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Exchange Act of 1934 (Amendment No. )
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PC SUPPORT COM, INC.
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PCSUPPORT.COM, INC.
3605 Gilmore Way, 3/rd/ Floor
Burnaby, British Columbia, Canada, V5G 4X5
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
December 11, 2000
Notice is hereby given that the Annual Meeting of Stockholders of
PCsupport.com, Inc., a Nevada corporation, will be held at the Company's offices
on Monday, December 11, 2000, at 2:00 PM for the following purposes:
(a) To elect directors to serve until our next annual meeting of
stockholders and until their successors are duly elected and
qualified;
(b) To approve the adoption of our new 2000 Stock Option Plan;
(c) To ratify the appointment of KPMG LLP as our independent accountants
for the fiscal year ending June 20, 2001; and
(d) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Your attention is directed to the accompanying proxy statement. Only
stockholders of record at the close of business on October 17, 2000 will be
entitled to notice of and to vote at the meeting and any adjournment thereof.
Please sign, date and complete the enclosed proxy and return it promptly in
the accompanying pre-addressed envelope, whether or not you expect to attend the
Annual Meeting, to ensure that your shares will be represented. Your promptness
in returning the enclosed proxy will greatly assist us in preparing for the
Annual Meeting. If you sign and return the accompanying proxy, you may revoke
this proxy at any time before it is voted at the Annual Meeting by following the
procedures set forth in the attached proxy statement.
By Order of the Board of Directors
/s/ Michael G. McLean
-----------------------------------------------
Michael G. McLean
Chairman, President and Chief Executive Officer
Burnaby, British Columbia, Canada
October 27, 2000
PLEASE SIGN AND DATE THE ENCLOSED FORM OF PROXY AND
MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE,
IN ORDER TO ENSURE THAT YOUR VOTES ARE COUNTED.
PROXY STATEMENT
TABLE OF CONTENTS
INTRODUCTION.............................................................. 1
Persons Making the Solicitation...................................... 1
Revocability of Proxy................................................ 1
Voting Securities.................................................... 1
ELECTION OF DIRECTORS..................................................... 2
Nominees for Election to Board of Directors.......................... 2
Committees and Meetings of the Board of Directors.................... 3
Executive Officers and Significant Employees......................... 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............ 5
EXECUTIVE COMPENSATION.................................................... 6
Summary Compensation Table........................................... 6
Compensation of Directors............................................ 6
1999 Stock Option Plan............................................... 6
Employment Agreements................................................ 7
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............................ 8
Private Placement of Common Shares................................... 8
Stock Pooling and Escrow Agreement................................... 8
Consulting Agreement with Director................................... 8
Transactions with ICE Holdings....................................... 8
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE................... 9
PROPOSAL TO APPROVE THE ADOPTION OF THE COMPANY'S 2000 STOCK OPTION PLAN.. 9
Description of the 2000 Plan......................................... 10
Certain Federal Income Tax Consequences.............................. 10
Participation in the 2000 Plan....................................... 11
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS............................ 11
STOCKHOLDER PROPOSALS AT THE NEXT ANNUAL MEETING OF STOCKHOLDERS.......... 12
OTHER MATTERS............................................................. 12
PCSUPPORT.COM, INC. 2000 STOCK OPTION PLAN........................ APPENDIX I
i
PCSUPPORT.COM, INC.
3605 Gilmore Way, 3/rd/ Floor
Burnaby, British Columbia, Canada, V5G 4X5
PROXY STATEMENT
Annual Meeting of Stockholders
December 11, 2000
INTRODUCTION
Persons Making the Solicitation
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of PCsupport.com, Inc., a Nevada corporation (the
"Company"), for use at our Annual Meeting of Stockholders (the "Annual Meeting")
to be held on December 11, 2000, and at any adjournment or postponement thereof.
This Proxy Statement is first being mailed to our stockholders on or about
November 6, 2000. You are requested to sign, date and return the enclosed proxy
card in order to ensure that your shares are represented at our Annual Meeting.
A form of proxy is enclosed for your use. The shares represented by each
properly executed unrevoked proxy will be voted as directed by the stockholder
executing the proxy. If no direction is made, the shares represented by each
properly executed unrevoked proxy will be voted "FOR" the election of
management's nominees for the Board of Directors, the approval of our new 2000
Stock Option Plan and the ratification of the appointment of KPMG LLP as our
independent accountants for the fiscal year ending June 30, 2001. With respect
to any other item of business that may come before the Annual Meeting, the
persons named as proxies will vote in accordance with their discretion.
We will pay the cost of solicitation of proxies, including the cost of
preparation and mailing of the Notice of Annual Meeting, this Proxy Statement,
and the enclosed proxy. We expect to reimburse brokerage houses, fiduciaries,
nominees, and others for their out-of-pocket expenses in forwarding proxy
material to beneficial owners of stock held in their names. Our directors,
officers, and employees may solicit proxies by telephone or in person without
additional compensation.
Revocability of Proxy
You may revoke your proxy at any time before the proxy is voted at the
Annual Meeting by delivering a written notice to the Secretary of the Company,
or by attending the Annual Meeting and voting in person. If, however, your
shares are held of record by a broker, bank or other nominee and you wish to
vote in person at the Annual Meeting, you must obtain a proxy issued in your
name from the record holder.
Voting Securities
Holders of record of our common stock, $0.001 par value (the "Common
Stock"), at the close of business on October 17, 2000 are entitled to notice of
and to vote at the meeting or any adjournment thereof. All outstanding voting
securities on October 17, 2000 consisted of 10,944,662 shares of Common Stock.
Holders of Common Stock are entitled to cast one vote per share on each matter
presented for consideration and action by the stockholders. The presence, in
person or by proxy, of stockholders entitled to cast at least a majority of the
votes entitled to be cast by all stockholders will constitute a quorum for the
transaction of business at the Annual Meeting.
Abstentions may be specified as to all proposals to be brought before the
Annual Meeting other than the election of directors. Votes cast by proxy or in
person at the Annual Meeting will be tabulated by the inspectors of election
appointed for the meeting, and will determine whether or not a quorum is
present. The inspectors of election will treat
1
abstentions as shares that are present and entitled to vote for purposes of
determining the presence of a quorum, but as unvoted for purposes of determining
the approval of any matter submitted to the stockholders for a vote. Approval of
our new 2000 Stock Option Plan and ratification of the appointment of the
independent accountants will require the affirmative vote of at least a majority
in voting interest of the stockholders present in person or by proxy at the
Annual Meeting and entitled to vote thereon. If a broker indicates on the proxy
that it does not have discretionary authority as to certain shares to vote on a
particular matter, those shares will not be considered as present and entitled
to vote with respect to that matter and, therefore, will have no effect on the
outcome of the vote.
The directors to be elected at the Annual Meeting will be elected by a
plurality of the votes cast. Only votes cast for the nominees will be counted,
except that each properly executed unrevoked proxy will be voted for
management's nominees for the Board of Directors in the absence of instructions
to the contrary. Abstentions, broker non-votes and instructions on a proxy to
withhold authority to vote for management's nominees will result in the nominees
receiving fewer votes.
