-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B/Tw1ilxrLvroo+G8BiMkdFRAx3HkPnFhQ8ZMyHSTCGP1iQGZ9GZ+NUSzu0VvcWV NMhC9Uh1BqyKIm+/x4Zghw== 0000950120-99-000099.txt : 19990325 0000950120-99-000099.hdr.sgml : 19990325 ACCESSION NUMBER: 0000950120-99-000099 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19990305 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990324 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PALADYNE CORP CENTRAL INDEX KEY: 0001043933 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 593562953 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-22969 FILM NUMBER: 99571602 BUSINESS ADDRESS: STREET 1: 168 E HIGHLAND AVENUE STREET 2: SUITE 300 CITY: ELGIN STATE: IL ZIP: 60120 BUSINESS PHONE: 8476220200 MAIL ADDRESS: STREET 1: 168 EAST HIGHLAND AVENUE STREET 2: SUITE 300 CITY: ELGIN STATE: IL ZIP: 60120 FORMER COMPANY: FORMER CONFORMED NAME: SYNAPTX WORLDWIDE INC DATE OF NAME CHANGE: 19970807 8-K 1 FORM 8-K ================================================================= SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) -- MARCH 5, 1999 PALADYNE CORP. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 0-22969 59-3562953 (STATE OR OTHER (COMMISSION (I.R.S. EMPLOYER JURISDICTION FILE NUMBER) IDENTIFICATION NO.) OF INCORPORATION) 615 CRESCENT EXECUTIVE COURT, SUITE 128, LAKE MARY, FLORIDA 32746 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE -- (407) 333-2488 SYNAPTX WORLDWIDE, INC. (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) ================================================================= ITEM 5. OTHER EVENTS Effective March 5, 1999, Synaptx Worldwide, Inc., a Utah corporation ("Synaptx"), completed a reincorporation (the "Reincorporation"), whereby the surviving company (or successor registrant) is Paladyne Corp., a Delaware corporation ("Paladyne"). The primary purpose of the Reincorporation was to migrate to the State of Delaware and to change the corporate name to Paladyne Corp. The shareholders of Synaptx approved the Reincorporation at the 1999 Annual Meeting of Shareholders (the "Annual Meeting") held on March 3, 1999. Paladyne has an authorized capitalization consisting of (i) 25,000,000 shares of common stock, $.001 par value ("Paladyne Common Stock"), of which 6,584,452 shares are outstanding after the Reincorporation, and (ii) 10,000,000 shares of Preferred Stock, $.001 par value, of which 137,143 of the Series A Convertible Preferred Stock are outstanding after the Reincorporation. The Reincorporation was effected by a migratory merger (the "Merger") between Synaptx and Paladyne, which was a newly-formed, wholly-owned subsidiary of Synaptx. Upon the Merger the outstanding shares of Synaptx Common Stock were exchanged on a one-for-one basis for shares of Paladyne Common Stock and the outstanding shares of Synaptx Series A Convertible Preferred Stock were exchanged on a one-for-one basis for shares of Paladyne Series A Convertible Preferred Stock, whereby the former Synaptx shareholders received the same proportionate ownership interest in Paladyne that they had in Synaptx. Paladyne has a 1999 Stock Option Plan under which options may be granted for the purchase of 2,500,000 shares of Paladyne Common Stock. Options were granted under the Paladyne Option Plan for outstanding options under the Synaptx 1996 Stock Option Plan and on the same terms as the Synaptx options. Upon the Reincorporation, Paladyne succeeded to all the business, properties, assets and liabilities of Synaptx. The Reincorporation did not result in any change of management. Pursuant to Rule 12g-3(f) under the Securities Exchange Act of 1934, as amended, by reason of the Reincorporation, the Paladyne Common Stock became registered pursuant to Section 12(g) thereof. The Paladyne Common Stock is traded on the OTC-Bulletin Board under the symbol "PLDY". Letters of Transmittal are being sent to the former Synaptx shareholders requesting that they exchange their Synaptx stock certificates for Paladyne stock certificates. In addition to approving the Reincorporation, at the Annual Meeting the shareholders of Synaptx also (i) elected Peter B. Atwal, John D. Foster, Kenneth W. Horn, William N. Kashul, Sr., James L. McGovern and Ronald L. Weindruch as directors and (ii) approved an amendment to Synaptx's 1996 Stock Option Plan to increase the number of shares authorized for issuance thereunder to 2,500,000. Upon the Reincorporation, the Board of Directors was divided into three classes with one class to be elected annually. Messrs. Horn and Kashul were designated as Class I directors to serve until the 2000 annual meeting, Messrs. Atwal and McGovern were designated as Class II directors to serve until the 2001 annual meeting and Messrs. Foster and Weindruch were designated as Class III directors to serve until the 2002 annual meeting. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 3.1 Certificate of Incorporation for Paladyne. 3.2 By-Laws for Paladyne. 3.3 Articles of Merger of Synaptx into Paladyne, dated March 3, 1999, as filed with the Division of Corporations and Commercial Code of the State of Utah on March 8, 1999. 3.4 Certificate of Merger of Synaptx into Paladyne, dated March 3, 1999, as filed with the Secretary of State of the State of Delaware on March 5, 1999. 10.1 Agreement and Plan of Merger, dated January 19, 1999, between Synaptx and Paladyne. -2- 10.2 Paladyne 1999 Stock Option Plan. 99.1 Press Release, dated March 10, 1999. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PALADYNE CORP. By: /s/ Ronald L. Weindruch ----------------------------------- Name: Ronald L. Weindruch Title: President and Chief Executive Officer Dated: March 24, 1999 Exhibit Index ------------- Exhibit Description ------- ----------- 3.1 Certificate of Incorporation for Paladyne. 3.2 By-Laws for Paladyne. 3.3 Articles of Merger of Synaptx into Paladyne, dated March 3, 1999, as filed with the Division of Corporations and Commercial Code of the State of Utah on March 8, 1999. 3.4 Certificate of Merger of Synaptx into Paladyne, dated March 3, 1999, as filed with the Secretary of State of the State of Delaware on March 5, 1999. 10.1 Agreement and Plan of Merger, dated January 19, 1999, between Synaptx and Paladyne. 10.2 Paladyne 1999 Stock Option Plan. 99.1 Press Release, dated March 10, 1999. EX-3 2 EXHIBIT 3.1 Exhibit 3.1 CERTIFICATE OF INCORPORATION OF PALADYNE CORP. The undersigned, for the purpose of organizing a corporation pursuant to the provisions of the General Corporation Law of the State of Delaware (the "DGCL"), does make and file this Certificate of Incorporation and does hereby certify as follows: FIRST: NAME. The name of the corporation is Paladyne Corp. (the "Corporation"). SECOND: REGISTERED OFFICE. The registered office of the Corporation is to be located in the City of Wilmington, County of New Castle, in the State of Delaware. The name of its registered agent is the Corporation Service Company, whose address is 1013 Centre Road, Wilmington, Delaware 19805. THIRD: PURPOSE. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL. FOURTH: CAPITAL STOCK. A. AUTHORIZED. The total number of shares of stock which the Corporation shall have authority to issue is Thirty- Five Million (35,000,000), of which Twenty-Five Million (25,000,000) shares shall be common stock, $.001 par value per share (the "Common Stock"), and Ten Million (10,000,000) shares shall be preferred stock, $.001 par value per share (the "Preferred Stock"). B. PROVISIONS RELATING TO PREFERRED STOCK. Shares of Preferred Stock may be issued from time to time in series, and the Board of Directors of the Corporation is hereby authorized, subject to the limitations provided by law, to establish and designate one or more series of the Preferred Stock, to fix the number of shares constituting each series, and to fix the designations, powers, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, of each series and the variations and the relative rights, preferences and limitations as between series, and to increase and to decrease the number of shares constituting each series. The authority of the Board of Directors of the Corporation with respect to each series shall include, but shall not be limited to, the authority to determine the following: (i) The designation of such series. (ii) The number of shares initially constituting such series. (iii) The increase, and the decrease to a number not less than the number of the outstanding shares of such series, of the number of shares constituting such series theretofore fixed. (iv) The rate or rates, and the conditions upon and the times at which dividends on the shares of such series shall be paid, the preference or relation which such dividends shall bear to the dividends payable on any other class or classes or on any other series of stock of the Corporation, and whether or not such dividends shall be cumulative, and, if such dividends shall be cumulative, the date or dates from and after which they shall accumulate. (v) Whether or not the shares of such series shall be redeemable, and, if such shares shall be redeemable, the terms and conditions of such redemption, including, but not limited to, the date or dates upon or after which such shares shall be redeemable and the amount per share which shall be payable upon such redemption, which amount may vary under different conditions and at different redemption dates. (vi) The rights to which the holders of the shares of such series shall be entitled upon the voluntary or involuntary liquidation, dissolution or winding up of, or upon any distribution of the assets of, the Corporation, which rights may be different in the case of a voluntary liquidation, dissolution or winding up than in the case of such an involuntary event. (vii) Whether or not the shares of such series shall have voting rights, in addition to the voting rights provided by law, and, if such shares shall have such voting rights, the terms and conditions thereof, including, but not limited to, the right of the holders of such shares to vote as a separate class either alone or with the holders of shares of one or more other series of Preferred Stock and the right to have more than one vote per share. (viii) Whether or not a sinking fund or a purchase fund shall be provided for the redemption or purchase of the shares of such series, and, if such a sinking fund or purchase fund shall be provided, the terms and conditions thereof. (ix) Whether or not the shares of such series shall be convertible into, or exchangeable for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation, and, if provision be made for conversion or exchange, the terms and conditions of conversion or exchange, including, but not limited to, any provision for the adjustment of the conversion or exchange rate or the conversion or exchange price. (x) Any other relative rights, preferences and limitations. -2- C. PROVISIONS RELATING TO COMMON STOCK. (i) DIVIDENDS. Subject to the preferential dividend rights applicable to shares of the Preferred Stock pursuant to Part D of this Article FOURTH and as determined by the Board of Directors of the Corporation pursuant to the provisions of Part B of this Article FOURTH, the holders of shares of the Common Stock shall be entitled to receive such dividends as may be declared by the Board of Directors of the Corporation. (ii) LIQUIDATION. Subject to the preferential liquidation rights pursuant to Part D of this Article FOURTH and as determined by the Board of Directors of the Corporation pursuant to the provisions of Part B of this Article FOURTH, in the event of any voluntary or involuntary liquidation, dissolution or winding up of, or any distribution of the assets of, the Corporation, the holders of shares of the Common Stock shall be entitled to receive all of the assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares of the Common Stock held by them. (iii) VOTING. Except pursuant to Part D of this Article FOURTH or as determined by the Board of Directors of the Corporation pursuant to the provisions of Part B of this Article FOURTH, the holders of shares of the Common Stock shall be entitled to vote on all matters at all meetings of the stockholders of the Corporation, and shall be entitled