SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 2000
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ______ to ______
Commission file number 0-20743
OPEN PLAN SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Virginia 54-1515256
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
4299 Carolina Avenue, 23222
Building C, Richmond, Virginia (Zip Code)
(Address of principal executive offices)
(804) 228-5600
(Telephone number of registrant)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No __.
As of the close of business on May 10, 2000, Open Plan Systems, Inc. had
4,402,891 shares of Common Stock, no par value, outstanding.
<PAGE>
Open Plan Systems, inc.
Table of Contents
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
<S> <C> <C>
Consolidated Balance Sheets - March 31, 2000 (unaudited) 1
and December 31, 1999
Consolidated Statements of Income - Three months 2
ended March 31, 2000 and 1999 (unaudited)
Consolidated Statements of Cash Flows - Three months 3
months ended March 31, 2000 and 1999 (unaudited)
Notes to Consolidated Financial Statements - March 31, 2000 (unaudited) 4
Item 2. Management's Discussion and Analysis of 6
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities and Use of Proceeds 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of 10
Security Holders
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES
</TABLE>
<PAGE>
Open Plan Systems, Inc.
Part I
Financial Information
Item 1: Financial Statements
Consolidated Balance Sheets
(amounts in thousands)
<TABLE>
<CAPTION>
March 31 December 31
2000 1999
------------------------------------
<S><C> <C> <C>
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 79 $ 13
Accounts receivable, net 7,656 7,144
Inventories 8,138 7,862
Prepaids and other 649 638
Refundable income taxes 193 188
Deferred income taxes 400 385
------------------------------------
Total current assets 17,115 16,230
Property and equipment, net 2,203 2,272
Goodwill, net 3,840 3,898
Deferred income taxes 976 1,093
Other 187 126
------------------------------------
Total assets $24,321 $23,619
====================================
Liabilities and shareholders' equity
Current liabilities:
Revolving line of credi $3,245 $2,419
Trade accounts payable 3,302 3,464
Accrued compensation 118 238
Other accrued liabilities 861 813
Customer deposits 1,006 1,005
Current portion of long-term debt 60 62
------------------------------------
Total current liabilities 8,592 8,001
Long-term debt 149 163
------------------------------------
Total liabilities 8,741 8,164
Shareholders' equity:
Preferred stock, no par value:
Authorized shares - 5,000
Issued and outstanding shares - none - -
Common stock, no par value:
Authorized shares - 50,000
Issued and outstanding shares - 4,403 18,651 18,651
Additional capital 137 137
Accumulated comprehensive income 1 -
Accumulated deficit (3,209) (3,333)
------------------------------------
Total shareholders' equity 15,580 15,455
------------------------------------
Total liabilities and shareholders' equity $24,321 $23,619
====================================
</TABLE>
See accompanying notes.
<PAGE>
Open Plan Systems, Inc.
Consolidated Statements of Income (Unaudited)
(amounts in thousands, except per share)
<TABLE>
<CAPTION>
Three Months ended
March 31
2000 1999
------------------------------------
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Net sales $ 9,333 $ 7,509
Cost of sales 6,420 5,388
------------------------------------
Gross profit 2,913 2,121
Operating expenses:
Amortization of intangibles 68 53
Selling and marketing 1,927 1,525
General and administrative 594 480
------------------------------------
2,589 2,058
------------------------------------
Operating income 324 63
Other (income) expense:
Interest expense 98 45
Minority interest (4) -
Other, net 2 (8)
------------------------------------
96 37
------------------------------------
Income before income taxes 228 26
Income taxes 104 -
------------------------------------
Net income $ 124 $ 26
====================================
Basic and diluted income per common share $ .03 $ .01
====================================
Diluted weighted average common shares outstanding 4,405 4,673
====================================
</TABLE>
See accompanying notes.
<PAGE>
Open Plan Systems, Inc.
Consolidated Statements of Cash Flows (Unaudited)
(amounts in thousands)
<TABLE>
<CAPTION>
Three Months ended
March 31
2000 1999
----------------------------------
<S> <C> <C>
Operating activities
Net income $ 124 $ 26
Adjustments to reconcile net income to net cash (used
in) provided by operating activities:
Provision for losses on receivables 29 9
Depreciation and amortization 301 243
Loss on sale of property - 3
Deferred income taxes 102 -
Changes in operating assets and liabilities:
Accounts receivable (541) 596
Inventories (276) (194)
Prepaids and other (88) (267)
Trade accounts payable (162) 62
Customer deposits 1 (252)
Accrued and other liabilities (71) (178)
----------------------------------
Net cash (used in) provided by operating activities (581) 48
Investing activities
Purchases of property and equipment (163) (84)
----------------------------------
Net cash used in investing activities (163) (84)
Financing activities
Net borrowings on revolving line of credit 826 71
Principal payments on long-term debt and capital
lease obligations (16) (3)
----------------------------------
Net cash provided by financing activities 810 68
----------------------------------
Increase in cash and cash equivalents 66 32
Cash and cash equivalents at beginning of period 13 2
----------------------------------
Cash and cash equivalents at end of period $ 79 $ 34
==================================
Supplemental disclosures
Interest paid $ 87 $ 45
==================================
Income taxes paid $ 42 $ -
==================================
</TABLE>
See accompanying notes.
<PAGE>
OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements (Unaudited)
March 31, 2000
1. Principles of Presentation
The accompanying unaudited consolidated financial statements of Open Plan
Systems, Inc. and subsidiaries (the Company) have been prepared in accordance
with generally accepted accounting principles for interim financial information.
The interim financial statements included herein are unaudited. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. All
significant intercompany balances and transactions are eliminated in
consolidation. In the opinion of management, these financial statements reflect
all adjustments of a normal recurring nature which the Company considers
necessary for a fair presentation. The results for the three month period ending
March 31, 2000 are not necessarily indicative of the results that may be
achieved for the entire year ending December 31, 2000 or for any other interim
period. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's Form 10-K for the year ended
December 31, 1999.
2. Mexican Subsidiaries
In January 2000, the Company entered into a Joint Venture Agreement to open a
new sales office in Mexico City, Mexico. The Company agreed to contribute
approximately 455,000 Pesos, or approximately $50,000, for an 80% interest in
the venture. The Joint Venture Agreement called for the creation of two new
companies, Open Plan Systems, S. de R.L. de C.V. and Open Plan Servicios, S. de
R.L. de C.V., each of which is 80% owned by the Company. The Company has
reported minority interest related to the earnings and the equity of the
minority partner in the accompanying financial statements.
3. Inventories
Inventories are in two main stages of completion and consisted of the following
(amounts in thousands):
<TABLE>
<CAPTION>
March 31 December 31
2000 1999
-------------------------------------
(Unaudited)
<S> <C> <C>
Components and fabric $5,566 $5,243
Jobs in process and finished goods 2,572 2,619
-------------------------------------
$8,138 $7,862
=====================================
</TABLE>
4. Income Taxes
The Company reported an effective tax rate of 45.6% for the first quarter of
2000. The difference between the Company's effective tax rate and the statutory
income tax rate for the first quarter of 2000 is due to permanent differences
related to amortization of non-deductible intangible assets. Utilization of net
operating loss carryforwards resulted in no income tax expense for the first
quarter of 1999. Related deferred income tax assets were offset by a valuation
allowance in the first quarter of 1999.
