SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
[_] Preliminary Information Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Information Statement
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TRIMOL GROUP, INC.
(Name of Registrant As Specified In Its Charter)
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[_] Fee paid previously with preliminary materials.
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TRIMOL GROUP, INC.
1285 Avenue of the Americas, 35th Floor
New York, New York 10019
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INFORMATION STATEMENT
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WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND A PROXY
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To all stockholders of Trimol Group, Inc.:
The enclosed Information Statement is being furnished to holders of the
outstanding common stock of Trimol Group, Inc., a Delaware corporation ("Trimol"
or, the "Company"), in connection with the prior approval of the corporate
actions described below. In accordance with the Delaware General Corporation Law
and the Company's Certificate of Incorporation, on June 18, 2001, a written
consent of the holders of a majority of the Company's common stock entitled to
vote was taken with respect to the matters referred to herein. All necessary
corporate approvals have been obtained and the enclosed Information Statement is
furnished solely for the purpose of informing Trimol's stockholders, in the
manner required under the Securities Exchange Act of 1934, of the following
corporate actions before they take effect:
o The election of five Directors until the earlier of their respective
resignations, removal, death, or the election of their respective
successors;
o The amendment of the Company's Certificate of Incorporation to
establish a "blank check" preferred stock consisting of 5,000,000
preferred shares; and,
o The approval and adoption of an amendment to the 2001 Omnibus Plan to
increase the number of shares of common stock available for issuance
under the 2001 Omnibus Plan to 10,000,000 shares.
The enclosed Information Statement also constitutes notice of action taken
without a meeting as required by Section 228(d) of the Delaware General
Corporation Law.
The Information Statement is being mailed on or about July 19, 2001 to all
stockholders of record as of the close of business on June 18, 2001.
The Company anticipates that all corporate actions referred to in the
Information Statement will take place no less than 20 days following the mailing
of the Information Statement to you, the Trimol stockholders.
By Order of the Board of Directors,
/s/ Alexander M. Gordin
July 19, 2001 -----------------------------------
Alexander M. Gordin, President
TRIMOL GROUP, INC.
1285 Avenue of the Americas, 35th Floor
New York, New York 10019
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INFORMATION STATEMENT
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The Board of Directors of Trimol Group, Inc., a Delaware corporation
("Trimol" or, the "Company") is furnishing this Information Statement to its
stockholders in connection with a written consent of the holders of a majority
of the Company's common stock entitled to vote, taken on June 18, 2001, in
accordance with the Delaware General Corporation Law and the Company's
Certificate of Incorporation, as amended. The stockholders who provided consent
to the corporate actions discussed herein collectively own in excess of the
required majority of the outstanding voting securities of the Company necessary
for adoption of the corporate actions.
The following actions were approved:
o The election of Messrs. Michael J. Solomon, John R. Loveland, Kerry
Moody, Walter J. Perchal and Vijay Sharma as members of the Company's
Board of Directors until the earlier of their respective resignations,
removal, death, or the election of their respective successors;
o The amendment of the Company's Certificate of Incorporation to
establish a "blank check" preferred stock consisting of 5,000,000
preferred shares; and,
o The approval and adoption of an amendment to the 2001 Omnibus Plan to
increase the number of shares of common stock available for issuance
under the Plan to 10,000,000 shares.
We Are Not Asking You For A Proxy
And You Are Requested Not To Send Us A Proxy
This Information Statement is first being mailed on or about July 19, 2001
and constitutes notice of action taken without a meeting as required by Section
228(d) of the Delaware General Corporation Law.
The Date of this Information Statement is July 19, 2001.
TABLE OF CONTENTS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS.............................1
OTHER AVAILABLE INFORMATION...................................................1
DISSENTERS' RIGHT OF APPRAISAL................................................1
QUESTIONS AND ANSWERS.........................................................2
STOCKHOLDER APPROVAL PREVIOUSLY OBTAINED......................................4
APPROVAL BY THE BOARD OF DIRECTORS............................................4
VOTING SECURITIES AND PRINCIPAL HOLDER THEREOF................................5
VOTING SECURITIES..........................................................5
SECURITY OWNERSHIP OF PRINCIPAL HOLDERS AND MANAGEMENT.....................5
ELECTION OF DIRECTORS.........................................................8
GENERAL....................................................................8
NOMINEES FOR ELECTION AS DIRECTORS.........................................9
DIRECTORS AND EXECUTIVE OFFICERS...........................................9
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS.............................12
SUMMARY COMPENSATION TABLE................................................12
ADDITIONAL COMPENSATION OF DIRECTORS......................................15
BOARD OF DIRECTORS AND COMMITTEES.........................................15
AMENDMENT TO THE CERTIFICATE OF INCORPORATION FOR THE
ESTABLISHMENT OF "BLANK CHECK" PREFERRED STOCK...............................16
AMENDMENT TO THE 2001 OMNIBUS PLAN TO INCREASE THE AGGREGATE
NUMBER OF SHARES AUTHORIZED FOR ISSUANCE.....................................18
GENERAL...................................................................18
SUMMARY OF 2001 OMNIBUS PLAN, AS AMENDED..................................18
The Plan...............................................................19
United States Tax Consequences of Awards...............................21
ISOS...................................................................21
NQSOS..................................................................23
Cashless Exercise--ISOS and NQSOS......................................24
SARS...................................................................24
RESTRICTED STOCK.......................................................24
PERFORMANCE AWARDS AND OTHER STOCK-BASED AWARDS........................25
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON......................25
INCORPORATION OF DOCUMENTS BY REFERENCE......................................26
ANNEX A.....................................................................A-1
ANNEX B.....................................................................B-1
ANNEX C.....................................................................C-1
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Information Statement contains certain forward-looking statements
which can sometimes be identified by the use of forward-looking words such as
"may," "will," "anticipate," "plan," "estimate," "expect" or "intend" or
comparable terminology. These statements are subject to known and unknown risks,
uncertainties and other factors, including, but not limited to, the Company's
limited operating history, that could cause actual results to differ materially
from those contemplated by the statements. Trimol does not undertake to publicly
update or revise its forward-looking statements even if experience or future
changes make it clear that any projected results expressed or implied therein
will not be realized. Additional information on risk factors that could
potentially affect Trimol's financial results may be found in Trimol's public
filings with the Securities and Exchange Commission (the "SEC") and press
releases. Certain of such filings may be accessed through the SEC's web site,
http://www.sec.gov.
OTHER AVAILABLE INFORMATION
Trimol is subject to the reporting requirements of the Securities Exchange
Act of 1934 (the "Exchange Act") and, in accordance therewith, is required to
file reports and other information with the SEC relating to its business,
financial condition and other matters. Information as of particular dates
concerning Trimol's directors and officers, their remuneration, the principal
holders of the Company's securities and any material interest of such persons in
transactions with Trimol is required to be disclosed in proxy statements
distributed to the Company's stockholders or other reports filed with the SEC.
Such reports, proxy statements and other information should be available for
inspection at the public reference facilities of the SEC located at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the SEC
located in the Citicorp Center, 500 West Madison Street (Suite 1400), Chicago,
Illinois 60661-2511 and Seven World Trade Center, Suite 1300, New York, New York
10048. Copies should be obtainable, by mail, upon payment of the SEC's customary
charges, by writing to the SEC's principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such material should also be available through the
Internet at the SEC's website. Such documents may also be requested from the
Company at 1285 Avenue of the Americas, 35th Floor, New York, New York 10019.
DISSENTERS' RIGHT OF APPRAISAL
The Delaware General Corporation Law does not provide for dissenter's
rights of appraisal in connection with the corporate actions contemplated
herein.
1
QUESTIONS AND ANSWERS
The following questions and answers are intended to summarize certain
information contained elsewhere in this Information Statement. Reference is made
to, and this summary is qualified in its entirety by, the more detailed
information contained in this Information Statement and the attached Annexes.
Unless otherwise defined, capitalized terms used in this summary have the
meanings ascribed to them elsewhere in this Information Statement. You are urged
to read this Information Statement and the Annexes in their entirety.
Q: What am I being asked to approve?
A: You are not being asked to approve anything. This Information Statement is
being provided to you solely for your information. The following corporate
actions have already been approved:
o The election of Messrs. Michael J. Solomon, John R. Loveland, Kerry
Moody, Walter J. Perchal and Vijay Sharma as members of the Company's
Board of Directors until the earlier of their respective resignations,
removal, death, or the election of their respective successors;
o The amendment of the Company's Certificate of Incorporation to
establish a "blank check" preferred stock consisting of 5,000,000
preferred shares; and,
o The approval and adoption of an amendment to the 2001 Omnibus Plan to
increase the number of shares of common stock available for issuance
under the Plan to 10,000,000 shares.
Q: Who has approved these corporate actions?
A: The Company's Board of Directors and the holders of a majority of the
Company's common stock entitled to vote have authorized and approved the
corporate actions discussed herein.
Q: Why have the Board of Directors and the holders of a majority of the
Company's common stock agreed to approve these actions?
A: Generally, the Board of Directors and the holders of a majority of the
Company's common stock believe that these actions are in the best interest
of the Company and its stockholders. Furthermore, a new class of
undesignated "blank check" preferred stock would allow the Board of
Directors of the Company to issue, without further stockholder action, one
or more series of preferred stock. Also, the Board of Directors and the
holders of the majority of the Company's common stock believe increasing
the number of shares of common stock available for issuance under the 2001
Omnibus Plan will enable the Company to provide additional incentives to
Trimol's officers, directors,
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employees and consultants, to advance the interest of Trimol and to enable
Trimol to attract qualified new employees in a competitive marketplace.
Q: Do I have appraisal rights?
A: No. Under Delaware law, which governs the corporate actions, stockholders
of Trimol are not entitled to appraisal rights.
Q: When do you expect the corporate actions contemplated in this Information
Statement to become effective?
A: No less than 20 days after the Information Statement has been sent to the
Trimol stockholders.
3
STOCKHOLDER APPROVAL PREVIOUSLY OBTAINED
As of June 18, 2001, there were 100,039,000 shares of the Company's common
stock outstanding, representing 100,039,000 votes entitled to be cast on such
date.
The Delaware General Corporation Law, the Company's Certificate of
Incorporation and the Company's By-laws require that the corporate actions
contemplated in this Information Statement be approved by stockholders holding a
majority of the votes of the outstanding voting securities of the Company,
which, on June 18, 2001, consisted of approximately 50,019,501 million votes.
As of June 18, 2001, Mr. Boris Birshtein, the Company's Chairman of the
Board of Directors, had or shared, directly or indirectly, the power to vote (or
direct the voting of) and the power to dispose (or direct the disposition) of
96,195,000 shares1 (96.15%) of the Company's outstanding common stock, on the
matters described herein. See "VOTING SECURITIES AND PRINCIPAL HOLDER THEREOF"
and "COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS." On June 18, 2001, Mr.
Birshtein provided irrevocable written consent approving the corporate matters
described herein. Such action by written consent is sufficient to satisfy the
requirements of the Delaware General Corporation Law. Therefore, your vote is
not required to approve or to effectuate the corporate actions described herein.
Accordingly, you will not be asked to take further action on any of these
corporate actions at any future meeting. However, since stockholder approval was
obtained by written consent rather than at a stockholders' meeting, the Exchange
Act will not permit the action to become effective until the expiration of 20
calendar days from the date this Information Statement is mailed to all Trimol
stockholders who did not execute the written consent.
The complete text of the written consent of stockholders in lieu of meeting
approving these actions are set out in Annex A to this Information Statement.
APPROVAL BY THE BOARD OF DIRECTORS
Immediately after the resignations of Messrs. Shmuel Gurfinkel and Gary
Shokin as members of the Board of Directors, on February 16, 2001, the entire
remaining Board of
---------------------------
(1) Does not include 600,000 warrants to purchase shares of common stock. See
"VOTING SECURITIES AND PRINCIPAL HOLDER THEREOF" and "COMPENSATION OF
DIRECTORS AND EXECUTIVE OFFICERS."