to one vote for each share of the Common Stock entitled to vote at such meeting, voting together with the holders of the Preferred Stock who are entitled to vote thereon, and not as a separate class. D. DESIGNATION OF SERIES A CONVERTIBLE PREFERRED STOCK. One Hundred Thirty-Seven Thousand One Hundred Forty-Three (137,143) authorized shares of Preferred Stock shall be issued in and as a series to be designated Series A Convertible Preferred Stock (the "Series A Preferred Stock") and shall have the powers, preferences, rights, qualifications and limitations as set forth in this Part D. (i) DIVIDENDS. The holders of shares of Series A Preferred Stock shall be entitled to receive, out of the net profits of the Corporation, with funds that at the time are legally available therefor, annual dividends at the rate of No Dollars and Twenty-Nine Point Seventy-Five Cents ($0.2975) per share. The calculation of net profits shall be taken from the Corporation's financial reports. If net profits in any year are not sufficient to pay this dividend, either in whole or in part, then any unpaid portion of the dividend will become a charge against the net profits of the Corporation and will be paid in full out of the net profits of the Corporation in subsequent years before any cash dividends are paid on the Common Stock of the Corporation in those years. The Series A Preferred Stock shall not be entitled to participate in the profits of the Corporation beyond its fixed, preferential annual dividend. (ii) VOTING PROVISIONS. The Series A Preferred Stock shall be entitled to vote at meetings of the stockholders (or consents in lieu of meetings) of the Corporation at the rate of one vote per share on the same basis as the shares of the Common Stock, and voting as a single class with the holders of the Common Stock, and not as a separate class. -3- (iii) LIQUIDATION PREFERENCE. (a) In the event of any liquidation, dissolution or winding-up of the Corporation, either voluntary or involuntary (a "Liquidation"), each holder of shares of the Series A Preferred Stock then issued and outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, from any source, before any payment shall be made to the holders of shares of the Common Stock or upon any other series of Preferred Stock of the Corporation with a liquidation preference subordinate to the liquidation preference of Series A Preferred Stock, an amount per share equal to $1.18 together with any accumulated dividends thereon. If, upon any Liquidation of the Corporation, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of the Series A Preferred Stock and the holders of any other series of Preferred Stock with a liquidation preference equal to the liquidation preference of the Series A Preferred Stock the full amounts to which they shall respectively be entitled, the holders of shares of the Series A Preferred Stock and the holders of any other series of Preferred Stock with liquidation preference equal to the liquidation preference of the Series A Preferred Stock, after providing for any stock which may rank prior to the Series A Preferred Stock, shall receive all of the assets of the Corporation available for distribution and each such holder of shares of the Series A Preferred Stock and the holders of any other series of Preferred Stock with a liquidation preference equal to the liquidation preference of the Series A Preferred Stock shall share ratably in any distribution in accordance with the amounts due such stockholders. After payment shall have been made to the holders of shares of Series A Preferred Stock of the full amount to which they shall be entitled, as aforesaid, the holders of shares of the Series A Preferred Stock shall be entitled to no further distributions thereon, and the holders of shares of the Common Stock and of shares of any other series of stock of the Corporation ranking junior to the Series A Preferred Stock in respect of distribution of assets, shall be entitled to share, according to their respective rights and preferences, in all remaining assets of the Corporation available for distribution to its stockholders. (b) The Corporation shall not establish a series of Preferred Stock with a liquidation preference senior to that of the Series A Preferred Stock. (c) The consolidation or merger of the Corporation with any other corporation or corporations shall not be deemed a Liquidation of the Corporation within the meaning of this Sub-Part (iii). (iv) CONVERSION PRIVILEGES. The holders of shares of Series A Preferred Stock have conversion rights as follows (the "Conversion Rights"): (a) Each share of Series A Preferred Stock shall be convertible, at the option of its holder, at any time, into shares of Common Stock of the Corporation at zero point six seven three six two (0.67362) shares of Common Stock for every one (1) share of Series A Preferred Stock held (the "Conversion Rate"), with a minimum of 13,714 shares of Series A Preferred Stock convertible in any single transaction, unless the holder is redeeming his remaining balance of Series A Preferred Stock. -4- (b) In the event the Corporation: (1) pays a dividend or makes a distribution on its Common Stock in shares of its Common Stock; (2) subdivides its outstanding shares of Common Stock into a greater number of shares; (3) combines its outstanding shares of Common Stock into a smaller number of shares; (4) makes a distribution on its Common Stock in shares of its capital stock other than Common Stock; or (5) issues by reclassification of its Common Stock any shares of its capital stock; then the Conversion Rate in effect immediately prior to such action shall be adjusted so that the holder may receive the number of shares of capital stock of the Company which he would have owned immediately following such action if he had converted the Series A Preferred Stock immediately prior to such action. The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision combination or reclassification. No adjustment in the Conversion Rate need be made unless the adjustment would require an increase or decrease of at least five (5%) percent in the Conversion Rate. Any adjustments that are not made shall be carried forward and taken into account in any subsequent adjustment. If a conversion results in fractional shares of Common Stock of the Corporation, such fractional share will be rounded up or down to a whole share amount of Common Stock. Whenever an adjustment is made in the Conversion Rate, the Corporation shall promptly mail to the holders of the Series A Preferred Stock a notice of adjustment. If after an adjustment a holder of Series A Preferred Stock upon conversion of it may receive shares of two or more classes of capital stock of the Corporation, the Corporation shall determine the allocation of the adjusted Conversion Rate between the classes of capital stock. After such allocation, the Conversion Rate of each class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this Section. (c) In the event of any capital reorganization of the Corporation, or any consolidation or merger of the Corporation with or into another corporation, or any sale or -5- conveyance to another corporation of all or substantially all of the property of the Corporation, the holder of each share of Series A Preferred Stock then outstanding shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such reorganization, consolidation, merger, sale or conveyance by a holder of the number of shares of Common Stock of the Corporation into which such share of Series A Preferred Stock might have been converted immediately prior to such reorganization, consolidation, merger, sale or conveyance, and shall have no further conversion rights under these provisions; and any such resulting or surviving corporation, if it is a reporting company under the Securities Exchange Act of 1934, as amended, shall expressly assume the obligation to deliver, upon the exercise of the conversion privilege, such shares, securities or property as the holders of the Series A Preferred Stock shall be entitled to receive pursuant to the provisions hereof. In case securities or property other than Common Stock shall be issuable or deliverable upon conversion as aforesaid, then all references in this Paragraph (c) to Common Stock shall be deemed to apply, so far as appropriate and as nearly as may be, to such other securities or property. (d) Upon the Corporation receiving a notice of conversion for any shares of Series A Preferred Stock pursuant to this Subpart, the shares covered by such notice of conversion shall no longer be deemed outstanding and all rights with respect to such shares shall cease and be canceled and such shares shall return to the status of authorized but unissued Preferred Stock of no designated class or series, and shall not be issuable by the Corporation as Series A Preferred Stock. (e) The Corporation shall have the option to require a conversion of all or any part of the outstanding shares of Series A Preferred Stock if the Common Stock (as presently constituted) of the Corporation achieves a closing price average per share for a consecutive sixty (60) day tracking period of Five Dollars and Twenty-Five Cents ($5.25) (the "Mandatory Conversion"). In the event the Corporation exercised its right to require a conversion under this provision, it shall give the holders of the Series A Preferred Stock written notification at least thirty (30) days prior to the exercise of the Mandatory Conversion. (v) REDEMPTION. The Corporation shall not have the right to redeem all or any part of the Series A Preferred Stock, and the holders of the Holders of the Series A Preferred Stock shall not have the right to require the Corporation to redeem such Preferred Stock. FIFTH: CLASSIFIED DIRECTORS. A. CLASSIFICATION. The total number of directors shall be divided into three classes, designated Class I, Class II and Class III, with each class containing one-third of the total, as near as may be possible. The term of office of directors of one class shall expire at each meeting of stockholders. The initial term of office of directors of Class I shall expire at annual meeting of stockholders in 2000, that of class II shall expire at the annual meeting of stockholders in 2001; and that of Class III shall expire at the annual meeting of stockholders in -6- 2002; and in any cases as to each director until his successor shall be elected and shall qualify or until his earlier resignation, removal from office, death or disability. Additional directorships resulting from an increase in the number of directors shall be apportioned among the classes as equally as possible. At each annual meeting of stockholders, the number of directors equal to the number of directors of the class whose term expires at such meeting (or, if less, the number of directors properly nominated and qualified for election) shall be elected to hold office until the third succeeding annual meeting of stockholders after their election. Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock of the Corporation shall have the right, voting separately as a class, to elect a director or directors, the director or directors so elected shall not be classified pursuant to this Article FIFTH, and the term of the director or directors so elected shall expire at the next succeeding annual meeting of stockholders. B. VOTE TO CHANGE. Notwithstanding any other provision of this Certificate of Incorporation or the By-Laws of the Corporation (and in addition to any other vote that may be required by law, the Certificate of Incorporation or the By-Laws of the Corporation), the affirmative vote of the holders of sixty-six and two-thirds (66 2/3%) percent of all classes of stock of the Corporation entitled to vote generally in election of directors, considered for purposes of this Article FIFTH as one class, shall be required to amend, alter, change, repeal or adopt any provision inconsistent with, this Article FIFTH. SIXTH: INCORPORATOR. The name and mailing address of the incorporator is: Name Mailing Address ---- --------------- Bruce A. Rich Thelen Reid & Priest LLP 40 West 57th Street New York, New York 10019 SEVENTH: COMPROMISE. Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors -7- or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation. EIGHTH: BOARD OF DIRECTORS AND BY-LAWS. All corporate powers shall be exercised by the Board of Directors, except as otherwise provided by statute, by this Certificate of Incorporation, by the By-Laws, or by any agreement among all of the stockholders. The By-Laws may be adopted, amended or repealed by the Board of Directors of the Corporation, except as otherwise provided by law, but any by-law made by the Board of Directors is subject to amendment or repeal by the stockholders of the Corporation. NINTH: LIMITED LIABILITY. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived any improper personal benefit. If the DGCL is hereafter amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended. Any repeal or modification of the foregoing paragraph by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. TENTH: INDEMNIFICATION. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or complete action, suit or proceeding, whether civil, criminal, administrative or investigative, or by or in the right of the Corporation to procure judgment in its favor, by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, in accordance with and to the full extent permitted by statute. Expenses (including attorneys' fees) incurred in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Corporation as authorized in this Article. The indemnification provided by this Article shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under this Certificate of Incorporation or any agreement or vote of stockholders or disinterested directors or otherwise, both as to action in his -8- official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. IN WITNESS WHEREOF, the undersigned, being the sole incorporator hereinbefore named, hereby declares and certifies that the facts herein stated are true, and accordingly have hereunto set my hand this 8th day of January, 1999. /s/ Bruce A. Rich ----------------------------------- Bruce A. Rich, Incorporator -9- EX-3 3 EXHIBIT 3.2 Exhibit 3.2 BY-LAWS OF PALADYNE CORP. ARTICLE I Stockholders' Meetings; Voting ------------------------------ Section 1.1. Annual Meetings. An annual meeting of --------------- stockholders shall be held for the election of directors on the first Wednesday in February of each year, if not a legal holiday, and, if a legal holiday, then on the next day not a legal holiday, at 10:00 o'clock in the forenoon at such time and place either within or without the State of Delaware as may be designated by the Board of Directors from time to time. Any other proper business may be transacted at the annual meeting. Section 1.2. Special Meetings. Special meetings of ---------------- stockholders may be called at any time by the Chairman of the Board, the President, the Board of Directors, or as provided in Section 2.2, to be held at such date, time and place either within or without the State of Delaware as may be stated in the notice of the meeting. A special meeting of stockholders shall be called by the Secretary upon the written request, stating the purpose of the meeting, of stockholders who together own of record at least twenty-five percent (25%) of the outstanding shares of stock entitled to vote at such meeting. Section 1.3. Notice of Meetings. Whenever ------------------ stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, the written notice of any meeting shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the Corporation. The Corporation shall, at the written request of any stockholder, cause such notice to such stockholder to be confirmed to such other address and/or by such other means as such stockholder may reasonably request, provided that if such written request is received after the date any such notice is mailed, such request shall be effective for subsequent notices only. Section 1.4. Adjournments. Any meeting of ------------ stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 1.5. Quorum. At each meeting of stockholders, ------ except where otherwise provided by law or the Certificate of Incorporation or these By-Laws, the holders of a majority of the outstanding shares of each class of stock entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum. With respect to any matter on which stockholders vote separately as a class, the holders of a majority of the outstanding shares of such class shall constitute a quorum for a meeting with respect to such matter. Two or more classes or series of stock shall be considered a single class for purposes of determining existence of a quorum for any matter to be acted on if the holders thereof are entitled or required to vote together as a single class at the meeting on such matter. In the absence of a quorum the stockholders so present may, by majority vote, adjourn the meeting from time to time in the manner provided by Section 1.4 of these By-Laws until a quorum shall attend. Section 1.6. Organization. Meetings of stockholders ------------ shall be presided over by the Chairman of the Board, or in his absence by the President, or in his absence by a Vice President, or in the absence of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his absence the chairman of the meeting may appoint any person to act as secretary of the meeting. Section 1.7. Voting; Proxies. Unless otherwise --------------- provided in the Certificate of Incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by him which has voting power upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the Corporation. Voting at meetings of stockholders need not be by written ballot -2- and need not be conducted by inspectors unless the holders of a majority of the outstanding shares of any class of stock entitled to vote thereon present in person or by proxy at such meeting shall so determine. At all meetings of stockholders for the election of directors, such election and all other elections and questions shall, unless otherwise provided by law or by the Certificate of Incorporation or these By-Laws, be decided by the vote of the holders of a majority of the outstanding shares of all classes of stock entitled to vote thereon present in person or by proxy at the meeting, voting as a single class. Section 1.8. Fixing Date for Determination of -------------------------------- Stockholders of Record. In order that the Corporation may ---------------------- determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. If no record date is fixed: (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (2) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board is necessary, shall be the day on which the first written consent is expressed; and (3) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting. Section 1.9. List of Stockholders Entitled to Vote. ------------------------------------- The Secretary shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. -3- Section 1.10. Consent of Stockholders in Lieu of ---------------------------------- Meeting. To the extent provided by any statute at the time in ------- force, whenever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, by any statute, by the Certificate of Incorporation or by these By-Laws, the meeting and prior notice thereof and vote of stockholders may be dispensed with if the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted shall consent in writing to such corporate action without a meeting by less than unanimous written consent and notice thereof shall be given to those stockholders who have not consent in writing. ARTICLE II Board of Directors ----------------- Section 2.1. Powers; Number; Qualifications. The ------------------------------ business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, except as may be otherwise provided by law or in the Certificate of Incorporation. The number of Directors which shall constitute the whole Board of Directors shall not be less than one (1) nor more than nine (9). Within such limits, the number of directors may be fixed from time to time by vote of the stockholders or of the Board of Directors, at any regular or special meeting, subject to the provisions of the Certificate of Incorporation. Section 2.2. Election; Term of Office; Resignation; -------------------------------------- Removal; Vacancies; Special Elections. Except as otherwise ------------------------------------- provided in the Certificate of Incorporation or in this Section 2.2, directors shall be elected annually at the annual meeting of the stockholders. Each director (whenever elected) shall hold office for the term specified upon his election and until his successor is elected and qualified or until his earlier resignation or removal as provided in the Certificate of Incorporation. Any director may resign at any time upon written notice to the Board of Directors or to the Chairman of the Board or to the President of the Corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. Any director may be removed with or without cause at any time upon the affirmative vote of the holders of a majority of the outstanding shares of stock of the Corporation entitled to vote for the election of such director, given at a special meeting of such stockholders called for the purpose, except as may otherwise be provided in the Certificate of Incorporation. If any vacancies shall occur in the Board of Directors, by reason of death, resignation, removal or otherwise, or if the authorized number of directors shall be increased, the directors then in office shall continue to act, and such vacancies may be filled by a majority of the directors then in office, though less than a quorum; provided, however, that whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the Certificate of Incorporation, vacancies and -4- newly created directorships of such class or classes or series shall be filled by a majority of the directors elected by such class or classes or series thereof then in office though less than a quorum or by a sole remaining director so elected. Any such vacancies or newly created directorships may also be filled upon the affirmative vote of the holders of a majority of the outstanding shares of stock of the Corporation entitled to vote for the election of directors, given at a special meeting of the stockholders called for the purpose. Section 2.3. Regular Meetings. Regular meetings of ---------------- the Board of Directors may be held at such places within or without the State of Delaware and at such times as the Board may from time to time determine, and if so determined notice thereof need not be given. Section 2.4. Special Meetings. Special meetings of ---------------- the Board of Directors may be held at any time or place within or without the State of Delaware whenever called by the Chairman of the Board, by the President or by any two directors. Reasonable notice thereof shall be given by the person or persons calling the meeting. Section 2.5. Telephonic Meetings Permitted. Unless ----------------------------- otherwise restricted by the Certificate of Incorporation or these By-Laws, any member of the Board of Directors, or any committee designated by the Board, may participate in a meeting of the Board or of such committee, as the case may be, by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this by-law shall constitute presence in person at such meeting. Section 2.6. Quorum; Vote Required for Action. At all -------------------------------- meetings of the Board of Directors the presence of a majority of the total number of directors shall constitute a quorum for the transaction of business. The vote of at least a majority of the directors present at any meeting at which a quorum is present shall be necessary to constitute and shall be the act of the Board unless the Certificate of Incorporation or these By-Laws shall otherwise provide. In case at any meeting of the Board a quorum shall not be present, the members of the Board present may adjourn the meeting from time to time until a quorum shall attend. Section 2.7. Organization. Meetings of the Board of ------------ Directors shall be presided over by the Chairman of the Board, or in his absence by the President, or in their absence by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his