5. Indebtedness
At March 31, 2000, the Company had outstanding borrowings of $3,245,000 on its
$5,000,000 line of credit.
In April 2000, the Company entered into an agreement with a bank for a new line
of credit to replace its former line of credit. This line of credit closed on
May 1, 2000 and is secured by substantially all assets of the Company. It
provides for availability of up to 80% of eligible accounts receivable along
with up to $2 million in eligible inventory and maximum borrowings of $5
million. Borrowings will bear interest at a floating rate, which is linked to
either LIBOR or prime, at the Company's request. At the same time, the Company
entered into a commitment with the bank to provide a letter of credit for $2.5
million of Industrial Revenue Bonds that may be issued by the Michigan Strategic
Fund. The Company expects those bonds to be issued in the second quarter of 2000
the proceeds of which will be used for building a new construction facility in
Michigan. The letter of credit and the line of credit will be
cross-collateralized.
6. Comprehensive Income
Comprehensive income for the quarter ended March 31, 2000 was $125,000. The
difference between net income and comprehensive income is due to foreign
currency translation gains.
7. Commitments and Contingencies
On April 30, 2000, the Company signed a letter of intent with a contractor for
the construction of a new production facility in Lansing, Michigan. The Company
plans to purchase a 5 acre building site and construct an approximately 70,000
square-foot facility in Lansing Michigan. This project is expected to be
completed in the fourth quarter of 2000. Total construction costs are estimated
to be approximately $2.5 million.
<PAGE>
OPEN PLAN SYSTEMS, INC.
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations
THREE MONTHS ENDED MARCH 31, 2000 COMPARED WITH 1999
Results of Operations
Sales. Sales for the three months ended March 31, 2000 were $9,333,000, an
increase of approximately $1,824,000 or 24.3% versus the same period in 1999.
The Company's sales offices and the National Accounts Group contributed to the
sales increases in the first quarter. Sales benefited from the Company's quality
management process and the Company's new marketing initiatives instituted in
1999.
The Company also increased its sales order volume during the first quarter
of 2000. It received orders of $10.1 million in the first quarter of 2000 up
31.2% from the $7.7 million in orders booked during the first quarter of 1999.
Additionally, the Company's order backlog at the end of March 2000 of $5.6
million was almost double the backlog at the end of the first quarter of 1999.
The Company believes that its marketing initiatives, including revised
training and compensation programs, have improved the professionalism and
performance of the sales force. These have resulted in productivity gains in the
various sales offices. The National Accounts business has been strengthened by
repeat business from several Fortune 500 companies. The Company expects to see
improved productivity in its existing offices and sales increases from new sales
offices and new product offerings during the remainder of 2000.
Cost of Sales. The Company's cost of sales includes costs of raw materials,
labor, supplies, freight, installation, and other manufacturing related
expenses. Cost of sales increased by $1,032,000 in the first quarter of 2000 to
$6,420,000 from the $5,388,000 reported in the first quarter of 1999. The
increase in cost of sales is attributable to increased sales volume offset in
part by reduced production costs.
The gross margin increased to 31.2% in the first quarter of 2000 from 28.2%
reported in the first quarter of 1999. The Company's gross margin during the
first quarter of 2000 benefited from efforts to reduce material and production
costs. Importantly, the Company's installation and other services increased in
profitability in the first quarter of 2000 as compared to 1999. The Company
continues to pursue avenues to streamline its production and purchasing
activities to reduce product costs and its overhead structure. The Company
anticipates further margin improvements as sales volume increases during the
year and once the Company completes construction on its new building in Lansing
Michigan in the fourth quarter of 2000.
Operating Expenses. The Company's most significant operating expense is
selling and marketing expense. These costs are primarily related to salesperson
compensation, advertising and other marketing expenses. The Company compensates
its salespeople through a combination of salaries and commissions. While most of
these expenses are directly related to the current year's sales, certain other
marketing expenses are incurred to build brand recognition and generate sales
leads that may contribute to sales in later periods.
The Company's selling and marketing expenses increased by $402,000 to
$1,927,000 from the $1,525,000 reported in the first quarter of 1999. The
increase was driven by higher levels of spending associated with the Company's
new marketing brochures and programs introduced during the second quarter of
1999, along with investments in two new sales offices, trade shows and other
sales growth initiatives. The bulk of the transitional portions of these
programs and changes were completed during the first quarter of 2000. The
Company believes that selling expenses as a percentage of sales will decrease
during the remainder of 2000.
General and administrative expenses increased to $594,000 in the first
quarter of 2000 from the $480,000 reported in the first quarter of 1999. This is
still well below the approximately $744,000 in expenses reported in the first
quarter of 1998. The primary reasons for the increase were additional costs
required to support the larger network of sales offices as well as certain
expenses incurred to reduce costs in future periods. The level of general and
administrative expenses equaled budgeted amounts and is expected to decrease as
a percentage of sales during 2000.
Other Non-Operating Income and Expense. Total other expense increased to
$96,000 for the first quarter of 2000 versus $37,000 for the first quarter of
1999. The primary reason for the increase is related to the Company increasing
its borrowings on the line of credit facility during the fourth quarter of 1999
and early 2000 to pay for the stock repurchased from a former officer of the
Company and settlement of legal matters with former officers of the Company. The
Company expects that these expenses would decrease over the next several
quarters until the Lansing facility is completed, at which time these expenses
would increase.
Income Taxes. In the first quarter of 2000, the Company recorded tax
expense at a rate equal to its expected tax rate for the year. Utilization of
net operating loss carryforwards resulted in no income tax expense for the first
quarter of 1999. In 1999, related deferred income tax assets were offset by a
valuation allowance.
Liquidity and Capital Resources
Cash Flows from Operating Activities. Net cash (used in) provided by
operating activities was ($581,000) for the three months ended March 31, 2000 as
compared to $48,000 for the three months ended March 31, 1999. The decrease in
cash provided by operating activities for the first quarter of 2000 was
primarily due to increases in accounts receivable and inventories. The Company's
accounts receivable increased primarily due to increased volume as well as an
increase in days sales outstanding due from governmental customers. The
Company's inventory increased at the end of the first quarter of 2000 due to the
shipment of a large order being delayed until the second quarter of the year.
The Company continues to focus on decreasing the number of days sales
outstanding and streamlining inventory management processes.
Cash Flows from Investing Activities. Net cash used in investing activities
was $163,000 for the three months ended March 31, 2000 as compared to $84,000
for the three months ended March 31, 1999. The Company continues to invest in
additional equipment to improve the productivity of its remanufacturing
activities. These purchases are consistent with the Company's focus on producing
high-quality, affordable office systems. During the remainder of 2000, the
Company anticipates commencing construction of a new production facility in
Lansing, Michigan market to replace the Company's rented facility. The Company
anticipates borrowing under Industrial Revenue Bonds issued by the State of
Michigan in order to facilitate construction of this facility. The source of
funds for other anticipated capital spending will be funds from operations as
well as borrowings on the Company's line of credit. At March 31, 2000, the
Company had borrowings of approximately $3,200,000 under its line of credit.