4
Directors appointed Messrs. Michael J. Solomon, John R. Loveland, Kerry Moody,
Walter J. Perchal and Vijay Sharma as members of the Board of Directors, in
compliance with the Company's Certificate of Incorporation and By-laws. See
"ELECTION OF DIRECTORS." The Board of Directors (with Messrs. Solomon, Loveland,
Moody, Perchal and Sharma abstaining as a result of their respective interest)
has determined that the election of Messrs. Solomon, Loveland, Moody, Perchal
and Sharma as Directors of the Company is advisable and in the best interests of
the Company and its stockholders and approved this action. Furthermore, the
entire Board of Directors of the Company (including Messrs. Solomon, Loveland,
Moody, Perchal and Sharma) has determined that the other corporate actions
discussed herein are advisable and in the best interests of, and fair to, the
Company and its stockholders, and approved these actions.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Voting Securities
At June 18, 2001, (the "Record Date"), the Company had 100,039,000 shares
of common stock, par value $0.01 outstanding. These are the securities that
would have been entitled to vote if a meeting was required to be held. Each
share of common stock is entitled to one vote. The outstanding shares of common
stock at the close of business on the Record Date for determining stockholders
who would have been entitled to notice of and to vote on corporate actions
discussed herein, were held by approximately four hundred one (401) stockholders
of record. The Company and the holders of a majority of the Company's common
stock have already agreed to:
o The election of Messrs. Michael J. Solomon, John R. Loveland, Kerry
Moody, Walter J. Perchal and Vijay Sharma as members of the Company's
Board of Directors until the earlier of their respective resignations,
removal, death, or the election of their respective successors;
o The amendment of the Company's Certificate of Incorporation to
establish a "blank check" preferred stock consisting of 5,000,000
preferred shares; and,
o The approval and adoption of an amendment to the 2001 Omnibus Plan to
increase the number of shares of common stock available for issuance
under the Plan to 10,000,000 shares.
The beneficial owners of a total of 96,195,000 shares of common stock
(96.15%) of the Company's outstanding common stock, have already agreed to the
foregoing actions. See "STOCKHOLDER APPROVAL PREVIOUSLY OBTAINED."
Security Ownership of Principal Holders and Management
The following table sets forth information concerning the beneficial
ownership of shares of common stock of the Company with respect to stockholders
who were known to Trimol to be beneficial owners of more than 5% of the common
stock as of June 18, 2001, and officers and
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directors of the Company, individually and as a group. Unless otherwise
indicated, the beneficial owner has sole voting and investment power with
respect to such shares of common stock.
As of the date of this Information Statement (1)
AMOUNT AND
NATURE OF PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNER CLASS
------------------------ ---------------- -----
Boris Birshtein (2)(3)(4) 96,795,000 92.84%
Aluminum-Power, Inc.
87 Scollard Street
Toronto, Ontario M5R 1G4 (2) 88,000,000 84.4%
Alexander M. Gordin (5) 500,000 .47%
Gary Shokin (6) 500,000 .47%
Shmuel Gurfinkel (7) ----- ----
100,000 .09%
Michael J. Solomon (8) ----- ----
100,000 .09%
John R. Loveland (9) ----- ----
500,000 .47%
Kerry Moody (10) ----- ----
Walter J. Perchal (11) ----- ----
Vijay Sharma (12) ----- ----
Donald W. Kirk (13) ----- ----
Rafael Ferry (14) ----- ----
All Executive Officers and
Directors as a Group (11 persons)(15) 98,495,000 94.47%
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(1) Based on a total of 104,259,000 shares of common stock, which includes
100,039,000 shares of common stock issued and outstanding as of the date of
this Information Statement, warrants to purchase 1,520,000 shares of common
stock, and 2,000,000 options to purchase common stock granted pursuant to
the 2001 Omnibus Plan. Such total also includes the 500,000 options to
purchase common stock granted pursuant to the Partners Group I, Inc.
Agreement, which is a corporation effectively controlled by Kerry Moody,
and the 100,000 options to purchase common stock granted to each of Messrs.
Loveland and Solomon that are subject to the approval of the amendment to
the 2001 Omnibus Plan by the Stockholders.
(2) Mr. Birshtein is an indirect owner of Aluminum-Power, Inc. Aluminum-Power,
Inc.'s majority shareholder is Eontech Group, Inc. Birshtein Holdings, Ltd.
is the majority owner of Eontech Group, Inc. Mr. Birshtein directly
controls Birshtein Holdings, Ltd.
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(3) Mr. Birshtein currently serves as the Company's Chairman of the Board.
(4) Includes 4,285,000 shares of common stock owned directly by Mr. Birshtein;
3,910,000 owned by Magnum Associates, Inc., of which Mr. Birshtein is the
sole shareholder; warrants to purchase 600,000 shares of common stock; and,
88,000,000 shares of common stock owned by Aluminum-Power, Inc.
(5) Includes 500,000 options to purchase common stock granted to Mr. Gordin by
the Omnibus Committee pursuant to the 2001 Omnibus Plan. Mr. Gordin
currently serves as a Director, the President and the Chief Executive
Officer of the Company.
(6) Includes 500,000 options to purchase common stock granted to Mr. Shokin by
the Omnibus Committee pursuant to the 2001 Omnibus Plan. On February 16,
2001, Mr. Shokin resigned from his position as a Director of the Company
but remains a Vice President and Assistant Secretary of the Company.
(7) On February 16, 2001, Mr. Gurfinkel resigned from his position as Director
of the Company, but remains the Chief Financial Officer of the Company.
(8) On February 16, 2001, Mr. Solomon was appointed as a member of the Board of
Directors. Mr. Solomon was granted 100,000 options to purchase common stock
pursuant to the 2001 Omnibus Plan which have been granted subject to the
effective date of the actions contained in said Information Statement..
(9) On February 16, 2001, Mr. Loveland was appointed as a member of the Board
of Directors. Mr. Loveland was granted 100,000 options to purchase common
stock pursuant to the 2001 Omnibus Plan which have been granted subject to
the effective date of the actions contained in said Information Statement.
(10) On February 16, 2001, Mr. Moody was appointed as a member of the Board of
Directors. Mr. Moody, as the sole officer, director and shareholder of
Partners Group I, Inc., is the beneficial owner of 500,000 options to
purchase common stock which were granted pursuant to the Partners Group I,
Inc. Agreement. See "INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED
UPON."
(11) On February 16, 2001, Mr. Perchal was appointed as a member of the Board of
Directors.
(12) On February 16, 2001, Mr. Sharma was appointed as a member of the Board of
Directors.
(13) Mr. Kirk was named as the Company's Chief Scientific Officer in February of
2001.
(14) Mr. Ferry was named as the Company's Vice President of Marketing in
February of 2001.
(15) Includes Messrs. Birshtien, Gordin, Solomon, Loveland, Moody, Perchal,
Sharma, Gurfinkel, Shokin, Kirk and Ferry.
7
ELECTION OF DIRECTORS
General
The Certificate of Incorporation and By-laws of the Company provide that
the number of Directors of the Company shall be not less than three or more than
fifteen.
Directors need not be stockholders of the Company or residents of the State
of Delaware. Directors are generally elected for an annual term and hold office
until their respective successors have been duly elected and qualified.
Directors may receive compensation for their services as determined by the Board
of Directors. See "COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS." The
remaining Directors may fill a vacancy on the Board even though less than a
quorum remains. A Director appointed to fill a vacancy remains a Director until
his successor is elected by the stockholders at the next annual meeting of
stockholders or until a special meeting is called to elect Directors.
Currently the Board of Directors consists of seven members: Messrs.
Birshtein, Gordin, Solomon, Loveland, Moody, Perchal and Sharma. Pursuant to the
Company's By-laws, on February 16, 2001, the entire Board of Directors appointed
Messrs. Solomon, Loveland, Moody, Perchal and Sharma to fill the vacancies
caused by an increase in the authorized number of directors, the resignations of
Messrs. Gurfinkel and Shokin from the Board of Directors on February 16, 2001,
and the resignations of Messrs. Theodore B. Shapiro and Robert L. Blessey on
January 10, 2001.
At present there exists only one committee of the Board of Directors: the
Omnibus Committee. See "AMENDMENT TO THE 2001 OMNIBUS PLAN TO INCREASE THE
AGGREGATE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE." The Board of Directors acts
as its own nominating committee, compensation committee and internal audit
committee.
The executive officers of the Company are appointed by the Board of
Directors. There are no family relationships between any Directors or executive
officers of the Company.
The Board of Directors and the holders of a majority of the Company's
common stock entitled to vote have already agreed to the foregoing actions. See
"APPROVAL BY THE BOARD OF DIRECTORS"; "STOCKHOLDER APPROVAL PREVIOUSLY
OBTAINED"; and "VOTING SECURITIES AND PRINCIPAL HOLDER THEREOF."
The foregoing election will become effective no sooner than 20 calendar
days after the date of mailing of this Information Statement to the stockholders
of the Company. The complete text of the Written Consent of Stockholders In Lieu
of Meeting is set out in Annex A to this Information Statement.
8
Nominees for Election As Directors
The following table sets forth certain information with respect to persons
nominated by the Board of Directors of the Company for election as Directors of
the Company and who have been elected by the written consent of stockholders in
lieu of a meeting:
NAME AGE POSITION CURRENTLY WITH THE COMPANY
---- --- -----------------------------------
Michael J. Solomon (1) 63 Director
John R. Loveland (1) 64 Director
Kerry Moody (1) 45 Director
Walter J. Perchal (1) 49 Director
Vijay Sharma (1) 30 Director
- ----------------------
(1) On February 16, 2001, the remaining members of the Board of Directors
appointed Messrs. Solomon, Loveland, Moody, Perchal and Sharma to fill
vacancies caused by an increase in the authorized number of directors and
the resignations of certain directors.
The Board of Directors knows of no reason why any nominee will be unable or
will refuse to accept election. However, if any of the nominees becomes unable
or refuses to accept his election, the Board of Directors will reduce the number
of Directors standing for election and the written consent of stockholders in
lieu of a meeting will be revised accordingly.
If elected, all nominees are expected to serve until their respective
resignations, removal, death, or the election of their respective successors.
Directors and Executive Officers
Set forth below is the biographies of each of the Company's current
executive officers and Directors.
Boris Birshtein has served as the Company's Chairman of the Board of
Directors since January 1998. Since 1999, Mr. Birshtein has acted as the
Chairman of the Board of Directors of EonTech Group, Inc., a corporation
organized under the laws of the Province Ontario, Canada. He is also the
principal shareholder of EonTech Group, Inc. Mr. Birshtein also has acted as the
Chairman of the Board of Directors of Aluminum-Power, Inc. since 1999. From 1996
to the present, Mr. Birshtein has served as the Chairman of the Board of
Directors of World Assets (Media) Inc., a corporation organized under the laws
of the Province Ontario, Canada. In 1999, Mr. Birshtein received a gold medal
from the International Information Academy. That same year, he received a Ph.D.
in Philosophy from the International Information Academy and was confirmed as a
full Professor.
9
Alexander M. Gordin has served as a member of the Board of Directors and
the President of the Company since May 2000, and the Chief Executive Officer
since November 2000. In 1995, Mr. Gordin was awarded a MBA degree from the
Wharton School at the University of Pennsylvania. From 1998 until 1999, Mr.
Gordin was employed as the Director of Strategic Business Development at Amdour
Group located in Stamford, Connecticut. Mr. Gordin's duties at Amdour Group
included extensive responsibility for direct investments and Mergers &
Acquisitions in the areas of media, wireless communications, and commercial real
estate. From 1996 until 1998, Mr. Gordin was employed as a Managing Director of
Broad Street Capital LLC. From 1990 until 1996, Mr. Gordin was engaged as the
President of Radio Communications International Corp., which was the first
Motorola distributor located in the former Soviet Union.
Michael J. Solomon was appointed to the Company's Board of Directors in
February 2001. Since 2000, Mr. Solomon has served as the Chairman of the Board
of Directors of Maxx International, Inc. Mr. Solomon currently serves as
Chairman and CEO of Team Communications, Inc.; and as a Director on the Boards
of New York University Stern School of Business, the Entertainment Business &
Management Advisory Board at UCLA, and the International Council of the National
Academy of Television Arts and Sciences.
