EXHIBIT 2.1
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AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
PRO SQUARED, INC.,
ITS STOCKHOLDERS
AND
GLOBAL BOULEVARD INTERNATIONAL, INC.
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TABLE OF CONTENTS
Page
ARTICLE I - AGREEMENT
1.1 Plan of Reorganization 5
1.2 Exchange of Stock 5
1.3 Delivery of Shares 6
1.4 Capital Structure of Pro Squared, Inc. 6
1.5 Present Capital Structure of GBBV 6
1.6 Capital Structure of GBBV at the Closing 6
1.7 No Changes in Capitalization 7
1.8 Capital Structure of GBBV After the Closing 7
ARTICLE II - CLOSING; EFFECTIVE DATE 8
2.1 Closing 8
2.2 Closing Documents 8
2.3 Miscellaneous Closing Covenants 8
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF GBBV 9
3.1 Organization and Qualification; Subsidiaries 9
3.2 Articles of Incorporation and Bylaws 9
3.3 Authority Relative to This Agreement 10
3.4 No Conflict; Required Filings and Consents 10
3.5 Compliance; Permits 10
3.6 Financial Statements 11
3.7 Commission Filings 11
3.8 OTCBB. 11
3.9 State Takeover Statutes 11
3.10 Absence of Certain Changes or Events 12
3.11 Absence of Litigation 12
3.12 Employee Benefit Plans 12
3.13 Title to Property 12
3.14 Directors and Officers 12
3.15 Corporate Record Books 12
3.16 Lack of Disputes 12
3.17 Board Approval 13
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF PRO AND THE STOCKHOLDERS
4.1 Organization and Qualification 13
4.2 Articles of Incorporation and Bylaws 13
4.3 Authority Relative to This Agreement 13
4.4 No Conflict; Required Filings and Consents 14
4.5 Compliance; Permits 14
4.6 Financial Statements 14
4.7 No Undisclosed Liabilities 14
4.8 Absence of Litigation 15
4.9 Labor Matters 15
4.10 Restrictions on Business Activities 15
4.11 Title to Property 15
4.12 Environmental Matters 15
4.13 Intangible Assets 16
4.14 Directors and Officers 16
4.15 Corporate Record Books 16
4.16 Lack of Disputes 16
4.17 Board Approval 16
4.18 Vote Required 16
4.19 Disclosures 16
4.20 Confidentiality and Non Disclosure 16
4.21 Access to Information 16
ARTICLE V - TERMINATION, AMENDMENT AND WAIVERS
5.1 Termination 17
5.2 Notice of Termination; Effect of Termination 17
5.3 Fees and Expenses 17
5.4 Amendment 17
5.5 Waiver 17
ARTICLE VI - LEAK-OUT AGREEMENTS; PUBLIC DISCLOSURE
6.1 Public Disclosure 18
ARTICLE VII - GENERAL PROVISIONS
7.1 Non-Survival. 18
7.2 Notices 18
7.3 Further Assurances 18
7.4 Interpretation 18
7.5 Counterparts 19
7.6 Entire Agreement; Third Party Beneficiaries 19
7.7 Severability 19
7.8 Other Remedies; Specific Performance 19
7.9 Governing Law 19
Signatures 20
Schedules A-D: 22
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization is entered into on this 26th
day of March, 2003 ("Agreement"), by and among Pro Squared, Inc., a Texas
corporation ("PRO"), the undersigned stockholders of PRO as set forth
on Schedule A attached hereto, (the "Stockholders") and Global Boulevard
International, Inc., a Nevada corporation ("GBBV").
RECITALS
WHEREAS, the Stockholders own beneficially and of record 99.5% of the
issued and outstanding shares of common stock, par value $.001 per share (the
"PRO Common Stock"), of PRO; and
WHEREAS, GBBV desires to acquire 99.5% of the issued and outstanding PRO
Common Stock, making PRO a subsidiary of GBBV and the Stockholders desire to
make a tax-free exchange of their PRO Common Stock for an aggregate of
49,720,500 shares of GBBV common stock, par value $.001 per share, (the "GBBV
Common Stock"); and
WHEREAS, the parties intend, by entering into this Agreement, to adopt a
plan of reorganization within the meaning of Section 368 of the Internal Revenue
Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the covenants, promises and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
AGREEMENT
1.1 Plan of Reorganization. PRO, the Stockholders and GBBV agree that
99.5% of the issued and outstanding Common Stock of PRO shall be acquired by
GBBV in a transaction qualifying as a tax-free stock-for-stock exchange
pursuant to Section 368(a)(1)(B) of the Code in exchange solely for shares
of GBBV Common Stock.
1.2 Exchange of Stock. As of the date hereof, PRO has 59,044,266 shares of
Common Stock issued and outstanding. At the Closing (as hereinafter defined),
58,754,266 shares of PRO will be exchanged for 49,720,500 shares of GBBV
Common Stock, an exchange of 1 share of GBBV Common Stock for every 1.1816909
shares of PRO Common Stock currently owned. A list of the holders of PRO Common
Stock, how many shares they own, and the shares of GBBV Common Stock each is to
receive shall be attached hereto as Schedule A. Pursuant to the terms of
this Agreement, the shares of GGBV Common Stock issued herein shall subsequently
be reverse split at a 1:2.5 basis so that the aggregate number of shares issued
to the GBBV Shareholders of 49,720,500 shall be reduced to 19,888,200 shares of
GBBV Common Stock.
The Stockholders represent and warrant to GBBV that the shares of
GBBV Common Stock that each will receive are being acquired for investment for
each Stockholder's own account and not with a view to sale, resale or
distribution except in compliance with applicable federal and state
securities laws. The Stockholders understand that the shares of GBBV Common
Stock they will acquire have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), and applicable state securities
law, that they are "restricted securities" as defined under the Securities
Act and that the certificates representing such shares of GBBV Common
Stock will bear a legend to such effect. The Stockholders have had access to
a Private Placement Memorandum offered by GBBV and have had the opportunity to
examine via the Internet on the Securities and Exchange Commission's ("SEC")
Web Site, all reports, filings and other documents filed by GBBV with the
SEC.
1.3 Delivery of Shares. At the Closing, certificates or subscriptions of
share ownership representing 95% of the issued and outstanding shares of PRO
Common Stock shall be delivered to GBBV, duly endorsed for transfer or
accompanied by appropriate stock powers duly executed. GBBV will receive valid
title to such shares of PRO Common Stock, free and clear of all liens and
other encumbrances. At the Closing, GBBV shall issue and deliver to the
Stockholders shares of GBBV Common Stock as provided in the list delivered to
GBBV pursuant to Section 1.2.
1.4 Capital Structure of PRO. The authorized capital stock of PRO
consists of 200,000,000 shares of PRO Common Stock, of which 59,044,266 shares
are issued and outstanding as of March 1, 2003. No other class of stock is
authorized. There are currently options outstanding to purchase (i) 500,000
shares of PRO Common Stock exercisable at $.125 if and when PRO does $5,000,000
in annual revenue and (ii) 500,000 shares exercisable at $.25 if and when PRO
does $10,000,000 in annual revenue. Both sets of options are held by Mr. ▇▇▇
▇▇▇▇▇▇ and will be adjusted in accordance with the final exchange ratio and will
be adjusted in accordance with the proposed reverse split so that such options
will then provide the holder with the right to purchase shares of GBBV Common
Stock in the adjusted amount and at the adjusted prices.
1.5 Present Capital Structure of GBBV. The authorized capital stock of
GBBV consists of 100,000,000 shares of GBBV Common Stock, of which 5,524,500
shares are issued and outstanding. All of the issued and outstanding GBBV Common
Stock have been duly authorized and validly issued, are fully paid and
non-assessable and were issued free of preemptive rights. Except as set forth
as "Schedule B" to this Agreement, there are no outstanding options, warrants,
conversion rights, preemptive rights or other rights to subscribe for, purchase
or otherwise acquire any shares of GBBV Common Stock, or any obligation of
GBBV to issue any shares of GBBV Common Stock.
1.6 Capital Structure of GBBV at the Closing. Prior to the Closing, GBBV
shall duly and validly adopt, in form and substance acceptable to PRO,
corporate resolutions by unanimous written consent of the Board of Directors of
GBBV to authorize and approve the actions listed in this Section 1.6 (a)-(f) and
shall also file, with the Secretary of state of the State of Nevada, an
amendment to the Company's Certificate of Incorporation, where necessary, to
effectuate the following actions:
(a) Approving an amendment to GBBV's Articles of Incorporation to change
the corporate name to THE PROJECT GROUP, INC., or such other name as may be
mutually agreed between GBBV and PRO. GBBV shall also comply with NASD
requirements to allow the ticker symbol, "GBBV", to be changed to reflect the
new corporate name.
(b) Approving and authorizing the designation of a class of Preferred Stock
consisting of 5,000,000 shares. The Board shall subsequently designate the terms
of a set of Class A Preferred Stock as set forth in "Schedule C" attached
hereto.
(c) Approving and authorizing the execution, delivery and performance of
this Agreement by GBBV, including the issuance of 49,720,500 shares of
GBBV Common Stock to the Stockholders.
(d) Approving and authorizing a reverse split of GBBV's shares of Common
Stock on a 1: 2.5 basis. The 49,720,500 shares of GBBV to be issued to the Pro
Stockholders is calculated on a presplit basis (19,888,200 post split).
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(e) Approving and authorizing the designation of an Employee/Consultant
2003 Stock Option Plan in the general form as attached hereto as Exhibit "D" and
the registration of such plan on a Form S-8 registration statement.
(f) At the closing of the proposed share exchange, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
shall resign as President, CEO, Chief Financial Officer, Director, and
Corporate Secretary, and the following officers and directors shall be elected:
Name: Title:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ President, Chief Executive Officer and
Director
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Chairman and Director
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Senior Vice President and Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. Vice President, Chief Technology Officer
▇▇▇▇ ▇▇▇▇▇▇ Director, Treasurer and Secretary
GBBV shall file a Schedule 14F1 with the Securities and Exchange Commission or
any other required filing related to the change of control.
After shareholder approval from the majority of the shareholders, GBBV shall
file with the SEC a Preliminary Information Statement and Definitive Information
Statement, if required, to effectuate those items set forth in Section 1.6
(a)-(f) of this Agreement.