ELECTION OF DIRECTORS
Nominees for Election to Board of Directors
The size of the Company's Board of Directors currently is fixed at five
members. At present, there are four directors who are serving, leaving one
vacancy. W. Benjamin Catalano will not be standing for re-election as a
director at the Annual Meeting, and the Board of Directors has determined to
nominate Michael G. McLean, Steven W. Macbeth and Bruce S. Nelson for re-
election at the Annual Meeting, leaving two vacancies on the Board of Directors.
The directors shall hold office until the next annual meeting of stockholders or
until their successors have been elected and qualified.
We will vote the proxies "FOR" the election of all of the above-named
nominees unless you indicate that the proxy shall not be voted for all or any
one of the nominees. The election of each nominee for director requires a
majority of the votes cast. If for any reason any nominee should, prior to the
Annual Meeting, become unavailable for election as a director, the proxies will
be voted for each such substitute nominee, if any, as may be recommended by
management. In no event, however, will the proxies be voted for a greater
number of persons than the number of nominees named.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE THREE
PERSONS NOMINATED FOR DIRECTOR HEREIN
The following chart sets forth biographical information concerning the
current directors and nominees for election as director.
Principal Occupation for the
Current Positions Past Five Years and
Name Age with Company Certain Other Directorships
- ---- --- ------------ ---------------------------
Michael G. McLean 39 Chairman of the Board, From June 1999 to present, President and Chief
(Director Nominee) President and Chief Executive Executive Officer and a director of the
Officer Company; from 1997 to June 1999, President and
Director of Reconnaissance Technologies, Inc.
("RTI"), a predecessor company to the Company;
from March 1997 to June 1997, Product
Development Manager of Riptide Technologies, a
software development company; from May 1996 to
December 1996, General Manager of a business
unit at Simba Technologies, a software
development and marketing company; and from
1993 to 1996, Software Development Manager at
Health-VISION Corporation, a software company.
2
Steven W. Macbeth 31 Chief Technology Officer, From June 1999 to present, Chief Technology
(Director Nominee) Secretary/Treasurer and Director Officer, Secretary/Treasurer and a director of
the Company; from 1997 to June 1999, Chief
Executive Officer of RTI; from 1996 to 1997,
Cofounder and Director, Product Development of
Riptide Technologies; and from 1995 to 1996,
Technical Project Manager at MPR Teltech.
Bruce S. Nelson 48 Director A director of the Company since June 2000;
(Director Nominee) from 1999 to present, an independent
consultant; from 1998 to 1999, Vice Chairman
and a member of the Management Committee of
Young & Rubicam Inc., a global marketing and
communications company; and from 1994 to 1998,
Executive Vice President, Director of
Worldwide Accounts and Director of Strategy
for Worldwide Accounts at McCann-Erickson
Worldwide, a global marketing company. Mr.
Nelson is a director of Official Payments
Corporation, and also served as a director of
iTurf Inc. and of Euro American Capital
Partners.
W. Benjamin Catalano 36 Director From June 1999 to present, a director of the
Company; from 1999 to present, Vice President
of Corporate Affairs and Director of
Themescapes, Inc., a technology company; and
from 1986 to present, personal business owner
and participant in investment brokerage and
real estate industries.
Committees and Meetings of the Board of Directors
During the fiscal year ended June 30, 2000, the Board of Directors held ten
meetings. All directors attended at least 75% of the last fiscal year's
meetings held while they were serving as directors.
The Company's Audit Committee of the Board of Directors reviews the
independence, professional services, fees, plans and results of the independent
auditors' engagement and recommends their retention or discharge to the Board of
Directors. During the last completed fiscal year, the Audit Committee held one
meeting. Three members of the Audit Committee participated in the one Audit
Committee meeting held during the last completed fiscal year. The Audit
Committee's members are Steven W. Macbeth, Bruce S. Nelson, and W. Benjamin
Catalano.
During the fiscal year ended June 30, 2000, the Company's Compensation
Committee of the Board of Directors held no formal meetings. The Compensation
Committee establishes the compensation of executive officers and administers the
Company's stock option plans. The Compensation Committee's members are Michael
G. McLean, Bruce S. Nelson and W. Benjamin Catalano.
The Board of Directors has no committees other than the Audit Committee
and the Compensation Committee.
3
Executive Officers and Significant Employees
The following chart sets forth information concerning the executive
officers of the Company who are not described above under "Nominees for Election
to the Board of Directors" and other significant employees of the Company.
Current Positions Principal Occupation for the
Name Age with Company Past Five Years
- ---- --- ------------ ---------------
David W. Rowat 45 Vice President and From June 1999 to present, Vice
Chief Financial Officer President, Finance and Chief
Financial Officer of the Company;
from April 1999 to June 1999, Vice
President, finance and Business
Development; and from 1995 to 1999,
founder and President of Strategic
Catalysts Inc.
Bruce McDonald 33 Vice President, Operations From December 1999 to present, Vice
President, Operations of the
Company; from 1996 to 1999, Director
of Customer and Technical Services
for Seanix Technology Inc
("Seanix"); and from 1995 to 1996,
National Sales Manager for Seanix.
4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of October 17, 2000 by (i) each person who is known
by us to own more than 5% of the outstanding Common Stock; (ii) each of our
directors (including the director nominees); (iii) each of our executive
officers who are named in the compensation tables included below in this Proxy
Statement; and (iv) all of our current executive officers and directors as a
group.
Name and Address/1/ Amount and Nature of Approximate Percent of
Beneficial Ownership Ownership of
Common Stock/2/
Advanced Financial Services, Inc./3/ 576,029 5.3%
The Dromond Technologies Group, Inc./4/ 553,440 5.1%
CGTF, LLC/5/ 590,000/6/ 5.3%
Richard and Laurie Kraniak/7/ 600,000/8/ 5.2%
M&J Investment Trust/9/ 600,000/10/ 5.2%
Michael G. McLean 660,220/11/ 6.0%
Steven W. Macbeth 686,195/12/ 6.2%
W. Benjamin Catalano 70,454/13/ 0.6%
Bruce S. Nelson 5,000/14/ 0%
ICE Holdings 595,000/15/ 5.3%
All executive officers and directors as a 1,749,394 15.6%
group/16/
____________________
/1/ Unless otherwise indicated, the address of each person is c/o the Company
at 3605 Gilmore Way, 3/rd/ Floor, Burnaby, British Columbia, Canada V5G
4X5.
/2/ Includes 10,944,662 shares of common stock issued and outstanding plus the
number of shares of Common Stock issuable pursuant to warrants and options
that are currently exercisable, or exercisable by the beneficial owner
listed in this table within 60 days.
/3/ Advanced Financial Services Inc. is located at P.O. Box 3340 Road Town,
Tortola, British Virgin Islands.
/4/ The Dromond Technologies Group, Inc. is located at Suite 305, 2692
Clearbrook Road, Abbotsford, British Columbia, Canada V2T 2Y8.
/5/ CGTF, LLC is located at 200 North Westlake Blvd., Suite 205, Westlake
Village, California 91362.
/6/ Includes 240,000 shares issuable upon exercise of currently exercisable
warrants.
/7/ The address of Mr. and Mrs. Kraniak is 3260 Wellington Court, West
Bloomfield, Michigan 48324.
/8/ Consists of shares issuable upon exercise of currently exercisable
warrants.
/9/ The address of M&J Investment Trust is 14 Woodbridge Road, Hingham,
Massachusetts 02403.
