SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by party other than the registrant [_]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
BRISTOL TECHNOLOGY SYSTEMS, INC.
(Name of Registrant as Specified in Its Charter)
BRISTOL TECHNOLOGY SYSTEMS, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-
6j(2)
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(45) and 0-11
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:___________________________________________
(2) Form, schedule or registration statement no.:_____________________
(3) Filing party:_____________________________________________________
(4) Date filed:_______________________________________________________
<PAGE>
BRISTOL TECHNOLOGY SYSTEMS, INC.
18201 Von Karman Avenue, Suite 305
Irvine, California 92612
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Bristol Technology Systems, Inc., a Delaware corporation (the "Company"), will
be held at 18201 Von Karman Avenue, Suite 305, Irvine, California 92612 at 10:00
a.m. on Tuesday, May 20, 1997, for the following purposes:
Proposal 1. To elect six (6) directors to the Board of Directors until
the next annual meeting of stockholders of the Company and until their
successors have been elected and qualified;
Proposal 2. To ratify the appointment of Ernst & Young LLP as auditors
of the Company's financial statements for the fiscal year ending December 31,
1997;
Proposal 3. To consider and act upon a proposal to approve an increase
in the number of shares which may be granted under the Company's 1996 Equity
Participation Plan from 450,000 to 2,450,000;
Proposal 4. To consider and act upon a proposal to approve the Company's
1997 Employee Stock Purchase Plan;
and to transact such other business as may properly come before the Meeting or
any adjournments thereof.
The close of business on April 9, 1997 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Meeting.
PLEASE SIGN, DATE AND MAIL YOUR PROXY IN THE ENVELOPE PROVIDED FOR YOUR
CONVENIENCE. YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO THE MEETING AND, IF
YOU ATTEND THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON.
BY ORDER OF THE BOARD OF DIRECTORS
Paul Spindler, Secretary
Dated: April 14, 1997
<PAGE>
BRISTOL TECHNOLOGY SYSTEMS, INC.
18201 Von Karman Avenue, Suite 305
Irvine, California 92612
PROXY STATEMENT
------------------------------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Bristol Technology Systems, Inc. (the
"Company") for use at the Annual Meeting of Stockholders to be held at 10:00
A.M. on May 20, 1997 at 18201 Von Karman Avenue, Suite 305, Irvine, California
92612, or at any adjournments thereof (the "Annual Meeting"), for the purposes
set forth herein and in the foregoing Notice. This Proxy Statement and the
accompanying Proxy are being mailed to the Company's stockholders on or about
April 14, 1997.
At the close of business on April 9, 1997, the record date fixed by the
Board of Directors of the Company for determining those stockholders entitled to
vote at the Annual Meeting (the "Record Date"), the outstanding shares of the
Company entitled to vote consisted of 4,745,654 shares of Common Stock. Each
stockholder of record at the close of business on the Record Date is entitled to
one vote for each share then held on each matter submitted to a vote of the
stockholders.
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any stockholder giving the proxy so desire. Stockholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Company's
Secretary at the Company's headquarters a written revocation or duly executed
proxy bearing a later date; however, no such revocation will be effective until
written notice of the revocation is received by the Company at or prior to the
Annual Meeting.
The attendance, in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum. Directors will be elected (Proposal 1) by a
plurality of the votes cast by the shares of Common Stock represented in person
or by proxy at the Annual Meeting. Under applicable Delaware state law, if a
quorum exists, action on a matter other than the election of directors is
approved if a majority of shares voting at the Annual Meeting in person or proxy
favor the proposed action. If less than a majority of outstanding shares
entitled to vote are represented at the Annual Meeting, a majority of the shares
so represented may adjourn the Annual Meeting to another date, time or place,
and notice need not be given of the new date, time or place if the new date,
time or place is announced at the meeting before an adjournment is taken.
Abstentions and "broker non-votes" are counted as shares eligible to
vote at the Annual Meeting in determining whether a quorum is present, but do
not represent votes cast with respect to any Proposal. "Broker non-votes" are
shares held by a broker or nominee as to which instructions have not been
received from the beneficial owners or persons entitled to vote and the broker
or nominee does not have discretionary voting power.