(g) As required under the Securities and Exchange Act of 1934, GBBV and PRO
will disclose the acquisition and change of control in a Form 8-K filing to be
filed with the SEC within fifteen days from the date of the acquisition.
Thereafter, within 60 days from the filing of the Form 8-K, GBBV will file a
Form 8-K/A with the required audited financial statements of PRO and required
Pro Forma financial statements.
1.7 No Changes in Capitalization. Other than as described in this
Agreement, prior to the Closing Date, GBBV will not (i) make any change in its
Article of Incorporation or By-laws, issue any additional shares of GBBV
Common Stock or any other security or grant any option, warrant or right to
acquire any shares of GBBV Common Stock or any other security or alter or
make any change in any of its outstanding securities or its capitalization,
whether by reason of a reclassification, recapitalization, split, stock
dividend, combination, exchange or otherwise, or (ii) redeem, retire,
purchase or otherwise acquire, directly or indirectly, any shares of GBBV
Common Stock or any other security or declare or pay any dividends or other
distributions in respect of such shares or securities without the prior written
consent of PRO.
1.8 Capital Structure of GBBV After the Closing. After the Closing,
including the actions described in this Agreement, the following shall
represent, on a post1:2.5reverse split basis, all of the issued and outstanding
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securities of GBBV:
-- Current Pro Stockholders who now own an aggregate of 59,044,266
(pre-split) shares of PRO Common Stock will own 19,888,200 shares of GBBV on a
post-split basis. The 19,888,200 shares of GBBV on a post split basis will equal
90% of the outstanding shares of GBBV.
-- Current GBBV Stockholders who now own an aggregate of 5,524,500
(pre-split) shares of GBBV Common Stock will own 2,209,800 shares of GBBV on a
post-split basis. The 2,209,800 shares of GBBV on a post split basis will equal
10% of the outstanding shares of GBBV.
-- A shareholder of Pro Common Stock who elects to exchange their shares for
shares of GBBV Common Stock will received 1 share of GBBV Common Stock for
every 1.1816909 shares of PRO Common Stock currently owned.
ARTICLE II
CLOSING; EFFECTIVE DATE;
2.1 Closing. The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place at 5:00 P.M., Eastern Standard Time, on March
26, 2003 or at such other time and date as the parties shall agree in writing
(the "Closing Date"), at the offices of PRO, or at such other place as the
parties shall agree in writing.
2.2 Closing Documents. (a) At the Closing, GBBV, PRO and the
Stockholders shall deliver all certificates to be exchanged and/or subscriptions
representing acceptance of the shares exchanged.
(b) The effective date of the reorganization, for accounting purposes,
shall be determined by the company's accountants so as to provide the maximum
tax benefits.
(c) All certificates, instruments, opinions and other documents to be
executed or delivered by or on behalf of GBBV or under the provisions of
this Agreement, and all other actions and proceedings to be taken by or on
behalf of GBBV or in furtherance of the transaction contemplated hereby,
shall be satisfactory in form and substance to PRO and the Stockholders.
2.3 Miscellaneous Closing Covenants.
(1) The undersigned parties agree that post acquisition, (and subsequent to the
1:2.5 reverse split required under the terms of this Agreement), GBBV's board of
directors will not vote, as directors or shareholders, in favor of another
reverse split of the shares of GBBV common stock for a period of twelve months
from the date hereof.
(2) Prior to the execution of this Agreement, GBBV will have had distributed a
Private Placement Memorandum in which GBBV shall offer, pursuant to Regulation
D, Rule 506 of the Securities Act of 1933, as amended, 49,720,500 shares of GBBV
Common Stock to the shareholders of PRO in exchange for their outstanding shares
of PRO Common Stock. All shares of GBBV exchanged for the shares of PRO shall be
restricted and shall contain a restrictive legend as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
THEREFORE MAY NOT BE SOLD OR TRANSFERRED EXCEPT UPON SUCH
REGISTRATION OR UPON DELIVERY TO THE CORPORATION OF AN OPINION OF
COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE CORPORATION THAT
REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER.
(3) At or prior to Closing, an outstanding loan to GBBV by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.,
shall be cancelled by GBBV in exchange for the issuance of 30,000 shares of GBBV
on a post split basis.
(4) At or Prior to Closing, a consultant to PRO, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, shall have
his consulting agreement bought out and accrued fees due to him in the form of a
$98,000 Non-Interest Bearing Promissory Note ("Note"), effective December 31,
2002. Such Note requires that ▇▇. ▇▇▇▇▇▇▇▇ shall have the right to convert such
Note into 1,960,000 shares of GBBV Common Stock (on a post reverse split basis)
to be registered on a Form S-8 and shall also be issued (b) three year warrants
to purchase 500,000 shares of GBBV Common Stock (post reverse split) exercisable
at $.25 per share; and (c) three year warrants to purchase 500,000 shares of
GBBV Common Stock (post reverse split) exercisable at $.50 per share. Such
1,960,000 shares to be issued to ▇▇. ▇▇▇▇▇▇▇▇ upon conversion of such Note,
shall not be included in the calculated 90% of GBBV to be owned by the PRO
shareholders. Effective upon Closing, GBBV shall assume the liability of the
Note and the obligation to honor and satisfy any conversion of the Note. Any
time subsequent to the filing of a Certificate of Amendment of the Certificate
of Incorporation and the Form 8-K, at the request of ▇▇. ▇▇▇▇▇▇▇▇, GBBV shall
file a Form S-8 to register the shares underlying ▇▇. ▇▇▇▇▇▇▇▇'▇ warrants.
Notwithstanding anything to the contrary in this Agreement, in no event shall
▇▇. ▇▇▇▇▇▇▇▇ be entitled to convert any portion of the Promissory Note to the
extent that, after such conversion, that number of shares of Common Stock, which
when added to the sum of the number of shares already beneficially owned, (as
such term is defined under Section 13(d) and Rule 13d-3 of the Securities
Exchange Act of 1934 (the "1934 ACT")), by ▇▇. ▇▇▇▇▇▇▇▇, would exceed 9.99% of
the number of shares of Common Stock outstanding on the Promissory Note
conversion date, as determined in accordance with Rule 13d-1(j) of the ▇▇▇▇ ▇▇▇.
(5) The Closing shall be subject to meeting all state and federal regulatory
requirements for the acquisition.
(6) Other than as provided for in this Agreement, the undersigned parties agree
that GBBV shall not file a registration statement on behalf of selling security
holders for a period of 12 months from the date hereof, except where required by
an investor in order to raise new money for GBBV at fair value which shall be
defined as the then current average closing bid price of the Company's Common
Stock as quoted on the OTC Bulletin Board for any consecutive 20 trading days.
(7) In consideration for the officers and directors who have converted an
aggregate of $64,486.31 of accrued salaries owed to them into shares of PRO
Common Stock, the officers and directors shall be granted an option of
converting all of their PRO Common Stock into a designated class of Class A
preferred shares that will offer voting rights identical to those rights of
holders of common shares. Such option shall also be given to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ who
has converted a $15,000 note into shares of PRO Common Stock. The right of the
foregoing individuals to convert all of their shares of PRO Common Stock, an
aggregate of 36,289,766 shares, into shares of Class A preferred stock shall
vest 2 business days after GBBV files a certificate of amendment with the State
of Nevada to designate such class of preferred shares. Such Class A preferred
stock will be convertible beginning TWO (2) years from the date of issuance and,
if and when converted, shall be converted into shares of GBBV Common Stock
based on the total number of shares of the GBBV Common Stock issued and
outstanding on the conversion date such that the issuance of GBBV Common Stock
to the holder shall represent, on a pro rata basis, 59.38% of GBBV's Common
Stock then outstanding after such conversion has taken place. Such Class A
preferred shares shall have voting rights equal to an aggregate of 59.38% of the
total shares outstanding of GBBV Common Stock, on a pro rata basis.
(8) Pursuant to an engagement letter between PRO and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C.,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C. is owed 100,000 shares of PRO Common Stock for legal
services rendered. Pursuant to this Agreement, GBBV will issue ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
P.C. 100,000 (post-split) restricted shares of GBBV Common Stock to be
physically delivered to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C. within three days after the
effectiveness of the proposed reverse split.
(9) Excluding shares issued for a fair value formal acquisition or for fair
value new capital paid into GBBV in cash by an investor, any issuance of shares,
other than pursuant to (i) the Company Employee/Consultant Stock Option Plan as
stated above and/or (ii) the conversion of what will be GBBV's Class A Preferred
Stock, which shall, directly or indirectly, increase the number of total
outstanding shares of GBBV by more than a cumulative total of 10% (ten percent)
in the first 12 (twelve) months from the date hereof, shall cause an equalizing
anti-dilution adjustment of the shares and warrants outlined above for the GBBV
shareholders as of the date hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF GBBV
GBBV represents and warrants to PRO and the Stockholders as set forth
in this Article III:
3.1 Organization and Qualification; Subsidiaries. GBBV was organized by the
filing of Articles of Incorporation with the Secretary of State of the State of
Nevada on April 16, 1998 (Date of Inception) under the name Registered Agents of
Southern Nevada, Inc. The Company amended its Articles on March 25, 2000
changing its name to Global Boulevard International, Inc. GBBV is duly
incorporated, validly existing and in good standing under the laws of Nevada
and has the requisite corporate power and authority to own, lease and
operate its assets and properties and to carry on its business as it is now
being conducted and as proposed to be conducted after the Closing. GBBV is
in possession of all franchises, grants, authorizations, licenses,
permits, easements, consents, certificates, approvals and orders necessary to
own, lease and operate the properties it purports to own, operate or lease
and to carry on its business as it is now being conducted. GBBV is duly
qualified or licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of the properties
owned, leased or operated by it or the nature of its activities makes such
qualification or licensing necessary. Other than pursuant to this
Agreement, GBBV does not directly or indirectly own, or have the right or
obligation to acquire, any equity or similar interest in, or any interest
convertible or exchangeable or exercisable for, any equity or similar interest
in, any corporation, partnership, limited liability company, joint venture or
other business, association or entity.