Cash Flows from Financing Activities. Net cash provided by financing
activities was $810,000 during the first quarter of 2000 as compared to $68,000
in the first quarter of 1999. This increase in cash flows provided by financing
activities for the first quarter of 2000 was principally due to the Company's
higher accounts receivable and inventory.
Expected Future Cash Flows. The Company expects that cash flows from
operating activities will increase over the next several quarters as the Company
continues to improve its financial performance and that such cash flow, together
with borrowings under its line of credit, will be sufficient to meet the
Company's short- and long-term financing needs.
Stock Repurchase Program. During the first quarter of 2000, the Company
announced a stock repurchase program for up to 100,000 shares of the Company's
stock. As of May 12, 2000, the Company had not acquired any shares under this
program.
<PAGE>
Seasonality and Impact of Inflation
The Company has no discernable pattern of seasonality. Because the Company
recognizes revenues upon shipment and typically ships Work Stations within three
weeks of an order, a substantial portion of the Company's revenues in each
quarter results from orders placed by customers during that quarter. As a
result, the Company's sales may vary from quarter to quarter.
Inflation has not had a material impact on the Company's net sales or
income to date. However, there can be no assurances that the Company's business
will not be affected by inflation in the future.
Forward-Looking Statements
The foregoing discussion contains certain forward-looking statements, which
may be identified by phrases such as "the Company expects" or words of similar
effect. The Private Securities Litigation Reform Act of 1995 provides a safe
harbor for forward-looking statements. The Company has identified certain
important factors that in some cases have affected, and in the future could
affect, the Company's actual results and could cause the Company's actual
results for fiscal 2000 and any interim period to differ materially from those
expressed or implied in any forward-looking statements made by, or on behalf of,
the Company. These factors are set forth under the caption "Forward-Looking
Statements" in Item 7 of the Company's Form 10-K for the fiscal year ended
December 31, 1999, a copy of which is on file with the Securities and Exchange
Commission. The Company assumes no duty to update any of the forward-looking
statements of this report.
Item 3: Quantitative and Qualitative Disclosures about Market Risk
The Company believes that its exposure to market risk associated with
transactions involving derivative and other financial instruments is not
material.
<PAGE>
OPEN PLAN SYSTEMS, INC.
Item 1. Legal Proceedings
The Company continues to be party to certain arbitration matters
related to the finalization of the purchase price for Total
Facilities Management ("TFM"). The Company believes that it has
established adequate provision in it's financial statements for
any amounts which might become due to the former shareholders of
TFM as a result of the finalization of these proceedings. The
Company expects these proceedings and findings to be completed in
the second quarter of 2000.
Item 2. Changes in Securities and Use of Proceeds
Not Applicable
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
The registrant has included the following exhibits pursuant to
Item 601 of Regulation S-K.
<TABLE>
<CAPTION>
Exhibit No. Description
------------------ --------------------------------------------------------------
<S> <C> <C>
10.1 Open Plan Systems, Inc. 1996 Stock Incentive Plan, as
amended on May 12, 2000
10.2 Open Plan Systems, Inc. 2000 Stock Option Plan for
Non-Employee Directors, as amended on May 12, 2000
10.3 Note and Security Agreement by and between Wachovia Bank,
N.A. and the Registrant dated April 17, 2000
11 Statement Re: Computation of Per Share Earnings
27 Financial Data Schedule (filed electronically only)
</TABLE>
(b) Reports on Form 8-K
None
<PAGE>
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.
OPEN PLAN SYSTEMS, INC.
---------------------------
(Registrant)
Date: May 15, 2000 /s/ John L. Hobey
---------------------------
John L. Hobey
Chief Executive Officer
Date: May 15, 2000 /s/ William F. Crabtree
---------------------------
William F. Crabtree
Chief Financial Officer
Date: May 15, 2000 /s/ Neil F. Suffa
--------------------------
Neil F. Suffa
Corporate Controller
<PAGE>
OPEN PLAN SYSTEMS, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
------------------- ------------------------------------------------------------------------
<S> <C> <C>
10.1 Open Plan Systems, Inc. 1996 Stock Incentive Plan, as amended on May
12, 2000
10.2 Open Plan Systems, Inc. 2000 Stock Option Plan for Non-Employee
Directors, as amended on May 12, 2000
10.3 Note and Security Agreement by and between Wachovia Bank, N.A. and the
Registrant, dated April 17, 2000
11 Statement Re: Computation of Per Share Earnings
27 Financial Data Schedule (filed electronically only)
</TABLE>
OPEN PLAN SYSTEMS, INC.
1996 STOCK INCENTIVE PLAN
(as amended November 1, 1996 and May 12, 2000)
Article I
DEFINITIONS
1.01 Affiliate means any "subsidiary" or "parent corporation" (within the
meaning of Section 424 of the Code) of the Company.
1.02 Agreement means a written agreement (including any amendment or
supplement thereto) between the Company and a Participant specifying the terms
and conditions of a Grant or an Award issued to such Participant.
1.03 Award means an award of Common Stock, Restricted Stock and/or Phantom
Stock.
1.04 Board means the Board of Directors of the Company.
1.05 Change of Control means and shall be deemed to have taken place if:
(i) any individual, entity or group (within the meaning of Sections 13(d)(3) or
14(d)(2) of the Exchange Act) becomes the beneficial owner of shares of the
Company having 20 percent or more of the total number of votes that may be cast
for the election of directors of the Company, other than (x) as a result of any
acquisition directly from the Company or (y) as a result of any acquisition by
the Company or any employee benefit plans (or related trusts) sponsored or
maintained by the Company or its Subsidiaries; or (ii) a change in the
composition of the Board such that the individuals who, as of the date hereof,
constitute the Board (the Board as of the date hereof shall be hereinafter
referred to as the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, for purposes of this Section,
that any individual who becomes a member of the Board subsequent to the date
hereof whose election, or nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of those individuals who are
members of the Board and who were also members of the Incumbent Board (or deemed
to be such pursuant to this proviso) shall be considered as though such
individual were a member of the Incumbent Board; but, provided further, that any
such individual whose initial assumption of office occurs as a result of either
an actual or threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board shall not be so considered as a member of the Incumbent Board.
1.06 Change of Control Date is the date on which an event described in (i)
or (ii) of Section 1.05 occurs.
1.07 Code means the Internal Revenue Code of 1986, and any amendments
thereto.
1.08 Commission means the Securities and Exchange Commission or any
successor agency.
1.09 Committee means the Compensation Committee of the Board.
1.10 Common Stock means the Common Stock of the Company.
1.11 Company means Open Plan Systems, Inc.
1.12 Exchange Act means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
1.13 Fair Market Value means, on any given date, the mean between the
highest and lowest reported sales prices of Common Stock as reported on the
Nasdaq National Market System. If there is no regular public trading market for
the Common Stock, the Fair Market Value shall be determined by the Committee in
good faith.
1.14 Grant means a grant of an Option and/or an SAR.
1.15 Incentive Stock Option means an Option that is intended to qualify as
an "incentive stock option" under Section 422 of the Code.
