SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential; for use
[ ] Definitive Proxy Statement of the Commission Only
[ ] Definitive Additional Materials (as permitted by Rule
[ ] Soliciting Material Pursuant to 14a-6(e)(2))
Rule 14a-11 or Rule 14a-12
BELL TECHNOLOGY GROUP LTD.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
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PRELIMINARY COPY -- FOR THE INFORMATION OF THE
SECURITIES AND EXCHANGE COMMISSION ONLY
BELL TECHNOLOGY GROUP LTD.
295 LAFAYETTE STREET
NEW YORK, NEW YORK 10012
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD March 26, 1998
To: the Shareholders of BELL TECHNOLOGY GROUP LTD.
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Shareholders of BELL
TECHNOLOGY GROUP LTD. (the "Company"), a Delaware corporation, will be held at
the offices of the corporation at 295 Lafayette Street, New York, New York 10012
on Thursday, March 26, 1998, at 11:00 a.m., local time, for the following
purposes:
1. To elect six directors to serve, subject to the provisions of the
By-laws, until the next Annual Meeting of Shareholders and until their
respective successors have been duly elected and qualified;
2. To consider and act upon a proposal to approve the Company's 1998
Stock Option Plan;
3. To consider and act upon a proposal to amend the Certificate of
Incorporation to change the Company's name to ______________________.
4. To consider and act upon a proposal to amend the Certificate of
Incorporation to change the Company's authorized common stock to
20,000,000 shares having a par value of $.01 per share.
5. To consider and act upon a proposal to approve the selection of Arthur
Andersen LLP as the Company's independent auditors for the fiscal year
ending September 30, 1998;
6. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof
The Board of Directors has fixed the close of business on February 20, 1998 as
the record date for the meeting. Only holders of shares of record at that time
will be entitled to notice of and to vote at the 1998 Annual Meeting of
Shareholders or any adjournment or adjournments thereof.
By order of the Board of Directors.
Marc H. Bell
Chairman of the Board
New York, New York
February 23, 1998
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IMPORTANT
IF YOU CANNOT PERSONALLY ATTEND THE MEETING, IT IS REQUESTED THAT YOU
INDICATE YOUR VOTE ON THE ISSUES INCLUDED ON THE ENCLOSED PROXY AND DATE,
SIGN AND MAIL IT IN THE ENCLOSED SELF-ADDRESSED ENVELOPE THAT REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES.
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<PAGE>
PRELIMINARY COPY -- FOR THE INFORMATION OF THE
SECURITIES AND EXCHANGE COMMISSION ONLY
BELL TECHNOLOGY GROUP LTD.
295 Lafayette Street, New York, New York 10012
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PROXY STATEMENT
for
1998 ANNUAL MEETING OF SHAREHOLDERS
to be held March 26, 1998
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February 23, 1998
The enclosed proxy is solicited by the Board of Directors of Bell Technology
Group Ltd., a Delaware corporation (the "Company") in connection with the 1998
Annual Meeting of Shareholders to be held at the offices of the corporation at
295 Lafayette Street, New York, New York 10012 on Thursday, March 26, 1998, at
11:00 a.m., local time, and any adjournments thereof, for the purposes set forth
in the accompanying Notice of Meeting. Unless instructed to the contrary on the
proxy, it is the intention of the persons named in the proxy to vote the proxies
in favor of (i) the election as directors of the six nominees listed below to
serve until the next annual meeting of shareholders; (ii) approval of the
Company's 1998 Stock Option Plan; (iii) a proposal to amend the Certificate of
Incorporation to change the name of the Company to ______________________; (iv)
a proposal to amend the Certificate of Incorporation to change the authorized
common stock of the Company to 20,000,000 shares having a par value of $.01 per
share; and (v) approval of the selection of Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending September 30, 1998. The record
date with respect to this solicitation is the close of business on February 20,
1998, and only shareholders of record at that time will be entitled to vote at
the meeting.
The principal executive office of the Company is 295 Lafayette Street, New
York, New York 10012, and its telephone number is (212) 334-8500. The shares
represented by all validly executed proxies received in time to be taken to the
meeting, and not previously revoked, will be voted at the meeting. The proxy may
be revoked by the shareholder at any time prior to its being voted. This proxy
statement and the accompanying proxy were mailed to you on or about February 23,
1998.
OUTSTANDING SHARES
The number of outstanding shares entitled to vote at the meeting is 3,448,450
common shares, par value $.01 per share each of which is entitled to one vote.
The presence in person or by proxy at the Annual Meeting of the holders of
one-third of such shares shall constitute a quorum. There is no cumulative
voting.
Assuming the presence of a quorum at the Annual Meeting, the affirmative vote
of a majority of the common shares present at the meeting and entitled to vote
on each matter is required for the election as directors of the six nominees
listed below. The affirmative vote of the holders of a majority of the total
outstanding common shares is necessary to approve the Company's 1998 Stock
Option Plan and the Amendments to the Certificate of Incorporation. Votes shall
be counted by one or more employees of the Company's Transfer Agent who shall
serve as the inspectors of election. The inspectors of election will canvas the
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shareholders present in person at the meeting, count their votes and count the
votes represented by proxies presented. Abstentions and broker non-votes are
counted for purposes of determining the number of shares represented at the
meeting, but are deemed not to have voted on the proposal. Broker non-votes
occur when a broker nominee (which has voted on one or more matters at the
meeting) does not vote on one or more other matters at the meeting because it
has not received instructions to so vote from the beneficial owner and does not
have discretionary authority to so vote.