3.2 Articles of Incorporation and Bylaws. GBBV has previously furnished
directly or through electronic filings with the SEC to PRO and the
Stockholders a complete and correct copy of its Articles of Incorporation
and Bylaws as amended to date. Such Articles of Incorporation and Bylaws are in
full force and effect. GBBV is not in violation of any of the provisions of its
Articles of Incorporation or Bylaws.
3.3 Authority Relative to This Agreement. GBBV has all necessary
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by GBBV and
the consummation by GBBV of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action on the part of
GBBV and no other corporate proceedings on the part of GBBV are necessary to
authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
GBBV and, assuming the due authorization, execution and delivery by PRO
and the Stockholders, constitutes a legal and binding obligation of GBBV,
enforceable against GBBV in accordance with its terms.
3.4 No Conflict; Required Filings and Consents. (a) The execution and
delivery of this Agreement by GBBV do not, and the performance of this
Agreement by GBBV shall not, (i) conflict with or violate its Articles of
Incorporation or Bylaws, (ii) subject to obtaining the approval of this
Agreement by the holders of a majority of the outstanding shares of GBBV
Common Stock, conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to GBBV or by which it or any of its
properties is bound or affected, or (iii) result in any breach of or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, or impair GBBV's rights or alter the rights or obligations of
any third party under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of the properties or assets of GBBV pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which GBBV is a party or by
which GBBV or any of its properties is bound or affected.
(b) The execution and delivery of this Agreement by GBBV does not, and
the performance of this Agreement by GBBV shall not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
court, administrative agency, commission, or governmental or regulatory
authority, domestic or foreign, except for applicable requirements, if any, of
the Securities Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), state securities laws, and the rules and regulations
thereunder, and the rules and regulations of NASDAQ.
3.5 Compliance; Permits. (a) GBBV is not in conflict with, or in
default or violation of, (i) any law, rule, regulation, order, judgment or
decree applicable to GBBV or by which any of its properties is bound or
affected, or (ii) any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which
GBBV is a party or by which GBBV or any of its properties is bound or
affected. No investigation or review by any governmental or regulatory body or
authority is pending or, to the knowledge of GBBV, threatened against
GBBV, nor has any governmental or regulatory body or authority indicated an
intention to conduct the same.
(b) GBBV holds all permits, licenses, variances, exemptions, orders and
approvals from governmental authorities which are necessary or desirable to the
operation of the business of GBBV (collectively, the "GBBV Permits"). GBBV
is in compliance in all respects with the terms of the GBBV Permits.
3.6 Financial Statements GBBV has:
(a) Filed with the Securities and Exchange Commission financials statements
that are, accurate and that are required by the Commission.
(b) All the Financial Statements have been prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied
throughout the periods involved. As of the date of any of such balance sheets,
except to the extent reflected therein, GBBV did not have any liabilities or
obligations (absolute or contingent) which should be reflected in a balance
sheet or the notes thereto prepared in accordance with GAAP, and all assets
reflected therein are properly reported and present fairly the value of the
assets of GBBV in accordance with GAAP. Such statements of operations and
comprehensive income present fairly the results of operations of GBBV for the
periods indicated. Such statements of changes in shareholders' equity and
cash flows present fairly the information, which should be presented therein in
accordance with GAAP.
(c) The financial and other books and records of GBBV are complete and
correct and have been maintained in accordance with good business and accounting
practices, and the Financial Statements can be reconciled with such books and
records.
3.7 Commission Filings. Since such date GBBV was first required to make (or
has voluntarily made) such filings, GBBV believes it has filed with the SEC all
Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB, Current Reports
on Form 8-K, proxy materials, registration statements and other reports and
documents required to be filed by it pursuant to federal securities laws and has
made all other filings with the SEC required to be made (collectively, the
"GBBV Commission Filings"). GBBV has, to the best of its knowledge, satisfied
all requirements to be a "small business issuer" as defined pursuant to the
Exchange Act.
3.8 OTCBB. GBBV and its market makers have complied with and are
current with all applicable requirements for the GBBV Common Stock to be
quoted on the OTC Bulletin Board ("OTCBB") under the symbol "GBBV". Neither
GBBV nor any of its market makers have received any notice, nor to their
knowledge is it threatened, that at any time the GBBV Common Stock may no
longer be eligible to be quoted on the OTCBB.
The restricted shares of GBBV Common Stock issuable to the Stockholders
pursuant to this Agreement, when issued, will be duly authorized and validly
issued, fully paid and nonassessable and free of any preemptive rights and
will be eligible to be quoted on the OTCBB. There has been no stop order
issued by any regulatory authority including, without limitation, the NASD, the
SEC or any state regulatory authority relating to GBBV or the GBBV Common
Stock and GBBV has not received any notice of any investigation or other
proceeding that could result in any stop order.
3.9 No Undisclosed Liabilities. GBBV does not have any liabilities
(absolute, accrued, contingent or otherwise) except (i) liabilities provided for
in GBBV's balance sheet as the 10-QSB dated September 30, 2002 or (ii)
banking, accounting, legal and printing fees associated with the
transactions contemplated by this Agreement, which do not exceed $2,500.00 in
the aggregate.
3.10 Absence of Certain Changes or Events. Since September 30, 2002, GBBV
has conducted no business and has incurred no liabilities. Since September 30,
2002 no material change has occurred in the financial condition, assets,
liabilities or business of GBBV.
3.11 Absence of Litigation. There are no claims, actions, suits,
investigations or proceedings pending or, to the knowledge of GBBV,
threatened against GBBV or any properties or rights of GBBV or as to which
GBBV has received any written notice or assertion, before any court,
arbitrator or administrative, governmental or regulatory authority or body,
domestic or foreign.
3.12 Employee Benefit Plans. GBBV is not a party to any oral or written (i)
contract for the employment of any officer or employee; (ii) profit sharing,
bonus, deferred compensation, pension or retirement plan, agreement or
arrangement; (iii) collective bargaining agreement; or (iv) employee fringe or
benefit plan, commitment or other arrangements (whether or not set forth in a
written document and including, without limitation, all "employee benefit plans"
within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), that covers any active or former employee,
director or consultant of GBBV, or with respect to which GBBV has or may
in the future have liability.
3.13 Title to Property. GBBV owns no real property.
3.14 Directors and Officers. GBBV has delivered to PRO and the
Stockholders or has made available via the Internet SEC filings, a complete
list of the current Board of Directors and officers of GBBV.
3.15 Corporate Record Books. The corporate record books of GBBV are in
reasonable order, accurate, up to date, with all necessary signatures, and set
forth all recent meetings and actions set forth in all certificates of votes of
stockholders or directors furnished to anyone at any time.
3.16 Lack of Disputes. There is currently no dispute, pending or, to the
knowledge of GBBV, threatened, anticipated or contemplated of any kind with any
customer, supplier, source of financing, employee, landlord, or licensee of
GBBV.
3.17 Board Approval. The Board of Directors of GBBV and the majority of the
stockholders of GBBV by written consent have, as of the date of this Agreement,
(i) approved, this Agreement and the transactions contemplated hereby and (ii)
determined that this Agreement is in the best interests of the stockholders of
GBBV and is on terms that are fair to such stockholders.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PRO AND THE STOCKHOLDERS
PRO and the Stockholders jointly and severally represent and warrant to
GBBV as set forth in this Article IV:
4.1 Organization and Qualification. PRO was duly incorporated on
July 24, 2001 and validly existing and in good standing under the laws
of Texas and has the requisite corporate power and authority to own, lease and
operate its assets and properties and to carry on its business as it is now
being conducted. PRO is in possession of all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates, approvals
and orders necessary to own, lease and operate the properties it purports to
own, operate or lease and to carry on its business as it is now being conducted.
4.2 Articles of Incorporation and Bylaws. PRO has previously furnished to
GBBV or has made available to GBBV via the Internet SEC filings, a complete
and correct copy of its Articles of Incorporation and Bylaws as amended to
date. Such Articles of Incorporation and Bylaws are in full force and effect.
PRO, to the best of its knowledge, is not in violation of any of the
provisions of its Articles of Incorporation or Bylaws.
4.3 Authority Relative to This Agreement. PRO has all necessary
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
by PRO and the consummation by PRO of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action on
the part of PRO and no other corporate proceedings on the part of PRO are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby (other than the approval of this Agreement by the holders
of a minimum of 66-2/3% of the outstanding shares of PRO Common Stock). This
Agreement has been duly and validly executed and delivered by PRO and the
Stockholders and, assuming the due authorization, execution and delivery by
GBBV, constitutes a legal and binding obligation of PRO and the
Stockholders, enforceable against PRO and the Stockholders in accordance
with its terms.
4.4 No Conflict; Required Filings and Consents. (a) The execution and
delivery of this Agreement by PRO and the Stockholders do not, and the
performance of this Agreement by PRO and the Stockholders shall not, (i)
conflict with or violate PRO's Articles of Incorporation or Bylaws, (ii)
subject to obtaining the approval of this Agreement by the holders of a majority
of the outstanding shares of PRO Common Stock, conflict with or violate any
law, rule, regulation, order, judgment or decree applicable to PRO or by
which it or any of its properties is bound or affected, or (iii) result in any
breach of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or impair PRO's rights or alter the
rights or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of PRO
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which PRO is a
party or by which PRO or any of its properties is bound or affected.
(b) The execution and delivery of this Agreement by PRO and the
Stockholders do not, and the performance of this Agreement by PRO and the
Stockholders shall not, require any consent, approval, authorization or permit
of, or filing with or notification to, any court, administrative agency,
commission, or governmental or regulatory authority, domestic or foreign, except
for applicable requirements, if any, of the Securities Act, the Exchange Act,
state securities laws, and the rules and regulations thereunder, and the rules
and regulations of NASDAQ.
4.5 Compliance; Permits. (a) PRO is not in conflict with, or in default or
violation of, (i) any law, rule, regulation, order, judgment or decree
applicable to PRO or by which any of its properties is bound or affected, or
(ii) any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which PRO is a party or
by which PRO or any of its properties is bound or affected. No
investigation or review by any governmental or regulatory body or authority is
pending or, to the knowledge of PRO, threatened against PRO, nor has any
governmental or regulatory body or authority indicated an intention to conduct
the same.
(b) PRO holds all permits, licenses, variances, exemptions, orders and
approvals from governmental authorities which are necessary or desirable to the
operation of the business of PRO(collectively, the "PRO Permits"). PRO is in
compliance in all respects with the terms of the PRO Permits.