1.16 Initial Value means, with respect to an SAR, the Fair Market Value of
one share of Common Stock on the date of its grant, as set forth in the
Agreement.
1.17 Non-Qualified Stock Option means an option other than an Incentive
Stock Option.
1.18 Option means a stock option that entitles the holder to purchase from
the Company a stated number of shares of Common Stock at the price set forth in
an Agreement.
1.19 Option Price means the price per share for Common Stock purchased on
the exercise of an Option as provided in Article VI.
1.20 Participant means an officer, director or key employee of the Company
or of a Subsidiary who satisfies the requirements of Article IV and is selected
by the Committee to receive a Grant or an Award.
1.21 Phantom Stock means a bookkeeping entry on behalf of a Participant by
which his account is credited (but not funded) as though Common Stock had been
transferred to such account.
1.22 Plan means the Open Plan Systems, Inc. 1996 Stock Incentive Plan.
1.23 Restricted Stock means shares of Common Stock awarded to a Participant
under Article IX. Shares of Common Stock shall cease to be Restricted Stock
when, in accordance with the terms of the applicable Agreement, they become
transferable and free of substantial risks of forfeiture.
1.24 Rule 16b-3 means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time.
1.25 SAR means a stock appreciation right granted pursuant to the Plan that
entitles the holder to receive, with respect to each share of Common Stock
encompassed by the exercise of such SAR, the lesser of (a) the excess of the
Fair Market Value at the time of exercise over the Initial Value of the SAR or
(b) the Initial Value of the SAR; provided that any limited stock appreciation
right granted by the Committee and exercisable upon a Change of Control shall
entitle the holder to receive, with respect to each share of Common Stock
encompassed by the exercise of such SAR, the higher of (x) the highest sales
price of a share of Common Stock on the Nasdaq National Market System during the
60-day period prior to and including the Change of Control Date or (y) the
highest price per share paid in a Change of Control transaction, except that in
the case of SARs related to Incentive Stock Options, such price shall be based
only on the Fair Market Value on the date that the Incentive Stock Option is
exercised.
1.26 Securities Broker means the registered securities broker acceptable to
the Company who agrees to effect the cashless exercise of an Option pursuant to
Section 8.05 hereof.
1.27 Subsidiary means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations in the chain (other than the last corporation) owns stock
possessing at least 50 percent of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
Article II
PURPOSES
The Plan is intended to assist the Company in recruiting and retaining
officers, directors and key employees with ability and initiative by enabling
such persons who contribute significantly to the Company or an Affiliate to
participate in its future success and to associate their interests with those of
the Company and its shareholders. The Plan is intended to permit the award of
Common Stock, Restricted Stock, and Phantom Stock, and the issuance of Options
qualifying as Incentive Stock Options or Non-Qualified Stock Options, as
designated by the Committee at the time of their grant, and SARs. No Option that
is intended to be an Incentive Stock Option, however, shall be invalid for
failure to qualify as an Incentive Stock Option under Section 422 of the Code
but shall be treated as a Non-Qualified Stock Option.
Article III
ADMINISTRATION
The Plan shall be administered by the Committee, which shall be composed of
two or more directors. The Committee shall have authority to issue Grants and
Awards upon such terms (not inconsistent with the provisions of the Plan) as the
Committee may consider appropriate. The terms of such Grants and Awards may
include conditions (in addition to those contained in the Plan) on (i) the
exercisability of all or part of an Option or SAR and (ii) the transferability
or forfeitability of Restricted Stock or Phantom Stock. In addition, the
Committee shall have complete authority to interpret all provisions of the Plan;
to prescribe the form of Agreements; to adopt, amend, and rescind rules and
regulations pertaining to the administration of the Plan; and to make all other
determinations necessary or advisable for the administration of the Plan. To
fulfill the purposes of the Plan without amending the Plan, the Committee may
also modify any Grants or Awards issued to Participants who are nonresident
aliens or employed outside of the United States to recognize differences in
local law, tax policy or custom.
The express grant in the Plan of any specific power to the Committee shall
not be construed as limiting any power or authority of the Committee. Any
decision made, or action taken, by the Committee or in connection with the
administration of the Plan shall be final and conclusive. All expenses of
administering the Plan shall be borne by the Company.
Article IV
ELIGIBILITY
4.01 General. Any officer, director or employee of the Company or a
Subsidiary (including any corporation that becomes a Subsidiary after the
adoption of the Plan) who, in the judgment of the Committee, has contributed
significantly or can be expected to contribute significantly to the profits or
growth of the Company or a Subsidiary may receive one or more Grants and/or
Awards, or any combination or type thereof. Employee and non-employee directors
of the Company are eligible to participate in the Plan.
4.02 Grants and Awards. The Committee will designate individuals to whom
Grants and/or Awards are to be issued and will specify the number of shares of
Common Stock subject to each such Grant or Award. An Option may be granted alone
or in addition to other Grants and/or Awards under the Plan. The Committee shall
have the authority to grant any Participant Incentive Stock Options,
Non-Qualified Stock Options or both types of Options (in each case with or
without a related SAR); provided, however, that Incentive Stock Options may be
granted only to employees of the Company and its Subsidiaries. An SAR may be
granted with or without a related Option. All Grants and Awards issued under the
Plan shall be evidenced by Agreements that shall be subject to applicable
provisions of the Plan and to such other provisions as the Committee may
determine. No Participant may be granted Options that are Incentive Stock
Options, or related SARs (under all Incentive Stock Option Plans of the Company
and its Affiliates), that are first exercisable in any calendar year for stock
having an aggregate Fair Market Value (determined as of the date that an Option
is granted) exceeding $100,000.
4.03 Designation of Option as an Incentive Stock Option or Non-Qualified
Stock Option. The Committee will designate at the time that an Option is granted
whether the Option is to be treated as an Incentive Stock Option or a
Non-Qualified Stock Option. In the absence, however, of any such designation,
such Option shall be treated as an Incentive Stock Option.
4.04 Qualification of Incentive Stock Option under Section 422 of the Code.
Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to Incentive Stock Options shall be interpreted, amended or altered nor
shall any discretion or authority granted under the Plan be exercised so as to
disqualify the Plan under Section 422 of the Code or, without the consent of the
optionee affected, to disqualify any Incentive Stock Option under such Section
422.
Article V
STOCK SUBJECT TO PLAN
5.01 Maximum Number of Shares to be Awarded. Upon the exercise of any
Option (or tandem SAR), the award of Common Stock or Restricted Stock, or the
payment of an award of Phantom Stock, the Company may deliver to the Participant
authorized but previously unissued shares of Common Stock or previously issued
shares of Common Stock reacquired by the Company. The maximum aggregate number
of shares of Common Stock that may be issued pursuant to the Plan is 400,000.
The maximum aggregate number of shares of Common Stock that may be issued
pursuant to the exercise of Options (or tandem SARs) and the award of Common
Stock or Restricted Stock or the payment of an award of Phantom Stock under the
Plan is subject to adjustment as provided in Article XI. If an Option is
terminated, in whole or in part, for any reason other than its exercise, the
number of shares of Common Stock allocated to the Option or a portion thereof
may be reallocated to other Grants or Awards to be made under the Plan. Any
shares of Restricted Stock that are forfeited may be reallocated to other Grants
or Awards to be made under the Plan.
