SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act 1934 of 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
[ X ] Definitive Information Statement
GLOBAL SPORTS AND ENTERTAINMENT, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box)
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) 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:
- --------------------------------------------------------------------------------
INFORMATION STATEMENT
OF
GLOBAL SPORTS & ENTERTAINMENT, INC.
5092 SOUTH JONES BLVD.
LAS VEGAS, NEVADA 89118
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
This Information Statement is first being furnished on or about June 20,
2002 to the holders of record as of the close of business on April 30, 2002 of
the common stock of Global Sports & Entertainment, Inc. ("GWIN").
This Information Statement is being sent in compliance with Section 228(e)
of the Delaware General Corporation Law.
GWIN's Board of Directors has approved, and a total of 6 stockholders
owning 10,423,673 shares of the 19,579,728 shares of common stock outstanding as
of March 31, 2002 have consented in writing to the actions described below. Such
approval and consent constitute the approval and consent of a majority of the
total number of shares of outstanding common stock and are sufficient under the
Delaware General Corporation Law and GWIN's By-Laws to approve the actions.
Accordingly, the actions will not be submitted to the other stockholders of GWIN
for a vote and this Information Statement is being furnished to stockholders to
provide them with certain information concerning the actions in accordance with
the requirements of the Securities Exchange Act of 1934 and the regulations
promulgated thereunder, including Regulation 14C.
ACTIONS BY BOARD OF DIRECTORS
AND
CONSENTING STOCKHOLDERS
GENERAL
GWIN will pay all costs associated with the distribution of this
Information Statement, including the costs of printing and mailing. GWIN will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending this Information Statement to
the beneficial owners of GWIN's common stock.
GWIN will only deliver one information statement to multiple security
holders sharing an address unless we have received contrary instructions from
one or more of the security holders. GWIN will promptly deliver a separate copy
of this information statement and future shareholder communication documents to
any security holder at a shared address to which a single copy of this
information statement was delivered, or deliver a single copy of this
information statement and future shareholder communication documents to any
security holder or holders sharing an address to which multiple copies are now
delivered, upon written or oral request to the following address:
Global Sports & Entertainment, Inc.
Attn: Douglas R. Miller
5092 South Jones Blvd.
Las Vegas, Nevada 89118
(702) 967-6000
Security holders may also address future requests regarding delivery of
information statements and/ or annual reports by contacting GWIN at the address
listed above.
1
INFORMATION ON CONSENTING STOCKHOLDERS
Pursuant to GWIN's Bylaws and the Delaware General Corporation Act, a vote
by the holders of at least a majority of GWIN's outstanding capital stock is
required to effect the actions described herein. GWIN's Certificate of
Incorporation does not authorize cumulative voting. As of the record date, GWIN
had 19,579,728 voting shares of common stock issued and outstanding of which
9,827,365 shares are required to pass any stockholder resolutions. The
consenting stockholders, who consist of 6 current stockholders of GWIN, are
collectively the record and beneficial owners of 10,423,673 shares, which
represents 53.4% of the issued and outstanding shares of common stock. Pursuant
to Section 228 (a) of the Delaware General Corporation Act, the consenting
stockholders voted in favor of the actions described herein in a written
Consent, dated June 18, 2002, attached hereto as Exhibit A. No consideration was
paid for the consent. The consenting stockholders' names, affiliations with GWIN
and their beneficial holdings are as follows:
Name Affiliation Shares Beneficially Held Percentage
- --------------------------- ------------------------- ------------------------- -----------
Wayne Allyn Root Chairman, Chief Executive
Officer 4,292,818 21.9%
Douglas R. Miller Director, Chief Financial
Officer 3,710,474 19.0%
Timothy J. Keating Director 959,207 4.9%
John T. Manner Director 639,308 3.3%
Ralph R. Papitto Director 289,110 1.5%
Edward J. Fishman Director 532,756 2.8%
TOTAL 10,423,673 53.4%
INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE ACTED UPON
None.
PROPOSALS BY SECURITY HOLDERS
None
DISSENTERS' RIGHT OF APPRAISAL
There are no appraisal rights regarding any matter to be acted upon.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of April 30, 2002 as to each
person who is known to GWIN to be the beneficial owner of more than 5% of GWIN's
outstanding common stock and as to the security and percentage ownership of each
executive officer and director of GWIN and all officers and directors of GWIN as
a group. Except where specifically noted, each person listed in the table has
sole voting and investment power with respect to the shares listed.
2
Amount And Nature
Title Of Class Of Beneficial Percent Of
Name (1) Ownership Class
--------------------------------------- ------------------ ------------
Common Stock Wayne Allyn Root, Chairman and Chief 4,292,818 22.3%
Executive Officer (2)
Common Stock Douglas Miller, Director and Chief 3,710,474 19.3%
Financial Officer (3)
Common Stock Timothy J. Keating, Director (4) 959,207 5.0%
Common Stock John T. Manner, Director (5) 639,308 3.3%
Common Stock Ralph R. Papitto, Director (6) 289,110 1.5%
Common Stock David P. Hanlon, Director (7) ___ ___
Common Stock Edward J. Fishman, Director 532,756 2.8%
Common Stock Thomas G. Muehlbauer, Director ___ ___
Officers & Directors as a group (8 persons) 10,423,673 53.4%
Series C Preferred Stock Trilium Holdings Ltd. 1,000,000(8) ___
Charlotte House, Charlotte Street
P.O. Box 9204
Nassau, Bahamas
Series C Preferred Stock Luca Toscani
220 Montgomery Street
Suite 5
San Francisco, CA 94104 280,000 (8) ___
(1) Unless otherwise noted, the address for each of the named directors and
officers is: 5092 South Jones Blvd., Las Vegas, Nevada 89118.
(2) Does not include Mr. Root's stock options to acquire 106,551 shares of
common stock at an exercise price of $1.41.
(3) The shares are held in the name of Kerlee Inter Vivos Trust for which Mr.
Miller is a beneficiary. Amount does not include Mr. Miller's stock options
to acquire 106,551 shares of common stock at an exercise price of $1.41.
(4) Does not include Mr. Keating shares of Series C Preferred Stock, that
are held by him and through his affiliated entity, that are convertible
into 1,720,000 shares of common stock. Does not also include Mr.
Keating's warrants to acquire 600,000 shares of common stock at $.10 per
share, and 400,000 shares of common stock at $1.00 per share.
(5) Does not include Mr. Manner's stock options to acquire 168,465 shares of
common stock at an exercise price of $1.41.
(6) Does not include Mr. Papitto's stock options to acquire 133,189 shares of
common stock at an exercise price of $1.41 and 92,345 warrants at
an exercise price of $1.41.
(7) Does not include Mr. Hanlon's stock options to acquire 106,551 shares of
common stock at an exercise price of $1.41.
3
(8) Represents Series C Convertible Preferred Stock that is convertible into
common shares. As of April 30, 2002, the Series C Preferred Stock was not
converted.
NOTICE TO STOCKHOLDERS OF ACTIONS APPROVED BY CONSENTING STOCKHOLDERS
The following actions were taken based upon the unanimous recommendation by
GWIN's Board of Directors and the written Consent of the consenting
stockholders:
ACTION 1
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO CHANGE THE NAME OF THE COMPANY
On June 14, 2002, the Board issued a Resolution adopting and approving an
amendment to GWIN's Certificate of Incorporation to change the name of the
company from "Global Sports & Entertainment, Inc." to "GWIN" (the "Name
Change"). On June 18, 2002, the consenting stockholders issued a Consent,
whereby they approved the Name Change. It is the opinion of the Board and the
consenting shareholders that the Name Change is desirable to avoid both consumer
confusion and both potential and actual litigation with another Delaware company
with a similar name, Global Sports, Inc. Global Sports, Inc. filed a complaint
against us on October 11, 2001 regarding the similarities in our names. Although
our businesses are not competitive, in evaluating our options regarding this
proceeding, including a consideration of the time and resources which would have
been required to adequately respond to this proceeding, it is the opinion of the
Board that it is in the best interests of the company and its shareholders to
avoid the deleterious effects of pursuing this cause of action altogether, and
commence the Name Change, permitting us to focus on the business and operations
of the company.
GWIN's stockholders will not be affected by the name change in any way, and
GWIN stockholders will not be required to exchange outstanding stock
certificates for new certificates.