absence the chairman of the meeting may appoint any person to act as secretary of the meeting. Section 2.8. Action by Directors Without a Meeting. ------------------------------------- Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at -5- any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board or such committee, as the case may be, consents thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. ARTICLE III Committees ---------- Section 3.1. Committees. The Board of Directors may, ---------- by resolution passed by a majority of the total number of directors, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Any such committee, to the extent provided in the resolution of the Board, and unless otherwise restricted by the Certificate of Incorporation or these By-Laws, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, to the full extent permitted by law. Section 3.2. Committee Rules. Unless the Board of --------------- Directors otherwise provides, each committee designated by the Board may adopt, amend and repeal rules for the conduct of its business. In the absence of a provision by the Board or a provision in the rules of such committee to the contrary, the entire authorized number of members of such committee shall constitute a quorum for the transaction of business, the vote of all such members present at a meeting shall be the act of such committee, and in other respects each committee shall conduct its business pursuant to Article II of these By-Laws. ARTICLE IV Officers -------- Section 4.1. Officers; Election. As soon as ------------------ practicable after the annual meeting of stockholders in each year, the Board shall elect a President and a Secretary. The Board may also elect a Chairman of the Board, one or more Vice Presidents, one or more Assistant Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers and may give any of them such further designations or alternate titles as it considers desirable. Any number of offices may be held by the same person. Section 4.2. Term of Office; Resignation; Removal; ------------------------------------- Vacancies. Except as otherwise provided in the resolution of the --------- Board of Directors electing any officer, each officer shall hold office until the first meeting of the Board after the annual meeting of stockholders next succeeding his election, and until his successor is elected and qualified or until his earlier resignation or removal. Any officer may resign at any time upon -6- written notice to the Board or to the President of the Corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. The Board may remove any officer with or without cause at any time, provided that such action by the Board shall require the vote of a majority of the whole Board. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation, but the election of an officer shall not of itself create contractual rights. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise shall or may be filled for the unexpired portion of the term by the Board at any regular or special meeting in the manner provided in Section 4.1 for election of officers following the annual meeting of stockholders. Section 4.3. Chairman of the Board. The Chairman of --------------------- the Board or, if there is not a Chairman of the Board, the President, shall be the chief executive officer and shall have general charge and supervision of the business of the Corporation. In addition, he shall preside at all meetings of the Board of Directors and of the stockholders at which he shall be present. He shall have and may exercise such powers and perform such other duties as are, from time to time, assigned to him by the Board and as may be provided by law. Section 4.4. President. The President shall be the --------- chief operating officer and shall perform all duties incident to such office, and such other duties as, from time to time, may be assigned to him by the Board or as may be provided by law. Section 4.5. Vice Presidents. The Vice President or --------------- Vice Presidents, at the request of the President or in his absence or during his inability to act, shall perform the duties of the President, and when so acting shall have the powers of the President. If there be more than one Vice President, the Board of Directors may determine which one or more of the Vice Presidents shall perform any of such duties; or if such determination is not made by the Board, the President may make such determination; otherwise any of the Vice Presidents may perform any of such duties. The Vice President or Vice Presidents shall have such other powers and perform such other duties as may be assigned to him or them by the Board or the President or as may be provided by law. Section 4.6. Secretary. The Secretary shall have the --------- duty to record the proceedings of the meetings of the stockholders, the Board of Directors and any committees in a book to be kept for that purpose; he shall see that all notices are duly given in accordance with the provisions of these By-Laws or as required by law; he shall be custodian of the records of the Corporation; he may affix the corporate seal to any document the execution of which, on behalf of the Corporation, is duly authorized, and when so affixed may attest the same; and, in general, he shall perform all duties incident to the office of secretary of a corporation, and such other duties as, from time to time, may be assigned to him by the Board or the President or as may be provided by law. -7- Section 4.7. Treasurer. The Treasurer shall have --------- charge of and be responsible for all funds, securities, receipts and disbursements of the Corporation, and shall deposit or cause to be deposited, in the name of the Corporation, all moneys or other valuable effects in such banks, trust companies or other depositories as shall, from time to time, be selected by or under authority of the Board of Directors; if required by the Board, he shall give a bond for the faithful discharge of his duties, with such surety or sureties as the Board may determine; he shall keep or cause to be kept full and accurate records of all receipts and disbursements in books of the Corporation and shall render to the President and to the Board, whenever requested, an account of the financial condition of the Corporation; and, in general, he shall perform all the duties incident to the office of treasurer of a corporation, and such other duties as may be assigned to him by the Board or the President or as may be provided by law. Section 4.8. Other Officers. The other officers, if -------------- any, of the Corporation shall have such powers and duties in the management of the Corporation as shall be stated in a resolution adopted by the Board of Directors which is not inconsistent with these By-Laws and, to the extent not so stated, as generally pertain to their respective offices, subject to the control of the Board. The Board may require any officer, agent or employee to give security for the faithful performance of his duties. ARTICLE V Stock ----- Section 5.1. Certificates. Every holder of stock in ------------ the Corporation shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman of the Board of Directors, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the Corporation, certifying the number of shares owned by him in the Corporation. If such certificate is manually signed by one officer or manually countersigned by a transfer agent or by a registrar, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. Section 5.2. Lost, Stolen or Destroyed Stock ------------------------------- Certificates; Issuance of New Certificates. The Corporation may ------------------------------------------ issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or his legal representative, to -8- give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. ARTICLE VI Miscellaneous ------------- Section 6.1. Seal. The Corporation may have a ---- corporate seal which shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors. The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced. Section 6.2. Waiver of Notice of Meetings of ------------------------------- Stockholders, Directors and Committees. Whenever notice is -------------------------------------- required to be given by law or under any provision of the Certificate of Incorporation or these By-Laws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the Certificate of Incorporation or these By-Laws. Section 6.3. Form of Records. Any records maintained --------------- by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same. Section 6.4. Dividends. Dividends upon the stock of --------- the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, bonds, in property, or in shares of stock, subject to the provisions of the Certificate of Incorporation. Section 6.5. Reserves. Before the payment of any -------- dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think -9- proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purposes as the directors shall think conducive to the interest of the Corporation, and the directors may modify or abolish any such reserve. Section 6.6. Checks. All checks or demands for money ------ and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. Section 6.7. Fiscal Year. The fiscal year of the ----------- Corporation shall be fixed by resolution of the Board of Directors. Section 6.8. Offices. The registered office of the ------- Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware. The Corporation may also have offices at such other places within or outside the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE VII Amendments ---------- Section 7.1. Amendments. These By-Laws may be ---------- altered, amended or repealed at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of such alteration, amendment or repeal be contained in the notice of such special meeting. ARTICLE VIII Indemnification --------------- Section 8.1. Indemnification. The Corporation shall --------------- indemnify to the fullest extent permitted by law any person made or threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person, or a person of whom he is the legal representative, is or was a director, officer, employee or agent of the Corporation or any predecessor of the Corporation, or serves or served any other enterprise as a director, officer, employee or agent at the request of the Corporation or any predecessor of the Corporation. The Corporation shall pay any expenses reasonably incurred by a director or officer in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not -10- entitled to be indemnified by the Corporation under this Article or otherwise. The Corporation may, by action of its Board of Directors, provide for the payment of such expenses incurred by employees and agents of the Corporation as it deems appropriate. The rights conferred on any person under this Article shall not be deemed exclusive of any other rights that such person may have or hereafter acquire under any statute, provision of the Corporation's Certificate of Incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise. All rights to indemnification and to the advancement of expenses under this Article shall be deemed to be provided by a contract between the Corporation and the director, officer, employee or agent who serves in such capacity at any time while these By-Laws and any other relevant provisions of the Delaware General Corporation Law and any other applicable law, if any, are in effect. Any repeal or modification thereof shall not affect any rights or obligations then existing. For purposes of this Article, references to "the Corporation" shall be deemed to include any subsidiary of the Corporation now or hereafter organized under the laws of the State of Delaware. -11- EX-3 4 EXHIBIT 3.3 Exhibit 3.3 ARTICLES OF MERGER OF SYNAPTX WORLDWIDE, INC. AND PALADYNE CORP. To the Division of Corporations and Commerical Code State of Utah Pursuant to the provisions of the Utah Revised Business Corporation Act, the domestic business corporation and the foreign business corporation hereinafter named do hereby adopt the following Articles of Merger. 