ELECTION OF DIRECTORS
The six persons named below, who are currently members of the Board of
Directors, have been nominated for re-election to serve until the next Annual
Meeting of Shareholders and until their respective successors have been elected
and qualified.
Unless stated to be voted otherwise, each proxy will be voted for the election
of the nominees named below. All of the nominees have consented to serve as
directors if elected. If at the time of the Annual Meeting any nominee is unable
or declines to serve, the proxies may be voted for any other person who shall be
nominated by the present Board of Directors to fill the vacancy.
<TABLE>
<CAPTION>
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Name and Age Positions with the Director Since Number of Shares Percent of
Company Beneficially Owned Class
<S> <C> <C> <C> <C>
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Marc H. Bell, 30 President & Chief 1989 1,682,142 (1) 48.8%
Executive Officer
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Robert B. Bell, 58 Executive Vice- 1994 90,000 (2) 2.5%
president & Chief
Financial officer
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Martin Fox, 61 Director 1995 6,000 (2) *
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Dr. Richard Director 1995 6,000 (2) *
Videbeck, 74
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Lord Anthony Director 1997 15,000 (4) *
St. John, 40
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T. Shiraishi, 53 Director 1994 862,500 (3) 25%
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</TABLE>
Mr. Marc Bell has been President and Chief Executive Officer of the Company
since 1989.
Mr. Robert Bell has been Executive Vice President and Chief Financial Officer of
the Company since 1994. Mr. Bell was a practicing attorney for more than five
years before joining the Company. Mr. Robert Bell is Mr. Marc Bell's father.
Mr. Martin Fox has been the President and a director of Initio, Inc., a publicly
owned mail order retailer of consumer goods for more than five years.
Dr. Richard Videbeck has, for more than five years, been an independent
consultant in consumer risk analysis, particularly for retailers and banks.
Anthony St. John, Lord St. John of Bletso is a member of the House of Lords of
the Parliament of the United Kingdom, has served as a consultant to Merrill
Lynch and is a Registered Representative of the London Stock Exchange.
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Mr. Tsuyoshi Shiraishi has been the Chairman of Century World PTE Ltd., an
investment consulting firm, and the Managing Director of Harpoon Holdings Ltd.
for more than five years.
*less than 1%
(1) Includes 862,500 shares of common stock owned by Harpoon Holdings,
Ltd. ("Harpoon") which Marc Bell has the sole right to vote in the
election of directors pursuant to a voting agreement between Mr.
Bell and Harpoon entered into in October, 1995. Such agreement
terminates in October 2005.
(2) Robert Bell, Martin Fox and Dr. Richard Videbeck have the right to
acquire the number of shares shown pursuant to currently
exercisable stock options.
(3) Mr. Shiraishi, a director of the Company, is the sole shareholder
of Harpoon.
(4) Lord St. John has the right to acquire 10,000 shares pursuant to
currently exercisable stock options.
Meetings and Committees of the Board of Directors.
The Board of Directors of the Company met three times during the fiscal year
which ended on September 30, 1997. None of the directors nominated (other than
Lord St. John who was elected a director in November, 1997, and Mr. Shiraishi,
who attended one meeting) have attended fewer than 75% of the total number of
meetings of the Board of Directors and committees on which he serves.
The Company has an Audit Committee consisting of Messrs. Robert Bell, Martin
Fox and Alan Levy. The Audit Committee reviews the financial reporting and
internal controls of the Company and meets with appropriate financial personnel
of the Company, as well as its independent auditors, in connection with these
reviews. The Audit Committee also recommends to the Board the accounting firm
that is to be presented to the shareholders for designation as independent
auditors to examine the corporate accounts of the Company for the current fiscal
year. The Audit Committee met in December 1997 and discussed financial events
occurring during the course of the fiscal year and voted to recommend the
continuation of Arthur Andersen LLP as the company's auditors.
The Company also has a Stock Option Committee, consisting of Messrs. Marc
Bell and Martin Fox. Subject to existing contractual obligations, the Stock
Option Committee is responsible for setting and administering the policies that
govern the granting of employee stock options.
The Stock Option Committee met periodically during fiscal 1997, to grant
employee stock options and, on one occasion to re-price certain employee stock
options already granted.
The Company does not have a nominating committee, employee compensation
committee or other committees.
Other Executive Officers
William T. Jahnke has been a Vice President of the Company
since March 1997 and the Director of Corporate Sales of the Company since August
1995. Prior to joining the Company, Mr. Jahnke was president and chief operating
officer of Vernon Computer Rentals and Leasing from February 1989 to
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December 1994, where he pioneered and implemented a nationwide asset management
program for Apple which is used by several thousand U.S. sales representatives.
Mr. Jahnke received a B.S. Degree in Computer Science from Seneca College in
1975.
Marc Jaffe a Vice President of the Company since March 1997 and
Director of On-Line Services, joined the Company in early 1995 to run the
Company's Internet services business. Prior to joining the Company, Mr. Jaffe
had extensive experience in the use of computers and telecommunications in the
advertising and marketing industry. Mr. Jaffe recently developed an
Internet-focused marketing strategy that won the prestigious CreaTech Award,
presented by Advertising Age magazine, and has spoken at numerous Internet
conferences sponsored by Apple Computer. Prior to joining the Company, Mr. Jaffe
was a department manager at Sid Patterson Advertising Inc. in New York City
since 1989. Mr. Jaffe graduated from Colgate University in 1989, where he
received a Bachelor of Arts Degree.
