award. A Dividend Equivalent Right granted in
tandem with another award may be evidenced by the agreement for such other
award; otherwise, a Dividend Equivalent Right shall be evidenced by a separate
Stock Rights Agreement. Payment may be made by the Company in cash or by shares
of the Company's Common Stock or by a combination of the foregoing, may be
immediate or deferred and may be subject to such employment, performance
objectives or other conditions as the Program Administrators may determine and
specify in the Stock Rights Agreement for such Dividend Equivalent Rights. The
total payment attributable to a share of Common Stock subject to a Dividend
Equivalent Right shall not exceed one hundred percent (100%) of the equivalent
dividends payable with respect to an outstanding share of Common Stock during
the term of such Dividend Equivalent Right, taking into account any assumed
investment (including assumed reinvestment in shares of Common Stock) or
interest earnings on the equivalent dividends as determined under the Stock
Rights Agreement in the case of a deferred payment, provided that such
percentage may increase to a maximum of two hundred percent (200%) if a Dividend
Equivalent Right is subject to a Performance Objective.
Section 7. Compliance with Securities Laws. Securities shall not be issued
with respect to any award under the Stock Rights Plan, unless the issuance and
delivery of the securities pursuant thereto shall comply with all applicable
provisions of foreign, state and federal law, including, without limitation, the
Securities Act of 1933, as amended, and the Exchange Act, and the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the securities may then be listed, and shall be further subject to
the approval of counsel for the Company with respect to such compliance. The
Program Administrators may also require a Plan Participant to furnish evidence
satisfactory to the Company, including a written and signed representation
letter and consent to be bound by any transfer restrictions imposed by law,
legend, condition, or otherwise, that the securities are being acquired only for
investment purposes and without any present intention to sell or distribute the
securities in violation of any state or federal law, rule, or regulation.
Further, each Plan Participant shall consent to the imposition of a legend on
the securities subject to his or her award and the imposition of stop-transfer
instructions restricting their transferability as required by law or by this
Section 7.
Section 8. Continued Employment or Service. Each Plan Participant, if
requested by the Program Administrators, must agree in writing as a condition of
receiving his or her award, to remain in the employment of, or service to, the
Company or any of its subsidiaries following the date of the granting of that
award for a period specified by the Program Administrators. Nothing in this
Stock Rights Plan in any award granted hereunder shall confer upon any Plan
Participant any right to continued employment by, or service to, the Company or
any of its subsidiaries, or limit in any way the right of the Company or any
subsidiary at any time to terminate or alter the terms of that employment or
service arrangement.
Section 9. Rights Upon Termination of Employment or Service. If a Plan
Participant under this Stock Rights Plan ceases to be employed by, or provide
service to, the Company or any of its subsidiaries for any reason his or her
award shall immediately terminate.
<PAGE>
EXHIBIT D
FORM OF BY-LAWS
HOLLYWOOD PARTNERS.COM, INC.
By-Laws
Article I
OFFICES
Section 1.
The registered office of the Corporation in the State of Delaware shall be
in the City of Wilmington, County of New Castle, State of Delaware.
The Corporation shall have offices at such other places as the Board of
Directors may from time to time determine.
Article II
STOCKHOLDERS
Section 1. ANNUAL MEETING.
The annual meeting of the stockholders for the election of Directors and
for the transaction of such other business as may properly come before the
meeting shall be held on such date as the Board of Directors shall each year
fix. Each such annual meeting shall be held at such place, within or without the
State of Delaware, and hour as shall be determined by the Board of Directors.
The day, place and hour of each annual meeting shall be specified in the notice
of annual meeting.
The meeting may be adjourned from time to time and place to place until its
business is completed.
At an annual meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be properly
brought before an annual meeting, business must be (a) specified in the notice
of meeting (or any supplement thereto) given by or at the direction of the Board
of Directors, (b) otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or (c) otherwise properly brought before
the meeting by a stockholder. For business to be properly brought before an
annual meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation, not less than sixty days nor
more than ninety days prior to the meeting; provided, however, that in the event
that less than seventy days' notice or prior public disclosure of the date of
the meeting is given or made to stockholders, notice by the stockholder to be
timely must be so received not later than the close of business on the tenth day
following the date on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. A stockholder's notice to the
Secretary shall set forth as to each matter the stockholder proposes to bring
before the annual meeting (a) a brief description of the business desired to be
brought before the annual meeting, (b) the name and address, as they appear on
the Corporation's books, of the stockholder proposing such business, (c) the
class and number of shares of the Corporation which are beneficially owned by
the stockholder, and (d) any material interest of the stockholder in such
business. Notwithstanding anything in the By-Laws to the contrary, no business
shall be conducted at an annual meeting except in accordance with the procedures
set forth in this Section 1. The presiding officer of an annual meeting shall,
if the facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting and in accordance with the provisions of
this Section 1, and if he should so determine, he shall so declare to the
meeting and any such business not properly brought before the meeting shall not
be transacted.
Section 2. SPECIAL MEETINGS.