The Name Change Amendment will become effective upon the filing of the
Amended Certificate of Incorporation. Under federal securities laws, GWIN cannot
file the Amended Certificate of Incorporation until at least 20 days after the
mailing of this Information Statement
ACTION 2
ADOPTION OF THE 2002 EQUITY INCENTIVE PLAN
On June 14, 2002, the Board issued a Resolution adopting and approving an
Equity Incentive Plan, reserving 3,000,000 shares of common stock for issuance
under the Plan. On June 18, 2002, the consenting stockholders issued a Consent,
whereby they approved the adoption of the Equity Incentive Plan. Under the Plan,
options may be issued to directors, officers, key employees, consultants,
agents, advisors, and independent contractors who are in a position to
contribute materially to the prosperity of the company. The Plan provides for
the issuance of both Incentive Stock Options ("ISOs") and Non-Qualified Stock
Options ("NQSOs"). ISOs are issued to employees and NQSOs are generally issued
to non-employees. The number of shares that are subject to ISOs is limited to
3,000,000 under the Plan. The number of NQSOs that may be issued is subject to
the discretion of the Board of Directors. The Plan is attached as an Exhibit to
this Information Statement.
Our Board of Directors administers the Plan but may delegate such
administration to a committee, which shall consist of at least two members of
the Board. The Board or the Committee has the authority to determine the number
of options to be granted, when the options may be exercised and the exercise
price of the options, provided that the exercise price may never be less than
the fair market value of the shares of the Common Stock on the date the option
is granted (110% in the case of any employee who owns more than 10% of the
combined voting power or value of all classes of stock). Options may be granted
for terms not exceeding ten years from the date of the grant, except for options
granted to persons holding in excess of 10% of the common stock, in which case
the options may be granted for a term not to exceed five years from the date of
the grant.
4
The Board of Directors believes that the Plan will provide greater
flexibility in structuring compensation arrangements with management,
consultants and employees, and will provide an equity incentive for those who
are awarded shares under the Plan. The issuance of common stock as an award
under the Plan may have a financially dilutive effect depending on the price
paid for such shares, and an absolute dilutive effect due to the increase in
issued and outstanding shares.
ACTION 3
ELECTION OF DIRECTORS
In accordance with GWIN's By-Laws, the Board shall consist of not less than
three and not more than nine persons. The size of the Board is currently fixed
at eight, and the Board has nominated the individuals listed below for election
as directors, all of whom are presently members of the Board and were elected by
shareholders at the 2001 annual meeting, with the exception of Mr. Thomas G.
Muehlbauer, who is not being renominated at the end of his present term. The
Board does not intend to fill Mr. Muehlbauer's vacancy, and has reduced its
Board of Directors to seven by affirmative vote of the Board of Directors, dated
June 14, 2002, as permitted by Article III, Section 2 of its By-Laws. All of the
proposed director-nominees have signified their willingness to serve, if
elected. On June 18, 2002, the consenting stockholders issued a Consent, whereby
they duly elected the director-nominees for a new term, such term to begin as
soon as permissible by the Federal securities laws.
The following brief biographies contain information about the seven
director-nominees. The information includes each person's principal occupations
and business experience for at least the past five years.
NAME AGE TITLE
- -------------------- --- --------
Wayne Allyn Root 40 Chairman of the Board and Chief Executive Officer
Douglas R. Miller 55 President, Chief Operating Officer, Chief Financial Officer,
Secretary and Director
David P. Hanlon 56 Director
Edward J. Fishman 58 Director
Ralph R. Papitto 74 Director
Timothy J. Keating 38 Director
John T. Manner 55 Director
WAYNE ALLYN ROOT has served as our Chief Executive Officer and Chairman of
our board of directors since our reorganization in July 2001. From 1999 to 2001,
Mr. Root served as Chairman and Chief Executive Officer of our subsidiary,
Global Sports Edge, Inc. From 1990 to 1999, Mr. Root served as a sports
handicapper for National Sports Service. Mr. Root has appeared on Proline, a
college and pro football show on USA Network, since 1990. Mr. Root holds a B.A.
in political science from Columbia University. Other than the Registrant, Mr.
Root does not hold a board seat in any other public company.
DOUGLAS R. MILLER has served as our President, Chief Operating Officer,
Secretary and director since our reorganization in July 2001. Mr. Miller has
also served as our Chief Financial Officer since November 7, 2001. From 1999 to
2001, Mr. Miller served as President of our subsidiary, Global Sports Edge, Inc.
From 1998 to 1999, Mr. Miller was the Chief Financial Officer of Body Code
International, an apparel manufacturer. Mr. Miller holds a B.A. degree in
5
Economics from the University of Nebraska, and an MBA degree from Stanford
University, and has over twenty-five years of senior management experience.
Other than the Registrant, Mr. Miller does not hold a board seat in any other
public company.
DAVID HANLON has served as a director since September 2001. Mr. Hanlon has
been employed an independent business consultant since 1998. From 1996 to
1998, Mr. Hanlon served as President and Chief Operating Officer of Rio Suites
Hotel & Casino. Mr. Hanlon holds a degree from Cornell University and a MBA from
the Wharton School of Business at the University of Pennsylvania. Other than the
Registrant, Mr. Hanlon does not hold a board seat in any other public company.
RALPH PAPITTO has served as a director since August 2001. Mr. Papitto has
been the Chairman and CEO of AFC Cable Systems, Inc. since 1990. Mr. Papitto
previously served as a director and officer of Nortek, Inc. and GTI Corporation
and was a founder of both companies. Mr. Papitto holds a B.S. degree from Bryant
College and honorary doctorate degrees from The New England Institute of
Technology, Roger Williams University, Bryant College and Suffolk University.
Mr. Papitto currently serves on the board of directors of Lynch Interactive
Corporation, Lynch Corporation, AFC Cable Systems, Inc. and Avtek, Inc. In
addition, Mr. Papitto is currently the Chairman of the Board of Trustees of
Roger Williams University.
EDWARD FISHMAN has served as a director since August 2001. From 1985 to
1995, he served as the Chief Executive Officer of Players International, Inc., a
company he co-founded. Mr. Fishman has over 18 years experience in the gaming
industry and has served as a marketing and strategic planning consultant to
casinos worldwide. Mr. Fishman holds directorships in two other public
companies, Laserlock, Inc. and Interactive Solutions Company.
TIMOTHY J. KEATING served as our Chief Executive Officer from August 1999
to July 2001, and has served as our director since August 2001. Mr. Keating is
currently the President of Keating Investments, LLC, a licensed broker-dealer
and registered investment advisor, a position he has held since 1987. Mr.
Keating was Managing Director and Head of European equity trading at Bear
Stearns International, Ltd. in London from 1994 to 1997. Mr. Keating holds an
A.B. degree in Economics from Harvard College. Other than the Registrant, Mr.
Keating does not hold a board seat in any other public company.
JOHN T. MANNER has served as a director since September 2001. Mr. Manner
has served as President of John Manner Insurance Agency Inc. for the past 30
years. Mr. Manner holds a B.S. degree from Milliken University and a M.S. degree
from Indiana University. Other than the Registrant, Mr. Manner does not hold a
board seat in any other public company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the reorganization and sale of Series C Preferred Stock
in July 2001, we paid a placement fee of $150,000 to Keating Investments, LLC
for services rendered in connection with the private placement of our Series C
preferred stock. Timothy J. Keating, a director of our company and our former
President and Chief Executive Officer, is the Managing Member and President of
Keating Investments, LLC.
On September 4, 2001, we sold to Keating Partners, L.P., for an aggregate
purchase price of $200,000, a total of 400,000 shares of our common stock,
together with a warrant to purchase an additional 400,000 shares at an exercise
price of $1.00 per share expiring on August 31, 2004. This transaction triggered
the anti-dilution adjustment provisions of our Series C preferred stock, of
which 36,694 shares are beneficially owned by Mr. Keating, resulting in an
increase in the conversion rate for the Series C preferred stock from 31.25 to
46.875 shares of common stock for every one share of Series C preferred stock.
In September 2001, we entered into a financial advisory agreement with
Keating Investments, LLC. In consideration for the services to be rendered
pursuant to this agreement, we issued Keating Investments, LLC a warrant to
purchase 600,000 shares of our common stock at a purchase price of $0.10 per
share, exercisable until September 10, 2006. The cost of this agreement has been
recorded at $240,000 and is being charged to operations over 48 months. The
holders of the Series C preferred stock executed a waiver of the anti-dilution
adjustment to the conversion rate of the Series C preferred stock that otherwise
would have been triggered by this transaction.