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A form of proxy is enclosed for use at the Annual Meeting. The proxy
may be revoked by a stockholder at any time prior to the exercise thereof, and
any stockholder present at the Annual Meeting may revoke his proxy thereat and
vote in person if he or she so desires. When such proxy is properly executed and
returned, the shares it represents will be voted at the Annual Meeting in
accordance with any instructions noted thereon. If no direction is indicated,
all shares represented by valid proxies received pursuant to this solicitation
(and not revoked prior to exercise) will be voted for the election of the
nominees for directors named herein (unless authority to vote is withheld) and
in favor of all other proposals stated in the Notice of Annual Meeting and
described in this Proxy Statement.
The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996 is enclosed with this Proxy Statement.
PROPOSAL 1:
ELECTION OF DIRECTORS
Nominees
Six (6) of the current members of the Board of Directors are to be
elected at the Annual Meeting, each to hold office until the next Annual Meeting
and until their successors are elected and qualified. The Board of Directors has
nominated for election as directors the six (6) persons indicated in the
following table. In the election of directors, the proxy holders intend, unless
directed otherwise, to vote for the election of the nominees named below, all of
whom are now members of the Board of Directors. It is not anticipated that any
of the nominees will decline or be unable to serve as director. If, however,
that should occur, the proxy holders will vote the proxies in their discretion
for any nominee designated by the present Board of Directors to fill the
vacancy.
The following table gives certain information as to each person
nominated for election as a director:
<TABLE>
<CAPTION>
Director
Name Age Since Positions
<S> <C> <C> <C>
Richard H. Walker 53 1996 President, Chief Executive Officer and
Director
Paul Spindler 66 1996 Chairman of the Board, Executive Vice
President, Secretary
Lawrence Cohen 53 1996 Vice Chairman of the Board, Executive Vice
President, Treasurer
Maurice R. Johnson 55 1996 Vice President, Director
Dr. Jack Borsting 67 1996 Director
Dr. Thomas Lutri 41 1996 Director
</TABLE>
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RICHARD H. WALKER is a founder of the Company and has served as
President, Chief Executive Officer and a director of the Company since its
inception in April 1996. Prior to joining the Company, Mr. Walker served as
Chairman of the Board and Chief Executive Officer for Castle Office Systems,
Inc., a privately owned company that acquires and operates office machine
dealerships in the mid-Atlantic region of the United States, from April 1994 to
March 1996. Previous to that, Mr. Walker served as Vice President of Toshiba
America Information Systems, Inc. ("Toshiba") and General Manager of Toshiba's
Electronic Imaging Division from November 1989 to March 1994. Mr. Walker also
served as an executive of Matsushita Electric Corporation of America's office
automation group from March 1981 to November 1989, most recently as Vice
President, Marketing.
PAUL SPINDLER is a founder of the Company and has served as Chairman of
the Board, Executive Vice President and Secretary of the Company since its
inception in April 1996. Prior to joining the Company, Mr. Spindler served as
President of GCI Spindler, a corporate/investor relations and marketing
communications firm, from May 1987 to December 1996.
LAWRENCE COHEN is a founder of the Company and has served as Vice
Chairman of the Board, Executive Vice President and Treasurer of the Company
since its inception in April 1996. From November 1990 to September 1996, Mr.
Cohen served as Chairman of the Board of BioTime, Inc., a biotechnology company
engaged in the artificial plasma business. Mr. Cohen has also served as a
director of ASHA Corporation, a publicly traded supplier of traction control
systems, from April 1995 to present; a director of Apollo Genetics Inc., a
company founded by Mr. Cohen which is engaged in the genetic pharmaceutical
business, from January 1993 to the present; a director of Registry Magic Inc., a
company founded by Mr. Cohen which develops voice recognition equipment, from
November 1995 to present; and a director of Kaye Kotts Associates, Inc. from
April 1995 to the present.
MAURICE R. JOHNSON has served as Vice President and a director of the
Company since July 1996. From March 1, 1993 to present, Mr. Johnson has served
as President and a director of CRI. From June 1992 to March 1993, Mr. Johnson
was a consultant to CRI. Prior to that time, Mr. Johnson served as Vice
President of Omron Systems, a manufacturer of electronic components and POS
systems, from August 1980 to February 1992.
DR. JACK BORSTING has served as a director of the Company since November
1996. From August 1988 to present, Dr. Borsting has been an E. Morgan Stanley
Professor of Business Administration at the University of Southern California
("USC"). Since January 1995, Dr. Borsting has served as Executive Director of
the Center of Telecommunications at USC. Dr. Borsting served as the Dean of the
USC School of Business Administration from August 1988 to January 1994. From
January 1994 to January 1995, Dr. Borsting was on sabbatical. A former Assistant
Secretary of Defense, Dr. Borsting is also a director of Northrop Grumman
Corporation, Whitman Medical and TRO Learning, Inc.