Except as otherwise required by law and subject to the rights of the
holders of any class or series of stock having a preference over the Common
Stock as to dividends or on liquidation, special meetings of the stockholders
may be called only by the Chairman of the Board, the President, or the Board of
Directors pursuant to a resolution approved by a majority of the entire Board of
Directors.
Section 3. STOCKHOLDER ACTION; HOW TAKEN.
Any action required or permitted to be taken by the stockholders of the
Corporation must be effected at a duly called annual or special meeting of such
holders and may not be effected by any consent in writing by such holders.
Section 4. NOTICE OF MEETING.
Notice of every meeting of the stockholders shall be given in the manner
prescribed by law.
Section 5. QUORUM.
Except as otherwise required by law, the Certificate of Incorporation or
these By-Laws, the holders of shares entitled to cast not less than one-third of
the votes at any meeting of the stockholders, present in person or by proxy,
shall constitute a quorum and the act of the holders of shares entitled to cast
a majority of such votes shall be deemed the act of the stockholders.
If a quorum shall fail to attend any meeting, the chairman of the meeting
may adjourn the meeting to another place, date or time.
If a notice of any adjourned special meeting of stockholders is sent to all
stockholders entitled to vote thereat, stating that it will be held with those
present constituting a quorum, then, except as otherwise required by law, those
present at such adjourned meeting shall constitute a quorum and all matters
shall be determined by a majority of votes cast at such meeting.
Section 6. QUALIFICATION OF VOTERS.
The Board of Directors (hereinafter sometimes referred to as the "Board")
may fix a day and hour not more than sixty nor less than ten days prior to the
day of holding any meeting of the stockholders as the time as of which the
stockholders entitled to notice of and to vote at such meeting shall be
determined. Only those persons who were holders of record of voting stock at
such time shall be entitled to notice of and to vote at such meeting.
Section 7. PROCEDURE.
The order of business and all other matters of procedure at every meeting
of the stockholders may be determined by the presiding officer.
The Board shall appoint two or more inspectors of election to serve at
every meeting of the stockholders at which Directors are to be elected.
Article III
DIRECTORS
Section 1. NUMBER, ELECTION AND TERMS.
Except as otherwise fixed pursuant to the provisions of Article __ of the
Certificate of Incorporation relating to the rights of the holders of any class
or series of stock having a preference over the Common Stock as to dividends or
upon liquidation to elect additional directors under specified circumstances,
the number of Directors shall be fixed from time to time by the Board of
Directors but shall not be less than three nor more than nine. The Directors
other than those who may be elected by the holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation, shall initially serve for a term expiring at the first annual
meeting of stockholders to be held after their election, with the members to
hold office until their successors are elected and qualified. At the first
annual meeting at which provisions of California law no longer are applicable to
the Corporation pursuant to Section 2115 of the California Corporations Code the
Directors, other than those who may be elected by the holders of any class or
series of stock having a preference over the Common Stock as to dividends or
upon liquidation, shall be classified, with respect to the time for which they
severally hold office, into three classes, as nearly equal in number as
possible, as determined by the Board of Directors, one class to hold office
initially for a term expiring at the first annual meeting of stockholders after
such initial meeting, another class to hold office initially for a term expiring
at the second annual meeting of stockholders after such initial meeting, and
another class to hold office initially for a term expiring at the third annual
meeting of stockholders after such initial meeting, with the members of each
class to hold office until their successors are elected and qualified. At each
annual meeting of stockholders, the successors of the class of Directors whose
term expires at that meeting shall be elected to hold office for a term expiring
at the annual meeting of stockholders held in the third year following the year
of their election.
The term "entire Board" as used in these By-Laws means the total number of
Directors which the Corporation would have if there were no vacancies.
Subject to the rights of holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation,
nominations for the election of Directors may be made by the Board of Directors
or a committee appointed by the Board of Directors or by any stockholder
entitled to vote in the election of Directors generally. However, any
stockholder entitled to vote in the election of Directors generally may nominate
one or more persons for election as Directors at a meeting only if written
notice of such stockholder's intent to make such nomination or nominations has
been given, either by personal delivery or by United States mail, postage
prepaid, to the Secretary of the Corporation not later than (i) with respect to
an election to be held at an annual meeting of stockholders, ninety days prior
to the anniversary date of the immediately preceding annual meeting, and (ii)
with respect to an election to be held at a special meeting of stockholders for
the election of Directors, the close of business on the tenth day following the
date on which notice of such meeting is first given to stockholders. Each such
notice shall set forth: (a) the name and address of the stockholder who intends
to make the nomination and of the person or persons to be nominated; (b) a
representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the stockholder; (d) such other information regarding each nominee proposed by
such stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission; and (e)
the consent of each nominee to serve as a Director of the Corporation if so
elected. The presiding officer of the meeting may refuse to acknowledge the
nomination of any person not made in compliance with the foregoing procedure.