6
In November 2001, we entered into two separate notes payable agreements
with Mr. Root, an officer and Director, and Mr. Keating, a Director, each note
in principle amount of $50,000, and accruing interest at 12% annually. At May
31, 2002, we had a balance of $100,000 outstanding under this agreement with
accrued interest of $7,323. The notes plus accrued interest are payable no later
than June 30, 2002 and are therefore classified as current liabilities.
Mr. Root earned handicapping fees of $227,000 in the 2001 fiscal year,
$74,000 of which has not yet been paid. We are currently negotiating with Mr.
Root regarding payment of these fees, and anticipate settling this amount by the
end of the next quarter by payment of an equivalent value of either options or
restricted stock.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of copies of Forms 3 and 4 and amendments
thereto furnished to the company pursuant to Rule 16(a)-(e), Forms 5 and
amendments thereto furnished to the company with respect to the last fiscal
year, and any written representations regarding each and all of these Forms,
GWIN is not aware of any failure to comply with Section 16(A) by any of the
company's officers, directors and 10% stockholders.
COMMITTEES
On February 7, 2002, GWIN formed an Audit Committee, comprised of Messrs.
Hanlon, Keating and Manner. The purpose and functions performed by the committee
are as follows: The Audit Committee shall represent the Board of Directors in
discharging its responsibility relating to the accounting, reporting, and
financial practices of the Company and its subsidiaries, and shall have general
responsibility for surveillance of internal controls and accounting and audit
activities of the Company and its subsidiaries. The Audit Committee does not
itself prepare financial statements or perform audits, and its members are not
auditors or certifiers of the Company's financial statements. Specifically, the
Audit Committee shall:
(i) Recommend to the Board of Directors, and evaluate, the firm of independent
certified public accountants to be appointed as auditors of the Company,
which firm shall be ultimately accountable to the Board of Directors
through the Audit Committee.
(ii) Review and discuss with the outside auditors their audit procedures,
including the scope, fees and timing of the audit, and the results of the
annual audit examination and any accompanying management letter, and any
reports of the outside auditors with respect to interim periods.
(iii)Review and discuss the written statement from the outside auditor of the
Company concerning any relationships between the auditor and the Company or
any other relationships that may adversely affect the independence of the
auditor and, based on such review, assess the independence of the outside
auditor.
(iv) Review and discuss with management and the auditors the financial
statements of the Company, including analysis of the auditors' judgment as
to the quality of the Company's accounting principles.
(v) Based on the review and discussions described in paragraphs (ii) through
(iv) above, recommend that the financial statements be included in the
Annual Report on Form 10-K.
7
(vi) Review and discuss with management and outside auditors: (a) any material
financial or non-financial arrangements of the Company which do not
appear on the financial statements of the Company; and (b) any
transactions or courses of dealing with parties related to the Company
which transactions are significant in size or involve terms or other
aspects that differ from those that would likely be negotiated with
independent parties and which arrangements or transactions are relevant
to an understanding of the Company's financial statements
(vii) Review and discuss with management and the outside auditors the adequacy
of the Company's internal controls.
(viii)Review and discuss with management and the outside auditors the
accounting policies which may be viewed as critical and review and
discuss any significant changes in the accounting policies of the Company
and accounting and financial reporting that may have a significant impact
on the Company's financial reports.
(ix) Establish policies and procedures for the engagement of the outside
auditors to provide non-audit services and consider whether the outside
auditors' performance of information technology and other non-audit
services is compatible with the auditor's independence.
(x) Review material pending legal proceedings involving the Company and other
contingent liabilities.
(xi) Review of the Audit Committee Charter on an annual basis.
The Audit Committee has drafted a charter, and anticipates adopting such
charter at its next regularly scheduled meeting on July 29, 2002. The Audit
Committee has held one meeting as of the date of this Information Statement. At
its meeting on May 7, 2002, (1) The audit committee has reviewed and discussed
the audited financial statements with management, (2) The audit committee has
discussed with the independent auditors the matters required to be discussed by
SAS 61, as may be modified or supplemented, (3) The audit committee has 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 (4) Based on the review and
discussions referred to in paragraphs (a)(1) through (a)(3) of this Item, the
audit committee 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.
On February 7, 2002, GWIN formed a compensation committee, comprised of
Messrs. Manner and Fishman. The Compensation Committee has held one meeting as
of the date of this Information Statement. The purpose and primary functions of
this Committee are to review executive compensation plans and arrangements, as
well as employee incentive plans and arrangements, and determine that all such
plans and arrangements have been properly conducted and are in the best
interests of the Company and the shareholders.
MEETINGS
GWIN held an aggregate of four regularly scheduled and special meetings of
the Board of Directors since the election of the current Board of Directors on
July 21, 2001 pursuant to the merger of the Company's predecessor, Imsco
Technologies, Inc. with Global Sports and Entertainment, Inc. Prior to that
date, the Board of Directors was comprised of one individual.
8
EXECUTIVE COMPENSATION
The following tables and discussion set forth information with respect to
all incentive stock option plan and non-plan compensation awarded to, earned by
or paid to the Chief Executive Officer ("CEO"), all services rendered in all
capacities to the Company and its subsidiaries for each of the Company's last
three (3) completed fiscal years; provided, however, that no disclosure has been
made for any executive officer, other than the CEO, whose total annual salary
and bonus does not exceed $100,000.
Long-Term
Annual Compensation Compensation
------------------------------- -------------
Securities
Underlying All Other
Options Compen
Name And Position Year Salary ($) Other Granted -Sation
- ------------------------------------- ------ ----------- ---------- --------- -----------
Wayne Allyn Root (1) 2001 $ 165,000 $227,000(2) - -
Chairman and Chief Executive Officer 2000 $ 180,000 $ 70,000 106,551 -
1999 - - - -
Douglas R. Miller (3) 2001 $ 173,845 - - -
President and Secretary 2000 $ 180,000 - 106,551 -
1999 - - - -
Timothy J. Keating (4) 2001 - - - -
former Chief Executive Officer 2000 - $ 75,000 - -
1999 - - 175,000 -
(1) The amounts set forth above for Mr. Root represent compensation paid to him
beginning on December 6, 1999 when he become an executive officer of Global
SportsEDGE, Inc., which became a wholly-owned subsidiary of our company as
a result of our reorganization in July 2001.
(2) Other compensation represents handicapping fees earned, and includes
$74,000 earned but not yet paid by our company.
(3) The amounts set forth above for Mr. Miller represent compensation paid to
him beginning on December 6, 1999 when he became an executive officer of
Global SportsEDGE, Inc.
(4) Mr. Keating served as our Chief Executive Officer from August 1999 to July
2001. As compensation for serving as our Chief Executive Officer, on
October 13, 2000, we granted Mr. Keating a total of 200,000 shares of our
common stock, which had a fair market value of approximately $75,000 on the
date of grant.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth option grants to our Chief Executive Officer and
our other executive officers during the year ended December 31, 2001.
Percent Of
Number Of Total Options
Securities Granted To
Underlying Employees In Exercise Price Expiration
Name Options Granted Fiscal Year 2001 Per Share Date
- ------------------------------------ --------------- ---------------- -------------- ----------
Wayne Allyn Root
Chairman and Chief Executive Officer 0 N/A
Douglas R. Miller
President and Secretary 0 N/A
Timothy J. Keating
Former Chief Executive Officer - - - -
9
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND OPTION VALUES AS OF
DECEMBER 31, 2001
The following table sets forth information concerning option exercises and
option holdings for the year ended December 31, 2001 with respect to our Chief
Executive Officer and each of our other executive officers.
Number Of Securities Value Of Unexercised
Shares Underlying Unexercised In-The-Money Options
Acquire Options At December 31, 2001 at December 31, 2001
on Value ---------------------------- --------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------ ------------ ------------ ----------- ------------- ----------- -------------
Wayne A. Root - - 106,551 - 0 0
Douglas R. Miller - - 106,551 - 0 0
Timothy J. Keating - - - - - -
DIRECTOR COMPENSATION
There are no standard or individual compensation packages for any of
the directors.