Alan Levy joined the Company as Treasurer and Chief Accounting
Officer in February 1997. From March 1994 to February 1997, Mr. Levy was the
Assistant to the Vice President of Finance of Del Laboratories, Inc., a
manufacturer and wholesaler of cosmetics and over-the-counter pharmaceuticals.
Prior to that, Mr. Levy was a Technical Manager with the American Institute of
Certified Public Accountants from August 1990 to March 1994. He is a Certified
Public Accountant and received his Bachelor's degree in Public Accounting from
Long Island University, C.W. Post Campus.
Scott Safran has been Vice President - Training and Interactive
Development since June 1997 and the Director of Corporate Training since
joining the Company in March 1996. Prior to joining the Company he was a
Senior Account Executive at IBM Skill Dynamics Corporation from December 1994
to October 1995. From December 1989 to December 1994 Mr. Safran was in various
sales positions with AT&T Networking Systems. Mr. Safran has a Bachelor of
Arts in English Literature and Master of Business Administration degrees from
St. John's University.
COMPENSATION OF DIRECTORS AND OFFICERS
The following table sets forth compensation paid to the Company's Chief
Executive Officer and the three most highly compensated executive officers for
the three fiscal years ended September 30, 1997:
SUMMARY COMPENSATION TABLE
Annual Compensation
Name and
Principal Position Year Salary Options
- ------------------ ---- ------ -------
Marc H. Bell 1997 $200,000 --
President and Chief 1996 $165,000 --
Executive Officer 1995 $ 45,000 --
Robert B. Bell 1997 $125,000 --
1996 100,504 90,000
1995 18,000 --
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None of the named executive officers exercised their options to
acquire shares during fiscal 1997. The following table sets forth information
concerning the fiscal year end value of unexercised options:
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Name Numbered of Unexercised Value of Unexercised
Options at September 30, In-the-money Options at
1997 September 30, 1997
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Robert Bell 90,000 -0-
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(1) All such options are currently exercisable.
Calculation based upon the average of the high and low prices of the Company's
Common Stock on Nasdaq on September 30, 1997 of $6.125 per share.
Compensation of Directors
Marc Bell, Robert Bell, T. Shiraishi, and Lord Anthony St. John did not
receive any cash compensation for their services. Dr. Richard Videbeck receives
$1,000 (plus travel expenses) for each meeting of the directors actually
attended. For the fiscal year ended September 30, 1997, Dr. Videbeck received
the sum of $2,000. For the fiscal year ended September 30, 1997, Mr. Martin Fox
received the sum of $4,000 as compensation for services rendered as a director
and $9,516 for services as a financial advisor to the Company. Lord St. John,
upon becoming a director of the Company was granted options to purchase 10,000
shares of common stock at a price of $7.25. During the fiscal year ended
September 30, 1997, Dr. Videbeck and Mr. Fox were each granted options to
purchase 3,000 shares of common stock at a price of $6.125.
In January 1997, the Company purchased an aggregate of $1,000,000 of liability
insurance from Zurich American Insurance group for indemnification of all of its
directors and officers at a cost of approximately $35,000.
Employment Contracts and Termination of Employment and Change-of Control
Arrangements
Mr. Marc Bell has an employment agreement with the Company pursuant to which
he receives a fixed salary of $200,000 per year during the term of the
agreement, which expires in the year 2000.The agreement also provides that for a
period of six months after termination of employment, Mr. Bell will not
"compete" with the Company. Under the employment agreement, if Mr. Bell is
terminated without cause, he will be entitled to receive a payment equal to 2.99
times his average annual compensation paid by the Company (including bonuses, if
any) during the five years preceding the date of termination. If there is a
"Change of Control" (as defined in the Agreement) during the term of the
agreement, Mr. Bell would also be entitled to receive the such payment.
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PRINCIPAL SHAREHOLDERS
The following table sets forth, as of February 15, 1998, certain information
concerning stock ownership of the Company by (i) each person who is known by the
Company to own beneficially more than 5% of the outstanding common shares of the
Company, (ii) each of the Company's directors and (iii) all current directors
and executive officers of the Company as a group. Except as otherwise indicated,
all such persons have both sole voting and investment power over the shares
shown as being beneficially owned by them.
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Name and Address Number of Shares Percent of Class
Beneficially Owned
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(1) Marc H. Bell 1,682,142 48.8%
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(2) T. Shiraishi 862,500 25%
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All directors and (3) 1,812,474 50.7%
officers as a group
(10 persons)
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(1) The address for Marc H. Bell is c/o Bell Technology Group Ltd., 295
Lafayette Street, New York, New York 10012.
(2) The address for Mr. Shiraishi is c/o Harpoon Holdings, Ltd., 2 Handy
Road, #11-09 Cathay Building, Singapore 229233.
(3) Includes 125,332 shares which certain executive officers have the right
to acquire pursuant to stock options.