/10/ Consists of shares issuable upon exercise of currently exercisable
warrants.
/11/ Includes half of the 553,440 shares of Common Stock owned by Dromond, as to
which Messrs. McLean and Macbeth have shared voting and investment power.
Also includes 35,000 shares of Common Stock issuable pursuant to options
that are currently exercisable, or exercisable within 60 days.
/12/ Includes half of the 553,440 shares owned by Dromond, as to which Messrs.
McLean and Macbeth have shared voting and investment power. Also includes
54,475 shares issuable pursuant to options that are currently exercisable,
or exercisable within 60 days.
/13/ Includes 15,000 shares issuable pursuant to options that are currently
exercisable, or exercisable within 60 days.
/14/ Includes 5,000 shares issuable pursuant to options that are currently
exercisable, or exercisable within 60 days.
/15/ Includes 250,000 shares issuable upon exercise of currently exercisable
warrants.
/16/ Includes 237,000 shares of common stock issuable pursuant to options are
currently exercisable, or exercisable within 60 days. Also includes the
553,440 shares owned by Dromond, as to which Messrs. McLean and Macbeth
have shared voting and investment power.
5
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the compensation which we paid to Michael G.
McLean, our Chief Executive Officer (the "named executive officer"), for the
fiscal years ended June 30, 1998, 1999 and 2000. No other officer of the
Company received a combined salary and bonus in excess of $100,000 during the
last fiscal year. As we completed the merger with RTI on June 23, 1999, the
information provided in the table includes information for our predecessor, RTI,
for the period December 10, 1997 to June 23, 1999.
Annual Compensation Long-Term All Other
------------------- Compensation Compensation
------------ ------------
Securities
Fiscal Underlying
Name & Principal Position Year/(1)/ Salary Bonus Options
- ------------------------- ------- ------ ----- -------
Michael G. McLean 2000 $77,324/(2)/ $23,456 50,000 $ -0-
CEO & President
1999 $45,565/(2)/ $ -0- 0 $151,274/(3)/
1998 $26,176/(2)/ $ -0- 0 $ 29,388/(4)/
(1) For the twelve months ended June 30, 2000 ("fiscal 2000"), the twelve
months ended June 30, 1999 ("fiscal 1999") and the period from December 10,
1997 to June 30, 1998 ("fiscal 1998").
(2) Includes fees paid to ST Technologies Inc., a company of which Mr. McLean
is the sole owner, amounting to $11,122 for fiscal 2000, $2,926 for fiscal
1999 and $10,788 for fiscal 1998. Also includes Mr. McLean's share of
consulting fees paid by the Company to Dromond, of which Mr. McLean owns
50%, amounting to $35,516 for fiscal 2000, $42,639 for fiscal 1999 and
$15,388 for fiscal 1998.
(3) Includes the difference between the price paid by Mr. McLean in April, 1999
for shares of common stock of PCsupport.com, Inc. ("PCS"), the company
which merged with RTI to form our Company and the then market price of
these shares. See "Certain Relationships and Related Transactions." Also
includes $26,962 in common stock, representing Mr. McLean's 50% share of
63,440 shares of common stock in RTI issued on January 6, 1999 for services
rendered to RTI (as adjusted to reflect the one-for-five exchange ratio in
the merger with PCS).
(4) Represents Mr. McLean's share of the difference between the price paid by
Dromond in January 1998 for 489,800 shares of common stock of RTI and the
then market price.
Compensation of Directors
We grant non-employee directors options to purchase 30,000 shares of Stock
upon their initial election to the Board of Directors. The exercise price of
these options is the market value of the Common Stock at the time the option is
granted, and the options vest on a monthly basis over three years. Directors
who are also officers of the Company receive no additional compensation for
their services as directors. Except for the option grants to non-employee
directors, none of our directors received any compensation for their services as
directors during the last fiscal year. We compensate one of our directors for
his services as a consultant. See "Certain Relationships and Related
Transactions - Consulting Agreement with Director."
1999 Stock Option Plan
We adopted a stock option plan in July 1999 (the "1999 Plan"). The 1999
Plan authorizes the grant of stock options to our directors, officers,
consultants and employees. Under the terms of the Plan, at no time may the
number of shares subject to options result in:
(a) the number of shares reserved for issuance pursuant to stock options
granted to insiders exceeding 15% of our issued and outstanding shares
of Common Stock;
(b) the issuance to insiders, within a one-year period, of a number of
shares exceeding 15% of our issued and outstanding shares of Common
Stock; or
(c) the issuance to any one individual, within a one-year period, of a
number of shares exceeding 5% of our issued and outstanding shares of
Common Stock.
6
The following table sets forth the grants of stock options to the named
executive officer during our fiscal year ended June 30, 2000:
Number of Securities % of Total Options/SARS
Underlying Options/SARs Granted to Employees in
Name Granted Fiscal Year Exercise or Base Price Expiration Date
---- ------- ----------- ---------------------- ---------------
Michael G. McLean 50,000 3.8% $1.00 July 2, 2004
The following table sets forth information concerning the value of unexercised
stock options held by the named executive officer as of June 30, 2000:
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options at Fiscal
Shares Acquired on at Fiscal Year-End Year End
Name Exercise Value Realized (Exercisable/Unexercisable) (Exercisable/Unexercisable)
---- -------- -------------- ------------------------------- -------------------------------
Michael G. McLean 0 0 16,666/33,334 $16,666/$33,334
Employment Agreements
We have entered into an employment agreement with Michael G. McLean, our
Chief Executive Officer, that commenced in March 2000. Under this agreement,
Mr. McLean received an initial monthly salary of (Cdn.) $8,300 which increased
to (Cdn.) $12,500 in April 2000. An annual cash bonus equal to up to 75% of the
annual salary will be paid, based upon achieving performance standards that are
agreed to by Mr. McLean and the Company. Either Mr. McLean or the Company may
terminate the agreement at any time. If the Company terminates Mr. McLean's
employment agreement without cause, the Company is required to pay him severance
equal to a total of nine months salary plus one month for each year or partial
year of his employment with the Company.
7
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Private Placement of Common Shares
The following current and former directors and officers of the Company
participated in a private placement of common stock of PCS completed in April
1999 at a price of $0.01 per share as set forth below. This private placement
was conducted before the completion of the merger of PCS and RTI (with issuance
of the securities in this offering being subject to completion of the merger),
at a time when the foregoing directors and officers were not directors and
officers of PCS, but were directors and officers of RTI. A total of 3,222,255
shares were sold in the private placement. 1,500,000 of these shares were sold
to directors and officers of RTI at a price of $0.01 per share, as detailed in
the chart below. An additional 593,000 shares were sold at a price of $0.01 per
share, 399,000 shares were sold at a price of $0.50 per share, and the remaining
730,255 shares were sold at a price of $1.00 per share to persons who were not
affiliated with PCS or RTI.
Number of PCS
Name of Director or Officer Shares Acquired
--------------------------- ---------------
Michael G. McLean 362,500
Steven W. Macbeth 362,500
Alan Ackerman/1/ 275,000
David W. Rowat 200,000
Gary Yurkovich/2/ 300,000
Total 1,500,000
(1) Mr. Ackerman resigned as a director on June 23, 1999.