EMPLOYMENT CONTRACTS
We have entered into employment agreements with our Chief Executive
Officer, Wayne Allyn Root, and our President and Chief Operating Officer,
Douglas R. Miller. Pursuant to their agreements, Mr. Root and Mr. Miller are
required to devote their entire business time to the affairs of the company. Mr.
Root's and Mr. Miller's employment agreements call for a current base salary of
$250,000 per year. They have agreed, however, to accept base salaries of
$175,000 until we have either raised sufficient capital to do so or our profits
allow payment of a greater amount. In addition, both agreements provide that
their salaries are to be adjusted annually by no less than the greater of 5% or
the increase in CPI during the year. Mr. Miller's employment agreement
terminates on December 31, 2004. Mr. Root's employment agreement terminates on
February 28, 2005. Mr. Root's agreement is renewable for an additional five-year
period at our option until February 28, 2010. We must notify Mr. Root of our
desire to exercise our option by December 31, 2004.
ACTION 4
RATIFICATION OF AUDITORS
On June 14, 2002, the Board of Directors reappointed Moore Stephens, P.C.,
as the Company's independent auditors to audit the consolidated financial
statements of the Company for the current fiscal year ending July 31, 2002. The
Board of Directors considered the fees paid to Moore Stephens as disclosed in
our subheadings "Financial Information Systems Design and Implementation Fees"
and "All Other Fees" in determining whether the provision of the services
covered in those sections are compatible with maintaining Moore Stephens'
independence. On June 18, 2002, the consenting stockholders issued a Consent,
10
whereby they approved and ratified the reappointment of Moore Stephens, P.C. as
the Company's independent auditors.
AUDIT FEES
The aggregate fees billed by Moore Stephens for professional services
rendered for the audit of GWIN's annual financial statements for the fiscal year
ended December 31, 2001, and for the reviews of the financial statements
included in GWIN's quarterly reports for 2001, were approximately $29,737, not
including Attestation Fees, discussed below.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed by Moore Stephens or its affiliates for
professional services rendered for information technology services relating to
financial information systems design and implementation for the fiscal year
ended December 31, 2001.
ALL OTHER FEES
The aggregate fees for all other services rendered by Moore Stephens in the
fiscal year ended December 31, 2001 were approximately $20,760 and can be
sub-categorized as follows:
Attestation Fees. The aggregate fees for attestation services rendered
by Moore Stephens for matters such as consents related to SEC registration
statements, audits of employee benefit plans, agreed-upon procedures, due
diligence pertaining to acquisitions and consultation on accounting standards or
transactions was approximately $20,760.
Other Fees. The aggregate fees for all other services rendered by Moore
Stephens in the 2001 fiscal year was approximately $0.00.
Representatives of Moore Stephens, P.C. are expected to be present in the
event that we hold an Annual Meeting, which date has not yet been determined,
and will be provided an opportunity to make a statement and to respond to
appropriate inquiries from stockholders.
11
EXHIBIT A
WRITTEN CONSENT TO ACTION
MAJORITY SHAREHOLDERS
OF
GLOBAL SPORTS AND ENTERTAINMENT, INC.
(A DELAWARE CORPORATION)
TAKEN WITHOUT A MEETING
- --------------------------------------------------------------------------------
Pursuant to the authority of Section 228 (a) of the Delaware General
Corporation Act, and Article II, Section 11 of the By-Laws of Global Sports and
Entertainment, Inc. (the "Company") a Delaware corporation, the undersigned,
constituting at least a majority of the shareholders of the Company, do hereby
consent to all resolutions as described herein and adopted by the Board of
Directors on June 14, 2002, such consent issued without a meeting, and to be
made effective as of June 18, 2002 or as soon thereafter as practicable and
permissible by the Federal securities laws.
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
---------------------------------------------
TO CHANGE THE NAME OF THE COMPANY
---------------------------------
WHEREAS, the Company is aware of another non-competing company which exists and
is operating and doing business as "Global Sports, Inc." which has filed a
complaint against the Company claiming, among other things, the existence of
trademark infringement regarding the use of our name;
WHEREAS, the Company desires to avoid both consumer confusion and both potential
and actual litigation with Global Sports, and, without regard to the merits of
the complaint filed, but in consideration of the time and resources which will
be required to adequately respond to this proceeding, deem it in the best
interests of the Company and the shareholders of the Company to avoid the
deleterious effects of pursuing this cause of action altogether and focus on the
business and operations of the Company;
WHEREAS, it is proposed that the Company amend its Certificate of Incorporation
to change the Company's name from "Global Sports & Entertainment, Inc." to
"GWIN, Inc."
NOW, THEREFORE, BE IT RESOLVED, that any executive officer of this Company,
acting alone, be and hereby is authorized, empowered and directed, for and on
behalf of this Company, to take such further action and execute and deliver any
additional agreements, instruments, certificates, filings or other documents and
to take any additional steps as any such officer deems necessary or appropriate
to effectuate the purposes of the foregoing resolutions;
FURTHER RESOLVED, that any action or actions heretofore taken by any executive
officer of this Company on behalf of this Company in connection with the
foregoing resolutions are hereby ratified and approved as the actions of this
Company.
ADOPTION OF THE 2002 EQUITY INCENTIVE PLAN
------------------------------------------
WHEREAS, it is in the best interests of this Company and its stockholders to
attract and retain the highest level of talent among its key employees and
consultants and;
WHEREAS, the undersigned have been presented with a form of the proposed 2002
Equity Incentive Plan, attached hereto as Exhibit 1 (the "Plan");
WHEREAS, it is deemed to be in the best interests of the Company and its
stockholders to approve and adopt the Plan in all material respects;
12
NOW, THEREFORE, BE IT RESOLVED, that any executive officer of this Company,
acting alone, be and hereby is authorized, empowered and directed, for and on
behalf of this Company, to take such further action and execute and deliver any
additional agreements, instruments, certificates, filings or other documents and
to take any additional steps as any such officer deems necessary or appropriate
to effectuate the purposes of the foregoing resolutions;
FURTHER RESOLVED, that any action or actions heretofore taken by any executive
officer of this Company on behalf of this Company in connection with the
foregoing resolutions are hereby ratified and approved as the actions of this
Company.
BOARD OF DIRECTORS REDUCTION
----------------------------
WHEREAS, Article III, Section 2 of the By-Laws of this Company require the Board
of Directors to include not less than three members, nor more than nine members,
and such number may be fixed from time to time by affirmative vote of the
majority of the Board of Directors or by action of the shareholders of the
Company;
WHEREAS, it is proposed that the Board of Directors, currently numbering eight
members, be reduced to seven members, and thereafter fixed at seven, until such
time as the Board of Directors deem it appropriate and necessary for the best
interest of the Company to alter such number;
WHEREAS, it is deemed to be in the best interests of the Company and its
stockholders to approve the reduction in the Board of Directors and fix the
number of members of such Board at seven;
NOW, THEREFORE, BE IT RESOLVED, that any executive officer of this Company,
acting alone, be and hereby is authorized, empowered and directed, for and on
behalf of this Company, to take such further action and execute and deliver any
additional agreements, instruments, certificates, filings or other documents and
to take any additional steps as any such officer deems necessary or appropriate
to effectuate the purposes of the foregoing resolutions;
FURTHER RESOLVED, that any action or actions heretofore taken by any executive
officer of this Company on behalf of this Company in connection with the
foregoing resolutions are hereby ratified and approved as the actions of this
Company.
ELECTION OF DIRECTORS
---------------------
WHEREAS, it is proposed that the following individuals be nominated by the Board
of Directors to serve as Directors of the Company for the next term;
Wayne Allyn Root
Douglas R. Miller
David P. Hanlon
Edward J. Fishman
Ralph R. Papitto
Timothy J. Keating
John T. Manner
WHEREAS, the above-listed individuals are duly nominated by the Board of
Directors to serve as Directors of the Company;
WHEREAS, it is deemed to be in the best interests of the Company and its
stockholders to elect such nominated Directors;
13
NOW, THEREFORE, BE IT RESOLVED, that the individuals named above be, and hereby
are, elected to serve as Directors of the Company until their successors are
duly elected or qualified, effective immediately upon compliance with all state
and federal regulatory requirements;
FURTHER RESOLVED, that any action or actions heretofore taken by any executive
officer of this Company on behalf of this Company in connection with the
foregoing resolutions are hereby ratified and approved as the actions of this
Company.