Section 2. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
Except as otherwise fixed pursuant to the provisions of Article __ of the
Certificate of Incorporation relating to the rights of the holders of any class
or series of stock having a preference over the Common Stock as to dividends or
upon liquidation to elect Directors under specified circumstances, newly created
directorships resulting from any increase in the number of Directors and any
vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or other cause shall be filled solely by the
affirmative vote of a majority of the remaining Directors then in office, even
though less than a quorum of the Board of Directors. Any Director elected in
accordance with the preceding sentence shall hold office for the remainder of
the full term of the class of Directors in which the new directorship was
created or the vacancy occurred and until such Director's successor shall have
been elected and qualified. No decrease in the number of Directors constituting
the Board of Directors shall shorten the term of any incumbent Director.
Section 3. REMOVAL
Subject to the rights of any class or series of stock having a preference
over the Common Stock as to dividends or upon liquidation to elect Directors
under specified circumstances, any Director may be removed from office, without
cause, only by the affirmative vote of the holders of 80% of the combined voting
power of the then outstanding shares of stock entitled to vote generally in the
election of Directors, voting together as a single class.
Section 4. REGULAR MEETINGS.
Regular meetings of the Board shall be held at such times and places as the
Board may from time to time determine.
Section 5. SPECIAL MEETINGS.
Special meetings of the Board may be called at any time, at any place and
for any purpose by the Chairman of the Board, the President, the Vice Chairman
of the Executive Committee (if there be such a committee), or by any officer of
the Corporation upon the request of a majority of the entire Board.
Section 6. NOTICE OF MEETING.
Notice of regular meetings of the Board need not be given.
Notice of every special meeting of the Board shall be given to each
Director at his usual place of business, or at such other address as shall have
been furnished by him for the purpose. Such notice shall be given at least
twenty-four hours before the meeting by telephone or by being personally
delivered, mailed, or telegraphed. Such notice need not include a statement of
the business to be transacted at, or the purpose of, any such meeting.
Section 7. QUORUM.
Except as may be otherwise provided by law or in these By-Laws, the
presence of one-third of the entire Board shall be necessary and sufficient to
constitute a quorum for the transaction of business at any meeting of the Board,
and the act of a majority of such quorum shall be deemed the act of the Board.
Less than a quorum may adjourn any meeting of the Board from time to time
without notice.
Section 8. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE.
Members of the Board, or of any committee thereof, may participate in a
meeting of such Board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and such participation shall constitute presence in
person at such meeting.
Section 9. POWERS.
The business, property and affairs of the Corporation shall be managed by
or under the direction of its Board of Directors, which shall have and may
exercise all the powers of the Corporation to do all such lawful acts and things
as are not by law, or by the Certificate of Incorporation, or by these By-Laws,
directed or required to be exercised or done by the stockholders.
Section 10. COMPENSATION OF DIRECTORS.
Directors shall receive such compensation for their services as shall be
determined by a majority of the entire Board provided that Directors who are
serving the Corporation as officers or employees and who receive compensation
for their services as such officers or employers shall not receive any salary or
other compensation for their services as Directors.
Section 11. EMERGENCY MANAGEMENT COMMITTEE.
The Board of Directors, by resolution, may provide for an Emergency
Management Committee and appoint members or designate the manner in which
membership of the Committee shall be determined. The emergency powers granted
hereunder shall be operative during any emergency resulting from an attack on
the United States or on a locality in which the Corporation conducts its
business or customarily holds meetings of its Board of Directors or its
stockholders, or during any nuclear or atomic disaster or during the existence
of any catastrophe, or other similar emergency condition, as a result of which a
quorum of the Board of Directors or a standing committee thereof cannot readily
be convened for action. Said Committee shall have and may exercise all of the
powers of the Board of Directors in the management of the business and affairs
of the Corporation. It shall act only during such period of attack and so long
as the number of Directors able to act shall have been reduced to less than
five, and until a Board of Directors has been elected by the stockholders. Such
Committee shall meet as promptly as possible after the occurrence of the event
herein described which would activate the Committee and at such subsequent time
or times as it may designate until a Board of Directors has been duly elected.
Such Committee shall as the first order of business elect an Executive Committee
from among its members and a chairman thereof, who shall be the chief executive
officer of the Corporation. Such Executive Committee shall function in the same
manner and possess the same powers as the Executive Committee of the Board of
Directors, as provided in Article V of these By-Laws, and shall have as many
members as shall be provided by resolution of the Board. Such Committees shall
make their own rules of procedure except to the extent otherwise provided by
resolution of the Board. A majority of the members of the Committees able to act
shall constitute a quorum. The physical presence of a member shall not be
required if his vote on an action to be taken can be obtained by available means
of communication. Any vacancy occurring in said Committees caused by
resignation, death or other incapacity may be filled by a majority of the
remaining members of the Emergency Management Committee and any member so chosen
shall serve until a Board of Directors has been duly elected.
Article IV
OFFICERS
Section 1. NUMBER.
