Exhibit 4.3
This document constitutes part
of a prospectus covering
securities that have been
registered under the Securities
Act of 1933, as amended. The
date of this document is June
2, 2000.
OPEN PLAN SYSTEMS, INC.
EMPLOYEE STOCK PURCHASE AND BONUS PLAN AND PROSPECTUS
2000 LOAN PROGRAM
Open Plan Systems, Inc. (the "Company") has established the Loan
Program (the "Program") described below to facilitate purchases of shares of the
Company's Common Stock pursuant to the Company's Employee Stock Purchase and
Bonus Plan (the "Plan"). This document constitutes both the Plan and the Plan's
Prospectus. Under the Program an eligible participant (a "Participant") may
borrow an amount equal to the full purchase price of shares of Common Stock
purchased under the Plan (a "Loan"). A total of 150,000 shares have been
authorized for acquisition under the Program, subject to adjustment as a result
of various changes in the capitalization of the Company. Any shares authorized
but not acquired under the Program will remain available under the Plan for
acquisition outside this Program. This Program is being offered only for a
limited time. In order to participate in the Program, an eligible person must
complete and return the attached Enrollment Agreement to Karoline Pope no later
than June 15, 2000. All Enrollment Agreements are subject to acceptance by the
Company in Richmond, Virginia and once accepted will become binding upon the
Participant. The Company reserves the right to amend or terminate the Program at
any time.
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GENERAL PLAN INFORMATION
Program Eligibility
-------------------
The Program is being made available to all regular full-time employees
of the Company and its subsidiaries and to all regular part-time employees of
the Company and its subsidiaries who have two or more years of service as of
March 30, 2000 and receive at least $40,000 in annual compensation. The Program
is not available to those employees who are on probation or who are employed (i)
to perform a specific assignment, (ii) for a period of time of limited duration
or (iii) who have failed, when required, to execute and deliver an Employee
Secrecy and Non-Piracy Agreement. All requests by eligible employees to
participate in the Program are subject to approval, disapproval or reductions in
Loan amount by the Executive Officers of the Company.
Levels of Participation
-----------------------
Except in the case of a Loan Rollover as described below, in order to
participate in the Program, a Participant must agree to borrow a minimum of
$5,000. If an employee's base salary is less that $50,000, the maximum amount of
the Loan to the employee under the Program will be limited to 50% of the
employee's annual base salary. If an employee's base salary is greater than or
equal to $50,000, the maximum amount of the Loan available to the employee under
the Program will be limited to 100% of annual base salary. In either case, the
Executive Officers of the Company may, in their sole discretion and if
requested, approve a greater amount.
Loan Terms
----------
Amount
The Loan to an employee will be in an original principal amount equal
to $5,000 and in $2,500 increments above $5,000, as selected by the employee.
The Loan will be unsecured but will be full recourse to the employee. This means
the Loan will represent an unconditional promise to repay the principal amount
borrowed plus accrued interest irrespective of the value of the shares of Common
Stock purchased pursuant to the Plan. The Loan will mature on March 31, 2010.
Loans may become due and payable at earlier times upon the occurrence of certain
events. See "Other Terms" below.
Interest
The Loan will accrue interest from the later of the date of the last
purchase of shares under the Program or November 1, 2000 ("Closing") until paid
in full at a rate of 5% per year. The interest rate may increase in the event
any of the shares (including Special Stock Bonus Awards) acquired under the
Program are sold, pledged or otherwise transferred or, unless certain
arrangements are made, if any such shares are withdrawn from the Participant's
account with the Investing Broker. See "Other Terms" below.
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Payments
If the original principal amount of the Loan is less than $25,000,
payment must be made by bi-weekly payroll deductions, which will begin with the
first full payroll period after Closing.
If the Loan amount, as determined above, is greater than or equal to
$25,000, an employee may elect to make annual payments on March 31 of each year.
