SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, For Use of the Commission Only
(As Permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
IBIZ TECHNOLOGY CORP.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
iBIZ Technology Corp.
1919 West Lone Cactus
Phoenix, AZ 85021
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ?, 2001
Phoenix, Arizona
October 19, 2001
The annual meeting of stockholders (the "Annual Meeting") of iBiz
Technology Corp., a Florida corporation (the "Company"), will be held at our
offices at 1919 West Lone Cactus, Phoenix, AZ 85021 on November 21, 2001 at
10:00 AM (local time) for the following purposes:
1. Election three members to the Company's board of directors, each to hold
office until his or her successor is elected and qualified;
2. Amend the Company's certificate of incorporation to increase the
authorized amount of capital stock from 100,000,000 shares to 500,000,000
shares, of which 450,000,000 shall be common stock and 50,000,000 shall be
preferred stock;
3. Adoption of the 1999 Stock Option Plan;
4. Adoption of the 2001 Stock Option Plan;
5. Ratification of the appointment of the firm of Moffitt & Co. PC as
independent accountants auditors for the fiscal year end October 31, 2001; and
6. Transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business are more fully described in the proxy
statement, which is attached and made a part of this Notice.
The board of directors has fixed the close of business on September 5,
2001 as the record date for determining the stockholders entitled to notice of
and to vote at the Annual Meeting and any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you expect to attend the Annual Meeting in
person, you are urged to mark, date, sign and return the enclosed proxy card as
promptly as possible in the postage-prepaid envelope provided to ensure your
representation and the presence of a quorum at the Annual Meeting. If you send
in your proxy card and then decide to attend the Annual Meeting to vote your
shares in person, you may still do so. Your proxy is revocable in accordance
with the procedures set forth in the Proxy Statement.
By Order of the Board of Directors,
/s/ Terry S. Ratliff
Secretary
IMPORTANT
---------
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. IF A QUORUM IS NOT REACHED, THE COMPANY WILL HAVE THE ADDED EXPENSE OF
RE-ISSUING THESE PROXY MATERIALS. IF YOU ATTEND THE MEETING AND SO DESIRE, YOU
MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
THANK YOU FOR ACTING PROMPTLY
iBIZ TECHNOLOGY, CORP.
1919 West Lone Cactus
Phoenix, AZ 85021
PROXY STATEMENT
GENERAL
This proxy statement is furnished in connection with the solicitation
by the board of directors (the "Board") of iBiz Technology Corp., a Florida
corporation (the "Company"), of proxies in the enclosed form for use in voting
at the Annual Meeting of Stockholders (the "Annual Meeting") to be held at our
offices at 1919 West Lone Cactus, Phoenix, AZ 85021 on November 21, 2001 at
10:00 AM (local time), and any adjournment or postponement thereof. Only holders
of record of the Company's common stock, $.001 par value per share, on September
5, 2001 (the "Record Date") will be entitled to vote at the Annual Meeting. At
the close of business on the Record Date, the Company had outstanding 99,862,248
shares of common stock.
Any person giving a proxy in the form accompanying this proxy statement
has the power to revoke it prior to its exercise. Any proxy given is revocable
prior to the Annual Meeting by an instrument revoking it or by a duly executed
proxy bearing a later date delivered to the Secretary of the Company. Such proxy
is also revoked if the stockholder is present at the Annual Meeting and elects
to vote in person.
The Company will bear the entire cost of preparing, assembling,
printing and mailing the proxy materials furnished by the Board to stockholders.
Copies of the proxy materials will be furnished to brokerage houses, fiduciaries
and custodians to be forwarded to the beneficial owners of the common stock. In
addition to the solicitation of proxies by use of the mail, some of the
officers, directors and regular employees of the Company may (without additional
compensation) solicit proxies by telephone or personal interview, the costs of
which the Company will bear.
This Proxy Statement and the accompanying form of proxy is being sent
or given to stockholders on or about October 19, 2001.
Stockholders of the Company's common stock are entitled to one vote for
each share held. Such shares may not be voted cumulatively.
Each validly returned proxy (including proxies for which no specific
instruction is given) which is not revoked will be voted "FOR" each of the
proposals as described in this proxy statement and, at the proxy holders'
discretion, on such other matters, if any, which may come before the Annual
Meeting (including any proposal to adjourn the Annual Meeting).
Determination of whether a matter specified in the Notice of Annual
Meeting of Stockholders has been approved will be determined as follows. Those
persons will be elected directors who receive a plurality of the votes cast at
the Annual Meeting in person or by proxy and entitled to vote on the election.
Accordingly, abstentions or directions to withhold authority will have no effect
on the outcome of the vote. The affirmative vote, of a majority of the shares of
common stock outstanding, in person or by proxy and entitled to vote on such
matter is required for approval of the amendment to our certificate of
incorporation to increase our authorized capital stock. For each other matter
specified in the Notice of Annual Meeting of Stockholders, the affirmative vote
of a majority of the shares of common stock present at the Annual Meeting in
person or by proxy and entitled to vote on such matter is required for approval.
Abstentions will be considered shares present in person or by proxy and entitled
to vote and, therefore, will have the effect of a vote against the matter.
Broker non-votes will be considered shares not present for this purpose and will
have no effect on the outcome of the vote. Directions to withhold authority to
vote for directors, abstentions and broker non-votes will be counted for
purposes of determining whether a quorum is present for the Annual Meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS FOR A TERM OF ONE YEAR
The Board proposes the election of the current directors of the Company
for an additional term of one year. Following is information about each nominee,
including biographical data for at least the last five years. Should one or more
of these nominees become unavailable to accept nomination or election as a
director, the individuals named as proxies on the enclosed proxy card will vote
the shares that they represent for the election of such other persons as the
Board may recommend, unless the Board reduces the number of directors.
The iBIZ Board has long adhered to governance principles designed to
assure the continued vitality of the Board and excellence in the execution of
its duties. Accordingly, directors are compensated for their service to the
Company pursuant to the terms of their employment agreements. The Board is
responsible for supervision of the overall affairs of the Company. In fiscal
2000, Board business was conducted by consents in lieu of meetings. The
directors executed nine consents in lieu of meeting. Following the Annual
Meeting, the Board will consist of three directors. The term of each director
continues until the next annual meeting or until successors are elected. No
director holds any other directorships in reporting companies. The nominees for
director are Kenneth W. Schilling, Terry S. Ratliff, and Mark H. Perkins.
Kenneth W. Schilling founded INVNSYS' predecessor, SouthWest Financial
Systems, in 1979, and has been Chief Executive Officer, President and a Director
since INVNSYS' founding. Mr. Schilling studied for a B.S. in electrical
engineering at the University of Pittsburgh from 1970 to 1972 but left for
military service prior to receiving his degree.
Terry S. Ratliff joined INVNSYS in 1989 as controller and has served as
Vice President, Secretary and a Director since March 5, 1999, and was appointed
Chief Financial Officer on July 1, 2000. Ms. Ratliff studied accounting at
Nicholls State University in Thibodaux, Louisiana.
Mark H. Perkins joined INVNSYS in 1994 and currently serves as Executive
Vice President. Mr. Perkins was appointed to iBIZ's Board on March 5, 1999.
Prior to his joining INVNSYS, Mr. Perkins was employed at American Express as a
project manager for major systems implementation, a position he held for eight
years. Mr. Perkins earned a degree in business management from California State
University-Sonoma.
Employment Agreements
Employment Agreement For Kenneth W. Schilling. Effective July 12, 2001,
Kenneth W. Schilling and iBIZ entered into an Employment Agreement (the
"Agreement"). Under the Agreement, Mr. Schilling has been retained to act as
President and Chief Executive Officer of iBIZ. The Agreement is for a term of
three years ending July 12, 2004. Under the Agreement, Mr. Schilling shall
receive an annual base salary of $250,000. Mr. Schilling will also receive three
hundred thousand (300,000) options to purchase three hundred thousand (300,000)
shares of common stock of iBIZ at an exercise price to be determined by the
Board based upon the closing price of the Company's common stock. In addition,
Mr. Schilling will also receive a bonus equal to one percent 1% of the total
sales of the Company recorded in the preceding fiscal quarter.
Employment Agreement For Terry Ratliff. Effective July 12, 2001, Terry
Ratliff and iBIZ entered into an Employment Agreement (the "Agreement"). Under
the Agreement, Ms. Ratliff has been retained to act as Vice-President and Chief
Financial Ofificer and Secretary of iBIZ. The Agreement is for a term of three
years ending July 12, 2004. Under the Agreement, Ms. Ratliff shall receive an
annual base salary of $150,000. Ms. Ratliff will also receive three hundred
thousand (300,000) options to purchase three hundred thousand (300,000) shares
of common stock of iBIZ at an exercise price to be determined by the Board based
upon the closing price of the Company's common stock. In addition, Ms. Ratliff
will also receive a bonus equal to one percent 1% of the total sales of the
Company recorded in the preceding fiscal quarter.
Employment Agreement For Mark Perkins. Effective July 12, 2001, Mark
Perkins and iBIZ entered into an Employment Agreement (the "Agreement"). Under
the Agreement, Mr. Perkins has been retained to act as Executive Vice-President
of iBIZ. The Agreement is for a term of three years ending July 12, 2004. Under
the Agreement, Mr. Perkins shall receive an annual base salary of $150,000. Mr.
Perkins will also receive three hundred thousand (300,000) options to purchase
three hundred thousand (300,000) shares of common stock of iBIZ at an exercise
price to be determined by the Board based upon the closing price of the
Company's common stock. In addition, Mr. Perkins will also receive a bonus equal
to one percent 1% of the total sales of the Company recorded in the preceding
fiscal quarter.