1. Attached hereto as Exhibit A and made a part hereof is --------- the Agreement and Plan of Merger (the "Merger Agreement") for merging Synaptx Worldwide, Inc., a Utah corporation, with and into Paladyne Corp., a Delaware corporation and a wholly-owned subsidiary of Synaptx Worldwide, Inc., as adopted by unanimous written consent of the Board of Directors of Synaptx Worldwide, Inc. on January 19, 1999 and by unanimous written consent of the Board of Directors of Paladyne Corp. on January 19, 1999. 2. With regard to Synaptx Worldwide, Inc., the designation, the number of outstanding shares and the number of votes entitled to be cast by each voting group entitled to vote together on the Merger Agreement are as follows: The holders of outstanding shares of Common Stock, $.001 par value per share ("Common Stock"), and the shares of Series A Convertible Preferred Stock, $.001 par value per share ("Series A Preferred Stock"), were entitled to vote together as one class on the Merger Agreement. As of January 22, 1999, 6,721,595 shares of stock were issued and outstanding, consisting of 6,584,452 shares of Common Stock and 137,143 shares of Series A Preferred Stock. Each share of Common Stock and Series A Preferred Stock was entitled to one vote. 3. With regard to Paladyne Corp., the designation, the number of outstanding shares and the number of votes entitled to be cast by each voting group entitled to vote together on the Merger Agreement are as follows: The holder of the outstanding shares of Common Stock, $.001 par value per share ("Common Stock"), was entitled to vote on the Merger Agreement. As of January 19, 1999, 100 shares of Common Stock were issued and outstanding. 4. With regard to Synaptx Worldwide, Inc., 4,021,227 votes were cast "for" approval of the Merger Agreement and -0- votes were cast "against" approval of the Merger Agreement by the holders of the outstanding shares of Common Stock and Series A Preferred Stock at the annual meeting of shareholders of the corporation held on March 3, 1999. 5. With regard to Paladyne Corp., 100 votes were cast "for" approval of the Merger Agreement and -0- votes were cast "against" approval of the Merger Agreement by the holder of the outstanding shares of Common Stock by a written consent of the sole shareholder of the corporation, dated January 19, 1999. 6. The said number of votes cast for the Merger Agreement by the shareholders of Synaptx Worldwide, Inc. was sufficient for the approval by the sole voting group. 7. The said number of votes cast for the Merger Agreement by the shareholders of Paladyne Corp. was sufficient for the approval by the sole voting group. 8. The merger of Synaptx Worldwide, Inc. with and into Paladyne Corp. is permitted by the laws of Delaware, the jurisdiction of organization of Paladyne Corp., and has been authorized in compliance with said laws. 9. The address of the principal office of Paladyne Corp. within or without the State of Utah at which Paladyne Corp. has authorized process to be served upon it by registered or certified mail return receipt requested is as follows: 615 Crescent Executive Court, Suite 128, Lake Mary, Florida 32746 10. The merger shall be effective upon the filing of this Certificate with the State of Utah. Dated: March 3, 1999 SYNAPTX WORLDWIDE, INC. By: /s/ Ronald L. Weindruch --------------------------- Name: Ronald L. Weindruch Title: President PALADYNE CORP. By: /s/ Ronald L. Weindruch --------------------------- Name: Ronald L. Weindruch Title: President -2- EX-3 5 EXHIBIT 3.4 Exhibit 3.4 CERTIFICATE OF MERGER OF SYNAPTX WORLDWIDE, INC. (A UTAH CORPORATION) INTO PALADYNE CORP. (A DELAWARE CORPORATION) (Pursuant to Section 252 of the General Corporation Law of the State of Delaware) The undersigned corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: 1. The name and state of incorporation of each of the constituent corporations (the "Constituent Corporations") to the merger (the "Merger") is as follows: NAME STATE OF INCORPORATION ---- ---------------------- Synaptx Worldwide, Inc. Utah Paladyne Corp. Delaware 2. An Agreement and Plan of Merger, dated January 19, 1999, between the Constituent Corporations has been approved, adopted, certified, executed and acknowledged by each of the Constituent Corporations in accordance with the requirements of Section 252(c) of the General Corporation Law of the State of Delaware. 3. The name of the surviving corporation of the Merger is Paladyne Corp. (the "Surviving Corporation"). Synaptx Worldwide, Inc. shall be the merging corporation. 4. The Certificate of Incorporation of the Surviving Corporation shall be its Certificate of Incorporation. 5. The executed Agreement and Plan of Merger is on file at the principal place of business of the Surviving Corporation. The address of the principal place of business of the Surviving Corporation is 615 Crescent Executive Court, Suite 128, Lake Mary, Florida 32746. 6. A copy of the Agreement and Plan of Merger will be furnished by the Surviving Corporation, on request and without cost, to any stockholder of either Constituent Corporation. 7. The authorized capital stock of each Constituent Corporation that is not a corporation of the State of Delaware is as follows: NAME AUTHORIZED CAPITAL STOCK ---- ------------------------ Synaptx Worldwide, Inc. 25,000,000 shares of Common Stock, $.001 par value per share. 10,000,000 shares of Preferred Stock, $.001 par value per share. 8. This Certificate of Merger shall be effective on the date and at the time it is filed with the Secretary of State of the State of Delaware. IN WITNESS WHEREOF, this Certificate of Merger has been executed on this 3rd day of March, 1999. PALADYNE CORP. By: /s/ Ronald L. Weindruch -------------------------------- Ronald L. Weindruch President and Chief Executive Officer -2- EX-10 6 EXHIBIT 10.1 Exhibit 10.1 AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER, dated January 19, 1999 (the "Agreement"), between SYNAPTX WORLDWIDE, INC., a Utah corporation ("Synaptx"), and PALADYNE CORP., a Delaware corporation ("Paladyne") (Synaptx and Paladyne are sometimes referred to herein collectively as the "Constituent Corporations"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Paladyne was incorporated in the State of Delaware on January 11, 1999, and is a wholly-owned subsidiary of Synaptx; and WHEREAS, the Board of Directors of Synaptx believes that it is in the best interest of Synaptx to reincorporate in the State of Delaware by merging with and into Paladyne pursuant to this Agreement. NOW, THEREFORE, in consideration of the foregoing premises, the mutual agreements and undertakings herein given and other good and valuable consideration, the parties hereto agree, in accordance with the applicable provisions of the statutes of Utah and Delaware, respectively, which permit such merger, Synaptx shall be, and hereby is, merged with and into Paladyne, at the Effective Time (as herein defined), and that the terms and conditions of the merger hereby agreed to (the "Merger") shall be as hereinafter set forth: ARTICLE ONE Principal Terms of Merger Section 1.01. Merger. At the Effective Time (as herein ------ defined), Synaptx shall merge with and into Paladyne provided that this Agreement has not been terminated pursuant to Section 4.02 herein. Section 1.02. Effective Time of Merger. The Merger shall ------------------------ become effective as of the completion of all filing requirements specified in Sections 4.03 and 4.04 of this Agreement, and such date and time is hereinafter referred to as the "Effective Time." ARTICLE TWO Certificate of Incorporation, By-Laws and Directors Section 2.01. Certificate of Incorporation. The ---------------------------- Certificate of Incorporation of Paladyne in effect at the Effective Time of the Merger shall be the Certificate of Incorporation of Paladyne, to remain unchanged until amended as provided by law. Section 2.02. By-Laws. The By-Laws of Paladyne in effect ------- at the Effective Time of the Merger shall be the By-Laws of Paladyne, to remain unchanged until amended as provided by law. Section 2.03. Directors. Synaptx, in its capacity as sole --------- shareholder of Paladyne, shall elect as directors of Paladyne those individuals elected by the shareholders of Synaptx prior to the Effective Time of the Merger, and such persons shall serve as directors of Paladyne until the next annual meeting of the stockholders of Paladyne. ARTICLE THREE Exchange and Cancellation of Shares At the Effective Time of the Merger, all issued and outstanding shares of Synaptx common stock, $.001 par value (the "Old Common Stock"), and all issued and outstanding shares of Synaptx's Series A Convertible Preferred Stock, $.001 par value (the "Old Preferred Stock"), shall be canceled and the corporate existence of Synaptx, shall cease. Shares of Paladyne's common stock, par value $.001 per share (the "New Common Stock"), and shares of Paladyne's Series A Convertible Preferred Stock, $.001 par value (the "New Preferred Stock"), shall be issued to the shareholders of Synaptx as a result of the Merger as herein provided. Section 3.01. The Surviving Corporation Stock. Each share ------------------------------- of Old Common Stock which is outstanding prior to the Effective Time of the Merger shall be converted into one issued and outstanding share of New Common Stock and, from and after the Effective Time of the Merger, the holders of all of said issued and outstanding shares of Old Common Stock shall automatically be and become holders of shares of New Common Stock upon the basis above specified, whether or not certificates representing said shares are then issued and delivered. Each share of Old Preferred Stock which is outstanding prior to the Effective Time of the Merger shall be converted into one issued and outstanding share of New Preferred Stock and, from and after the Effective Time of the Merger, the holders of all of said issued and outstanding shares of Old Preferred Stock shall automatically be and become holders of shares of New Preferred Stock upon the basis above specified, whether or not certificates representing said shares are then issued and delivered. Section 3.02. Cancellation of Old Common Stock and Old ---------------------------------------- Preferred Stock. After the Effective Time of the Merger, each --------------- holder of record of any outstanding certificate or certificates theretofore representing shares of Old Common Stock or Old Preferred Stock may surrender the same to American Stock Transfer & Trust Company, New York, New York, and such holder shall be entitled upon such surrender to receive in exchange therefor a certificate or certificates representing an equal number of shares of New Common Stock or New Preferred Stock. Until so surrendered, each outstanding certificate which, prior to the Effective Time of the Merger, represented one or more shares of Old Common Stock or Old Preferred Stock shall be deemed for all corporate purposes to evidence ownership of an equal number of shares of New Common Stock or New Preferred Stock, respectively. Upon the surrender of a certificate or certificates representing shares of Old Common Stock or Old Preferred Stock, a proper officer of Paladyne shall cancel said certificate or certificates. -2- ARTICLE FOUR Adoption and Termination Section 4.01. Submission to Vote of Shareholders. This ---------------------------------- Agreement shall be submitted to the shareholders of Synaptx, as provided by applicable law, and shall take effect, and be deemed to be the Agreement and Plan of Merger of the Constituent Corporations, upon the approval or adoption thereof by said shareholders of Synaptx in accordance with the requirements of the laws of the State of Utah. Section 4.02. Termination of Agreement. Anything herein or ------------------------ elsewhere to the contrary notwithstanding, this Agreement may be abandoned by Synaptx by an appropriate resolution of its Board of Directors at any time prior to the Effective Time of the Merger if such Board of Directors believes that the Merger is not in the best interests of Synaptx or in the event that the shareholders who hold more than five (5%) percent of the outstanding and issued shares of Old Common Stock [and Old Preferred