The officers of the Corporation shall be appointed or elected by the Board
of Directors. The officers shall be a Chairman of the Board, a President, such
number of Vice Chairmen of the Board as the Board may from time to time
determine, such number of Vice Presidents as the Board may from time to time
determine, a Secretary, a Treasurer and a Controller. The Chairman of the Board
shall be the Chief Executive Officer. The Chairman of the Board or, in his
absence or if such office be vacant, the President or, in his absence or if such
office be vacant, a member of the Executive Committee who is designated by the
Board, shall preside at all meetings of the stockholders and of the Board. Any
person may hold two or more offices at the same time. The Chairman of the Board,
the President and the Vice Chairmen of the Board shall be chosen from among the
Board of Directors, but the other officers need not be members of the Board.
Section 2. ADDITIONAL OFFICERS.
The Board may appoint such other officers, agents and employees as it shall
deem appropriate.
Section 3. TERMS OF OFFICE.
All officers, agents and employees of the Corporation shall hold their
respective offices or positions at the pleasure of the Board of Directors and
may be removed at any time by the Board of Directors with or without cause.
Section 4. DUTIES.
The officers, agents and employees shall perform the duties and exercise
the powers usually incident to the offices or positions held by them
respectively, and/or such other duties and powers as may be assigned to them
from time to time by the Board of Directors or the chief executive officer.
Article V
EXECUTIVE COMMITTEE
Section 1. ELECTION.
At any meeting of the Board, an Executive Committee, composed of the
Chairman of the Board, the President, the Vice Chairmen of the Board, if any,
and not less than two other members, may be elected by a majority vote of the
entire Board to serve until the Board shall otherwise determine. The Chairman of
the Board shall be the Chairman of the Executive Committee, and the Vice
Chairman of the Board so designated by the Board shall be the Vice Chairman
thereof. Members of the Executive Committee shall be members of the Board.
Section 2. POWERS.
The Executive Committee shall have and may exercise all of the powers of
the Board of Directors when the Board is not in session, except that it shall
have no power to (a) elect directors or officers; (b) alter, amend or repeal
these By-Laws or any resolution or resolutions of the Board of Directors
relating to the Executive Committee; (c) declare any dividend or make any other
distribution to the stockholders of the Corporation; (d) appoint any member of
the Executive Committee; or (e) take any other action which legally may be taken
only by the Board.
Section 3. RULES.
The Executive Committee shall adopt such rules as it may see fit with
respect to the calling of its meetings, the procedure to be followed thereat,
and its functioning generally.
Section 4. VACANCIES.
Vacancies in the Executive Committee may be filled at any time by a
majority vote of the entire Board.
Article VI
OTHER COMMITTEES
Section 1. APPOINTMENT AND POWERS.
The Board of Directors may from time to time, by resolution passed by
majority of the whole Board, designate one or more other committees, each
committee to consist of one or more directors of the Corporation. The Board of
Directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. The resolution of the Board of Directors may, in addition or
alternatively, provide that in the absence or disqualification of a member of a
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he, she or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board of Directors,
shall have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers which may
require it, except as otherwise provided by law. Unless the resolution of the
Board of Directors expressly so provides, no such committee shall have the power
or authority to declare a dividend or to authorize the issuance of stock. Any
such committee may adopt rules governing the method of calling and time and
place of holding its meetings. Unless otherwise provided by the Board of
Directors, a majority of any such committee (or the member thereof, if only one)
shall constitute a quorum for the transaction of business, and the vote of a
majority of the members of such committee present at a meeting at which a quorum
is present shall be the act of such committee. Each such committee shall keep a
record of its acts and proceedings and shall report thereon to the Board of
Directors whenever requested so to do. Any or all members of any such committee
may be removed, with or without cause, by resolution of the Board of Directors,
passed by a majority of the whole Board.
Article VII
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
Section 1. INDEMNIFICATION.
The Corporation shall indemnify to the full extent permitted by, and in the
manner permissible under, the laws of the State of Delaware any person made, or
threatened to be made, a party to an action or proceeding, whether criminal,
civil, administrative or investigative, by reason of the fact that he, his
testator or intestate is or was a director, officer or employee of the
Corporation, or served any other enterprise as a director, officer or employee
at the request of the Corporation.
For purposes of this Section, service "at the request of the Corporation"
shall include, without limitation, (a) service as a director, officer or
employee of a majority-owned subsidiary of the Corporation and (b) service by a
director, officer or employee of the Corporation or a majority-owned subsidiary
of the Corporation (i) as a director or officer of an enterprise in which the
Corporation holds, directly or indirectly, an ownership interest, (ii) with
respect to an employee benefit plan, when such person's service as a director,
officer or employee of the Corporation or a majority-owned subsidiary of the
Corporation imposes duties on, or involves services by, such person with respect
to such plan, and (iii) as a director, officer or employee of an enterprise
other than that referred to in (i) when such person's service as a director,
officer or employee of the Corporation or a majority-owned subsidiary of the
Corporation imposes duties on, or involves services by, such person with respect
to such enterprise.
Section 2. GENERAL.
The foregoing provisions of this Article VII shall be deemed to be a
contract between the Corporation and each director, officer and employee
referred to in such provisions who serves in such capacity at any time while
this By-Law is in effect, and any repeal or modification thereof shall not
affect any rights or obligations then existing with respect to any state of
facts then or theretofore existing or any action, suit or proceeding theretofore
or thereafter brought based in whole or in part upon any such state of facts.
