<PAGE> 1
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant[x]
Filed by a Party other than the Registrant[ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.1a-11(c) or Section 240.1a-
12
NASHVILLE COUNTRY CLUB, INC.
(Name of Registrant as Specified In Its Charter)
NASHVILLE COUNTRY CLUB, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
Title of each class of securities to which transaction applies:
Not applicable.
Aggregate number of securities to which transaction applies: Not
applicable.
Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:* Not applicable.
Proposed maximum aggregate value of transaction: Not applicable.
* Set forth amount on which the filing is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount previously paid: Not applicable.
Form, Schedule or Registration Statement No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
<PAGE> 2
July ___, 1997
Dear Fellow Shareholder:
This year's Annual Meeting of Shareholders (the "Meeting") will be held
on Monday, September 8, 1997, at the Liftside Inn at The Village at
Breckenridge Resort, Breckenridge, Colorado, commencing at 9:00 a.m. local
time. You are cordially invited to attend. At the Meeting you will be asked
to:
1. elect thirteen directors;
2. approve the Nashville Country Club, Inc. 1997 Stock Option Plan
(the "1997 Plan");
3. approve changing the name of the Company to TBA Entertainment
Corporation;
4. approve reincorporating the Company in Delaware; and
5. transact such other business as may properly come before the
Meeting.
To be certain that your shares are voted at the Meeting, whether or not
you plan to attend in person, please sign, date and return the enclosed proxy
card as soon as possible. Your vote is important.
At the Meeting, management will review the Company's activities during
the past year and its plans and prospects for the future. An opportunity will
be provided for questions by shareholders. I hope you will be able to join us.
Sincerely,
NASHVILLE COUNTRY CLUB, INC.
Thomas Jackson Weaver III
Chairman of the Board, Chief
Executive Officer
and President
<PAGE> 3
NASHVILLE COUNTRY CLUB, INC.
402 HERITAGE PLANTATION WAY
HICKORY VALLEY, TENNESSEE 38042
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 8, 1997
To the Shareholders of
NASHVILLE COUNTRY CLUB, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of Nashville Country Club, Inc. (the "Company") will be held on
Monday, September 8, 1997, at the Liftside Inn at The Village at Breckenridge
Resort, Breckenridge, Colorado, commencing at 9:00 a.m. local time, for the
following purposes:
(i) To elect thirteen directors to hold office until the next annual
meeting of shareholders and until their successors are duly
elected and qualify;
(ii) To approve the Nashville Country Club, Inc. 1997 Stock Option
Plan (the "1997 Plan");
(iii) To approve changing the name of the Company to TBA Entertainment
Corporation;
(iv) To approve reincorporating the Company in Delaware; and
(v) To transact such other business as may properly come before the
Meeting or any adjournment thereof.
A copy of the Proxy Statement relating to the Meeting, in which the foregoing
matters are described in more detail, and the Annual Report outlining the
Company's operations for the year ended December 31, 1996, accompanies this
Notice of Annual Meeting of Shareholders.
Only shareholders of record at the close of business on July 25, 1997
are entitled to notice of and to vote at the Meeting or any adjournment
thereof. A list of such shareholders, arranged in alphabetical order and
showing the address of and the number of shares registered in the name of each
such shareholder, will be available for examination by any shareholder for any
purpose germane to the Meeting during ordinary business hours for a period of
at least ten days prior to the Meeting at the offices of the Company at 402
Heritage Plantation Way, Hickory Valley, Tennessee.
Your vote is important. Whether or not you expect to be personally
present at the Meeting, please complete, sign, date and return promptly the
enclosed proxy in the enclosed pre-addressed, postage-paid return envelope.
By Order of the Board of Directors,
Frank A. McKinnie Weaver, Sr.
Secretary
July ____, 1997
<PAGE> 4
NASHVILLE COUNTRY CLUB, INC.
402 HERITAGE PLANTATION WAY
HICKORY VALLEY, TENNESSEE 38042
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 8, 1997
This Proxy Statement is being furnished to the shareholders of Nashville
Country Club, Inc. (the "Company") in connection with the solicitation by the
Board of Directors of the Company of proxies to be used at the 1997 Annual
Meeting of Shareholders (the "Meeting") to be held at the Liftside Inn at The
Village at Breckenridge Resort, Breckenridge, Colorado, on Monday, September 8,
1997, at 9:00 a.m. This Proxy Statement and the accompanying form of proxy,
Notice of Annual Meeting of Shareholders and letter to shareholders are first
being mailed to shareholders of the Company on or about July ___, 1997.
SOLICITATION OF PROXIES
The expense of the solicitation of proxies will be borne by the Company.
In addition to the solicitation of proxies by mail, solicitation may be made by
the directors, officers and employees of the Company by other means, including
telephone, telegraph or in person. No special compensation will be paid to
directors, officers or employees for the solicitation of proxies. To solicit
proxies, the Company also will request the assistance of banks, brokerage
houses and other custodians, nominees or fiduciaries, and, upon request, will
reimburse such organizations or individuals for their reasonable expenses in
forwarding soliciting materials to beneficial owners and in obtaining
authorization for the execution of proxies. The Company will also use the
services of the proxy solicitation firm of Corporate Investor Communications,
Inc. to assist in the solicitation of its proxies. For such services the
Company will pay a fee that is not expected to exceed $5,000, plus
out-of-pocket expenses.
PURPOSE OF MEETING
At the Meeting, action will be taken to (i) elect thirteen directors to
hold office until the next annual meeting of shareholders and until their
successors shall have been duly elected and qualify; (ii) approve the Nashville
Country Club, Inc. 1997 Stock Option Plan (the "1997 Plan"); (iii) approve
changing the name of the Company to TBA Entertainment Corporation (the "Name
Change Proposal"); and (iv) approve reincorporating the Company in Delaware
(the "Reincorporation Proposal").
Shareholders are urged to sign the accompanying form of proxy and,
immediately after reviewing the information contained in this Proxy Statement
and in the Annual Report outlining the Company's operations for the year ended
December 31, 1996, return it in the envelope provided for that purpose. Valid
proxies will be voted at the Meeting and any adjournment or adjournments
thereof in the manner specified therein. If no directions are given but
proxies are executed in the manner set forth therein, such proxies will be
voted FOR the election of the nominees for director set forth in this Proxy
Statement, FOR the approval of the 1997 Plan, FOR the approval of the Name
Change Proposal and FOR the approval of the Reincorporation Proposal. The
Company does not know of any other matters that are to come before the meeting.
If any other matters are properly presented at the Meeting, however, the
persons named in the enclosed form of proxy and acting thereunder will have
discretion to vote on such matters in accordance with their judgment.
<PAGE> 5
REVOCATION OF PROXY
Any shareholder returning the accompanying proxy may revoke such proxy
at any time prior to its exercise by giving written notice to the Secretary of
the Company of such revocation, voting in person at the Meeting, or executing
and delivering to the Secretary of the Company a later-dated proxy.
QUORUM AND VOTING REQUIREMENTS
Only shareholders of record as of the close of business on July 25, 1997
(the "Record Date") are entitled to notice of and to vote at the Meeting or any
adjournments thereof. As of the close of business on the Record Date, there
were _________ shares of the Company's common stock, no par value per share
(the "Common Stock"), issued and outstanding and entitled to vote. Each
shareholder of record on the Record Date is entitled to one vote for each share
of Common Stock held. A majority of the outstanding shares of Common Stock,
represented in person or by proxy, will constitute a quorum at the Meeting;
however, if a quorum is not present or represented at the Meeting, the
shareholders entitled to vote thereat, present in person or represented by
proxy, have the power to adjourn the Meeting from time to time, without notice,
other than by announcement at the Meeting, until a quorum is present or
represented. At any such adjourned Meeting at which a quorum is present or
represented, any business may be transacted that might have been transacted at
the original Meeting.
Each share of Common Stock may be voted to elect up to thirteen
individuals (the number of directors to be elected) as directors of the
Company. To be elected, each nominee must receive a plurality of all votes
cast with respect to such position as director. It is intended that, unless
authorization to vote for one or more nominees for director is withheld,
proxies will be voted FOR the election of all of the nominees named in this
Proxy Statement. The Reincorporation Proposal requires the affirmative vote of
at least a majority of the votes entitled to be cast. All other proposals
require the affirmative vote of at least a majority of the votes cast.
Votes cast by proxy or in person will be counted by two persons
appointed by the Company to act as inspectors for the Meeting. The election
inspectors will treat shares represented by proxies that reflect abstentions as
shares that are present and entitled to vote for the purpose of determining the
presence of a quorum. Because the Reincorporation Proposal requires the
affirmative vote of at least a majority of the votes entitled to be cast, an
abstention from voting on this proposal will have the same effect as a vote
AGAINST the matter. Abstentions will have no effect on the outcome of the
election of directors or the other proposals to be voted on at the Meeting.
Broker non-votes occur where a broker holding stock in street name votes
the shares on some matters but not others. Brokers are permitted to vote on
routine, non-controversial proposals in instances where they have not received
voting instructions from the beneficial owner of the stock but are not
permitted to vote on non-routine matters. The missing votes on non-routine
matters are deemed to be "broker non-votes." The election inspectors will
treat broker non-votes as shares that are present and entitled to vote for the
purpose of determining the presence of a quorum. However, for the purpose of
determining the outcome of any matter as to which the broker or nominee has
indicated on the proxy that it does not have discretionary authority to vote,
those shares will be treated as not present and not entitled to vote with
respect to that matter (even though those shares are considered entitled to
vote for quorum purposes and may be entitled to vote on other matters).
Because the Reincorporation Proposal requires the affirmative vote of at least
a majority of the votes entitled to be cast, a broker non-vote on this proposal
will have the same effect as a vote AGAINST the matter. Broker non-votes will
have no effect on the outcome of the election of directors or the other
proposals to be voted on at the Meeting.
-2-
<PAGE> 6
ELECTION OF DIRECTORS
The current Board of Directors consists of thirteen members. At the
Meeting, thirteen directors are to be elected and will hold office until the
next annual meeting of shareholders and until their successors have been
elected and qualify. Each of the nominees has consented to serve as a director
if elected. If any of the nominees shall become unable or unwilling to stand
for election as a director (an event not now anticipated by the Board of
Directors), proxies will be voted for such substitute as shall be designated by
the Board of Directors. The following table sets forth for each nominee for
election as a director of the Company, his age, principal occupation, position
with the Company, if any, and certain other information.
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
- ---- --- -------------------- --------------
<S> <C> <C> <C>
Frank Bumstead 53 Since 1989, Mr. Bumstead has been President and June 1993
a principal shareholder of Flood, Bumstead,
McCready & McCarthy, Inc., a business
management firm which represents the financial
interests of artists, song writers and
producers in the music industry ("FBMM, Inc.").
Since 1993, he has also served as Chairman and
Chief Executive Officer, and been a principal
shareholder, of FBMS Financial, Inc., a
registered investment advisor under the
Investment Company Act of 1940 ("FBMS
Financial"). He is also Vice Chairman of the
Board of Response Oncology Inc. and a director
of First Union National Bank of Tennessee,
American Retirement Corp. and Veritas Music
Entertainment, Inc.
Charles Flood 51 Since 1989, Mr. Flood has been the Chairman of May 1995
the Board and a principal shareholder of FBMM,
Inc. Since 1993 he has also served as a
Director and Treasurer, and been a principal
shareholder, of FBMS Financial. Prior to that
time, Mr. Flood worked at Capitol Records in
Nashville as the Director of Artist Relations
and later as Director of Talent Acquisition.
Mr. Flood is a director of Veritas Music
Entertainment, Inc.
Robert E. Geddes 51 Mr. Geddes has served as a director of the April 1997
Company since April 1997. Mr. Geddes is a
founder and the Chairman of the Board and Chief
Executive Officer of Eric/Chandler, Ltd.,
managing partner of Irvine Meadows
Amphitheater, a California general partnership,
and a director and executive officer of New
Avalon, Inc. and TBA Media, Inc. For at least
the last five years, Mr. Geddes has served as a
director of Avalon Entertainment Group, Inc.
("AEG").
Jeffrey McIntyre 46 Mr. McIntyre has served as Co-Managing Director April 1996
of The Village at Breckenridge Resort (the
"Resort") since December 1994. From 1988 to
1994, Mr. McIntyre was Senior Vice President of
Operations for Doubletree/Guest Quarters Suite
Hotels. Mr McIntyre has served in management
positions for Radisson Hotel Corporation and
Sheraton Hotel Corporation.
</TABLE>
-3-
<PAGE> 7
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
- ---- --- -------------------- --------------
<S> <C> <C> <C>
Thomas Miserendino 47 Mr. Miserendino has served as a director of the April 1997
Company since April 1997. For at least the
last five years, Mr. Miserendino was the Chief
Financial Officer and Treasurer of AEG. He has
served as President of Eric/Chandler, Ltd.
since 1986. Mr. Miserendino is a director and
executive officer of New Avalon, Inc. and TBA
Media, Inc. Mr. Miserendino is a certified
public accountant.
Prab Nallamilli 47 Since 1991, Mr. Nallamilli has owned and June 1993
operated restaurants in London and has served
as a consultant in the restaurant industry.
From 1971 to 1991, Mr. Nallamilli served in
various capacities for Hard Rock International
plc and its predecessors, most recently as
Director of World Wide Operations.
Mr. Nallamilli is also a director of Sunrise
Diner, Limited.