Stock] dissent from the Merger and seek appraisal rights pursuant to Sections 16-10a-1301 through 16-10a-1331 of the Utah Revised Business Corporation Act. Section 4.03. Filing of Articles of Merger in the State of -------------------------------------------- Utah. As soon as practicable after the requisite shareholder ---- approval referenced in Section 4.01 herein, Articles of Merger to effectuate the terms of this Agreement shall be executed and acknowledged by Paladyne and thereafter delivered to the Division of Corporations and Commerical Code (the "Division") of the State of Utah for filing and recording in accordance with applicable law, unless this Agreement has been terminated pursuant to Section 4.02 herein. Section 4.04. Filing of Certificates of Merger in the State --------------------------------------------- of Delaware. As soon as practicable after the requisite ----------- shareholder approval referenced in Section 4.01 herein, a Certificate of Merger to effectuate the terms of this Agreement shall be executed by each of the Constituent Corporations and thereafter delivered to the Secretary of State of the State of Delaware for filing and recording in accordance with applicable law, unless this Agreement has been terminated pursuant to Section 4.02 herein. ARTICLE FIVE Effect of Merger Section 5.01. Effect of Merger. At the Effective Time of ---------------- the Merger, the Constituent Corporations shall be a single corporation, which shall be Paladyne, and the separate existence of Synaptx shall cease except to the extent provided by the laws of the States of Utah and Delaware. Paladyne shall thereupon and thereafter possess all the rights, privileges, immunities and franchises, of both a public and private nature, of each of the Constituent Corporations; and all property, real, personal and mixed, and all debts due on whatever account, including subscriptions to shares, and all other choses in action, and all and every other interest of, or belonging to, or due to each of the Constituent Corporations, shall be taken and deemed to be vested in Paladyne without further act or deed; and the title to all real estate, or any interest therein, vested in either of the -3- Constituent Corporations shall not revert or be in any way impaired by reason of the Merger. Paladyne shall thenceforth be responsible and liable for all of the liabilities and obligations of each of the Constituent Corporations and any claim existing or action or proceeding pending by or against either of the Constituent Corporations may be prosecuted to judgment as if the Merger had not taken place, or the Surviving Corporation may be substituted in its place, and neither the rights of creditors nor any liens upon the property of either of the Constituent Corporations shall be impaired by the Merger. Paladyne shall assume any stock option or similar employee benefits plan of Synaptx, and all contractual rights of Synaptx for the issuance of shares of the Old Common Stock and Old Preferred Stock, and such issuances or reserves for issuances shall be of shares of New Common Stock and New Preferred Stock on an as-converted basis as set forth in Section 3.01 hereof. Section 5.02. Business Combinations with Ronald E. Weindruch. ---------------------------------------------- Paladyne hereby acknowledges that Ronald E. Weindruch, beneficially owns 1,661,881 shares of Old Common Stock at the date of this Agreement and further recognizes that, as a result of such stock ownership, Mr. Weindruch could be deemed to be an Interested Stockholder (as that term is defined under Section 203 of the General Corporation Law of the State of Delaware) of Paladyne after the consummation of the Merger. Paladyne hereby represents and warrants to Synaptx that the Board of Directors of Paladyne has considered the stock ownership that Mr. Weindruch will have in Paladyne at the Effective Time of the Merger in approving this Agreement. Paladyne hereby represents and warrants to Synaptx that the Board of Directors of Paladyne has approved such stock acquisition. ARTICLE SIX Post Merger Undertakings Section 6.01 Service of Process. Paladyne hereby agrees ------------------ that it may be served with process within the State of Utah in any proceeding for the enforcement of any obligation of Synaptx and in any proceeding for the enforcement of the rights of any dissenting shareholder of Synaptx. Section 6.02 Authorization of Service of Process. ----------------------------------- Paladyne hereby authorizes service of process on it pursuant to Section 6.01 herein by registered or certified mail return receipt requested to its principal office as set forth in the Articles of Merger to be filed pursuant to Section 4.03 herein or as changed by notice to the Division. Section 6.03 Payments to Dissenting Shareholders. ----------------------------------- Paladyne shall promptly pay to any shareholders of Synaptx who dissent from the Merger the amount, if any, to which such dissenting shareholders shall be entitled with respect to the Merger pursuant to applicable law. ARTICLE SEVEN Miscellaneous Section 7.01 Further Actions. Each of the Constituent --------------- Corporations shall take or cause to be taken all action, or do, or cause to be done, all things necessary, proper or advisable under the laws of the States of Utah and Delaware to consummate and make effective the Merger following approval of the Merger by the shareholders of Synaptx in accordance with the laws of said States. Section 7.02. Amendments. At any time prior to the ---------- Effective Time of the Merger (notwithstanding any shareholder approval), if authorized by their respective Board of Directors, -4- the parties hereto may, by written agreement, amend or supplement any of the provisions of this Agreement. Any written instrument or agreement referred to in this section shall be validly and sufficiently authorized for the purposes of this Agreement if signed on behalf of each of the Constituent Corporations by a person authorized to sign this Agreement. Section 7.03. Counterparts. This Agreement may be executed ------------ in any number of counterparts, each of which shall be deemed to be an original instrument, but all such counterparts together shall constitute one and the same instrument. IN WITNESS WHEREOF, the Constituent Corporations, pursuant to the approval and authority duly given by resolutions adopted by their respective Board of Directors have caused this Agreement and Plan of Merger to be executed by an authorized officer of each party hereto, and the corporate seal affixed on the date above first written. PALADYNE CORP. (a Delaware corporation) By: /s/ Ronald L. Weindruch ------------------------------ Name: Ronald L. Weindruch Title: President SYNAPTX WORLDWIDE, INC. (a Utah corporation) By: /s/ Ronald L. Weindruch ------------------------------ Name: Ronald L. Weindruch Title: President -5- EX-10 7 EXHIBIT 10.2 Exhibit 10.2 PALADYNE CORP. 1999 STOCK OPTION PLAN 1 Purpose. This 1999 Stock Option Plan (the "Plan") ------- of Paladyne Corp., a Delaware corporation (the "Company"), is intended to provide incentives: (i) to certain directors, officers, employees and other persons who perform services for or on behalf of the Company and any subsidiaries of the Company (collectively, the "Subsidiaries") by providing them with opportunities to purchase capital stock in the Company pursuant to options granted hereunder which qualify as "incentive stock options" under Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code") ("ISO" or "ISOs") or which do not qualify as ISOs ("Non-Qualified Option" or "Non-Qualified Options"); and (ii) to individuals who are directors but not also employees of the Company and the Subsidiaries ("Non-Employee Directors"), and to individuals who are members of the Advisory Board or an independent contractor, or consultant to the Company or its Subsidiaries, by providing them with opportunities to purchase capital stock in the Company pursuant to Non-Qualified Options. Both ISOs and Non-Qualified Options are referred to hereinafter individually as an "Option" and collectively as "Options," and persons to whom Options are granted are referred to hereinafter individually as an "Optionee" and collectively as "Optionees." As used herein, the term "Subsidiary" means "subsidiary corporation" as that term is defined in Section 424(f) of the Code. 2 Administration of the Plan. The Plan shall be -------------------------- administered by a Committee of the Board of Directors of the Company (the "Committee"), each member of which shall be a "Non- Employee Director" within the meaning of Rule 16b-3 or any successor provision ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Committee shall consist of two or more members. Subject to the terms of the Plan, the Committee shall have the authority to (i) determine the employees of the Company and Subsidiaries (from among the class of employees eligible under Section 4 hereof to receive ISOs) to whom ISOs may be granted; (ii) determine the person and the number of shares which may be issued under each Option; (iii) determine the time or times at which Options may be granted; (iv) determine the exercise price of shares subject to each Option, which price shall not be less than the fair market value as specified in Section 6; (v) determine (subject to Sections 7 and 9) the time or times when each Option shall become exercisable and the duration of the exercise period; (vi) determine whether restrictions are to be imposed on shares subject to Options and the nature of such restrictions, if any, and (vii) interpret the Plan and prescribe and rescind rules and regulations relating to it. If the Committee determines to issue a Non-Qualified Option, it shall take whatever actions it deems necessary, under Section 422 of the Code and the regulations promulgated thereunder, to ensure that such Option is not treated as an ISO. The interpretation and construction by the Committee of any provisions of the Plan or of any Option granted under it shall be final. The Committee may from time to time adopt such rules and regulations for carrying out the Plan as it may deem best. No 1 member of the Committee or of the Board of Directors of the Company shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted under it. 3 Stock. The stock delivered under this Plan shall ----- be the Company's Common Stock, par value $.001 per share (the "Common Stock"), either authorized and unissued, treasury stock or shares purchased on the open market. The aggregate number of shares which may be issued pursuant to the Plan is 2,500,000, subject to adjustment as provided in Section 13. If any Option granted under the Plan shall expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part, the unpurchased shares subject to such Option shall again be available for grants of Options under the Plan. 4 Eligible Employees and Others. ISOs and Non- ----------------------------- Qualified Options may be granted to individuals who are employees of the Company and its Subsidiaries, including officers and directors who are also employees at the time the Option is granted. Non-Qualified Options may be granted to Non-Employee Directors and independent contractors and consultants to the Company and its Subsidiaries, affiliates or any entity in which the Company has an interest, or who are deemed by the Committee to be in a position to perform such services in the future. Granting of any Option to any person shall neither entitle that person to, nor disqualify him from, participation in any other Option grant. 5 Term of Plan; Granting of Options. The term of --------------------------------- the Plan will commence on the date of adoption of the Plan by the Company's Board of Directors, subject to approval by stockholders within one year of adoption, and terminate on the day immediately preceding the tenth anniversary of said adoption, except as to Options outstanding on that date and subject to earlier termination as provided in Sections 9 and 10 hereof. Options may be granted under the Plan at any time during the term of the Plan. The date of grant of an Option under the Plan shall be the date specified by the Committee at the time it grants the Option; provided, however, that such date shall not be prior to the date on which the Committee acts to approve the grant. No Option shall be granted pursuant to the Plan after January 18, 2009. 