The foregoing rights of indemnification shall not be deemed exclusive of
any other rights to which any director, officer or employee may be entitled
apart from the provisions of this Article.
Article VIII
WAIVER OF NOTICE
Section 1. WAIVER OF NOTICE.
Whenever notice is required to be given by statute, or under any provision
of the Certificate of Incorporation or these By-Laws, a written waiver thereof,
signed by the person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. In the case of a stockholder,
such waiver of notice may be signed by such stockholder's attorney or proxy duly
appointed in writing. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders, directors or members of a
committee of directors need be specified in any written waiver of notice.
Article IX
SEAL
Section 1.
The Corporate seal shall bear the name of the Corporation, the date 1989
and the words "Corporate Seal, Delaware."
Article X
AMENDMENTS
Section 1. AMENDMENT OF BY-LAWS.
Subject to the provisions of the Certificate of Incorporation, these
By-Laws may be altered, amended or repealed at any regular meeting of the
stockholders (or at any special meeting thereof duly called for that purpose) by
a majority vote of the shares represented and entitled to vote at such meeting;
provided that in the notice of such special meeting notice of such purpose shall
be given. Subject to the laws of the State of Delaware, the Certificate of
Incorporation and these By-Laws, the Board of Directors may by majority vote of
those present at any meeting at which a quorum is present amend these By-Laws,
or enact such other By-Laws as in their judgment may be advisable for the
regulation of the conduct of the affairs of the Corporation.
Article XI
EMERGENCY BY-LAWS
Section 1. Emergency By-Laws.
The Emergency By-Laws provided in this Section 1 shall be operative during
any emergency in the conduct of the business of the corporation resulting from
an attack on the United States or on a locality in which the corporation
conducts its business or customarily holds meetings of its Board of Directors or
its stockholders, or during any nuclear or atomic disaster, or during the
existence of any catastrophe, or other similar emergency condition, as a result
of which a quorum of the Board of Directors or a standing committee thereof
cannot readily be convened for action notwithstanding any different provision in
the preceding By-Laws or in the Certificate of Incorporation or in the law. To
the extent not inconsistent with provisions of this Section, the By-Laws of the
Corporation shall remain in effect during any emergency and upon its termination
the Emergency By-Laws shall cease to be operative. Any amendments of these
Emergency By-Laws may make any further or different provision that may be
practical and necessary for the circumstances of the emergency.
During any such emergency: (A) A meeting of the Board of Directors or a
committee thereof may be called by any officer or director of the Corporation.
Notice of the time and place of the meeting shall be given by the person calling
the meeting to such of the directors as it may be feasible to reach by any
available means of communication. Such notice shall be given at such time in
advance of the meeting as circumstances permit in the judgment of the person
calling the meeting; (B) The director or directors in attendance at the meeting
shall constitute a quorum; (C) The officers or other persons designated on a
list approved by the Board of Directors before the emergency, all in such order
of priority and subject to such conditions and for such period of time (not
longer than reasonably necessary after the termination of the emergency) as may
be provided in the resolution approving the list, shall, to the extent required
to provide a quorum at any meeting of the Board of Directors, be deemed
directors for such meeting; (D) The Board of Directors, either before or during
any such emergency, may provide, and from time to time modify, lines of
succession in the event that during such emergency any or all officers or agents
of the corporation shall for any reason be rendered incapable of discharging
their duties; (E) The Board of Directors, either before or during any such
emergency, may, effective in the emergency, change the head office or designate
several alternative head offices or regional offices, or authorize the officers
so to do; and (F) To the extent required to constitute a quorum at any meeting
of the Board of Directors during such an emergency, the officers of the
corporation who are present shall be deemed, in order of rank and within the
same rank in order of seniority, directors for such meeting.
No officer, director or employee acting in accordance with any Emergency
By-Laws shall be liable except for willful misconduct.
These Emergency By-Laws shall be subject to repeal or change by further
action of the Board of Directors or by action of the stockholders.
<PAGE>
EXHIBIT E
LIST OF PENDING CONTRACTS OF COMPANY
Acquisition of, investments in or alliances with product, distribution,
direct sales or similar companies, primarily related to the food industry.
Licensing and similar contracts with intellectual property owners or
licensing or sublicensing of intellectual property to third parties.
<PAGE>
SCHEDULE 1.9
PRINCIPAL STOCKHOLDERS
<PAGE>
SCHEDULE 1.16
DELINQUENT SECURITIES FILINGS
In 1989, Public Company offered and sold securities to non-accredited
investors in the states of California and Colorado. Public Company effected such
offers and sales in reliance on the exemption from registration or qualification
in the states of California and Colorado. Public Company did not make the
filings regarding the exemptions required by California and Colorado in
connection with such offers and sales, but Public Company represents and
warrants that such offers and sales were exempt from such registration and
qualification despite the lack of such filings.