Louis J. Risi, Jr. 59 For at least the last five years, Mr. Risi has April 1996
served as the Chairman and Chief Executive
Officer of Risi Holdings Group, a private
investment and operating company. Prior to that
time, Mr. Risi held various executive
positions, including President, Director and
Chairman of the Executive Committee of Norin
Corp., an American Stock Exchange-traded
company, Chairman and Chief Executive Officer
of National Investors Fire and Casualty
Company, Executive Vice-President and Director
of the Detroit Red Wings Hockey Club, Inc.,
member of the Board of Governors of the
National Hockey League, Member of the Advisory
Counsel of the American Stock Exchange,
Director of the Chicago Rock Island and Pacific
Railroad, Director of Midland National Bank,
Executive Vice President and Director of Ivan
Tors Films, Inc., Director of Upper Lakes
Shipping, Ltd., Director of Maple Leaf Mills,
Ltd., Director of Investors Equity Life
Insurance Company of Hawaii, Director of
Corporate Foods, Inc. and Director of Southeast
Airlines, Inc. Mr. Risi is a director of
Bankmanagers Corp., a bank holding company in
Milwaukee, Wisconsin. Mr. Risi is the father of
Steven L. Risi.
Steven L. Risi 40 Mr. Risi has served as the Chief Financial April 1996
Officer of Risi Holdings Group since 1989. He
has also served as trustee and personal adviser
to the beneficiary of the Bruce A. Norris
Trust, Wendy G. Norris, since 1988. Mr. Risi is
a director of Community Bank of Homestead,
Florida. Mr. Risi is a certified public
accountant. Mr. Risi is the son of Louis J.
Risi, Jr.
</TABLE>
-4-
<PAGE> 8
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
- ---- --- -------------------- --------------
<S> <C> <C> <C>
Jose F. Rosado 48 For at least the last five years, Mr. Rosado April 1996
has served as the Chief Executive Officer of
IBEX Institutional Advisors ("IBEX"), a real
estate investment and management firm serving
the domestic pension fund industry and
corporate and individual offshore investors.
Mark van Hartesvelt 45 Mr. van Hartesvelt has served as Co-Managing April 1996
Director of the Resort since December 1994.
From 1989 to 1994, Mr. van Hartesvelt was
Senior Vice President of Marketing and Sales
for Doubletree/Guest Quarters Suite Hotels. Mr.
van Hartesvelt has served in management
positions for Pratt Hotels Corporation, Resorts
International, Harrah's Casinos, Holiday Inns,
Inc. and Levanthal and Horwath.
Frank A. McKinnie Weaver, Sr. 36 Mr. Weaver joined National Bank of Commerce June 1993
("NBC"), Memphis, Tennessee, in 1994 and serves
as Vice President, Correspondent Banking. NBC
is a wholly-owned subsidiary of National
Commerce Bancorporation. Prior to joining NBC,
Mr. Weaver served as Vice President and
Director of The Whiteville Bank from 1991 to
1994. Mr. Weaver is also a director of Heritage
Trust Company and Heritage Farms of Hickory
Valley, Inc. Mr. Weaver is the brother of
Thomas J. Weaver III.
Thomas Jackson Weaver III 39 Mr. Weaver has served as Chairman of the Board, June 1993
President and Chief Executive Officer of the
Company since its inception. From 1986 to 1988,
Mr. Weaver served as president of Hard Rock
International plc, an English public company
whose securities traded on the London Stock
Exchange and the American Stock Exchange. Since
1988 he has been the President of Heritage
Trust Company, a corporation with investments
in numerous public and private companies. Mr.
Weaver continues to serve as President of
Heritage Trust Company, but devotes his
full-time efforts to the business operations of
the Company. Mr. Weaver is the brother of Frank
A. McKinnie Weaver, Sr.
Kyle Young 42 Since 1985, Mr. Young has been the Deputy March 1996
Director of the Country Music Foundation (the
"CMF"). From 1975 to 1985, Mr. Young was
employed by the CMF in various capacities,
including involvement in the development and
licensing of television shows, radio programs
and music festivals produced by the CMF. Mr.
Young is involved in the Country Music
Association, the National Academy of the
Recording Arts and Sciences, the National
Association of Independent Record Distributors,
the Nashville Entertainment Association, the
Inter-Museum Council of Nashville, the
Nashville Institute for the Arts and Vanderbilt
University Press.
</TABLE>
-5-
<PAGE> 9
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the year ended December 31, 1996, the Board of Directors held one
meeting. Each of the directors attended at least 75% of all meetings held by
the Board of Directors and all meetings of each committee of the Board of
Directors on which such director served during the year ended December 31, 1996
or, in the case of Messrs. McIntyre, Louis J. Risi, Jr., Steven L. Risi,
Rosado, van Hartesvelt and Young, during the period in which they were
directors.
The Board of Directors has an Audit Committee, a Compensation Committee
and an Executive Committee. The Board of Directors does not have a Nominating
Committee.
The Audit Committee currently consists of Messrs. Steven L. Risi, Kyle
Young and Frank McKinnie Weaver, Sr. The Audit Committee met one time during
the year ended December 31, 1996. The functions of the Audit Committee are (i)
to review significant audit and accounting policies and practices; (ii) to
review the scope of audits and reports; and (iii) to review the performance of
the overall accounting and financial controls of the Company. The Audit
Committee also recommends to the Board of Directors the independent auditors to
perform the annual audit of the Company's financial statements.
The Compensation Committee currently consists of Messrs. Steven L. Risi
and Kyle Young. The functions of the Compensation Committee are (i) to review
and recommend to the Board of Directors the direct and indirect compensation
and employee benefits of the Company's executive officers; (ii) to review and
administer the Company's employee benefit plans; (iii) to review the Company's
policies relating to employee and executive compensation; and (iv) to review
management's long-range planning for executive development and succession. The
Compensation Committee also performs the functions of the nominating committee
of the Board of Directors. The Compensation Committee did not meet during the
year ended December 31, 1996.
The Executive Committee was formed in May 1996 and currently consists of
Messrs. Thomas J. Weaver (Chairman), McIntyre and van Hartesvelt. The
Executive Committee did not formally meet during the year ended December 31,
1996.
COMPENSATION OF DIRECTORS
Non-employee members of the Board of Directors are paid a fee of $100
for each board meeting personally attended and are reimbursed for their
out-of-pocket expenses incurred in attending board meetings.
AEG, a wholly-owned subsidiary of the Company, has entered into
consulting agreements with Robert E. Geddes and Thomas Miserendino providing
for consulting services to AEG for terms that commenced on April 21, 1997 and
end on December 31, 2002. The agreements provide for annual base compensation
of $100,000 for Mr. Geddes and $50,000 for Mr. Miserendino, with cost of living
increases as determined by the Board of Directors of the Company, and, for each
calendar year after 1996, annual incentive compensation based on AEG's
operating results.
-6-
<PAGE> 10
EXECUTIVE OFFICERS
The executive officers of the Company serve at the discretion of the
Board of Directors and are chosen annually by the Board at its meeting
coinciding with the annual meeting of shareholders. The following table sets
forth the names and ages of the executive officers of the Company and all
positions held with the Company by each individual.
<TABLE>
<CAPTION>
Name Age Title
---- --- -----
<S> <C> <C>
Thomas J. Weaver III . . . . . . . 39 Chairman of the Board, Chief
Executive Officer and President
Bryan J. Cusworth . . . . . . . . . 37 Chief Financial Officer
Frank A. McKinnie Weaver, Sr. . . . 36 Director, Secretary
</TABLE>
For a description of the business experience of Messrs. Frank A. Weaver
and Thomas J. Weaver, see "Election of Directors."
Bryan J. Cusworth has served as Chief Financial Officer of the Company
since September 1996. Prior to joining the Company, Mr. Cusworth was employed
by Arthur Andersen LLP from July 1982 to September 1996, where he specialized
in the resort, real estate and entertainment industries. Mr. Cusworth is a
certified public accountant.
EXECUTIVE COMPENSATION
Thomas J. Weaver III, the Company's Chairman of the Board, President and
Chief Executive Officer, was the only executive officer of the Company who
received annual salary and bonus in excess of $100,000 for the three years
ended December 31, 1996 (the "Named Executive Officer"). Mr. Weaver received
salaries of $88,942, $125,000 and $62,500, respectively, for the years 1994,
1995 and 1996. Mr. Weaver did not receive a bonus during any of those years.
To assist the Company's cash flow position, Mr. Weaver waived one-half of his
1996 salary earned under his employment agreement. The Company has an
employment agreement with Mr. Weaver. See "----Employment Agreements."
EMPLOYMENT AGREEMENTS
The Company has entered into an employment agreement with Thomas J.
Weaver III for a term of five years, commencing January 1, 1994. The agreement
provides for an annual base salary of $125,000 and an annual bonus as
determined by the Board of Directors based on the operating results of the
Company. The agreement is automatically renewed on each anniversary date for an
additional five-year term unless it is terminated by either party prior to the
anniversary date. The agreement provides that Mr. Weaver is entitled to payment
for the unexpired portion of the current term in the event his employment is
terminated without cause by the Company. Under the agreement, cause is defined
to include failure to perform the duties of his office, breach of fiduciary
duty to the Company and willful violation of the confidentiality or non-
competition provisions of the agreement.
The Company has entered into employment agreements with Jess McIntyre
and Mark van Hartesvelt providing for the employment of Messrs. McIntyre and
van Hartesvelt for five year terms commencing April 29, 1996. The agreements
provide for annual base salaries of $125,000 and annual incentive bonuses based
upon the operating results of the Resort.
The Company has entered into an employment agreement with Prab
Nallamilli for a term of five years, commencing January 1, 1994. The agreement
provides for an annual base salary of $35,000.
-7-
<PAGE> 11
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of ____________, 1997 certain
information with respect to the beneficial ownership of the Company's Common
Stock and Series A Preferred Stock by (i) each person who is known by the
Company to be the beneficial owner of more than 5% of the outstanding shares of
Common Stock and Series A Preferred Stock of the Company, (ii) each of the
Company's directors, (iii) the Named Executive Officer and (iv) all directors
and executive officers of the Company as a group. Unless otherwise indicated,
each of the shareholders listed below has sole voting and investment power with
respect to the shares of Common Stock and Series A Preferred Stock beneficially
owned.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Owned Percent of Total
--------------------------------------------------
Series A Series A
Common Preferred Common Preferred
Name and Address(1) Stock Stock Stock Stock
- ----------------------------------- ------------ ------------- ----------- -----------
<S> <C> <C> <C> <C>
Thomas Jackson Weaver III . . . . 1,030,000(2) 152,839 18.2% 45.7%
Bryan Cusworth . . . . . . . . . 0 0 0 0
Prab Nallamilli . . . . . . . . . 0 238 0 *
Frank Bumstead . . . . . . . . . 0 36,099(3) 0 10.8
Charles Flood . . . . . . . . . . 0 36,099(3) 0 10.8
Jeffrey McIntyre . . . . . . . . 18,233 0 * 0
Louis Risi, Jr. . . . . . . . . . 139,322(4) 0 2.6% 0
Steven L. Risi . . . . . . . . . 20,684(4) 0 * 0
Jose F. Rosado . . . . . . . . . 222,094(4) 0 4.1% 0
Mark van Hartesvelt . . . . . . . 18,233 0 * 0
Frank A. McKinnie Weaver, Sr . . 0 54,000 0 16.2
Kyle Young . . . . . . . . . . . 0 0 0 0
Robert E. Geddes . . . . . . . . 165,342 0 3.1% 0
Thomas Miserendino . . . . . . . 40,492 0 * 0
All executive officers and
directors 1,654,400 268,135 29.1% 80.2%
as a group (14 persons) . . . .
</TABLE>
- ----------
* Less than 1%.
(1) The address for Messrs. Weaver, Nallamilli and Weaver is 402 Heritage
Plantation Way, Hickory Valley, Tennessee 38042, the address for Messrs.
Bumstead and Flood is 1700 Hayes Street, Suite 304, Nashville, Tennessee
37203, the address for Mr. Young is 4 Music Square East, Nashville,
Tennessee 37203, the address for Messrs. McIntyre, van Hartesvelt and
Cusworth is 535 South Park, Breckenridge, Colorado 80424, the address
for Messrs. Risi, Rosado and Risi is 2333 Ponce de Leon Blvd., Suite
650, Coral Gables, Florida 33134, and the address for Messrs. Geddes and
Miserendino is 17835 Ventura Blvd., Suite 300, Encino, California 91316.
(2) Includes 250,000 shares issuable upon the exercise of outstanding stock
options.
(3) Includes 11,140 shares held by a corporation over which Mr. Bumstead and
Mr. Flood share voting and investment power.
(4) Includes 10,000 shares issuable upon the exercise of outstanding stock
options.
-8-
<PAGE> 12
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that
Company directors, executive officers and persons who own more than 10% of the
Common Stock file initial reports of ownership and reports of changes in
ownership of Common Stock with the Securities and Exchange Commission (the
"SEC"). Officers, directors and shareholders who own more than 10% of the
Common Stock are required by the SEC to furnish the Company with copies of all
Section 16(a) reports they file.
To the Company's knowledge, based solely on the review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the year ended December 29, 1996, all Section
16(a) filing requirements applicable to its officers, directors and 10%
shareholders were complied with.
INDEPENDENT AUDITORS
The Board of Directors, upon recommendation of its Audit Committee, has
appointed Arthur Andersen LLP as the Company's independent auditors for the
year ending December 31, 1997. A representative of Arthur Andersen is not
expected to be present at the Meeting.