RATIFICATION OF AUDITORS
------------------------
WHEREAS, it is proposed that Moore Stephens, P.C. be appointed to serve as
independent auditors to the Company for the fiscal year ended July 31, 2002;
WHEREAS, the Board of Directors has considered the previous service provided by
Moore Stephens, P.C. as independent auditors to the Company, including
consideration of the fees paid to Moore Stephens regarding Financial Information
Systems Design and Implementation Fees and any other fees paid to Moore Stephens
for the fiscal year ended December 31, 2001, which do not include audit fees, in
determining whether the provision of the services covered in those sections are
compatible with maintaining Moore Stephens' independence;
WHEREAS, after such consideration, Moore Stephens, P.C. is duly appointed by the
Board of Directors to serve as independent auditors to the Company;
WHEREAS, it is deemed to be in the best interests of the Company and its
stockholders to ratify such appointed auditors;
NOW, THEREFORE, BE IT RESOLVED, that Moore Stephens, P.C. be, and hereby is,
ratified to serve as independent auditors to the Company for the fiscal year
ended July 31, 2002;
FURTHER RESOLVED, that any action or actions heretofore taken by any executive
officer of this Company on behalf of this Company in connection with the
foregoing resolutions are hereby ratified and approved as the actions of this
Company.
<SIGNATURES ON FOLLOWING PAGE>
14
This Written Consent shall be added to the corporate records of this
Company and made a part thereof, and the resolutions set forth above shall have
the same force and effect as if adopted at a meeting duly noticed and held.
This Written Consent may be executed in counterparts and with facsimile
signatures with the effect as if all parties hereto had executed the same
document. All counterparts shall be construed together and shall constitute a
single Written Consent.
STOCKHOLDERS:
Date: June 18, 2002 /s/ Wayne Allyn Root
-----------------------------
Name: Wayne Allyn Root
Date: June 18, 2002 /s/ Douglas R. Miller
------------------------------
Name: Douglas R. Miller
Date: June 18, 2002 /s/ Timothy J. Keating
------------------------------
Name: Timothy J. Keating
Date: June 18, 2002 /s/ John T. Manner
------------------------------
Name: John T. Manner
Date: June 18, 2002 /s/ Ralph R. Papitto
------------------------------
Name: Ralph R. Papitto
Date: June 18, 2002 /s/ Edward J. Fishman
------------------------------
Name: Edward J. Fishman
15
EXHIBIT 1
2002 EQUITY INCENTIVE PLAN
AS ADOPTED JUNE 14, 2002 AND APPROVED BY THE SHAREHOLDERS JUNE 18, 2002
1. PURPOSE.
The purpose of this Plan is to provide incentives to attract, retain and
motivate eligible persons whose present and potential contributions are
important to the success of the Company, its Parents and its Subsidiaries, by
offering them an opportunity to participate in the Company's future performance
through awards of Options, Restricted Stock and Stock Bonuses. Capitalized
terms not defined in the text are defined in Section 2.
2. DEFINITIONS.
As used in this Plan, the following terms will have the following meanings:
"AWARD" means any award under this Plan, including any Option, Restricted
-----
Stock or Stock Bonus.
"AWARD AGREEMENT" means, with respect to each Award, the signed written
----------------
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.
"BOARD" means the Board of Directors of the Company.
-----
"CAUSE" means any cause, as defined by applicable law, for the termination
-----
of a Participant's employment with the Company or a Parent or Subsidiary of the
Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
----
"COMMITTEE" means the Compensation Committee of the Board.
---------
"COMPANY" means GWIN, Inc., formerly known as Global Sports &
-------
Entertainment, Inc., a Nevada corporation, or any successor corporation.
"DISABILITY" means a disability, whether temporary or permanent, partial or
----------
total, as determined by the Committee.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
-------------
"EXERCISE PRICE" means the price at which a holder of an Option may
---------------
purchase the Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value of a share of the
-------------------
Company's Common Stock determined as follows:
(a) if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of
determination on the principal national securities exchange on which
the Common Stock is listed or admitted to trading as reported in The
Wall Street Journal;
16
(b) if such Common Stock is quoted on the NASDAQ National Market, its
closing price on the NASDAQ National Market on the date of
determination as reported in The Wall Street Journal;
(c) if such Common Stock is publicly traded but is not listed or admitted
to trading on a national securities exchange, the average of the
closing bid and asked prices on the date of determination as reported
on the NASD over-the-counter bulletin board Internet website, or other
NASD-sponsored website reporting such trading.
(d) in the case of an Award made on the Effective Date, the price per
share at which shares of the Company's Common Stock are initially
offered for sale to the public by the Company's underwriters in the
initial public offering of the Company's Common Stock pursuant to a
registration statement filed with the SEC under the Securities Act; or
(e) if none of the foregoing is applicable, by the Committee in good
faith.
"INSIDER" means an officer or director of the Company or any other person
-------
whose transactions in the Company's Common Stock are subject to Section 16 of
the Exchange Act.
"OPTION" means an award of an option to purchase Shares pursuant to Section
------
6.
"PARENT" means any corporation (other than the Company) in an unbroken
------
chain of corporations ending with the Company if each of such corporations other
than the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
"PARTICIPANT" means a person who receives an Award under this Plan.
-----------
"PERFORMANCE FACTORS" means the factors selected by the Committee, in its
--------------------
sole and absolute discretion, from among the following measures to determine
whether the performance goals applicable to Awards have been satisfied:
(a) Net revenue and/or net revenue growth;
(b) Earnings before income taxes and amortization and/or earnings
before income taxes and amortization growth;
(c) Operating income and/or operating income growth;
(d) Net income and/or net income growth;
(e) Earnings per share and/or earnings per share growth;
(f) Total stockholder return and/or total stockholder return growth;
(g) Return on equity;
(h) Operating cash flow return on income;
(i) Adjusted operating cash flow return on income;
(j) Economic value added; and
(k) Individual confidential business objectives.
17
"PERFORMANCE PERIOD" means the period of service determined by the
-------------------
Committee, not to exceed five years, during which years of service or
performance is to be measured for Restricted Stock Awards or Stock Bonuses.
"PLAN" means this GWIN 2002 Equity Incentive Plan, as amended from time to
----
time.
"RESTRICTED STOCK AWARD" means an award of Shares pursuant to Section 7.
------------------------
"SEC" means the Securities and Exchange Commission.
---
"SECURITIES ACT" means the Securities Act of 1933, as amended.
---------------
"SHARES" means shares of the Company's Common Stock reserved for issuance
------
under this Plan, as adjusted pursuant to Sections 3 and 19, and any successor
security.
"STOCK BONUS" means an award of Shares, or cash in lieu of Shares, pursuant
-----------
to Section 8.
"SUBSIDIARY" means any corporation (other than the Company) in an unbroken
----------
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
"TERMINATION" or "TERMINATED" means, for purposes of this Plan with respect
----------- ----------
to a Participant, that the Participant has for any reason ceased to provide
services as an employee, officer, director, consultant, independent contractor,
or advisor to the Company or a Parent or Subsidiary of the Company. An employee
will not be deemed to have ceased to provide services in the case of (i) sick
leave, (ii) military leave, or (iii) any other leave of absence approved by the
Company, provided that such leave is for a period of not more than 90 days,
unless reemployment upon the expiration of such leave is guaranteed by contract
or statute or unless provided otherwise pursuant to a formal policy adopted from
time to time by the Company and issued and promulgated to employees in writing.
In the case of any employee on an approved leave of absence, the Committee may
make such provisions respecting suspension of vesting of the Award while on
leave from the employ of the Company or a Subsidiary as it may deem appropriate,
except that in no event may an Option be exercised after the expiration of the
term set forth in the Option agreement. The Committee will have sole discretion
to determine whether a Participant has ceased to provide services and the
effective date on which the Participant ceased to provide services (the
"TERMINATION DATE").
"UNVESTED SHARES" means "Unvested Shares" as defined in the Award
----------------
Agreement.
"VESTED SHARES" means "Vested Shares" as defined in the Award Agreement.
