SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 4, 2000
INTERNET CABLE CORPORATION
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(Exact name of registrant as specified in its charter)
NEVADA 000-26011 87-0540291
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
263 KING STREET
CHARLESTON, SOUTH CAROLINA 29401
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(Address of principal executive offices, including zip code)
(843) 722-8007
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(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
THE ACQUISITION OF CABLE SYSTEMS TECHNICAL SERVICES INC.:
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On January 4, 2000, Internet Cable Corporation (the "Company")
completed the acquisition of Cable Systems Technical Services Inc., a
corporation formed under the laws of the Province of Ontario ("Cable Systems")
which resulted in Cable Systems becoming a wholly-owned subsidiary of the
Company. The Company purchased one hundred percent (100%) of the issued and
outstanding common stock of Cable Systems in consideration of: (i) Three Million
Nine Hundred Thousand United States dollars (US$3,900,000.00) in cash; (ii)
warrants to purchase one hundred thousand (100,000) shares of the Company's
common stock at a price of Two United States dollars and Fifty Cents (US$2.50)
per share for a period of two (2) years; and (iii) the Company exercised it
option to extend the Closing Date by payment of an option fee which increased
the purchase price by One Hundred Twenty Thousand dollars (US$120,000.00). In
addition, the Company caused Cable Systems to: (i) satisfy an outstanding loan
to a shareholder of Cable Systems in the amount of Three Hundred Ninety Six
Thousand Seven Hundred Eighty Five United States dollars (US$396,785.00); (ii)
redeem all of its issued and outstanding shares of Series A Preferred Stock; and
(iii) satisfy the discharge of all personal guarantees of debts and other
obligations of Cable Systems, its subsidiaries and its shareholders made to
vendors and lending institutions.
The acquisition was pursuant to the Share Purchase Agreement
dated July 8, 1999, between 1291973 Ontario Limited, Eugene Harbin, Joseph M.
Melanson, Ontario Cable and Contracting Incorporated, Rupel Holdings Inc., Ryon
Future Inc., Vonda Thompson (being all of the stockholders of Cable Systems),
and the Company (the "Share Purchase Agreement").
On January 18, 2000, Joseph M. Melanson and the Company
entered into a three (3) year employment agreement effective as of November 11,
1999 for Mr. Melanson will serve as the Chief Executive Officer and President of
Cable Systems TSi at an annual salary of Two Hundred Fifty Thousand United
States dollars (US$250,000). Pursuant to the employment agreement, Mr. Melanson
will receive a yearly performance bonus in the form of stock and cash based on
the Company's pre-tax earnings reaching a mutually agreed upon target. In
addition, the Company has granted to Mr. Melanson an option to purchase one
million two hundred thousand (1,200,000) shares of its common stock at an
exercise price of Six United States dollars and Twelve and One Half Cents
(US$6.125) per share for a period of five (5) years. Such option shall vest
according to the following schedule: (i) three hundred thousand (300,000) shares
on November 11, 1999, (ii) three hundred thousand (300,000) shares on November
11, 2000, (iii) three hundred thousand (300,000) shares on November 11, 2001,
and (iv) three hundred thousand (300,000) shares on November 11, 2002. The
employment agreement provides that one hundred percent (100%) of the option
shall immediately vest upon the occurrence of certain events, including, but not
limited to, a stock split or the sale of forty five percent (45%) or more of the
Company's assets. The employment agreement also contains a one-year
non-competition provision pursuant to which Mr. Melanson will be prohibited from
engaging in, as owner, stockholder, employee, partner, agent, representative or
otherwise, any business, firm, corporation, or other entity in direct
competition with the business of the Company.
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In addition, Mr. Melanson has been nominated to serve on the
Board of Directors of the Company. The Company's Annual Meeting of Stockholders,
pursuant to which the Stockholders will vote to elect directors, will be held on
January 25, 2000.
The Company has also entered into three (3) year employment
agreements with several of the key employees of Cable Systems.
Prior to the date of the Share Purchase Agreement, there was
no material relationship between the Company, Cable Systems or any of its
shareholders.
Cable Systems provides sophisticated engineering, testing,
maintenance and other services to the cable television industry throughout the
United States and Canada. Cable Systems maintains offices in Chicago, Illinois,
Jacksonville, Florida and Richmond, Virginia, in the United States and in the
cities of Toronto, London and Cambridge in Canada.
THE ACQUISITION OF CAD CONSULTANTS, INC.:
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On January 11, 2000, the Company completed the acquisition of
CAD Consultants, Inc., a New Jersey corporation ("CAD"). The acquisition was
completed by a merger of ICC Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of the Company, into CAD, with CAD, being the surviving
entity. As consideration for the merger, the Company: (i) issued four hundred
fifty thousand shares of it common stock to Craig Lerman, the sole shareholder
of CAD; and (ii) paid to Mr. Lerman Six Hundred Eighty Two Thousand Three
Hundred Seventy Three United States dollars (US$682,373.00) in cash to satisfy
certain liabilities and debts incurred by Mr. Lerman on behalf of CAD.