On May 8, 1996, the Company dismissed Ernst & Young LLP ("Ernst &
Young"), the Company's independent auditor for the years ended December 31,
1994 and December 31, 1995. The reports of Ernst & Young on the Company's
financial statements for the past two years contained no adverse opinion or
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principle, except that the 1995 Report of Ernst &
Young contained an explanatory paragraph with respect to a going concern
uncertainty. The Company's Board of Directors participated in and approved the
decision to change independent auditors.
In connection with its audits of the Company's financial statements for
the two years ended December 31, 1994 and December 31, 1995, and the subsequent
interim period through May 8, 1996, except as stated in the remainder of this
paragraph, there were no disagreements with Ernst & Young on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which, if not resolved to the satisfaction of Ernst & Young
would have caused Ernst & Young to make reference thereto in its report. Ernst
& Young advised the Company that (a) on December 19, 1995 the Company indicated
to Ernst & Young that it desired to reflect the operating results of an
acquired business as of January 1, 1996, even though the business combination
would likely be completed subsequent to that date and would be contingent upon
the consummation of a public offering of the Company's equity securities and
other conditions, and (b) Ernst & Young orally advised the Company at that time
that generally the operations of an entity acquired in a purchase business
combination would be reflected from the date that the transaction was
completed. On May 8, 1996, the Company engaged Ehrhardt Keefe Steiner &
Hottman P.C. as its independent auditors for the interim period prior to the
appointment of Arthur Andersen LLP as independent auditors for the year ended
December 31, 1996.
-9-
<PAGE> 13
PROPOSALS FOR SHAREHOLDER ACTION
1. ELECTION OF DIRECTORS
The nominees for election as directors are Frank Bumstead, Charles
Flood, Robert E. Geddes, Jeffrey McIntyre, Thomas Miserendino, Prab Nallamilli,
Louis J. Risi, Jr., Steven L. Risi, Jose F. Rosado, Mark van Hartesvelt, Frank
A. McKinnie Weaver, Sr., Thomas J. Weaver III and Kyle Young. Information
concerning the nominees is set forth in the section captioned "Election of
Directors."
THE BOARD RECOMMENDS A VOTE FOR EACH OF THE NOMINEES.
2. APPROVAL OF THE 1997 PLAN
On April 20, 1997, the Board of Directors authorized the adoption of the
Nashville Country Club, Inc. 1997 Stock Option Plan (the "1997 Plan"). The
purpose of the 1997 Plan is to strengthen the Company by providing a means of
retaining and attracting competent personnel by extending to certain key
employees, officers and directors of the Company, and to certain consultants
providing services to the Company, added long-term incentives for high levels
of performance and for unusual efforts designed to improve the financial
performance of the Company through the opportunity for ownership of Common
Stock and the benefits of stock appreciation.
A copy of the 1997 Plan is included herein as Exhibit A. The following
is a summary of key provisions of the 1997 Plan and does not purport to be
complete and is qualified in its entirety by reference to the detailed
provisions thereof.
SHARES AVAILABLE FOR OPTIONS
A total of 500,000 shares of Common Stock, subject to adjustment for
stock splits, stock dividends and similar events, may be purchased pursuant to
options granted under the 1997 Plan. Shares issued under the 1997 Plan may be
either authorized and unissued Common Stock or Common Stock held in the
treasury of the Company. If an option expires or becomes unexercisable for any
reason without having been exercised in full, the unpurchased shares which were
subject to such option will again become available for future option grants
under the plan.
PERSONS ELIGIBLE TO PARTICIPATE
Eligibility for participation in the 1997 Plan is confined to key
employees, officers and directors of the Company, and to certain consultants
providing services to the Company.
ADMINISTRATION
The 1997 Plan will be administered by a committee selected by the Board
of Directors, which will be comprised of two or more non-employee directors
(the "Committee"). The Committee will have the authority to construe and
interpret the 1997 Plan, to define the terms used in the plan, to prescribe,
amend and rescind rules and regulations relating to the administration of the
plan, to determine the duration and purposes of leaves of absence which may be
granted to participants without constituting a termination of their employment
for purposes of the plan and to make all other determinations necessary or
advisable for the administration of the plan.
-10-
<PAGE> 14
OPTIONS
Under the 1997 Plan, the Committee may grant options in the form of
incentive stock options ("ISOs") or non-qualified stock options ("NQSOs").
Subject to the express provisions of the 1997 Plan, the Committee will have the
authority to determine those individuals to whom stock options will be granted,
the number of shares subject to the option, the term of the option (which, for
incentive stock options, shall not exceed ten years (five years in the case of
an optionee owing more than 10% of the Common Stock)), the exercise price per
share of stock subject to the option (which, for incentive stock options, must
be not less than the fair market value of the Common Stock at the time of grant
(110% of fair market value in the case of an optionee owning more than 10% of
the Common Stock)) and the other material terms of the option. The aggregate
fair market value (determined at the time of grant) of the Common Stock with
respect to which ISOs are exercisable for the first time by an optionee during
any calendar year may not exceed $100,000. Any option granted in the form of
an ISO must satisfy the other applicable requirements of Section 422 of the
Internal Revenue Code of 1986, as amended. No options may be granted under the
1997 Plan after April 20, 2007.
The exercise price of an option shall be paid by the optionee at the
time of exercise of an option in cash or by check or by such other
consideration as may be provided for in the respective option agreement. If
the option agreement so provides, an optionee may deliver in payment of a
portion or all of the exercise price certificates for Common Stock, including a
multiple series of exchanges of such Common Stock, which will be valued at the
fair market value of such Common Stock on the date of exercise of the option.
VESTING AND EXERCISABILITY
Each option granted under the 1997 Plan to an employee, officer or
director of the Company shall, by its terms, require such optionee to remain in
the continuous employment or service of the Company for such period of time, if
any, as the Committee may determine at the time of grant before any part of the
option may be exercised. The Committee shall establish such rules as it deems
appropriate in connection with the grant of options to consultants.
The 1997 Plan provides that if an optionee who is an employee, officer
or director of the Company dies while employed by or in the service of the
Company, stock options, to the extent vested or which otherwise would have
vested during the twelve-month period beginning on the date of death, will be
exercisable for twelve months after the date of death or until the end of the
option term, whichever is shorter. Upon termination of employment or service
of an optionee who is an employee, officer or director of the Company by reason
of disability, stock options, to the extent vested or which otherwise would
have vested during the twelve-month period beginning on the date of such
termination, will be exercisable for twelve months after the date of such
termination or until the end of the option term, whichever is shorter. Unless
the Board determines otherwise at the time of grant or thereafter, upon
termination of employment or service of an optionee who is an employee, officer
or director of the Company for any reason other than death or disability or for
cause, stock options, to the extent vested, will be exercisable for three
months, or until the end of the option term, whichever is shorter. Upon
termination of employment or service for cause, all stock options held by such
terminated employee will immediately terminate. Options not exercised within
the time periods set forth above shall terminate. Options granted under the
1997 Plan to consultants may contain such terms and conditions with respect to
death, disability and termination of the consulting relationship as the
Committee deems necessary or appropriate.
CHANGES IN CAPITALIZATION OR CHANGE IN CONTROL
The number of shares of Common Stock authorized to be issued under the
1997 Plan and each outstanding award shall be proportionately adjusted in the
event of any stock split or stock dividend. In the event of any other
reorganization, recapitalization, stock split, combination of shares, merger or
consolidation involving the Company, or any exchange of securities involving
the Common Stock, there
-11-
<PAGE> 15
shall be substituted for each share of Common Stock subject to an option and
each share of Common Stock reserved for issuance under the 1997 Plan but not
yet covered by an option, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock shall be so
changed or for which each such share shall be exchanged. In the event of any
other kind of change in the number or kind of outstanding shares of Common
Stock the Committee may provide for such equitable adjustment as the Committee
in its sole discretion may determine. Upon the occurrence of a change in
control of the Company, if provision is made in writing for the assumption and
continuation or substitution for options granted under the 1997 Plan, such
options or the new options substituted therefor shall continue in the manner
and under the terms provided. In the event that no such provision is made, all
such options shall become fully vested and may be exercised prior to the
effective date of such change in control.
AMENDMENT
The Board of Directors may suspend or terminate the 1997 Plan at any
time and may, with the consent of the holder of an option, make such
modifications in the terms and conditions of such holder's option as it shall
deem advisable. The Board of Directors may at any time amend the 1997 Plan as
it shall deem advisable; provided, however, that the approval of the
shareholders of the Company is required for any amendment that would increase
the aggregate number of shares which may be issued pursuant to options granted
under the 1997 Plan, change the minimum option price, increase the maximum
terms of options to be granted under the plan, materially modify the
requirements for eligibility to participate in the plan, remove the
administration of the plan from the Committee or materially increase the
benefits accruing to holders of options under the plan. An amendment that
would have a material effect on the rights of a participant under an
outstanding option will not be valid with respect to such option without the
participant's consent.
BENEFITS TO CERTAIN PERSONS UNDER THE 1997 PLAN
On April 20, 1997, the Committee authorized the issuance of an option to
Thomas Jackson Weaver III to purchase 250,000 shares of Common Stock at an
exercise price of $5.40. The option will expire on April 20, 2007. The
individuals who will receive future grants of options under the 1997 Plan will
be selected by the Committee and are not presently determinable.
The closing market value of the Common Stock as of ________, 1997 was
$____ per share, as reported on the Nasdaq National Market.
CERTAIN FEDERAL INCOME TAX MATTERS
Under current law, the federal income tax consequences to an individual
and to the Company with regard to the grant and exercise of an option under the
1997 Plan generally will be as follows:
An individual will not recognize any income upon the grant or exercise
of an ISO. If the individual does not dispose of the Common Stock acquired
pursuant to the exercise of an ISO until at least two years after the date the
ISO is granted and at least one year after exercise of the ISO, the individual
will recognize long-term capital gain upon the sale of the Common Stock in an
amount equal to the excess, if any, of his or her selling price for the Common
Stock over the option exercise price. In such case, the Company will not be
entitled to any tax deduction resulting from the issuance or sale of the Common
Stock. If the individual disposes of the Common Stock acquired pursuant to the
exercise of an ISO prior to the expiration of either two years from the date
the ISO is granted or one year from the date the ISO is exercised, any gain
realized will be taxable at the time of such disposition as follows: (a) as
ordinary income to the extent of the difference between the option exercise
price and the lesser of the fair market value of the Common Stock on the date
the ISO was exercised or the amount realized from such disposition, and (b) as
capital gain to the extent of any excess of the amount realized from such
disposition over the fair market value of the Common Stock on the date of
exercise, which gain shall be treated as short-term or long-term capital
-12-
<PAGE> 16
gain depending upon the holding period of the Common Stock. In such case, the
Company may claim an income tax deduction (as compensation) for the amount
taxable to an individual as ordinary income.
In general, the difference between the fair market value of the Common
Stock at the time the ISO is exercised and the option exercise price will
constitute an item of adjustment, for purposes of determining alternative
minimum taxable income, and under certain circumstances may subject the
participant, in the year in which the option is exercised, to the alternative
minimum tax.
If an individual uses Common Stock which he or she owns to pay, in whole
or in part, the exercise price for Common Stock acquired pursuant to an ISO,
(a) the holding period for the newly issued Common Stock equal in value to the
old Common Stock which was surrendered upon the exercise shall include the
period during which the old Common Stock was held, (b) the individual's basis
in such newly issued Common Stock will be the same as his or her basis in the
old Common Stock surrendered and (c) no gain or loss will be recognized by the
individual on the old Common Stock surrendered. However, if an employee uses
Common Stock previously acquired pursuant to the exercise of an ISO to pay all
or part of the exercise price under an ISO, such tender will constitute a
disposition of such previously acquired Common Stock for purposes of the
one-year (and two-year) holding period requirement applicable to such ISO and
such tender may be treated as a taxable exchange.
The federal income tax consequences to an individual who receives NQSOs
and to the Company generally will, under current law, be as follows:
An individual will not recognize any income at the time the NQSO is
granted. Generally, an individual will recognize ordinary income, at the time
the NQSO is exercised, in a total amount equal to the excess of the then fair
market value of the Common Stock acquired over the exercise price. However,
Section 83 of the Internal Revenue Code of 1986, as amended (the "Code"),
provides that, if an employee receives Common Stock subject to a substantial
risk of forfeiture (e.g., vesting requirements) or if a director, officer or
principal stockholder (i.e., an owner of more than ten percent of the
outstanding Common Stock) receives shares of Common Stock pursuant to the
exercise of a NQSO, he or she is not required to recognize any income until the
Common Stock is no longer subject to a substantial risk of forfeiture or the
date on which such shares can be sold at a profit without liability under
Section 16(b) of the Exchange Act, respectively. At such time, the employee or
director, officer or principal stockholder will recognize ordinary income equal
to the amount by which the then fair market value of the Common Stock acquired
pursuant to the exercise of such NQSO exceeds the price paid for such Common
Stock. Alternatively, an employee or director, officer or principal
stockholder who would not otherwise be taxed at the time the shares of Common
Stock are received may file a written election, a Code Section 83(b) election,
within 30 days of such receipt, with the Internal Revenue Service, to be
subject to ordinary income tax as of the date of receipt on the difference
between the then fair market value of the Common Stock and the price paid for
such Common Stock.
All income realized upon the exercise of a NQSO or the making of a Code
Section 83(b) election will be taxed as ordinary compensation income, subject
to withholding. The Company will be entitled to a tax deduction (as
compensation) for the amount taxable to an individual (including a director,
officer and principal stockholder) upon the exercise of a NQSO, as described
above, in the same year as those amounts are taxable to the individual.