--------------
3. SHARES SUBJECT TO THE PLAN.
3.1 Number of Shares Available. Subject to Sections 3.2 and 19, the
-----------------------------
total aggregate number of Shares reserved and available for grant and issuance
pursuant to this Plan will be 3,000,000 plus Shares that are subject to: (a)
issuance upon exercise of an Option but cease to be subject to such Option for
any reason other than exercise of such Option; (b) an Award granted hereunder
but forfeited or repurchased by the Company at the original issue price; and (c)
an Award that otherwise terminates without Shares being issued. At all times
the Company shall reserve and keep available a sufficient number of Shares as
shall be required to satisfy the requirements of all outstanding Options granted
under this Plan and all other outstanding but unvested Awards granted under this
Plan.
3.2 Adjustment of Shares. In the event that the number of outstanding
---------------------
shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in the
capital structure of the Company without consideration, then (a) the number of
Shares reserved for issuance under this Plan, (b) the Exercise Prices of and
18
number of Shares subject to outstanding Options, and (c) the number of Shares
subject to other outstanding Awards will be proportionately adjusted, subject to
any required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; provided, however, that fractions of
a Share will not be issued but will either be replaced by a cash payment equal
to the Fair Market Value of such fraction of a Share or will be rounded up to
the nearest whole Share, as determined by the Committee.
4. ELIGIBILITY.
ISOs (as defined in Section 6 below) may be granted only to employees
(including officers and directors who are also employees) of the Company or of a
Parent or Subsidiary of the Company. All other Awards may be granted to
employees, officers, directors, consultants, independent contractors and
advisors of the Company or any Parent or Subsidiary of the Company; provided
such consultants, contractors and advisors render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction.
5. ADMINISTRATION.
5.1 Committee Authority. This Plan will be administered by the
--------------------
Committee or by the Board acting as the Committee. Subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan. Without
limitation, the Committee will have the authority to:
(a) construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to this
Plan or any Award;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration subject to
Awards;
(f) determine whether Awards will be granted singly, in combination with,
in tandem with, in replacement of, or as alternatives to, other Awards
under this Plan or any other incentive or compensation plan of the
Company or any Parent or Subsidiary of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, ability to exercise and payment of Awards;
(i) correct any defect, supply any omission or reconcile any inconsistency
in this Plan, any Award or any Award Agreement;
(j) determine whether an Award has been earned; and
(k) make all other determinations necessary or advisable for the
administration of this Plan.
5.2 Committee Discretion. Any determination made by the Committee with
--------------------
respect to any Award will be made at the time of grant of the Award or, unless
in contravention of any express term of this Plan or Award, at any later time,
19
and such determination will be final and binding on the Company and on all
persons having an interest in any Award under this Plan. The Committee may
delegate to one or more officers of the Company the authority to grant an Award
under this Plan to Participants who are not Insiders of the Company.
6. OPTIONS.
The Committee may grant Options to eligible persons and will determine
whether such Options will be Incentive Stock Options within the meaning of the
Code ("ISO") or Nonqualified Stock Options ("NQSOS"), the number of Shares
subject to the Option, the Exercise Price of the Option, the period during which
the Option may be exercised, and all other terms and conditions of the Option,
subject to the following:
6.1 Form of Option Grant. Each Option granted under this Plan will be
---------------------
evidenced by an Award Agreement that will expressly identify the Option as an
ISO or an NQSO (hereinafter referred to as the "STOCK OPTION AGREEMENT"), and
will be in such form and contain such provisions (which need not be the same for
each Participant) as the Committee may from time to time approve, and which will
comply with and be subject to the terms and conditions of this Plan.
6.2 Date of Grant. The date of grant of an Option will be the date on
--------------
which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.
6.3 Exercise Period. Options may be exercisable within the times or
----------------
upon the events determined by the Committee as set forth in the Stock Option
Agreement governing such Option; provided, however, that no Option will be
exercisable after the expiration of ten (10) years from the date the Option is
granted; and provided further that no ISO granted to a person who directly or by
attribution owns more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or of any Parent or Subsidiary of the
Company ("TEN PERCENT STOCKHOLDER") will be exercisable after the expiration of
five (5) years from the date the ISO is granted. The Committee also may provide
for Options to become exercisable at one time or from time to time, periodically
or otherwise, in such number of Shares or percentage of Shares as the Committee
determines.
6.4 Exercise Price. The Exercise Price of an Option will be determined
--------------
by the Committee when the Option is granted and may be not less than 85% of the
Fair Market Value of the Shares on the date of grant; provided that: (a) the
Exercise Price of an ISO will be not less than 100% of the Fair Market Value of
the Shares on the date of grant; and (b) the Exercise Price of any ISO granted
to a Ten Percent Stockholder will not be less than 110% of the Fair Market Value
of the Shares on the date of grant. Payment for the Shares purchased may be
made in accordance with Section 9 of this Plan.
6.5 Method of Exercise. Options may be exercised only by delivery to
--------------------
the Company of a written stock option exercise agreement (the "EXERCISE
AGREEMENT") in a form approved by the Committee, (which need not be the same for
each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement, if
any, and such representations and agreements regarding Participant's investment
intent and access to information and other matters, if any, as may be required
or desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price for the number of Shares being
purchased.
6.6 Termination. Notwithstanding the exercise periods set forth in the
-----------
Stock Option Agreement, exercise of an Option will always be subject to the
following:
(a) If the Participant's service is Terminated for any reason except
death or Disability, then the Participant may exercise such Participant's
Options only to the extent that such Options would have been exercisable
upon the Termination Date no later than three (3) months after the
Termination Date
20
(or such shorter or longer time period not exceeding five (5) years as may
be determined by the Committee, with any exercise beyond three (3) months
after the Termination Date deemed to be an NQSO), but in any event, no
later than the expiration date of the Options.
(b) If the Participant's service is Terminated because of
Participant's death or Disability (or the Participant dies within three (3)
months after a Termination other than for Cause or because of Participant's
Disability), then Participant's Options may be exercised only to the extent
that such Options would have been exercisable by Participant on the
Termination Date and must be exercised by Participant (or Participant's
legal representative or authorized assignee) no later than twelve (12)
months after the Termination Date (or such shorter or longer time period
not exceeding five (5) years as may be determined by the Committee, with
any such exercise beyond (i) three (3) months after the Termination Date
when the Termination is for any reason other than the Participant's death
or Disability, or (ii) twelve (12) months after the Termination Date when
the Termination is for Participant's death or Disability, deemed to be an
NQSO), but in any event no later than the expiration date of the Options.
(c) Notwithstanding the provisions in paragraph 6.6(a) above, if a
Participant's service is Terminated for Cause, neither the Participant, the
Participant's estate nor such other person who may then hold the Option
shall be entitled to exercise any Option with respect to any Shares
whatsoever, after Termination, whether or not after Termination the
Participant may receive payment from the Company or Subsidiary for vacation
pay, for services rendered prior to Termination, for services rendered for
the day on which Termination occurs, for salary in lieu of notice, or for
any other benefits. For the purpose of this paragraph, Termination shall be
deemed to occur on the date when the Company dispatches notice or advice to
the Participant that his service is Terminated.
6.7 Limitations on Exercise. The Committee may specify a reasonable
-------------------------
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising
the Option for the full number of Shares for which it is then exercisable.
6.8 Limitations on ISO. The aggregate Fair Market Value (determined as
------------------
of the date of grant) of Shares with respect to which ISO are exercisable for
the first time by a Participant during any calendar year (under this Plan or
under any other incentive stock option plan of the Company, Parent or Subsidiary
of the Company) will not exceed $100,000. If the Fair Market Value of Shares on
the date of grant with respect to which ISO are exercisable for the first time
by a Participant during any calendar year exceeds $100,000, then the Options for
the first $100,000 worth of Shares to become exercisable in such calendar year
will be ISO and the Options for the amount in excess of $100,000 that become
exercisable in that calendar year will be NQSOs. In the event that the Code or
the regulations promulgated thereunder are amended after the Effective Date of
this Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISO, such different limit will be automatically
incorporated herein and will apply to any Options granted after the effective
date of such amendment.
6.9 Modification, Extension or Renewal. The Committee may modify,
-------------------------------------
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights under
any Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section 424(h)
of the Code. The Committee may reduce the Exercise Price of outstanding Options
without the consent of Participants affected by a written notice to them;
provided, however, that the Exercise Price may not be reduced below the minimum
Exercise Price that would be permitted under Section 6.4 of this Plan for
Options granted on the date the action is taken to reduce the Exercise Price.