(2) Mr. Yurkovich's employment with us ended on June 28, 1999, and we
repurchased 285,000 of these shares for $0.01 per share.
Stock Pooling and Escrow Agreement
Pursuant to a Stock Pooling and Escrow Agreement, dated July 31, 1999
("Pooling Agreement"), and amended on March 6, 2000, Messrs. McLean, Macbeth,
Rowat, Rowlands and Ackerman and Dromond and Advanced have agreed to pool an
aggregate of 2,179,429 shares of Common Stock and options and warrants to
purchase 266,666 shares of Common Stock. These securities may not be sold or
transferred until they are released from the pool. If Messrs. McLean, Macbeth
or Rowat cease to participate on a full-time basis in our business, we have the
option to repurchase certain of their shares at a price of $0.01 per share.
This right of repurchase lapses as to a certain number of shares each month
depending upon the individual, and lapses completely on January 1, 2002.
The shares, options and warrants will be released from the pool in
accordance with the following schedule:
March 6, 2000 May 25, 2000 November 25, 2000 May 25, 2001
------------- ------------ ----------------- -------------
Shares 100,000 500,000 850,000 729,429
Options 0 133,334 66,666 66,666
Consulting Agreement with Director
We have engaged one of our directors, Bruce Nelson, to perform certain
consulting services for us. Under the terms of this Agreement, we have paid
Bruce Nelson $50,000 for each of the fiscal years ending June 30, 2000 and 2001.
Transactions with ICE Holdings
In March 2000, the Company entered into an agreement with ICE Holdings
pursuant to which ICE agreed to provide certain investment banking services to
the Company. In connection with this agreement, the Company reimbursed ICE
Holdings for $40,000 of its legal and certain other out-of-pocket expenses and
paid ICE Holdings a
8
commission equal to 7.5% of the proceeds received by the Company from a private
placement of 600,000 shares of Common Stock arranged by ICE Holdings at $2.125
per share. (ICE Holdings and its affiliates purchased 345,000 of the shares in
the foregoing private placement.) The Company's agreement with ICE Holdings
further provides for the issuance of two-year warrants to ICE Holdings to
purchase up to 1,000,000 shares of Common Stock upon the achievement of certain
specified financing milestones. In May 2000, the Company agreed to accelerate
the issuance of a portion of these warrants, which were issued to an affiliate
of ICE Holdings as follows:
(a) warrants to purchase 125,000 shares at $4.50 per share;
(b) warrants to purchase 62,500 shares at $3.38 per share; and
(c) warrants to purchase 62,500 shares at $2.25 per share.
The Company also agreed to pay ICE Holdings a commission equal to 7.5% of
the offering proceeds in connection with a subsequent private placement in which
$2,025,000 of securities have been sold to date. In addition, pursuant to this
private placement, an additional 250,000 warrants will be issued to ICE Holdings
at an exercise price to be determined, and the Company will pay ICE $50,000 of
corporate finance consulting fees.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, as well as persons who own more than 10% of
the Company's Common Stock, to file with the Commission initial reports of
beneficial ownership and reports of changes in beneficial ownership of the
Common Stock. Directors, executive officers and greater-than-10% stockholders
are required by the Commission's regulations to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely upon a review of these forms, the Company believes that all of
the officers, directors and persons who own more than 10% of the Company's
Common Stock have fully and timely reported to the Commission all of the
information required by Section 16(a) for the fiscal year ended June 30, 2000,
except as follows:
Michael G. McLean was required to file a Form 4 to report his sale of
shares in March 2000. Mr. McLean did not file a Form 4 reporting this
transaction, which subsequently will be reported by Mr. McLean on a Form 5.
W. Benjamin Catalano filed a Form 4 to report his sale of shares in March
2000; however the form was filed after it was due. Mr. Catalano was required to
file a Form 4 to report a purchase of shares in August 2000. Mr. Catalano did
not file the Form 4 for this transaction, which subsequently will be reported by
Mr. Catalano on a Form 5.
Bruce S. Nelson did not file the required Form 3 to report his becoming a
director, which will be reported by Mr. Nelson on a Form 5.
Messrs. McLean, Macbeth, Catalano, Nelson and Rowat will file Form 5's to
report grants of stock options made to them, although these Form 5's will be
filed after their due dates.
PROPOSAL TO APPROVE THE ADOPTION OF THE COMPANY'S
2000 STOCK OPTION PLAN
In October 2000, the Company's Board of Directors unanimously adopted and
approved the Company's 2000 Stock Option Plan (the "2000 Plan"). The purpose of
the 2000 Plan is to enable the Company to attract and retain top-quality
employees, officers, directors and consultants who are primarily residents of
the United States and to provide such employees, officers, directors and
consultants with an incentive to enhance stockholder return. The full text of
the 2000 Plan appears as Appendix I to this Proxy Statement and the description
of the 2000 Plan herein is qualified by reference to the text of the 2000 Plan.
9
Description of the 2000 Plan
The key terms of the 2000 Plan are outlined below.
The 2000 Plan provides for the grant of options to officers, directors,
other key employees and consultants of the Company to purchase up to an
aggregate of 1,500,000 shares of Common Stock. The 2000 Plan is to be
administered by the Board of Directors or a committee of the Board, and is
currently administered by the Compensation Committee of the Board of Directors,
which has complete discretion to select the optionees and to establish the terms
and conditions of each option, subject to the provisions of the 2000 Plan. The
Company has formed a 162(m) committee consisting of two outside directors which
may determine the grants, including the terms and conditions, of options to
executive officers. Options granted under the 2000 Plan may be "incentive stock
options" as defined in Section 422 of the United States Internal Revenue Code
(the "Code"), or nonqualified options, and will be designated as such. Options
covering no more than 500,000 shares of Common Stock may be granted to any one
employee in any twelve-month period.
The exercise price of incentive stock options may not be less than 100% of
the fair market value of the Common Stock as of the date of grant (110% of the
fair market value if the grant is to an employee who owns more than 10% of the
total combined voting power of all classes of capital stock of the Company).
The Code currently limits to $100,000 the aggregate value of Common Stock that
may become exercisable in any one year pursuant to incentive stock options under
the 2000 Plan or any other option plan adopted by the Company. Nonqualified
options may be granted under the 2000 Plan at an exercise price less than the
fair market value of the Common Stock on the date of grant. Nonqualified
options also may be granted without regard to any restriction on the amount of
Common Stock that may be acquired upon exercise of such options in any one year.
The closing sale price of the Common Stock on October 27, 2000 as reported by
the Nasdaq Over-the-Counter Bulletin Board was $1.625.
In general, upon termination of employment of an optionee, all options
granted to such person which were not exercisable on the date of such
termination would immediately terminate, and any options that are exercisable
would terminate 30 days following termination of employment. In the event of a
merger of the Company with or into another company or certain other similar
transactions, options then outstanding will terminate, although the Company may
in its sole discretion permit exercise of those options even if they would not
otherwise be exercisable or provide for those options to be assumed by the
successor corporation. The Company may also in its sole discretion permit the
exercise of options even if they would not otherwise yet be exercisable upon
certain changes in the control of the Company.