Common Stock issued pursuant to the exercise of a NQSO generally will
constitute a capital asset in the hands of an individual (including a director,
officer or principal stockholder) and will be eligible for capital gain or loss
treatment upon any subsequent disposition. The holding period of such
individual will commence upon the date he or she recognizes income with respect
to the issuance of such Common Stock, as described above. The individual's
basis in the Common Stock will be equal to the greater of the fair market value
of the Common Stock as of that date or the amount paid for such Common Stock.
If, however, an individual uses Common Stock which he or she owns to pay, in
whole or in part, the exercise price for Common Stock acquired pursuant to the
exercise of a NQSO, (a) the holding period for the newly
-13-
<PAGE> 17
issued Common Stock equal in value to shares of the old Common Stock which were
surrendered upon the exercise shall include the period during which the old
Common Stock was held, (b) the individual's basis in such newly issued Common
Stock will be the same as his or her basis in the surrendered Common Stock, (c)
no gain or loss will be realized by the individual on the old Common Stock
surrendered, and (d) the individual will realize ordinary compensation income
in an amount equal to the fair market value of the additional number of shares
of Common Stock received over and above the number of shares of old Common
Stock surrendered.
In addition to the federal income tax consequences discussed above,
Section 280G of the Code provides that if an officer, stockholder or highly
compensated individual receives a payment which is in the nature of
compensation and which is contingent upon a change in control of the employer,
and such payment equals or exceeds three times his or her "base salary" (as
defined below), then any amount received in excess of base salary shall be
considered an "excess parachute payment." An individual's "base salary" is
equal to his or her average annual compensation over the five-year period (or
period of employment, if shorter) ending with the close of the individual's
taxable year immediately preceding the taxable year in which the change in
control occurs. If the taxpayer establishes, by clear and convincing evidence,
that an amount received is reasonable compensation for past or future services,
all or a portion of such amount may be deemed not to be an excess parachute
payment. If any payments made under the 1997 Plan in connection with a change
in control of the Company constitute excess parachute payments with respect to
any individual (and such payments are not reduced or eliminated pursuant to the
terms of the 1997 Plan), then in addition to any income tax which would
otherwise be owed on such payment, the individual will be subject to an excise
tax equal to 20% of such excess parachute payment and the Company will not be
entitled to any tax deduction to which it otherwise would have been entitled
with respect to such excess parachute payment.
Section 280G provides that payments made pursuant to a contract entered
into within one year of the change in control are presumed to be parachute
payments unless the individual establishes, by clear and convincing evidence,
that such contract was not entered into in contemplation of a change in
control. In addition, the General Explanation of the Tax Reform Act of 1984
prepared by the Staff of the Joint Committee on Taxation indicates that the
grant of an option within one year of the change in control or the accelerated
exercisability of an option because of a change in control may be considered a
parachute payment, in an amount equal to the value of the option or the value
of the accelerated portion of the option, as the case may be. Pursuant to
proposed regulations issued by the Treasury Department under Section 280G, if
the option would not have been accelerated absent the change in control, the
accelerated exercisability of a NQSO because of the change in control is
considered a parachute payment in an amount equal to the value of the
accelerated portion of the NQSO. If the option would have become exercisable
without regard to whether the change occurred, the accelerated exercisability
of the NQSO because of the change in control is considered a parachute payment
in an amount equal to the excess of the amount of the payment over the present
value of the payment absent the acceleration. If at the time of the change it
is substantially certain that the payment would have been made if the
participant had continued providing services, the amount considered to be a
parachute payment is the amount described in the immediately preceding sentence
(or the amount of the accelerated payment, if less) plus an additional amount
to reflect the value of the excused services. Even if the grant of an option
within one year of the change in control or the acceleration of an option is
not a parachute payment for purposes of Section 280G, the exercise of an option
granted within one year of the change in control or the exercise of the
accelerated portion of an option may result in a parachute payment, in an
amount equal to the excess of the fair market value of the Common Stock
received upon exercise of the option over the exercise price. Payments
received for the cancellation of an option because of a change in control may
also result in parachute payments.
Under Section 162(m) of the Code, publicly held companies may not deduct
compensation for certain employees to the extent that such compensation exceeds
$1 million for the taxable year. The $1 million limitation applies to the
Company's Chief Executive Officer and the four most highly compensated officers
other than the Chief Executive Officer. Compensation which is performance
based (as defined in the Code and rules and regulations thereunder), however,
is not counted as subject to the
-14-
<PAGE> 18
deductibility limitation of Section 162(m). The options under the 1997 Plan
may not qualify as performance-based compensation and, therefore, the
compensation expense incurred by the Company with respect to the options may
not be exempt from the limitations of Section 162(m).
The foregoing summary with respect to federal income taxation does not
purport to be complete and reference is made to the applicable provisions of
the Code.
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE 1997 PLAN.
3. APPROVAL OF THE NAME CHANGE PROPOSAL
On June 30, 1997, the Board of Directors adopted resolutions approving
and recommending that the shareholders approve a change in the name of the
Company to TBA Entertainment Corporation. The Board of Directors believes that
the new name more accurately reflects the Company's business operations and
plans for the future.
If the shareholders approve the Reincorporation Proposal, the name of
the Company will be changed to TBA Entertainment Corporation pursuant to the
terms of the Merger Agreement (as hereinafter defined). See "Approval of the
Reincorporation Proposal." If the shareholders do not approve the
Reincorporation Proposal but the Name Change Proposal is approved by the
shareholders, the Company's Charter will be amended to effect the Name Change
Proposal. This will be accomplished by an amendment to Section 1 of the
Company's charter, which currently states:
"The name of the corporation is Nashville Country Club, Inc."
Section 1 of the Company's Charter will be amended to state:
"The name of the corporation is TBA Entertainment Corporation."
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE NAME CHANGE PROPOSAL.
4. APPROVAL OF THE REINCORPORATION PROPOSAL
On June 30, 1997, the Board of Directors adopted resolutions approving
and recommending that the shareholders approve the Reincorporation Proposal
changing the Company's state of incorporation from the State of Tennessee to
the State of Delaware (the "Reincorporation"). The Reincorporation is to be
accomplished by merging the Company with and into its newly formed Delaware
subsidiary, TBA Entertainment Corporation ("Newco"), with Newco being the
surviving corporation. The Reincorporation will (i) change the Company's state
of incorporation from Tennessee to Delaware, (ii) change the name of the
Company to TBA Entertainment Corporation, and (iii) assign a par value to the
shares of stock.
The Board of Directors of the Company believes that the best interests
of the Company and its shareholders will be served by the Reincorporation. For
many years the State of Delaware has followed a policy of encouraging
incorporation in that state and, in furtherance of that policy, has adopted
comprehensive, modern and flexible corporate laws which are periodically
updated and revised to meet changing business needs. As a result, many
corporations have been initially incorporated in Delaware or have subsequently
reincorporated in Delaware in a manner similar to that proposed by the Company.
Because Delaware is a state of incorporation for many corporations, the
Delaware courts have developed considerable expertise in dealing with corporate
issues and a substantial body of case law has developed construing Delaware
corporate law and establishing public policies with respect to corporations
incorporated in Delaware. Consequently, Delaware corporate law is
comparatively well known and understood. The
-15-
<PAGE> 19
Board of Directors believes that the more established body of case law
interpreting Delaware law and establishing public policies relating to
corporations incorporated in Delaware will provide greater certainty with
respect to the Company's corporate affairs.
Despite the belief of the Board of Directors that the Reincorporation is
in the best interests of the Company and its shareholders, shareholders should
be aware that Delaware corporate law has been publicly criticized on the
grounds that it does not afford minority shareholders the same substantive
rights and protections as are available under the laws of some other states.
For a comparison of shareholders' rights and the powers of management under
Delaware law and Tennessee law, see "Comparison of Delaware and Tennessee
Corporate Law and Corresponding Features of Corporate Certificate of
Incorporation and Bylaws."
REINCORPORATION IMPLEMENTED THROUGH PLAN OF MERGER
In order to effect the proposed Reincorporation, the Company will be
merged with and into Newco pursuant to the terms of the proposed Agreement and
Plan of Merger (the "Merger Agreement") in substantially the form attached
hereto as Exhibit B. Upon the completion of the merger, the owner of each
outstanding share of Common Stock of the Company will automatically own one
share of the common stock, par value $.001 per share, of Newco (the "Newco
Common Stock"), so that the holders of the Company's Common Stock will own a
corresponding number of shares of Newco Common Stock. Each outstanding
certificate representing a share or shares of the Company's Common Stock and
Preferred Stock will continue to represent the same number of shares in Newco.
THUS, IT WILL NOT BE NECESSARY FOR SHAREHOLDERS OF THE COMPANY TO EXCHANGE
THEIR EXISTING STOCK CERTIFICATES FOR STOCK CERTIFICATES OF NEWCO. It is
anticipated that the Common Stock of the Company will continue to be listed on
the Nasdaq National Market without interruption and that delivery of existing
stock certificates of the Company will constitute "good delivery" of shares of
Newco in transactions on the Nasdaq National Market subsequent to the merger.
Under the Merger Agreement, the Newco Certificate of Incorporation will
be the certificate of incorporation of the surviving corporation. The Newco
Certificate of Incorporation will be substantially in the form attached hereto
as Exhibit C and, other than the change in the corporate name and the
assignment of a par value to the shares of stock, will be substantially the
same as the Company's current Certificate of Incorporation in all material
respects (after changing references to the different states of incorporation
and the corporate law thereof). See "Comparison of Delaware and Tennessee
Corporate Law and Corresponding Features of Corporate Certificate of
Incorporation and Bylaws."
The Newco Bylaws will be the bylaws of the surviving corporation in the
merger. The Newco Bylaws are identical to the Company's current Bylaws, except
that the change in the corporate name is reflected and references to Delaware
have been substituted for references to Tennessee.
ABANDONMENT
Notwithstanding a favorable vote of the stockholders, the Company
reserves the right by action of the Board of Directors to abandon the
Reincorporation prior to its effectiveness if it determines that such
abandonment is in the best interests of the Company. The Board of Directors
has made no determination as to any circumstances which may prompt a decision
to abandon the Reincorporation.
NO CHANGE WILL BE MADE IN THE BUSINESS OR PHYSICAL LOCATION OF THE COMPANY
The Reincorporation will effect a change in the name and legal domicile
of the Company and other changes of a legal nature, the most significant of
which are described in this Proxy Statement. However, the Reincorporation will
not result in any change in the business, management, location of the principal
executive offices, assets, liabilities or net worth of the Company. The
management of the Company, including all directors and officers, will remain
the same after the Reincorporation and will assume identical
-16-
<PAGE> 20
positions with Newco. Moreover, as noted above, it is anticipated that after
the Reincorporation, the shares of Common Stock of the surviving corporation
will be traded, without interruption, on the Nasdaq National Market.
COMPARISON OF DELAWARE AND TENNESSEE CORPORATE LAW AND CORRESPONDING FEATURES
OF CORPORATE CERTIFICATE OF INCORPORATION AND BYLAWS
The rights of the Company's shareholders are currently governed by the
Company's Charter, the Company's Bylaws and Tennessee law. Upon the
effectiveness of the merger, the rights of Newco's shareholders would be
governed by the Newco Certificate of Incorporation, Newco Bylaws and Delaware
law. The following is a summary of certain similarities and differences
between the rights of the Company's shareholders under the foregoing governing
documents and applicable law. This summary does not purport to be a complete
statement of such similarities and differences. The identification of specific
similarities and differences is not meant to indicate that other equally or
more significant similarities and differences do not exist. Such similarities
and differences can be examined in full by reference to Delaware law, Tennessee
law and corporate governing documents of the Company and Newco.
Par Value of Shares. Both Tennessee law and Delaware law allow the
issuance of shares with or without par value. Delaware franchise taxes are
calculated on the basis of the par value of a corporation's authorized stock;
for purposes of this calculation, shares without par value are assigned a value
of $100 per share. The Company's Charter does not assign a par value to its
shares. The Newco Certificate of Incorporation assigns a par value of $.001
per share to its shares, which will result in lower Delaware franchise taxes to
the Company than if the Newco Certificate of Incorporation provided for the
issuance of no par value shares.
Amendment of Bylaws. Under Tennessee law, a corporation's board of
directors may amend or repeal the corporation's bylaws unless the Charter or
Tennessee law otherwise reserves the power exclusively to shareholders, in
whole or in part. In addition, the shareholders of a Tennessee corporation may
amend or repeal the corporation's bylaws even though the board of directors
also has that power. Under Delaware law, the authority to adopt, amend or
repeal the bylaws of a Delaware corporation is held exclusively by the
shareholders unless such authority is conferred upon the board of directors in
the corporation's certificate of incorporation. Because of this difference in
the state laws, Newco's Certificate of Incorporation contains a provision
conferring authority on the Board of Directors of Newco to amend Newco's
Bylaws, thus preserving the same authority to the Board of Directors of Newco
as is set forth in the Company's Bylaws.
Amendment of Certificate of Incorporation or Charter. Under Tennessee
law, a board of directors, without shareholder action, may adopt certain
amendments to the charter including, but not limited to, (i) deleting or
changing the name and address of the initial registered agent or registered
office, (ii) changing issued and unissued authorized shares of an outstanding
class into a greater number of whole shares if the corporation has only shares
of that class outstanding, (iii) designating or changing the address of the
principal office of the corporation or (iv) making certain changes to the
corporation's name. All other amendments to the charter of a Tennessee
corporation must be approved by a majority of the votes entitled to be cast on
the amendment by any voting group, unless Tennessee law, the charter or the
resolutions of the board of directors recommending such amendment to the
shareholders specifically require a greater vote for such an amendment.