PROPOSED 1998 STOCK OPTION PLAN
There is being submitted to the shareholders for approval at the 1998 Annual
Meeting, the Bell Technology Group Ltd. 1998 Stock Option Plan (the "1998
Plan"), an incentive stock option plan which authorizes the issuance of up to
800,000 shares of the Company's voting common shares. The 1998 Plan was approved
by the Board of Directors at a meeting held on January 8, 1998 subject to
shareholder approval. If the 1998 Plan is approved, the 800,000 common shares
being authorized will be used to grant options to employees, officers,
Non-Employee Directors and consultants of the Company, including a grant of
options to acquire _____ shares to Marc Bell.
The Board of Directors believes that the Company and its shareholders have
benefitted from the grant of stock options in the past and that similar benefits
will result from the adoption of the 1998 Plan. It is believed that stock
options play an important role in providing eligible employees with an incentive
and inducement to contribute fully to the further growth and development of the
Company and its subsidiaries because of the opportunity to acquire a proprietary
interest in the Company on an attractive basis.
Except as expressly provided in the Plan, all stock options granted under the
1998 Plan will be exercisable at such time or times and in such installments, if
any, as the Company's Stock Option Committee or the Board of Directors may
determine and expire no more than five years from the date of grant. The
exercise price of the stock option will be the fair market value of the
Company's common shares on the date of grant and must be paid in cash or in
stock of the Company valued at its then fair market value. The market value of
the Company's shares at February 15, 1998 was
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$______. Options are non-transferable except by will or by the laws of descent
and distribution, or as expressly authorized by the Stock Option Committee or
the Board of Directors. Each option to be granted under the 1998 Plan will be
evidenced by an agreement subject to the terms and conditions set forth above.
Options granted under the 1998 Plan terminate three months after the
optionee's relationship with the Company is terminated except if termination is
by reason of death or disability. In such event the option terminates six months
after the optionee's death or termination of employment by reason of disability.
The Board of Directors has a limited right to modify or amend the 1998 Plan,
which does not include the right to increase the number of shares which is
available for the grant of options.
During the term of the 1998 Plan, the Eligible Employees of the Company will
receive, for no consideration prior to exercise, the opportunity to profit from
any rise in the market value of the common stock. This will dilute the equity
interest of the other shareholders of the Company. The grant and exercise of the
options also may affect the Company's ability to obtain additional capital
during the term of any options.
The 1998 Plan will be administered by the Stock Option Committee appointed by
the Board of Directors. The Stock Option Committee is comprised of Martin Fox
and Marc Bell. The Board of Directors is recommending the adoption of the 1998
Plan. The description of the proposed 1998 Plan set forth above is qualified in
its entirety by reference to the text of the 1998 Plan as set forth in Exhibit
A.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the Federal income tax treatment of the stock
options which may be granted under the 1998 Plan based upon the current
provisions of the Internal Revenue Code.
An option holder who exercises a stock option will not realize any taxable
income, and the company will not suffer a charge to earnings at the time of the
grant of the option to the employee or the exercise of the option by the
employee. A taxable capital gain income (either long-term or short-term,
depending on the holding period of the shares) in an amount equal to the
difference between the option price and the selling price of the shares on the
date of sale will be realized by the optionee. At that time, the Company will be
entitled to a deduction from income in the same amount. The option holder's
basis in such shares will be the fair market value on the date of exercise. The
exercise of an option by the exchange of common shares already owned by the
optionee generally will not result in any taxable gain or loss on the unrealized
appreciation of the shares so used. The Internal Revenue Service has ruled that
(i) a number of shares of the stock received equal to the number of shares
surrendered will have the same basis as the shares surrendered and (ii) the
remaining shares received will have a basis equal to their fair market value on
the date of exercise (the sum of the option price and the compensation income
recognized upon exercise). For purposes of determining whether shares have been
held for the long-term capital gain holding period, the holding period of shares
received will generally include the holding period of shares surrendered only if
the shares received have the same basis, in whole or in part, in the employee's
hands as the shares surrendered.
Whenever under the 1998 Plan shares are to be delivered upon exercise of a
stock option, the Company shall be entitled to require as a condition of
delivery that the option holder remit an amount sufficient to satisfy all
Federal, state, and other governmental withholding tax requirements related
thereto.
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PROPOSAL TO CHANGE COMPANY'S NAME
There is being submitted to the shareholders for approval at the 1998 Annual
Meeting a proposal to amend the Certificate of Incorporation to change the
Company's name to ______________________. The proposed Amendment to the
Certificate of Incorporation is attached hereto as Exhibit B.
This change is necessitated by a threat by Bell Atlantic Corporation to
commence litigation against the Company to stop it from using the name Bell in
any part of its name. The Board of Directors of the Company believes that it is
not worth the expense to engage in litigation with Bell Atlantic and therefore,
is recommending adoption of this proposal.
PROPOSAL TO INCREASE AUTHORIZED COMMON STOCK
There is being submitted to the shareholders for approval at the 1998 Annual
Meeting a proposal to amend the Certificate of Incorporation to increase the
authorized common stock of the Company, par value $.01, from 10,000,000 to
20,000,000. The increase in capital stock will provide the Company's Board of
Directors with the ability to use the Company's stock in corporate transactions
without having to seek further shareholder approval. While the increase in
authorized Common Stock will not change substantially the rights of holders of
the Corporation's Common Stock, issuance of shares in future transactions may
have a dilutive effect.
The Board of Directors is recommending such increase
SELECTION OF AUDITORS
The Company's financial statements for the past several fiscal years were
examined by Arthur Andersen LLP, independent public accountants. On January 8,
1998, the Board of Directors voted to propose and recommend the selection of
Arthur Andersen LLP as independent auditors to examine its financial statements
for the fiscal year ending September 30, 1998.