Options may not be exercised more than ten years after the grant (five
years after the grant if the grant is an incentive stock option to an employee
who owns more than 10% of the total combined voting power of all classes of
capital stock of the Company. Options granted under the 2000 Plan are not
transferable (except with the consent of the Company in the case of nonqualified
options) and may be exercised only by the respective grantees during their
lifetime or by their heirs, executors or administrators in the event of death.
Under the 2000 Plan, shares subject to cancelled or terminated options are
reserved for subsequently granted options. The number of options outstanding
and the exercise price thereof are subject to adjustment in the case of certain
transactions such as mergers, recapitalizations, stock splits or stock
dividends. The 2000 Plan is effective for ten years, unless sooner terminated
or suspended.
Certain U.S. Federal Income Tax Consequences
Incentive stock options under the 2000 Plan are afforded favorable federal
income tax treatment under the Code for U.S. residents. If an option is treated
as an incentive stock option, the optionee will recognize no income upon grant
or exercise of the option unless the alternative minimum tax rules apply. Upon
an optionee's sale of the shares (assuming that the sale occurs at least two
years after grant of the option and at least one year after exercise of the
option), any gain will be taxed to the optionee as long-term capital gain. If
the optionee disposes of the shares prior to the expiration of the above holding
periods, then the optionee will recognize ordinary income in an amount generally
measured as the difference between the exercise price and the lower of the fair
market value of the shares at the exercise date or the sale price of the shares.
Any gain or loss recognized on such a premature sale of the shares in excess of
the amount treated as ordinary income will be characterized as capital gain or
loss.
All other options granted under the 2000 Plan are nonstatutory stock
options and will not qualify for any special tax benefits to the optionee. An
optionee generally will not recognize any taxable income at the time he or she
is granted a nonstatutory stock option. However, upon exercise of the
nonstatutory stock option, the optionee will recognize ordinary income for
federal income tax purposes in an amount generally measured as the excess of the
then fair market value of each share over its exercise price. Upon an
optionee's resale of such shares, any difference between the sale price and the
fair market value of such shares on the date of exercise will be treated as
capital gain or loss and will generally qualify for long-term capital gain or
loss treatment if the shares have been held for more than one year.
10
Subject to the limits on deductibility of employee remuneration under
Section 162(m) of the Code, the Company will generally be entitled to a tax
deduction in the amount that an optionee recognizes as ordinary income with
respect to an option. Options granted to executive officers under the 2000 Plan
are intended to qualify as performance-based compensation for purposes of
Section 162(m) of the Code, and the Company will generally be entitled to a tax
deduction in the amount recognized by such officers upon exercise of the
options. No tax authority or court has ruled on the applicability of Section
162(m) to the 2000 Plan and any final determination of the deductibility of
amounts realized upon exercise of an option granted under the 2000 Plan could
ultimately be made by the Internal Revenue Service or a court having final
jurisdiction with respect to the matter. The Company retains the right to grant
options under the 2000 Plan in accordance with the terms of the 2000 Plan
regardless of any final determination as to the applicability of Section 162(m)
of the Code to these grants.
The Board of Directors may suspend, terminate, modify or amend the 2000
Plan, provided that stockholder approval will be obtained if such approval is
required to preserve incentive stock option treatment for federal income tax
purposes or the Board of Directors concludes that stockholder approval is
advisable. No suspension, termination, modification or amendment of the 2000
Plan may, without the consent of the participant to whom an option has already
been granted, affect the rights of such participant under such option, except
for modifications made to conform the 2000 Plan or incentive stock options
granted under the Plan to the requirements of federal or other tax laws relating
to incentive stock options.
The foregoing does not purport to be a complete summary of the federal
income tax considerations that may be relevant to holders of options or to the
Company. It also does not reflect provisions of the income tax laws of any
municipality, state or foreign country in which an optionee may reside, nor does
it reflect the tax consequences of an optionee's death.
Participation in the 2000 Plan
One non-employee director and three employees resident in the United States
currently are eligible to participate in the 2000 Plan. No options have yet been
granted under the 2000 Option Plan, and future grants to eligible persons are
not currently determinable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE THE
ADOPTION OF THE COMPANY'S 2000 STOCK OPTION PLAN.
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed the firm of KPMG LLP as our
independent auditors for the fiscal year ending June 30, 2001, subject to
ratification by the stockholders. The Company first engaged KPMG LLP as its
principal independent accountants to audit the Company's financial statements in
July 1999. Neither the Company nor its predecessor for accounting purposes,
RTI, had engaged any accountants prior to the engagement of KPMG LLP. A
representative of KPMG LLP is expected to attend the Annual Meeting. He or she
will have an opportunity to make a statement, if he or she desires to do so, and
will be available to respond to appropriate questions.
Stockholder ratification of the selection of KPMG LLP as our independent
public accountants is not required by our Bylaws or otherwise. However, the
Board is submitting the selection of KPMG LLP to the stockholders for
ratification as a matter of good corporate practice. If the stockholders fail
to ratify the selection, the Board of Directors will reconsider whether or not
to retain that firm. Even if the selection is ratified, the Board of Directors
in their discretion may direct the appointment of a different independent
accounting firm at any time during the fiscal year if it determines that such a
change would be in the best interests of the Company and our stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF KPMG LLP AS
OUR INDEPENDENT PUBLIC ACCOUNTANTS
11
STOCKHOLDER PROPOSALS AT THE NEXT ANNUAL MEETING OF STOCKHOLDERS
Stockholders who intend to submit proposals to our stockholders at the next
annual meeting of stockholders must submit such proposals within a reasonable
time before the Company begins to print and mail its proxy materials in order
for such proposals to be included in the proxy materials. Stockholder proposals
should be submitted to David W. Rowat, Chief Financial Officer, at
PCsupport.com, Inc., 3605 Gilmore Way, 3rd Floor, Burnaby, British Columbia,
V5G 4X5.
OTHER MATTERS
If any matters not referred to in this Proxy Statement should properly come
before the Annual Meeting, the persons named in the proxies will vote the shares
represented thereby in accordance with their judgment. Management is not aware
of any such matters that may be presented for action at the Annual Meeting.
Matters incident to the conduct of the Annual Meeting may be voted upon pursuant
to the proxies.
The Company's Annual Report on Form 10-KSB for the fiscal year ended June
30, 2000 accompanies this Proxy Statement. Any securityholder of the Company may
obtain a copy of any exhibit to the Form 10-KSB upon request to David W. Rowat,
Chief Financial Officer, at PCsupport.com, Inc., 3605 Gilmore Way, 3rd Floor,
Burnaby, British Columbia, V5G 4X5, accompanied by payment of a fee in an amount
equal to the Company's reasonable expenses to furnish that exhibit.
By Order of the Board of Directors
/s/ Michael G. McLean
------------------------------------------------
Michael G. McLean
Chairman, President and Chief Executive Officer
October 27, 2000
12
APPENDIX I
----------
2000 STOCK OPTION PLAN
OF
PCSUPPORT.COM, INC.
1. PURPOSES OF THE PLAN
--------------------
The purposes of the 2000 Stock Option Plan ("Plan") of PCSupport.com, Inc.,
a Nevada corporation (the "Company"), are to:
(a) Encourage selected employees, directors, consultants and
advisers to improve operations and increase profits of the Company;
(b) Encourage selected employees, directors, consultants and
advisers to accept or continue employment or association with the Company or its
affiliates; and
(c) Increase the interest of selected employees, directors,
consultants and advisers in the Company's welfare through participation in the
growth in value of the common stock of the Company (the "Common Stock").