Under Delaware law, amendments to a certificate of incorporation of a
corporation require the approval of the board of directors and the approval of
the holders of a majority of the outstanding shares entitled to vote, unless a
greater vote is required in the corporation's certificate of incorporation.
The Company's Charter and the Newco Certificate of Incorporation do not require
a greater vote for such amendments.
Special Meetings of Shareholders. Tennessee law provides that special
meetings of shareholders may be called by the board of directors and, unless
the charter provides otherwise, by holders of at least
-17-
<PAGE> 21
10% of the shares entitled to vote at the meeting who sign, date and deliver to
the corporation's secretary one or more written demands for the meeting
describing the purpose or purposes for which it is to be held.
Under Delaware law, a special meeting of shareholders may be called by
the board of directors or any person authorized to do so in the corporation's
certificate of incorporation or bylaws. The Company's Bylaws and the Newco
Bylaws provide that a special meeting of shareholders may be called by the
Board of Directors or the holders of at least 10% of the shares entitled to
vote at the meeting.
Actions by Written Consent of Shareholders. Under Tennessee law and
Delaware law, shareholders may execute an action by written consent in lieu of
a meeting of shareholders. Tennessee law requires the unanimous consent of
shareholders in order to execute an action by written consent. Under Delaware
law, action may be taken by the written consent of the holders of outstanding
stock having at least the number of votes that would be required at a meeting.
Removal of Directors. Under Tennessee law and Delaware law,
shareholders generally may remove one or more directors from an unclassified
board with or without cause, unless the corporation's charter provides that
directors may be removed only with cause. The Company's Charter and the Newco
Certificate of Incorporation do not limit the ability of the shareholders to
remove directors, with or without cause.
Appraisal Rights. Because the Common Stock of the Company is listed on
The Nasdaq National Market, appraisal rights are not available to the Company's
shareholders under either Tennessee or Delaware law.
Limitation of Liability of Directors. Under both Tennessee law and
Delaware law, a corporation's charter or certificate of incorporation may
contain a provision which, subject to the limitations described below, would
limit or eliminate a director's personal liability to the corporation or its
shareholders for monetary damages for breach of his or her fiduciary duty.
Tennessee law prohibits the limitation of liability of a director (i) for any
breach of a director's duty of loyalty to the corporation or its shareholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, or (iii) for unlawful distributions
under Tennessee law. Delaware law prohibits the limitation of liability of a
director (i) for breaches of the duty of loyalty to the corporation or its
shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for transactions
from which the director derived an improper personal benefit, or (iv) for the
payment of unlawful dividends or expenditures of funds for unlawful stock
purchases or redemptions. The Company's Charter and the Newco Certificate of
Incorporation eliminate liability for monetary damages for breach of director's
fiduciary to the fullest extent possible under applicable law.
Indemnification. Tennessee law and Delaware law both contain provisions
setting forth conditions under which a corporation may indemnify its directors,
officers and employees. Tennessee law and Delaware law are substantially
similar in providing for indemnification if the person acted in good faith and
in a manner he or she believed to be in, or at least not opposed to, the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the conduct was unlawful. Under
both Tennessee law and Delaware law, indemnification of officers, directors and
employees is permissive; however, a director or officer (and, under Delaware
law, an employee or agent) of a corporation must be indemnified against
expenses if he or she is successful on the merits or otherwise in defense of
any action, suit or proceeding to which he or she was made a party by reason of
the fact that he or she is or was a director or officer (or, under Delaware
law, an employee or agent) of the corporation, unless otherwise set forth in
the corporation's charter or certificate of incorporation. Under both
Tennessee and Delaware law, a corporation may not indemnify a director or
officer of the corporation in connection with a proceeding by or in the right
of the corporation in which the director, officer, employee or agent was
adjudged liable to the corporation. Delaware law, however, permits
indemnification in such a case if the Delaware Court of Chancery or the court
in which such action or suit was brought determines that the person is fairly
and reasonably entitled to indemnification. The Company's Charter and the
Newco Certificate of Incorporation do not limit indemnification of directors,
officers and employees.
-18-
<PAGE> 22
Shareholder Approval of Certain Corporate Transactions. The sale,
lease, exchange or disposal of all, or substantially all, of the assets of a
Tennessee corporation, not in the ordinary course of business, as well as any
merger, consolidation or share exchange, generally must be recommended by the
board of Directors and approved by the vote of the holders of a majority of the
shares entitled to vote on such matters. The majority voting requirement may
be increased or decreased by the corporation's charter. Under Delaware law,
with certain exceptions, any merger, consolidation or sale of all or
substantially all of the assets of a corporation must be approved by the Board
of Directors and the holders of a majority of the outstanding shares entitled
to vote. Under both Tennessee law and Delaware law, the vote of the
shareholders of a corporation surviving a merger is not required if (i)
shareholders of the surviving corporation who held shares before the merger
will hold the same number of shares, with identical rights, immediately after
the merger, (ii) the number of voting shares outstanding immediately after the
merger plus the number of shares to be issued in the merger do not exceed 20%
of the total number of voting shares of the surviving corporation outstanding
immediately before the merger, and (iii) the merger effects no material
amendments to the charter or certificate of incorporation of the surviving
corporation.
Business Combinations. Tennessee law contains a provision that
restricts certain business combination transactions with an "interested
stockholder" for a period of five years following the date that such
stockholder became an interested stockholder, unless prior to such date the
Board of Directors of the corporation approved either the business combination
or the transaction which resulted in the stockholder becoming an interested
stockholder. Tennessee law defines an "interested stockholder" generally to
mean any person that is the beneficial owner, directly or indirectly, or any
affiliate or associate of the corporation who has been the beneficial owner,
either directly or indirectly, of 10% or more of the voting power of any class
or series of the corporation's stock at any time within the five-year period
preceding the date in question.
A provision of Delaware law prohibits certain transactions between a
Delaware corporation and an "interested stockholder." An "interested
stockholder" for purposes of this Delaware law provision is a stockholder that
is directly or indirectly a beneficial owner of 15% or more of the voting power
of the outstanding voting stock of a Delaware corporation (or its affiliate or
associate). This provision prohibits certain business combinations between an
interested stockholder and a corporation for a period of three years after the
date the interested stockholder became an interested stockholder unless (i) the
business combination is approved by the corporation's Board of Directors prior
to such date; (ii) the interested stockholder acquired at least 85% of the
voting stock of the corporation in the transaction in which such stockholder
became an interested stockholder; or (iii) the business combination is approved
by a majority of the Board of Directors and the affirmative vote, which cannot
be in the form of a written consent, of the holders of two-thirds of the
outstanding voting stock not held by the interested stockholder. A Delaware
corporation may elect, pursuant to its Certificate of Incorporation or Bylaws,
not to be governed by this provision. Newco's Certificate of Incorporation and
Bylaws contain no such election or other limitation on the applicability of
this provision; however, the Board of Directors is evaluating whether to make
such an election.
TAX CONSEQUENCES
The proposed Reincorporation accomplished by the merger will be a tax
free reorganization under the Internal Revenue Code of 1986, as amended.
Accordingly: (i) no gain or loss will be recognized for federal income tax
purposes by the shareholders of the Company as a result; and (ii) the basis and
holding period for the stock of Newco received by the shareholders of the
Company in exchange for the Company's stock will be the same as the basis and
holding period of the stock of the Company exchanged therefor. The
Reincorporation will have no federal income tax effect on the Company or on
Newco. State, local and foreign income tax consequences to shareholders may
vary from the federal tax consequences described above, and shareholders should
consult their own tax advisors as to the effect of the Reincorporation under
applicable state, local or foreign income tax laws.
-19-
<PAGE> 23
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE REINCORPORATION PROPOSAL.
OTHER MATTERS
The management of the Company is not aware of any other matters to be
presented for action at the Meeting; however, if any such matters are properly
presented for action, it is the intention of the persons named in the enclosed
form of proxy to vote in accordance with their best judgment on such matters.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1998 annual
meeting of shareholders of the Company must be received by the Secretary of the
Company at the Company's principal executive office no later than January 1,
1998, in order to be included in the proxy statement and form of proxy for such
meeting.
By Order of the Board of Directors,
FRANK A. MCKINNIE WEAVER, SR.
Secretary
July ___, 1997
Hickory Valley, Tennessee
SHAREHOLDERS ARE URGED, REGARDLESS OF THE NUMBER OF SHARES OF COMMON
STOCK OF THE COMPANY OWNED, TO DATE, SIGN AND RETURN THE ENCLOSED PROXY. YOUR
COOPERATION IN GIVING THESE MATTERS YOUR IMMEDIATE ATTENTION AND IN RETURNING
YOUR PROXY PROMPTLY IS APPRECIATED.
-20-
<PAGE> 24
EXHIBIT A
NASHVILLE COUNTRY CLUB, INC.
1997 STOCK OPTION PLAN
ARTICLE I
Purpose of Plan; Administration
1.1. Purpose. The purpose of the Nashville Country Club, Inc. 1997
Stock Option Plan (the "Plan") is to strengthen Nashville Country Club, Inc.
(the "Corporation") by providing a means of retaining and attracting competent
personnel by extending to certain key employees, officers and directors of the
Corporation, and to certain consultants providing services to the Corporation
("Consultants"), added long-term incentives for high levels of performance and
for unusual efforts designed to improve the financial performance of the
Corporation. It is intended that this purpose be achieved through the
opportunity for ownership of shares of Common Stock of the Corporation (the
"Common Stock") and the benefits of stock appreciation offered under the Plan.
It is further intended that pursuant to this Plan the Committee (as defined
herein) may grant either incentive stock options as defined in Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), or nonqualified
stock options.
1.2. Administration. The Plan shall be administered by a committee
selected by the Board of Directors of the Corporation (the "Committee"), which
shall be comprised of two (2) or more directors, each of whom shall be a
"Non-Employee Director," as defined in Rule 16b-3(b)(3)(i), promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Subject to the express provisions of the Plan, the Committee shall have
the authority to construe and interpret the Plan, to define the terms used in
the Plan, to prescribe, amend and rescind rules and regulations relating to the
administration of the Plan, to determine the duration and purposes of leaves of
absence which may be granted to participants without constituting a termination
of their employment for purposes of the Plan, and to make all other
determinations necessary or advisable for the administration of the Plan. The
determinations of the Committee on all matters referred to in this Plan shall
be conclusive. No member of the Committee shall be liable for any action,
failure to act, determination or interpretation made in good faith with respect
to the Plan or any transaction under the Plan.
Subject to the express provisions of the Plan, the Committee shall
determine from the eligible class those individuals to whom incentive stock
options or nonqualified stock options under the Plan shall be granted (the
"Optionees"), the terms and provisions of the
-21-
<PAGE> 25
respective agreements (which need not be identical) evidencing such options,
the time at which options shall be granted, and the number of shares of stock
subject to each option.
1.3. Participation. Key employees, officers and directors of the
Corporation and Consultants shall be eligible for selection to participate in
the Plan upon approval by the Committee.
1.4. Stock Subject to the Plan. Subject to adjustment as provided in
Section 3.1 hereof, the stock to be offered under the Plan shall be treasury
shares or shares of the Corporation's authorized but unissued Common Stock, no
par value, (hereinafter collectively called "Stock"). The aggregate number of
shares of Stock to be issued upon exercise of all options granted under the
Plan shall not exceed five hundred thousand (500,000) shares, subject to
adjustment as set forth in Sections 3.1 and 3.2 hereof. If any option granted
hereunder shall lapse or terminate for any reason without having been fully
exercised, the shares subject thereto shall again be available for purposes of
the Plan.
1.5. Restrictions on Exercise. No option granted hereunder may be
exercised unless and until the Committee determines that such exercise will be
made in compliance with all applicable laws, rules and regulations, including,
without limitation, applicable securities laws, rules and regulations. The
Corporation does not have any obligation to take any action to register or
qualify shares of Common Stock pursuant to applicable securities laws or to
perfect an exemption from such registration/qualification requirements.
ARTICLE II
Stock Options
2.1. Grant and Option Price. The Committee may grant one or more
options to any eligible individual. Options granted under the Plan shall be
granted within ten (10) years from the earlier of the date the Plan is adopted
by the Board of Directors of the Corporation (the "Board of Directors") or
approved by the shareholders of the Corporation, and such options may be
intended to qualify as an Incentive Stock Option (as hereinafter defined), or
the Committee may in its discretion grant nonqualified stock options under the
Plan; provided, however, that no option granted hereunder shall be considered
an Incentive Stock Option unless the Plan is approved by the shareholders of
the Corporation within twelve (12) months before or after the date on which the
Plan is adopted by the Board of Directors. All options shall be subject to the
terms and conditions set forth in the Plan and such other terms and conditions
established by the Committee as are not inconsistent with the purposes and
provisions of the Plan.