In addition to the foregoing, each Agreement contains the following
termination provisions:
"(a) Termination By The Company For Cause: The Company shall have the
right to terminate this Agreement and to discharge Employee for cause
(hereinafter "Cause"), and all compensation to Employee shall cease to accrue
upon discharge of Employee for Cause. For the purposes of this Agreement, the
term "Cause" shall mean (i) Employee's conviction of a felony; (ii) the
alcoholism or drug addiction of Employee; (iii) gross negligence or willful
misconduct of Employee in connection with his duties hereunder; (iv) the
determination by any regulatory or judicial authority (including any securities
self-regulatory organization) that Employee directly violated, before or after
the date hereof, any federal or state securities law, any rule or regulation
adopted thereunder; or (v) the continued and willful failure by Employee to
substantially and materially perform his material duties hereunder.
(b) Termination By The Company Without Cause: In the event Employee's
employment hereunder shall be terminated by the Company for other than Cause:
(1) the Employee shall thereupon receive as severance in a lump sum payment from
the Company the amount of one (1) year of Salary in effect at the time of such
termination.
(c) Resignation: In the event Employee resigns without Reason, he shall
receive any unpaid fixed salary through such resignation date and such benefits
to which he is entitled by law, and shall also receive a lump sum payment from
the Company in the amount of six (6) months Salary in effect at the time of such
resignation.
(d) Change of Control: In the event of a Change in Control, as
hereinafter defined, the Company shall pay the Employee in a lump sum the amount
of three (3) years of annual Salary in effect at the time of such Change in
Control. Such payment and grant shall be made regardless of the continuation or
termination of Employee's employment with the Company after a Change of Control,
and shall be in addition to, and not in lieu of, any other payments or issuances
due pursuant to the terms of this agreement. For purposes hereof, a Change in
Control shall be deemed to have occurred (i) if there has occurred a "change in
control" as such term is used in Item 1 (a) of Form 8-K promulgated under the
Securities Exchange Act of 1934, as amended, at the date hereof ("Exchange Act")
or (ii) if there has occurred a change in control as the term "control" is
defined in Rule 12b-2 promulgated under the Exchange Act."
Recommendation of the Board for Proposal No. 1:
THE BOARD RECOMMENDS A VOTE FOR THE NOMINEES.
PROPOSAL NO. 2
AMENDMENT TO THE ARTICLES OF INCORPORATION
The Board of the Company proposes amending the Company's certificate of
incorporation to increase the number of authorized shares of common stock from
100,000,000 to 450,000,000 and to authorize the creation of 50,000,000 shares of
blank check preferred stock. The Company currently has authorized capital stock
of 100,000,000 of shares of common stock and approximately 99,862,248 shares of
common stock are outstanding as of the Record Date. The Board believes that the
increase in authorized shares would provide the Company greater flexibility with
respect to the Company's capital structure for such purposes as additional
equity financing, and stock based acquisitions.
INCREASE IN AUTHORIZED COMMON STOCK
The terms of the additional shares of common stock will be identical to
those of the currently outstanding shares of common stock. However, because
holders of common stock have no preemptive rights to purchase or subscribe for
any unissued stock of the Company, the issuance of additional shares of common
stock will reduce the current stockholders' percentage ownership interest in the
total outstanding shares of common stock. This amendment will not alter the
current number of issued shares. The relative rights and limitations of the
shares of common stock would remain unchanged under this proposal.
As of September 5, 2001, a total of 99,862,248 shares of the Company's
currently authorized shares of common stock are issued and outstanding. The
99,862,248 issued shares represent substantially all of the Company's authorized
shares of common stock. The increase in the number of authorized but unissued
shares of common stock would enable the Company, without further stockholder
approval, to issue shares from time to time as may be required for proper
business purposes, such as raising additional capital for ongoing operations,
business and asset acquisitions, stock splits and dividends, present and future
employee benefit programs and other corporate purposes.
One of the effects of proposed amendment might be to enable the Board
to render it more difficult to, or discourage an attempt to, obtain control of
the Company by means of a merger, tender offer, proxy contest or otherwise, and
thereby protect the continuity of present management. The Board would, unless
prohibited by applicable law, have additional shares of common stock available
to effect transactions (such as private placements) in which the number of the
Company's outstanding shares would be increased and would thereby dilute the
interest of any party attempting to gain control of the Company. Such action
could discourage an acquisition of the Company, which stockholders might view as
desirable.
CREATION OF BLANK CHECK PREFERRED STOCK
The amendment to the certificate of incorporation will create
50,000,000 authorized shares of "blank check" preferred stock. Article IV of the
proposed amendment to the certificate of incorporation attached as Exhibit "A"
to this proxy statement contains provisions related to the "blank check"
preferred stock. The following summary does not purport to be complete and is
qualified in its entirety by reference to the proposed amendment to the
certificate of incorporation as set forth in Exhibit "A."
The term "blank check" refers to preferred stock, the creation and
issuance of which is authorized in advance by the stockholders and the terms,
rights and features of which are determined by the Board of the Company upon
issuance. The authorization of such blank check preferred stock would permit the
board of directors to authorize and issue preferred stock from time to time in
one or more series.
Subject to the provisions of the Company's amendment to the certificate
of incorporation and the limitations prescribed by law, the Board would be
expressly authorized, at its discretion, to adopt resolutions to issue shares,
to fix the number of shares and to change the number of shares constituting any
series and to provide for or change the voting powers, designations, preferences
and relative, participating, optional or other annual rights, qualifications,
limitations or restrictions thereof, including dividend rights (including
whether the dividends are cumulative), dividend rates, terms of redemption
(including sinking fund provisions), redemption prices, conversion rights and
liquidation preferences of the shares constituting any series of the preferred
stock, in each case without any further action or vote by the stockholders. The
Board would be required to make any determination to issue shares of preferred
stock based on its judgment as to the best interests of the Company and its
stockholders. The Board is seeking stockholder approval of an amendment to the
certificate of incorporation which would give the Board flexibility, without
further stockholder action, to issue preferred stock on such terms and
conditions as the board of directors deems to be in the best interests of the
Company and its stockholders. The Company has no immediate definitive plans to
issue any shares of preferred stock. Therefore, the terms, rights and features
of a preferred stock subject to this proposal cannot be stated or predicted with
certainty.
It is not possible to state the effects of the proposed amendment upon
the rights of holders of common stock until the Board determines the respective
rights of the holders of one or more series of preferred stock. However, the
issuance of shares of preferred stock pursuant to the Board's authority
described above may adversely affect the rights of the holders of common stock.
Specifically, the effects of such issuances of preferred stock could include (i)
reduction of the amount of cash otherwise available for payment of dividends on
common stock, if any, (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. For example,
preferred stock issued by the Company may rank prior to the common stock as to
dividend rights, liquidation preferences or both, may have full or limited
voting rights, and may be convertible into shares of common stock. Accordingly,
the issuance of shares of preferred stock could decrease the amount of earnings
and assets allocable to or available for distribution to holders of common stock
and adversely affect the rights and powers, including voting rights of the
common stock, and may discourage bids for the common Stock or may otherwise
adversely affect the market price of the common Stock.
The amendment will provide the Company with increased financial
flexibility in meeting future capital requirements by providing another type of
security in addition to its common stock, as it will allow preferred stock to be
available for issuance from time to time and with such features as determined by
the Board for any proper corporate purpose. Such purposes could include, without
limitation, issuance for cash as a means of obtaining capital for use by the
Company, or issuance as part or all of the consideration required to be paid by
the Company for acquisitions of other businesses or assets.
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
by increasing the number of votes required to approve a change in control of the
Company. Shares of voting or convertible preferred stock could be issued, or
rights to purchase such shares could be issued, to render more difficult or
discourage an attempt to obtain control of the Company by means of a tender
offer, proxy contest, merger or otherwise. The ability of the board of directors
to issue such additional shares of preferred stock, with the 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 that such an
attempt could cause. Moreover, the issuance of such additional shares of
preferred stock to persons friendly to the Board could make it more difficult to
remove incumbent managers and directors from office even if such change were to
be favorable to stockholders generally.
While the amendment may have anti-takeover ramifications, the Board
believes that the financial flexibility offered by the amendment outweighs any
disadvantages. To the extent that the amendment may have anti-takeover effects,
the amendment may encourage persons seeking to acquire the Company to negotiate
directly with the Board enabling the Board to consider the proposed transaction
in a manner that best serves the stockholders' interests.
Unless marked otherwise, proxies received will be voted "FOR" the
approval of this Proposal No. 1. amending the certificate of incorporation of
the Company requires the affirmative vote of the holders of a majority of the
outstanding shares of common stock of the Company.
Recommendation of the Board for Proposal No. 2:
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT OF THE CERTIFCATE OF
INCORPORATION.
PROPOSAL NO. 3
EMPLOYEE 1999 STOCK OPTION PLAN
At the Annual Meeting, the shareholders are being asked to approve the
iBIZ Technology Corp. 1999 Stock Option Plan (the "Stock Option Plan"). The
Stock Option Plan was adopted by the Board on January 31, 1999 and amended on
August 3, 2001. The Stock Option Plan provides for the grant of stock options to
purchase common stock to eligible directors, officers, key employees, and
service providers of iBIZ. The Stock Option Plan covers an aggregate maximum of
ten million (10,000,000) shares of common stock and provides for the granting of
non-qualified stock options. Under the Stock Option Plan, the exercise price may
not be less than the fair market value of the common stock on the date of the
grant of the option. As of September 30, 2001, 4,005,000 options (the "Options")
had been granted (net of cancelled and exercised) under the plan at exercise
prices of between $0.53 and $5.00. As of September 30, 2001, the market price of
the stock was $0.03. The Options have been granted for periods ranging from one
(1) to ten (10) years, subject to earlier cancellation upon termination of
employment, resignation, disability and death. The Options vest pursuant to the
terms of each individual option, which to date have ranged from immediate to a
five (5) year period. Approximately 53 people are eligible to participate in the
Stock Option Plan.