6 Minimum Exercise Price; ISO Limitations. --------------------------------------- 6.1 Price for Non-Qualified Options. The ------------------------------- exercise price per share for each Non-Qualified Option granted under the Plan shall not be less than the fair market value of the Common Stock on the date of grant of the Option, and in no event shall be less than the minimum legal consideration required therefor under the laws of the State of Delaware or the laws of any jurisdiction in which the Company or its successors in interest may be organized. 6.2 Price for ISOs. The exercise price per share -------------- for each ISO granted under the Plan shall not be less than the fair market value per share of Common Stock on the date of such grant. In the case of an ISO to be granted to an employee owning stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Subsidiary (a "10% Employee"), the price per share for such ISO shall not be less than one hundred ten percent (110%) of the fair market value per share of Common Stock on the date of grant. 2 For purposes of determining stock ownership under this Section, the rules of Section 424(d) of the Code shall apply. 6.3 $100,000 Annual Limitation on ISO Vesting. ----------------------------------------- To the extent that, in the aggregate under this Plan and all incentive stock option plans of the Company and any Subsidiary, ISOs become exercisable for the first time by an employee during any calendar year with respect to stock having a fair market value (determined at the time the ISOs were granted) in excess of $100,000, such excess amount of stock shall be deemed to have been granted as a Non-Qualified Option, and not as an ISO. 6.4 Determination of Fair Market Value. If at ---------------------------------- the time an Option is granted under the Plan, the Company's Common Stock is publicly traded, "fair market value" shall be determined as of the last business day for which the prices or quotes discussed in this sentence are available prior to the date such Option is granted and shall be (i) the mean (on that date) of the high and low prices of the Common Stock on the principal national securities exchange on which the Common Stock is traded, if the Common Stock is then traded on a national securities exchange; (ii) the last reported sale price (on that date) of the Common Stock on the NASDAQ National Market or Small Cap Market (or other interdealer quotation system), if the Common Stock is not then traded on a national securities exchange; or (iii) the closing bid price (or average of bid prices) last quoted (on that date) by the OTC Electronic Bulletin Board or other established quotation service for over-the-counter securities, if the Common Stock is not reported on the NASDAQ National Market or Small Cap Market (or other interdealer quotation system). However, if the Common Stock is not publicly traded at the time an Option is granted under the Plan, the "fair market value" shall be deemed to be the fair value of the Common Stock as determined by the Committee in good faith after taking into consideration all factors which it deems appropriate, including, without limitation, recent sale and offer prices of the Common Stock in private transactions negotiated at arm's length. 7 Option Duration. Subject to earlier termination --------------- as provided in Sections 9 and 10, each Option shall expire on the date specified by the Committee, but not more than (i) ten (10) years from the date of grant in the case of Non-Qualified Options, (ii) ten (10) years from the date of grant in the case of ISOs generally, and (iii) five (5) years from the date of grant in the case of ISOs granted to a 10% Employee, as determined under Section 6.02. Subject to earlier termination as provided in Sections 9 and 10, the term of each ISO shall be the term set forth in the original instrument granting such ISO, except with respect to any part of such ISO that is converted into a Non-Qualified Option pursuant to Section 16. 8 Exercise of Option. Subject to the provisions of ------------------ Sections 9 through 12, each Option granted under the Plan shall be exercisable as follows: 8.1 Vesting. The Option shall either be fully ------- exercisable on the date of grant or shall become exercisable thereafter in such installments as the Committee may specify, provided that an Option granted to a director or officer of the Company may not vest earlier than six (6) months from the date of grant. 3 8.2 Full Vesting of Installments. Once an ---------------------------- installment becomes exercisable it shall remain exercisable until expiration or termination of the Option, unless otherwise specified by the Committee. 8.3 Partial Exercise. Each Option or installment ---------------- may be exercised at any time or from time to time, in whole or in part, for up to the total number of shares with respect to which it is then exercisable. 8.4 Acceleration of Vesting. The Committee shall ----------------------- have the right to accelerate the date of exercise of any installment of any Option, provided that the Committee shall not, without the consent of an Optionee, accelerate the exercise date of any installment of any Option granted to any employee as an ISO if such acceleration would violate the annual vesting limitation contained in Section 422(d) of the Code, as described in Section 6.03. 9 Termination of Employment. If an Optionee ceases ------------------------- his employment with, or service by, the Company and all Subsidiaries other than by reason of death or disability as defined in Section 10 or by the Company or any Subsidiary for cause, no further installments of his Options shall become exercisable, and his Options shall terminate after the passage of one (1) year from the date of termination of his employment or service (or three (3) months as to ISOs), but in no event later than on their specified expiration dates, during which period he shall have the right to exercise any Options exercisable by him on the date of termination of employment, subject to exercise for such other periods as determined by the Committee at the time of grant. Options held by an Optionee whose termination of employment or service is for cause shall terminate upon such termination. For purposes of this Section 9 only, employment or service shall be considered as continuing uninterrupted during any bona fide leave of absence (such as those attributable to illness, military obligations or governmental service). A bona fide leave of absence with the written approval of the Committee shall not be considered an interruption of employment or service under this Section 9, provided that such written approval contractually obligates the Company or any Subsidiary to continue the employment or service of the Optionee after the approved period of absence. Options granted under the Plan shall not be affected by any change of employment or service within or among the Company and Subsidiaries, so long as the Optionee continues to be an employee or independent contractor or advisor of the Company or any Subsidiary. Nothing in the Plan shall be deemed to give any Optionee the right to be retained in employment or other service by the Company or any Subsidiary for any period of time. The Committee may, in its sole discretion, change the termination period for any Option from the period provided for in this Section 9 or in Section 10 to a period less than the respective periods specified herein. 10 Death; Disability. ----------------- 10.1 Death. If an Optionee ceases his employment ----- with or service by the Company and all Subsidiaries by reason of his death, any Option may be exercised, to the extent of the number of shares with respect to which he could have exercised it on the date of his death, by his estate, personal representative or beneficiary who has acquired the Option by will or by the laws of descent and distribution at any time within one (1) year from 4 the date of the Optionee's death or such later date as fixed by the Committee as to Non-Qualified Options, but in no event later than on their specified expiration dates. 10.2 Disability. If an Optionee ceases his ---------- employment with or service by the Company and all Subsidiaries by reason of his disability, he shall have the right to exercise any Option held by him on the date of termination of employment, to the extent of the number of shares with respect to which he could have exercised it on that date, at any time prior to one (1) year from the date of the termination of the Optionee's employment or service or such later date as fixed by the Committee as to Non- Qualified Options, but in no event later than on their specified expiration dates. For the purposes of the Plan, the term "disability" shall mean "permanent and total disability" as defined in Section 22(e)(3) of the Code or successor statute. 11 Assignability. No Option shall be assignable or ------------- transferable by the Optionee except (i) by will or by the laws of descent and distribution, (ii) pursuant to a qualified domestic relations order or Title I of the Employee Retirement Income Security Act or (iii) with respect to Non-Qualified Options, to a spouse or lineal descendant or lineal ascendant of the Optionee. 12 Terms and Conditions of Options. Options shall be ------------------------------- evidenced instruments (which need not be identical) in such forms as the Committee may from time to time approve (the "Option Agreements"). The Option Agreements shall conform to the terms and conditions set forth in Sections 6 through 11 hereof and may contain such other provisions as the Committee deems advisable which are not inconsistent with the Plan, including restrictions applicable to shares of Common Stock issuable upon the exercise of Options. The Committee may from time to time confer authority and responsibility on one or more of its own members and/or one or more officers of the Company to execute and deliver the Option Agreements. The proper officers of the Company are authorized and directed to take any and all action necessary or advisable from time to time to carry out the terms of the Option Agreements. 13 Adjustments. Upon the occurrence of any of the ----------- following events, an Optionee's rights with respect to Options granted to him hereunder shall be adjusted as hereinafter provided, unless otherwise specifically provided in the written agreement between the Optionee and the Company relating to such Option: 13.1 Stock Dividends and Stock Splits. If the -------------------------------- shares of Common Stock shall be subdivided or combined into a smaller or greater number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock, the number of shares of Common Stock deliverable upon the exercise of Options shall be appropriately decreased or increased proportionately, and appropriate adjustments shall be made in the purchase price per share to reflect such subdivision, combination or stock dividend. 13.2 Consolidations or Mergers. If the Company is ------------------------- to be consolidated with or acquired by another entity in a merger, sale of all or substantially all of the Company's assets or otherwise (an "Acquisition"), the Committee or the board of directors of any entity assuming the obligations of the Company hereunder (the "Successor Board"), shall, as to outstanding Options, either (i) make appropriate provision for the continuation of such Options by substituting on an equitable 5 basis for the shares then subject to such Options the consideration payable with respect to the outstanding shares of Common Stock in connection with the Acquisition; (ii) upon written notice to the Optionees, provide that all Options must be exercised, to the extent then exercisable, within a specified number of days of the date of such notice, at the end of which period the Options shall terminate; or (iii) terminate all Options in exchange for a cash payment equal to the excess of the fair market value of the shares subject to such Options (to the extent then exercisable) over the exercise price thereof. 