The acquisition was pursuant to an Agreement and Plan of
Merger dated October 8, 1999, between the Company, ICC Acquisition Corp., CAD
and Mr. Lerman (the "Agreement and Plan of Merger").
On December 20, 1999, Craig Lerman and the Company entered
into a three (3) year employment agreement effective as of October 8, 1999 for
Mr. Lerman to serve as the President of CAD Consultants at an annual salary of
Two Hundred Thousand United States dollars (US$200,000.00). Pursuant to the
employment agreement, the Company granted Mr. Lerman an option to purchase two
hundred thousand (200,0000) shares of its common stock at an exercise price of
Five United States dollars and Fifty Cents ($5.50) per share for a period of
five (5) years. Such option shall vest according to the following schedule: (i)
fifty thousand (50,000 shares on October 8, 1999, (ii) fifty thousand (50,000)
shares on October 8, 2000, (iii) fifty thousand (50,000) shares on October 8,
2001, and (iv) fifty thousand (50,000) shares on October 8, 2002. The employment
agreement also provides that one hundred percent (100%) of the option shall
immediately vest upon the occurrence of certain events, including, but not
limited to, a stock split or the sale of forty five percent (45%) or more of the
Company's assets. The employment agreement also contains a one (1) year
non-competition provision pursuant to which Mr. Lerman is prohibited from
engaging in, as owner, stockholder, employee, partner, agent, representative or
otherwise, any business, firm, corporation, or other entity in direct
competition with the business of the Company.
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The Company has also entered into three (3) year employment
agreements with several of the key employees of CAD.
Prior to the date of the Agreement and Plan of Merger, there
was no material relationship between the Company, Cable Systems or any of its
shareholders.
CAD is a wireless design and installation company that
provides data and voice communication systems solutions to universities,
hospitals and office buildings. CAD's solutions are unique in that CAD allows
its customers to control LAN through wireless connections enabling the users
avoid using outside telephone lines resulting lower Internet access fees. CAD
currently provides services to such companies as Lucent, ATT, Exxon and Mercedes
Benz. CAD has been approached by unsolicited customers and has a large backlog
for wireless design and installations.
ITEM 5. OTHER EVENTS
Effective December 20, 1999 (the "Effective Date"), Timothy R.
Karnes resigned as the Company's President and Chief Executive Officer. On the
Effective Date, the Company's Board of Directors appointed Michael F. Mulholland
to serve as the Company's Chief Executive Officer and President.
On the Effective Date, Michael F. Mulholland and the Company
entered into a three (3) year employment agreement effective as of August 31,
1999 for Mr. Mulholland to serve as the Chief Executive Officer and President at
an annual salary of Three Hundred Thousand United States dollar (US$$300,000).
Pursuant to the employment agreement, Mr. Mulholland will receive a yearly
performance bonus in the form of stock and cash based on the Company's pre-tax
earnings reaching a mutually agreed upon target. In addition, the Company
granted Mr. Mulholland an option to purchase one million five hundred thousand
(1,500,000) shares of its common stock at an exercise price of Four United
States dollars and Sixty Two and One Half Cents (US$4.625) per share for a
period of five (5) years. Such option shall vest according to the following
schedule: (i) three hundred seventy five thousand (375,000) shares on August 31,
1999, (ii) three hundred seventy five thousand (375,000) shares on August 31,
2000, (iii) three hundred seventy five thousand (375,000) shares on August 31,
2001, and (iv) three hundred seventy five thousand (375,000) shares on August
31, 2002. The employment agreement also provides that one hundred percent (100%)
of the option shall immediately vest upon the occurrence of certain events,
including, but not limited to, a stock split or the sale of forty five percent
(45%) or more of the Company's assets. The employment agreement also contains a
one-year non-competition provision pursuant to which Mr. Mulholland is
prohibited from engaging in, as owner, stockholder, employee, partner, agent,
representative or otherwise, any business, firm, corporation, or other entity in
direct competition with the business of the Company.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a),(b) Financial Statements. The financial statements required under Item 7 of
Form 8-K for both of the transactions described in Item 2 are not included in
this initial report on Form 8-K. The Company shall provide such financial
statements by amendment within Sixty (60) days from the date that this initial
Form 8-K is filed with the Securities and Exchange Commission.
(c) Exhibits.
2.1 Share Purchase Agreement dated July 8, 1999, by and between 1291973
Ontario Limited, Eugene Harbin, Joseph Melanson, Ontario Cable and
Contracting Incorporated, Rupel Holdings Inc., Ryon Future Inc., Vonda
Thompson and Internet Cable Corporation.
2.2 Agreement and Plan of Merger dated October 8, 1999 by and between
Internet Cable Corporation, ICC Acquisition Corp., CAD Consultants,
Inc. and Craig Lerman.
99.1 Form of Employment Agreement between Joseph M. Melanson and Internet
Cable Corporation.
99.2 Form of Employment Agreement between Craig Lerman and Internet Cable
Corporation.
99.3 Form of Employment Agreement between Michael F. Mulholland and Internet
Cable Corporation.
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERNET CABLE CORPORATION
By: /S/ WILLIAM F. WALSH
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William F. Walsh
Chief Financial Officer
Dated: January 19, 2000
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