Except as otherwise provided herein, the purchase price of the Stock
covered by each option shall be determined by the Committee and set forth in an
Option Agreement (as hereinafter defined), but as to Stock covered by an
Incentive Stock Option the purchase price shall not be less than 100% of the
Fair Market Value (as such term is defined in this Section 2.1) of such Stock
on the date of the grant of the option; provided, however, that as to Stock
covered by an Incentive Stock Option granted to an Optionee
-22-
<PAGE> 26
who owns or is deemed to own more than 10% of the total combined voting power
and value of all classes of stock of the Corporation, the purchase price shall
not be less than 110% of the Fair Market Value of such Stock on the date of the
grant of the option. For purposes of the Plan, the term "Fair Market Value" on
any date shall mean (i) if the Stock is listed or admitted to trade on a
national securities exchange, the closing price of the Stock on the Composite
Tape, as published in the Wall Street Journal, of the principal national
securities exchange on which the Stock is so listed or admitted to trade, on
such date or, if there is no trading of the Stock on such date, then the
closing price of the Stock as quoted on such Composite Tape on the next
preceding date on which there was trading in such shares; (ii) if the Stock is
not listed or admitted to trade on a national securities exchange, then the
closing price of the Stock as quoted on the National Market System of the
National Association of Securities Dealers, Inc. ("NASD") on such date; (iii)
if the Stock is not listed to trade on the National Market System of the NASD,
the mean between the bid and asked price for the Stock on such date, as
furnished by the NASD through NASDAQ or a similar organization if NASDAQ is no
longer reporting such information; or (iv) if the Stock is not listed or
admitted to trade on a national securities exchange and if bid and asked prices
for the stock are not so furnished by the NASD or a similar organization, the
values established by the Committee for purposes of granting options under the
Plan. In addition to the above rules, Fair Market Value shall be determined
without regard to any restriction other than a restriction which, by its terms,
will never lapse.
2.2. Stock Option Agreement. Each option granted pursuant to the Plan
shall, subject to the power of the Committee to prescribe certain terms of the
options granted hereunder, be evidenced by a Stock Option Agreement in
substantially the form of Exhibit "A"" or "B" attached hereto and incorporated
fully herein by reference (each, an "Option Agreement"). Exhibit "A" shall be
used whenever such option is intended to be an "incentive stock option" within
the meaning of Section 422 of the Code ("Incentive Stock Option"). Exhibit "B"
shall be used whenever such option is intended to be a nonqualified stock
option, as determined in the sole and absolute discretion of the Committee.
2.3. Option Period. Except as otherwise provided herein, each option
and all rights or obligations thereunder shall expire on such date as the
Committee shall determine (the "Expiration Date"), but not later than the tenth
anniversary of the date on which the option is granted, and shall be subject to
earlier termination as hereinafter provided. Notwithstanding the foregoing,
the Expiration Date of any Incentive Stock Option granted to an Optionee who
owns or is deemed to own more than 10% of the total combined voting power and
value of all classes of stock of the Corporation shall be no later than the
fifth anniversary of the date on which the option is granted, and shall be
subject to earlier termination as hereinafter provided.
2.4. Terms of Options. Each option granted under this Plan to an
employee, officer or director of the Corporation by its terms shall require the
employee, officer or director granted such option to remain in the continuous
employ or service of the
-23-
<PAGE> 27
Corporation for such period of time, if any, from the date of grant of his
option, before the right to exercise any part of the option will accrue as the
Committee may determine at the time of granting such option. The Committee
shall prescribe such rules as it deems appropriate in connection with the grant
of options to Consultants.
2.5. Exercise of Options. Each option shall become exercisable and
the total number of shares subject thereto shall be as the Committee shall
determine, as set forth in the Option Agreement evidencing such option. The
purchase price of the Stock purchased upon exercise of an option shall be paid
in full in cash or by check at the time of each exercise of an option or by
such other consideration as may be provided for in the Option Agreement by the
Committee; provided, however, that if the Option Agreement so provides and upon
receipt of all regulatory approvals, the person exercising the option may
deliver in payment of a portion or all of the purchase price certificates for
Common Stock, including a multiple series of exchanges of such Common Stock,
which shall be valued at the Fair Market Value of such Common Stock on the date
of exercise of the option. No options shall be exercisable except in respect
of whole shares of Stock.
2.6. Nontransferability of Options. An option granted under the Plan
shall, by its terms, be nontransferable by the Optionee other than by will or
by the laws of descent and distribution, and shall be exercisable during the
Optionee's lifetime only by the Optionee or by the Optionee's duly appointed
guardian or personal representative.
2.7. Termination of Relationship.
(a) If the employment or service of an Optionee (who is an
employee, officer or director of the Corporation) is terminated for any
reason other than (i) Disability (as hereinafter defined) of the
Optionee, (ii) death of the Optionee, or (iii) for cause (as determined
by the Committee in its sole and absolute discretion), then such
Optionee shall have the right at any time prior to the Expiration Date
of the option or within three (3) months after the date of termination
of employment or service, whichever is the shorter period, to exercise
the option for the full number of shares or any portion thereof (except
as to the issuance of fractional shares), but only to the extent such
option was otherwise exercisable on the date of termination of
employment or service.
(b) If the employment or service of an Optionee (who is an
employee, officer or director of the Corporation) is terminated by
reason of the Optionee's Disability, then such Optionee shall have the
right at any time prior to the Expiration Date of the option or within
twelve (12) months after the date of termination of employment or
service, whichever is the shorter period, to exercise the option for the
full number of shares or any portion thereof (except as to the issuance
of fractional shares) which are vested on or before the date on which
the Optionee's termination of employment or service occurs, or which
would otherwise have vested during the twelve month period beginning on
the date on which such
-24-
<PAGE> 28
termination of employment or service occurs. As used herein, the term
"Disability" shall mean the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less
than twelve (12) months. The determination of whether or not an
Optionee's employment or service is terminated by reason of Disability
shall be in the sole and absolute discretion of the Committee. An
individual shall not be considered Disabled unless he furnishes proof of
the existence thereof in such form and manner, and at such times, as the
Committee may require.
(c) If the employment or service of an Optionee (who is an
employee, officer or director of the Corporation) is terminated by
reason of the death of such Optionee, the option shall be exercisable at
any time prior to the Expiration Date of the option or within twelve
(12) months after the date of such death, whichever is the shorter
period, for the full number of shares or any portion thereof (except as
to the issuance of fractional shares) which are vested on or before the
date on which the Optionee's death occurs, or which would otherwise have
vested during the twelve month period beginning on the date on which the
Optionee's death occurs. Options exercisable under this subsection may
be exercised by the person or persons entitled to do so under the
Optionee's will, or if the Optionee shall fail to make testamentary
disposition of said option or shall die intestate, by the Optionee's
legal representative or representatives,
(d) If the employment or service of an Optionee (who is an
employee, officer or director of the Corporation) is terminated for
cause (which determination shall be made in the sole and absolute
discretion of the Committee), any then outstanding options of such
Optionee shall automatically terminate as of the date on which the
employment or service of such Optionee is terminated.
2.8. Issuance of Stock Certificates. Upon exercise of an option, but
subject to the provisions of Section 3.7 of the Plan, the person exercising the
option shall be entitled to one (1) stock certificate evidencing the shares
acquired upon such exercise; provided, however, that any person who tenders
Common Stock in payment of a portion or all of the purchase price of Stock
purchased upon exercise of the option shall be entitled to receive a separate
certificate representing the number of shares purchased in consideration of the
tender of such Common Stock.
2.9. Limitation on Grant of Incentive Stock Options. The aggregate
Fair Market Value (determined at the time the option is granted) of the Stock
with respect to which Incentive Stock Options are exercisable for the first
time by an Optionee during any calendar year (under all such plans of the
individual's employer corporation and its parent and subsidiary corporations,
if any) shall not exceed $100,000. In the event the
-25-
<PAGE> 29
limits of this Section 2.9 would otherwise be exceeded, the Optionee may still
exercise his option, but such option, to the extent of such excess, shall be
deemed to be a nonqualified option.
2.10. Other Limitations. The Board of Directors shall impose any other
limitations on the terms and conditions of Incentive Stock Options granted
under the Plan required in order that such options qualify as Incentive Stock
Options as that term is defined in Section 422 of the Code.
ARTICLE III
Other Provisions
3.1. Adjustments upon Changes in Capitalization. In the event that a
dividend payable in shares of Common Stock or a stock split shall be
hereinafter declared upon the Common Stock, the number of shares of Common
Stock then subject to any option granted hereunder and the number of shares
reserved for issuance pursuant to the Plan but not yet covered by an option
shall be adjusted by adding to each such share the number of shares which would
be distributable thereon if such share had been outstanding on the date fixed
for determining the shareholders entitled to receive such stock dividend or
stock split. In the event that the outstanding shares of the Common Stock
shall be changed into or exchanged for a different number or kind of shares of
stock or other securities of the Corporation or of another corporation, whether
through reorganization, recapitalization, stock split, combination of shares,
merger or consolidation, then there shall be substituted for each share of
Common Stock subject to any such option and for each share of Common Stock
reserved for issuance pursuant to the Plan but not yet covered by an option,
the number and kind of shares of stock or other securities into which each
outstanding share of Common Stock shall be so changed or for which each such
share shall be exchanged. In the event there shall be any change, other than
as specified above in this Section 3.1, in the number or kind of outstanding
shares of Common Stock or of any stock or other securities into which Common
Stock shall have been changed or for which it shall have been exchanged, then
if the Committee shall in its sole discretion determine that such change
equitably requires an adjustment in the number or kind of shares theretofore
reserved for issuance pursuant to the Plan but not yet covered by an option and
of the shares then subject to an option or options, such adjustment shall be
made by the Committee and shall be effective and binding for all purposes of
the Plan and of each Option Agreement. In the case of any such substitution or
adjustment as provided for in this Section, the option price in each Option
Agreement for each share covered thereby prior to such substitution or
adjustment will be the option price for all shares of stock or other securities
which shall have been substituted for such share or to which such adjustment
provided for in this Section 3.1 shall be made, in accordance with Section
424(a) of the Code. No adjustment or substitution provided for in this Section
3.1 shall require the Corporation pursuant to any Option Agreement to sell a
fractional share, and the total substitution or adjustment with respect to each
Option Agreement shall be limited accordingly.
-26-
<PAGE> 30
3.2. Acceleration. In the event of a Change of Control (as defined
herein), the provisions of subsections (a) and (b) of this Section 3.2 shall
apply to determine the exercisability of options granted hereunder. A "Change
of Control" for purposes of this Plan shall mean (i) the acquisition by a
single entity or group of affiliated entities of more than fifty percent (50%)
of the Common Stock issued and outstanding immediately prior to such
acquisition; or (ii) the dissolution or liquidation of the Corporation or the
consummation of any merger or consolidation of the Corporation or any sale or
other disposition of all or substantially all of its assets, if the
shareholders of the Corporation immediately before such transaction own,
immediately after consummation of such transaction, equity securities (other
than options and other rights to acquire equity securities) possessing less
than fifty percent (50%) of the voting power of the surviving or acquiring
corporation.
(a) Change of Control with Provision Being Made Therefor. If
provision be made in writing in connection with a Change of Control for
the assumption and continuance of any option granted under the Plan, or
the substitution for such option of a new option covering the shares of
the successor employer corporation, with appropriate adjustment as to
number and kind of shares and prices, the option granted under the Plan,
or the new option substituted therefor, as the case may be, shall
continue in the manner and under the terms provided.
(b) Change of Control Without Provisions Being Made Therefor.
In the event provision is not made in connection with a Change of
Control for the continuance and assumption of the option granted under
the Plan or for the substitution of any option covering the shares of
the successor employer corporation, then the holder of any such option
shall be entitled, prior to the effective date of any such Change of
Control, to purchase the full number of shares not previously exercised
under such option, without regard to the determination as to the periods
and installments of exercisability made pursuant to Section 2.4 and 2.5
if (and only if) such option has not at that time expired or been
cancelled, failing which purchase, any unexercised portion shall be
deemed cancelled as of the effective date of such Change of Control.
All adjustments under this Section 3.2 shall be made by the Committee,
whose determination as to what adjustments shall be made and the extent thereof
shall be final, binding and conclusive for all purposes of the Plan and of each
Option Agreement.
3.3. Continuation of Employment. Nothing contained in the Plan (or in
any option granted pursuant to the Plan) shall confer upon any employee,
officer or director any right to continue in the employ or service of the
Corporation or constitute any contract or agreement of employment or service or
interfere in any way with the right of the Corporation to reduce any person's
compensation from the rate in existence at the time
-27-
<PAGE> 31
of the granting of an option or to terminate such person's employment or
service. Nothing contained herein or in any Option Agreement shall affect any
other contractual rights of an employee.
3.4. Withholding. The Corporation shall have the right to deduct any
sums that the Committee reasonably determines that federal, state or local tax
law requires to be withheld with respect to the exercise of any option or as
otherwise may be required by those laws. The Corporation may require as a
condition to issuing shares of Stock upon exercise of the option that the
Optionee or other person exercising the option pay any sums that federal, state
or local tax law requires to be withheld with respect to the exercise. The
Corporation shall not be obligated to advise any Optionee of the existence of
the tax or the amount which it will be so required to withhold. Upon the
exercise of a nonqualified option, if tax withholding is required, an Optionee
may, with the consent of the Committee, have shares of Stock withheld ("Share
Withholding") by the Corporation from the shares otherwise to be received;
provided, that if the Optionee is subject to the provisions of Section 16 under
the Exchange Act, no Share Withholding shall be permitted unless such
transaction complies with the requirements of the Exchange Act and the rules
and regulations promulgated thereunder. The number of shares so withheld
should have an aggregate Fair Market Value on the date of exercise sufficient
to satisfy the applicable withholding taxes.