If this option is elected, the normal annual payment will be due on March 31
each year until the Loan is repaid.
Payment amounts, whether bi-weekly or annual, will be based on a 5%
interest rate per annum and assuming full amortization of the Loan over a
15-year term. The Loan will, however, be due and payable in under 10 years, on
March 31, 2010, and accordingly there will be a "balloon" payment of remaining
principal due at that time.
The following examples illustrate these payment terms.
Example 1: If an employee borrows $10,000, beginning with the first
pay period after Closing, the employee would repay by
payroll deduction $36.47 per pay period (i.e., every two
weeks) until March 31, 2010. At that time an additional
payment of $4,191.45 representing the remaining principal
balance of the Loan will also be due and payable.
In this example the bi-weekly payment amount is $3.65 per
thousand dollars borrowed from Closing through March 31,
2010. The "balloon" payment of principal due on March 31,
2010 will equal $419.15 per thousand dollars borrowed.
Example 2: An employee borrows $30,000. Because the Loan is more than
$25,000, the employee elects the annual method of
repayment. No payment would be due until March 31, 2001,
at which time a payment of $2,890.27 would be due. On
March 31, 2010, an additional payment of $15,403.60,
representing the remaining principal and interest balance,
will also be due and payable.
In this example the payment due March 31, 2001 is $96.34
per thousand dollars borrowed and this payment continues
through March 31, 2009. The "balloon" payment of principal
and interest due on March 31, 2010 will equal $513.45 per
thousand dollars borrowed.
Other Terms
All Loans under the Program may be prepaid at any time. Prepayments
will be applied first to accrued but unpaid interest and then to principal.
Unless a prepayment is equal to or greater than 10% of the then outstanding Loan
balance, prepayments will not change the amount of required payments, they will
instead reduce the balance of the
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Loan resulting in a smaller balloon payment or full repayment before the normal
maturity date. If a prepayment is equal to or greater than 10% of the then
outstanding Loan balance the Company will, at a Participant's request, prepare a
new payment schedule which will provide for the repayment of the remaining Loan
balance in substantially equal installments (either bi-weekly or annual, as
applicable) on the terms described above.
A Loan will become due and payable at the option of the Company in the
event of (i) the failure by an employee to make any payment when due; (ii) an
employee's insolvency, application for appointment of receiver, filing of a
petition under any bankruptcy law or the making of an assignment for the benefit
of creditors; (iii) an employee's death or long-term disability or (iv)
termination of employment with the Company or its subsidiaries, whether
voluntary or involuntary, except that if, at the time of termination, the
employee pledges the Common Stock acquired under the Program (including the
Special Stock Bonus Award and if vested, the Restricted Stock Award, each as
hereafter defined) or provides other collateral acceptable to the Company to
secure the Loan, the Company will not cause the Loan to become due and payable
prior to 90 days following such termination.
Because the Program is designed to encourage employee ownership of
Common Stock, if any shares of Common Stock acquired by a Participant under the
Program are sold, pledged (other than to the Company) or otherwise transferred,
the interest rate will be immediately adjusted to a "market rate" which the
Company has determined to be the Prime Rate plus 7% and payments will also
commence immediately at the higher rate. For those making payments by bi-weekly
payroll deduction, the payment amount will immediately increase. For those
making annual payments, the next payment, which would otherwise be due, will be
immediately due and payable and the remaining annual payment amounts will be
increased to reflect the higher rate on the Loan. If a Participant withdraws any
such shares from his or her account with the Investing Broker, the Participant
must make arrangements satisfactory to the Company regarding the registration
and/or custody of the share certificates so that the Company can determine the
interest rate and payment terms applicable to the Participant's Loan. A failure
to make such arrangements will result in the interest rate and payment terms
being adjusted as described above. A Participant shall not be deemed to have
transferred or withdrawn shares acquired under this Program so long as the
number of shares held in the Participant's account with the Investing Broker is
not less than the number of shares acquired under this Program.