DR. THOMAS LUTRI has served as a director of the Company since November
1996. Dr. Lutri was a founder of Gentle Care, Inc., a home health care company
in New York City, and has served as President and Chief Executive Officer from
October 1991 to present. Dr. Lutri has served as President and Chief Executive
Officer of Family Care, P.C., a New York walk-in medical clinic, from September
1987 to present.
Remuneration of Non-Employee Directors
Non-Employee Directors are not compensated for their services as
Directors of the Company.
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Board Committees and Annual Meetings
During the fiscal year ending December 31, 1996, there were 12 meetings
of the Company's Board of Directors. Each Board member attended all of the
meetings of the Board of Directors and the meetings of all Committees of the
Board of Directors on which he served. Additionally, there were approximately 10
separate actions of the Board of Directors which were taken by unanimous written
consent.
The Audit Committee was established on January 10, 1997. The members of
the Audit Committee are Dr. Jack Borsting and Dr. Thomas Lutri, neither of whom
are employees of the Company. The functions of the Audit Committee are to define
the scope of the audit, review the auditor's reports and comments and monitor
the internal auditing procedures of the Company. To date, there have been no
meetings of the Audit Committee, however, the Audit Committee is scheduled to
meet on a quarterly basis.
The Compensation Committee was established on December 9, 1996. The
members of the Compensation Committee are Dr. Jack Borsting and Dr. Thomas
Lutri, neither of whom are employed by the Company. The functions of the
Compensation Committee are to review, discuss and make recommendations to the
Board of Directors with respect to all compensation issues requiring Board
approval, including, but not limited to, executive compensation and the issuance
of stock. In addition, the Compensation Committee is acting Plan Administrator
for the Company's 1997 Employee Stock Purchase Plan. The Compensation Committee
met on December 9, 1996.
The Executive Committee was established on December 9, 1996. The
members of the Executive Committee are Richard H. Walker, Paul Spindler and
Lawrence Cohen. The functions of the Executive Committee include exercising all
of the powers and authority of the Board of Directors in the management of the
business and affairs of the Company, but do not include the power and authority
to amend the Company's Certificate of Incorporation, adopt agreements of merger,
consolidation or acquisition, recommend to stockholders the sale, lease or
exchange of all or substantially all of the Company's property and assets,
recommended to stockholders a dissolution of the Company or a revocation of
dissolution, amend the Company's bylaws, declare a dividend or authorize the
issuance of stock of the Company. The Executive Committee meets from time to
time as necessary.
There is no Nominating Committee of the Board of Directors.
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE.
PROPOSAL 2:
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997 and has
further directed that management submit the selection of auditors for
ratification by the stockholders at the Annual Meeting. Ernst & Young LLP was
first appointed independent auditors of the Company in June 1996.
Representatives of Ernst & Young LLP are expected to be present at the Annual
Meeting, will have an opportunity to make a statement if they so desire, and
will be available to respond to appropriate questions.
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Stockholder ratification of the selection of Ernst & Young LLP as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Ernst & Young LLP
to the stockholders for ratification as a matter of good corporate practice. If
the stockholders fail to ratify the selection, the Board will reconsider whether
to retain that firm. Even if the selection is ratified, the Board in its
discretion may direct the appointment of a different independent accounting firm
at any time during the year if the Board determines that such a change would be
in the best interests of the Company and its stockholders.
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.
PROPOSAL 3:
APPROVE AMENDMENT OF THE COMPANY'S
1996 EQUITY PARTICIPATION PLAN INCREASING
THE NUMBER OF SHARES AUTHORIZED TO BE ISSUED
UNDER THE PLAN TO 2,450,000 SHARES FROM 450,000 SHARES
On July 31, 1996, in order to attract and retain personnel who possess
a high degree of competence, experience and motivation, the Company's Board of
Directors adopted and the stockholders of the Company approved the Company's
1996 Equity Participation Plan (the "Stock Option Plan"). A copy of the
Amendment to the Stock Option Plan is attached hereto as Exhibit A. At present,
the Stock Option Plan, as approved by the Board of Directors of the Company,
authorizes the Company to grant both incentive and nonqualified stock options to
purchase 450,000 shares of the Company's Common Stock. On April 3, 1997, the
Board of Directors approved an increase to 2,450,000 shares under the Stock
Option Plan, and the Company is seeking ratification and authorization from the
stockholders for such increase. The Company has at the present time 450,000
options outstanding under the Stock Option Plan.