6.10 No Disqualification. Notwithstanding any other provision in this
--------------------
Plan, no term of this Plan relating to ISO will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.
21
7. RESTRICTED STOCK.
A Restricted Stock Award is an offer by the Company to sell to an eligible
person Shares that are subject to restrictions. The Committee will determine to
whom an offer will be made, the number of Shares the person may purchase, the
price to be paid (the "PURCHASE PRICE"), the restrictions to which the Shares
will be subject, and all other terms and conditions of the Restricted Stock
Award, subject to the following:
7.1 Form of Restricted Stock Award. All purchases under a Restricted
--------------------------------
Stock Award made pursuant to this Plan will be evidenced by an Award Agreement
(the "RESTRICTED STOCK PURCHASE AGREEMENT") that will be in such form (which
need not be the same for each Participant) as the Committee will from time to
time approve, and will comply with and be subject to the terms and conditions of
this Plan. The offer of Restricted Stock will be accepted by the Participant's
execution and delivery of the Restricted Stock Purchase Agreement and full
payment for the Shares to the Company within thirty (30) days from the date the
Restricted Stock Purchase Agreement is delivered to the person. If such person
does not execute and deliver the Restricted Stock Purchase Agreement along with
full payment for the Shares to the Company within thirty (30) days, then the
offer will terminate, unless otherwise extended by the Committee.
7.2 Purchase Price. The Purchase Price of Shares sold pursuant to a
---------------
Restricted Stock Award will be determined by the Committee on the date the
Restricted Stock Award is granted, except in the case of a sale to a Ten Percent
Stockholder, in which case the Purchase Price will be 100% of the Fair Market
Value. Payment of the Purchase Price must be made in accordance with Section 9
of this Plan.
7.3 Terms of Restricted Stock Awards. Restricted Stock Awards shall be
--------------------------------
subject to such restrictions as the Committee may impose. These restrictions
may be based upon completion of a specified number of years of service with the
Company or upon completion of the performance goals as set out in advance in the
Participant's individual Restricted Stock Purchase Agreement. Restricted Stock
Awards may vary from Participant to Participant and between groups of
Participants. Prior to the grant of a Restricted Stock Award, the Committee
shall: (a) determine the nature, length and starting date of any Performance
Period for the Restricted Stock Award; (b) select from among the Performance
Factors to be used to measure performance goals, if any; and (c) determine the
number of Shares that may be awarded to the Participant. Prior to the payment
of any Restricted Stock Award, the Committee shall determine the extent to which
such Restricted Stock Award has been earned. Performance Periods may overlap
and Participants may participate simultaneously with respect to Restricted Stock
Awards that are subject to different Performance Periods and have different
performance goals and other criteria.
7.4 Termination During Performance Period. If a Participant is
----------------------------------------
Terminated during a Performance Period for any reason, then such Participant
will be entitled to payment (whether in Shares, cash or otherwise) with respect
to the Restricted Stock Award only to the extent earned as of the date of
Termination in accordance with the Restricted Stock Purchase Agreement, unless
the Committee determines otherwise.
8. STOCK BONUSES.
8.1 Awards of Stock Bonuses. A Stock Bonus is an award of Shares (which
-----------------------
may consist of Restricted Stock) for extraordinary services rendered to the
Company or any Parent or Subsidiary of the Company. A Stock Bonus will be
awarded pursuant to an Award Agreement (the "STOCK BONUS AGREEMENT") that will
be in such form (which need not be the same for each Participant) as the
Committee will from time to time approve, and will comply with and be subject to
the terms and conditions of this Plan. A Stock Bonus may be awarded upon
satisfaction of such performance goals as are set out in advance in the
Participant's individual Award Agreement (the "PERFORMANCE STOCK BONUS
AGREEMENT") that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will comply
with and be subject to the terms and conditions of this Plan. Stock Bonuses may
vary from Participant to Participant and between groups of Participants, and may
be based upon the achievement of the Company, Parent or Subsidiary and/or
individual performance factors or upon such other criteria as the Committee may
determine.
22
8.2 Terms of Stock Bonuses. The Committee will determine the number of
----------------------
Shares to be awarded to the Participant. If the Stock Bonus is being earned
upon the satisfaction of performance goals pursuant to a Performance Stock Bonus
Agreement, then the Committee will: (a) determine the nature, length and
starting date of any Performance Period for each Stock Bonus; (b) select from
among the Performance Factors to be used to measure the performance, if any; and
(c) determine the number of Shares that may be awarded to the Participant.
Prior to the payment of any Stock Bonus, the Committee shall determine the
extent to which such Stock Bonuses have been earned. Performance Periods may
overlap and Participants may participate simultaneously with respect to Stock
Bonuses that are subject to different Performance Periods and different
performance goals and other criteria. The number of Shares may be fixed or may
vary in accordance with such performance goals and criteria as may be determined
by the Committee. The Committee may adjust the performance goals applicable to
the Stock Bonuses to take into account changes in law and accounting or tax
rules and to make such adjustments as the Committee deems necessary or
appropriate to reflect the impact of extraordinary or unusual items, events or
circumstances to avoid windfalls or hardships.
8.3 Form of Payment. The earned portion of a Stock Bonus may be paid
-----------------
to the Participant by the Company either currently or on a deferred basis, with
such interest or dividend equivalent, if any, as the Committee may determine.
Payment may be made in the form of cash or whole Shares or a combination
thereof, either in a lump sum payment or in installments, all as the Committee
will determine.
9. PAYMENT FOR SHARE PURCHASES.
9.1 Payment. Payment for Shares purchased pursuant to this Plan may be
-------
made in cash (by check) or, where expressly approved for the Participant by the
Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of shares that either: (1) have been owned by Participant
for more than six (6) months and have been paid for within the meaning
of Rule 144 of the Securities Act of 1933 (and, if such shares were
purchased from the Company by use of a promissory note, such note has
been fully paid with respect to such shares); or (2) were obtained by
Participant in the public market;
(c) by tender of a full recourse promissory note having such terms as may
be approved by the Committee and bearing interest at a rate sufficient
to avoid imputation of income under Sections 483 and 1274 of the Code;
provided, however, that Participants who are not employees or
directors of the Company will not be entitled to purchase Shares with
a promissory note unless the note is adequately secured by collateral
other than the Shares;
(d) by waiver of compensation due or accrued to the Participant for
services rendered;
(e) with respect only to purchases upon exercise of an Option, and
provided that a public market for the Company's stock exists:
(1) through a "same day sale" commitment from the Participant and a
broker-dealer that is a member of the National Association of
Securities Dealers (an "NASD DEALER") whereby the Participant
irrevocably elects to exercise the Option and to sell a portion
of the Shares so purchased to pay for the Exercise Price, and
whereby the NASD Dealer irrevocably commits upon receipt of such
Shares to forward the Exercise Price directly to the Company; or
23
(2) through a "margin" commitment from the Participant and a
NASD Dealer whereby the Participant irrevocably elects to
exercise the Option and to pledge the Shares so purchased to
the NASD Dealer in a margin account as security for a loan
from the NASD Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the
Company; or
(f) by any combination of the foregoing.
9.2 Loan Guarantees. The Committee may help the Participant pay for
----------------
Shares purchased under this Plan by authorizing a guarantee by the Company of a
third-party loan to the Participant.
10. WITHHOLDING TAXES.
10.1 Withholding Generally. Whenever Shares are to be issued in
----------------------
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan,
payments in satisfaction of Awards are to be made in cash, such payment will be
net of an amount sufficient to satisfy federal, state, and local withholding tax
requirements.
10.2 Stock Withholding. When, under applicable tax laws, a participant
-----------------
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Committee may allow the
Participant to satisfy the minimum withholding tax obligation by electing to
have the Company withhold from the Shares to be issued that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose will be made in accordance with the requirements established by the
Committee and be in writing in a form acceptable to the Committee.
11. PRIVILEGES OF STOCK OWNERSHIP.
11.1 Voting and Dividends. No Participant will have any of the rights
---------------------
of a stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will
be a stockholder and will have all the rights of a stockholder with respect to
such Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided, further, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Shares that
are repurchased at the Participant's Purchase Price or Exercise Price pursuant
to Section 12.