John R. Loveland was appointed to the Company's Board of Directors in
February 2001. Since 1994, Mr. Loveland has served in his capacity as a director
and Chief Executive Officer of Op-Tech Environmental Services, Inc. Since 1973,
he has served as a director of O'Brien & Gere Engineers, Inc. From 1989 until
1999, Mr. Loveland served as the Chairman of the Board of Directors of O'Brien &
Gere Limited. From 1999 until 2000, Mr. Loveland served as the President of
O'Brien & Gere Property Development.
Kerry Moody was appointed to the Company's Board of Directors in February
2001. Since 1999, Mr. Moody has served as the Vice President and Director of
Government Affairs for AcSys Biometrics, Inc., a leader in Artificial Neural
Systems. From 1996 until 1999, Mr. Moody served as the CEO and Chairman of the
Board of ASAPconnecT.com, which acts as a private labeled Internet Service
Provider ("ISP"). Mr. Moody also served as the Reagan White House Liason to the
General Services Administration.
Walter J. Perchal, Ph.D. was appointed to the Company's Board of Directors
in February 2001. Since 1997, Mr. Perchall has served as the President and Chief
Executive Officer of ICInc., a consulting firm, which provides consulting
services in North America, Europe and Asia. For the past 20 years, Mr. Perchall
has served as an adjunct Professor at York University located in Toronto,
Canada, where he focuses on teaching Business Studies.
Vijay Sharma was appointed to the Company's Board of Directors in February
2001. Since March 16, 2001, Mr. Sharma has served as the President of
Aluminum-Power, Inc., a corporation organized under the laws of the Province of
Ontario, Canada. Since 1993, Mr. Sharma was employed by ATI Technologies
initially as a Product Manager, then a Group Product Manager and finally as a
Senior Group Manager of Business Management. Mr. Sharma received a Masters of
Business Administration from Edinburgh Business School, Herlot-Watt University
and a B.A.Sc. in Chemical Engineering from the University of Toronto.
10
Shmuel Gurfinkel has been the Chief Financial Officer of the Company since
January 1998. From 1998 until 2000, Mr. Gurfinkel served as a Director of the
Company. Since 1996, Mr. Gurfinkel also has been a Director of Banca Commerciala
pe Actiuni "Export-Import". For the past five years, Mr. Gurfinkel has been
actively engaged in managing and operating the Shmuel Gurfinkel accounting firm
in Ramat-Gan. Since 1997, Mr. Gurfinkel has served as a Director of Peker Plada
Metals, Ltd., a subsidiary of Africa Israel Investments Ltd.
Gary Shokin has served as the Vice President and Assistant Secretary of the
Company since May 2000. From May 2000 until January 2001, Mr. Shokin also served
as a Director of the Company. Since 1995, Mr. Shokin has served as the President
of Emerald Spa, Inc., a New York based company specializing in beauty
enhancement, physical fitness and skin care. Since 1993, Mr. Shokin has served
as the President of North Star Auto Center, Inc.
Donald W. Kirk, Ph.D. was named the Company's Chief Scientific Officer on
February 21, 2001. Dr. Kirk received his B.A.Sc. in Engineering Science and
MASc. degree in Chemical Engineering from the University of Toronto in 1972 and
1975 respectively. Dr. Kirk received his Ph.D. in Chemical Engineering from the
University of Toronto in 1979. Since 1993, Dr. Kirk has been a professor with
the Department of Chemical Engineering and Applied Chemistry at the University
of Toronto. In 1997, Dr. Kirk was asked to serve as an advisory professor at
Chongqing University located in China. In April 2000, Dr. Kirk served as the
Technical Chair at the 10th Annual Pacific Basin Consortium Symposium and has
been a member of the Board of Directors of the Pacific Basin Consortium for
Hazardous Waste. Dr. Kirk is also a member of the Association of Professional
Engineers of Ontario.
Rafael Ferry was named the Company's Vice President of Marketing on
February 1, 2001. Mr. Ferry presently serves as the Vice President of Marketing
for Aluminum-Power, Inc. From 1996 until 1998, Mr. Ferry was employed as a Sales
Manager at Gestetner (Israel) Ltd. Mr. Ferry holds a Bachelor of Business
Administration from York University.
11
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth all compensation awarded to, earned by or
paid to each of the Company's executive officers and directors for the Company's
fiscal periods as specified below. No other executive officers or directors of
the Company earned over $100,000 during such periods.
Summary Compensation Table
OTHER ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
--------------------------- ---- ------ ----- ------------
Boris Birshtein (1); 1998 -- -- --
Chairman of the Board of Directors 1999 120,000 -- 21,600
2000 250,000(2) -- 21,600
Alexander Gordin (3); 1998 -- -- --
Director, President and CEO 1999 -- -- --
2000 80,000 -- --
Gary Shokin (4); 1998 -- -- --
Director; Vice President and Assistant Secretary 1999 -- -- --
2000 56,000 -- --
Shmuel Gurfinkel (5); 1998 6,000 -- --
Director and Chief Financial Officer 1999 6,000 -- --
2000 55,000 -- --
Theodore B. Shapiro (6); 1998 -- -- --
1999 120,000 -- 21,600
2000 120,000 -- 21,600
Robert L. Blessey (7); 1998 -- -- --
1999 120,000 -- 21,600
2000 120,000 -- 21,600
Michael J. Solomon (8) 1998 -- -- --
1999 -- -- --
2000 -- -- --
John R. Loveland (9) 1998 -- -- --
1999 -- -- --
2000 -- -- --
12
Kerry Moody (10) 1998 -- -- --
1999 -- -- --
2000 -- -- --
Walter J. Perchal (11) 1998 -- -- --
1999 -- -- --
2000 -- -- --
Donald W. Kirk 1998 -- -- --
1999 -- -- --
2000 -- -- --
Rafael Ferry 1998 -- -- --
1999 -- -- --
2000 -- -- --
Vijay Sharma (12) 1998 -- -- --
1999 -- -- --
2000 -- -- --
- ---------------------
(1) On February 25, 1999, the Company entered into an Employment Agreement with
Mr. Birshtein for a term of five years commencing January 1, 1999 providing
for an annual salary of $120,000 for the first year (subject to increase to
$250,000 per year, in the event that the Company consummates an acquisition
of a business with net pre-tax profits (as defined therein) of $3,000,000
or more in such year) and, during each of the remaining years, an amount
equal to $250,000 plus Fifty Percent (50%) of the total Bonus received by
Mr. Birshtein in the preceding year. The Employment Agreement requires Mr.
Birshtein to spend a substantial portion of his time in the performance of
his duties thereunder, and provides for certain other specified fringe
benefits and change of control severance payments. Mr. Birshtein also
receives a monthly auto and insurance allowance of $1,800. In addition, the
Employment Agreement provides for incentive warrants to be issued to Mr.
Birshtein based upon Excess Net Pre-Tax Profits (as defined below) in each
year of the Employment Agreement. For each $1,000,000 of Excess Net Profit,
the Company is required to issue 100,000 of incentive warrants up to a
maximum of 1,000,000 incentive warrants in each such year of the Employment
Agreement. Any issued incentive warrants will have a five year term from
issuance and shall be exercisable at the market price of the Common Stock
on the date of issuance. The Employment Agreement also provides for an
annual bonus of 10% of any Excess Net Pre-Tax Profits in each year during
the term of the Employment Agreement. Excess Net Pre-Tax Profits is defined
as the excess of the then current years net pre-tax profits over the then
preceding year's net pre-tax profits.
On February 28, 2000 the Company issued to Mr. Birshtein warrants to
purchase 600,000 shares of Common Stock and simultaneously cancelled
warrants previously issued to purchase the same number of shares, which
were exercisable at a purchase price of $11.50 per share. The newly issued
warrants have a five year exercise period beginning on the date of issuance
at an exercise price of $0.50 per share. The original warrants issued to
Mr. Birshtein were in recognition of his uncompensated services expended on
the Company's behalf.
(2) Of the $250,000 that Mr. Birshtein was entitled to receive, $120,000 was
paid and $130,000 was accrued but has not been paid as of the date of this
Information Statement.
13
(3) Mr. Gordin was elected a Director and appointed to the positions of
President on May 1, 2000 and CEO on November 9, 2000. On May 1, 2000, Mr.
Gordin's annual salary is $120,000. Additionally, Mr. Gordin has been
granted 500,000 options pursuant to the terms of the 2001 Omnibus Plan.
(4) Mr. Shokin was elected a Director and appointed to the position of Vice
President and Assistant Secretary on May 1, 2000 and December 28, 2000,
respectively. On May 1, 2000, Mr. Shokin became entitled to an annual
salary of $84,000. Additionally, Mr. Shokin has been granted 500,000
options pursuant to the terms of the 2001 Omnibus Plan.
(5) Beginning February 1, 2000, Mr. Gurfinkel is paid a monthly salary of
$5,000.
(6) Mr. Shapiro was elected as a Director and appointed President and CEO on
January 6, 1998. On February 25, 1999, the Company entered into an
Employment Agreement with Mr. Shapiro having a five year term, which
provided for an annual salary of $120,000.
On February 28, 2000 the Company issued warrants to purchase 400,000 shares
of Common Stock to Mr. Shapiro and simultaneously cancelled warrants
previously issued to purchase the same number of shares, which were
exercisable at a purchase price of $11.50 per share. The newly issued
warrants have a five year exercise period beginning on the date of issuance
at an exercise price of $0.50 per share. The original warrants issued to
Mr. Shapiro were in recognition of his uncompensated services expended on
the Company's behalf.
Mr. Shapiro resigned as President of the Company on May 1, 2000 and as
Director and CEO of the Company on October 25, 2000, thereupon became Vice
President. His Employment Agreement was mutually terminated on October 25,
2000. However, he continued to receive an annual salary of $120,000 plus a
monthly auto and insurance allowance of $1,800. On January 10, 2001, Mr.
Shapiro resigned from his position as an officer of the Company and his
salary and benefits were terminated.
(7) Mr. Blessey was elected as a Director and appointed Secretary on January 6,
1998. On February 25, 1999, the Company entered into an Employment
Agreement with Mr. Blessey having a five year term, which provided for an
annual salary of $120,000.
On February 28, 2000 the Company issued warrants to purchase 400,000 shares
of Common Stock to Mr. Blessey and simultaneously cancelled warrants
previously issued to purchase the same number of shares, which were
exercisable at a purchase price of $11.50 per share. The newly issued
warrants have a five year exercise period beginning on the date of issuance
at an exercise price of $0.50 per share. The original warrants issued to
Mr. Blessey were in recognition of his uncompensated services expended on
the Company's behalf.
On October 25, 2000, Mr. Blessey resigned as Director of the Company and
his Employment Agreement was mutually terminated. However, Mr. Blessey
continued to act as Secretary and the continues to receive an annual salary
of $120,000 plus a monthly auto and insurance allowance of $1,800. On
January 10, 2001, Mr. Blessey resigned from his position as an officer of
the Company and his salary and benefits were terminated.
(8) Mr. Solomon was appointed as a member of the Board of Directors on February
16, 2001. He did not serve as an officer or as Director of the Company
during 1998, 1999 and 2000.
(9) Mr. Loveland was appointed as a member of the Board of Directors on
February 16, 2001. He did not serve as an officer or as Director of the
Company during 1998, 1999 and 2000.
(10) Mr. Moody was appointed as a member of the Board of Directors on
February 16, 2001. He did not serve as an officer or as Director of the
Company during 1998, 1999 and 2000.
(11) Mr. Perchal was appointed as a member of the Board of Directors on February
16, 2001. He did not serve as an officer or as Director of the Company
during 1998, 1999 and 2000.
14
(12) Mr. Sharma was appointed as a member of the Board of Directors on
February 16, 2001. He did not serve as an officer or as Director of the
Company during 1998, 1999 and 2000.
Additional Compensation of Directors
All directors of the Company are paid an attendance fee of $2,000 for each
meeting of the Board of Directors attended up to a maximum of $8,000 for a 12
month period.
Board of Directors and Committees
Currently, the Company's Board of Directors consists of Messrs. Birshtein,
Gordin, Solomon, Loveland, Moody, Perchal and Sharma. Their respective
compensation is described above. The Board of Directors has appointed Mr.