The Stock Option Plan benefits currently have no value, as all of the
outstanding options were issued at exercise prices greater than the current
price of the Company's stock. Ken Schilling, C.E.O., holds 250,000 options.
Terry Ratliff, C.F.O., V.P. and Secretary, holds 350,000 options. Mark Perkins,
Exec. V.P., holds 350,000 options. The Executive Group, which includes all of
the Directors, collectively holds 1,450,000 options, while the non-executive
officer and employee group holds 1,935,000 options.
The Board administers and interprets the Stock Option Plan and is
authorized to grant options thereunder to all eligible persons. In the event the
Board has at least two (2) members who are not either employees or officers of
iBIZ or of any parent or subsidiary of iBIZ, the Stock Option Plan will be
administered by a committee of not less than two (2) persons who are such
independent directors. The Board designates the optionees, the number of shares
subject to the options and the terms and conditions of each option. Certain
changes in control of iBIZ, as defined in the Stock Option Plan, will cause the
options to vest immediately. Each option granted under the Stock Option Plan
must be exercised, if at all, during a period established in the grant that may
not exceed ten (10) years from the date of grant. An optionee may not transfer
or assign any option granted and may not exercise any options after a specified
period subsequent to the termination of the optionee's employment with iBIZ. The
Board may make amendments to the Stock Option Plan from time to time it deems
proper and in the best interests of iBIZ provided it may not take any action
which disqualifies any option granted under the Stock Option Plan as an
incentive stock option or which adversely effects or impairs the rights of the
holder of any option under the Stock Option Plan.
A complete copy of the Stock Option Plan may be found attached hereto
as EXHIBIT B.
Recommendation of the Board for Proposal No. 3:
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.
PROPOSAL NO. 4
EMPLOYEE 2001 STOCK OPTION PLAN
At the Annual Meeting, the shareholders are being asked to approve the
iBIZ Technology Corp. 2001 Stock Option Plan (the "2001 Stock Option Plan"). The
2001 Stock Option Plan was adopted by the Board on July 25, 2001. The 2001 Stock
Option Plan provides for the grant of stock options to purchase common stock to
eligible directors, officers, key employees, and service providers of iBIZ. The
2001 Stock Option Plan covers an aggregate maximum of ten million (10,000,000)
shares of common stock and provides for the granting of both incentive stock
options (as defined in Section 422 of the Internal Revenue Code of 1986, as
amended) and non-qualified stock options (options which do not meet the
requirements of Section 422). Under the 2001 Stock Option Plan, the exercise
price may not be less than the fair market value of the common stock on the date
of the grant of the option. As of September 30, 2001, 1,200,000 options (the
"Options") had been granted (net of cancelled and exercised) under the plan at
exercise prices of between $0.53 and $5.00. As of September 30, 2001, the market
price of the stock was $0.03. The Options have been granted for periods ranging
from one (1) to ten (10) years, subject to earlier cancellation upon termination
of employment, resignation, disability and death. The Options vest pursuant to
the terms of each individual option, which to date have ranged from immediate to
a five (5) year period.
The Board administers and interprets the 2001 Stock Option Plan and is
authorized to grant options thereunder to all eligible persons. In the event the
Board has at least two (2) members who are not either employees or officers of
iBIZ or of any parent or subsidiary of iBIZ, the 2001 Stock Option Plan will be
administered by a committee of not less than two (2) persons who are such
independent directors. The Board designates the optionees, the number of shares
subject to the options and the terms and conditions of each option. Certain
changes in control of iBIZ, as defined in the 2001 Stock Option Plan, will cause
the options to vest immediately. Each option granted under the 2001 Stock Option
Plan must be exercised, if at all, during a period established in the grant that
may not exceed ten (10) years from the date of grant. An optionee may not
transfer or assign any option granted and may not exercise any options after a
specified period subsequent to the termination of the optionee's employment with
iBIZ. The Board may make amendments to the 2001 Stock Option Plan from time to
time it deems proper and in the best interests of iBIZ provided it may not take
any action which disqualifies any option granted under the 2001 Stock Option
Plan as an incentive stock option or which adversely effects or impairs the
rights of the holder of any option under the 2001 Stock Option Plan.
FEDERAL INCOME TAX ASPECTS OF THE 2001 STOCK OPTION PLAN
THE FOLLOWING IS A BRIEF SUMMARY OF THE EFFECT OF FEDERAL INCOME
TAXATION UPON THE PARTICIPANTS AND THE COMPANY WITH RESPECT TO THE PURCHASE OF
SHARES UNDER THE 2001 STOCK OPTION PLAN. THIS SUMMARY DOES NOT PURPORT TO BE
COMPLETE AND DOES NOT ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES TO TAXPAYERS
WITH SPECIAL TAX STATUS. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS THE
PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY
IN WHICH THE PARTICIPANT MAY RESIDE, AND DOES NOT DISCUSS ESTATE, GIFT OR OTHER
TAX CONSEQUENCES OTHER THAN INCOME TAX CONSEQUENCES. THE COMPANY ADVISES EACH
PARTICIPANT TO CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES
OF PARTICIPATION IN THE 2001 STOCK OPTION PLAN AND FOR REFERENCE TO APPLICABLE
PROVISIONS OF THE CODE.
The 2001 Stock Option Plan and the right of participants to make
purchases thereunder are intended to qualify under the provisions of Sections
421, 422 and 423 of the Internal Revenue Code of 1986 (the "Code"). Under these
provisions, no income will be recognized by a participant prior to disposition
of shares acquired under the 2001 Stock Option Plan.
If the shares are sold or otherwise disposed of (including by way of
gift) more than two years after the first day of the offering period during
which shares were purchased (the "Offering Date"), a participant will recognize
as ordinary income at the time of such disposition the lesser of (a) the excess
of the fair market value of the shares at the time of such disposition over the
purchase price of the shares or (b) 15% of the fair market value of the shares
on the first day of the offering period. Any further gain or loss upon such
disposition will be treated as long-term capital gain or loss. If the shares are
sold for a sale price less than the purchase price, there is no ordinary income
and the participant has a capital loss for the difference.
If the shares are sold or otherwise disposed of (including by way of
gift) before the expiration of the two-year holding period described above, the
excess of the fair market value of the shares on the purchase date over the
purchase price will be treated as ordinary income to the participant. This
excess will constitute ordinary income in the year of sale or other disposition
even if no gain is realized on the sale or a gift of the shares is made. The
balance of any gain or loss will be treated as capital gain or loss and will be
treated as long-term capital gain or loss if the shares have been held more than
one year.
In the case of a participant who is subject to Section 16(b) of the
Exchange Act, the purchase date for purposes of calculating such participant's
compensation income and beginning of the capital gain holding period may be
deferred for up to six months under certain circumstances. Such individuals
should consult with their personal tax advisors prior to buying or selling
shares under the 2001 Stock Option Plan.
The ordinary income reported under the rules described above, added to
the actual purchase price of the shares, determines the tax basis of the shares
for the purpose of determining capital gain or loss on a sale or exchange of the
shares.
The Company is entitled to a deduction for amounts taxed as ordinary
income to a participant only to the extent that ordinary income must be reported
upon disposition of shares by the participant before the expiration of the
two-year holding period described above.
A complete copy of the 2001 Stock Option Plan may be found attached
hereto as EXHIBIT C.
Recommendation of the Board for Proposal No. 4:
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board has appointed the firm of Moffitt & Co. PC, independent
accountants, to be iBIZ's auditors for the year 2001 and recommends to
stockholders that they vote for ratification of that appointment. Moffitt & Co.
PC served in this capacity for the year 2000. Its representative will be present
at the Annual Meeting and will have an opportunity to make a statement and be
available to respond to appropriate questions. None of the hours expended on
Moffitt & Co.'s engagement to audit the Company's financial statements for
fiscal 2000 were attributed to work performed by persons other than Moffitt &
Co.'s full-time, permanent employees. The aggregate fees billed for professional
services rendered for the audit of the Company's annual financial statements for
fiscal 2000 and the reviews of the financial statements included in the
Company's Forms 10-QSB's for fiscal 2000 amounted to approximately $30,000. The
aggregate fees billed for the professional services described in para.
(c)(4)(ii) of Rule 2-01 of Regulation S-X rendered by Moffitt & Co. for fiscal
2000 amounted to $0. The aggregate fees billed for services rendered by Moffitt
& Co., other than the services covered in the preceding sections, for fiscal
2000 amounted to $0. The appointment of auditors is approved annually by the
Board and subsequently submitted to the stockholders for ratification. The
decision of the Board is based on its reviews and approval in advance of the
audit scope, the types of nonaudit services, and the estimated fees for the
coming year. Before making its recommendation to the Board for appointment of
Moffitt & Co. PC, the Board carefully considered that firm's qualifications as
auditors for the Company. This included a review of its performance in prior
years, as well as its reputation for integrity and competence in the fields of
accounting and auditing. The Board has expressed its satisfaction with Moffitt &
Co. PC in all of these respects.
Recommendation of the Board for Proposal No. 3:
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.
OTHER MATTERS
The Board knows of no other business that will be presented to the
Annual Meeting. If any other business is properly brought before the Annual
Meeting, proxies in the enclosed form will be voted in respect thereof as the
proxy holders deem advisable.
It is important that the proxies be returned promptly and that your
shares be represented. Stockholders are urged to mark, date, execute and
promptly return the accompanying proxy card in the enclosed envelope.
ADDITIONAL INFORMATION
The following information is provided to give shareholders a more
comprehensive understanding of the Company in accordance with the disclosure
requirements of the securities laws and regulations.
Voting Securities and Principal Holders Thereof
As of March 31, 2001, there were 38,017,966 shares of common stock, par
value $0.001 outstanding.