5.02 Independent SARs. Upon the exercise of an SAR granted independently of
an Option, the Company may deliver to the Participant authorized but previously
unissued Common Stock, cash, or a combination thereof as provided in Section
8.03. The maximum aggregate number of shares of Common Stock that may be issued
pursuant to SARs that are granted independently of Options is subject to the
provisions of Section 5.01 hereof.
Article VI
OPTION PRICE
The price per share for Common Stock purchased on the exercise of an Option
shall be fixed by the Committee on the date of its grant; provided, however,
that, in the case of an Option that is an Incentive Stock Option, the price per
share shall not be less than the Fair Market Value on such date.
Article VII
EXERCISE OF OPTIONS
7.01 Maximum Option or SAR Period. The period in which an Option or SAR may
be exercised shall be determined by the Committee on the date of its grant;
provided, however, that an Incentive Stock Option or related SAR shall not be
exercisable after the expiration of ten years from the date that the Incentive
Stock Option is granted.
7.02 Nontransferability. Any Option or SAR granted under the Plan shall be
nontransferable except by will or by the laws of descent and distribution. In
the event of any such transfer, the Option and any related SAR must be
transferred to the same person or persons, trust or estate. During the lifetime
of the Participant to whom an Incentive Stock Option or related SAR is granted,
such Option or SAR may be exercised only by the Participant. No right or
interest of a Participant in any Option or SAR shall be liable for, or subject
to, any lien, obligation or liability of such Participant.
7.03 Employee Status. For purposes of determining the applicability of
Section 422 of the Code (relating to Incentive Stock Options), or in the event
that the terms of any Grant provide that it may be exercised only during
employment or within a specified period of time after termination of employment,
the Committee may decide to what extent leaves of absence for governmental or
military service, illness, temporary disability, or other reasons shall not be
deemed interruptions of continuous employment.
Article VIII
METHOD OF EXERCISE
8.01 Exercise. Subject to the provisions of Articles VII and XII, an Option
or SAR may be exercised in whole at any time or in part from time to time at
such times and in compliance with such requirements as the Committee shall
determine; provided, however, that an SAR that is related to an Option may be
exercised only to the extent that the related Option is exercisable and when the
Fair Market Value exceeds the Option Price of the related Option. An Option or
SAR granted under the Plan may be exercised with respect to any number of whole
shares less than the full number for which the Option or SAR could be exercised.
Such partial exercise of an Option or SAR shall not affect the right to exercise
the Option or SAR from time to time in accordance with the Plan with respect to
remaining shares subject to the Option or related SAR. The exercise of an Option
shall result in the termination of the SAR to the extent of the number of shares
with respect to which the Option is exercised.
8.02 Payment. Unless otherwise provided by the Agreement, payment of the
Option Price shall be made in cash. If the Agreement provides, payment of all or
part of the Option Price (and any applicable withholding taxes) may be made by
the Participant's surrendering shares of Common Stock to the Company or by the
Company's withholding shares of Common Stock from the Participant upon exercise,
provided that the shares surrendered or withheld have a Fair Market Value
(determined as of the day preceding the date of exercise) that is not less than
such price or part thereof and any such withholding taxes. In addition, the
Committee may establish such payment or other terms as it may deem to be
appropriate and consistent with these purposes.
8.03 Determination of Payment of Cash and/or Common Stock upon Exercise of
SAR. At the Committee's discretion, the amount payable as a result of the
exercise of an SAR may be settled in cash, Common Stock, or a combination
thereof. No fractional shares shall be delivered upon the exercise of an SAR,
and a cash payment will be made in lieu thereof.
8.04 Shareholder Rights. No participant shall have any rights as a
shareholder with respect to shares subject to his Option or SAR until the date
that he exercises such Option or SAR.
8.05 Cashless Exercise. To the extent permitted under the applicable laws
and regulations, at the request of the Participant and with the consent of the
Committee, the Company agrees to cooperate in a "cashless exercise" of the
Option. The cashless exercise shall be effected by the Participant delivering to
the Securities Broker instructions to exercise all or part of the Option,
including instructions to sell a sufficient number of shares of Common Stock to
cover the costs and expenses associated therewith. The Committee may permit a
Participant to elect to pay any applicable withholding taxes by requesting that
the Company withhold the number of shares of Common Stock equivalent at current
market value to the withholding taxes due.
8.06 Cashing Out of Option. The Committee may elect to cash out all or part
of the portion of any Option to be exercised by paying the optionee an amount,
in cash or Common Stock, equal to, on the effective date of such cash out, the
excess of the Fair Market Value of the Common Stock that is the subject of the
portion of the Option to be exercised over the Option Price times the number of
shares of Common Stock subject to the portion of the Option to be exercised.
Article IX
COMMON STOCK AND RESTRICTED STOCK
9.01 Award. In accordance with the provisions of Article IV, the Committee
may designate persons to whom an award of Common Stock and/or Restricted Stock
is to be made and will specify the number of shares of Common Stock covered by
such award or awards.
9.02 Vesting. In the case of Restricted Stock, on the date of the award,
the Committee may prescribe that the Participant's rights in the Restricted
Stock shall be forfeitable or otherwise restricted for a period of time set
forth in the Agreement and/or until certain financial performance objectives are
satisfied as determined by the Committee in its sole discretion. Subject to the
provisions of Article XII hereof, the Committee may award Common Stock to a
Participant that is not forfeitable and is free of any restrictions on
transferability.
9.03 Shareholder Rights. Prior to forfeiture in accordance with the terms
of the Agreement and while the shares are Restricted Stock, a Participant will
have all rights of a shareholder with respect to Restricted Stock, including the
rights to receive dividends, warrants and rights and to vote the shares;
provided, however, that (i) a Participant may not sell, transfer, pledge,
exchange, hypothecate, or otherwise dispose of Restricted Stock, (ii) the
Company shall retain custody of the certificates evidencing shares of Restricted
Stock, and (iii) the Participant will deliver to the Company a stock power,
endorsed in blank, with respect to each award of Restricted Stock.
Article X
PHANTOM STOCK
10.01 Award. Pursuant to the Plan or any Agreement establishing additional
terms and conditions, the Committee may designate employees to whom awards of
Phantom Stock may be made and will specify the number of shares of Common Stock
covered by such award.
10.02 Vesting. The Committee may prescribe such terms and conditions under
which a Participant's right to receive payment for Phantom Stock shall become
vested.
10.03 Shareholder Rights. A Participant for whom Phantom Stock has been
credited generally shall have none of the rights of a shareholder with respect
to such Phantom Stock. However, a plan or agreement for the use of Phantom Stock
may provide for the crediting of a Participant's Phantom Stock account with cash
or stock dividends declared with respect to Common Stock represented by such
Phantom Stock.
10.04 Payment. At the Committee's discretion, the amount payable to a
Participant for Phantom Stock credited to his account shall be made in cash,
Common Stock or a combination thereof.
10.05 Nontransferability. Any Phantom Stock awarded under the Plan shall be
nontransferable except by will or by the laws of descent and distribution.