Representatives of Arthur Andersen LLP are expected to be present at the
annual meeting of shareholders with the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Marc Bell presently has a loan outstanding from the Company. As of
February 15, 1998, the outstanding principal balance of such loan was $145,408.
The loan is due in 2002, and bears interest at the rate of 8.75% per annum.
OTHER MATTERS
The Board of Directors does not know of any matters other than those described
above to be presented to the meeting. If any other matters do come before the
meeting, the persons named in the proxy will exercise their discretion in voting
thereon.
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SHAREHOLDER PROPOSALS
Proposals by any shareholders intended to be presented at the 1999 Annual
Meeting of Shareholders must be received by the Corporation for inclusion in
proxy material relating to such meeting not later than September 5, 1998.
EXPENSES
All expenses in connection with solicitation of proxies will be borne by the
Company. Officers and regular employees of the Company may solicit proxies by
personal interview and telephone and telegraph. Brokerage houses, banks and
other custodians, nominees and fiduciaries will be reimbursed for out-of-pocket
and reasonable expenses incurred in forwarding proxies and proxy statements.
UNDERTAKING
The Company undertakes to provide without charge to each person solicited by
this proxy statement a copy of the Company's annual report on Form 10-KSB
including the financial statements and financial statement schedules required to
be filed with the Securities and Exchange Commission for the Company's most
recent fiscal year. The request made in writing shall be addressed to Marc H.
Bell, Bell Technology Group Ltd., 295 Lafayette Street, 3rd Floor, New York,
New York 10012.
By Order of the Board of Directors,
Marc H. Bell
Chairman of the Board
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Exhibit A
BELL TECHNOLOGY GROUP LTD.
1998 STOCK OPTION PLAN
1. Purpose of Plan. This 1998 Stock Option Plan (the "Plan") is
designed to assist Bell Technology Group Ltd. (the "Company") in retaining the
services of key employees, Non-Employee Directors (as hereinafter defined) and
such consultants as may be designated and to provide them with an incentive and
inducement to contribute fully to the further growth and development of the
business of the Company and its subsidiaries.
2. Definitions. In addition to other definitions contained elsewhere in
the Plan, as used in the Plan the following terms have the following meanings
unless the context requires a different meaning:
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as the same may from time
to time be amended.
"Committee" means the committee referred to in Section 4 hereof.
"Common Stock" means the Common Stock of the Company, par value $.01 per
share.
"Designated Beneficiary" means the person designated by an optionee to be
entitled on his death to any remaining rights arising out of an option,
such designation to be made in accordance with such regulations as the
Committee or Board may establish.
"Fair market value" shall be the mean between dealer closing "bid" and
"ask" prices on the over-the-counter market on the last day on which the
Company's shares of Common stock were traded immediately preceding the date
an option is granted pursuant to the Plan, as reported by the National
Association of Security Dealers Automated Quotation System ("NASDAQ"), or
NASDAQ's Successor, or if not reported on NASDAQ, the fair market value of
such Common Stock as determined by the Committee or the Board in good faith
and based on all relevant factors.
"Non-Employee Directors" means Non-Employee Director as defined in Rule
16b-3(b)(3), or any successor provision promulgated under the
Securities Exchange Act of 1934.
"Stock Options" means any stock options granted to an optionee under the
Plan.
"Stock Option Agreement" means a stock option agreement entered into
pursuant to the Plan.
3. Stock Options: Stock Subject to Plan. The stock to be issued upon
exercise of Stock Options granted under the Plan shall consist of authorized but
unissued shares, or of treasury shares, of Common stock, as determined from time
to time- by the Board. The maximum number of shares for which Stock Options may
be granted under the Plan is 800,000 shares, subject to adjustment as provided
in Section 7 of the Plan. If any Stock Option granted under the Plan should
expire or terminate for any reason whatsoever without having been exercised in
full, the unpurchased shares shall become available for new options.
<PAGE>
4. Administration.
(a) The Plan shall be administered by a Stock Option Committee or, if
such Committee is not appointed, then it shall be administered by the Board. For
purposes of the Plan, the Board or its appointed Committee shall be referred to
as the "Committee." The Committee, if any, shall be appointed by the Board and
shall consist of not less than two members. The Board shall establish the number
of members to serve on the Committee, shall fill all vacancies or create new
openings on the Committee, and may remove any member of the Committee at any
time with or without cause. The Committee shall select its own chairman and
shall adopt, alter or repeal such rules and procedures as it may deem proper and
shall hold its meetings at such times and places as it may determine. The
Committee shall keep minutes of its meetings and of actions taken by it
without a meeting. A majority of the Committee present at any meeting at which a
quorum is present, or acts approved in writing by all members of the
Committee without a meeting, shall be the acts of the Committee.
(b) Unless otherwise by the Board, the Committee shall have full and
final authority in its discretion, but subject to the express provisions of the
Plan, to:
(i) prescribe, amend and rescind rules and regulations relating to
the Plan;
(ii) interpret the Plan and the respective Stock Options; and
(iii) make all other determinations necessary or advisable for
administering the Plan. All determinations and interpretations by the Committee
or the Board shall be binding and conclusive upon all parties. No member of the
Committee or the Board shall be liable for any action or determination made in
good faith in respect of the Plan or any Stock Option granted under it.