4.6 Financial Statements. (a) Within 45 days from the effective date of
this agreement, PRO will deliver to GBBV a fully audited balance sheet of
PRO and the related audited profit and loss statement as of December 31, 2002
(collectively, the "PRO Financial Statements").
(b) The PRO Financial Statements will present fairly the value of the
assets of PRO as of the effective date and the results of operations for the
period indicated. The PRO Financial Statements will be prepared in accordance
with GAAP consistently applied.
(c) Except as otherwise disclosed, since the date of the PRO Financial
Statements, there have been no material adverse changes in the financial
condition, assets, liabilities or business of PRO, nor any increase paid, or
agreed to, in the compensation, retirement benefits or other commitments to
employees of PRO.
4.7 No Undisclosed Liabilities. PRO does not have any liabilities
(absolute, accrued, contingent or otherwise) except (i) liabilities provided for
in the PRO Financial Statements, (ii) liabilities incurred in the ordinary
course of business, or (iii) banking, accounting, legal and printing fees
associated with the transactions contemplated by this Agreement.
4.8 Litigation. There are no claims, actions, suits, investigations or
proceedings pending or, to the knowledge of PRO, threatened against PRO or any
properties or rights of PRO or as to which PRO has received any written
notice or assertion, before any court, arbitrator or administrative,
governmental or regulatory authority or body, domestic or foreign.
4.9 Labor Matters. There is no litigation pending or, to the knowledge of
PRO, threatened, between PRO and any of its employees. As of the date of this
Agreement, PRO is not a party to any collective bargaining agreement or other
labor union contract applicable to persons employed by PRO nor does PRO know
of any activities or proceedings of any labor union to organize any such
employees. As of the date of this Agreement, PRO has no knowledge of any
strikes, slowdowns, work stoppages or lockouts, or threats thereof, by or with
respect to any employees of PRO.
4.10 Restrictions on Business Activities. There is no agreement, judgment,
injunction, order or decree binding upon PRO which has or could reasonably be
expected to have the effect of prohibiting or impairing any business practice of
PRO, any acquisition of property by PRO or the conduct of business by PRO
as currently conducted.
4.11 Title to Property. PRO has good and defensible title to all of its
properties and assets, free and clear of all liens, charges and encumbrances;
and all leases pursuant to which PRO leases from others material amounts of
real or personal property are in good standing, valid and effective in
accordance with their respective terms, and there is not, under any of such
leases, any existing default or event of default (or any event which with notice
or lapse of time, or both, would constitute a default).
4.12 Intangible Assets. PRO has full rights to all patents and patent
applications (pending or in the process of preparation), domestic or foreign,
patent rights, trademarks, trade names and licenses under the patents of others,
trade secrets, secret processes and other proprietary rights of every kind and
nature used by PRO at any time or necessary for use by PRO in its business as
presently conducted. All such patents, patent applications, patent rights and
licenses are valid and effective in accordance with their terms, and all such
trade names, trade secrets, secret processes and other proprietary rights are
valid and effective. To the best of Pro's knowledge, the conduct of PRO's
business or any other actions by PRO has not and does not infringe upon the
patents, trademarks, trade secrets, or copyrights or other intellectual
property rights of any other party. PRO has not received any notice of any claim
of infringement.
4.13 Directors and Officers. PRO has delivered to GBBV or made available
via Internet SEC filings, a complete list of the current Board of Directors and
officers of GBBV.
4.14 Corporate Record Books. The corporate record books of PRO are in
good order, complete, accurate, up to date, with all necessary signatures, and
set forth all meetings and actions set forth in all certificates of votes of
stockholders or directors furnished to anyone at any time.
4.15 Lack of Disputes. There is currently no dispute, pending or, to the
knowledge of PRO, threatened, anticipated or contemplated of any kind with
any customer, supplier, source of financing, employee, landlord, or licensee of
PRO.
4.16 Board Approval. The Board of Directors of PRO has, as of the date of
this Agreement, (i) approved this Agreement and the transactions contemplated
hereby, (ii) determined that this Agreement is in the best interests of the
stockholders of PRO and is on terms that are fair to such stockholders and
(iii) recommended that the stockholders of PRO subscribe to exchange their
shares of Pro Common Stock for shares of GBBV Common Stock.
4.17 Vote Required. The affirmative vote of the holders of a majority of
the outstanding shares of PRO Common Stock is the only vote of the holders of
any class or series of PRO 's capital stock necessary to approve this
Agreement and the transactions contemplated hereby.
4.18 Disclosures. None of the representations or warranties by PRO in
this Agreement and no statement contained in any certificate or other writing
furnished by PRO in connection herewith contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements contained herein or therein not
misleading.
4.19 Confidentiality and Non Disclosure. None of the parties hereto shall
disclose to any third party any information obtained pursuant to this Agreement
or relating to any other party which is not otherwise generally available to the
public or not already within its knowledge, except as may be required by
applicable law or as expressly agreed by the parties.
4.20 Access to Information. PRO has provided GBBV and its
representatives (i) full access to all of its offices, properties, books,
records, documents and personnel and furnished such information regarding PRO
as they may have requested; and (ii) any and all relevant documents regarding
securities filings, broker dealer due diligence packages and offering
memorandums.
4.21 Material Customers. List of entities with whom PRO has or had
material consulting
contracts with:
AIM Advisors, Inc. (subsidiary of AIM Financial, Inc.)
Aspen Technology, Inc.
Federated Systems Group, Inc. McKesson
Microsoft Tyson Foods America, Inc.
University of Texas Health Science
Center at Houston Varco, Inc.
Wal-Mart, Inc. Waste Management
Wyndham, Inc. El Paso Corp.
OKONE, Inc. ACXIOM, Inc.
AMS, Inc. ▇▇▇▇▇▇▇ Enterprises, Inc.
Christus Health Care, Inc. ▇▇▇▇▇▇▇ Title, Landata
Viewpointe Archive Services, Inc. OXY, Inc.
EDS DOW
TXI Miami Dade County Florida
Broward County Florida Oklahoma Department of Health
Services
Texas Instruments, Inc. Sprint
Solvay Project Assistants, Inc.
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, Inc.
InfoMAC, Inc. ▇▇▇▇▇▇▇ ▇▇▇▇▇ and Root, Inc.
Halliburton, Inc. Georgia Tech University
Clear Channel Communication BMC
ARTICLE V
TERMINATION, AMENDMENT AND WAIVERS
5.1 Termination. This Agreement may be terminated at any time prior to
Closing, whether before or after the requisite approvals of the stockholders of
GBBV or PRO :
(a) by mutual written consent duly authorized by the Boards of Directors of
PRO and GBBV;
(c) by PRO, upon a breach of any representation, warranty, covenant or
agreement on the part of GBBV or by GBBV, upon a breach of any representation,
warranty, covenant or agreement on the part of PRO or the Stockholders; however,
if either of the undersigned parties withdraws, is in breach of this Agreement,
or does not diligently pursue completion of the acquisition, such party shall be
responsible to pay the other party a $100,000 break up fee ("Break Up Fee").
Should GBBV be required to pay the above stated Break Up Fee, GBBV shall either
pay the $100,000 in cash payment or may satisfy its obligation by issuing Pro
Squared an amount of newly issued GBBV Common Stock equal to 25% of GBBV's total
outstanding shares, all at GBBV's discretion; or
(e) by either PRO or GBBV if a governmental entity shall have issued an
order, decree or ruling or taken any other action, in any case having the
effect of restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, such that the consummation of the acquisition
appears unlikely to be reasonably achieved within 90 days from the date hereof.
In such instances, the break up fee as set forth above shall not apply.
5.2 Notice of Termination; Effect of Termination. Any termination of this
Agreement pursuant to Section 5.1 will be effective immediately upon the
delivery of written notice by the terminating party to the other parties hereto.
In the event of any such termination, this Agreement shall be of no further
force or effect, except (i) as set forth in Section 4.19, this Section 5.2,
Section 5.3 and Article VII (General Provisions), each of which shall survive
the termination of this Agreement, and (ii) nothing herein shall relieve any
party from liability for any breach of this Agreement.
5.3 Fees and Expenses. Except as set forth in this Section 5.3, all fees
and expenses in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such fees and expenses, whether or
not the Closing occurs.
5.4 Amendment. This Agreement may be amended only by an instrument in
writing signed by all of the parties.
5.5 Waiver. Any party may (i) waive any inaccuracies in the representations
and warranties made to such party contained herein or in any document delivered
pursuant hereto or (ii) waive compliance with or fulfillment of any of the
agreements or conditions for the benefit of such party contained herein. The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach, whether or not
similar. Any waiver must be in an instrument in writing signed by the waiving
party. Delay in exercising any right under this Agreement shall not constitute a
waiver of such right.
ARTICLE VI
LEAK-OUT AGREEMENTS; PUBLIC DISCLOSURE
6.1 Public Disclosure. PRO and GBBV will consult with each other and,
to the extent practicable, agree before issuing any press release or
otherwise making any public statement with respect to this Agreement and the
transactions contemplated hereby and will not issue any such press release or
make any public statement prior to such consultation, except as may be required
by law or any listing agreement with a national securities exchange or OTCBB.
ARTICLE VII
GENERAL PROVISIONS
7.1 Non-Survival. The representations and warranties of GBBV, PRO and
the Stockholders contained in this Agreement shall terminate at the Closing and
only the covenants and agreements that by their terms survive the Closing
shall survive the Closing.
7.2 Notices. All notices and other communications hereunder shall be in
writing and shall be delivered or sent, with the copies indicated, if delivered
personally, by registered or certified mail (postage pre-paid, return receipt
requested), fax (with confirmation and additional copy sent by overnight
delivery service) or overnight delivery service (by a reputable national
carrier) to the parties as follows (or at such other address as a party may
specify by notice given pursuant to this Section):
(a) If to GBBV:
Global Boulevard International, Inc.
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(b) If to PRO or the Stockholders:
Pro Squared, Inc.
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
All notices shall be deemed given and received one business day after their
delivery to the addresses for the respective party, with the copies indicated as
provided in this Section.