The following table sets forth certain information regarding the
beneficial ownership of the our common stock as of March 31, 2001, by:
o all directors
o each person who is known by us to be the beneficial owner of more than
five percent (5%) of the outstanding common stock
o each executive officer named in the Summary Compensation Table
o all directors and executive officers as a group
The number of shares beneficially owned by each director or executive
officer is determined under rules of the SEC, and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under the
SEC rules, beneficial ownership includes any shares as to which the individual
has the sole or shared voting power or investment power. In addition, beneficial
ownership includes any shares that the individual has the right to acquire
within 60 days of March 31, 2001, through the exercise of any stock option or
other right. Unless otherwise indicated, each person listed below has sole
investment and voting power (or shares such powers with his or her spouse). In
certain instances, the number of shares listed includes (in addition to shares
owned directly), shares held by the spouse or children of the person, or by a
trust or estate of which the person is a trustee or an executor or in which the
person may have a beneficial interest.
---------------------------------------------------------------------------------------------------------
Number of Shares of Common Stock Beneficially Owned
----------------------------------------------------------------------------------------------------------
Name and Address of Beneficial Owner Shares Vested Options (1) Total (1) Percent (1)
----------------------------------------------------------------------------------------------------------
Kenneth W. Schilling(2) -------- 225,000 225,000 *
1919 W. Lone Cactus Drive
Phoenix, AZ 85021
Moorea Trust(2)
1919 W. Lone Cactus Drive
Phoenix, AZ 85021 9,710,480 --------- 9,710,480 25.54
Terry S. Ratliff
1919 W. Lone Cactus Drive
Phoenix, AZ 85021 1,771,200 325,000 2,096,200 5.51
Mark H. Perkins
1919 W. Lone Cactus Drive
Phoenix, AZ 85021 1,771,200 325,000 2,096,200 5.51
All directors and officers as group
(4 persons)(3) 13,253,880 1,375,000 14,628,880 38.47
----------------------------------------------------------------------------------------------------------
(1) Includes options vested on or before March 31, 2001. "*" means less
than one percent.
(2) Kenneth and Diane Schilling, husband and wife, hold the shares as
trustees under the Moorea Trust dated December 18, 1991.
(3) Includes Kenneth Schilling, Mark Perkins, Terry Ratliff, and James
Ratliff.
Directors, Executive Officers, Promoters and Control Persons
-------------------------------- -------- ---------------------------------------------------------------
Name Age Position
-------------------------------- -------- ---------------------------------------------------------------
Kenneth W. Schilling 49 President, Chief Executive Officer, Director
Terry S. Ratliff 43 Vice President, Chief Financial Officer, Director
Mark H. Perkins 37 Executive Vice President, Director
James A. Ratliff(1) 43 Chief Operating Officer
(1) James Ratliff and Terry Ratliff were formerly husband and wife. Mr.
Ratliff, while not a director, is included in this proxy to give shareholders a
more complete understanding of the Company's management.
Please see Proposal 1, above, for information respecting Ms. Ratliff and
Messrs. Schilling and Perkins.
James A. Ratliff joined iBIZ as Chief Operating Officer in January 2000.
Prior to joining the iBIZ, Mr. Ratliff held the position of Director of Global
Procurement at American Express from February 1998 to December 1999. From August
1995 to January 1998, Mr. Ratliff served as International Program Manager for
AlliedSignal Aerospace, where he was responsible for the development of
international partnerships. From 1991 through July 1995, Mr. Ratliff served as
an International Buyer for Amoco Corporation. Mr. Ratliff earned an MBA and a BS
in Purchasing Materials and Logistics from Arizona State University, where he
graduated summa cum laude in 1991.
Section 16(a) Beneficial Ownership Reporting Compliance.
On February 28, 2001, Mr. Schilling filed a delinquent Form 4 for the month
of October 2000. On January 31, 2001, Mr. Ratliff filed a delinquent Form 3.
On January 15, 2001, Mr. Ratliff filed a delinquent Form 4 for the month of
August 2000.
Legal Proceedings
iBIZ has been assessed approximately $62,000 in penalties and interest by
the IRS in connection with payroll taxes due through the first quarter of 1999.
iBIZ has paid the taxes, interest, and some portion of the penalty, but has
requested an abatement of the remaining penalty imposed. iBIZ is awaiting a
final disposition by the IRS.
On February 28, 2001, the Securities and Exchange Commission commenced an
administrative proceeding against iBIZ. IBIZ has negotiated and submitted a
settlement offer, which has been formally approved by the Commission itself.
Pursuant to this settlement agreement, an administrative order has been issued
which orders iBIZ to cease and desist from committing or causing any future
violations of Section 10(b) of the Securities and Exchange Act of 1934 and Rule
10b-5 thereunder. No other relief against iBIZ is being sought. This
administrative proceeding is based on the Commission's allegations that iBIZ,
through its President and CEO Ken Schilling, referenced certain reports prepared
by Michael A. Furr in its press releases, and posted hyperlinks to Furr's
reports on its website. The Commission alleges that the Furr reports contained
false revenue and stock price projections. The Commission also alleges that iBIZ
falsely characterized Furr as independent of iBIZ. IBIZ neither admits nor
denies the allegations as part of the settlement offer.
Certain Relationships And Related Transactions
While a private company, INVNSYS (now iBIZ) made loans totaling $992,037 to
Kenneth Schilling. These loans are payable on demand and accrued interest at
eight percent (8%) during 1997 and six percent (6%) during 1998 and 1999. As of
January 31, 2001, the balance of the loans payable by Mr. Schilling to INVNSYS
totaled approximately Three Hundred Eighty-Four Thousand Nine Hundred
Eighty-Eight Dollars and Ninety-Four Cents ($384,988.94). Mr. Schilling, as
trustee of the Moorea Trust, pledged 2,000,000 shares of iBIZ common stock to
secure this debt.
iBIZ leases its facility from Lone Cactus Capital Group, L.L.C., a limited
liability company in which Kenneth Schilling is a member. iBIZ believes the
terms of the lease are at an arms-length fair market rate.
Audit Committee
iBIZ does not have an Audit Committee; however, Terry Ratliff is
responsible for reviewing reports of the Company's financial results, audits,
internal controls, and compliance with federal procurement laws and regulations.
Ms. Ratliff recommends to the Board of Directors the selection of the Company's
outside auditors and reviews their procedures for ensuring their independence
with respect to the services performed for the Company. Ms. Ratliff has reviewed
and discussed the audited financial statements with management; discussed with
the independent auditors the matters required to be discussed by SAS 61, as may
be modified or supplemented; received the written disclosures and the letter
from the independent accountants required by Independence Standards Board
Standard No. 1 (Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees), as may be modified or supplemented, and has
discussed with the independent accountant the independent accountant's
independence; and, based on the review and discussions referred to above, Ms.
Ratliff has recommended to the Board of Directors that the audited financial
statements be included in the company's Annual Report on Form 10-KSB for the
last fiscal year for filing with the Commission.
Executive Compensation
The Board believes that leadership and motivation of our executives are
critical to establishing iBIZ's preeminence both in the marketplace and as an
investment for stockholders. The Board is responsible for ensuring that the
individuals in executive positions are highly qualified and that they are
compensated in a manner that furthers our business strategies and aligns their
interests with those of the stockholders. To support this philosophy, the
following principles provide a framework for the compensation program:
o offer competitive total compensation value that will attract the best
talent to iBIZ; motivate individuals to perform at their highest
levels; reward outstanding achievement; and retain those individuals
with the leadership abilities and skills necessary for building
long-term stockholder value.
o encourage executives to manage from the perspective of owners with an
equity stake in iBIZ.
o iBIZ's compensation program for executive officers is targeted to
provide highly competitive total compensation levels (including both
annual and long-term incentives) for highly competitive performance.
The following table sets forth certain compensation paid or accrued by
us to certain of our executive officers during fiscal years ended 2000 and 1999.
Summary Compensation Table
-----------------------------------------------------------------------------------------------------------
Fiscal Year Salary ($) Bonus Options(1) (#)
Name and Principal Position
-----------------------------------------------------------------------------------------------------------
Kenneth W. Schilling, President & CEO 1999 $200,000 250,000
2000 $200,000 $40,000
Terry S. Ratliff, Vice President, Chief Financial
Officer, Director 1999 $88,000 300,000
2000 $88,000 $40,000
Mark H. Perkins, Executive Vice President, Director 1999 $88,000 300,000
2000 $88,000 $40,000
(1) Includes 50,000 options granted for service as a director of iBIZ.
Option Grants in Last Fiscal Year
No options were granted during the fiscal year ended October 31, 2000.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
------------------------------------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised
Shares Options at Fiscal Year In-the-Money Options at
Acquired on Value End Exercisable/ Fiscal Year End Exercisable/
Name Exercise (#) Realized ($) Un-exercisable Un-exercisable (1)
------------------------------------------------------------------------------------------------------------
Kenneth W. Schilling -0- -0- 225,000/25,000 $0/$0
Terry S. Ratliff -0- -0- 325,000/25,000 $0/$0
Mark H. Perkins -0- -0- 325,000/25,000 $0/$0
------------------------------------------------------------------------------------------------------------
(1) Based on closing price of the Common Stock on October 31, 2000 of
$0.4844 per share. None of the options are "in-the-money."
There were no long-term incentive plans or rewards made in fiscal 2000.
*************
The Company's annual report on Form 10-KSB for the fiscal year ended
October 31, 2000 and quarterly report on Form 10-QSB for the quarter ended July
31, 2001 are being delivered to you with this proxy statement. The Company will
furnish a copy of any exhibit thereto or other information upon request by a
stockholder to Terry S. Ratliff, iBIZ Technology Corp., 1919 West Lone Cactus,
Phoenix, AZ 85021 telecopier number (623) 492-9921.
By Order of the Board of Directors,
/s/ Terry S. Ratliff
Terry S. Ratliff
Secretary
Phoenix, AZ
October 19, 2001
PROXY PROXY
iBIZ TECHNOLOGY CORP.