Loveland to replace Mr. Gurfinkel, and to join Mr. Birshtein as a member of the
Omnibus Committee to administer the Plan. At present, the Board of Directors has
not established any other committees.
15
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
FOR THE ESTABLISHMENT OF "BLANK CHECK" PREFERRED STOCK
The Board of Directors and the holders of a majority of the Company's
common stock entitled to vote have approved an amendment to the Company's
Certificate of Incorporation to establish what is commonly referred to as "Blank
Check" Preferred Stock, with a limitation of 5,000,000 authorized shares (the
"Preferred Stock"). Currently, there are no authorized or issued shares of
preferred stock. The Company has no present agreement to issue any shares of
preferred stock. The proposed amendment will state that series or classes of the
Preferred Stock may be created and issued from time to time, with such
designations, preferences, conversion rights, cumulative, relative,
participating, optional or other rights, including voting rights,
qualifications, limitations or restrictions as shall be stated and expressed in
the resolution or resolutions providing for the creation. Any issuance of
Preferred Stock with voting rights could, under certain circumstances, have the
effect of delaying or preventing a change in control of the Company by
increasing the number of outstanding shares entitled to vote and increasing the
number of votes required to approve a change in control of the Company.
It is not possible to state the effects of the amendment to the Company's
Certificate of Incorporation upon the rights of the holders of the Company's
common stock until the Board of Directors determines the respective rights of
the holders of one or more series of Preferred Stock. The effects of such
issuance could include, however, (i) reductions of the amount otherwise
available for payment of dividends on common stock; (ii) restrictions on
dividends on common stock; (iii) dilution of the voting power of common stock;
and (iv) restrictions on the rights of holders of common stock to share in the
Company's assets on liquidation until satisfaction of any liquidation preference
granted to the holders of such subsequently designated series of Preferred
Stock.
This amendment is being sought because the Board of Directors believes it
is advisable and in the best interest of the Company to have available Preferred
Stock to provide the Company with greater flexibility in financing any proper
corporate purpose, which may include but not be limited to, the continued
operations of the Company and the development of its aluminum-air fuel cell
technology. The Board of Directors believes that authorizing the Company to
issue "Blank Check" Preferred Stock will provide the Company with a capital
structure better suited to meet the Company's short and long-term capital needs.
Having the authority to create an equity instrument with provisions to be
determined at the time of issuance provides for the greatest possible
flexibility in financing the future operations of the Company. For example,
"Blank Check" Preferred Stock permits the Company to negotiate the precise terms
of an equity investment by simply creating a new series of preferred stock
without incurring the cost and delay of obtaining stockholder approval. This
allows the Company to more effectively negotiate with and satisfy the precise
financial criteria of any investor in a timely manner.
In order to raise additional capital, the Company may issue additional
shares of common stock or seek loans. Accordingly, any investor seeking rights
or preferences different than those of the Company's common stock has no other
choices other than to purchase a debt instrument. Although the Board of
Directors believes that having the ability to offer preferred stock as an
alternative to common stock or a loan will greatly enhance the flexibility of
the Company, there
16
can be no assurance that the Company will be able to raise such financing on
terms acceptable to the Company, if at all.
Shares of voting or convertible Preferred Stock could be issued, or rights
to purchase such shares could be issued, to create voting impediments or to
frustrate persons seeking to affect a takeover or otherwise gain control of the
Company. The ability of the Company's Board of Directors to issue such
additional shares of Preferred Stock, with rights and preferences it deems
advisable, could discourage an attempt by a party to acquire control of the
Company by tender offer or other means. Such issuances could therefore deprive
stockholders of benefits that could result from such an attempt, such as the
realization of a premium over the market price for their shares in a tender
offer or the temporary increase in market price that such an attempt could
cause. Moreover, the issuance of such additional shares of Preferred Stock to
persons friendly to the Board of Directors could make it more difficult to
remove incumbent officers and directors from office even if such change were to
be favorable to stockholders generally. At the present time, the Company is not
aware of any contemplated mergers, tender offers or other plans by a third party
to attempt to effect a change in control of the Company. While the amendment may
have anti-takeover ramifications, the proposed designation of "Blank Check"
Preferred Stock is not intended to be an anti-takeover device and the Board of
Directors believes that financial flexibility offered by the amendment outweighs
any disadvantages.
The entire Board of Directors and the holders of a majority of the
Company's common stock entitled to vote have already agreed to the foregoing
actions. See "APPROVAL BY THE BOARD OF DIRECTORS"; "STOCKHOLDER APPROVAL
PREVIOUSLY OBTAINED" and "VOTING SECURITIES AND PRINCIPAL HOLDER THEREOF."
The foregoing amendment will become effective upon filing the Certificate
of Amendment to the Certificate of Incorporation with the Delaware Secretary of
State no sooner than 20 calendar days after the date of mailing of this
Information Statement to the stockholders of the Company. The complete text of
the Certificate of Amendment to the Certificate of Incorporation is set out in
Annex B to this Information Statement.
17
AMENDMENT TO THE 2001 OMNIBUS PLAN TO INCREASE THE AGGREGATE
NUMBER OF SHARES AUTHORIZED FOR ISSUANCE
The Board of Directors and the holders of a majority of the Company's
common stock entitled to vote have already agreed to the following action. See
"APPROVAL BY THE BOARD OF DIRECTORS"; "STOCKHOLDER APPROVAL PREVIOUSLY
OBTAINED"; and "VOTING SECURITIES AND PRINCIPAL HOLDER THEREOF."
The following action will become effective no sooner than 20 calendar days
after the date of mailing of this Information Statement to the stockholders of
the Company. The complete text of the Written Consent of Stockholders In Lieu of
Meeting is set out in Annex A to his Information Statement.
General
Generally, the Board of Directors of the Company may at any time amend,
suspend or terminate the 2001 Omnibus Plan; provided, however, that no amendment
may be made increasing the aggregate number of shares of common stock with
respect to which awards under the 2001 Omnibus Plan may be granted, without the
approval of the holders of a majority of the outstanding voting shares of the
Company.
On June 18, 2001, the Company's Board of Directors approved a resolution to
increase the maximum aggregate number of shares that may be issued under the
Company's 2001 Omnibus Plan. On June 18, 2001, holders of a majority of shares
entitled to vote provided written consent pursuant to the General Corporation
Law of the State of Delaware to increase the authorized number of shares
issuable pursuant to the 2001 Omnibus Plan from 4,000,000 to 10,000,000 shares.
Summary of 2001 Omnibus Plan, as amended
The Board of Directors and the holders of a majority of the Company's
common stock have authorized the adoption of the 2001 Omnibus Plan (the "Plan")
in order to attract and retain qualified directors, officers, employees,
consultants and advisors. Qualified directors, officers, employees, consultants
and advisors of the Company and its subsidiaries are eligible to be granted (a)
stock options ("Options"), which may be designated as nonqualified stock options
("NQSOs") or incentive stock options ("ISOs"), (b) stock appreciation rights
("SARs"), (c) restricted stock awards ("Restricted Stock"), (d) performance
awards ("Performance Awards") or (e) other forms of stock-based incentive awards
(collectively, the "Awards"). A director, officer, employee, consultant or
advisor who has been granted an Option is referred to herein as an "Optionee"
and a director, officer, employee, consultant or advisor who has been granted
any other type of Award is referred to herein as a "Participant."
The purposes of the Plan are to enable the Company to provide additional
incentives to its Directors, officers, employees, consultants and advisors, to
advance the interests of the Company and to enable the Company to attract
qualified personnel in a competitive marketplace.
18
The following description of the Plan is only a summary; it does not
purport to be a complete or detailed description of all of the provisions of the
Plan. This summary is qualified by reference to the full terms of the Plan, a
copy of which is attached hereto as Annex C.
The Plan
The Omnibus Committee administers the Plan and has full discretion and
exclusive power to (a) select the Directors, officers, employees, consultants
and advisors who will participate in the Plan and grant Awards to such
Directors, officers, employees, consultants and advisors, (b) determine the time
at which such Awards shall be granted and any terms and conditions with respect
to such Awards as shall not be inconsistent with the provisions of the Plan, and
(c) resolve all questions relating to the administration of the Plan. Members of
the Omnibus Committee receive no additional compensation for their services in
connection with the administration of the Plan.
Those who are eligible to participate in the Plan are officers, management,
other key employees and consultants and advisors of the Company and its
subsidiaries as the Omnibus Committee may from time to time determine, provided
that members of the Omnibus Committee shall be ineligible to participate in the
Plan and shall otherwise qualify as disinterested persons for purposes of Rule
16b-3(c)(2)(i) under the Securities Exchange Act of 1934.
The Omnibus Committee may grant NQSOs or ISOs that are evidenced by stock
option agreements. A NQSO is a right to purchase a specific number of shares of
common stock during such time as the Omnibus Committee may determine, not to
exceed ten years, at a price determined by the Omnibus Committee that, unless
deemed otherwise by the Omnibus Committee, is not less than the fair market
value of the common stock on the date the NQSO is granted. An ISO is an Option
that meets the requirements of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"). No ISOs may be granted under the Plan to an employee
who owns more than 10% of the outstanding voting stock of the Company ("Ten
Percent Stockholder") unless the option price is at least 110% of the fair
market value of the common stock at the date of grant and the ISO is not
exercisable more than five years after it is granted. In the case of an employee
who is not a Ten Percent Stockholder, no ISO may be exercisable more than ten
years after the date the ISO is granted and the exercise price of the ISO shall
not be less than the fair market value of the common stock on the date the ISO
is granted. Further, no employee may be granted ISOs that first become
exercisable during a calendar year for the purchase of common stock with an
aggregate fair market value (determined as of the date of grant of each ISO) in
excess of $100,000. An ISO (or any installment thereof) counts against the
annual limitation only in the year it first becomes exercisable.
The exercise price of the common stock subject to a NQSO or ISO may be paid
in cash or, at the discretion of the Omnibus Committee, by the a promissory note
or by the tender of common stock owned by the Option holder or through a
combination thereof. The Omnibus Committee may provide for the exercise of
Options in installments and upon such terms, conditions and restrictions as it
may determine. Options are generally exercisable in equal annual installments
over a predetermined period. All installments that become exercisable are
generally cumulative and may be exercised at any time after they become
exercisable until the expiration of the term of the Option. The Omnibus
Committee may provide for termination of an Option in the case of termination of
employment or directorship or any other reason. If an
19
Optionee retires or becomes disabled prior to totally exercising the Option, the
Option agreement may provide that the Option may be exercised by for a period of
12 months after the date of such termination of employment by reason of
retirement or disability. If an Optionee dies prior to totally exercising the
Option, the Option agreement may provide that the Option may be exercised by (a)
the Optionee's estate or by the person who acquired the right to exercise the
Option by bequest or inheritance or by reason of the Optionee's death not more
than three years from the date of the Optionee's death.
An SAR is a right granted to a Participant to receive, upon surrender of
the right, but without payment, an amount payable in cash. The amount payable
with respect to each SAR shall be based on the excess, if any, of the fair
market value of a share of common stock on the exercise date over the exercise
price of the SAR, which will not be less than the fair market value of the
common stock on the date the SAR is granted. In the case of an SAR granted in
tandem with an ISO to an employee who is a Ten Percent Stockholder, the exercise
price shall not be less than 110% of the fair market value of a share of common
stock on the date the SAR is granted.
Restricted Stock is common stock that is issued to a Participant at a price
determined by the Omnibus Committee, which price per share may not be less than
the par value of the common stock, and is subject to restrictions on transfer
and/or such other restrictions on incidents of ownership as the Omnibus
Committee may determine.
A Performance Award granted under the Plan (a) may be denominated or
payable to the Participant in cash, common stock (including, without limitation,
Restricted Stock), other securities or other Awards and (b) shall confer on the
Participant the right to receive payments, in whole or in part, upon the
achievement of such performance goals during such performance periods as the
Omnibus Committee shall establish. Subject to the terms of the Plan and any
applicable Award agreement, the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any
Performance Award granted and the amount of any payment or transfer to be made
pursuant to any Performance Award shall be determined by the Omnibus Committee.