Since the adoption of the Stock Option Plan on July 31, 1996, the
Company has completed its initial public offering of its securities, has
consummated certain acquisitions of additional companies in furtherance of its
corporate strategy and is in the process of negotiating additional potential
acquisitions and will likely complete the acquisitions of other companies in the
future in fulfillment of its strategic acquisition program. As a result of such
acquisitions and expansion of its operations, the Company will need to retain
significant additional key employees. It will be critical for the Company in
order to complete such acquisitions, to be able to offer various forms of equity
compensation to future key employees in order to attract such key personnel.
Accordingly, in order to continue to offer incentive compensation in
the form of stock ownership in the Company and for the Company to be able to
continue to issue stock options and other forms of stock-based incentive
compensation under the Stock Option Plan, the Compensation Committee and the
Board have deemed it advisable to amend the Stock Option Plan to increase the
number of shares authorized to be issued under the Stock Option Plan to
2,450,000 from 450,000 shares. In the opinion of the Compensation Committee and
the Board, the authorization to issue additional shares would provide the
necessary flexibility to motivate and reward the employees of the Company in a
manner that would improve the Company's financial performance. The affirmative
vote of the holders of a majority of the shares of the Company's Common Stock
voting at the Annual Meeting is necessary to approve the amendment to the Stock
Option Plan.
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Description of Stock Option Plan
On July 31, 1996, the Company adopted its Stock Option Plan under
which, as approved by the stockholders, 450,000 shares of Common Stock have been
reserved for issuance to executive officers, independent directors, other key
employees and consultants of the Company upon exercise of options designated as
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986 or upon exercise of nonstatutory options. The Stock Option
Plan is administered by the Compensation Committee consisting of outside members
of the Board of Directors which will determine, among other things, the persons
to be granted options, the number of shares subject to each option and the
option price.
The exercise price of the shares subject to the options shall be set by
the Compensation Committee; provided, however, that such price shall be no less
than the par value of a share of Common Stock, unless otherwise permitted by
applicable state law, and (i) in the case of incentive stock options and options
intended to qualify as performance-based compensation, such price shall not be
less than 100% of the fair market value of a share of Common Stock, on the date
the option is granted; (ii) in the case of incentive stock options granted to an
individual then owning more than 10% of the total combined voting power of all
classes of stock of the Company or any subsidiary thereof, such price shall not
be less than 110% of the fair market value of a share of common stock on the
date the option is granted; and (iii) in the case of options granted to
independent directors, such price shall equal 100% of the fair market value of a
share of Common Stock on the date the option is granted; provided, however, that
the price of each share subject to each option granted to independent directors
on the date of the initial public offering of Common Stock shall equal the
initial public offering price (net of underwriting discounts and commissions)
per share of Common Stock. In consideration of the granting of an option, the
optionee shall remain in the employ of (or to consult for or to serve as an
independent director of, as applicable) the Company or any subsidiary of the
Company for a period of at least six (6) months (or such shorter period as may
be fixed in the Stock Option Agreement or by action of the Compensation
Committee following grant of the option) after the option is granted (or until
the next annual meeting of stockholders of the Company, in the case of an
independent director).
The term of an option shall be set by the Compensation Committee in its
discretion; provided, however, that, (i) in the case of options granted to
independent directors, the term shall be ten (10) years from the date the option
is granted, without variation or acceleration, and (ii) in the case of incentive
stock options, the term shall not be more than ten (10) years from the date the
incentive stock option is granted, or five (5) years from such date if the
incentive stock option is granted to an individual then owning more than 10% of
the total combined voting power of all classes of stock of the Company or any
subsidiary thereof. Except as limited by requirements of Section 422 of the Code
and regulations and rulings thereunder applicable to incentive stock options,
the Compensation Committee may extend the terms of any outstanding option in
connection with any termination of employment or termination of consultancy of
the optionee, or amend any other term or condition of such option relating to
such a termination.