PROXY FOR ANNUAL MEETING TO BE HELD ON NOVEMBER 21, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Kenneth W. Schilling, as proxy, with
the power to appoint his substitute, to represent and to vote all the shares of
common stock of iBIZ Technology Corp. (the "Company"), which the undersigned
would be entitled to vote, at the Company's Annual Meeting of Stockholders to be
held on November 21, 2001 and at any adjournments thereof, subject to the
directions indicated on the reverse side hereof.
In his discretion, the Proxy is authorized to vote upon any other
matter that may properly come before the meeting or any adjournments thereof.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE,
BUT IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR THE PROPOSALS
LISTED ON THE REVERSE SIDE.
IMPORTANT--This Proxy must be signed and dated on the reverse side.
THIS IS YOUR PROXY
YOUR VOTE IS IMPORTANT!
Dear Stockholder:
We cordially invite you to attend the Annual Meeting of Stockholders of
iBIZ Technology Corp. to be held at our offices at 1919 West Lone Cactus,
Phoenix, AZ 85021 on November 21, 2001 at 10:00 a.m. (local time).
Please read the proxy statement which describes the proposals and
presents other important information, and complete, sign and return your proxy
promptly in the enclosed envelope.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1-4
1. Election of directors:
--------------------------------------------------- --------- --- ------------
Nominees: For Withhold
--------------------------------------------------- --------- --- ------------
Kenneth W. Schilling [_] [_]
--------------------------------------------------- --------- --- ------------
Terry S. Ratliff [_] [_]
--------------------------------------------------- --------- --- ------------
Mark H. Perkins [_] [_]
------------------------------------------------------------------- --- ---------- ---------- ------------
2. Proposal to approve the amendment of the Company's For Against Abstain
certificate of incorporation to increase the authorized amount of [_] [_] [_]
common stock from 100,000,000 shares to 450,000,000 shares, and
authorize the creation of 50,000,000 shares of "blank check"
preferred stock.
------------------------------------------------------------------- --- ---------- ---------- ------------
3. Proposal to approve the adoption of the Company's 1999 Stock For Against Abstain
Option Plan. [_] [_] [_]
------------------------------------------------------------------- --- ---------- ---------- ------------
4. Proposal to approve the adoption of the Company's 2001 Stock For Against Abstain
Option Plan. [_] [_] [_]
------------------------------------------------------------------- --- ---------- ---------- ------------
5. Proposal to ratify appointment of accountants. For Against Abstain
[_] [_] [_]
------------------------------------------------------------------- --- ---------- ---------- ------------
If you plan to attend the Annual Meeting please mark this box [_]
Dated:________________, 2001
Signature ______________________________________________________________________
Name (printed) _________________________________________________________________
Title __________________________________________________________________________
Important: Please sign exactly as name appears on this proxy. When signing
as attorney, executor, trustee, guardian, corporate officer, etc., please
indicate full title.
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
EXHIBIT A
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
IBIZ TECHNOLOGY CORP.
iBIZ Technology Corp. (the "Corporation") a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Florida, DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, in lieu of meeting
by consent, adopted the following resolution:
RESOLVED that the Board of Directors hereby declares it
advisable and in the best interest of the Corporation that
Article IV of the Certificate of Incorporation be amended to
read as follows:
RESOLVED that the Board of Directors hereby declares it
advisable and in the best interest of the Corporation that
Article IV of the Certificate of Incorporation be superceded
and replaced as follows:
Capital Stock. The Corporation is authorized to issue two
classes of stock. One class of stock shall be Common Stock,
par value $0.001. The second class of stock shall be Preferred
Stock, par value $0.001. The Preferred Stock, or any series
thereof, shall have such designations, preferences and
relative, participating, optional or other annual rights and
qualifications, limitations or restrictions thereof as shall
be expressed in the resolution or resolutions providing for
the issue of such stock adopted by the board of directors and
may be made dependent upon facts ascertainable outside such
resolution or resolutions of the board of directors, provided
that the matter in which such facts shall operate upon such
designations, preferences, rights and qualifications;
limitations or restrictions of such class or series of stock
is clearly and expressly set forth in the resolution or
resolutions providing for the issuance of such stock by the
board of directors.
The total number of shares of stock of each class which the
Corporation shall have authority to issue and the par
value of each share of each class of stock are as follows:
Class Par Value Authorized Shares Total
---------------------------------------------------------------------------
Common $0.001 450,000,000 $450,000
Preferred $0.001 50,000,000 50,000
--------- ------
Totals: 500,000,000 $500,000
RESOLVED, that the appropriate corporate officers be, and each of them
with full authority to act without the others hereby is, authorized and
directed for and on behalf of the Corporation to take or cause to be
taken any and all actions, to execute and deliver any and all
certificates, instructions, requests, or other instruments, and to do
any and all things which, in any such officer's judgment, may be
necessary or desirable to effect each of the foregoing resolutions and
to carry out the purposes thereof, the taking of any such actions, the
execution and delivery of any such certificates, instructions,
requests, or instruments, or the doing of any such things to be
conclusive evidence of their necessity or desirability.
SECOND: That the aforesaid amendment has been consented to and
authorized by the holders of a majority of the issued and outstanding stock
entitled to vote by written consent given in accordance with the provisions of
Section ? of the General Corporation Law of the State of Florida.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed this ?th day of ____2001.
By:___________________________
Name: Kenneth W. Schilling
Title: Chief Executive Officer
EXHIBIT B
iBIZ TECHNOLOGY CORP.
STOCK OPTION PLAN
1. PURPOSE OF PLAN.
(a) General Purpose. The purpose of iBIZ TECHNOLOGY CORP. STOCK OPTION
PLAN ("Plan") is to further the interests of iBIZ TECHNOLOGY CORP., a Florida
corporation (the "Corporation"), and its stockholders by providing an incentive
based form of compensation to the directors, officers, key employees and service
providers of the Corporation and by encouraging such persons to invest in shares
of the Corporation's Common Stock, thereby acquiring a proprietary interest in
its business and an increased personal interest in its continued success and
progress and ongoing inducement to remain in the Corporation's employ, service
or as a director.
(b) Incentive Stock Options. Some one or more of the options granted
under the Plan may be intended to qualify as an "incentive stock option" as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and any grant of such an option shall clearly specify that such option
is intended to so qualify. If no such specification is made, an option granted
hereunder shall not be intended to qualify as an "incentive stock option." The
employees eligible to be considered for the grant of incentive stock options
hereunder are any persons regularly employed by the Corporation in a managerial,
professional or technical capacity on a full-time, salaried basis.
2. STOCK AND MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN.
(a) Description of Stock and Maximum Shares Allocated. The stock
subject to the provisions of the Plan and issuable upon exercise of options
granted under the Plan are shares of the Corporation's Common Stock, $.001 par
value, which may be either unissued or treasury shares, as the Corporation's
Board of Directors (the "Board") may from time to time determine. Subject to
adjustment as provided in Section 7, the aggregate number of shares of Common
Stock covered by the Plan and issuable upon exercise of all options granted
hereunder shall be 10,000,000 shares, which shares shall be reserved for use
upon the exercise of options to be granted from time to time.
(b) Restoration of Unpurchased Shares. If an option expires or
terminates for any reason prior to its exercise in full and before the term of
the Plan expires, the shares subject to, but not issued under such option shall
again be available for other options thereafter granted.
3. ADMINISTRATION; AMENDMENTS.
(a) Administration by Committee. The Plan shall be administered by the
Board of Directors or whenever the Board has at least two members who are not
either employees or officers of the Corporation or of any parent or subsidiary
of the Corporation ("Independent Directors") by a committee of not less than two
persons who are Independent Directors (the "Compensation Committee"), with full
power to administer the Plan, to interpret the Plan and to establish and amend
rules and regulations for its administration. (The term "Compensation Committee"
as used throughout this Plan shall 1 14 refer to the Board of Directors or a
committee of two Independent Directors, whichever is administering the Plan at
the time).
(b) Exercise Price. Upon the grant of any option, the Compensation
Committee shall specify the exercise price for the shares issuable upon exercise
of options granted. In no event may an option exercise price per share be less
than 100% of the Fair Market Value (as defined below) per share of the
Corporation's Common Stock on the date such option is granted.
(c) Fair Market Value. The Fair Market Value of a share on any
particular day shall be determined as follows:
(1) If the shares are listed or admitted to trading on any
securities exchange, the fair market value shall be the average sales
price on such day on the New York Stock Exchange, or if the shares have
not been listed or admitted to trading on the New York Stock Exchange,
on such other securities exchange on which such stock is then listed or
admitted to trading, or if no sale takes place on such day on any such
exchange, the average of the closing bid and asked price on such day as
officially quoted on any such exchange;
(2) If the shares are not then listed or admitted to trading
on any securities exchange, the fair market value shall be the average
sales price on such day or, if no sale takes place on such day, the
average of the reported closing bid and asked price on such date, in
the over-the-counter market as furnished by the National Association of
Securities Dealers Automated Quotation ("NASDAQ"), or if NASDAQ at the
time is not engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business and
selected by the Board; or
(3) If the shares are not then listed or admitted to trading
in the over-the-counter market, the fair market value shall be the
amount determined by the Board in a manner consistent with Treasury
Regulation Section 20-2031-2 promulgated under the Code or in such
other manner prescribed by the Secretary of the Treasury or the
Internal Revenue Service.
(d) Interpretation. The interpretation and construction by the
Compensation Committee of the terms and provisions of this Plan and of the
agreements governing options and rights granted under the Plan shall be final
and conclusive. No member of the Compensation Committee shall be liable for any
action taken or determination made in good faith.
(e) Amendments to Plan. The Compensation Committee may, without action
on the part of the stockholders of the Corporation, make such amendments to,
changes in and additions to the Plan as it may, from time to time, deem proper
and in the best interests of the Corporation; provided that the Compensation
Committee may not, without consent of the holder, take any action which
disqualifies any option granted under the Plan as an incentive stock option for
treatment as such or which adversely affects or impairs the rights of the holder
of any option outstanding under the Plan.