The Omnibus Committee may grant Awards under the Plan that provide the
Participants with the right to purchase common stock or that are valued by
reference to the fair market value of the common stock (including, but not
limited to, phantom securities or dividend equivalents). Such Awards shall be in
a form determined by the Omnibus Committee (and may include terms contingent
upon a change of control of the Company); provided that such Awards shall not be
inconsistent with the terms and purposes of the Plan.
The Omnibus Committee determines the price of any such Award and may accept
any lawful consideration.
The Omnibus Committee may at any time amend, suspend or terminate the Plan;
provided, however, that (a) no change in any Awards previously granted may be
made without the consent of the holder thereof and (b) no amendment (other than
an amendment authorized to reflect any merger, consolidation, reorganization or
the like to which the Company is a party or any reclassification, stock split,
combination of shares or the like) may be made increasing the aggregate number
of shares of the common stock with respect to which Awards may be granted
20
or changing the class of persons eligible to receive Awards, without the
approval of the holders of a majority of the outstanding voting shares of the
Company.
In the event a Change in Control (as defined in the Plan) occurs, then,
notwithstanding any provision of the Plan or of any provisions of any Award
agreements entered into between the Company and any Optionee or Participant to
the contrary, all Awards that have not expired and which are then held by any
Optionee or Participant (or the person or persons to whom any deceased
Optionee's or Participant's rights have been transferred) shall, as of such
Change of Control, become fully and immediately vested and exercisable and may
be exercised for the remaining term of such Awards.
If the Company is a party to any merger, consolidation, reorganization or
the like, the Omnibus Committee has the power to substitute new Awards or have
the Awards be assumed by another corporation. In the event of a
reclassification, stock split, combination of shares or the like, the Omnibus
Committee shall conclusively determine the appropriate adjustments.
No Award granted under the Plan may be sold, pledged, assigned or
transferred other than by will or the laws of descent and distribution, and
except in the case of the death or disability of an Optionee or a Participant,
Awards shall be exercisable during the lifetime of the Optionee or Participant
only by that individual.
No Awards may be granted under the Plan on or after January 2, 2011, but
Awards granted prior to such date may be exercised in accordance with their
terms.
The Plan and all Award agreements shall be construed and enforced in
accordance with and governed by the laws of the State of New York.
As of July 18, 2001, 2,200,000 options were granted under the Plan. See
"VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF."
United States Tax Consequences of Awards
The following summarizes the major United States tax consequences to United
States individuals that are expected to occur in connection with Awards granted
under the Plan.
ISOS
An Optionee has no taxable income, and the Company is not entitled to a
deduction, at the time of the grant of an Option. All Options that qualify under
the rules of Section 422 of the Code will be entitled to ISO treatment. To
receive ISO treatment, an Optionee must not dispose of the acquired common stock
within two years after the ISO is granted or within one year after the ISO is
exercised. In addition, the Optionee must have been an employee of the Company
or any of its subsidiaries (or their predecessors) for the entire time from the
date the ISO is granted until three months (one year if the Optionee is
disabled) before the date of exercise. The requirement that the Optionee be an
employee and the two-year and one-year holding periods are waived in the case of
death of the Optionee. If all such requirements are met, no tax will be imposed
upon exercise of the ISO, and any gain upon sale of the common stock will be
entitled to capital gain treatment. The Optionee's gain on exercise (the excess
of the fair market value of
21
the common stock at the time of exercise over the exercise price) of an ISO is a
tax preference item and, accordingly, is included in the computation of
alternative minimum taxable income.
If an Optionee does not meet the two-year and one-year holding requirements
(a "disqualifying disposition"), tax will be imposed at the time of sale of the
common stock. In such event the Optionee's gain on exercise of the ISO will be
compensation to him taxed as ordinary income rather than capital gain to the
extent the fair market value of the acquired common stock on the date of
exercise of the ISO exceeds the aggregate exercise price paid for that common
stock, and the Company will be entitled to a corresponding deduction at the time
of sale. Any remaining gain on sale of that common stock (equal to the excess of
the amount realized on the disqualifying disposition of that common stock over
its fair market value on the date of exercise of the ISO) will be long-term
capital gain if the Optionee held that common stock for more than one year. If
the amount realized on the disqualifying disposition is less than the fair
market value of the common stock on the date of exercise of the ISO, the total
amount includible in the Optionee's gross income, and the amount deductible by
the Company, will equal the excess of the amount realized on the disqualifying
disposition over the exercise price.
If the Optionee pays all or a portion of the exercise price of an ISO by
tendering other shares of common stock he owns, then the following consequences
occur. If the tendered shares of common stock were acquired by the Optionee
through the prior exercise of an ISO (the "Prior ISO") and do not satisfy both
the two-year and one-year holding requirements ("Disqualified Payment Shares"),
then the tender by the Optionee of such shares constitutes a disqualifying
disposition that will result in compensation to the Optionee taxed as ordinary
income in an amount equal to the excess of the fair market value of such
Disqualified Payment Shares, determined when the Prior ISO was exercised, over
the exercise price previously paid for such Disqualified Payment Shares. Any
appreciation that has occurred in the Disqualified Payment Shares that is not
taxed to the Optionee as compensation income under the disqualifying disposition
rules is not recognized as gain under Section 1036 of the Code. The number of
shares of common stock received upon exercise of the ISO equal to the number of
Disqualified Payment Shares tendered in payment thereof will have a basis equal
to the Optionee's basis in the Disqualified Payment Shares plus any ordinary
income recognized by the Optionee as a result of the disqualifying disposition.
The number of shares of common stock received upon exercise of the ISO in excess
of the number of Disqualified Payment Shares will have a basis equal to the
amount of the exercise price of the ISO paid in cash (if any). The number of
shares of common stock received upon exercise of the ISO, equal to the number of
shares of Disqualified Payment Shares tendered, will have the same holding
period on the date that the ISO is exercised as such Disqualified Payment Shares
had on that date and the holding period of any additional shares of common stock
received upon exercise of the ISO will begin on that date. For purposes of the
two-year and one-year holding requirements relating to a disqualified
disposition, however, the holding period of all shares received on exercise of
the ISO will begin on the date the ISO is exercised.
Alternatively, if the exercise price of the ISO is funded by tendering
shares of common stock owned by the Optionee other than Disqualified Payment
Shares ("Qualified Payment Shares"), including shares of common stock received
by the Optionee from exercise of a prior ISO that satisfied both the two-year
and one-year holding requirements, shares of common stock acquired from exercise
of a NQSO or otherwise as an Award, and shares of common stock purchased on the
open market, then the following consequences occur. Under Section 1036 of
22
the Code, the Optionee will not recognize gain or loss on the tender of the
previously owned Qualified Payment Shares. The number of new shares of common
stock received upon exercise of the ISO, equal to the number of shares of
Qualified Payment Shares tendered, will have the same basis as such Qualified
Payment Shares had in the hands of the Optionee and the basis in any additional
shares of common stock received will equal the exercise price paid in cash (if
any). The number of shares of common stock received upon exercise of the ISO,
equal to the number of shares of Qualified Payment Shares tendered, will have
the same holding period on the date the ISO is exercised as such Qualified
Payment Shares had on that date and the holding period of any additional shares
of common stock received upon exercise of the ISO will begin on that date. For
purposes of the two-year and one-year holding requirements relating to a
disqualified disposition, however, the holding period of all shares received on
exercise of the ISO will begin on the date the ISO is exercised.
NQSOS
Upon exercise of a NQSO, an Optionee will recognize compensation taxed to
him as ordinary income to the extent the fair market value of the acquired
common stock on the date of exercise of the NQSO exceeds the aggregate exercise
price paid for that common stock. The exercise of a NQSO entitles the Company to
a tax deduction for the year in which the exercise occurred in the same amount
as is includible in the income of the Optionee. Any gain or loss realized by an
Optionee on subsequent disposition of the shares of common stock acquired by
exercise of a NQSO generally is a capital gain or loss and does not result in
any tax deduction to the Company.
If the Optionee pays all or a portion of the exercise price of a NQSO by
tendering other shares of common stock he owns ("Payment Shares"), then the
following consequences occur regardless if such Payment Shares are Disqualified
Payment Shares, Qualified Payment Shares or otherwise. With respect to the
number of shares of common stock received on exercise of the NQSO that exceeds
the number of Payment Shares used to exercise the NQSO, the Optionee will
recognize compensation taxed to him as ordinary income to the extent the fair
market value of such shares of common stock on the date of exercise of the NQSO
exceeds the aggregate exercise price paid in cash (if any). Under Section 1036
of the Code, no income, gain or loss is recognized upon the exchange of Payment
Shares for shares of common stock received upon the exercise of the NQSO to the
extent of the number of Payment Shares tendered. The number of shares of common
stock received upon exercise of the NQSO, equal to the number of shares of
Payment Shares tendered, will have the same basis as such Payment Shares had in
the hands of the Optionee. The basis of the Optionee in the number of any
additional shares of common stock received upon exercise of the NQSO will equal
the amount of the exercise price of the NQSO paid in cash plus any compensation
income recognized by the Optionee. The number of shares received upon exercise
of the NQSO, equal to the number of shares of Payment Shares tendered, will have
the same holding period on the date that the NQSO is exercised as such Payment
Shares had on that date and the holding period of any additional shares of
common stock received upon exercise of the NQSO will begin on that date.
23
CASHLESS EXERCISE--ISOS AND NQSOS
If an Optionee exercises an ISO or NQSO through the cashless exercise
method, the Optionee will authorize a broker designated by the Company to sell a
specified number of the shares of common stock to be acquired by the Optionee on
the exercise of the Option, having a then fair market value equal to the sum of
the exercise price of the ISO or NQSO, as applicable, plus any transaction costs
(the "Cashless Shares"). The remainder of the shares not sold (the "Non-Cashless
Shares") will be delivered to the Optionee. An Optionee who uses the cashless
exercise method will be treated as constructively receiving the full amount of
shares of common stock that otherwise would be issued upon payment of the
exercise price of the Option in cash, followed immediately by a sale of the
Cashless Shares by the Optionee. In the case of an ISO, the cashless exercise
method would result in a disqualifying disposition of the Cashless Shares with
the tax consequences set forth above under "ISOs." In the case of a NQSO, the
cashless exercise method would result in compensation to the Optionee with
respect to both the Cashless Shares and Non-Cashless Shares as discussed above
under "NQSOs." Since the Optionee's basis in the Cashless Shares that are
received and simultaneously sold on exercise of the NQSO is equal to the sum of
the exercise price and the compensation to the Optionee, no additional gain must
be recognized by the Optionee upon the simultaneous sale of the Cashless Shares.
SARS
A Participant has no taxable income, and the Company is not entitled to a
deduction, at the time of the grant of an SAR. On exercise of an SAR, a
Participant of an SAR will recognize compensation taxed as ordinary income in an
amount equal to the cash received under the SAR.
RESTRICTED STOCK
A Participant who receives a grant of Restricted Stock will recognize
compensation taxed as ordinary income equal to the excess of the fair market
value of the Restricted Stock over the price paid for the Restricted Stock (a)
as of the date of grant, if an election is properly made by the Participant
under Section 83(b) of the Code, or (b) at the time the restrictions lapse,
absent a proper election by the Participant under Section 83(b) of the Code. If
the Participant makes a proper election under Section 83(b) of the Code, no
additional income will be recognized by the Participant when the restrictions
lapse. If, however, the shares of Restricted Stock are forfeited after a proper
election under Section 83(b) of the Code is made by the Participant, no loss may
be recognized. Any compensation income recognized by the Participant with
respect to the Restricted Stock will be added to the Participant's basis in the
Restricted Stock. Gain or loss recognized by a Participant upon a disposition of
the shares of Restricted Stock will be capital gain or loss, taxed as long-term
capital gain or loss if the Restricted Stock has been held by the Participant
for more than one year. The one-year holding period commences on the date the
restrictions lapse or, if a proper election is made by the Participant under
Section 83(b) of the Code, when the Restricted Stock is granted. The Participant
must file any Section 83(b) election with the Internal Revenue Service not later
than 30 days after the date of grant of the Restricted Stock. Each Participant
who receives a grant of Restricted Stock is urged to consult his or her own tax
advisor with respect to whether an election should be made under Section 83(b)
of the Code and the manner of making a proper election. The granting of an SAR
or Restricted Stock entitles the Company to a tax deduction for the year in
which the compensation income is
24
recognized by the Participant in the same amount as is includible in the income
of the Participant.