The Company will consider waiving the foregoing interest rate
adjustment if the purpose of the sale, pledge or other transfer is to fund a
medical emergency or other financial hardship. Any decision to waive the
forfeiture of a Restricted Stock Award is solely within the Company's discretion
and must be made in advance by the Company's Executive Officers.
Neither a Loan nor any rights or obligations thereunder will be
transferable by the Participant except by will or the laws of descent and
distribution. The promissory note evidencing the Loan may be sold or transferred
by the Company.
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Special Stock Bonus Award
-------------------------
Participants in the Program will receive a stock bonus of one share of
Common Stock for every 20 shares of Common Stock purchased under the Program (a
"Special Stock Bonus Award"). Special Stock Bonus Awards will be rounded to the
nearest whole number of shares. The timing of the delivery of a Special Stock
Bonus Award to or on behalf of a Participant shall be as determined by the
Executive Officers of the Company. No Special Stock Bonus Award will be made as
a consequence of an increase or decrease in a number of shares of Common Stock
held resulting solely from a subdivision or consolidation of shares, the payment
of a stock dividend, a stock split or other change in capitalization. Special
Stock Bonus Awards will be appropriately adjusted to reflect the effects of such
a change.
Participants holding Common Stock received by Special Stock Bonus Award
may exercise full voting rights with respect to the shares covered thereby and
are entitled to receive all dividends and other distributions paid with respect
to those shares.
Restricted Stock Award
----------------------
Participants in the Program will receive, in addition to the Special
Stock Bonus Award described above, a bonus of one share of restricted Common
Stock for every 20 shares of Common Stock purchased under the Program (a
"Restricted Stock Award"). Each Restricted Stock Award will vest at the rate of
20% of the number of shares covered by such award on each of the second through
the sixth anniversaries of the later of November 1, 2000 or the date of the last
purchase of shares under the Program. Under the occurrence of any of the
following events, that portion of a Participant's Restricted Stock Award that
has not previously vested shall be immediately forfeited: (i) termination of the
Participant's employment with the Company or its subsidiaries, whether voluntary
or involuntary (including by death or disability), (ii) except in the limited
circumstances described below, any shares of Common Stock acquired by the
Participant under the Program (including the Special Stock Bonus Award and the
vested portion, if any of the Restricted Stock Award) are sold, pledged (other
than to the Company) or otherwise transferred or (iii) unless the Participant
makes satisfactory arrangements with the Company as described under "Other
Terms" above, the Participant withdraws any shares referred to in clause (ii)
above from his or her account with the Investing Broker.
The Company will consider waiving the forfeiture of the unvested
portion of the Restricted Stock Award in the event of sale, pledge or transfer
described in clause (ii) above if the purpose of the sale, pledge or transfer is
to fund a medical emergency or other financial hardship. Any decision to waive
is solely within the Company's discretion and must be made in advance by the
Company's Executive Officers.
Restricted Stock Awards will be rounded to the nearest whole number of
shares and will, when vested, be deposited directly into the Participant's
account with the Investing Broker. The timing of the delivery of a Restricted
Stock Award on behalf of a Participant shall be as determined by the Executive
Officers of the Company. No Restricted Stock Award will be made as a consequence
of an increase in the number of shares of Common Stock held resulting solely
from a subdivision or consolidation of
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shares, the payment of a stock dividend, a stock split or other change in
capitalization. Restricted Stock Awards will be appropriately adjusted to
reflect the effects of such a change.
During the period of restriction, Participants holding Restricted Stock
Awards may exercise full voting rights with respect to the shares covered
thereby and are entitled to receive all dividends and other distributions paid
with respect to those shares. The unvested portion of a Restricted Stock Award
may not be sold, pledged or otherwise transferred or withdrawn from the
Participant's account with the Investing Broker.