(c) The provisions of this Section 4 shall survive any termination of
the Plan.
5. Non-Employee Directors Options to be Granted. So long as shares are
available under this Plan, stock options shall be granted to Non-Employee
Directors as follows:
(a) Options shall be granted each year to each of the Non-Employee
directors to purchase 3,000 or more shares of Common Stock on the first day of
the Company's fiscal year, or on the first day of his/her term as director, at a
purchase price equal to the fair market value on the date of grant.
(b) Stock Options granted to Non-Employee Directors shall be
exercisable in full on the date of grant.
(c) In the event a Non-Employee Director ceases to serve as a member of
the Board of Directors of the Company any time for any reason, his Stock Option
and all rights thereunder shall be exercisable by him at any time within three
months thereafter, but in no event later than the termination date of his Stock
Option. If a Non-Employee Director shall die while serving as a director of the
Company, his Stock Options may be exercised by his designated beneficiary or
beneficiaries (or, a person who has been effectively designated, by his
executor, administrator or the person to whom his rights under his Stock Option
shall pass by his will or by the laws of descent and distribution) at any time
within one year after the date of his death, but not later than the termination
date of his Stock Option.
(d) Nothing in the Plan or in any Stock Option granted pursuant hereto
shall confer on any Non-Employee Director any right to continue as a director of
the Company.
6. Terms and Exercise of Stock Option.
(a) Unless otherwise determined by the Committee each Stock Option
shall terminate no later than ten years (or such shorter term as may be fixed
by the Committee) after the date on which it shall have been granted. The date
of termination pursuant to this paragraph is referred to hereinafter as
the "termination date" of the option.
(b) Except as provided in Section 5, unless otherwise determined by the
Committee, Stock Options shall be exercisable with respect to one-fifth of the
shares subject to the Stock Option on the first anniversary of the date of grant
and an additional one-fifth on each of the succeeding four anniversaries of the
date of grant. Any shares which may be purchased on any such date or other
period which are not purchased on such date or other period may be purchased at
any time or from time to time during any subsequent time period during the term
of the Stock Option.
(c) A Stock Option shall be exercised by written notice to the
Secretary of Treasurer of the Company at its then principal office. The notice
shall specify the number of shares as to which the Stock Option is being
exercised and shall be accompanied by payment in full of the purchase price for
such shares; provided, however, that an optionee at his or her discretion may,
in lieu of cash payment, to the Company, deliver Common Stock already owed by
him or her, valued at fair market value on the date of delivery, as payment for
the exercise of any Stock Option or (ii) request that the Company withhold, from
the number at shares of Common stock that may otherwise be obtained upon the
exercise of the Stock Option, that number of shares having an aggregate fair
market value equal to the Stock Option exercise price. In the event a Stock
Option is being exercised, in whole or in part pursuant to Section 6(c) hereof
by any person other than the optionee, a notice of election shall be accompanied
by proof satisfactory to the Company of the rights of such person to exercise
said Stock Option. An optionee shall not, by virtue of the granting of a Stock
Option, be entitled to any rights of a shareholder in the Company and such
optionee shall not be considered a record holder of shares purchased by him or
her until the date on which he or she shall actually be recorded as the holder
of such shares upon the stock records of the Company. The Company shall not be
required to issue any fractional shares upon exercise of any Stock Option and
shall not be required to pay to the person exercising the Stock Option the cash
equivalent of any fractional share interest unless so determined by the
Committee.
(d) In the event an optionee elects to deliver Common Stock
already owned by such optionee or to request that Common Stock be withheld in
accordance with subsection (c) above, upon exercise of a Stock Option granted
hereunder, the Company shall be entitled to require as a condition thereto
that the optionee remit an amount which the Company deems sufficient to
satisfy all Federal, state and other governmental withholding tax
requirements related thereto. The Company shall have the right, in lieu of
or in addition to the foregoing to withhold such sums from compensation
otherwise due to the optionee.
7. Other Stock Option Conditions.
(a) Except as expressly directed by the Board, no Stock Option shall be
transferred by the optionee otherwise than by will or by the laws of descent and
distribution. During the lifetime of the optionee the Stock Option shall be
exercisable only by such optionee, by his or her legal representative or by a
transferee permitted under the terms of the grant of the Stock Option.
<PAGE>
(b) Except as provided in Section 5, unless otherwise determined by the
Committee, in the event of the termination of an optionee's employment by the
Company at any time for any reason (excluding disability or death), his or her
option and all rights thereunder shall be exercisable by the optionee at any
time within three months thereafter but in no event later than the termination
date of his or her Stock Option. Notwithstanding the foregoing, unless otherwise
determined by the Committee, in the event an optionee is permanently and totally
disabled (within the meaning of section 105(d)(4), or any successor section, of
the Code), his or her Stock Option and all rights thereunder shall be
exercisable by the optionee (or his or her legal representative) at any time
within six (6) months of termination of employment - but in no event later than
the termination date of his Stock Option.
(c) Except as provided in Section 5, unless otherwise determined by the
Committee, if an optionee shall die while in the employ of the Company, his or
her Stock Option may be exercised by his or her designated beneficiary or
beneficiaries (or if none have been effectively designated, by his or her
executor, administrator or the person to whom his or her rights under his or her
Stock Option shall pass by will or by the laws of descent arid distribution) at
any time within six (6) months after the date of death, but not later than the
termination date of his or her Stock Option.