Under the terms of the grant, the period during which the right to
exercise an option in whole or in part vests in the optionee shall be set by the
Compensation Committee and the Compensation Committee may determine that an
option may not be exercised in whole or in part for a specific period after it
is granted; provided, however, that unless the Compensation Committee otherwise
provides in the terms of the option or otherwise, no option shall be exercisable
by any optionee within the period ending six (6) months and one (1) day after
the date the option is granted; and provided, further, that options granted to
independent directors shall become exercisable in cumulative annual installments
of 25% on
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each of the first, second, third and fourth anniversaries of the date of option
grant. At any time after grant of an option, the Compensation Committee may, in
its sole discretion accelerate the period during which an option (except an
option granted to an independent director) vests. No portion of an option which
is unexercisable at termination of employment (for any reason, with or without
cause, including, a termination by resignation, discharge, death, disability or
retirement), termination of directorship or termination of consultancy, shall
thereafter become exercisable, except as may be otherwise provided by the
Compensation Committee in the case of options granted to employees or
consultants either in the stock option agreement or by action of the
Compensation Committee following the grant of the option. No option granted to
an independent director may be exercised to any extent by anyone after the first
to occur of the following events: (a) the expiration of twelve (12) months from
the date of the optionee's death; (b) the expiration of twelve (12) months from
the date of the optionee's termination of directorship by reason of permanent
and total disability; (c) the expiration of three (3) months from the date of
the optionee's termination of directorship for any reason other than such
optionee's death or permanent and total disability, unless the optionee dies
within said three-month period; or (d) the expiration of ten (10) years from the
date the option was granted.
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 3.
PROPOSAL 4:
APPROVAL OF THE COMPANY'S 1997
EMPLOYEE STOCK PURCHASE PLAN
The Company has completed its initial public offering of its
securities, has consummated certain acquisitions of additional companies in
furtherance of its corporate strategy and is in the process of negotiating
additional potential acquisitions and will likely complete the acquisitions of
other companies in the future in fulfillment of its strategic acquisition
program. As a result of such acquisitions and expansion of its operations, the
Company will need to retain significant additional key employees. It will be
critical for the Company in order to complete such acquisitions, to be able to
offer various forms of equity compensation to future key employees in order to
attract such key personnel. Therefore the Board of Directors of the Company and
the Plan Administrator propose the establishment of a 1997 Employee Stock
Purchase Plan (the "1997 Employees Plan"), a copy of which is attached hereto as
Exhibit B providing eligible employees of the Company and its wholly-owned
subsidiaries with the opportunity to acquire a proprietary interest in the
Company through participation in a payroll-deduction based employee stock
purchase plan. A total of 200,000 shares of Common Stock will be reserved for
issuance pursuant to the 1997 Employees Plan. Unless terminated earlier pursuant
to the 1997 Employees Plan, the Plan shall terminate on June 30, 2005.
Pursuant to the 1997 Employees Plan, shares of Common Stock shall be
offered for purchase under the 1997 Employees Plan through a series of
successive offering periods until such time as (i) the maximum number of shares
of Common Stock available for issuance under the Plan shall have been purchased;
or (ii) the Plan shall have been terminated. Each offering period shall have a
maximum duration of twenty-four (24) months; provided, however, that the Plan
Administrator may designate any duration of an offering period prior to the
start date of the offering period and in the absence of any expressed
determination otherwise, each offering period shall have a duration of six (6)
months and be the same as a single semi-annual period of participation. The
initial offering period shall run from July 1, 1997 until the last business day
in December 1997. The next offering period shall commence on the
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first business day in January 1998, and subsequent offering periods shall
commence as designated by the Plan Administrator. The participant shall be
granted a separate purchase rate for each offering period for which he/she
participates. The purchase right shall be granted on the date the employee first
joins an offering period (which such time shall not be earlier than July 1,
1997) and shall be automatically exercised on the last business day of June and
December occurring within the offering period. No purchase rights granted under
the Plan will be exercised and no shares of Common Stock will be issued
thereunder until the Company has complied with all applicable requirements of
the Securities Act of 1933, as amended (including the registration of the shares
of Common Stock issuable under the Plan on a Form S-8 Registration Statement
filed with the Securities and Exchange Commission), all applicable listing
requirements of any securities exchange on which the Common Stock is listed for
trading and all other applicable requirements established by law or regulation.
The payroll deduction authorized by the participant for purposes of
acquiring shares of Common Stock under the 1997 Employees Plan may be any
multiple of one (1%) percent of the base salary paid to the participant during
each semi-annual period of participation, up to a maximum of ten (10%) percent.