Methods of Purchases
--------------------
In order to participate in the Program, each eligible Participant must
complete and return the enclosed Enrollment Agreement to Human Resources no
later than June 15, 2000. Upon execution of the Enrollment Agreement, the
Participant irrevocably agrees to borrow the amount indicated in the Enrollment
Agreement and agrees to execute and deliver promissory notes and other
agreements that the Company deems necessary or appropriate to implement the
Program. Each Enrollment Agreement is subject to acceptance or rejection by the
Company, in whole or in part. The Company will begin accepting Enrollment
Agreements as soon as reasonably practicable and will instruct the Investing
Broker to begin purchasing shares of Common Stock under the Program. The
purchase price for a Participant's stock will be determined by the average price
paid for all of the Common Stock purchased for all Participants pursuant to the
Program. Shares acquired under this Program will be purchased by the Investing
Broker in the open market.
The maximum aggregate number of shares initially available for
acquisition under the Program is 125,000, subject to the sole discretion of the
Executive Officers who may increase the number of shares allocated to the
Program to 150,000. In the event the aggregate shares requested by Participants
exceeds the Program's capacity, or if the purchase price becomes excessive in
the judgement of the Executive Officers of the Company, the amounts requested by
employees may be reduced pro rata. Any such reduction shall not affect an
employee's ability, based on the amount he or she requested, to participate in
the Program or to refinance existing Loans due to the Company (see "Levels of
Participation") or to elect the annual method of repayment (see "Loan Terms -
Payments").
The Investing Broker will provide quarterly account statements to
Participants outlining the dates and amounts of share purchases under the Plan,
the price per share paid, the current total share balance in Participants'
accounts and the aggregate market value of shares held in Participants'
accounts. These statements will only provide information about the activity of
accounts held under the Plan and will not show any information about any other
Company stock Participants may own outside of the Plan. In the case of
Participants whose accounts have had activity during a particular month, the
Investing Broker will provide a monthly account statement containing the above
information.
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Administration
--------------
The Plan and the Program are administered by the Executive Officers of
the Company. The Executive Officers have the authority to construe the Plan and
the Program, to determine all questions arising thereunder and to adopt and
amend such rules and regulations for the administration of the Plan and the
Program as they may deem desirable, consistent with the provisions of the Plan
and the Program. The Executive Officers, however, have no discretion with
respect to the selection of employees to receive Loans or awards or with respect
to the number of shares subject to the Plan or the Program or to any awards
thereunder. The Executive Officers may act only by a majority of its members,
except that the members thereof may authorize any one or more of their number or
the Secretary of the Company or any other officer of the Company to execute and
deliver documents on behalf of the Executive Officers. No individual Executive
Officer shall be liable for anything done or omitted to be done by such
Executive Officer or by any other Executive Officer in connection with the Plan
or the Program, except in circumstances involving actual bad faith. All costs
and expenses of administering the Plan and the Program shall be borne by the
Company.
Rights of Participants
----------------------
A Participant will have full shareholder rights with respect to shares
of Common Stock acquired pursuant to the Program including the right to vote the
shares. A Participant has the right to sell, pledge or otherwise dispose of such
shares, however such actions may result in a higher interest rate being charged
thereafter on the Loan or forfeiture of unvested Restricted Stock Awards.
Duration
--------
No Loan or award may be granted under the Plan or the Program before
May 15, 2000 or after March 31, 2010 (the "Termination Date"). Loans and awards
granted on or before the Termination Date shall remain valid in accordance with
their respective terms.