(d) Each Stock Option granted pursuant to the Plan shall be evidenced
by a written Stock Option Agreement duly executed by the Company and the
optionee, in such form and containing such provisions as the Committee may from
time to time authorize or approve.
8. Provisions. The Stock Option Agreements shall contain such
provisions as the Committee shall determine to be appropriate for the adjustment
of the kind and number of shares subject to each outstanding Stock Option, or
the Stock Option prices, or both, in the event of any changes in the outstanding
Common Stock of the Company by reason of stock dividends, stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations or
exchanges of shares, or the like. In the event of any such change or changes in
the outstanding Common Stock, and as often as the same shall occur, the kind and
aggregate number of shares available under the Plan may be appropriately
adjusted by the Committee, whose determination shall be binding and conclusive.
9. Amendment and Termination.
(a) Unless the Plan shall have been otherwise terminated as provided
herein, it shall terminate on, and no option shall be granted thereunder, after
September 1, 2008. The Board may at any time prior to that date alter, suspend
or terminate the Plan as it may deem advisable, except that it may not without
further shareholder approval (i) increase the maximum number of shares subject
to the Plan (except for changes pursuant to Section 7); (ii) permit the grant of
options to anyone other than the key employees, other employers, Non-Employee
Directors and consultants; (iii) change the manner of determining the minimum
stock exercise prices (except for changes pursuant to Section 7); or (iv)
extend the period during which Stock Options may be granted or exercised.
Except as otherwise hereinafter provided, no alteration, suspension or
termination of the Plan may, without the consent of the optionee to whom
any Stock Option shall have theretofore been granted (or the person or
persons entitled to exercise such Stock Option under Section 6(c) of the
Plan), terminate such optionee's Stock Option or adversely affect such
optionee's rights thereunder.
(b) Anything herein to the contrary notwithstanding, in the event that
the Board shall at any time declare it advisable to do so in connection with any
proposed sale or conveyance of all or substantially all of the property and
assets of the Company or of any proposed consolidation or merger of the Company
(unless the Company shall be the surviving corporation in such merger), the
<PAGE>
Company may give written notice to holder of any Stock Option that his or her
Stock Option may be exercised only within (30) days after the date of such
notice but not thereafter, and all rights under said Stock Option which shall
not have been so exercised shall terminate at the expiration of such thirty (30)
days, provided that the proposed sale, conveyance, consolidation or merger to
which such notice shall relate shall be consummated within six (6) months after
the Date of such notice. If such proposed sale, conveyance, consolidation or
merger shall not be consummated within said time period, no unexercised rights
under any Stock Option shall be affected by such notice except that such Stock
Option may, not be exercised between the date of expiration of such thirty (30)
days and the date of the expiration of such six month period.
10. Indemnification. Any member of the Committee or the Board who is
made, or threatened to be made, a party to any action or proceeding, whether
civil or criminal, by reason of the fact that such person is or was a member of
the Committee or the Board insofar as it relates to the Plan shall be
indemnified by the Company, and the Company may advance such person's related
expenses, to the full extent permitted by law and/or the Certificate of
Incorporation of the Company.
11. Effective Date of the Plan: Termination of the Plan and Stock
Options. The Plan shall become effective on the date of adoption by the Board,
provided, however, that the Plan shall be subject to approval by the affirmative
vote of the holders of the majority of Common Stock of the Company on or before
December 31, 1998.
12. Expenses: Except as otherwise provided herein for the payment of
Federal, State and other governmental taxes, the Company shall pay all fees and
expenses incurred in connection with the Plan and the issuance of the stock
hereunder.
13. Government Regulations, Registrations and Listing of Stock.
(a) The Plan, and the grant and exercise of Stock Options
thereunder, and the Company's obligation to sell and deliver stock under such
Stock Options shall be subject to all applicable Federal and State laws, rules
and regulations and to such approvals by any regulatory or governmental agency
as may, in the opinion of the Company, be necessary or appropriate.
(b) The Company may in its discretion require whether or not a
registration statement under the Securities Act of 1933 and the applicable rules
and regulations thereunder (collectively the "Act") is then in effect with
respect to shares issuable upon exercise of any stock option or the offer and
sale of such shares is exempt from the registration provisions of such Act,
that as a condition precedent to the exercise of any Stock Option the
person exercising the Stock Option give to the Company a written
representation and undertaking satisfactory in form and substance to the
Company that such person is acquiring the shares for his or her own account for
investment and not with a view to the distribution or resale thereof and
otherwise establish to the company's satisfaction that the offer or sale
of the shares issuable upon exercise of the Stock Option will not
constitute or result in any breach or violation of the Act or any similar act
or statute or law or regulation in the event that a Registration statement
under the Act is not then effective with respect to the Common Shares issued
upon the exercise of such stock option; the company may place upon any stock
certificate appropriate legends referring to the restriction on disposition
under the Act
(c) In the event the class of shares issuable upon the exercise of any
Stock Option is listed on any national securities exchange or NASDAQ, the
company shall not be required to issue or achieve any certificate for shares
upon the exercise of any Stock Option, or to the listing of the shares so
issuable on such national securities exchange or NASDAQ and prior to the
registration of the same under the Securities Exchange Act of 1934 or any
similar act or statute.