Options granted under this Plan ("Options") may be "incentive stock
options" ("ISOs") intended to satisfy the requirements of Section 422 of the
United States Internal Revenue Code of 1986, as amended, and the regulations
thereunder (the "Code"), or "nonqualified options" ("NQOs").
2. ELIGIBLE PERSONS
----------------
Every person who at the date of grant of an Option is an employee of the
Company or of any Affiliate (as defined below) of the Company is eligible to
receive NQOs or ISOs under this Plan. Every person who at the date of grant is a
consultant or adviser to, or non-employee director of, the Company or any
Affiliate (as defined below) of the Company is eligible to receive NQOs under
this Plan. The term "Affiliate" as used in this Plan means a parent or
subsidiary corporation as defined in the applicable provisions (currently
Sections 424(e) and (f), respectively) of the Code. The term "employee" includes
an officer or director who is an employee of the Company. The term "consultant"
includes persons employed by, or otherwise affiliated with, a consultant. The
term "adviser" includes persons employed by, or otherwise affiliated with, an
adviser.
3. STOCK SUBJECT TO THIS PLAN; MAXIMUM NUMBER OF GRANTS
----------------------------------------------------
Subject to the provisions of Section 6.1.1 of this Plan, the total number
of shares of stock which may be issued under Options granted pursuant to this
Plan shall not exceed 1,500,000 shares of Common Stock. The shares covered by
the portion of any grant under this
1
Plan which expires, terminates or is cancelled unexercised shall become
available again for grants under this Plan. Where the exercise price of an
Option is paid by means of the optionee's surrender of previously owned shares
of Common Stock or the Company's withholding of shares otherwise issuable upon
exercise of the Option as permitted herein, only the net number of shares issued
and which remain outstanding in connection with such exercise shall be deemed
"issued" and no longer available for issuance under this Plan. No eligible
person shall be granted Options during any twelve-month period covering more
than 500,000 shares.
4. ADMINISTRATION
--------------
(a) This Plan shall be administered by the Board of Directors of
the Company (the "Board") or by a committee (the "Committee") to which
administration of this Plan, or of part of this Plan, is delegated by the Board
(in either case, the "Administrator"). The Board shall appoint and remove
members of the Committee in its discretion in accordance with applicable laws.
If necessary in order to comply with Rule 16b-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or Section 162(m) of the Code, the
Committee shall, in the Board's discretion, be comprised solely of "non-employee
directors" within the meaning of said Rule 16b-3 or "outside directors" within
the meaning of Section 162(m) of the Code. The foregoing notwithstanding, the
Administrator may delegate nondiscretionary administrative duties to such
employees of the Company as it deems proper and the Board, in its absolute
discretion, may at any time and from time to time exercise any and all rights
and duties of the Administrator under this Plan.
(b) Subject to the other provisions of this Plan, the
Administrator shall have the authority, in its discretion: (i) to grant Options;
(ii) to determine the fair market value of the Common Stock subject to Options;
(iii) to determine the exercise price of Options granted; (iv) to determine the
persons to whom, and the time or times at which, Options shall be granted, and
the number of shares subject to each Option; (v) to construe and interpret the
terms and provisions of this Plan and of any option agreement and all Options
granted under this Plan; (vi) to prescribe, amend, and rescind rules and
regulations relating to this Plan; (vii) to determine the terms and provisions
of each Option granted (which need not be identical), including but not limited
to, the time or times at which Options shall be exercisable; (viii) with the
consent of the optionee, to modify or amend any Option; (ix) to reduce the
exercise price of any Option; (x) to accelerate or defer (with the consent of
the optionee) the exercise date of any Option; (xi) to authorize any person to
execute on behalf of the Company any instrument evidencing the grant of an
Option; and (xii) to make all other determinations deemed necessary or advisable
for the administration of this Plan or any option agreement or Option. The
Administrator may delegate nondiscretionary administrative duties to such
employees of the Company as it deems proper.
(c) All questions of interpretation, implementation, and
application of this Plan or any option agreement or Option shall be determined
by the Administrator, which determination shall be final and binding on all
persons.
2
5. GRANTING OF OPTIONS; OPTION AGREEMENT
-------------------------------------
(a) No Options shall be granted under this Plan after 10 years
from the date of adoption of this Plan by the Board.
(b) Each Option shall be evidenced by a written stock option
agreement, in form satisfactory to the Administrator, executed by the Company
and the person to whom such Option is granted. In the event of a conflict
between the terms or conditions of an option agreement and the terms and
conditions of this Plan, the terms and conditions of this Plan shall govern.
(c) The stock option agreement shall specify whether each Option
it evidences is an NQO or an ISO, provided, however, all Options granted under
this Plan to non-employee directors, consultants and advisers of the Company are
intended to be NQOs.
(d) Subject to Section 6.3.3 with respect to ISOs, the
Administrator may approve the grant of Options under this Plan to persons who
are expected to become employees, directors, consultants or advisers of the
Company, but are not employees, directors, consultants or advisers at the date
of approval, and the date of approval shall be deemed to be the date of grant
unless otherwise specified by the Administrator.
6. TERMS AND CONDITIONS OF OPTIONS
-------------------------------
Each Option granted under this Plan shall be subject to the terms and
conditions set forth in Section 6.1. NQOs shall be also subject to the terms and
conditions set forth in Section 6.2, but not those set forth in Section 6.3.
ISOs shall also be subject to the terms and conditions set forth in Section 6.3,
but not those set forth in Section 6.2.
6.1 Terms and Conditions to Which All Options Are Subject. All Options
-----------------------------------------------------
granted under this Plan shall be subject to the following terms and conditions:
6.1.1 Changes in Capital Structure. Subject to Section 6.1.2, if the
----------------------------
stock of the Company is changed by reason of a stock split, reverse stock split,
stock dividend, recapitalization, combination or reclassification, or if the
Company effects a spin-off of the Company's subsidiary, appropriate adjustments
shall be made by the Administrator, in its sole discretion, in (a) the number
and class of shares of stock subject to this Plan and each Option outstanding
under this Plan, and (b) the exercise price of each outstanding Option;
provided, however, that the Company shall not be required to issue fractional
shares as a result of any such adjustments.
6.1.2 Corporate Transactions. Except as otherwise provided in the
----------------------
stock option agreement, in the event of a Corporate Transaction (as defined
below), the Administrator shall notify each optionee at least 30 days prior
thereto or as soon as may be practicable. To the extent not previously
exercised, all Options shall terminate immediately prior to the consummation of
such Corporate Transaction unless the Administrator determines otherwise in
3
its sole discretion; provided, however, that the Administrator, in its sole
discretion, may (i) permit exercise of any Options prior to their termination,
even if such Options would not otherwise have been exercisable, and (ii) provide
that all outstanding Options shall be assumed or an equivalent option
substituted by an applicable successor corporation or any Affiliate of the
successor corporation in the event of a Corporate Transaction. A "Corporate
Transaction" means a liquidation or dissolution of the Company, a merger or
consolidation of the Company with or into another corporation or entity, a sale
of all or substantially all of the assets of the Company, or a purchase or other
acquisition of more than 50 percent of the outstanding capital stock of the
Company in a single transaction or a series of related transactions by one
person or more than one person acting in concert.