<PAGE>
SCHEDULE 1.18
TAX MATTERS
Public Company has not made any filings with the Internal Revenue Service
since its formation. All such returns are delinquent and may subject Public
Company to late filing fines and penalties. Public Company does not owe any
federal or state taxes for any prior periods, except any minimum tax imposed by
the Internal Revenue Service of approximately $250 per year.
<PAGE>
Exhibit A
RESTATED AND AMENDED
CERTIFICATE OF INCORPORATION
OF
GUIDELINE CAPITAL CORPORATION
GUIDELINE CAPITAL CORPORATION, a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, was
originally incorporated under the name of Guideline Capital Corporation; the
original date of incorporation was August 31, 1989; this Restated and Amended
Certificate of Incorporation was duly adopted in accordance with Sections 245,
242 and 103 of the Delaware General Corporation Law, and
DOES HEREBY CERTIFY:
FIRST. That by the unanimous written consent of the Board of Directors of
Guideline Capital Corporation, this Restated and Amended Certificate of
Incorporation of Guideline Capital Corporation (the "Certificate") was ratified,
confirmed and approved.
SECOND. That the Board hereby desires to restate and amend the Certificate
of Incorporation of this Corporation in its entirety, as follows:
FIRST. The name of this corporation is:
Hollywood Partners.com, Inc.
SECOND. Its registered office in the State of Delaware is to be
located at 3422 Old Capitol Trail, Suite 700, in the City of Wilmington,
County of New Castle, 19808-6192 and its registered agent at such address
is Delaware Business Incorporators, Inc.
THIRD. The purpose or purposes of this Corporation shall be:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware (the "GCL").
FOURTH: The Corporation is authorized to issue two classes of shares
of stock, common stock and preferred stock. The total number of shares of
stock which the Corporation shall have authority to issue is Fifty-five
Million (55,000,000) shares, consisting of Fifty Million (50,000,000)
shares of common stock, par value $.001 per share, designated as Common
Stock (the "Common Stock") and Five Million (5,000,000) shares of preferred
stock, par value $.001 per share, designated as Preferred Stock (the
"Preferred Stock").
A. Preferred Stock. The Board of Directors of the Corporation
(hereinafter referred to as the "Board of Directors") is hereby
expressly authorized at any time, and from time to time, to
create and provide for the issuance of shares of Preferred Stock
in one or more series and, by filing a certificate pursuant to
the GCL (hereinafter referred to as a "Preferred Stock
Designation"), to establish the number of shares to be included
in each such series, and to fix the designations, preferences and
relative, participating, optional or other special rights of the
shares of each such series and the qualifications, limitations or
restrictions thereof, as shall be stated and expressed in the
resolution or resolutions providing for the issue thereof adopted
by the Board of Directors, including, but not limited to, the
following:
1. the number of shares of any series and the designation to
distinguish the shares of such series from the shares of all
other series;
2. whether dividends, if any, shall be cumulative or
non-cumulative, the dividend rate of such series, and the
dates and preferences of dividends on such series;
3. the redemption provisions, if any, applicable to such
series, including the redemption price or prices to be paid;
4. the terms and amount of any sinking fund provided for the
purchase or redemption of the shares of such series;
5. whether or not the shares of such series shall be
convertible into or exchangeable for shares of any other
class or classes of, any other series of any class or
classes of capital stock of, or any other security of, the
Corporation or any other corporation, and, if provision be
made for any such conversion or exchange, the times, prices,
rates, adjustments and any other terms and conditions of
such conversion or exchange;
6. the voting powers, if any, and whether such voting powers
are full or limited in such series;
7. the restrictions, if any, on the issue or reissue of shares
of the same series or of any other class or series;
8. the amounts payable on and the preferences, if any, of the
shares of such series in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation; and
9. any other relative rights, preferences and limitations of
that series.
B. Common Stock. The Common Stock shall be subject to the express
terms of any series of Preferred Stock set forth in the Preferred
Stock Designation relating thereto. Each holder of Common Stock
shall have one vote in respect of each share of Common Stock held
by such holder of record on the books of the Corporation for the
election of directors and on all other matters on which
stockholders of the Corporation are entitled to vote. The holders
of shares of Common Stock shall be entitled to receive, when and
if declared by the Board of Directors, out of the assets of the
Corporation which are by law available therefor, dividends
payable either in cash, in stock or otherwise. In addition, the
Class A Common Stock shall be subject to the express restrictions
set forth below in this Section B.
C. Stock Split. That, upon the filing date of this Restated and
Amended Certificate of Incorporation (the "Effective Date"), a
six-for-one split of the Corporation's Common Stock shall become
effective, pursuant to which each share of Common Stock
outstanding and held of record by each stockholder of the
Corporation (including treasury shares) immediately prior to the
Effective Date shall be reclassified and divided into six shares
of Common Stock automatically and without any action by the
holder thereof upon the Effective Date and shall represent six
shares of Common Stock from and after the Effective Date.