11.2 Financial Statements. The Company will provide financial
---------------------
statements to each Participant prior to such Participant's purchase of Shares
under this Plan, and to each Participant annually during the period such
Participant has Awards outstanding, if and in such form as may be required by
Nevada law; provided, however, the Company will not be required to provide such
financial statements to Participants whose services in connection with the
Company assure them access to equivalent information.
12. TRANSFERABILITY.
Awards granted under this Plan, and any interest therein, will not be
transferable or assignable by Participant, and may not be made subject to
24
execution, attachment or similar process, other than by will or by the laws of
descent and distribution. During the lifetime of the Participant an Award will
be exercisable only by the Participant. During the lifetime of the Participant,
any elections with respect to an Award may be made only by the Participant
unless otherwise determined by the Committee and set forth in the Award
Agreement with respect to Awards that are not ISOs.
13. RESTRICTIONS ON SHARES.
At the discretion of the Committee, the Company may reserve to itself
and/or its assignee(s) in the Award Agreement a right to repurchase a portion of
or all Unvested Shares held by a Participant following such Participant's
Termination at any time within ninety (90) days after the later of (a)
Participant's Termination Date, or (b) the date Participant purchases Shares
under this Plan. Such repurchase by the Company shall be for cash and/or
cancellation of purchase money indebtedness, and the price per share shall be
the Participant's Exercise Price or the Purchase Price, as applicable.
14. CERTIFICATES.
All certificates for Shares or other securities delivered under this Plan
will be subject to such stock transfer orders, legends and other restrictions as
the Committee may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.
15. ESCROW; PLEDGE OF SHARES.
To enforce any restrictions on a Participant's Shares, the Committee may
require the Participant to deposit all certificates representing Shares,
together with stock powers or other instruments of transfer approved by the
Committee appropriately endorsed in blank, with the Company or an agent
designated by the Company to hold in escrow until such restrictions have lapsed
or terminated, and the Committee may cause a legend or legends referencing such
restrictions to be placed on the certificates. Any Participant who is permitted
to execute a promissory note as partial or full consideration for the purchase
of Shares under this Plan will be required to pledge and deposit with the
Company all or part of the Shares so purchased as collateral to secure the
payment of Participant's obligation to the Company under the promissory note;
provided, however, that the Committee may require or accept other or additional
forms of collateral to secure the payment of such obligation and, in any event,
the Company will have full recourse against the Participant under the promissory
note notwithstanding any pledge of the Participant's Shares or other collateral.
In connection with any pledge of the Shares, Participant will be required to
execute and deliver a written pledge agreement in such form as the Committee
will from time to time approve. The Shares purchased with the promissory note
may be released from the pledge on a pro rata basis as the promissory note is
paid.
16. EXCHANGE AND BUYOUT OF AWARDS.
The Committee may, at any time or from time to time, authorize the Company,
with the consent of the respective Participants, to issue new Awards in exchange
for the surrender and cancellation of any or all outstanding Awards. The
Committee may at any time buy from a Participant an Award previously granted
with payment in cash, Shares (including Restricted Stock) or other
consideration, based on such terms and conditions as the Committee and the
Participant may agree.
17. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.
An Award will not be effective unless such Award is in compliance with all
applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted, as they are
in effect on the date of grant of the Award and also on the date of exercise or
other issuance. Notwithstanding any other provision in this Plan, the Company
will have no obligation to issue or deliver certificates for Shares under this
Plan prior to: (a) obtaining any approvals from governmental agencies that the
25
Company determines are necessary or advisable; and/or (b) completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company will have no liability for any
inability or failure to do so.
18. NO OBLIGATION TO EMPLOY.
Nothing in this Plan or any Award granted under this Plan will confer or
be deemed to confer on any Participant any right to continue in the employ of,
or to continue any other relationship with, the Company or any Parent or
Subsidiary of the Company or limit in any way the right of the Company or any
Parent or Subsidiary of the Company to terminate Participant's employment or
other relationship at any time, with or without cause.
19. CORPORATE TRANSACTIONS.
19.1 Assumption or Replacement of Awards by Successor. In the event of
------------------------------------------------
(a) a dissolution or liquidation of the Company, (b) a merger or consolidation
in which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed, converted or
replaced by the successor corporation (if any), which assumption, conversion or
replacement will be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the Awards). The successor
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Subsection 19.1,
such Awards will expire on such transaction at such time and on such conditions
as the Committee will determine. Notwithstanding anything in this Plan to the
contrary, the Committee may provide that the vesting of any or all Awards
granted pursuant to this Plan will accelerate upon a transaction described in
this Section 19. If the Committee exercises such discretion with respect to
Options, such Options will become exercisable in full prior to the consummation
of such event at such time and on such conditions as the Committee determines,
and if such Options are not exercised prior to the consummation of the corporate
transaction, they shall terminate at such time as determined by the Committee.
19.2 Other Treatment of Awards. Subject to any greater rights granted
--------------------------
to Participants under the foregoing provisions of this Section 19, in the event
of the occurrence of any transaction described in Section 19.1, any outstanding
Awards will be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, or sale of assets.
19.3 Assumption of Awards by the Company. The Company, from time to
--------------------------------------
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either: (a) granting an Award under this Plan in substitution of
such other company's award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award
26
granted under this Plan. Such substitution or assumption will be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the exercise price and the number and nature of Shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.
20. ADOPTION AND STOCKHOLDER APPROVAL.
This Plan will become effective on the date on which it is adopted by the
Board (the "EFFECTIVE DATE"). This Plan shall be approved by the stockholders
of the Company within twelve (12) months before or after the date this Plan is
adopted by the Board. Upon the Effective Date, the Committee may grant Awards
pursuant to this Plan; provided, however, that: (a) no Option may be exercised
prior to stockholder approval of this Plan; (b) no Option granted pursuant to an
increase in the number of Shares subject to this Plan approved by the Board will
be exercised prior to the time such increase has been approved by the
stockholders of the Company; (c) in the event that stockholder approval of this
Plan is not obtained within the time period provided herein, all Awards granted
hereunder shall be cancelled, any Shares issued pursuant to any Awards shall be
cancelled and any purchase of Shares issued hereunder shall be rescinded; and
(d) in the event that stockholder approval of an increase in the number of
Shares subject to this Plan is not obtained, all Awards granted pursuant to such
increase will be cancelled, any Shares issued pursuant to any Award granted
pursuant to such increase will be cancelled, and any purchase of Shares pursuant
to such increase will be rescinded.
21. TERM OF PLAN/GOVERNING LAW.
Unless earlier terminated as provided herein, this Plan will terminate ten
(10) years from the date this Plan is adopted by the Board or, if earlier, the
date of stockholder approval. This Plan and all agreements thereunder shall be
governed by and construed in accordance with the laws of the State of Nevada.
22. AMENDMENT OR TERMINATION OF PLAN.
The Board may at any time terminate or amend this Plan in any respect,
including without limitation amendment of any form of Award Agreement or
instrument to be executed pursuant to this Plan; provided, however, that the
Board will not, without the approval of the stockholders of the Company, amend
this Plan in any manner that requires such stockholder approval.
23. NONEXCLUSIVITY OF THE PLAN.
Neither the adoption of this Plan by the Board, the submission of this Plan
to the stockholders of the Company for approval, nor any provision of this Plan
will be construed as creating any limitations on the power of the Board to adopt
such additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options and bonuses otherwise than
under this Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
24. ACTION BY COMMITTEE.
Any action permitted or required to be taken by the Committee or any
decision or determination permitted or required to be made by the Committee
pursuant to this Plan shall be taken or made in the Committee's sole and
absolute discretion.
27
IN WITNESS WHEREOF, GWIN has duly executed this Amendment to be effective
as the date first above written.
GWIN, INC.
A Delaware corporation
By: /s/ Douglas R. Miller
--------------------------
Name: Douglas R. Miller
Title: President and Chief Financial
Officer
28
EXHIBIT B
THE NAME CHANGE AMENDMENT
RESOLVED FURTHER, that Article First of the Amended Certificate of
Incorporation of the Company be amended to read in part as follows:
ARTICLE FIRST
-------------
FIRST: The name of the corporation is GWIN, Inc. (the "Corporation").
IN WITNESS WHEREOF, GWIN has duly executed this Amendment to be effective
as the date first above written.
GWIN, INC.
A Delaware corporation
By: /s/ Douglas R. Miller
--------------------------
Name: Douglas R. Miller
Title: President and Chief Financial
Officer
29