3.5. Amendment and Termination. The Board of Directors may at any
time suspend or terminate the Plan and may, with the consent of the holder of
an option, make such modifications of the terms and conditions of such holder's
option as it shall deem advisable. No option may be granted during any
suspension of the Plan or after such termination. The amendment, suspension or
termination of the Plan shall not, without the consent of the Optionee, alter
or impair any rights or obligations under any option theretofore granted under
the Plan.
The Board of Directors may at any time amend the Plan as it shall deem
advisable without further action on the part of the shareholders of the
Corporation; provided, that any amendment to the Plan must be approved by the
shareholders of the Corporation, if the amendment would (i) increase the
aggregate number of shares of Stock which may be issued pursuant to options
granted under the Plan; (ii) change the minimum option price; (iii) increase
the maximum terms of options provided for herein; (iv) materially modify the
requirements as to eligibility for participation in the Plan; (v) remove the
administration of the Plan from the Committee; or (vi) materially increase the
benefits accruing to holders of options under the Plan.
Notwithstanding the above, the Committee may grant to an Optionee, if he
is otherwise eligible, additional options or, with the consent of the Optionee,
may grant a new option in lieu of an outstanding option, at a price and for a
term which in any respect is greater or less than that of the earlier option,
subject to the general limitations of Article II hereof.
-28-
<PAGE> 32
3.6. Time of Grant and Exercise. The granting of an option pursuant
to the Plan shall take place at the time of the Committee's action, as
described in the third paragraph of Section 1.2 hereof; provided, however, that
if the appropriate resolutions of the Committee indicate that an option is to
be granted as of and at some future date, the date of grant shall be such
future date. In the event action by the Committee is taken by written consent
of its members, the action by the Committee shall be deemed to have been taken
at the time the last member required for a valid action of the Committee signs
the consent.
An option shall be deemed to be exercised when the Secretary of the
Corporation receives written notice of such exercise from the person entitled
to exercise the option together with payment of the purchase price made in
accordance with Section 2.5 of this Plan.
3.7. Privileges of Stock Ownership; Non-Distributive Intent. The
holder of an option shall not be entitled to the privileges of stock ownership
as to any shares of Stock not actually issued and delivered to the holder.
3.8. Effective Date of the Plan. The Plan shall be effective upon
approval by the Board of Directors of the Corporation.
3.9. Expiration. Unless previously terminated by the Board of
Directors, the Plan shall expire at the close of business on the date which is
the last day of the ten (10) year period beginning on the earlier of the date
on which the Plan is adopted by the Board of Directors or the date on which the
stockholders approve the Plan, and no option shall be granted under it
thereafter, but such expiration shall not affect any option theretofore
granted.
3.10. Governing Law. The Plan and the options issued hereunder shall
be governed by, and constructed and enforced in accordance with, the laws of
the State of Tennessee applicable to contracts made and performed within that
State.
3.11. Application of Funds. The proceeds received by the Corporation
from the sale of shares pursuant to options shall be used for general corporate
purposes.
3.12. No Liability for Good Faith Determinations. No member of the
Board of Directors shall be liable for any act, omission or determination taken
or made in good faith with respect to the Plan or any option granted under it.
3.13. Other Benefits. Participation in the Plan shall not preclude the
Optionee from eligibility in any other stock option plan of the Corporation or
any old age benefit, insurance, pension, profit sharing, retirement, bonus or
other extra compensation plans which the Corporation has adopted, or may, at
any time, adopt for the benefit of its employees.
-29-
<PAGE> 33
3.14. Execution of Receipts and Releases. Any payment or any issuance
or transfer of shares of Stock to the Optionee, or to his legal representative,
heir, legatee or distributee, in accordance with the provisions hereof, shall,
to the extent thereof, be in full satisfaction of all claims of such persons
hereunder. The Board of Directors may require any Optionee, legal
representative, heir, legatee or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.
3.15. No Guarantee of Interests. Neither the Board of Directors nor
the Corporation guarantees the Stock of the Corporation from loss or
depreciation.
3.16. Payment of Expenses. All expenses incident to the
administration, termination or protection of the Plan, including, but not
limited to, legal and accounting fees, shall be paid by the Corporation.
3.17. Corporation Records. Records of the Corporation regarding the
Optionee's period of employment, termination of employment and the reason
therefor, leaves of absence, re-employment and other matters shall be
conclusive for all purposes hereunder, unless determined by the Committee to be
incorrect.
3.18. Information. The Corporation shall, upon request or as may be
specifically required hereunder, furnish or cause to be furnished all of the
information or documentation which is necessary or required by the Committee to
perform its duties and functions under the Plan.
3.19. No Liability of Corporation. The Corporation assumes no
obligation or responsibility to the Optionee or his personal representatives,
heirs, legatees or distributees for any act of, or failure to act on the part
of, the Committee.
3.20. Severability. In the event any provision of this Plan shall be
held to be illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining provisions hereof, but shall be fully severable
and the Plan shall be construed and enforced as if the illegal or invalid
provision had never been included herein.
3.21. Notice. Whenever any notice is required or permitted hereunder,
such notice must be in writing and personally delivered or sent by mail.
Except as otherwise provided in Section 3.6 of this Plan, any notice required
or permitted to be delivered hereunder shall be deemed to be delivered on the
date on which it is personally delivered or, whether actually received or not,
on the third (3rd) business day after it is deposited in the United States
mail, certified or registered, postage pre-paid, addressed to the person who is
to receive it at the address which such person has theretofore specified by
written notice delivered in accordance herewith. The Corporation or an
Optionee may change, at any time and from time to time, by written notice to
the other, the address which it or he had theretofore specified for receiving
notices. Until it is changed in accordance
-30-
<PAGE> 34
herewith, the Corporation and each Optionee shall specify as its and his
address for receiving notices the address set forth in the Option Agreement
pertaining to the shares to which such notice relates.
3.22. Waiver of Notices. Any person entitled to notice hereunder may
waive such notice.
3.23. Successors. The Plan shall be binding upon the Optionee, his
heirs, legatees and legal representatives and upon the Corporation and its
successors and assigns.
3.24. Headings. The titles and headings of sections and paragraphs are
included for convenience of reference only and are not to be considered in
construction of the provisions hereof.
3.25. Word Usage. Words used in the masculine shall apply to the
feminine where applicable and, wherever the context of this Plan dictates, the
plural shall be read as the singular and the singular as the plural.
-31-
<PAGE> 35
EXHIBIT B
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Merger Agreement"), dated as of
__________, 1997, by and between Nashville Country Club, Inc., a Tennessee
corporation ("NCCI") and TBA Entertainment Corporation, a Delaware corporation
("TBA").
W I T N E S S E T H:
WHEREAS, NCCI is a corporation duly organized and existing under the
laws of the State of Tennessee, having at the date hereof authorized capital
stock consisting of (a) 20,000,000 shares of common stock, no par value per
share ("NCCI Common Stock"), of which as of __________, 1997, __________ shares
were issued and outstanding; and (b) 1,000,000 shares of preferred stock, no
par value per share ("NCCI Preferred Stock"), of which as of __________, 1997,
_________ shares were issued and outstanding; and in addition had, as of
__________, 1997, ______ shares of NCCI Common Stock reserved for issuance
pursuant to options and pursuant to exercise of outstanding warrants to
purchase NCCI Common Stock; and
WHEREAS, TBA is a corporation duly organized and existing under the
laws of the State of Delaware having at the date hereof authorized capital
stock of (a) 15,000,000 shares of common stock, par value $.001 per share ("TBA
Common Stock"), of which 1,000 shares have been issued to, and are owned by,
NCCI, and (b) 1,000,000 shares of Preferred Stock, par value $.001 per share
("TBA Preferred Stock"), none of which are issued and outstanding;
WHEREAS, NCCI and TBA desire that NCCI merge with and into TBA and
that TBA shall continue as the surviving corporation in such merger upon the
terms and subject to the conditions herein set forth and in accordance with the
laws of the State of Delaware and the laws of the State of Tennessee (the
"Merger"); and
WHEREAS, the Merger is intended to qualify as a "reorganization"
within the meaning of Section 368(a)(1)(F) of the Internal Revenue Code of
1986, as amended;
NOW, THEREFORE, in consideration of the premises and mutual
agreements, provisions and covenants contained herein, and subject to the terms
and conditions hereof, the parties hereto do hereby agree as follows:
ARTICLE I
PRINCIPAL TERMS OF THE MERGER
Section 1.1. Merger of NCCI into TBA. At the Effective Time of the
Merger (as defined in Section 1.2 hereof), NCCI shall merge with and into TBA
in accordance with the Tennessee Business Corporation Act (the "TBCA") and the
General Corporation Law of the State of
<PAGE> 36
Delaware (the "DGCL"). The separate existence of NCCI shall thereupon cease
and TBA shall be the surviving corporation (hereinafter sometimes referred to
as the "Surviving Corporation") and shall continue its corporate existence
under the laws of the State of Delaware under the name of TBA Entertainment
Corporation.
Section 1.2. Effective Time of the Merger. The Merger shall become
effective as of the date and time (the "Effective Time of the Merger") the
following actions are completed: (a) an appropriate certificate of merger is
filed with the Secretary of State of the State of Tennessee in accordance with
the TBCA and (b) an appropriate certificate of merger is filed with the
Secretary of the State of Delaware in accordance with the DGCL.
Section 1.3. Effects of the Merger. At the Effective Time of the
Merger, the Merger shall have the effects specified in the TBCA, the DGCL and
this Merger Agreement.
Section 1.4. By-laws. At the Effective Time of the Merger, the
By-laws of TBA as in effect immediately prior to the Effective Time of the
Merger shall become the By-laws of the Surviving Corporation until duly amended
in accordance with their terms and as provided by the DGCL.
Section 1.5. Directors and Officers. At the Effective Time of the
Merger, the directors and officers of TBA in office at the Effective Time of
the Merger shall become the directors and officers, respectively, of the
Surviving Corporation, each of such directors and officers to hold office,
subject to the applicable provisions of the Certificate of Incorporation and
By-laws of the Surviving Corporation and the DGCL, until his or her successor
is duly elected or appointed and shall qualify.
ARTICLE II
CERTIFICATE OF INCORPORATION
OF THE SURVIVING CORPORATION
At the Effective Time of the Merger, the Certificate of Incorporation
of the Surviving Corporation shall be the Certificate of Incorporation of TBA.
ARTICLE III
CONVERSION AND EXCHANGE OF STOCK
Section 3.1. Conversion. At the Effective Time of the Merger, each
of the following transactions shall be deemed to occur simultaneously:
(a) Each share of NCCI Common Stock issued and outstanding, or
held in treasury, immediately prior to the Effective Time of the Merger shall,
by virtue of the Merger and without
-2-
<PAGE> 37
any action on the part of the holder thereof, be converted into and become one
validly issued, fully paid and nonassessable share of TBA Common Stock.
(b) Each share of NCCI Preferred Stock issued and outstanding, or
held in treasury, immediately prior to the Effective Time of the Merger shall,
by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and become one validly issued, fully paid and
nonassessable share of TBA Preferred Stock.
(c) Each option to purchase shares of NCCI Common Stock
outstanding immediately prior to the Effective Time of the Merger shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into and become an option to purchase, upon the same terms and
conditions, the number of shares of TBA Common Stock which is equal to the
number of shares of NCCI Common Stock which the optionee would have received
had the optionee exercised such option in full immediately prior to the
Effective Time of the Merger (whether or not such option was then exercisable).
The exercise price per share under each of said options shall be equal to the
exercise price per share thereunder immediately prior to the Effective Time of
the Merger.
(d) Each warrant to purchase shares of NCCI Common Stock
outstanding immediately prior to the Effective Time of the Merger shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into and become a warrant to purchase, upon the same terms and
conditions, the number of shares of TBA Common Stock which is equal to the
number of shares of NCCI Common Stock which the warrant holder would have
received had the warrant holder exercised such warrant in full immediately
prior to the Effective Time of the Merger (whether or not such warrant was then
exercisable). The exercise price per share under each of said warrants shall
be equal to the exercise price per share thereunder immediately prior to the
Effective Time of the Merger.
(e) Each share of TBA Common Stock issued and outstanding
immediately prior to the Effective Time of the Merger and held by NCCI shall be
cancelled without any consideration being issued or paid therefor.
Section 3.2. Exchange. (a) After the Effective Time of the Merger,
each certificate theretofore representing issued and outstanding shares of NCCI
Common Stock shall represent the same number of shares of TBA Common Stock, and
each certificate theretofore representing issued and outstanding shares of NCCI
Preferred Stock shall represent the same number of shares of TBA Preferred
Stock.
(b) At any time on or after the Effective Time of the Merger, any
holder of certificates theretofore evidencing ownership of shares of NCCI
Common Stock or NCCI Preferred Stock will be entitled, upon surrender of such
certificates to the transfer agent of the Surviving Corporation, to receive in
exchange therefor one or more new stock certificates evidencing ownership of
the number of shares of TBA Common Stock or TBA Preferred Stock, respectively,
into which such NCCI Common Stock or NCCI Preferred Stock shall have been
converted in the Merger. If any certificate representing shares of TBA Common
Stock or TBA Preferred Stock
-3-
<PAGE> 38
is to be issued in a name other than that in which the certificate surrendered
in exchange therefor is registered, it shall be a condition of the issuance
thereof that the certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and that the person requesting such
exchange shall pay to the transfer agent any transfer or other taxes required
by reason of the issuance of a certificate representing shares of TBA Common
Stock in any name other than that of the registered holder of the certificate
surrendered, or otherwise required, or shall establish to the satisfaction of
the transfer agent that such tax has been paid or is not payable.