7.3 Further Assurances. At any time, and from time to time, after the
Closing, each party will execute such additional instruments and take such
additional action as may be reasonably requested by any other party to confirm
or perfect title to any property transferred hereunder or otherwise to carry out
and effect the intent and purposes of this Agreement.
7.4 Interpretation. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
7.5 Counterparts and by Facsimile. This Agreement may be executed
in one or more counterparts, all of which shall be considered one and the
same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties, it
being understood that all parties need not sign the same counterpart.
7.6 Entire Agreement; Third Party Beneficiaries. This Agreement and the
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein (a) constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof; and (b) are not intended to confer upon
any other person any rights or remedies hereunder.
7.7 Severability. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
7.8 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
7.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
GLOBAL BOULEVARD INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
_______________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
Title: President
PRO SQUARED, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
______________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
SEE ADDITRIONAL SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION
AMONG GBBV, PRO AND THE SHAREHOLDERS OF PRO
IN WITNESS WHEREOF, the parties have executed this agreement.
Pro Squared, Inc. SHAREHOLDERS:
SCHEDULE A
Pro Squared Shareholders Number of Shares Owned
SCHEDULE B
Options / Warrants outstanding to purchase shares of GBBV:
NONE
SCHEDULE C
Designation of Class A Preferred Stock
CERTIFICATE OF DESIGNATION AND PREFERENCES OF
CLASS A CONVERTIBLE PREFERRED STOCK OF
GLOBAL BOULEVARD INTERNATIONAL, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation") is
Global Boulevard International, Inc.
2. The certificate of incorporation of the corporation authorizes that
issuance of 5,000,000 shares of Preferred Stock, par value $.001 per share, and
expressly vests in the Board of Directors of the corporation the authority
provided therein to issue any or all of said shares in one or more series and by
resolution or resolutions, the designation, number, full or limited voting
powers, or other denial of voting powers, preferences and relative,
participating, optional, and other special rights and the qualifications,
limitations, restrictions, and other distinguishing characteristics of each
series to be issued.
3. The Board of Directors of the corporation, pursuant to the authority
expressly vested in it as aforesaid, has adopted the following resolutions
creating a Class A Convertible issue of Preferred Stock:
RESOLVED that pursuant to the authority expressly vested in the Board of
Directors of the Company by the Company's Certificate of Incorporation, the
Board of Directors hereby authorizes, out of the Company's 5,000,000 shares of
authorized preferred stock, par value $.001 per share, the designation of up to
2,500,000 shares of Class A Convertible Preferred Stock ("Class A Preferred
Stock"), $.001 par value, and hereby determines that the preferences, rights,
powers, limitations, qualifications and restrictions be in the form as attached
hereto as Exhibit A; and
RESOLVED that a Certificate of Designation reflecting the designation of
the Company's Class A Preferred Stock be filed with the Secretary of State of
the State of Nevada; and
4. FURTHER RESOLVED, that the statements contained in the foregoing
resolutions creating and designating the said Class A issue of Preferred Stock
and fixing the number, powers, preferences and relative, optional,
participating, and other special rights and the qualifications, limitations,
restrictions, and oilier distinguishing characteristics thereof shall, upon the
effective date of said class, be deemed to be included in and be a part of the
certificate of incorporation of the corporation
..
_________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
CERTIFICATE OF DESIGNATIONS OF
CLASS A CONVERTIBLE PREFERRED STOCK,
PAR VALUE $0.001 PER SHARE
Pursuant to Section 78.1955 of the Nevada Revised Statutes
IT IS HEREBY CERTIFIED that:
1. The name of the company (hereinafter called the "CORPORATION") is
Global Boulevard International, Inc., a corporation organized and now existing
under the Nevada Revised Statutes.
2. The Articles of Incorporation of the Corporation (the "ARTICLES OF
INCORPORATION") authorizes the issuance of Five Million (5,000,000) shares of
preferred stock, par value $0.001 per share (the "PREFERRED STOCK"), and
expressly vests in the Board of Directors of the Corporation the authority to
issue any or all of said shares by resolution or resolutions and to establish
the designation and number of shares to be issued.
3. The Board of Directors of the Corporation, pursuant to the authority
expressly vested in it as aforesaid, and pursuant to the provisions of Section
78.1955 of the Nevada Revised Statutes, has adopted the resolution set forth
below to create a series of Preferred Stock. Pursuant to Section 78.1955, the
approval of the Corporation's shareholders was not required.
RESOLVED, THAT 2,500,000 shares of the Five Million (5,000,000) shares
of Preferred Stock of the Corporation which are authorized shares as of the
date of this certificate shall hereby be designated Class A Convertible
Preferred Stock, par value $0.001 per share (the "CERTIFICATE"), and shall
possess the rights and preferences set forth below:
1. DIVIDENDS.
The holders of the Preferred stock shall be entitled, when and if declared by
the board of directors of the corporation (the "BOARD OF DIRECTORS"), to cash
dividends and distributions out of funds of the corporation legally available
for that purpose (collectively, "DISTRIBUTIONS") PRO RATA and PARI PASSU with
the holders of the Corporation's common stock, par value $0.001 per share
(the "COMMON STOCK") such that, the Distributions payable on each
issued and outstanding share of the Preferred Stock shall be equal to the
amount paid on each issued and outstanding share of the Common Stock, and all
Distributions shall be declared, paid and set aside ratably on the foregoing
basis among the holders of the Preferred Stock and the holders of the Common
Stock in proportion to the issued and outstanding shares of the Preferred Stock
and the Common Stock held by them; provided however that Distributions shall be
issued to the Preferred Stock holders on an as if converted basis of the
Preferred Stock to Common Stock.
2. VOTING.
(a) The holders of the Preferred Stock shall each be entitled to vote the
number of votes AS IF CONVERTED INTO COMMON STOCK equal to 59.38% of the
Common Stock into which such shares are to be converted pursuant to this
Section 4 of this Certificate. Except as expressly set forth in this Section 2
of this Certificate, any matter as to which the holders of Common Stock are
entitled to vote shall require the affirmative vote of the holders of a
majority of the issued and outstanding shares of Preferred Stock, voting as
one class.
(b) The affirmative vote of the holders of a majority of the issued and
outstanding shares of the Preferred Stock voting as a separate class, shall be
required to change the powers, preferences or special rights of the shares of
the Preferred Stock in relation to the shares of the Common Stock.
3. LIQUIDATION.
(a) Upon the occurrence of a Liquidating Event (as defined below in
Section 3(c) of this Certificate), whether voluntary or involuntary, the holders
of the Preferred Stock and the Common Stock of all classes shall be entitled to
receive, PRO RATA and PARI PASSU out of the assets of the Corporation available
for distribution to its stockholders or from the net proceeds from a sale,
lease, exchange or other disposition of the assets of the Corporation (in any
such case, the "PROCEEDS"), as applicable, as follows: the entire assets and
funds of the Corporation legally available for distribution shall be distributed
ratably among the holders of the Preferred Stock and the Common Stock such that,
the Proceeds distributed on account of each issued and outstanding share of the
Preferred Stock shall be equal to the amount distributed on account of each
issued and outstanding share of the Common Stock in proportion to the issued and
outstanding shares of the Preferred Stock and the Common Stock held by them.
(b) VALUATION. If any asset distributed to holders of the Corporation's
Common Stock upon the occurrence of any Liquidating Event consists of property
other than cash or securities, the value of such distribution shall be deemed to
be the fair market value thereof at the time of such distribution, as determined
in good faith by the Board of Directors.
(c) LIQUIDATING EVENT. Any of the following shall be considered a
"LIQUIDATING EVENT" and shall entitle the holders of the Preferred Stock and the
Common Stock to receive promptly, in cash, securities or other property, those
amounts specified in Section 3(a) of this Certificate and valued as provided in
Section 3(b) of this Certificate:
(i) any liquidation, dissolution or winding up of the Corporation;
or
(ii) any sale, lease, exchange or other disposition of all or
substantially all the Corporation's assets.
4. CONVERSION OF SHARES OF THE PREFERRED STOCK. Shares of the Preferred
Stock shall convert into shares of the Common Stock on the basis set forth in,
and subject to the limitations of, this Section 4 of this Certificate:
(a) CONVERSION RATIO.
(i) Conversion Date. The Class A preferred shares shall not be
converted at any time prior to the second anniversary of the date of issuance of
such Class A preferred shares (the "Conversion Date").
(ii) Subject to and in compliance with the provisions of
this Section 4, each one (1) share of the Preferred Stock shall be converted
into X NUMBER of fully paid and nonassessable shares of the Common Stock so
that the aggregate number of Class A preferred shares shall, when converted,
equal 59.38% of the total number of shares of GBBV Common Stock outstanding on
the conversion date (the "PREFERRED CONVERSION RATIO"), on a pro rata basis.
(iii) SUBDIVISION OR COMBINATION OF THE COMMON STOCK. If
the Corporation at any time or from time to time shall declare or pay any
dividend on the shares of the Common Stock payable in shares of the Common
Stock or in any right to acquire shares of the Common Stock, or shall effect
a subdivision of the outstanding shares of the Common Stock into a greater
number of shares of the shares of any class of the Common Stock (by stock
split, reclassification or otherwise), or if the outstanding shares of the
Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of the Common Stock, then the
Preferred Conversion Ratio in effect immediately prior to such event shall,
concurrently with the effectiveness of such event, be proportionately decreased
or increased, as appropriate, such that each share of the Preferred Stock is
converted into those shares of the Common Stock that represent the economic
equivalent of the shares of the Common Stock into which each share of the
Preferred Stock was convertible immediately prior to such dividend,
subdivision, combination or reclassification.
5. CONVERSION PROCEDURE.
In order for any holder of Class A Preferred Stock to convert the same into
shares of Common Stock, such holder shall execute the Conversion Election on the
reverse side of the certificate evidencing the Class A Preferred Stock being
converted and delivering such certificate to the Corporation at its principal
office, setting forth in the Conversion Election the name or names in which the
certificate or certificates for shares of Common Stock are to be issued. The
Conversion Election shall be deemed to be effective upon receipt by the
Corporation. If the Conversion Election is received by the Corporation after
3:00 p.m. Eastern Time on any day, it shall be deemed to be received the next
following business day. The Corporation shall, as soon as practicable, but not
later than five business days after the date of receipt of the Conversion
Election, issue and deliver to the location designated by such holder, the
certificate or certificates for the number of shares of Common Stock to which
such holder shall be entitled as a result of such conversion. The person or
persons entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock as of the effective date of such conversion. The
Corporation shall deliver to the converting holder:
(A) a certificate or certificates representing the number
of shares of the Common Stock issuable by reason of such
conversion consistent with Section 4 of this Certificate; and
(B) if a holder has requested conversion, a certificate
representing any shares of the Preferred Stock which were
represented by the certificate or certificates delivered to the
Corporation in connection with such conversion but which have not
converted.