PERFORMANCE AWARDS AND OTHER STOCK-BASED AWARDS
Under Section 83(a) of the Code, a Participant who receives a grant of a
Performance Award or other form of stock-based incentive award that constitutes
property and is payable in cash or common stock will recognize compensation
taxed as ordinary income generally when such cash or common stock is received
equal to the amount of cash or the excess (if any) of the fair market value of
common stock over the exercise price. If the common stock is Restricted Stock or
otherwise subject to forfeiture, then generally such common stock is taxed as
set forth above for Restricted Stock.
The tax status of the Performance Awards and other forms of stock-based
incentive awards will depend on the nature of such Awards and their specific
terms and conditions.
Under certain circumstances, the Company's tax deductions may be limited
under Section 162(m) of the Code.
The foregoing statements are based upon present United States federal
income tax laws and regulations and are subject to change if the tax laws and
regulations, or interpretations thereof, are changed.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
On June 1, 2001, the Company and Partners Group, Inc. ("Partners") entered
into a Consulting Agreement (the "Consulting Agreement") whereby Partners has
agreed, for a period from June 1, 2001 to July 31, 2001, to provide the Company
certain government relations services and strategic political advice pertaining
to federal and state governments and their respective agencies.
Partners is effectively owned and controlled by Mr. Kerry Moody, who was
appointed as a Director of the Company on February 16, 2001 and who is currently
a nominee for election as a member of the Company's Board of Directors. See
"ELECTION OF DIRECTORS."
Pursuant to the Consulting Agreement, the Company has agreed to pay
Partners $5,000.00 per month for services performed. Additionally, the Company
has agreed to pay all of Partners' reasonable and customary expenses incurred in
the performance of the Consulting Agreement. Lastly, the Company has agreed to
grant to Consultant the right to purchase Five Hundred Thousand (500,000) shares
of Company's common stock (the "Shares") with an exercise price of $.01 per
share for a period of One (1) year. One Hundred Thousand (100,000) Shares shall
immediately vest on June 1, 2001, and thereafter the remaining options shall
vest at a rate of Twenty-Five Thousand (25,000) per month.
25
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows the Company to "incorporate by reference" the information
the Company files with it, which means that the Company can disclose important
information without re-printing the information in this Information Statement by
referring to prior and future filings with the SEC. The information that is
incorporated by reference is an important part of this Information Statement,
and later information that is filed with the SEC will automatically update and
supersede this information.
The Company incorporates by reference the following documents filed by the
Company pursuant to the Exchange Act: (i) Trimol's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 2000; (ii) Trimol's Quarterly Report on
Form 10-QSB for the nine month period ended September 30, 2000; (iii) Trimol's
Current Report on Form 8-K filed with the SEC on March 1, 2001; and (iv) any
future filings the Company makes with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act. Copies of these filings (other than an exhibit to any
of these filings unless such exhibit is specifically incorporated by reference
into the filing) may be requested, at no cost, by writing or telephoning the
Company at the following address:
Trimol Group, Inc.
1285 Avenue of the Americas, 35th Floor
New York, New York 10019
Telephone No.: (212) 554-4394
The Company has not authorized any person to provide information other than
that provided here. The Company has not authorized anyone to provide different
information. It should not be assumed that the information in this Information
Statement or any supplement is accurate as of any date other than the date on
the front of the document.
26
ANNEX A
TRIMOL GROUP, INC.
WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF MEETING
Pursuant to Section 228 of the Delaware General Corporation Law, the
undersigned constituting a majority of the issued and outstanding shares of the
Common Stock entitled to vote of Trimol Group, Inc., a Delaware corporation (the
"Company"), do hereby consent, in writing and in lieu of meeting, to the
following:
WHEREAS, pursuant to the Company's 2001 Omnibus Plan (the "Plan"), any
amendment increasing the aggregate number of shares of the common stock of the
Company with which Awards (as defined in the Plan) may be granted requires the
approval of the holders of a majority of the outstanding voting shares of the
Company; and
WHEREAS, by resolution, the Board of Directors deems it in the Company's
best interest to increase the maximum number of shares of common stock of the
Company with respect to which Awards (as defined in the Plan) may be granted
under the Plan from 4,000,000 to 10,000,000, and has unanimously approved the
amendment to the Plan to increase the maximum number of shares of common stock
of the Company with respect to which Awards (as defined in the Plan) may be
granted under the Plan from 4,000,000 to 10,000,000; and
WHEREAS, by resolution, the Board of Directors deems it in the Company's
best interest to amend the Company's Certificate of Incorporation to establish a
"blank check" preferred stock consisting of 5,000,000 preferred shares; and
WHEREAS, by resolution, the Board of Directors deems it in the Company's
best interest to elect Messrs. Michael J. Solomon, John R. Loveland, Kerry
Moody, Walter J. Perchal and Vijay Sharma as members of the Company's Board of
Directors until the earlier of their respective resignations, removal, death, or
the election of their respective successors; be it then
RESOLVED, that the Plan be amended to increase the maximum number of shares
of common stock of the Company with respect to which Awards (as defined in the
Plan) may be granted under the Plan from 4,000,000 to 10,000,000; provided that
this resolution shall not be made effective until 20 calendar days after the
Company has sent an information statement pertaining to this amendment to each
of its stockholders, as of a record date determined by the Board of Directors,
pursuant to Rule 14c-2 of the Securities Exchange Act of 1934 (the "Exchange
Act"); and be it
FURTHER RESOLVED, that the Company's Certificate of Incorporation be
amended by amending Paragraph FOURTH thereof to read in its entirety as follows:
FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is One Hundred
Thirty Million (130,000,000) which shall consist of (i) One
Hundred Twenty-Five Million (125,000,000) shares of common
stock, $0.01 par value per share (the "Common Stock"), and
(ii) Five Million (5,000,000) shares of preferred stock,
$0.01 par value per share (the "Preferred Stock").
A-1
PART A
COMMON STOCK
(a) Each share of Common Stock issued and outstanding
shall be identical in all respects one with the other, and
no dividends shall be paid on any shares of Common Stock
unless the same dividend is paid on all shares of Common
Stock outstanding at the time of such payment.
(b) Except for and subject to those rights expressly
granted to the holders of the Preferred Stock, or except as
may be provided by the General Corporation Law of the State
of Delaware, the holders of Common Stock shall have
exclusively all other rights of stockholders including, but
not by way of limitation, (i) the right to receive
dividends, when, as and if declared by the Board of
Directors out of assets lawfully available therefore, and
(ii) in the event of any distribution of assets upon
liquidation, dissolution or winding up of the Corporation or
otherwise, the right to receive ratably and equally all the
assets and funds of the Corporation remaining after payment
to the holders of the Preferred Stock of the specific
amounts which they are entitled to receive upon such
liquidation, dissolution or winding up of the Corporation as
herein provided.
(c) Each holder of shares of Common Stock shall be
entitled to one vote for each share of such Common Stock
held by such holder, and voting power with respect to all
classes of securities of the Corporation shall be vested
solely in the Common Stock, other than as specifically
provided in the Corporation's Certificate of Incorporation,
as it may be amended, or any resolutions adopted by the
Board of Directors pursuant thereto, with respect to the
Preferred Stock.
PART B
PREFERRED STOCK
Authority is hereby vested in the Board of Directors of
the Corporation to provide for the issuance of Preferred
Stock and in connection therewith to fix by resolution
providing for the issue of such series, the number of shares
to be included and such of the
A-2
preferences and relative participating, optional or other
special rights and limitations of such series, including,
without limitation, rights of redemption or conversion into
Common Stock, to the fullest extent now or hereafter
permitted by the General Corporation Law of the State of
Delaware.
Without limiting the generality of the foregoing
paragraph, the authority of the Board of Directors with
respect to each series of Preferred Stock shall include,
without limitation, the determination of any of the
following matters:
(a) the number of shares constituting such series and
the designation thereof to distinguish the shares of such
series from the shares of all other series;
(b) the rights of holders of shares of such series to
receive dividends thereon and the dividend rates, the
conditions and time of payment of dividends, the extent to
which dividends are payable in preference to, or in any
other relation to, dividends payable on any other class or
series of stock, and whether such dividends shall be
cumulative or noncumulative;
(c) the terms and provisions governing the redemption
of shares of such series, if such shares are to be
redeemable;
(d) the terms and provisions governing the operation of
retirement or sinking funds, if any;
(e) the voting power of such series, whether full,
limited or none;
(f) the rights of holders of shares of such series upon
the liquidation, dissolution or winding up of, or upon
distribution of the assets of, the Corporation;
(g) the rights, if any, of holders of shares of such
series to convert such shares into, or to exchange such
shares for, any other class of stock, or of any series
thereof, and the prices or rates for such conversions or
exchanges, and any adjustments thereto; and
(h) any other preferences and relative, participating,
optional or other special rights, qualifications,
limitations or restrictions of such series.
The shares of each series of Preferred Stock may vary
from the shares of any other series of Preferred Stock as to
any of such matters.
A-3
BE IT FURTHER RESOLVED, that the filing by the Company's of a Certificate
of Amendment to the Company's Certificate of Incorporation with the Secretary of
State of the State of Delaware to effectuate the amendments referred to in the
foregoing resolution is hereby authorized and approved provided such filing
shall not be made until 20 calendar days after the Company has sent an
information statement pertaining to the foregoing amendment to each of its
stockholders, as of a record date determined by the Board of Directors, pursuant
to Rule 14c-2 of the Exchange Act; and be it
FURTHER RESOLVED, that Messrs. Michael J. Solomon, John R. Loveland, Kerry
Moody, Walter J. Perchal and Vijay Sharma be elected as members of the Company's
Board of Directors until the earlier of their respective resignations, removal,
death, or the election of their respective successors; provided that this
resolution shall not be made effective until 20 calendar days after the Company
has sent an information statement pertaining to this election to each of its
stockholders, as of a record date determined by the Board of Directors, pursuant
to Rule 14c-2 of the Exchange Act; and be it
FURTHER RESOLVED, that the appropriate officers are hereby authorized to
carry out this Resolution on behalf of the Company and are authorized,
empowered, and directed, in the name of and on behalf of the Company, to execute
and deliver all documents, to make all payments, and to perform any other act as
may be necessary from time to time to carry out the purpose and intent of this
resolution. All such acts and doings of all officers which are consistent with
the purposes of this resolution are hereby authorized, approved, ratified, and
confirmed in all respects; and be it
FURTHER RESOLVED, that this Resolution may be signed in as many counter
parts as necessary and each counter part will be accepted as if all parties had
signed; and
IN WITNESS WHEREOF, the undersigned stockholders, being the beneficial
owners of a majority of the outstanding shares of Common Stock of the Company,
consent to the adoption of the above resolutions and have executed this written
consent, which shall be effective as of June 18, 2001.
ALUMINUM-POWER, INC.
(Owner of 88,000,000 Shares)
- --------------------------------- ------------------------------
Name: Boris Birshtein
Title: (Owner of 4,285,000 Shares)
MAGNUM ASSOCIATES, LTD.
(Owner of 3,910,000 Shares)
- ---------------------------------
Name:
Title:
A-4
ANNEX B
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
TRIMOL GROUP, INC.
* * * * *
Trimol Group, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation, at a meeting duly
held, adopted a resolution proposing and declaring advisable to the stockholders
of said corporation the following amendment to the Certificate of Incorporation
of said corporation:
RESOLVED,that the Certificate of Incorporation of this corporation be
amended by changing the Article thereof numbered "FOURTH" so that, as amended,
said Article shall be read as follows:
"FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is One Hundred
Thirty Million (130,000,000) which shall consist of (i) One
Hundred Twenty-Five Million (125,000,000) shares of common
stock, $0.01 par value per share (the "Common Stock"), and
(ii) Five Million (5,000,000) shares of preferred stock,
$0.01 par value per share (the "Preferred Stock").
B-1
PART A
COMMON STOCK
(a) Each share of Common Stock issued and outstanding
shall be identical in all respects one with the other, and
no dividends shall be paid on any shares of Common Stock
unless the same dividend is paid on all shares of Common
Stock outstanding at the time of such payment.