4. PARTICIPANTS; DURATION OF PLAN.
(a) Eligibility and Participation. Options may be granted in the total
amount for the period as allocated by the Board as provided in Section 4(b)
below only to persons who at the time of grant are directors, key employees of,
or service providers to the Corporation, whether or not such persons are also
members of the Board; provided, however, that no incentive stock option may be
granted to a director of the Corporation unless such person is also an executive
employee of the Corporation.
(b) Allotment. The Board shall determine the aggregate number of shares
of Common Stock which may be optioned from time to time but the Compensation
Committee shall have sole authority to determine the number of shares and the
recipient thereof to be optioned at any time. The Compensation Committee shall
not be required to grant all options allocated by the Board for any given period
if it determines, in its sole and exclusive judgment, that such grant is not in
the best interests of the Corporation. The grant of an option to any person
shall neither entitle such individual to, nor disqualify such individual from,
participation in any other grant of options under the Plan.
(c) Duration of Plan. The term of the Plan, unless previously
terminated by the Board, is ten years or January 31, 2009. No option shall be
granted under the Plan unless granted within ten years after the adoption of the
Plan by the Board, but options outstanding on that date shall not be terminated
or otherwise affected by virtue of the Plan's expiration.
(d) Approval of Stockholders. If the Board issues any incentive stock
options, solely for the purposes of compliance with the Code provisions
pertaining to incentive stock options, the Plan shall be submitted to the
stockholders of the Corporation for their approval at a regular meeting to be
held within twelve months after adoption of the Plan by the Board. Stockholder
approval shall be evidenced by the affirmative vote of the holders of a majority
of the shares of Common Stock present in person or by proxy and voting at the
meeting. If the stockholders decline to approve the Plan at such meeting or if
the Plan is not approved by the stockholders within twelve months after its
adoption by the Board, no incentive stock options may be issued under the Plan
but all options granted under the Plan shall remain in full force and effect
regardless of Shareholder approval and the Plan may be used for future
nonincentive stock option issuances. If shareholders fail to approve the Plan,
all previously issued incentive stock options shall be automatically converted
to nonincentive stock options.
5. TERMS AND CONDITIONS OF OPTIONS AND RIGHTS.
(a) Individual Agreements. Options granted under the Plan shall be
evidenced by agreements in such form as the Board from time to time approves,
which agreements shall substantially comply with and be subject to the terms of
the Plan, including the terms and conditions of this Section 5.
(b) Required Provisions. Each agreement shall state (i) the total
number of shares to which it pertains, (ii) the exercise price for the shares
covered by the option, (iii) the time at which the option becomes exercisable,
(iv) the scheduled expiration date of the option, (v) the vesting period(s) for
such options, and (vi) the timing and conditions of issuance of any stock option
exercise.
(c) Period. No option granted under the Plan shall be exercisable for a
period in excess of ten years from the date of its grant. All options granted
shall be subject to earlier termination in the event of termination of
employment, retirement or death of the holder as provided in Section 6 or as
otherwise set forth in the agreement granting the option. An option may be
exercised in full or in part at any time or from time to time during the term
thereof, or provide for its exercise in stated installments at stated times
during such term.
(d) No Fractional Shares. Options shall be granted and exercisable
only for whole shares; no fractional shares will be issuable upon exercise of
any option granted under the Plan.
(e) Method of Exercising Option. Options shall be exercised by written
notice to the Corporation, addressed to the Corporation at its principal place
of business. Such notice shall state the election to exercise the option and the
number of shares with respect to which it is being exercised, and shall be
signed by the person exercising the option. Such notice shall be accompanied (i)
by the certificate described in Section 8(b) and (ii) by payment in full of the
exercise price for the number of shares being purchased. Payment may be made in
cash or by bank cashier's check, except that, if and to the extent the
instrument evidencing the option so provides and if the Company is not then
prohibited from purchasing or acquiring shares of such stock. In lieu of cash,
such payment may be made in whole or in part with shares of the same class of
stock as are then subject to the option, delivered in lieu of cash concurrently
with such exercise, the shares so delivered to be valued on the basis of the
fair market value of the stock (determined in a manner specified in the
instrument evidencing the option) on the day preceding the date of exercise.
Alternatively, the Grantee may, in lieu of using previously outstanding shares
therefore, use some of the shares as to which the option is then being
exercised. The Corporation shall deliver a certificate or certificates
representing the option shares to the purchaser as soon as practicable after
payment for those shares has been received. If an option is exercised by any
person other than the optionholder, such notice shall be accompanied by
appropriate proof of the right of such person to exercise the option. All shares
that are purchased and paid for in full upon the exercise of an option shall be
fully paid and non-assessable.
(f) No Rights of a Stockholder. An optionholder shall have no rights as
a stockholder with respect to shares covered by an option. No adjustment will be
made for dividends with respect to an option for which the record date is prior
to the date a stock certificate is issued upon exercise of an option. Upon
exercise of an option, the holder of the shares of Common Stock so received
shall have all rights of a stockholder of the Corporation as of the date of
issuance.
(g) Compliance with Law. No shares of Corporation Common Stock shall be
issued or transferred upon the exercise of any option unless and until all legal
requirements applicable to the issuance or transfer of such shares have been
completed.
(h) Other Provisions. The option agreements may contain such other
provisions as the Board deems necessary to effectuate the sense and purpose of
the Plan, including covenants on the holder's part not to compete and remedies
to the Corporation in the event of the breach of any such covenant.
6. TERMINATION OF EMPLOYMENT; ASSIGNABILITY; DEATH.
(a) Termination of Employment. If any optionholder ceases to be a
director or employee of the Corporation, or ceases to render services pursuant
to a consulting, management or other agreement, other than for death, disability
or discharge for cause, such holder (or successors or transferees) may, within
six months after the date of termination (three months in the case of incentive
stock options), unless otherwise stated by agreement, but in no event after the
stated expiration date, purchase some or all of the shares with respect to which
such optionholder was entitled to exercise such option, on the date such
employment, directorship, or consulting relationship terminated and the option
shall thereafter be void for all purposes. Any termination of an agreement
pursuant to which services are rendered to the Corporation by any party who is
an optionholder, without a renewal of that agreement or entry into a similar
successor agreement, may be treated as a termination of the employment of the
third party.
(b) Assignability. Options granted under the Plan and the privileges
conferred thereby shall not be assignable or transferable, unless the
Compensation Committee provides otherwise. Options shall be exercisable by such
transferee as set forth in this Section 6.
(c) Disability. If the employment or directorship of the optionholder
is terminated due to disability, the optionholder (or transferee of the
optionholder) may exercise the options, in whole or in part, to the extent they
were exercisable on the date when the optionholder's employment or directorship
terminated, at any time prior to the expiration date of the options or within
one year of the date of termination of employment or directorship, whichever is
earlier.
(d) Discharge for Cause. If the employment or directorship of the
optionholder with the Corporation is terminated due to discharge for cause, the
options shall terminate upon receipt by the optionholder of notice of such
termination or the effective date of the termination, whichever is earlier.
Discharge for cause shall include discharge for personal dishonesty, willful
misconduct in performance of duties, failure, impairment or inability to perform
required duties, inefficiencies or omissions in performing required duties,
breach of fiduciary duty or conviction of any felony or crime of moral
turpitude. The Compensation Committee shall have the sole and exclusive right to
determine whether the optionholder has been discharged for cause for purposes of
the Plan and the date of such discharge.
(e) Death of Holder. If optionholder dies while in the Corporation's
employ or while rendering consulting services to the Corporation, an option
shall be exercisable until the stated expiration date thereof by the person or
persons ("successors") to whom the holder's rights pass under will or by the
laws of descent and distribution or by transferees of the optionholders, as the
case may be, but only to the extent that the holder was entitled to exercise the
option at the date of death. An option may be exercised (and payment of the
option price made in full) by the successors or transferees only after written
notice to the Corporation, specifying the number of shares to be purchased or
rights to be exercised. Such notice shall comply with the provisions of Section
5(e), and shall be accompanied by the certificate required by Section 8(b).
7. CERTAIN ADJUSTMENTS.
(a) Capital Adjustments. Except as limited by Section 422 of the Code,
the aggregate number of shares of Common Stock subject to the Plan, the number
of shares covered by outstanding options, and the price per share stated in such
options shall be proportionately adjusted for any increase or decrease in the
number of outstanding shares of Common Stock of the Corporation resulting from a
subdivision or consolidation of shares or any other capital adjustment or the
payment of a stock dividend or any other increase or decrease in the number of
such shares effected without receipt by the Corporation of consideration
therefor in money, services or property.
8. DELIVERY OF STOCK; LEGENDS, REPRESENTATIONS.
(a) Legend on Certificates. All certificates representing shares of
Common Stock issued upon exercise of options granted under the Plan shall be
endorsed with a legend reading as follows: The shares of Common Stock evidenced
by this certificate have been issued to the registered owner in reliance upon
written representations that these shares have been purchased solely for
investment. These shares may not be sold, transferred or assigned unless in the
opinion of the Corporation and its legal counsel such sale, transfer or
assignment will not be in violation of the Securities Act of 1933, as amended,
and the Rules and Regulations thereunder.
(b) Private Offering for Investment Only. The options are and shall be
made available only to a limited number of present and future key executives,
directors, services providers and key employees who have knowledge of the
Corporation's financial condition, management and its affairs. The Plan is not
intended to provide additional capital for the Corporation, but to encourage
stock ownership among the Corporation's key personnel. By the act of accepting
an option, each optionholder agrees (i) that, if he, his successors, or his
transferees exercise his option, he his successors, or his transferees will
purchase the subject shares solely for investment and not with any intention at
such time to resell or redistribute those shares, and (ii) that he, his
successors, or his transferees will confirm such intention by an appropriate
certificate at the time the option is exercised. However, the neglect or failure
to execute such a certificate shall not limit or negate the foregoing agreement.