13.3 Recapitalization or Reorganization. In the ---------------------------------- event of a recapitalization or reorganization of the Company (other than a transaction described in Section 13.02) pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common Stock, an Optionee upon exercising an Option shall be entitled to receive for the purchase price paid upon such exercise the securities he would have received if he had exercised his Option prior to such recapitalization or reorganization. 13.4 Change in Control. In the event of a change ----------------- in control of the Company, all Options under the Plan which are not fully vested shall vest 100% and shall be immediately exercisable. For purposes of this Plan, a "change in control" shall mean any of the following events: (a) the Company receives a report on Schedule 13D filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Exchange Act disclosing that any person, group, corporation or other entity is the beneficial owner, directly or indirectly, of twenty percent (20%) or more of the outstanding Common Stock of the Company; (b) any person (as such term is defined in Section 13(d) of the Exchange Act), group, corporation or other entity other than the Company or any Subsidiary, purchases shares pursuant to a tender offer or exchange offer to acquire any Common Stock of the Company for cash, securities or any other consideration, provided that after consummation of the offer, the person, group, corporation or other entity in question is the beneficial owner (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of twenty percent (20%) or more of the outstanding Common Stock of the Company (calculated as provided in paragraph (d) of Rule 13d-3 under the Exchange Act in the case of rights to acquire common stock); (c) the stockholders of the Company approve (i) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of Common Stock would be converted into cash, securities or other property, or (ii) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company; or (d) there shall have been a change in a majority of the members of the Board of Directors of the Company within a twenty-four (24) month period unless the election or nomination for election by the Company's stockholders of each new director was approved by the vote of two-thirds of the directors then still in office who were in office at the beginning of the twenty-four (24) month period. 13.5 Modification of ISOs. Notwithstanding the -------------------- foregoing, any adjustments made pursuant to Section 13.01, 13.02, 13.03 or 13.04 with respect to ISOs shall be made only after the Committee, after consulting with counsel for the Company, determines whether such adjustments would constitute a "modification" of such ISOs (as that term is defined in Section 424 of the Code) or would cause any adverse tax consequences for 6 the holders of such ISOs. If the Committee determines that such adjustments made with respect to ISOs would constitute a modification of such ISOs, it may refrain from making such adjustments. 13.6 Dissolution or Liquidation. In the event of -------------------------- the proposed dissolution or liquidation of the Company, each Option will terminate immediately prior to the consummation of such proposed action or at such other time and subject to such other conditions as shall be determined by the Committee. 13.7 Issuances of Securities. Except as expressly ----------------------- provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to Options. No adjustments shall be made for dividends paid in cash or in property other than securities of the Company. 13.8 Fractional Shares. No fractional shares ----------------- shall be issued under the Plan and the Optionee shall receive from the Company cash in lieu of such fractional shares. 13.9 Adjustments. Upon the happening of any of ----------- the events described in Section 13.01, 13.02, 13.03 or 13.04 above, the class and aggregate number of shares set forth in Section 3 hereof that are subject to Options which previously have been or subsequently may be granted under the Plan shall also be appropriately adjusted to reflect the events described in such subparagraphs. The Committee or the Successor Board shall determine the specific adjustments to be made under this Section 13 and, subject to Section 2 hereof, its determination shall be conclusive. 14 Means of Exercising Options. An Option (or any --------------------------- installment or portion of an installment thereof) shall be exercised by giving written notice to the Company at its principal office address. The notice shall identify the Option being exercised and specify the number of shares as to which such Option is being exercised, accompanied by full payment of the purchase price therefor either: (a) in United States dollars in cash or by check; (b) at the discretion of the Committee, through delivery of shares of Common Stock having a fair market value equal as of the date of the exercise to the cash exercise price of the Option; or (c) at the discretion of the Committee, by any combination of (a) and (b) above. If the Committee exercises its discretion to permit payment of the exercise price of an ISO by means of the methods set forth in clauses (b) or (c) of the preceding sentence, such discretion shall be exercised in writing at the time of the grant of the Option in question. An Optionee shall not have the rights of a stockholder with respect to the shares covered by his Option until the date of issuance of a stock certificate to him for such shares. Except as expressly provided above in Section 13 with respect to changes in capitalization and stock dividends, no adjustment shall be made for dividends or similar rights for which the record date is before the date such stock certificate is issued. 15 Termination or Amendment of Plan. The Board of -------------------------------- Directors may terminate or amend the Plan in any respect at any time; however, without the approval of the Company's stockholders obtained within twelve (12) months before or after the Board of Directors adopts a resolution authorizing any such termination or 7 amendment, the Board of Directors may not so terminate or amend the Plan if prior stockholder approval is then required by Section 16(b) of the Exchange Act, applicable Delaware law or tax law, or the rules of any applicable national securities exchange or national stock quotation system on which the Common Stock may then be listed or traded. Except as otherwise provided in this Section 15, in no event may action of the Board of Directors or stockholders alter or impair the rights of an Optionee, without his consent, under any Option previously granted to him. 16 Notice to Company of Disqualifying Disposition. ---------------------------------------------- By accepting an ISO granted under the Plan, each Optionee agrees to notify the Company in writing immediately after making a Disqualifying Disposition, as described in Sections 421, 422 and 424 of the Code and regulations thereunder, of any stock acquired under the Plan (or stock received in a transaction described in Section 424(b) or 424(c)(1)(B) of the Code, relating to distributions of stock with respect to stock acquired under the Plan and certain tax-free exchanges of stock acquired under the Plan for other stock or securities). A Disqualifying Disposition (with certain exceptions) is generally any disposition within two (2) years of the date the ISO was granted or within one (1) year of the date the ISO was exercised, whichever period ends later. With respect to stock held jointly with right of survivorship, a termination of such joint tenancy may constitute a Disqualifying Disposition. This Section 16 shall be made binding upon the Optionee and upon any transferee of stock described in this Section to whom Section 424(c)(4)(B) of the Code applies. 17 Withholding of Additional Income Taxes. Upon the -------------------------------------- exercise of a Non-Qualified Option or the making of a Disqualifying Disposition (as defined in Section 16), the Company may withhold taxes in respect of amounts that constitute compensation includible in gross income, whenever the Company determines that such withholding is required. The Committee in its discretion may condition the exercise of an Option on the Optionee's making satisfactory arrangement for such withholding. In addition to tax withholding, government regulations may impose reporting or other obligations on the Company with respect to the Plan. For example, the Company may be required to send tax information statements to employees and former employees that exercise ISOs. 18 Governing Law, Construction. The validity and --------------------------- construction of the Plan and the agreements evidencing Options shall be governed by the laws of the State of Delaware, or the laws of any jurisdiction in which the Company or its successors in interest may be organized. In construing this Plan, the singular shall include the plural and the masculine gender shall include the feminine and neuter, unless the context otherwise requires. Adopted by the Board of Directors and Stockholders as of January 19, 1999 8 EX-99 8 EXHIBIT 99.1 Exhibit 99.1 Wednesday March 10, 1999 Company Press Release Synaptx Elects New Board Members And Approves PALADYNE As New Name ORLANDO, FL--(BUSINESS WIRE)--March 10, 1999-- Synaptx Worldwide, Inc. (OTC:BB SYTX) announced the election of John Foster and Kenneth Horn to its Board of Directors. Mr. Foster, 55, is the President of Vedra International Associates. He was formerly a Corporate Officer of AT&T (NYSE:T} where he served as Vice President - -Marketing and Sales, Southeastern Region, President and CEO of AT&T American Transtech, and as President and Managing Director of AT&T Communications Services Group - Europe. Foster is also a board member of Aerial Communications (NASDAQ:AERL). Mr. Horn, 58, is Managing Director of K&H Associates. He recently retired as a Corporate Officer of Nortel Networks (NYSE:NT/TSE:NTL) where he served as Vice President, Independents. Horn is widely credited with establishing Nortel's industry leading position with the Independent Telecommunication companies and the Competitive Local Exchange Carriers by generating many billions in sales. Commenting on the new Board Members, Ronald Weindruch, Chairman & CEO, stated that: "We are pleased to be able to attract quality people like John Foster and Ken Horn to the Board of our fast growing company. I'm confidant that their contributions will be significant as we accelerate the rollout of our Information Engineered Customer Management Products and Services. The four continuing directors were re-elected and the directors were classified with three year terms." In other business, the Company announced that the shareholders have approved a migratory merger pursuant to which the Company changed its state of incorporation from Utah to Delaware and its name to PALADYNE Corporation. On the merger, each outstanding share of Synaptx Common Stock became exchanged for one share of PALADYNE Common Stock. The name PALADYNE comes from the Greek language and represents CUSTOMER POWER. The new stock symbol will be PLDY effective with trading on Thursday, March 11, 1999. PALADYNE Corporation, headquartered in Orlando, Florida, provides companies the power to understand their customers, to know each customer, to best serve each customer, and to anticipate the needs of a customer and the market. PALADYNE's power to accomplish this comes from software products and ancillary services that integrate data quality, data processing, database development and customer interaction to help firms best target, acquire, and retain valued customers. Forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. Potential risks and uncertainties include, but are not limited to, the risks described in filings with the Securities and Exchange Commission =================== Contact: PALADYNE CORPORATION, Orlando, Florida Nik Souris Vice President and General Manager 407-333-8161 email: nsouris@synaptx.com -----END PRIVACY-ENHANCED MESSAGE-----