(b) Except for and subject to those rights expressly
granted to the holders of the Preferred Stock, or except as
may be provided by the General Corporation Law of the State
of Delaware, the holders of Common Stock shall have
exclusively all other rights of stockholders including, but
not by way of limitation, (i) the right to receive
dividends, when, as and if declared by the Board of
Directors out of assets lawfully available therefore, and
(ii) in the event of any distribution of assets upon
liquidation, dissolution or winding up of the Corporation or
otherwise, the right to receive ratably and equally all the
assets and funds of the Corporation remaining after payment
to the holders of the Preferred Stock of the specific
amounts which they are entitled to receive upon such
liquidation, dissolution or winding up of the Corporation as
herein provided.
(c) Each holder of shares of Common Stock shall be
entitled to one vote for each share of such Common Stock
held by such holder, and voting power with respect to all
classes of securities of the Corporation shall be vested
solely in the Common Stock, other than as specifically
provided in the Corporation's Certificate of Incorporation,
as it may be amended, or any resolutions adopted by the
Board of Directors pursuant thereto, with respect to the
Preferred Stock.
PART B
PREFERRED STOCK
Authority is hereby vested in the Board of Directors of
the Corporation to provide for the issuance of Preferred
Stock and in connection therewith to fix by resolution
providing for the issue of such series, the number of shares
to be included and such of the preferences and relative
participating, optional or other special rights and
limitations of such series, including, without limitation,
rights of redemption or conversion into Common Stock, to the
B-2
fullest extent now or hereafter permitted by the General
Corporation Law of the State of Delaware.
Without limiting the generality of the foregoing
paragraph, the authority of the Board of Directors with
respect to each series of Preferred Stock shall include,
without limitation, the determination of any of the
following matters:
(a) the number of shares constituting such series and
the designation thereof to distinguish the shares of such
series from the shares of all other series;
(b) the rights of holders of shares of such series to
receive dividends thereon and the dividend rates, the
conditions and time of payment of dividends, the extent to
which dividends are payable in preference to, or in any
other relation to, dividends payable on any other class or
series of stock, and whether such dividends shall be
cumulative or noncumulative;
(c) the terms and provisions governing the redemption
of shares of such series, if such shares are to be
redeemable;
(d) the terms and provisions governing the operation of
retirement or sinking funds, if any;
(e) the voting power of such series, whether full,
limited or none;
(f) the rights of holders of shares of such series upon
the liquidation, dissolution or winding up of, or upon
distribution of the assets of, the Corporation;
(g) the rights, if any, of holders of shares of such
series to convert such shares into, or to exchange such
shares for, any other class of stock, or of any series
thereof, and the prices or rates for such conversions or
exchanges, and any adjustments thereto; and
(h) any other preferences and relative, participating,
optional or other special rights, qualifications,
limitations or restrictions of such series.
The shares of each series of Preferred Stock may vary
from the shares of any other series of Preferred Stock as to
any of such matters."
B-3
SECOND: That in lieu of a meeting and a vote of stockholders, a majority of
the stockholders have given written consent to said amendment in accordance with
the provisions of Section 228 of the General Corporation Law of the State of
Delaware and written notice of the adoption of the amendment has been given as
provided in Section 228 of the General Corporation Law of the State of Delaware
to every stockholder entitled to such notice.
THIRD: That the aforesaid amendment was duly adopted in accordance with the
applicable provisions of Section 242 and 228 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, said Trimol Group, Inc. has caused this certificate to
be signed by Alexander Gordin, its President and attested by Gary Shokin, its
Assistant Secretary, this 18 day of June, 2001.
Trimol Group, Inc.
By:
---------------------------
Alexander Gordin, President
ATTEST:
By:
--------------------------------
Gary Shokin, Assistant Secretary
B-4
ANNEX C
TRIMOL GROUP INC.
2001 OMNIBUS PLAN, AS AMENDED
1. Purposes of the Plan
The Trimol Group Inc. 2001 Omnibus Plan (the "Plan") maintained by Trimol
Group Inc. (the "Company") is intended to promote the growth and general
prosperity of the Company by offering incentives to its key employees who are
primarily responsible for the growth of the Company and to attract and retain
qualified employees and thereby benefit its shareholders based on the growth of
the Company. Awards granted under the Plan may be (a) stock options ("Options")
which may be designated as (i) Incentive Stock Options ("ISOs") intended to
qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or (ii) Nonqualified Stock Options ("NQSOs") not intended to so
qualify; (b) stock appreciation rights ("SARs"); (c) restricted stock awards
("Restricted Stock"); (d) performance awards ("Performance Awards"); or (e)
other forms of stock-based incentive awards, as hereinafter defined
(collectively, the "Awards").
2. Shares of Stock Subject to the Plan
The shares of stock with respect to which the Awards may be granted shall
be the common stock, par value at $0.01 of the Company (the "Common Stock").
Shares delivered upon exercise of the Awards, at the election of the Board of
Directors of the Company, may be stock that is authorized but previously
unissued or stock reacquired by the Company or both. Subject to the provisions
of Section 14, the maximum number of shares with respect to which the Awards may
be granted under the Plan shall not exceed 10,000,000 shares of Common Stock;
provided, however, that such number of shares of Common Stock may also be
subject to adjustment, from time to time, at the discretion of the Board of
Directors of the Company. Any shares subject to an Award under the Plan, which
Award for any reason expires or is terminated unexercised as to such shares,
shall again be available for the grant of other Awards under the Plan provided,
however, that forfeited Common Stock or other securities shall not be available
for further Awards if the participant has realized any benefits of ownership
from such Common Stock.
3. Administration
The Plan shall be administered by a designated Omnibus Committee: (the
"Committee") composed of not less than two members of the Board of Directors of
the Company, all of whom
C-1
shall be ineligible to participate in the Plan and shall otherwise qualify as
disinterested persons for purposes of Rule 16b-3(c)(2)(i) promulgated by the
Securities and Exchange Commission. Subject to the provisions of the Plan the
Committee shall have full discretion and the exclusive power (i) to determine
the directors, employees, consultants and advisors to whom Options shall be
granted, the time when such Options shall be granted, the number of Shares which
shall be subject to each Option, the purchase price or exercise price of each
Share which shall be subject to each Option, the period(s) during which such
Options shall be exercisable (whether in whole or in part), and the other terms
and provisions of the respective Options (which need not be identical); (ii) to
construe the Plan and Options granted hereunder; (iii) to prescribe, amend and
rescind rules and regulations relating to the Plan; and (iv) to make all other
determination necessary or advisable for administering the Plan.
Without limiting the foregoing, the Committee also shall have the authority
to require, in its discretion, as a condition of the granting of any Option,
that the Participant agree (i) not to sell or otherwise dispose of Shares
acquired pursuant to the Option for a period of one (1) year (unless waived by
the Company) following the date of acquisition of such Shares and (ii) that in
the event of termination of directorship or employment (or in case of a
consultant or advisor, engagement by Company or any subsidiary corporation or
parent corporation of the Company) of participant, other than as a result of
dismissal without cause, such Participant will not, for a period to be fixed at
the time of the grant of the Option, enter into any employment or participate
directly or indirectly in any business or enterprise which is competitive with
the business of the Company or any subsidiary corporation or parent corporation
of the Company, or enter into any employment in which such employee will be
called to utilize special knowledge obtained through directorship or employment
(or in the case of a consultant or advisor, engagement) with or by the Company
or any subsidiary corporation or parent corporation thereof.
The interpretation of and application by the Committee of any provision of
the Plan shall be final and conclusive. The Committee may in its discretion
establish such rules and guidelines relating to the Plan, as it may deem
desirable.
The Committee may employ such legal counsel, consultants and agents as it
may deem desirable for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent. The Committee shall keep minutes of
its actions under the Plan.
No member of the Board of Directors or the Committee shall be liable for
any action or determination made in good faith with respect to the Plan or any
Awards granted hereunder.
4. Eligibility
The individuals who shall be eligible to participate in the Plan shall be
directors, officers, employees, consultants and advisors of the Company, or any
subsidiary corporation or parent
C-2
corporation of the Company now existing or hereafter formed or acquired, as the
Committee may from time to time determine. An employee who has been granted an
Award in one year shall not necessarily be entitled to be granted Awards in
subsequent years.
5. Stock Options
The Committee may grant Options, as follows, which may be designated as (i)
NQSOs or (ii) ISOs intended to qualify under Code Section 422:
(a) Nonqualified Stock Options. An NQSO is a right to purchase a specified
number of shares of Common Stock during such specified time as the
Committee may determine, not to exceed ten (10) years, at a price
determined by the Committee that, unless deemed otherwise by the
Committee, is not less than the fair market value of the Common Stock
on the date the option is granted.
(i) The purchase price of the Common Stock subject to the NQSO may be
paid in cash. At the discretion of the Committee, the purchase
price may also be paid by the tender of Common Stock or through a
combination of Common Stock and cash or through such other means
as the Committee determines are consistent with the Plan's
purpose and applicable law. No fractional shares of Common Stock
will be issued or accepted.
(ii) Without limiting the foregoing, to the extent permitted by law,
(including relevant state law), (A) the Committee may agree to
accept, as full or partial payment of the purchase price of
Common Stock issued upon the exercise of the NQSO, a promissory
note of the person exercising the NQSO evidencing the person's
obligation to make future cash payments to the Company, which
promissory note shall be payable as determined by the Company
(but in no event later than five (5) years after the date
thereof), shall be secured by a pledge of the shares of Common
Stock purchased and shall bear interest at a rate established by
the Committee and (B) the Committee may also permit the person
exercising the NQSO, either on a selective or aggregate basis, to
simultaneously exercise the NQSO and sell the shares of Common
Stock acquired, pursuant to a brokerage or similar arrangement
approved in advance by the Committee, and use the proceeds from
sale as payment of the Purchase price of such Common Stock.
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(b) Incentive Stock Options. An ISO is an Award in the form of an Option
to purchase Common Stock that complies with the requirements of Code
Section 422 or any successor section.
(i) The aggregate fair market value (determined at the time of the
grant of the Award) of the shares of Common Stock subject to ISOs
which are exercisable by one person for the first time during a
particular calendar year shall not exceed $100,000. To the extent
that ISOs granted to an employee exceed the limitation set forth
in the preceding sentence, ISOs granted last shall be treated as
NQSOs.
(ii) No ISO may be granted under this Plan on or after the tenth
anniversary of the date this Plan is adopted or the date
stockholders approve this Plan, whichever is earlier.
(iii) No ISO may be exercisable more than:
(A) in the case of an employee who is not a Ten Percent
Stockholder, within the meaning of Code Section 422, on the
date the ISO is granted; ten (10) years after the date the
ISO is granted; and
(B) in the case of an employee who is a Ten Percent Stockholder,
within the meaning of Code Section 422, on the date the ISO
is granted, five (5) years after the date the ISO is
granted.
(iv) The exercise price of any ISO shall be determined by the
Committee and shall be no less than:
(A) in the case of an employee who is not a Ten Percent
Stockholder, on the date the ISO is granted, the fair market
value of the Common Stock subject to the ISO on such date,
and
(B) in the case of an employee who is a Ten Percent Stockholder,
on the date the ISO is granted, not less than 110 percent of
the fair market value of the Common Stock subject to the ISO
on such date.
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(v) The Committee may provide that the option price under an ISO may
be paid by one or more of the methods available for paying the
option price of an NQSO.
6. Stock Appreciation Rights
An SAR is a right to receive, upon surrender of the right, but without
payment, an amount payable in cash.
(i) The amount payable with respect to each SAR shall be equal in
value to the applicable percentage of the excess, if any, of the
fair market value of a share of Common Stock on the exercise date
over the exercise price of the SAR. The exercise price of the SAR
shall be determined by the Committee and shall not be less than
the fair market value of a share of Common Stock on the date the
SAR is granted.
(ii) In the case of an SAR granted in tandem with an ISO to an
employee who is a Ten Percent Shareholder on the date of such
grant, the amount payable with respect to each SAR shall be equal
in value to the applicable percentage of the excess, if any, of
the fair market value of a share of Common Stock on the exercise
date over the exercise price of the SAR, which exercise price
shall not be less than 110% of the fair market value of a share
of Common Stock on the date the SAR is granted.