RESALE RESTRICTIONS
Shares of the Company's Common Stock distributed under the Plan to
"affiliates" of the Company, as that term is defined in the rules and
regulations under the Securities Act of 1933, as amended (the "Securities Act"),
are subject to restrictions on resale imposed by the Securities Act. Such shares
may be resold pursuant to Rule 144 under the Securities Act, or pursuant to
another applicable exemption, if any, from the registration requirements of the
Securities Act or pursuant to an effective registration statement. Rule 144
limits the number of shares that may be sold by "affiliates" within a
three-month period. Shares distributed to persons other than "affiliates"
generally will not be subject to restrictions on resale under the Securities
Act. An "affiliate" of the Company is defined by the rules and regulations under
the Securities Act as "a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with"
the Company. Directors, executive officers, substantial
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stockholders and others, who by one means or another have the ability to
exercise control over the Company, are or may be deemed to be "affiliates."
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the federal income tax consequences to
the Company and Participants under the Plan. It is general and does not purport
to be complete. There may also be applicable state and local taxes. In addition,
in some cases it may be important to consider the effect, if any, of gift,
estate and inheritance taxes.
NO REPRESENTATION RESPECTING THE TAX TREATMENT OF ANY LOAN HAS BEEN
MADE TO A PLAN PARTICIPANT. PLAN PARTICIPANTS ARE URGED TO CONSULT THEIR
COUNSEL, ACCOUNTANTS OR OTHER TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF
LOANS GRANTED TO THEM IN RELATION TO THEIR OWN PARTICULAR TAX SITUATION.
For Participants
----------------
The following is general information regarding tax consequences of the
features of the Plan described below under present federal income tax law and
existing, temporary and proposed regulations, which are subject to change at any
time.
Special Stock Awards
A Participant will receive a stock bonus of one or more shares of
Common Stock (see "Special Stock Bonus Award" above) for which no consideration
will be paid. The Special Stock Bonus Award will be taxable compensation to the
extent of the fair market value on the date of receipt of the number of shares
of Common Stock that constitute the Special Stock Bonus Award. The award will be
subject to federal and state income tax and Federal Insurance Contributions Act
("FICA") withholding.
Restricted Stock Awards
In general, a Participant who has received a Restricted Stock Award
will include in gross income as compensation income an amount equal to the fair
market value of the Restricted Stock Award at the time the restrictions lapse or
are removed. The amount will be included in income in the tax year of the
Participant in which such events occur, unless, in the case of Restricted Stock,
the Participant has made a timely election under the Code to have the fair
market value of the Restricted Stock Award included in income at the time of the
grant of the Restricted Stock Award. The Award is subject to federal and state
income tax and FICA withholdings at the time the compensation income is
recognized. Ordinary income attributable to the lapse of restrictions on the
shares under the Program will increase the Participant's tax basis for purpose
of determining gain or loss on the subsequent sale or exchange of the Common
Stock.
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Loans
The Internal Revenue Code provides that where the interest rate payable
on a Loan is less than the applicable federal rate (the "AFR"), the Loan is a
"below market loan" and in such case an amount known as "foregone interest" is
treated as transferred from the lender to the borrower, and retransferred by the
borrower to the lender as interest. The Company has determined that the initial
Loans under the Plan are compensation-related "below market loans" to which the
AFR rules apply. Accordingly, in any calendar year in which the aggregate Loans
outstanding between the Company and a Participant exceed $10,000, the amount of
"foregone interest" must be determined. If the Loan remains outstanding for an
entire calendar year, the amount of the "foregone interest" is the excess of (a)
the result produced when the appropriate AFR is multiplied by the principal
amount of the Loan over (b) the sum of all amounts payable as interest on the
Loan allocable to the calendar year. The AFR is published by the Internal
Revenue Service periodically and is determined when the Loan is made. If the
Loan is outstanding for part of a calendar year, the AFR regulations specify the
methodology for determining foregone interest for the part of the calendar year
the Loan was deemed outstanding. The Participant will have imputed taxable
income and imputed interest expense equal to the forgone interest each year the
Loan is outstanding.