ARTICLE IV
EMPLOYEE BENEFIT, INCENTIVE COMPENSATION
AND EMPLOYEE STOCK PURCHASE PLANS
At the Effective Time of the Merger, each employee benefit plan,
incentive compensation plan, employee stock purchase plan and other similar
plans to which NCCI is then a party shall be assumed by, and continue to be the
plan of, the Surviving Corporation. To the extent any employee benefit plan,
incentive compensation plan, employee stock purchase plan or other similar plan
of NCCI or any of its subsidiaries provides for the issuance or purchase of, or
otherwise relates to, NCCI Common Stock, after the Effective Time of the Merger
such plan shall be deemed to provide for the issuance or purchase of, or
otherwise relate to, TBA Common Stock.
ARTICLE V
CONDITIONS
Consummation of the Merger is subject to the satisfaction at or prior
to the Effective Time of the Merger of the following conditions:
Section 5.1. Shareholder Approval. This Merger Agreement and the
Merger shall have been adopted and approved by the affirmative vote of a
majority of the votes cast by all shareholders entitled to vote on the record
date fixed for determining the shareholders of NCCI entitled to vote thereon
(the "Record Date"). This Agreement and the Merger shall also have been
adopted and approved by NCCI as the holder of all the outstanding shares of TBA
Common Stock prior to the Effective Time of the Merger.
Section 5.2. Third Party Consents. NCCI shall have received all
consents to and approvals of the Merger required pursuant to [SPECIFY ANY THIRD
PARTY CONSENTS REQUIRED, INCLUDING LENDERS].
Section 5.3. Quotation on Nasdaq National Market. The shares of TBA
Common Stock to be issued in the Merger, or reserved for issuance immediately
after the Effective Time of the Merger, and the redeemable warrants to purchase
shares of TBA Common Stock to be issued in
-4-
<PAGE> 39
the Merger in exchange for redeemable warrants of NCCI shall have been approved
for quotation, subject to official notice of issuance, on the Nasdaq National
Market.
Section 5.4. Opinion as to Tax Matters. NCCI shall have received an
opinion of Winstead Sechrest & Minick P.C., counsel to NCCI, with respect to
the tax consequences of the Merger, in form and substance satisfactory to NCCI.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Amendment. This Merger Agreement may be amended,
modified or supplemented in whole or in part, at any time prior to the
Effective Time of the Merger with the mutual consent of the Boards of Directors
of the parties hereto; provided, however, that the Merger Agreement may not be
amended after it has been adopted by the shareholders of NCCI in any manner
which, in the judgment of the Board of Directors of NCCI, would have a material
adverse effect on the rights of such shareholders or in any manner not
permitted under applicable law.
Section 6.2. Termination. This Merger Agreement may be terminated or
abandoned by the parties hereto at any time prior to the filing of the
Certificate of Merger notwithstanding approval of this Merger Agreement by the
shareholders of either or both of NCCI or TBA.
Section 6.3. Necessary Actions, etc. If at any date after the
Effective Time of the Merger, the Surviving Corporation shall consider that any
assignments, transfers, deeds or other assurances in law are necessary or
desirable to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, title to any property or rights of NCCI, NCCI and its officers and
directors at the Effective Time of the Merger shall execute and deliver such
documents and do all things necessary and proper to vest, perfect or confirm
title to such property or rights in the Surviving Corporation, and the officers
and directors of the Surviving Corporation are fully authorized in the name of
NCCI or otherwise to take any and all such action.
Section 6.4. Counterparts. This Merger Agreement may be executed in
any number of counterparts, each of which shall be considered to be an original
instrument.
Section 6.5. Descriptive Headings. The descriptive headings are for
convenience of reference only and shall not control or affect the meaning or
construction of any provision of this Merger Agreement.
Section 6.6. Governing Law. This Merger Agreement shall be construed
in accordance with the laws of the State of Tennessee, except to the extent the
laws of the State of Delaware shall mandatorily apply to the Merger.
-5-
<PAGE> 40
IN WITNESS WHEREOF, the undersigned officers of each of the parties to
this Merger Agreement, pursuant to authority duly given by their respective
Boards of Directors, have caused this Merger Agreement to be duly executed.
NASHVILLE COUNTRY CLUB, INC.
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
Attest:
- ---------------------------
TBA ENTERTAINMENT CORPORATION
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
Attest:
- ---------------------------
-6-
<PAGE> 41
CERTIFICATES
The undersigned, Secretary of TBA Entertainment Corporation, a
Delaware corporation, hereby certifies, pursuant to Section 252(c) of the
General Corporation Law of the State of Delaware, that the foregoing Agreement
and Plan of Merger to which this Certificate is attached, after having been
first duly signed on behalf of TBA Entertainment Corporation, by its President
and attested to by its Secretary, was duly submitted to the sole stockholder of
TBA Entertainment Corporation, at a meeting thereof called for the purpose of
considering and acting upon said Agreement and Plan of Merger, held on the ___
day of __________, 1997, and at said meeting said Agreement and Plan of Merger
was adopted by the sole stockholder of TBA Entertainment Corporation, in
accordance with the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Certificate on
the ___ day of __________, 1997.
---------------------------
Secretary
The undersigned, Secretary of Nashville Country Club, Inc., a
Tennessee corporation, hereby certifies, pursuant to Section 252(c) of the
General Corporation Law of the State of Delaware, that the foregoing Agreement
and Plan of Merger to which this Certificate is attached, after having been
first duly signed on behalf of Nashville Country Club, Inc. by its President
and attested to by its Secretary, was duly submitted to the shareholders of
Nashville Country Club, Inc. at a meeting thereof called for the purpose of
considering and acting upon said Agreement and Plan of Merger, held after due
notice on the ___ day of __________, 1997, and that at said meeting said
Agreement and Plan of Merger was adopted by the shareholders of Nashville
Country Club, Inc. in accordance with the Tennessee Business Corporation Act.
IN WITNESS WHEREOF, the undersigned has executed this Certificate on
the ___ day of __________, 1997.
---------------------------
Secretary
-7-
<PAGE> 42
EXHIBIT C
CERTIFICATE OF INCORPORATION
OF
TBA ENTERTAINMENT CORPORATION
The undersigned natural person, acting as an incorporator of a
corporation under the General Corporation Law of Delaware, hereby adopts the
following Certificate of Incorporation for such corporation:
ARTICLE I
NAME
The name of the corporation is TBA Entertainment Corporation (the
"Corporation").
ARTICLE II
PURPOSE
The purpose for which the Corporation is organized is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware.
ARTICLE III
SHARES
The aggregate number of shares which the Corporation has authority to
issue is Fifteen Million (15,000,000) shares of Common Stock, par value $.001
per share, and One Million (1,000,000) shares of Preferred Stock, par value
$.001 per share. The Preferred Stock may be issued from time to time in one or
more series. The Board of Directors is hereby authorized, by filing a
certificate (a "Preferred Stock Designation") pursuant to the Delaware General
Corporation Law, to fix or alter from time to time the designation, powers,
preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions of any wholly unissued series of
Preferred Stock, and to establish from time to time the number of shares
constituting such series or any of them; and to increase or decrease the number
of shares of any series subsequent to the issuance of shares of that series,
but not below the number of shares of such series then outstanding. In case
the number of shares of any series shall be decreased in accordance with the
foregoing sentence, the shares constituting such decrease shall resume the
status that they had prior to the adoption of the resolution originally fixing
the number of shares of such series.
<PAGE> 43
ARTICLE IV
DENIAL OF PREEMPTIVE RIGHTS
No stockholder of the corporation or other person shall have any
preemptive right to purchase or subscribe to any shares of any class or any
notes, debentures, options, warrants or other securities, now or hereafter
authorized.
ARTICLE V
ELECTION OF DIRECTORS; NONCUMULATIVE VOTING
Directors shall be elected by plurality vote. Elections of directors
need not be by written ballot unless the Bylaws of the Corporation shall so
provide. No stockholder of this Corporation shall have the right to cumulate
his votes.
ARTICLE VI
REGISTERED OFFICE AND AGENT
The street address of the initial registered office of the Corporation
is 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, and the
name of its initial registered agent at such address is The Corporation Trust
Company.
ARTICLE VII
DIRECTORS
The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors. The number of directors
which constitute the whole Board of Directors shall be fixed by one or more
resolutions adopted by the Board of Directors. Notwithstanding the foregoing
provisions of this Article, each director shall serve until his successor is
duly elected and qualified or until his death, resignation or removal. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director. Any vacancies on the Board of
Directors resulting from death, resignation, disqualification, removal or other
causes and any newly created directorships resulting from any increase in the
number of directors, shall, unless the Board of Directors determines by
resolution that any such vacancies or newly created directorships shall be
filled by the stockholders, except as otherwise provided by law, be filled only
by the affirmative vote of a majority of directors then in office, even though
less than a quorum of the Board of Directors, and not by the stockholders. Any
director elected in accordance with the preceding sentence shall hold office
for the remainder of the full term of the director for which the vacancy was
created or occurred and until such director's successor shall have been elected
and qualified.
2
<PAGE> 44
ARTICLE VIII
LIMITATION OF PERSONAL LIABILITY OF DIRECTORS
No director (including any advisory director) of the Corporation shall
be 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 Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit.
ARTICLE IX
INDEMNITY
Section 1. The Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending, or
completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of the Corporation)
by reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit, or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 2. The Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation and except that no indemnification shall
be made in respect of any claim, issue, or matter as to which such person shall
have been adjudged to be liable to the Corporation unless and only to the
extent that the Delaware Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Delaware Court of Chancery or such other court shall deem proper.
3
<PAGE> 45
Section 3. To the extent that a director, officer, employee or
agent of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Sections 1 and 2, or
in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred
by him in connection therewith.
Section 4. Any indemnification under Sections 1 and 2 (unless
ordered by a court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in Sections 1 and 2. Such
determination shall be made (i) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable,
if a quorum of disinterested directors so directs, by independent legal counsel
in a written opinion, or (iii) by the stockholders. Notwithstanding the
foregoing, a director, officer, employee or agent of the Corporation shall be
able to contest any determination that the director, officer, employee or agent
has not met the applicable standard of conduct set forth in Sections 1 and 2 by
petitioning a court of appropriate jurisdiction.
Section 5. Expenses (including attorneys' fees) incurred by an
officer or director in defending or settling any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Corporation as authorized in this Article
IX. Such expenses incurred by other employees and agents may be so paid upon
such terms and conditions, if any, as the Board of Directors deems appropriate.
Section 6. The indemnification and advancement of expenses
provided by, or granted pursuant to, the other sections of this Article IX
shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any Bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both
as to action in his official capacity and as to action in another capacity
while holding such office.
Section 7. The Corporation shall have the power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have
the power to indemnify him against such liability under the provisions of this
Article IX.
Section 8. For purposes of this Article IX, references to "the
Corporation" shall include, in addition to the Corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation
4
<PAGE> 46
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position
under the provisions of this Article IX with respect to the Corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
Section 9. For purposes of this Article IX, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service as a director, officer, employee or agent of the
Corporation which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to in
this Article IX.
Section 10. The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article IX shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
ARTICLE X
BYLAWS
The Bylaws of the Corporation may be amended or repealed, or new
Bylaws may be adopted, (i) by the Board of Directors of the Corporation at any
duly held meeting or pursuant to a written consent in lieu of such meeting, or
(ii) by the holders of a majority of the shares represented at any duly held
meeting of stockholders, provided that notice of such proposed action shall
have been contained in the notice of any such meeting, or pursuant to a written
consent signed by the holders of a majority of the outstanding shares entitled
to vote thereon.
ARTICLE XI
INCORPORATOR
The name and address of the incorporator is:
Randall E. Roberts
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270-2199
5
<PAGE> 47
The undersigned, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, does make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly I have hereunto set my hand this the day of , 1997.
--- ----------
----------------------------------------
Randall E. Roberts
6
<PAGE> 48
NASHVILLE COUNTRY CLUB, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON SEPTEMBER 8, 1997
P The undersigned hereby appoints Thomas J. Weaver III, his true and
R lawful agents and proxies with full power of substitution in each, to
O represent the undersigned at the annual meeting of shareholders of
X Nashville Country Club, Inc., to be held at the Liftside Inn at The
Y Village at Breckenridge Resort, Breckenridge, Colorado, on Monday,
September 8, 1997, and at any adjournments thereof, on all matters
coming before said meeting.
Election of Directors, Nominees:
Frank Bumstead, Charles Flood, Robert E. Geddes,
Jeffrey McIntyre, Thomas Miserendino, Prab Nallamilli,
Louis J. Risi, Jr. Steven L. Risi, Jose F. Rosado, Mark van Hartesvelt,
Frank A. McKinnie Weaver, Sr. and Kyle Young
You are encouraged to specify your choices by marking the appropriate boxes,
SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. Proxies cannot vote
your shares unless you sign and return this card.
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
[X] Please mark your
votes as in this
example.
1. Election of Directors
(see reverse). FOR WITHHELD
all Nominees from all
(except as Nominees
noted below)
[ ] [ ]
2. Proposal to approve the
1997 Stock Option Plan FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Proposal to approve the
Name Change Proposal FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Proposal to approve the
Reincorporation Proposal FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. In their discretion, the Proxies
are authorized to vote upon such
other business as may properly
come before the meeting
For all nominees, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------
SIGNATURE(S) DATE
-------------------------------------- ------------
SIGNATURE(S) DATE
-------------------------------------- ------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