<PAGE>
Exhibit B
CERTIFICATE OF AMENDMENT
of
CERTIFICATE OF INCORPORATION
of
BELL TECHNOLOGY GROUP LTD.
Under Section 242 of the Delaware General Corporation Law
BELL TECHNOLOGY GROUP LTD., a corporation organized and
existing under the laws of the State of Delaware (the
"Corporation") hereby certifies as follows:
1. The name of the Corporation is Bell Technology Group Ltd.
2. The Certificate of Incorporation of the Corporation was filed with the
Secretary of State of Delaware, Division of Corporations on September 29,
1995.
3. The amendment of the Certificate of Incorporation of the Corporation
effected by this Certificate of Amendment is to change the name of the
Corporation and increase the number of shares authorized common stock of
the corporation.
4. To accomplish the foregoing amendment, Article FIRST of the Certificate of
Incorporation of the Corporation, relating to the name of the Corporation,
is hereby amended to read as follows:
"FIRST: The name of the Corporation is [to come].
5. Article FOURTH is hereby amended to read as follows:
"FOURTH: The Corporation shall have the authority to issue twenty
million (20,000,000) shares of Common Stock having a par value of $.01
per share. The Corporation shall also have the authority to issue five
hundred thousand (500,000) shares of Preferred Stock having a par value
of $.01 per share (the "Preferred Shares"). The Board of Directors of
the Corporation (the "Board") shall have the right to authorize, by
resolution of the Board adopted in accordance with the By-laws of the
Corporation, the issuance of the Preferred Shares and, in connection
therewith, to (a) cause such shares to be issued in series; (b) fix the
annual rate of dividends payable with respect to the Preferred shares
or series thereof; (c) fix the amount payable upon redemption of the
Preferred shares; (d) fix the amount payable upon liquidation or
dissolution of the Company; (e) fix provisions as to voting rights, if
any; and (e) fix such other rights, powers and preferences as the Board
shall determine."
6. The foregoing amendment of the Certificate of Incorporation of the
Corporation was authorized by a vote of Board of Directors of the
Corporation, followed by a vote of the holders of a majority of all
outstanding shares of the Corporation entitled to vote on said amendment
of the Certificate of Incorporation.
<PAGE>
IN WITNESS WHEREOF, we have subscribed this document on the date set forth
below and do hereby affirm, under the penalties of perjury, that the statements
contained herein have been examined by us and are true and correct.
March 25, 1998
By: _______________________
Marc H. Bell President
Attest:
By: _______________________
Paul Asher, Secretary
<PAGE>
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A P P E N D I X
- --------------------------------------------------------------------------------
PRELIMINARY COPY -- FOR THE INFORMATION OF THE
SECURITIES AND EXCHANGE COMMISSION ONLY
BELL TECHNOLOGY GROUP LTD.
PROXY
Annual Meeting of Shareholders - Thursday, March 26, 1998.
The undersigned shareholder of Bell Technology Group
Ltd. (the "Company") hereby appoints Marc H. Bell the attorney and proxy of the
undersigned, with full power of substitution, to vote, as indicated herein, all
the common shares of the Company standing in the name of the undersigned at the
close of business on February 20, 1998 at the Annual Meeting of Shareholders of
the Company to be held at the offices of the Company at 295 Lafayette Street,
New York, New York 10012 at 11:00 a.m., local time, on Thursday, March 26, 1998,
and at any and all adjournments thereof, with all the powers the undersigned
would possess if then and there personally present and especially (but without
limiting the general authorization and power hereby given) to vote as indicated
on the proposals, as more fully described in the Proxy Statement for the
meeting.
(Please fill in the reverse side and return promptly in the enclosed envelope.)
<PAGE>
Please mark boxes [ ] or [x] in blue or black ink.
1. Election of Directors.
FOR all nominees [ ]
WITHHOLD authority only for those nominees whose name(s) I have written below
[ ]
WITHHOLD authority for ALL nominees [ ]
Nominees for Director are: Marc H. Bell, Robert B. Bell, Martin
Fox, Dr. Richard Videbeck, Lord Anthony St. John of Bletso and Tsuyoshi
Shiraishi
- --------------------------------------------------------------------------------
2. Proposal to approve the Company's 1998 Stock Option Plan.
For [ ] Against [ ] Abstain [ ]
- --------------------------------------------------------------------------------
3. Proposal to approve the amendment to the Certificate of Incorporation to
change the Company's name to [TO COME].
For [ ] Against [ ] Abstain [ ]
- --------------------------------------------------------------------------------
4. Proposal to approve the amendment to the Certificate of Incorporation to
increase the company's authorized common stock to 20,000,000 shares, par value
$.01.
For [ ] Against [ ] Abstain [ ]
- --------------------------------------------------------------------------------
5. Proposal to approve the selection of Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending September 30, 1998.
For [ ] Against [ ] Abstain [ ]
- --------------------------------------------------------------------------------
6. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment or
adjournments thereof.
2
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED FOR THE
ELECTION OF THE PROPOSED DIRECTORS AND FOR THE ABOVE PROPOSALS UNLESS OTHERWISE
INDICATED.
SIGNATURE(S) should be exactly
as name or names appear on this
[Sign, Date and Return proxy. If stock is held jointly,
the Proxy Card Promptly each holder should sign. If
Using the Enclosed signing is by attorney, executor,
Envelope.] administrator, trustee or guardian,
please give full title.
Dated , 1998
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Signature
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Signature