6.1.3 Time of Option Exercise. Subject to Section 5 and Section
-----------------------
6.3.4, an Option granted under this Plan shall be exercisable (a) immediately as
of the effective date of the stock option agreement granting the Option, or (b)
in accordance with a schedule or performance criteria as may be set by the
Administrator and specified in the written stock option agreement relating to
such Option. In any case, no Option shall be exercisable until a written stock
option agreement in form satisfactory to the Company is executed by the Company
and the optionee.
6.1.4 Option Grant Date. The date of grant of an Option under this
-----------------
Plan shall be the effective date of the stock option agreement granting the
Option.
6.1.5 Nontransferability of Option Rights. Except with the express
-----------------------------------
written approval of the Administrator which approval the Administrator is
authorized to give only with respect to NQOs, no Option granted under this Plan
shall be assignable or otherwise transferable by the optionee except by will or
by the laws of descent and distribution. During the life of the optionee, an
Option shall be exercisable only by the optionee.
6.1.6 Payment. Except as provided below, payment in full, in cash or
-------
by certified check, shall be made for all stock purchased at the time written
notice of exercise of an Option is given to the Company, and proceeds of any
payment shall constitute general funds of the Company. The Administrator, in the
exercise of its absolute discretion after considering any tax, accounting and
financial consequences, may authorize any one or more of the following
additional methods of payment:
(a) Acceptance of the optionee's full recourse promissory note
for all or part of the Option price, payable on such terms and bearing such
interest rate as determined by the Administrator (but in no event less than the
minimum interest rate specified under the Code at which no additional interest
or original issue discount would be imputed), which promissory note may be
either secured or unsecured in such manner as the Administrator shall approve
(including, without limitation, by a security interest in the shares of the
Company);
(b) Subject to the discretion of the Administrator, after
considering any applicable tax, accounting and financial consequences, and the
terms of the stock option agreement granting the Option, delivery by the
optionee of shares of Common
4
Stock already owned by the optionee for all or part of the Option price,
provided the fair market value (determined as set forth in Section 6.1.9) of
such shares of Common Stock is equal on the date of exercise to the Option
price, or such portion thereof as the optionee is authorized to pay by delivery
of such stock;
(c) Subject to the discretion of the Administrator, after
considering any applicable tax, accounting and financial consequences, through
the surrender of shares of Common Stock then issuable upon exercise of the
Option, provided the fair market value (determined as set forth in Section
6.1.9) of such shares of Common Stock is equal on the date of exercise to the
Option price, or such portion thereof as the optionee is authorized to pay by
surrender of such stock; and
(d) By means of so-called cashless exercises as permitted
under applicable rules and regulations of the Securities and Exchange Commission
and the Federal Reserve Board.
6.1.7 Withholding and Employment Taxes. In the case of an employee
--------------------------------
exercising an NQO, at the time of exercise and as a condition thereto, or at
such other time as the amount of such obligation becomes determinable, the
optionee shall remit to the Company in cash or by certified check all applicable
federal and state withholding and employment taxes.
6.1.8 Other Provisions. Each Option granted under this Plan may
----------------
contain such other terms, provisions, and conditions not inconsistent with this
Plan as may be determined by the Administrator, and each ISO granted under this
Plan shall include such provisions and conditions as are necessary to qualify
the Option as an "incentive stock option" within the meaning of Section 422 of
the Code.
6.1.9 Determination of Value. For purposes of this Plan, the fair
----------------------
market value of Common Stock or other securities of the Company shall be
determined as the closing price of such stock as reported on the securities
exchange on which it is traded on the date the value is to be determined, but if
selling prices are not reported, its fair market value shall be the mean between
the high bid and low asked prices for such stock on the date the value is to be
determined (or if there are no quoted prices for the date of grant, then for the
last preceding business day on which there were quoted prices).
6.1.10 Option Term. Subject to Section 6.3.4, no Option shall be
-----------
exercisable more than 10 years after the date of grant, or such lesser period of
time as is set forth in the stock option agreement (the end of the maximum
exercise period stated in the stock option agreement is referred to in this Plan
as the "Expiration Date").
5
6.2 Terms and Conditions to Which Only NQOs Are Subject. Options granted
---------------------------------------------------
under this Plan which are designated as NQOs shall be subject to the following
terms and conditions:
6.2.1 Exercise Price.
--------------
(a) The exercise price of an NQO shall be the amount
determined by the Administrator as specified in the option agreement.
(b) To the extent required by applicable laws, rules and
regulations, the exercise price of an NQO granted to any person who owns,
directly or by attribution under the Code (currently Section 424(d)), stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or of any Affiliate (a "Ten Percent
Stockholder") shall in no event be less than 110% of the fair market value
(determined in accordance with Section 6.1.9) of the stock covered by the Option
at the time the Option is granted.
6.2.2 Termination of Employment. Except as otherwise provided in the
-------------------------
stock option agreement, if for any reason an optionee ceases to be employed by
the Company or any of its Affiliates, Options that are NQOs held at the date of
termination (to the extent then exercisable) may be exercised in whole or in
part at any time within 30 days of the date of such termination (but in no event
after the Expiration Date). For purposes of this Section 6.2.2, "employment"
includes service as a director, consultant or adviser. For purposes of this
Section 6.2.2, an optionee's employment shall not be deemed to terminate by
reason of the optionee's transfer from the Company to an Affiliate, or vice
versa, or sick leave, military leave or other leave of absence approved by the
Administrator, if the period of any such leave does not exceed 90 days or, if
longer, if the optionee's right to reemployment by the Company or any Affiliate
is guaranteed either contractually or by statute.
6.3 Terms and Conditions to Which Only ISOs Are Subject. Options granted
---------------------------------------------------
under this Plan which are designated as ISOs shall be subject to the following
terms and conditions:
6.3.1 Exercise Price.
--------------
(a) The exercise price of an ISO shall be not less than the
fair market value (determined in accordance with Section 6.1.9) of the stock
covered by the Option at the time the Option is granted.
(b) The exercise price of an ISO granted to any Ten Percent
Stockholder shall in no event be less than 110% of the fair market value
(determined in accordance with Section 6.1.9) of the stock covered by the Option
at the time the Option is granted.
6.3.2 Disqualifying Dispositions. If stock acquired by exercise of an
--------------------------
ISO granted pursuant to this Plan is disposed of in a "disqualifying
disposition" within the meaning of Section 422 of the Code (a disposition within
two years from the date of grant of the Option
6
or within one year after the transfer of such stock on exercise of the Option),
the holder of the stock immediately before the disposition shall promptly notify
the Company in writing of the date and terms of the disposition and shall
provide such other information regarding the Option as the Company may
reasonably require.
6.3.3 Grant Date. If an ISO is granted in anticipation of employment
----------
as provided in Section 5(d), the Option shall be deemed granted, without further
approval, on the date the grantee assumes the employment relationship forming
the basis for such grant, and, in addition, satisfies all requirements of this
Plan for Options granted on that date.
6.3.4 Term. Notwithstanding Section 6.1.10, no ISO granted to any Ten
----
Percent Stockholder shall be exercisable more than five years after the date of
grant.