The issuance of certificates for shares of the Common Stock upon conversion
of shares of the Preferred Stock pursuant to the foregoing clause (ii)
shall be made without charge to the holders of such shares of the Preferred
Stock for any issuance tax in respect thereof (so long as such certificates
are issued in the name of the record holder of such shares of the Preferred
Stock) or other cost incurred by the Corporation in connection with such
conversion and the related issuance of shares of the Common Stock. Upon
conversion of each share of the Preferred Stock, the Corporation shall
take all such actions as are necessary in order to ensure that the shares of
the Common Stock issuable with respect to such conversion shall be validly
issued, fully paid and nonassessable, free and clear of all taxes (other than
any taxes relating to any dividends paid with respect thereto), liens,
charges and encumbrances with respect to the issuance thereof.
RESERVATION OF COMMON STOCK. The Corporation shall, at all times when
shares of the Preferred Stock shall be outstanding, reserve and keep available
out of its authorized but unissued stock, for the purpose of effecting the
conversion of shares of the Preferred Stock, such number of its duly authorized
shares of the Common Stock as shall from time to time be sufficient to effect
the conversion of all outstanding shares of the Preferred Stock.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Designations and Preferences as the act and deed of the
corporation referenced above.
_____________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
SCHEDULE D - EMPLOYEE/CONSULTANT 2003 STOCK OPTION PLAN
GLOBAL BOULEVARD INTERNATIONAL, INC. (THE "COMPANY")
2003 EMPLOYEE STOCK OPTION PLAN
ARTICLE 1.
PURPOSE AND ADOPTION OF THE PLAN
1.1. PURPOSE. The purpose of the Global Boulevard International, Inc. 2003
Employee Stock Option Plan (hereinafter referred to as the "Plan") is to assist
in attracting and retaining highly competent key employees, non-employee
directors and consultants and to act as an incentive in motivating selected key
employees, non-employee directors and consultants of the Company and its
Subsidiaries (as defined below) to achieve long-term corporate objectives.
1.2. ADOPTION AND TERM. The Plan has been approved by the Board of Directors
(hereinafter referred to as the "Board") of the Company and by the majority of
its shareholders, to be effective as of March ____, 2003 (the "Effective
Date"). The Plan shall remain in effect until terminated by action of the Board;
provided, however, that no Incentive Stock Option (as defined below) may be
granted hereunder after the tenth anniversary of the Effective Date.
ARTICLE II.
DEFINITIONS
For the purposes of this Plan, capitalized terms shall have the following
meanings:
2.1. AWARD means any grant to a Participant of one or a combination of
Non-Qualified Stock Options or Incentive Stock Options described in Article VI.
2.2. AWARD AGREEMENT means a written agreement between the Company and
a Participant or a written notice from the Company to a Participant specifically
setting forth the terms and conditions of an Award granted under the Plan.
2.3. AWARD PERIOD means, with respect to an Award, the period of time
set forth in the Award Agreement during which specified target performance goals
must be achieved or other conditions set forth in the Award Agreement must be
satisfied.
2.4. BENEFICIARY means an individual, trust or estate who or which, by
a written designation of the Participant filed with the Company or by operation
of law, succeeds to the rights and obligations of the Participant under the Plan
and an Award Agreement upon the Participant's death.
2.5. BOARD means the Board of Directors of the Company.
1
2.6. CHANGE IN CONTROL means, and shall be deemed to have occurred upon
the occurrence of, any one of the following events:
(a) The acquisition in one or more transactions by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) (a "Person") of beneficial ownership (within the meaning of
Rule l3d-3 promulgated under the Exchange Act) of shares or other securities (as
defined in Section 3(a)(10) of the Exchange Act) representing 30% or more of
either (i) the Outstanding Common Stock or (ii) the Company Voting Securities;
provided, however, that a Change in Control as defined in this clause (a) shall
not be deemed to occur in connection with any acquisition by the Company, an
employee benefit plan of the Company or any Person who immediately prior to the
Effective Date is a holder of Outstanding Common Stock or Company Voting
Securities (a "Current Stockholder") so long as such acquisition does not result
in any Person other than the Company, such employee benefit plan or such Current
Stockholder beneficially owning shares or securities representing 30% or more of
either the Outstanding Common Stock or Company Voting Securities; or
(b) Any election has occurred of persons as directors of the
Company that replaces all of the board members that are members of the board of
directors as of the Effective Date; or
(c) Approval by the stockholders of the Company of a
reorganization, merger, consolidation or similar transaction (a "Reorganization
Transaction"), in each case, unless, immediately following such Reorganization
Transaction, more than 50% of, respectively, the outstanding shares of common
stock (or similar equity security) of the corporation or other entity resulting
from or surviving such Reorganization Transaction and the combined voting power
of the securities of such corporation or other entity entitled to vote generally
in the election of directors, is then beneficially owned, directly or
indirectly, by the individuals and entities who were the respective beneficial
owners of the Outstanding Common Stock and the Company Voting Securities
immediately prior to such Reorganization Transaction in substantially the same
proportions as their ownership of the Outstanding Common Stock and Company
Voting Securities immediately prior to such Reorganization Transaction; or
2
(d) Approval by the stockholders of the Company of (i) a
complete liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company to a
corporation or other entity, unless, with respect to such corporation or other
entity, immediately following such sale or other disposition more than 50% of,
respectively, the outstanding shares of common stock (or similar equity
security) of such corporation or other entity and the combined voting power of
the securities of such corporation or other entity entitled to vote generally in
the election of directors, is then beneficially owned, directly or indirectly,
by the individuals and entities who were the respective beneficial owners of the
Outstanding Common Stock and the Company Voting Securities immediately prior to
such sale or disposition in substantially the same proportions as their
ownership of the Outstanding Common Stock and Company Voting Securities
immediately prior to such sale or disposition.
2.7 CODE means the Internal Revenue Code of 1986, as amended.
References to a section of the Code include that section and any comparable
section or sections of any future legislation that amends, supplements or
supersedes said section.
2.8 COMMITTEE means the committee established in accordance with
Section 3.1.
2.9. COMPANY means Global Boulevard International, Inc., a Nevada
corporation, and its successors.
2.10 COMMON STOCK means Common Stock of the Company, par value $0.001
per share.
2.11. COMPANY VOTING SECURITIES means the combined voting power of all
outstanding securities of the Company entitled to vote generally in the election
of directors of the Company.
2.12. DATE OF GRANT means the date designated by the Committee as the
date as of which it grants an Award, which shall not be earlier than the date on
which the Committee approves the granting of such Award.
2.13. EFFECTIVE DATE shall have the meaning given to such term in
Section 1.2.
2.14. EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
2.15. FAIR MARKET VALUE means, as of any applicable date: (i) if the
Common Stock is listed on a national securities exchange or is authorized for
quotation on The Nasdaq National Market System ("NMS") or "BBX", the closing
price,
regular way, of the Common Stock on such exchange or NMS, as the case may be, on
such date or if no sale of the Common Stock shall have occurred on such date, on
the next preceding date on which there was such a reported sale; or (ii) if the
Common Stock is not listed for trading on a national securities exchange or
authorized for quotation on NMS, the closing bid price as reported by The Nasdaq
SmallCap Market on such date, or if no such price shall have been reported for
such date, on the next preceding date for which such price was so reported; or
(iii) if the Common Stock is not listed for trading on a national securities
exchange or authorized for quotation on NMS or The Nasdaq SmallCap Market (if
applicable), the last reported bid price published in the "pink sheets" or
displayed on the National Association of Securities Dealers, Inc. ("NASD")
Electronic Bulletin Board, as the case may be; or (iv) if the Common Stock is
not listed for trading on a national securities exchange, is not authorized for
quotation on NMS or The Nasdaq SmallCap Market and is not published in the "pink
sheets" or displayed on the NASD Electronic Bulletin Board, the fair market
value of the Common Stock as determined in good faith by the Committee.
3
2.16 INCENTIVE STOCK OPTION means a stock option within the meaning of
Section 422 of the Code.
2.17. MERGER means any merger, reorganization, consolidation, share
exchange, transfer of assets or other transaction having similar effect
involving the Company.
2.18. NON-EMPLOYEE DIRECTOR means a member of the Board who (i) is not
currently an officer or otherwise employed by the Company or a parent or a
subsidiary of the Company, (ii) does not receive compensation directly or
indirectly from the Company or a parent or a subsidiary of the Company for
services rendered as a consultant or in any capacity other than as a director,
except for an amount for which disclosure would not be required pursuant to Item
404(a) of Regulation S-K, (iii) does not possess an interest in any other
transaction for which disclosure would be required pursuant to Item 404(a) of
Regulation S-K, and (iv) is not engaged in a business relationship for which
disclosure would be required pursuant to Item 404(b) of Regulation S-K.
2.19. NON-EMPLOYEE DIRECTOR OPTION means a stock option granted to a
Non-Employee Director in accordance with Section 6.1 (a).
2.20. NON-QUALIFIED STOCK OPTION means a stock option which is not an
Incentive Stock Option.
2.21. OPTIONS means all Non-Qualified Stock Options and Incentive Stock
Options granted at any time under the Plan.
2.22. OUTSTANDING COMMON STOCK means, at any time, the issued and
outstanding shares of Common Stock.
2.23. PARTICIPANT means a person designated to receive an Award under
the Plan in accordance with Section 5.1.
2.24. PLAN means the 2003 Employee Stock Option Plan as described
herein, as the same may be amended from time to time.
2.25 PURCHASE PRICE, with respect to Options, shall have the meaning
set forth in Section 6.1(b).
2.26. RETIREMENT means early or normal retirement under a pension plan
or arrangement of the Company or one of its Subsidiaries in which the
Participant participates.