FIFTH: A. In furtherance, and not in limitation, of the powers
conferred by law, the Board of Directors is expressly authorized and
empowered:
1. to adopt, amend or repeal the Bylaws of the Corporation,
provided, however, that any Bylaws adopted by the Board of
Directors under the powers hereby conferred may be amended
or repealed by the Board of Directors or by the stockholders
having voting power with respect thereto; and
2. from time to time to determine whether and to what extent,
and at what times and places, and under what conditions and
regulations, the accounts and books of the Corporation, or
any of them, shall be open to inspection of stockholders;
and, except as so determined, or as expressly provided in
this Certificate of Incorporation or in any Preferred Stock
Designation, no stockholder shall have any right to inspect
any account, book or document of the Corporation other than
such rights as may be conferred by law.
B. The Corporation may in its Bylaws confer powers upon the Board of
Directors in addition to the foregoing and in addition to the
powers and authorities expressly conferred upon the Board of
Directors by law.
SIXTH: A. Subject to the rights of the holders of any series of
Preferred Stock or any other series or class of stock as set forth in this
Certificate of Incorporation to elect additional directors under specified
circumstances, the number of directors of the Corporation shall not be less
than three nor more than nine and shall be fixed from time to time in the
manner described in the Bylaws.
B. Unless and except to the extent that the Bylaws of the
Corporation shall so require, the election of directors of the
Corporation need not be by written ballot.
C. The directors, other than those who may be elected by the holders
of any series of Preferred Stock or any other series or class of
stock as set forth in this Certificate of Incorporation, shall be
classified with respect to the time for which they severally hold
office into three classes, as nearly equal in number as possible,
and designated as Class I, Class II and Class III, at the first
annual meeting of stockholders after the effective date of this
Certificate of Incorporation under Section 103 of the GCL or, in
the event the Corporation is then subject to Section 2115 of the
California Corporations Code, the date of the first annual
meeting of stockholders hereafter when the Corporation shall have
at least 800 stockholders as determined under Section 2115 of the
California Corporations Code (hereinafter, the "First Meeting").
The Directors first appointed to Class I at the First Meeting
shall hold office for a term expiring at the annual meeting of
the stockholders immediately following the First Meeting; the
Directors first appointed to Class II shall hold office for a
term expiring at the second annual meeting of the stockholders
following the First Meeting; and the Directors first appointed to
Class III shall hold office for a term expiring at the third
annual meeting of the stockholders following the First Meeting.
Members of each class shall hold office until their successors
are elected and qualified. Thereafter, at each succeeding annual
meeting of the stockholders of the Corporation, the successors of
the class of directors whose term expires at that meeting shall
be elected to hold office for a term expiring at the annual
meeting of stockholders held in the third year following the year
of their election, and until their successors are elected and
qualified. Notwithstanding the foregoing, if at the time of any
annual meeting of stockholders, the Corporation is prohibited by
applicable law from having a classified Board of Directors, all
of the Directors shall be elected at such annual meeting for a
one year term only. If at the time of any subsequent annual
meeting of stockholders the Corporation is no longer prohibited
by applicable law from having a classified Board of Directors,
the Board of Directors shall again be classified in accordance
with the first sentence of this paragraph, and at such annual
meeting Directors initially elected shall be elected to serve in
either Class I, Class II or Class III to hold office for a term
expiring at the first, second or third succeeding annual meeting
of the stockholders, respectively; thereafter successors to each
Class shall be elected in the accordance with the fourth sentence
of this paragraph.
D. Subject to the rights of the holders of any series of Preferred
Stock or any other series or class of stock as set forth in this
Certificate of Incorporation to elect additional directors under
specified circumstances, any director may be removed from office
at any time for cause by the affirmative vote of the holders of
at least a majority of the voting power of the then outstanding
Voting Stock, voting together as a single class. For the purposes
of this Certificate of Incorporation, "Voting Stock" shall mean
the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors.
E. Advance notice of stockholder nominations for the election of
directors shall be given in the manner provided in the Bylaws of
the Corporation.
F. Subject to the rights of the holders of any series of Preferred
Stock or any other series or class of stock as set forth in this
Certificate of Incorporation to elect additional directors under
specified circumstances, vacancies resulting from death,
resignation, retirement, disqualification, removal from office or
other cause, and newly created directorships resulting from any
increase in the authorized number of directors, may be filled
only by the affirmative vote of a majority of the remaining
directors, and directors so chosen shall hold office for a term
expiring at the annual meeting of stockholders at which the term
of office of the class to which they have been elected expires
and until such director's successor shall have been duly elected
and qualified. No decrease in the number of authorized directors
constituting the total number of directors which the Corporation
would at the time have if there were no vacancies shall shorten
the term of any incumbent director.
SEVENTH: A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
GCL or (iv) for any transaction from which the director derived an improper
personal benefit. No amendment or repeal of this Article SEVENTH shall
adversely affect any right or protection of a director of the Corporation
existing hereunder in respect of any act or omission occurring prior to
such amendment or repeal.