6.3.5 Termination of Employment. Except as otherwise provided in the
-------------------------
stock option agreement, if for any reason an optionee ceases to be employed by
the Company or any of its Affiliates, Options that are ISOs held at the date of
termination (to the extent then exercisable) may be exercised in whole or in
part at any time within 30 days of the date of such termination (but in no event
after the Expiration Date). For purposes of this Section 6.3.5, an optionee's
employment shall not be deemed to terminate by reason of the optionee's transfer
from the Company to an Affiliate, or vice versa, or sick leave, military leave
or other leave of absence approved by the Administrator, if the period of any
such leave does not exceed 90 days or, if longer, if the optionee's right to
reemployment by the Company or any Affiliate is guaranteed either contractually
or by statute.
7. MANNER OF EXERCISE
------------------
(a) An optionee wishing to exercise an Option shall give
written notice to the Company at its principal executive office, to the
attention of the officer of the Company designated by the Administrator,
accompanied by payment of the exercise price and withholding taxes as provided
in Sections 6.1.6 and 6.1.7. The date the Company receives written notice of an
exercise hereunder accompanied by payment of the exercise price will be
considered as the date such Option was exercised.
(b) Promptly after receipt of written notice of exercise of an
Option and the payments called for by Section 7(a), the Company shall, without
stock issue or transfer taxes to the optionee or other person entitled to
exercise the Option, instruct its transfer agent to prepare a certificate or
certificates for the requisite number of shares of stock and shall cause
delivery of such certificate(s) to the optionee or such other person. An
optionee or permitted transferee of the Option shall not have any privileges as
a stockholder with respect to any shares of stock covered by the Option until
the date of issuance (as evidenced by the appropriate entry on the books of the
Company or a duly authorized transfer agent) of such shares.
8. EMPLOYMENT OR CONSULTING RELATIONSHIP
-------------------------------------
Nothing in this Plan or any Option granted hereunder shall interfere with
or limit in any way the right of the Company or of any of its Affiliates to
terminate any optionee's
7
employment, consulting or advising at any time, nor confer upon any optionee any
right to continue in the employ of, or consult or advise with, the Company or
any of its Affiliates.
9. CONDITIONS UPON ISSUANCE OF SHARES
----------------------------------
9.1 Securities Act. Shares of Common Stock shall not be issued pursuant
--------------
to the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended (the "Securities Act").
9.2 Non-Compete Agreement. As a further condition to the receipt of
---------------------
Common Stock pursuant to the exercise of an Option, an optionee may be required
not to render services for any organization, or engage directly or indirectly in
any business, competitive with the Company at any time during which an Option is
outstanding to such Optionee and for six months after any exercise of an Option
or the receipt of Common Stock pursuant to the exercise of an Option. Failure to
comply with this condition shall cause such Option and the exercise or issuance
of shares thereunder to be rescinded and the benefit of such exercise or
issuance to be repaid to the Company.
10. NONEXCLUSIVITY OF THIS PLAN
---------------------------
The adoption of this Plan shall not be construed as creating any
limitations on the power of the Company to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options other than under this Plan.
11. MARKET STANDOFF
---------------
Each optionee, if so requested by the Company or any representative of the
underwriters in connection with any registration of the offering of any
securities of the Company under the Securities Act, shall not sell or otherwise
transfer any shares of Common Stock acquired upon exercise of Options during the
180-day period following the effective date of a registration statement of the
Company filed under the Securities Act; provided, however, that such restriction
shall apply only to the first registration statement of the Company to become
effective under the Securities Act after the date of adoption of this Plan which
includes securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restriction until the end of such 180-day period.
8
12. AMENDMENTS TO PLAN
------------------
The Board may at any time amend, alter, suspend or discontinue this Plan.
Without the consent of an optionee, no amendment, alteration, suspension or
discontinuance may adversely affect outstanding Options except to conform this
Plan and ISOs granted under this Plan to the requirements of federal or other
tax laws relating to incentive stock options. No amendment, alteration,
suspension or discontinuance shall require stockholder approval unless (a)
stockholder approval is required to preserve incentive stock option treatment
for federal income tax purposes or (b) the Board otherwise concludes that
stockholder approval is advisable.
13. EFFECTIVE DATE OF PLAN; TERMINATION
-----------------------------------
This Plan shall become effective upon adoption by the Board provided,
however, that no Option shall be exercisable unless and until written consent of
the stockholders of the Company, or approval of stockholders of the Company
voting at a validly called stockholders' meeting, is obtained within twelve
months after adoption by the Board. If any Options are so granted and
stockholder approval shall not have been obtained within twelve months of the
date of adoption of this Plan by the Board, such Options shall terminate
retroactively as of the date they were granted. Options may be granted and
exercised under this Plan only after there has been compliance with all
applicable federal and state securities laws. This Plan (but not Options
previously granted under this Plan) shall terminate within ten years from the
date of its adoption by the Board. Termination shall not affect any outstanding
Options.
9
PCSUPPORT.COM, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, DECEMBER 11, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby revokes all prior proxies, appoints Steven Macbeth
and David W. Rowat, and each or either of them, as proxy holders with full power
to appoint his substitute and hereby authorizes the proxy holders to represent
and vote all the shares of PCsupport.com, Inc. (the "Company") held of record by
the undersigned on October 17, 2000 at the Annual Meeting of Stockholders to be
held on December 11, 2000 at 2:00 P.M. or any and all adjournments thereof upon
the following proposals, which are more fully described in the Company's proxy
statement for the Annual Meeting, as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE FOLLOWING PROPOSALS.
(1) Election of Directors:
[_] FOR all nominees listed below (except as marked to the contrary
below).
[_] WITHHOLD AUTHORITY to vote for all nominees listed below.
Michael G. McLean
Steven W. Macbeth
Bruce S. Nelson
(INSTRUCTION: To withhold authority to vote for any specific nominee,
draw a line through such nominee's name.)
(2) Proposal to approve the adoption of the Company's 2000 Stock Option
Plan.
FOR [_] AGAINST [_] ABSTAIN [_]
(3) Proposal to ratify the appointment of KPMG LLP as the Company's
Independent Public Accountant.
FOR [_] AGAINST [_] ABSTAIN [_]
In their discretion, the proxy holders are authorized to vote upon such other
business as may properly be brought before the Annual Meeting or any and all
adjournments thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED OR, IF NO CHOICE IS SPECIFIED, FOR THE
ELECTION OF THE NOMINEES, FOR PROPOSALS 2 AND 3 AND AS SAID PROXIES DEEM
ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY
AND ALL ADJOURNMENTS THEREOF. IN THE EVENT ANY OF THE NOMINEES IS UNAVAILABLE
FOR ELECTION OR UNABLE TO SERVE, THE SHARES REPRESENTED BY THIS PROXY MAY BE
VOTED FOR A SUBSTITUTE NOMINEE SELECTED BY THE BOARD OF DIRECTORS.
Dated: ________________, 2000
_______________________________________________________
Signature
_______________________________________________________
(Signature, if held jointly)
Please sign exactly as your name appears hereon. When
shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name by
the President or other authorized officer. If a
partnership, please sign in partnership name by an
authorized partner.
PLEASE PROMPTLY MARK, SIGN, DATE, AND RETURN THIS PROXY
USING THE ENCLOSED ENVELOPE.