If the Common Stock purchased with a Loan under the Plan is sold,
pledged or withdrawn (see "Other Terms" above) or for any other reason the terms
of the Loan are adjusted and as a result the interest rate on the Participant's
Loan is increased so that the rate equals or exceeds the AFR (as described
above), the amount of foregone interest and imputed income for that year may be
reduced or eliminated with respect to the period following the interest rate
adjustment.
Interest paid by the Participant to the Company, including imputed
interest (as described above), is treated as the payment of investment interest
by the Participant. Individual taxpayers may deduct investment interest only to
the extent of their net investment income for the year. Net investment income is
the excess of investment income over investment expenses for the year.
Investment income consists of (1) gross income from property held for
investment, such as interest and dividends, (2) any net gain from disposition of
investment property other than net capital gain (net long-term capital gain in
excess of net short-term capital loss), and (3) any net capital gain which a
Participant elects to include in investment income thereby foregoing the
beneficial capital gain tax rate. Investment income does not include imputed
income resulting from the application of the AFR rules. Investment expenses are
deductible expenses other than interest, which are directly related to the
production of investment income (after applying the 2% of adjusted gross income
floor). Investment interest that is not deductible in a year may be carried over
and deducted in future years, subject to the applicable limitations.
Income imputed to a Participant under the AFR rules is not subject to
income tax withholding, but is subject to FICA withholding. The Company is
required to report the amount of the imputed income on the Participant's W-2
each year. In addition, the Company will timely furnish each Participant with
the information pertaining to the amount and computation of foregone interest.
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The principal amount of a Loan to acquire Common Stock will be the
Participant's tax basis for the purpose of determining gain or loss on the
subsequent sale or exchange of the Common Stock.
For the Company
---------------
The Company usually will be entitled to a business expense deduction at
the time and in the amount that the Participant recognizes ordinary income in
connection with a Loan or upon the receipt of a Special Bonus Award or
Restricted Stock Award. In addition, any payments of Loan interest by the
Participant to the Company would be taxable income to the Company. Generally,
the Company is not taxed on a Participant's repayment of principal of a Loan.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company has registered under the Securities Act an aggregate of
150,000 shares of Common Stock to be issued in connection with the Plan pursuant
to a registration statement on Form S-8 filed with the Securities and Exchange
Commission (the "Commission") on June 2, 2000 (Registration No. 333-_____) (the
"Registration Statement"). The Registration Statement incorporates by reference
certain documents filed with the Commission that are incorporated by reference
into this Prospectus and are available from the Company upon request from Plan
participants. See "Available Information" below.
The following reports and other documents previously filed by the
Company with the Commission under the Exchange Act are currently incorporated by
reference into this Prospectus:
(1) the Registrant's Annual Report on Form 10-K (the "Form 10-K")
for the fiscal year ended December 31, 1999, as amended by
Form 10-K/A (Amendment No. 1), filed on May 15, 2000, File No.
0-20743;
(2) the portions of the Registrant's definitive Proxy Statement
for the Annual Meeting of Shareholders held on May 12, 2000
that have been incorporated by reference into the Form 10-K;
(3) the Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2000, File No. 0-20743; and
(4) the description of the Registrant's Common Stock contained in
the Registrant's Form 8-A Registration Statement, filed May
20, 1996, File No. 0-20743.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment that indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference into this Prospectus
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and to be a part hereof from the date of filing of such documents. Any statement
contained in this Prospectus or in a report or document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
previous statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
AVAILABLE INFORMATION
The Company will provide without charge to each participant, upon the
written or oral request of such person, a copy of any or all of the information,
reports or other documents (not including exhibits to any such document unless
such exhibits are specifically incorporated by reference into such document)
incorporated by reference in this Prospectus, as set forth above, as well as a
copy of the Company's latest annual report to shareholders and copies of all
documents constituting the Plan Prospectus for the securities offered pursuant
to the Plan. Requests for such material should be directed to Neil F. Suffa,
4299 Carolina Avenue, Building C, Richmond, Virginia 23222, telephone: (804)
228-5600.