9. COMPLIANCE WITH LEGAL REQUIREMENTS.
(a) For Investment Only. If, at the time of exercise of this option,
there is not in effect as to the Option Shares being purchased a registration
statement under the Securities Act of 1933, as amended (or any successor
statute) (collectively the 1933 Act"), then the exercise of this option shall be
effective only upon receipt by the Corporation from the key employee or service
provider (or his legal representatives or heirs) of a written representation
that the option shares are being purchased for investment and not for
distribution.
(b) Registration Statement Preparation. The key employee or service
provider hereby agrees to supply the Corporation with such information and to
cooperate with the Corporation, as the Corporation may reasonably request, in
connection with the preparation and filing of the registration statements and
amendments thereto under the Securities Act of 1933 and applicable state
statutes and regulations applicable to the option shares. The Corporation shall
not be liable for failure to issue any such option shares where such opinion of
counsel cannot be obtained within the period specified for the exercise of the
option, or where such registration is required in the opinion of counsel. If
shares of Common Stock of the Corporation are, at the time of the exercise of
this option, listed upon a securities exchange, the exercise of this option
shall be contingent upon completion of the necessary steps to list the option
shares being purchased upon such securities exchange.
(c) Additional Restrictions on Option Exercise. Officers or any other
employee or service providers who are privy to material confidential information
of the Company as determined by the Committee may only exercise options during
the period commencing three days following the release for publication of
quarterly or annual financial information regarding the Corporation and ending
two weeks prior to the end of the then current fiscal quarter of the Corporation
(the "Release Period").
A "release for publication" shall be deemed to be satisfied if the
specified financial data appears:
(1) On a wire service;
(2) A financial news service;
(3) In a newspaper of general circulation; or
(4) Is otherwise made publicly available. Notwithstanding any
provision to the contrary contained herein, a key employee
or service provider may exercise options only so long as
such exercise does not violate the law or any rule or
regulation adopted by the appropriate governmental
authority.
10. APPLICATION OF FUNDS.
The proceeds received by the Corporation from the sale of Common Stock pursuant
to the exercise of options will be used for general corporate purposes.
11. WITHHOLDING OF TAXES. The Corporation shall have the right to deduct from
any other compensation of the option holder any federal, state or locate income
taxes (including FICA) required by law to be withheld with respect to the
granting or exercise of any options.
DATED January 31, 2001 and amended on August 3, 2001.
iBIZ TECHNOLOGY CORP.,
a Florida corporation
By __________________
Kenneth Schilling,
President and Chief Executive Officer
ATTESTED BY:
Name: ____________________________
Title: Secretary
EXHIBIT C
iBIZ TECHNOLOGY CORP.
2001 STOCK OPTION PLAN
1. PURPOSE OF PLAN.
(a) General Purpose. The purpose of iBIZ TECHNOLOGY CORP. STOCK OPTION
PLAN ("Plan") is to further the interests of iBIZ TECHNOLOGY CORP., a Florida
corporation (the "Corporation"), and its stockholders by providing an incentive
based form of compensation to the directors, officers, key employees and service
providers of the Corporation and by encouraging such persons to invest in shares
of the Corporation's Common Stock, thereby acquiring a proprietary interest in
its business and an increased personal interest in its continued success and
progress and ongoing inducement to remain in the Corporation's employ, service
or as a director.
(b) Incentive Stock Options. Some one or more of the options granted
under the Plan may be intended to qualify as an "incentive stock option" as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and any grant of such an option shall clearly specify that such option
is intended to so qualify. If no such specification is made, an option granted
hereunder shall not be intended to qualify as an "incentive stock option." The
employees eligible to be considered for the grant of incentive stock options
hereunder are any persons regularly employed by the Corporation in a managerial,
professional or technical capacity on a full-time, salaried basis.
2. STOCK AND MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN.
(a) Description of Stock and Maximum Shares Allocated. The stock
subject to the provisions of the Plan and issuable upon exercise of options
granted under the Plan are shares of the Corporation's Common Stock, $.001 par
value, which may be either unissued or treasury shares, as the Corporation's
Board of Directors (the "Board") may from time to time determine. Subject to
adjustment as provided in Section 7, the aggregate number of shares of Common
Stock covered by the Plan and issuable upon exercise of all options granted
hereunder shall be 10,000,000 shares, which shares shall be reserved for use
upon the exercise of options to be granted from time to time.
(b) Restoration of Unpurchased Shares. If an option expires or
terminates for any reason prior to its exercise in full and before the term of
the Plan expires, the shares subject to, but not issued under such option shall
again be available for other options thereafter granted.
3. ADMINISTRATION; AMENDMENTS.
(a) Administration by Committee. The Plan shall be administered by the
Board of Directors or whenever the Board has at least two members who are not
either employees or officers of the Corporation or of any parent or subsidiary
of the Corporation ("Independent Directors") by a committee of not less than two
persons who are Independent Directors (the "Compensation Committee"), with full
power to administer the Plan, to interpret the Plan and to establish and amend
rules and regulations for its administration. (The term "Compensation Committee"
as used throughout this Plan shall 1 14 refer to the Board of Directors or a
committee of two Independent Directors, whichever is administering the Plan at
the time).
(b) Exercise Price. Upon the grant of any option, the Compensation
Committee shall specify the exercise price for the shares issuable upon exercise
of options granted. In no event may an option exercise price per share be less
than 100% of the Fair Market Value (as defined below) per share of the
Corporation's Common Stock on the date such option is granted.
(c) Fair Market Value. The Fair Market Value of a share on any
particular day shall be determined as follows:
(1) If the shares are listed or admitted to trading on any
securities exchange, the fair market value shall be the average sales
price on such day on the New York Stock Exchange, or if the shares have
not been listed or admitted to trading on the New York Stock Exchange,
on such other securities exchange on which such stock is then listed or
admitted to trading, or if no sale takes place on such day on any such
exchange, the average of the closing bid and asked price on such day as
officially quoted on any such exchange;
(2) If the shares are not then listed or admitted to trading
on any securities exchange, the fair market value shall be the average
sales price on such day or, if no sale takes place on such day, the
average of the reported closing bid and asked price on such date, in
the over-the-counter market as furnished by the National Association of
Securities Dealers Automated Quotation ("NASDAQ"), or if NASDAQ at the
time is not engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business and
selected by the Board; or
(3) If the shares are not then listed or admitted to trading
in the over-the-counter market, the fair market value shall be the
amount determined by the Board in a manner consistent with Treasury
Regulation Section 20-2031-2 promulgated under the Code or in such
other manner prescribed by the Secretary of the Treasury or the
Internal Revenue Service.
(d) Interpretation. The interpretation and construction by the
Compensation Committee of the terms and provisions of this Plan and of the
agreements governing options and rights granted under the Plan shall be final
and conclusive. No member of the Compensation Committee shall be liable for any
action taken or determination made in good faith.
(e) Amendments to Plan. The Compensation Committee may, without action
on the part of the stockholders of the Corporation, make such amendments to,
changes in and additions to the Plan as it may, from time to time, deem proper
and in the best interests of the Corporation; provided that the Compensation
Committee may not, without consent of the holder, take any action which
disqualifies any option granted under the Plan as an incentive stock option for
treatment as such or which adversely affects or impairs the rights of the holder
of any option outstanding under the Plan.
4. PARTICIPANTS; DURATION OF PLAN.
(a) Eligibility and Participation. Options may be granted in the total
amount for the period as allocated by the Board as provided in Section 4(b)
below only to persons who at the time of grant are directors, key employees of,
or service providers to the Corporation, whether or not such persons are also
members of the Board; provided, however, that no incentive stock option may be
granted to a director of the Corporation unless such person is also an executive
employee of the Corporation.
(b) Allotment. The Board shall determine the aggregate number of shares
of Common Stock which may be optioned from time to time but the Compensation
Committee shall have sole authority to determine the number of shares and the
recipient thereof to be optioned at any time. The Compensation Committee shall
not be required to grant all options allocated by the Board for any given period
if it determines, in its sole and exclusive judgment, that such grant is not in
the best interests of the Corporation. The grant of an option to any person
shall neither entitle such individual to, nor disqualify such individual from,
participation in any other grant of options under the Plan.
(c) Duration of Plan. The term of the Plan, unless previously
terminated by the Board, is ten years or January 31, 2009. No option shall be
granted under the Plan unless granted within ten years after the adoption of the
Plan by the Board, but options outstanding on that date shall not be terminated
or otherwise affected by virtue of the Plan's expiration.
(d) Approval of Stockholders. If the Board issues any incentive stock
options, solely for the purposes of compliance with the Code provisions
pertaining to incentive stock options, the Plan shall be submitted to the
stockholders of the Corporation for their approval at a regular meeting to be
held within twelve months after adoption of the Plan by the Board. Stockholder
approval shall be evidenced by the affirmative vote of the holders of a majority
of the shares of Common Stock present in person or by proxy and voting at the
meeting. If the stockholders decline to approve the Plan at such meeting or if
the Plan is not approved by the stockholders within twelve months after its
adoption by the Board, no incentive stock options may be issued under the Plan
but all options granted under the Plan shall remain in full force and effect
regardless of Shareholder approval and the Plan may be used for future
nonincentive stock option issuances. If shareholders fail to approve the Plan,
all previously issued incentive stock options shall be automatically converted
to nonincentive stock options.
5. TERMS AND CONDITIONS OF OPTIONS AND RIGHTS.
(a) Individual Agreements. Options granted under the Plan shall be
evidenced by agreements in such form as the Board from time to time approves,
which agreements shall substantially comply with and be subject to the terms of
the Plan, including the terms and conditions of this Section 5.