Article XI
ADJUSTMENT UPON CHANGE IN COMMON STOCK
Should the Company effect one or more (x) stock dividends, stock split-ups,
subdivisions or consolidations of shares or other similar changes in
capitalization; (y) spin-offs, spin-outs, split-ups, split-offs, or other such
distribution of assets to shareholders; or (z) direct or indirect assumptions
and/or conversions of outstanding Options due to an acquisition of the Company,
then the maximum number of shares as to which Grants and Awards may be issued
under the Plan shall be proportionately adjusted, and their terms shall be
adjusted as the Committee shall determine to be equitably required. Any
determination made under this Article XI by the Committee shall be final and
conclusive.
The issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property or for labor
or services, either upon direct sale or upon the exercise of rights or warrants
to subscribe therefor, or upon conversion of shares or obligations of the
Company convertible into such shares or other securities, shall not affect, and
no adjustment by reason thereof shall be made with respect to, any Grant or
Award.
Article XII
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Grant shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under the Plan except in compliance with all applicable Federal and
state laws and regulations (including, without limitation, withholding tax
requirements) and the rules of all domestic stock exchanges on which the
Company's shares may be listed or the Nasdaq Stock Market. The Company may rely
on an opinion of its counsel as to such compliance. Any share certificate issued
to evidence Common Stock for which a Grant is exercised or an Award is issued
may bear such legends and statements as the Committee may deem advisable to
assure compliance with Federal and state laws and regulations. No Grant shall be
exercisable, no Common Stock shall be issued, no certificates for shares shall
be delivered, and no payment shall be made under the Plan until the Company has
obtained such consent or approval as the Committee may deem advisable from
regulatory bodies having jurisdiction over such matters.
Article XIII
GENERAL PROVISIONS
13.01 Effect on Employment. Neither the adoption of the Plan, or its
operation, nor any documents describing or referring to the Plan (or any part
thereof) shall confer upon any employee any right to continue in the employ of
the Company or a Subsidiary or in any way affect any right and power of the
Company or a Subsidiary to terminate the employment of any employee at any time
with or without assigning a reason therefor.
13.02 Unfunded Plan. The Plan, insofar as it provides for a Grant or for an
award of Phantom Stock, is not required to be funded, and the Company shall not
be required to segregate any assets that may be represented at any time by a
Grant or by an award of Phantom Stock under the Plan.
13.03 Change of Control. Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change of Control:
(a) Any outstanding Option, SAR (including any limited SAR) or Phantom
Stock that is not presently exercisable and vested as of a Change of Control
Date shall become fully exercisable and vested to the full extent of the
original Grant upon such Change of Control Date.
(b) The restrictions applicable to any outstanding Restricted Stock shall
lapse, and such Restricted Stock shall become free of all restrictions and
become fully vested, nonforfeitable and transferable to the full extent of the
original Grant. The Committee may also provide in an Agreement that a
Participant may elect, by written notice to the Company within 60 days after a
Change of Control Date, to receive, in exchange for shares that were Restricted
Stock immediately before the Change of Control Date, a cash payment equal to the
Fair Market Value of the shares surrendered on the last business day that the
Common Stock is traded on the Nasdaq National Market System prior to receipt by
the Company of such written notice.
13.04 Rules of Construction. Headings are given to the articles and
sections of the Plan for ease of reference. The reference to any statute,
regulation, or other provision of law shall be construed to refer to any
amendment to or successor of such provision of law.
13.05 Amendment. The Board may amend or terminate the Plan from time to
time; provided, however, that no amendment may become effective until
shareholder approval is obtained if the amendment (i) materially increases the
aggregate number of shares that may be issued pursuant to Options and Common
Stock and Restricted Stock awards, (ii) materially increases the benefits to
Participants under the Plan, or (iii) materially changes the requirements as to
eligibility for participation in the Plan. Except for an amendment made to cause
the Plan or a Grant or Award to qualify for the Rule 16b-3 exemption, no
amendment, without a Participant's consent, shall adversely affect any rights of
such Participant under any Grant or Award outstanding at the time that such
amendment is made.
13.06 Duration of Plan. No Grant or Award may be issued under the Plan
before March 27, 1996, or after March 26, 2006. Grants and Awards issued on or
after March 27, 1996, but on or before March 26, 2006, shall remain valid in
accordance with their terms.
13.07 Effective Date. The Plan has been approved by the Board and the
shareholders of the Company and shall be effective as of March 27, 1996.
Amendments to the Plan effective as of November 1, 1996 and May 12, 2000 were
approved by the Board.
OPEN PLAN SYSTEMS, INC.
2000 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
(as amended May 12, 2000)
Article I
DEFINITIONS
1.01 Agreement means a written agreement (including any amendment or
supplement thereto) between the Company and a Participant specifying the terms
and conditions of a Grant issued to such Participant.
1.02 Board means the Board of Directors of the Company.
1.03 Change of Control means and shall be deemed to have taken place if:
(i) any individual, entity or group (within the meaning of Sections 13(d)(3) or
14(d)(2) of the Exchange Act) becomes the beneficial owner of shares of the
Company having 20 percent or more of the total number of votes that may be cast
for the election of directors of the Company, other than (x) as a result of any
acquisition directly from the Company, or (y) as a result of any acquisition by
the Company or any employee benefit plans (or related trusts) sponsored or
maintained by the Company or its Subsidiaries; or (ii) a change in the
composition of the Board such that the individuals who, as of the Effective Date
set forth in Section 10.12 hereof, constitute the Board (the Board as of the
Effective Date shall be hereinafter referred to as the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board; provided,
however, for purposes of this Section, that any individual who becomes a member
of the Board subsequent to the Effective Date whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of those individuals who are members of the Board and who were also
members of the Incumbent Board (or deemed to be such pursuant to this proviso)
shall be considered as though such individual were a member of the Incumbent
Board; but, provided further, that any such individual whose initial assumption
of office occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a person other than the Board shall not be so considered as a
member of the Incumbent Board.
1.04 Code means the Internal Revenue Code of 1986, and any amendments
thereto.
1.05 Commission means the Securities and Exchange Commission or any
successor agency.
1.06 Committee means the Compensation Committee of the Board.
1.07 Common Stock means the Common Stock of the Company.
1.08 Company means Open Plan Systems, Inc.
1.09 Exchange Act means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
1.10 Fair Market Value means, on any given date, the mean between the
highest and lowest reported sales prices of a share of Common Stock, as reported
on the Nasdaq National Market on such date. If there is no regular public
trading market for the Common Stock, the Fair Market Value shall be determined
by the Committee in good faith.
1.11 Grant means the grant of an Option.
1.12 Non-Employee Director means a member of the Board who is not an
employee of the Company or any Subsidiary.
1.13 Option means a stock option that entitles the holder to purchase from
the Company under the terms of this Plan the number of shares of Common Stock
set forth in Article IV at the Option Price.
1.14 Option Price means the price per share for Common Stock purchased on
the exercise of an Option as provided in Article IV.
1.15 Participant means a Non-Employee Director who is eligible to receive a
Grant under this Plan.
1.16 Plan means the 2000 Stock Option Plan for Non-Employee Directors, as
amended from time to time.