(iii) The Committee shall establish the applicable percentage and
exercise price at the time the SAR is granted.
7. Restricted Stock
Restricted Stock is Common Stock of the Company that is issued to a
participant at a price determined by the Committee, which price per share may
not be less than the par value of the Common Stock, and is subject to
restrictions on transfer and/or such other restrictions on incidents of
ownership as the Committee may determine.
8. Performance Awards
A Performance Award granted under the Plan (i) may be denominated or
payable in cash, Common Stock (including without limitation, Restricted Stock),
other securities or other Awards and (ii) shall confer on the holder thereof the
right to receive payments, in whole or in part, upon the achievement of such
performance goals during such performance periods as the Committee
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shall establish. Subject to the terms of the Plan and any applicable Award
agreement, the performance goals to be achieved during any performance period,
the length of any performance period, the amount of any Performance Award
granted and the amount of any payment or transfer to be made pursuant to any
Performance Award shall be determined by the Committee.
9. Other Stock-Based Incentive Awards
The Committee may from time to time grant Awards under this Plan that
provide the participant with the right to purchase Common Stock or that are
valued by reference to the fair market value of the Common Stock (including, but
not limited to, phantom securities or dividend equivalents). Such Awards shall
be in a form determined by the Committee (and may include terms contingent upon
a change of control of the Company), provided that such Awards shall not be
inconsistent with the terms and purposes of the Plan. The Committee will
determine the price of any Award and may accept any lawful consideration.
10. Price and Payment
If the Shares are listed an a national securities exchange in the United
States on any date on which the fair market value per Share is to be determined,
the fair market value per Share shall be deemed to be the average of the high
and low quotations at which such Shares are sold on such national securities
exchange on such date. If the Shares are listed on a national securities
exchange in the United States on such date but the Shares are not traded on such
date, the fair market value per Share shall be determined as of the closest
preceding date on which such exchange shall have been open for business and the
Shares were traded. If the Shares are listed on more than one national
securities exchange in the United States on the date any such Option is granted,
the Committee shall determine which national securities exchange shall be used
for the purpose of determining the fair market value per Share.
If a public market exists for the Shares on any date on which the fair
market value per Share is to be determined but the Shares are not listed on a
national securities exchange in the United States, the fair market value per
Share shall be deemed to be the mean between the closing bid and asked
quotations for the Shares on such date, the fair market value per Share shall be
deemed to be the mean between the closing bid and asked quotations in the
over-the-counter market for the Shares on the closest date preceding such date
for which such quotations are available.
If no public market exists for the Shares on any date on which the fair
market value per Share is to be determined, the Committee shall, in its sole
discretion and best judgment, determine the fair market value of a Share.
For purposes of this Plan, the determination by the Committee of the fair
market value of a Share shall be conclusive.
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Upon the exercise of an Option, the Company shall cause the purchased
Shares to be issued only when it shall have received the full purchase price for
the Shares in cash or by certified check.
11. Exercise of Options
Options granted under the Plan may be exercised by an optionee only while
the employee is and, continuously since the date the Option was granted, has
been an employee of the Company or one of its subsidiaries, except that (i) if
the optionee's termination of employment is other than for deliberate, willful
or gross misconduct, any Options held by the optionee may be exercised, to the
extent then exercisable, for a period of three months after the date of such
termination of employment; (ii) if such termination of employment is by reason
of retirement or disability, any Options held by the optionee at the time of
retirement or disability will be exercisable for a period of 12 months after the
date of such termination of employment; (iii) in the event of death after
termination of employment pursuant to (i) or (ii) above, the person or persons
to whom the optionee's rights are transferred by will or the laws of descent and
distribution shall have a period of three years from the date of termination of
the optionee's employment to exercise any Options which the optionee could have
exercised during such period; and (iv) in the event of the death of an optionee
while employed, any Options then held by the optionee shall become fully and
immediately exercisable and may be exercised by the person or persons to whom
the optionee's rights are transferred by will or the laws of descent and
distribution for a period of three years after the optionee's death. In no
event, however, shall any Option be exercisable after the date specified in
Section 5, as applicable.
An Option granted hereunder shall be exercisable, in whole or in part, only
by written notice delivered in person or by mail to the Secretary of the Company
at its principal office, specifying the number of shares of Common Stock to be
purchased and accompanied by payment thereof and otherwise in accordance with
the option agreement pursuant to which the Option was granted.
12. Award Agreements
Each Award granted under the Plan shall be evidenced by an Award agreement
between the employee to whom the Award is granted and the Company, setting forth
the number of shares of Common Stock, SARs, or units subject to the Award and
such other terms and conditions applicable to the Award not consistent with the
Plan as the Committee may deem appropriate.
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13. Tax Withholding
The Committee may establish such rules and procedures as it considers
desirable in order to satisfy any obligation of the Company or any subsidiary to
withhold federal income taxes or other taxes with respect to any Award made
under the Plan. Such rules and procedures may provide (i) in the case of Awards
paid in shares of Common Stock, that the person receiving the Award may satisfy
the withholding obligation by instructing the Company to withhold shares of
Common Stock otherwise issuable upon exercise of such Award in order to satisfy
such withholding obligation and (ii) in the case of an Award paid in cash, that
the withholding obligation shall be satisfied by withholding the applicable
amount and paying the net amount in cash to the participant. The employer
corporation may, in its discretion, hold the stock certificate to which such
employee is entitled upon the exercise of an Option as security for the payment
of such withholding tax liability, until sufficient payment of that liability
has been accumulated.
14. Change of Control and Limited Rights
For the purpose of the Plan, a "Change of Control" affecting the Company
shall be deemed to have taken place upon (i) the acquisition by a third person,
including a "group" as defined in Section 13(d)(3) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended, of shares of the Company having 51%
or more of the total number of votes that may be cast for the election of
Directors of the Company; (ii) shareholder approval of a transaction for the
acquisition of the Company, or substantially all of its assets by another entity
or for a merger, reorganization, consolidation or other business combination to
which the Company is a part; or (iii) the election during any period of 24
months or less of 50% or more of the Directors of the Company where such
Directors were not in office immediately prior to such period provided, however,
that no "Change of Control" shall be deemed to have taken place if the Directors
of the Company in office on the date of adoption of the Plan, or their
successors in office nominated by such Directors, affirmatively approve a
resolution to such effect.
In the event of a Change of Control affecting the Company, then,
notwithstanding any provision of the Plan or of any provisions of any Award
agreements entered into between the Company and any participant to the contrary,
all Awards that have not expired and which are then held by any participant (or
the person or persons to whom any deceased participant's rights have been
transferred) shall, as of such Change of Control, become fully and immediately
vested and exercisable and may be exercised for the remaining term of such
Awards.
A limited right may be awarded by the Committee in connection with any
Option granted under the Plan with respect to all or some of the shares of
Common Stock covered by such related Option. A limited right may be granted
either at the time the Option is granted or thereafter at any time prior to the
cancellation, exercise, forfeiture, termination or expiration of the Option. A
limited right may be exercised only during the 60-day period beginning on a
Change of Control of the Company. Notwithstanding the provisions of the
immediately preceding sentences, no limited right may be exercised by an
employee who is subject to Section 16(b)
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of the Securities Exchange Act of 1934, as amended, until the expiration of six
months from the date of grant of the limited right.
Upon the exercise of limited rights, the participant shall receive in cash
an amount equal to the product computed by multiplying (i) the excess of (a) the
highest fair market value per share of Common Stock during the 60-day period
ending on the date the limited right is exercised (or, if greater, the price
offered for a share of Common Stock pursuant to a tender offer pending during
such period) over (b) the Option price per share of Common Stock at which the
related Option is exercisable by (ii) the number of shares of Common Stock with
respect to which the limited right is being exercised. Notwithstanding the
foregoing, in case of a limited right granted in respect of an ISO, the holder
may not receive an amount in excess of such amount as will enable such Option to
qualify as an ISO.
Upon exercise of a limited right, such related Option and any related SAR
shall cease to be exercisable to the extent of the shares of Common Stock with
respect to which such limited right is exercised. Upon the exercise or
termination of a related Option, the limited right with respect to such related
Option shall terminate to the extent of the shares of Common Stock with respect
to which the related Option was exercised or terminated.
15. Dilution or Other Adjustment
If the Company is a party to any merger or consolidation, or undergoes any
separation, reorganization or liquidation, the Board of Directors of the Company
shall have the power to make arrangements, which shall be binding upon the
holders of unexpired Awards, for the substitution of new Awards for, or the
assumption by another corporation of, any unexpired Awards then outstanding
hereunder. In the case of any ISO, such action shall be taken only in the manner
and to the extent permitted by Sections 422 and 424 of the Code. In addition, in
the event of a reclassification, stock split, combination of shares, separation
(including a spin-off), dividend on shares of the Common Stock payable in stock,
or other similar change in capitalization or in the corporate structure of
shares of the Common Stock of the Company, the Committee shall conclusively
determine the appropriate adjustment in the option prices of outstanding
Options, in the number and kind of shares or other securities as to which
outstanding Awards shall be exercisable, and in the aggregate number of shares
with respect to which Awards may be granted. In the case of any ISO, any such
adjustment in the shares or other securities subject to the ISO (including any
adjustment in the Option price) shall be made in such manner as not to
constitute a modification as defined by Section 424(h)(3) of the Code and only
to the extent permitted by Sections 422 and 424 of the Code.
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16. Assignability
No Award granted under this Plan shall be sold, pledged, assigned or
transferred other than by will or the laws of descent and distribution, and
Awards shall be exercisable during the employee's lifetime only by the employee.
17. Amendment or Termination
The Board of Directors of the Company may at any time amend, suspend or
terminate the Plan provided, however, that (i) no change in any Awards
previously granted may be made without the consent of the holder thereof, (ii)
no amendment (other than an amendment authorized by Section 15) may be made
increasing the aggregate number of shares of the Common Stock with respect to
which Awards may be granted, reducing the minimum option price at which Options
may be granted, extending the maximum period during which Awards may be
exercised or changing the class of employees eligible to receive Awards
hereunder, without the approval of the holders of a majority of the outstanding
voting shares of the Company.
18. General Provisions
No Awards may be exercised by the holder thereof if such exercise, and the
receipt of cash or stock thereunder, would be, in the opinion of counsel
selected by the Company, contrary to law or the regulations of any duly
constituted authority having jurisdiction over the Plan.
Absence on leave approved by a duly constituted officer of the Company or
any of its subsidiaries shall not be considered interruption or termination of
service of any employee for any purposes of the Plan or Awards granted
thereunder, except that no Awards may be granted to an employee while he or she
is absent on leave.
No Award recipient shall have any rights as a shareholder with respect to
any shares subject to Awards granted to him or her under the Plan prior to the
date as of which he or she is actually recorded as the holder of such shares
upon the stock records of the Company.
Nothing contained in the Plan or in Awards granted thereunder shall confer
upon any employee any right to continue in the employ of the Company or any of
its subsidiaries or interfere in any way with the right of the Company or any of
its subsidiaries to terminate his or her employment at any time.
Any Award agreement may provide that stock issued upon exercise of any
Awards may be subject to such restrictions, including, without limitation,
restrictions as to transferability and restrictions constituting substantial
risks or forfeiture as the Committee may determine at the time such Award is
granted.
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19. Effective Date
The Plan shall become effective on the date of its adoption by the Board of
Directors of the Company subject to approval of the Plan by the holders of a
majority of the outstanding voting shares of the Company within 12 months after
the date of the Plan's adoption by said Board of Directors. In the event of the
failure to obtain such shareholder approval, the Plan shall be null and void and
the Company shall have no liability thereunder. No Award granted under the Plan
shall be exercisable until such shareholder approval has been obtained.
20. Termination
No Award may be granted under the Plan on or after the date which is ten
(10) years following the effective date specified in Section 19, but Awards
previously granted may be exercised in accordance with their terms.
21. Governing Law
The Plan and such Options as may be granted thereunder and all related
matters shall be governed by, and construed and enforced in accordance with, the
laws of the State of New York, from time to time obtaining, without giving
effect to conflict of law principles thereof.
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