4
2.27. SUBSIDIARY means a subsidiary of the Company within the meaning
of Section 424(f) of the Code.
2.28. TERMINATION OF EMPLOYMENT means the voluntary or involuntary
termination of a Participant's employment with the Company or a Subsidiary for
any reason, including death, disability, retirement or as the result of the
divestiture of the Participant's employer or any similar transaction in which
the Participant's employer ceases to be the Company or one of its Subsidiaries.
Whether entering military or other government service shall constitute
Termination of Employment, or whether a Termination of Employment shall occur as
a result of disability, shall be determined in each case by the Committee in its
sole discretion. In the case of a consultant who is not an employee of the
Company or a Subsidiary, Termination of Employment shall mean voluntary or
involuntary termination of the consulting relationship for any reason. In the
case of a Non-Employee Director, Termination of Employment shall mean voluntary
or involuntary termination, non-election, removal or other act which results in
such Non-Employee Director no longer serving in such capacity.
ARTICLE III.
ADMINISTRATION
3.1. COMMITTEE. The Plan shall be administered by a committee of the
Board (the "Committee") comprised of at least one person. The Committee shall
have exclusive and final authority in each determination, interpretation or
other action affecting the Plan and its Participants. The Committee shall have
the sole discretionary authority to interpret the Plan, to establish and modify
administrative rules for the Plan, to impose such conditions and restrictions on
Awards as it determines appropriate, and to take such steps in connection with
the Plan and Awards granted hereunder as it may deem necessary or advisable. The
Committee may, subject to compliance with applicable legal requirements, with
respect to Participants who are not subject to Section 16(b) of the Exchange
Act, delegate such of its powers and authority under the Plan as it deems
appropriate to designated officers or employees of the Company. In addition, the
Board may exercise any of the authority conferred upon the Committee hereunder.
In the event of any such delegation of authority or exercise of authority by the
Board, references in the Plan to the Committee shall be deemed to refer to the
delegate of the Committee or the Board, as the case may be.
5
ARTICLE IV.
SHARES
4.1. NUMBER OF SHARES ISSUABLE. The total number of shares initially
authorized to be issued only upon exercise of Options issued under the Plan
shall be 3,000,000 shares of Common Stock (on a post reverse-split basis of
1:2.5 intended to be effective in March 2003) of which Options to purchase up to
1,000,000 shares on a post reverse-split basis of 1:2.5 intended to be effective
in March 2003)may be granted prior to March __, 2004. The number of shares
available for issuance upon exercise of Options shall be subject to adjustment
in accordance with Section 7.7. For the first twelve months from March __, 2003,
issuances pursuant to this 2003 Employee Stock Option Plan shall be limited to
Options which may be exercised with cash but not by using money presently owed
by Company prior to March __, 2003.
ARTICLE V.
PARTICIPATION
5.1. ELIGIBLE PARTICIPANTS. Participants in the Plan shall be such key
employees, consultants, and non-employee directors of the Company and its
Subsidiaries, whether or not members of the Board, as the Committee, in its sole
discretion, may designate from time to time. The Committee's designation of a
Participant in any year shall not require the Committee to designate such person
to receive Awards in any other year. The designation of a Participant to receive
an Award under one portion of the Plan does not require the Committee to include
such Participant under other portions of the Plan. The Committee shall consider
such factors as it deems pertinent in selecting Participants and in determining
the types and amounts of their respective Awards.
ARTICLE VI.
STOCK OPTIONS
6.1. OPTION AWARDS.
(a) GRANT OF OPTIONS. The Committee may grant, to such
Participants as the Committee may select, Options entitling the Participants to
purchase shares of Common Stock from the Company in such numbers, at such
prices, and on such terms and subject to such conditions, not inconsistent with
the terms of the Plan, as may be established by the Committee. The terms of any
Option granted under the Plan shall be set forth in an Award Agreement. Except
as provided in Sections 6.3(c), 6.3(e) or 6.5, Non-Employee Director Options
may be immediately exercisable, in whole or in part, and shall
remain exercisable until the first anniversary of the Date of Grant.
(b) PURCHASE PRICE OF OPTIONS. The Purchase Price of each
share of Common Stock which may be purchased upon exercise of any Option granted
under the Plan shall be determined by the Committee; however, Options issued
during
the first twelve months from March ___, 2003 shall have a minimum exercise price
-------
of $0.25 (twenty five cents) per share.
6
(c) DESIGNATION OF OPTIONS. Except as otherwise expressly
provided in the Plan, the Committee may designate, at the time of the grant of
an Option, such Option as an Incentive Stock Option or a Non-Qualified Stock
Option; provided, however, that an Option may be designated as an Incentive
Stock Option only if the applicable Participant is an employee of the Company or
a Subsidiary on the Date of Grant.
(d) INCENTIVE STOCK OPTION SHARE LIMITATION. No Participant
may be granted Incentive Stock Options under the Plan (or any other plans of the
Company and its Subsidiaries) that would result in Incentive Stock Options to
purchase shares of Common Stock with an aggregate Fair Market Value (measured on
the Date of Grant) in excess of that required by current law in any one calendar
year.
(e) RIGHTS AS A STOCKHOLDER. A Participant or a transferee of
an Option pursuant to Section 7.4 shall have no rights as a stockholder with
respect to the shares of Common Stock covered by an Option until that
Participant or transferee shall have become the holder of record of any such
shares, and no adjustment shall be made with respect to any such shares of
Common Stock for dividends in cash or other property or distributions of other
rights on the Common Stock for which the record date is prior to the date on
which that Participant or transferee shall have become the holder of record of
any shares covered by such Option; provided, however, that Participants are
entitled to share adjustments to reflect capital changes under Section 7.7.
6.2. INTENTIONALLY LEFT BLANK.
6.3. TERMS OF STOCK OPTIONS.
(a) CONDITIONS ON EXERCISE. An Award Agreement with respect to
Options may contain such waiting periods, exercise dates and restrictions on
exercise (including, but not limited to, periodic installments) as may be
determined by the Committee at the time of grant and subject to this Article VI.
(b) DURATION OF OPTIONS. Options shall terminate after the
first to occur of the following events:
(i) Expiration of the Option as provided in the
related Award Agreement; or
(ii) Termination of the Award as provided in Section
6.3(e), following the applicable Participant's Termination of Employment; or
(iii) In the case of an Incentive Stock Option, ten
year from the Date of Grant; or
7
(c) ACCELERATION OF EXERCISE TIME. The Committee, in its sole
discretion, shall have the right (but shall not in any case be obligated),
exercisable at any time after the Date of Grant, to permit the exercise of any
Option prior to the time such Option would otherwise become exercisable under
the terms of the related Award Agreement.
(d) EXTENSION OF EXERCISE TIME. In addition to the extensions
permitted under Section 6.3(e) in the event of Termination of Employment, the
Committee, in its sole discretion, shall have the right (but shall not in any
case be obligated), exercisable on or at any time after the Date of Grant, to
permit the exercise of any Option after its expiration date described in Section
6.3(e), subject, however, to the limitations described in Sections 6.3(b)(i),
(iii) and (iv).
(e) EXERCISE OF OPTIONS UPON TERMINATION OF EMPLOYMENT.
(i) TERMINATION OF VESTED OPTIONS UPON TERMINATION OF
EMPLOYMENT.
(a) TERMINATION. In the event of Termination
of Employment of a Participant other than by reason of death, disability or
Retirement, the right of the Participant to exercise any Option shall terminate
unless exercised within a period of three months from the date on which the
Employee ceased to be so employed, unless the exercise period is extended by the
Committee in accordance with Section 6.3(d).
(b) DISABILITY OR RETIREMENT. In the event
of a Participant's Termination of Employment by reason of disability or
Retirement, the right of the Participant to exercise any Option which he or she
was entitled to exercise upon Termination of Employment (or which became
exercisable at a later date pursuant to Section 6.3(e)(ii) shall terminate one
year after the date of such Termination of Employment, unless the exercise
period is extended by the Committee in accordance with Section 6.3(d). In no
event, however, may any Option be exercised later than the date of expiration of
the Option determined pursuant to Section 6.3(b)(i), (iii) or (iv).
(c) DEATH. In the event of the death of a
Participant while employed by the Company or a Subsidiary or within any
additional period of time from the date of the Participant's Termination of
Employment and prior to the expiration of any Option as provided pursuant to
Section 6.3(e)(i)(B) or Section 6.3(d) above, to the extent the right to
exercise the Option was accrued as of the date of such Termination of Employment
and had not expired during such additional period, the right of the
Participant's Beneficiary to exercise the Option shall terminate one year after
the date of the Participant's death (but in no event more than one year from the
date of the Participant's Termination of Employment by reason of disability or
Retirement), unless the exercise period is extended by the Committee in
accordance with Section 6.3(d). In no event, however, may any Option be
exercised later than the date of expiration of the Option determined pursuant to
Section 6.3(b)(i), (iii) or (iv).
8
(ii) TERMINATION OF UNVESTED OPTIONS UPON TERMINATION
OF EMPLOYMENT. Subject to Section 6.3(c), to the extent the right to exercise an
Option, or any portion thereof, has not accrued as of the date of Termination of
Employment, such right shall expire at the date of such Termination of
Employment. Notwithstanding the foregoing, the Committee, in its sole discretion
and under such terms as it deems appropriate, may permit, for a Participant who
terminates employment by reason of Retirement and who will continue to render
significant services to the Company or one of its Subsidiaries after his or her
Termination of Employment, the continued vesting of his or her Options during
the period in which that individual continues to render such services.