1.17 Prior Plan means the 1996 Stock Option Plan for Non-Employee
Directors, as amended from time to time.
1.18 Rule 16b-3 means Rule 16b-3 as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time, and any
successor thereto.
1.19 Securities Broker means the registered securities broker acceptable to
the Company who agrees to effect the cashless exercise of an Option pursuant to
Section 7.03 hereof.
1.20 Subsidiary means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations in the chain (other than the last corporation) owns stock
possessing at least 50 percent of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
Article II
PURPOSE
The Plan is intended to associate the interests of the Non-Employee
Directors with those of the Company and its shareholders through increased
equity ownership, to assist the Company in recruiting and retaining individuals
of ability and experience who are not employed by the Company to serve on the
Board and its committees and to provide incentive to those individuals by
enabling them to participate in the future success of the Company.
Article III
ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall have
all the powers vested in it by the terms of the Plan, such powers to include the
authority (within the limitations described herein) to prescribe the form of the
Agreements evidencing Grants under the terms of the Plan. Subject to the
provisions of the Plan, the Committee shall have the power to construe the Plan,
to determine all questions arising thereunder and to adopt and amend such rules
and regulations for the administration of the Plan as it may deem desirable,
consistent with the provisions of the Plan. Any decision of the Committee in the
administration of the Plan, as described herein, shall be final and conclusive.
The Committee may act only by a majority of its members in office, except that
the members thereof may authorize any one or more of their number or the
Secretary or any other officer of the Company to execute and deliver documents
on behalf of the Committee. No member of the Committee shall be liable for
anything done or omitted to be done by such member or by any other member of the
Committee in connection with the Plan, except in circumstances involving actual
bad faith. All costs and expenses of administering the Plan shall be borne by
the Company.
Article IV
GRANTS OF OPTIONS
Each Non-Employee Director who serves on the Board on that date which is
the first business day following each Annual Meeting of Shareholders during the
term of this Plan shall be granted an Option as of such date. Each Option shall
be for the purchase by the Participant of 1,000 shares of Common Stock at a
price per share equal to the Fair Market Value of a share of the Common Stock on
the date of Grant. Each Option shall be evidenced by an Agreement issued by the
Committee in the form prescribed by the Committee and consistent with the terms
of the Plan. All Options granted under the Plan shall be non-statutory in nature
and shall not be entitled to special tax treatment under Internal Revenue Code
Section 422.
Article V
AMOUNT OF STOCK
The total number of shares of Common Stock reserved and available for
issuance upon exercise of Options granted under the Plan shall be 25,000 shares,
subject to adjustment as provided in Article VIII below. The Common Stock to be
issued may be either authorized and unissued shares, issued shares acquired by
the Company or its Subsidiaries, or any combination thereof. In the event that
an Option under this Plan or the Prior Plan is forfeited, cancelled or otherwise
terminated, in whole or in part, for any reason other than its exercise, the
number of shares of Common Stock allocated to such Option may be reallocated to
other Options to be granted under this Plan. In the event that the number of
shares of Common Stock available for future Grants under the Plan is
insufficient to make all automatic Grants required to be made on such date, then
all Non-Employee Directors shall share ratably in the number of Options
available for Grants under the Plan.
Article VI
EXERCISE OF OPTIONS
6.01 Exercisability. Each Option shall be first exercisable on the date
which is six months from the date of the grant of the Option and shall continue
to be exercisable for a term of ten years thereafter; provided, however, that:
(i) subject to the six-month exercisability requirement set forth above, an
Option shall be exercisable, in the event of a Participant's death prior to
exercising the Option, by his estate, or the person or persons to whom his
rights under the Option shall pass by will or by the laws of descent and
distribution but only for a period of two years from the date of the
Participant's death or during the remainder of the period preceding the
expiration of the Option, whichever is shorter; (ii) subject to the six-month
exercisability requirement set forth above, an Option shall be exercisable if a
Participant becomes permanently and totally disabled (within the meaning of
Section 105(d)(4) of the Code) while serving on the Board prior to exercising
the Option, but only for a period of two years from the date on which he ceases
serving on the Board due to such disability or during the remainder of the
period preceding the expiration of the Option, whichever is shorter; and (iii)
subject to the six-month exercisability requirement set forth above, in the
event that a Participant resigns from or is not re-elected or does not stand for
re-election to the Board or in any other circumstance approved by the Committee
in its sole discretion, an Option shall be exercisable, but only for a period of
two years following the date of such resignation or cessation of service on the
Board, or in the period prescribed by the Committee in an approved circumstance,
or during the remainder of the period preceding the expiration of the Option,
whichever is shorter.
6.02 Transferability. Any Option granted hereunder shall not be
transferable otherwise than by will or by the laws of descent and distribution,
unless the Participant's Agreement expressly authorizes the transfer of all or
any portion of the Option by the Participant and the exercise thereof by a
person other than the Participant; provided, however, that (i) there may be no
consideration paid by the transferee for any such transfer and (ii) subsequent
transfers of transferred Options shall be prohibited except by will or the laws
of descent and distribution. Any Option transferred pursuant to this Section
6.02 shall continue to be subject to the same terms and conditions following
such transfer as were applicable immediately prior to such transfer. A
transferred Option shall be exercisable by the transferee only to the extent and
for the period specified in this Article VI.
Article VII
MANNER OF EXERCISE
7.01 Exercise. Subject to the provisions of Article VI, an Option may be
exercised in whole at any time or in part from time to time. An Option granted
under the Plan may be exercised with respect to any number of whole shares less
than the full number for which the Option could be exercised. Such partial
exercise of an Option shall not affect the right to exercise the Option from
time to time in accordance with this Plan with respect to remaining shares
subject to the Option.
7.02 Payment. Payment of the Option Price may be made in cash or by
surrendering previously owned shares of Common Stock to the Company, provided
that the shares surrendered have a Fair Market Value (determined as of the day
preceding the date of exercise of the Option) that is not less than such Option
Price or part thereof.
7.03 Cashless Exercise. To the extent permitted under applicable laws and
regulations, at the request of the Participant, the Company will cooperate in a
"cashless exercise" of an Option. The cashless exercise shall be effected by the
Participant delivering to the Securities Broker instructions to exercise all or
part of the Option, including instructions to sell a sufficient number of shares
of Common Stock to cover the costs and expenses associated therewith.
7.04 Withholding. At the time of the exercise of an Option, the Participant
shall pay to the Company in cash the full amount of all federal and state income
and employment taxes required to be withheld by the Company with respect to the
taxable income of the Participant resulting from such exercise. If the Agreement
so provides, payment of all or a part of such taxes may be made by the
Participant surrendering shares of Common Stock to the Company, provided the
shares surrendered have a Fair Market Value (determined as of the day preceding
the date of exercise of the Option) that is not less than the amount of such
taxes or part thereof, or by the sale of shares of Common Stock upon the
cashless exercise of an Option pursuant to Section 7.03.
7.05 Shareholder Rights. No Participant shall have any rights as a
shareholder with respect to shares subject to an Option until the date such
Option is exercised.