(b) Required Provisions. Each agreement shall state (i) the total
number of shares to which it pertains, (ii) the exercise price for the shares
covered by the option, (iii) the time at which the option becomes exercisable,
(iv) the scheduled expiration date of the option, (v) the vesting period(s) for
such options, and (vi) the timing and conditions of issuance of any stock option
exercise.
(c) Period. No option granted under the Plan shall be exercisable for a
period in excess of ten years from the date of its grant. All options granted
shall be subject to earlier termination in the event of termination of
employment, retirement or death of the holder as provided in Section 6 or as
otherwise set forth in the agreement granting the option. An option may be
exercised in full or in part at any time or from time to time during the term
thereof, or provide for its exercise in stated installments at stated times
during such term.
(d) No Fractional Shares. Options shall be granted and exercisable
only for whole shares; no fractional shares will be issuable upon exercise of
any option granted under the Plan.
(e) Method of Exercising Option. Options shall be exercised by written
notice to the Corporation, addressed to the Corporation at its principal place
of business. Such notice shall state the election to exercise the option and the
number of shares with respect to which it is being exercised, and shall be
signed by the person exercising the option. Such notice shall be accompanied (i)
by the certificate described in Section 8(b) and (ii) by payment in full of the
exercise price for the number of shares being purchased. Payment may be made in
cash or by bank cashier's check, except that, if and to the extent the
instrument evidencing the option so provides and if the Company is not then
prohibited from purchasing or acquiring shares of such stock. In lieu of cash,
such payment may be made in whole or in part with shares of the same class of
stock as are then subject to the option, delivered in lieu of cash concurrently
with such exercise, the shares so delivered to be valued on the basis of the
fair market value of the stock (determined in a manner specified in the
instrument evidencing the option) on the day preceding the date of exercise.
Alternatively, the Grantee may, in lieu of using previously outstanding shares
therefore, use some of the shares as to which the option is then being
exercised. The Corporation shall deliver a certificate or certificates
representing the option shares to the purchaser as soon as practicable after
payment for those shares has been received. If an option is exercised by any
person other than the optionholder, such notice shall be accompanied by
appropriate proof of the right of such person to exercise the option. All shares
that are purchased and paid for in full upon the exercise of an option shall be
fully paid and non-assessable.
(f) No Rights of a Stockholder. An optionholder shall have no rights as
a stockholder with respect to shares covered by an option. No adjustment will be
made for dividends with respect to an option for which the record date is prior
to the date a stock certificate is issued upon exercise of an option. Upon
exercise of an option, the holder of the shares of Common Stock so received
shall have all rights of a stockholder of the Corporation as of the date of
issuance.
(g) Compliance with Law. No shares of Corporation Common Stock shall be
issued or transferred upon the exercise of any option unless and until all legal
requirements applicable to the issuance or transfer of such shares have been
completed.
(h) Other Provisions. The option agreements may contain such other
provisions as the Board deems necessary to effectuate the sense and purpose of
the Plan, including covenants on the holder's part not to compete and remedies
to the Corporation in the event of the breach of any such covenant.
6. TERMINATION OF EMPLOYMENT; ASSIGNABILITY; DEATH.
(a) Termination of Employment. If any optionholder ceases to be a
director or employee of the Corporation, or ceases to render services pursuant
to a consulting, management or other agreement, other than for death, disability
or discharge for cause, such holder (or successors or transferees) may, within
six months after the date of termination (three months in the case of incentive
stock options), but in no event after the stated expiration date, purchase some
or all of the shares with respect to which such optionholder was entitled to
exercise such option, on the date such employment, directorship, or consulting
relationship terminated and the option shall thereafter be void for all
purposes. Any termination of an agreement pursuant to which services are
rendered to the Corporation by any party who is an optionholder, without a
renewal of that agreement or entry into a similar successor agreement, may be
treated as a termination of the employment of the third party.
(b) Assignability. Options granted under the Plan and the privileges
conferred thereby shall not be assignable or transferable, unless the
Compensation Committee provides otherwise. Options shall be exercisable by such
transferee as set forth in this Section 6.
(c) Disability. If the employment or directorship of the optionholder
is terminated due to disability, the optionholder (or transferee of the
optionholder) may exercise the options, in whole or in part, to the extent they
were exercisable on the date when the optionholder's employment or directorship
terminated, at any time prior to the expiration date of the options or within
one year of the date of termination of employment or directorship, whichever is
earlier.
(d) Discharge for Cause. If the employment or directorship of the
optionholder with the Corporation is terminated due to discharge for cause, the
options shall terminate upon receipt by the optionholder of notice of such
termination or the effective date of the termination, whichever is earlier.
Discharge for cause shall include discharge for personal dishonesty, willful
misconduct in performance of duties, failure, impairment or inability to perform
required duties, inefficiencies or omissions in performing required duties,
breach of fiduciary duty or conviction of any felony or crime of moral
turpitude. The Compensation Committee shall have the sole and exclusive right to
determine whether the optionholder has been discharged for cause for purposes of
the Plan and the date of such discharge.
(e) Death of Holder. If optionholder dies while in the Corporation's
employ or while rendering consulting services to the Corporation, an option
shall be exercisable until the stated expiration date thereof by the person or
persons ("successors") to whom the holder's rights pass under will or by the
laws of descent and distribution or by transferees of the optionholders, as the
case may be, but only to the extent that the holder was entitled to exercise the
option at the date of death. An option may be exercised (and payment of the
option price made in full) by the successors or transferees only after written
notice to the Corporation, specifying the number of shares to be purchased or
rights to be exercised. Such notice shall comply with the provisions of Section
5(e), and shall be accompanied by the certificate required by Section 8(b).
7. CERTAIN ADJUSTMENTS.
(a) Capital Adjustments. Except as limited by Section 422 of the Code,
the aggregate number of shares of Common Stock subject to the Plan, the number
of shares covered by outstanding options, and the price per share stated in such
options shall be proportionately adjusted for any increase or decrease in the
number of outstanding shares of Common Stock of the Corporation resulting from a
subdivision or consolidation of shares or any other capital adjustment or the
payment of a stock dividend or any other increase or decrease in the number of
such shares effected without receipt by the Corporation of consideration
therefor in money, services or property.
8. DELIVERY OF STOCK; LEGENDS, REPRESENTATIONS.
(a) Legend on Certificates. All certificates representing shares of
Common Stock issued upon exercise of options granted under the Plan shall be
endorsed with a legend reading as follows: The shares of Common Stock evidenced
by this certificate have been issued to the registered owner in reliance upon
written representations that these shares have been purchased solely for
investment. These shares may not be sold, transferred or assigned unless in the
opinion of the Corporation and its legal counsel such sale, transfer or
assignment will not be in violation of the Securities Act of 1933, as amended,
and the Rules and Regulations thereunder.
(b) Private Offering for Investment Only. The options are and shall be
made available only to a limited number of present and future key executives,
directors, services providers and key employees who have knowledge of the
Corporation's financial condition, management and its affairs. The Plan is not
intended to provide additional capital for the Corporation, but to encourage
stock ownership among the Corporation's key personnel. By the act of accepting
an option, each optionholder agrees (i) that, if he, his successors, or his
transferees exercise his option, he his successors, or his transferees will
purchase the subject shares solely for investment and not with any intention at
such time to resell or redistribute those shares, and (ii) that he, his
successors, or his transferees will confirm such intention by an appropriate
certificate at the time the option is exercised. However, the neglect or failure
to execute such a certificate shall not limit or negate the foregoing agreement.
9. COMPLIANCE WITH LEGAL REQUIREMENTS.
(a) For Investment Only. If, at the time of exercise of this option,
there is not in effect as to the Option Shares being purchased a registration
statement under the Securities Act of 1933, as amended (or any successor
statute) (collectively the 1933 Act"), then the exercise of this option shall be
effective only upon receipt by the Corporation from the key employee or service
provider (or his legal representatives or heirs) of a written representation
that the option shares are being purchased for investment and not for
distribution.
(b) Registration Statement Preparation. The key employee or service
provider hereby agrees to supply the Corporation with such information and to
cooperate with the Corporation, as the Corporation may reasonably request, in
connection with the preparation and filing of the registration statements and
amendments thereto under the Securities Act of 1933 and applicable state
statutes and regulations applicable to the option shares. The Corporation shall
not be liable for failure to issue any such option shares where such opinion of
counsel cannot be obtained within the period specified for the exercise of the
option, or where such registration is required in the opinion of counsel. If
shares of Common Stock of the Corporation are, at the time of the exercise of
this option, listed upon a securities exchange, the exercise of this option
shall be contingent upon completion of the necessary steps to list the option
shares being purchased upon such securities exchange.
(c) Additional Restrictions on Option Exercise. Officers or any other
employee or service providers who are privy to material confidential information
of the Company as determined by the Committee may only exercise options during
the period commencing three days following the release for publication of
quarterly or annual financial information regarding the Corporation and ending
two weeks prior to the end of the then current fiscal quarter of the Corporation
(the "Release Period").
A "release for publication" shall be deemed to be satisfied if the
specified financial data appears:
(5) On a wire service;
(6) A financial news service;
(7) In a newspaper of general circulation; or
(8) Is otherwise made publicly available. Notwithstanding any
provision to the contrary contained herein, a key employee
or service provider may exercise options only so long as
such exercise does not violate the law or any rule or
regulation adopted by the appropriate governmental
authority.
10. APPLICATION OF FUNDS.
The proceeds received by the Corporation from the sale of Common Stock pursuant
to the exercise of options will be used for general corporate purposes.
11. WITHHOLDING OF TAXES. The Corporation shall have the right to deduct from
any other compensation of the option holder any federal, state or locate income
taxes (including FICA) required by law to be withheld with respect to the
granting or exercise of any options.
DATED July 25, 2001.
iBIZ TECHNOLOGY CORP.,
a Florida corporation
By __________________
Kenneth Schilling,
President and Chief Executive Officer
ATTESTED BY:
Name:____________________________
Title: Secretary