6.4. EXERCISE PROCEDURES. Each Option granted under the Plan shall be
exercised by written notice to the Company which must be received by the officer
or employee of the Company designated in the Award Agreement at or before the
close of business on the expiration date of the Award. The Purchase Price of
shares purchased upon exercise of an option granted under the Plan shall be paid
in full in cash by the Participant pursuant to the Award Agreement; PROVIDED,
HOWEVER, that the Committee may (but shall not be required to) permit payment to
be made by delivery to the Company of either (a) shares of Common Stock (which
may include shares issuable in connection with the exercise of the Option,
subject to such rules as the Committee deems appropriate) or (b) any combination
of cash and Common Stock or (c) such other consideration as the Committee deems
appropriate and in compliance with applicable law (including payment in
accordance with a cashless exercise program under which, if so instructed by a
Participant, shares of Common Stock may be issued directly to the Participant's
broker or dealer upon receipt of an irrevocable written notice of exercise from
the Participant). In the event that any shares of Common Stock shall be
transferred to the Company to satisfy all or any part of the Purchase Price, the
part of the Purchase Price deemed to have been satisfied by such transfer of
shares of Common Stock shall be equal to the product derived by multiplying the
Fair Market Value as of the date of exercise times the number of shares of
Common Stock transferred to the Company. The Participant may not transfer to the
Company in satisfaction of the Purchase Price any fractional share of Common
Stock. Any part of the Purchase Price paid in cash upon the exercise of any
Option shall be added to the general funds of the Company and may be used for
any proper corporate purpose. Unless the Committee shall otherwise determine,
any shares of Common Stock transferred to the Company as payment of all or part
of the Purchase Price upon the exercise of any Option shall be held as treasury
shares.
6.5. CHANGE IN CONTROL. Unless otherwise provided by the Committee in
the applicable Award Agreement, in the event of a Change in Control, all Options
outstanding on the date of such Change in Control shall become immediately and
fully exercisable. The provisions of this Section 6.5 shall not be applicable to
any Options granted to a Participant if any Change in Control results from such
Participant's beneficial ownership (within the meaning of Rule l3d-3 under the
Exchange Act) of Common Stock or Company Voting Securities.
9
ARTICLE VII.
TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN
7.1. PLAN PROVISIONS CONTROL AWARD TERMS. The terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the Committee
have the power to grant any Award under the Plan the terms of which are contrary
to any of the provisions of the Plan. In the event any provision of any Award
granted under the Plan shall conflict with any term in the Plan as constituted
on the Date of Grant of such Award, the term in the Plan as constituted on the
Date of Grant of such Award shall control. Except as provided in Section 7.3 and
Section 7.7, the terms of any Award granted under the Plan may not be changed
after the Date of Grant of such Award so as to materially decrease the value of
the Award without the express written approval of the holder.
7.2. AWARD AGREEMENT. No person shall have any rights under any Award
granted under the Plan unless and until the Company and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or the Participant shall have received and acknowledged notice of the
Award authorized by the Committee expressly granting the Award to such person
and containing provisions setting forth the terms of the Award.
7.3. MODIFICATION OF AWARD AFTER GRANT. No Award granted under the Plan
to a Participant may be modified (unless such modification does not materially
decrease the value of that Award) after its Date of Grant except by express
written agreement between the Company and such Participant, provided that any
such change (a) may not be inconsistent with the terms of the Plan, and (b)
shall be approved by the Committee.
7.4. LIMITATION ON TRANSFER. A Participant's rights and interest under
the Plan may not be assigned or transferred other than by will or the laws of
descent and distribution and, during the lifetime of a Participant, only the
Participant personally (or the Participant's personal representative) may
exercise rights under the Plan. The Participant's Beneficiary may exercise the
Participant's rights to the extent they are exercisable under the Plan following
the death of the Participant. Notwithstanding the foregoing, the Committee may
grant Non-Qualified Stock Options that are transferable, without payment of
consideration, to immediate family members of the Participant or to trusts or
partnerships for such family members, and the Committee may also amend
outstanding Non-Qualified Stock Options to provide for such transferability.
7.5. TAXES. The Company shall be entitled, if the Committee deems it
necessary or desirable, to withhold (or secure payment from the Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or paid by the Company with respect to any amount payable and/or
shares issuable under such Participant's Award or with respect to any income
recognized upon a disqualifying disposition of shares received pursuant to the
exercise of an Incentive Stock Option, and the Company may defer payment of cash
or issuance of shares upon exercise or vesting of an Award unless indemnified to
its satisfaction against any liability for any such tax. The amount of such
withholding or tax payment shall be determined by the Committee and shall be
payable by the Participant at such time as the Committee determines in
accordance with the following rules:
10
(a) The Participant shall have the right to elect to meet his
or her withholding requirement (i) by having withheld from such Award at the
appropriate time that number of shares of Common Stock, rounded up to the next
whole share, the Fair Market Value of which is equal to the amount of
withholding taxes due, (ii) by direct payment to the Company in cash of the
amount of any taxes required to be withheld with respect to such Award or (iii)
by a combination of withholding such shares and paying cash.
(b) The Committee shall have the discretion as to any Award to
cause the Company to pay to tax authorities for the benefit of the applicable
Participant, or to reimburse such Participant for, the individual taxes which
are due on the grant, exercise or vesting of any Award or the lapse of any
restriction on any Award (whether by reason of such Participant's filing of an
election under Section 83(b) of the Code or otherwise), including, but not
limited to, Federal income tax, state income tax, local income tax and excise
tax under Section 4999 of the Code, as well as for any such taxes as may be
imposed upon such tax payment or reimbursement.
(c) In the case of Participants who are subject to Section 16
of the Exchange Act, the Committee may impose such limitations and restrictions
as it deems necessary or appropriate with respect to the delivery or withholding
of shares of Common Stock to meet tax withholding obligations.
7.6. SURRENDER OF AWARDS. Any Award granted under the Plan may be
surrendered to the Company for cancellation on such terms as the Committee and
the Participant approve.
7.7 ADJUSTMENTS TO REFLECT CAPITAL CHANGES.
(a) RECAPITALIZATION. The number and kind of shares subject to
outstanding Awards, the Purchase Price, the number and kind of shares available
for Awards subsequently granted under the Plan and the maximum number of shares
in respect of which Awards can be made to any Participant in any calendar year
shall be appropriately adjusted to reflect any stock dividend, stock split,
combination or exchange of shares, merger, consolidation or other change in
capitalization with a similar substantive effect upon the Plan or the Awards
granted under the Plan; provided however that this Section 7.7(a) is intended to
apply only after a reverse-split on a basis of 1:2.5, intended to be effective
in March 2003. The Committee shall have the power and sole discretion to
determine the amount of the adjustment to be made in each case.
(b) MERGER. After any Merger in which the Company is the
surviving corporation, each Participant shall, at no additional cost, be
entitled upon any exercise of an Option or receipt of any other Award to receive
(subject to any required action by stockholders), in lieu of the number of
shares of Common Stock receivable or exercisable pursuant to such Award prior to
such Merger, the number and class of shares or other securities to which such
Participant would have been entitled pursuant to the terms of the Merger if, at
the time of the Merger, such Participant had been the holder of record of a
number of shares of Common Stock equal to the number of shares of Common Stock
receivable or exercisable pursuant to such Award. Comparable rights shall accrue
to each Participant in the event of successive Mergers of the character
described above. In the event of a Merger in which the Company is not the
surviving corporation, the surviving, continuing, successor or purchasing
corporation, as the case may be (the "Acquiring Corporation"), will either
assume
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the Company's rights and obligations under outstanding Award Agreements or
substitute awards in respect of the Acquiring Corporation's stock for
outstanding Awards, provided, however, that if the Acquiring Corporation does
not assume or substitute for such outstanding Awards, the Board shall provide
prior to the Merger that any unexercisable and/or unvested portion of the
outstanding Awards shall be immediately exercisable and vested as of a date
prior to such merger or consolidation, as the Board so determines. The exercise
and/or vesting of any Award that was permissible solely by reason of this
Section 7.7(b) shall be conditioned upon the consummation of the Merger. Any
Options which are neither assumed by the Acquiring Corporation not exercised as
of the date of the Merger shall terminate effective as of the effective date of
the Merger.
(c) OPTIONS TO PURCHASE SHARES OR STOCK OF ACQUIRED COMPANIES.
After any merger in which the Company or a Subsidiary shall be a surviving
corporation, the Committee may grant substituted options under the provisions of
the Plan, pursuant to Section 424 of the Code, replacing old options granted
under a plan of another party to the merger whose shares of stock subject to the
old options may no longer be issued following the merger. The manner of
application of the foregoing provisions to such options and any appropriate
adjustments shall be determined by the Committee in its sole discretion. Any
such adjustments may provide for the elimination of any fractional shares which
might otherwise become subject to any Options.
7.8 NO RIGHT TO EMPLOYMENT. No employee or other person shall have any
claim of right to be granted an Award under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any of its Subsidiaries.
7.9. AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES. Payments received by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any pension, group insurance or other benefit
plan applicable to the Participant which is maintained by the Company or any of
its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.
7.10. GOVERNING LAW. All determinations made and actions taken pursuant
to the Plan shall be governed by the laws of the State of Nevada and construed
in accordance therewith.
7.11. NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against the Company, the Committee or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Committee.
7.12. CAPTIONS. The captions (i.e., all Section headings) used in the
Plan are for convenience only, do not constitute a part of the Plan, and shall
not be deemed to limit, characterize or affect in any way any provisions of the
Plan, and all provisions of the Plan shall be construed as if no captions had
been used in the Plan.
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7.13. SEVERABILITY. Whenever possible, each provision in the Plan and
every Award at any time granted under the Plan shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of the Plan or any Award at any time granted under the Plan shall be held to be
prohibited by or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan, such Award and every other Award at any time granted under the Plan
shall remain in full force and effect.
7.14. AMENDMENT AND TERMINATION.
(a) AMENDMENT. The Board shall have complete power and
authority to amend the Plan at any time without the authorization or approval of
the Company's stockholders, unless the amendment (i) materially increases the
benefits accruing to Participants under the Plan, (ii) materially increases the
aggregate number of securities that may be issued under the Plan or (iii)
materially modifies the requirements as to eligibility for participation in the
Plan, but in each case only to the extent then required by the Code or
applicable law, or deemed necessary or advisable by the Board. No termination or
amendment of the Plan may, without the consent of the Participant to whom any
Award shall theretofore have been granted under the Plan, materially adversely
affect the right of such individual under such Award.
(b) TERMINATION. The Board shall have the right and the power
to terminate the Plan at any time. No Award shall be granted under the Plan
after the termination of the Plan, but the termination of the Plan shall not
have any other effect and any Award outstanding at the time of the termination
of the Plan may be exercised after termination of the Plan at any time prior to
the expiration date of such Award to the same extent such Award would have been
exercisable had the Plan not been terminated.
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