Article VIII
ADJUSTMENT UPON CHANGE IN COMMON STOCK
Should the Company effect one or more (x) stock dividends, stock split-ups,
subdivisions or consolidations of shares or other similar changes in
capitalization; (y) spin-offs, spin-outs, split-ups, split-offs, or other such
distribution of assets to shareholders; or (z) direct or indirect assumptions
and/or conversions of outstanding options due to an acquisition of the Company,
then the maximum number of shares as to which Grants may be issued under this
Plan and the number and price of shares of Common Stock subject to Grants shall
be proportionately adjusted, and the terms of Options shall be adjusted, as the
Committee shall determine to be equitably required to retain for the
Participants the equivalent economic benefit of their Option(s). Any
determination made under this Article VIII by the Committee shall be final and
conclusive.
The issuance by the Company of shares of Common Stock or securities
convertible into shares of Common Stock, for cash or property or for labor or
services, either upon direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, any Grant.
Article IX
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Option shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitation, withholding tax
requirements) and the rules of the Nasdaq Stock Market or any other domestic
stock exchanges or market on which the Common Stock may be listed or traded. The
Company may rely on an opinion of its counsel as to such compliance. Any share
certificate issued to evidence Common Stock for which an Option is exercised may
bear such legends and statements as the Committee may deem advisable to assure
compliance with federal and state laws and regulations. No Grant shall be
exercisable, no Common Stock shall be issued, no certificates for shares shall
be delivered, and no payment shall be made under this Plan until the Company has
obtained such consent or approval as the Committee may deem advisable from
regulatory bodies having jurisdiction over such matters.
Article X
GENERAL PROVISIONS
10.01 Rules of Construction. Headings are given to the articles and
sections of this Plan for ease of reference. The reference to any statute,
regulation, or other provision of law shall be construed to refer to any
amendment to or successor of such provision of law.
10.02 Change of Control. In the event of a Change of Control, unless
otherwise provided by the Committee in an Agreement, any outstanding Option
which is not presently exercisable and vested as of the date any Change of
Control occurs shall become fully exercisable and vested to the full extent of
the original Grant upon such Change of Control date.
10.03 Amendment. The Board may amend or terminate this Plan from time to
time; provided, however, that no amendment may become effective until
shareholder approval is obtained if the amendment would increase the number of
shares that may be issued hereunder pursuant to Options, increase the benefits
to Participants under the Plan, or change the requirements as to eligibility for
participation in the Plan. Without a Participant's consent, no amendment shall
adversely affect any rights of such Participant under any Grant outstanding at
the time that such amendment is made, except for an amendment made to cause the
Plan or a Grant to qualify for the Rule 16b-3 exemption. No amendment shall be
made if it would disqualify the Plan from the exemption provided by Rule 16b-3.
10.04 No Right. Neither the Plan nor any action taken hereunder shall be
construed as giving any Non-Employee Director any right to be retained in the
service of the Company.
10.05 Unfunded Plan. The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the issuance of shares upon exercise of any
Option under the Plan, and issuance of shares upon exercise of Options shall be
subordinated to the claims of the Company's general creditors.
10.06 Acceptance. By accepting any Option or other benefit under the Plan,
each Participant and each person claiming under or through such person shall be
conclusively deemed to have indicated his acceptance and ratification of, and
consent to, any action taken under the Plan by the Company or the Board.
10.07 Rule 16b-3 Compliance. It is the intention of the Company that the
Plan comply in all respects with Rule 16b-3, that any ambiguities or
inconsistencies in construction of the Plan be interpreted to give effect to
such intention and that, if any provision of the Plan is found not to be in
compliance with Rule 16b-3, such provision shall be deemed null and void to the
extent required to permit the Plan to comply with Rule 16b-3. The Committee may
adopt rules and regulations under, and the Board may amend, the Plan in
furtherance of the intent of the foregoing.
10.08 Governing Law. The validity, construction and effect of the Plan and
any actions taken or related to the Plan shall be determined in accordance with
the laws of the Commonwealth of Virginia and applicable federal law.
10.09 Successors and Assigns. All obligations of the Company under the
Plan, with respect to Grants made hereunder, shall be binding on any successor
to the Company, whether the existence of such successor is the result of a
merger, consolidation, direct or indirect purchase of all or substantially all
of the business and/or assets of the Company or otherwise. The Plan shall be
binding on all successors and permitted assigns of a Participant, including, but
not limited to, the estate of such Participant and the executor, administrator
or trustee of such estate, and the guardians or legal representative of the
Participant.
10.10 Effect on Prior Plan and Other Compensation Arrangements. The
adoption of this Plan shall have no effect on Grants made pursuant to the Prior
Plan and the Company's other compensation arrangements. Nothing contained in
this Plan shall prevent the Company from adopting other or additional
compensation plans or arrangements for its Non-Employee Directors.
10.11 Term of Plan. No Grant may be made under this Plan before the
Effective Date of the Plan or after the first business day following the 2005
Annual Meeting of Shareholders (the "Termination Date"). Grants issued on or
before the Termination Date shall remain valid in accordance with their terms.
10.12 Effective Date. The Plan shall become effective on May 12, 2000 upon
approval of the holders of a majority of the shares of the Company's outstanding
voting stock present in person, or represented by proxy, and entitled to vote at
a duly held meeting of the shareholders. Amendments to the Plan effective as of
May 12, 2000 were approved by the Board.
OPEN PLAN SYSTEMS, INC.
EXHIBIT 11 - Statement Re: Computation of Per Share Earnings
<TABLE>
<CAPTION>
Three Months Ended
March 31
2000 1999
---------------------------------------
<S> <C> <C>
Weighted average shares outstanding during the
period 4,403 4,672
Assumed exercise of options less assumed
acquisition of shares 2 1
---------------------------------------
Total 4,405 4,673
=======================================
Net income used in computation (in thousands)
$ 124 $ 26
=======================================
Income per common share $ .03 $ .01
=======================================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF OPEN PLAN SYSTEMS, INC. AS OF MARCH 30, 2000 AND THE RELATED STATEMENTS
OF INCOME AND CASH FLOWS FOR THE THREE MONTHS THEN ENDED AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001011738
<NAME> OPEN PLAN SYSTEMS, INC.
<MULTIPLIER> 1,000
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-30-2000
<EXCHANGE-RATE> 1
<CASH> 73
<SECURITIES> 0
<RECEIVABLES> 7,848
<ALLOWANCES> (192)
<INVENTORY> 8,318
<CURRENT-ASSETS> 17,115
<PP&E> 4,838
<DEPRECIATION> (2,635)
<TOTAL-ASSETS> 24,321
<CURRENT-LIABILITIES> 8,592
<BONDS> 0
0
0
<COMMON> 18,651
<OTHER-SE> (3,071)
<TOTAL-LIABILITY-AND-EQUITY> 24,321
<SALES> 9,333
<TOTAL-REVENUES> 9,333
<CGS> 6,420
<TOTAL-COSTS> 6,420
<OTHER-EXPENSES> 2,589
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 98
<INCOME-PRETAX> 228
<INCOME-TAX> 104
<INCOME-CONTINUING> 124
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 124
<EPS-BASIC> .03
<EPS-DILUTED> .03
</TABLE>