EIGHTH: Except as may be expressly provided below in this Article
EIGHTH, the Corporation reserves the right at any time and from time to
time to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation or a Preferred Stock Designation, and any
other provisions authorized by the laws of the State of Delaware at the
time in force may be added or inserted, in the manner now or hereafter
prescribed herein or by law, and all powers, preferences and rights of
whatsoever nature conferred upon stockholders, directors or any other
persons whomsoever by and pursuant to this Certificate of Incorporation in
its present form or as hereafter amended are granted subject to the right
reserved in this Article EIGHTH; provided, however, that no Preferred Stock
Designation shall be amended after the issuance of any shares of the series
of Preferred Stock created thereby, except in accordance with the terms of
such Preferred Stock Designation and the requirements of law; and provided,
further, that the affirmative vote of at least 66-2/3 percent of the voting
power of the then outstanding Voting Stock, voting together as a single
class, shall be required to amend, repeal or adopt any provision
inconsistent with the provisions of Article FIFTH, Article SIXTH or Article
EIGHTH of this Certificate of Incorporation, unless such amendments or
changes are approved by a majority of the directors of the Corporation not
affiliated or associated with any person, other than Vitafort International
Corporation, holding (or which has announced an intention to acquire) 20%
or more of the voting power of the then outstanding Voting Stock, voting
together as a single class.
THIRD. That this Certificate was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH. That the capital of said corporation shall not be reduced
under or by reason of the Certificate.
In Witness Whereof, said corporation has caused this Certificate to be
signed by __________, its Secretary, this ___ day of September, 1999.
________________________________
_____________________,Secretary
TERRA HEALTHY LIVING, LTD.
Pasea Estate
Post Office Box
Road Town, Tortola BVI
September 13, 1999
Via Facsimile
Vitafort International Corporation
1800 Avenue of the Stars, Suite 480
Los Angeles, CA 90067
Re: Sale of Hollywood Partners to Guideline Capital Corporation
Dear Mark:
This letter memorializes the understanding reached by Vitafort
International Corporation ("Vitafort") and Terra Healthy Living Ltd. ("Terra
Healthy") on August 9, 1999. As a condition precedent to Vitafort's sale of its
wholly owned subsidiary, Hollywood Partners ("HP") to Guideline Capital
Corporation ("Guideline"), a Delaware corporation, Terra Healthy has agreed that
as additional consideration for and to further induce Vitafort's sale of HP to
Guideline, Terra Healthy will reduce the principal amount owed under that
certain note receivable from Vitafort payable to Terra Healthy dated January 15,
1999 (the "Note") by $1,800,000.
As of the date hereof, the entire amount of principal, interest and
penalties owing under the Note is $2,343,775. After giving effect to the
$1,800,000 reduction agreed to herein, the new amount payable by Vitafort to
Terra Healthy under the Note shall be $543,775.
Terra Healthy and Vitafort agree to work diligently with one another to
prepare and execute all additional documentation required for this transaction.
Please confirm your understanding of and agreement to the foregoing by
signing the enclosed copy of this letter and returning the same to me.
Very truly yours,
TERRA HEALTHY LIVING, LTD.
By: /s/ Daniel Montangero
---------------------------
Daniel Montangero
AGREED AND ACCEPTED as of September 13, 1999:
VITAFORT INTERNATIONAL CORPORATION
By: /s/ Mark Beychok
------------------------
Mark Beychok
President and CEO
Terra Healthy Living, Ltd.
Pasea Estate
Post Office Box
Road Town, Tortola BVI
September 13, 1999
Via Facsimile
Catalyst Capital, LLC
8936 Echo Ridge Drive
Las Vegas, NV 89117
(702) 254-7766
Re: Guideline Capital Corporation
Dear Mark:
The purpose of this letter is to memorialize our mutual agreements and
commitments following Catalyst Capital, LLC's entry into an Escrow Agreement
dated August 9, 1999 between Catalyst Capital, LLC ("Catalyst") and Bryan A.
Gianesin, Esq. and Gianesin & Associates (collectively, "Gianesin"). Pursuant to
that Escrow Agreement, Catalyst obtained the right to acquire a majority of the
outstanding stock of Guideline Capital Corporation, a Delaware corporation (as
its name may be changed after the date hereof, "Guideline"), which rights were
assigned to Terra Healthy Living, Ltd. ("Terra Healthy") pursuant to a letter
agreement dated August 9, 1999, subject to the reservation of certain rights in
favor of Catalyst as set forth in that letter.
In furtherance of the foregoing, and in acknowledgment and consideration of
the efforts of Catalyst in structuring the transaction contemplated in the
Escrow Agreement and the parties thereto consummating the transactions
contemplated thereby, by this letter Terra Healthy covenants and agrees to
invest $2,000,000 in Guideline. The funding of this investment will occur
promptly following the consummation of the transactions contemplated in the
Escrow Agreement and shall be in the form of an additional contribution (paid in
capital) to the equity capital of Guideline.
Please confirm your understanding of and agreement to the foregoing by
signing the enclosed copy of this letter and returning the same to me.
Very truly yours,
TERRA HEALTHY LIVING, LTD.
By: /s/ Daniel Montangero
Daniel Montangero
AGREED AND ACCEPTED
as of September 13, 1999:
CATALYST CAPITAL, LLC
By: /s/ Kiran Sidhu
Kiran Sidhu
Manager