The deduction rate so authorized shall continue in effect for the remainder of
the offering period, except to the extent such rate is changed in accordance
with the following: (i) the participant may, at any time during a semi-annual
period of participation, reduce his/her rate of payroll deduction to become
effective as soon as possible after filing of the requisite reduction form with
the Plan Administrator; and (ii) the participant may, prior to the commencement
of any new semi-annual period of participation within the offering period,
increase the rate of his/her payroll deduction by filing the appropriate form
with the Plan Administrator. The new rate (which may not exceed the ten (10%)
percent maximum) shall become effective as of the first day of the first
semi-annual period of participation following the filing of such form. Payroll
deductions will automatically cease upon the termination of the participant's
purchase rate.
The Common Stock purchasable under the Plan shall, solely in the
discretion of the Plan Administrator, be made available for either authorized
unissued shares of Common Stock or from shares of Common Stock reacquired by the
Company, including shares of Common Stock purchased on the open market. The
total number of shares which may be issued under the 1997 Employees Plan shall
not exceed 200,000 shares, subject to adjustment in the event of a change in the
Company's outstanding Common Stock as stated below.
Common Stock shall be purchasable on each semi-annual purchase date
within the Offering period at a purchase price equal to eighty-five (85%)
percent of the lower of (i) the fair market value per share of Common Stock on
the purchaser's entry date into that Offering period; or (ii) the fair market
value per share on that semi-annual purchase date. However, for each participant
whose entry date is other than the start date of the Offering period, the clause
(i) amount shall in no event be less than the fair market value of the Common
Stock on the start date of that Offering period. The number of shares
purchasable per participant on each semi-annual purchase date shall be the
number of whole shares obtained by dividing the amount collected from the
participant through payroll deductions during the semi-annual period of
participation ending with that semi-annual purchase date (together with any
carryover deductions from the proceeding semi-annual period of participation) by
the purchase price in effect for the semi-annual purchase date; provided,
however, that the maximum number of shares of Common Stock purchasable per
participant on any semi-annual purchase date shall not exceed 1,000 shares,
subject to periodic adjustment. Purchase rights shall not be granted under the
1997 Employee's Plan to any eligible employee if such individual would,
immediately after the grant, own or hold outstanding options or other rights to
purchase stock possessing five (5%) percent or more of the total combined voting
power of all classes of stock of the Company or any of its corporate affiliates.
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Payment for the Common Stock purchased under the Plan shall be effected
by means of the participant's authorized payroll deductions.
In the event the total number of shares of Common Stock which are to be
purchased pursuant to outstanding purchase rights on any particular semi-annual
purchase date exceeds the number of shares then available for issuance under the
1997 Employee's Plan, the Plan Administrator shall make a pro-rata allocation of
the available shares on a uniform and non-discriminatory basis, and the payroll
deductions of each participant, to the extent in excess of the aggregate
purchase price payable for the Common Stock pro-rated to such individual, shall
be promptly refunded to the participant.
A participant shall have no stockholder rights with respect to the
shares subject to his/her outstanding purchase rights until the shares are
actual purchased on the participant's behalf in accordance with the 1997
Employee's Plan. No adjustments shall be made for dividends, distributions or
other rights for which the record date is prior to the date of such purchase. No
purchase right granted under the 1997 Employee's Plan shall be assignable or
transferable by the participant other than by will or by the laws of descent and
distribution following the participant's death, and during the participant's
lifetime the purchase right shall be exercisable only by the participant.
In the event of any of the following transactions (a "Change in
Ownership") occurring during the Offering period: (i) a merger or consolidation
in which the Company is not the surviving entity, except for a transaction the
principal purpose of which is to change the state in which the Company is
incorporated; (ii) the sale, transfer, or other disposition of all or
substantially all of the assets of the Company; (iii) a complete liquidation or
dissolution of the Company; or (iv) any reverse merger in which the Company is
the surviving entity but in which securities possessing more than fifty (50%)
percent of the total combined voting power of the Company's outstanding
securities are transferred to a person or persons different from the person
holding those securities immediately prior to the merger, all outstanding
purchase rights under the 1997 Employee's Plan shall automatically be exercised
immediately prior to the effective date of such Change in Ownership by applying
the payroll deductions of each participant for the semi-annual period of
participation in which such Change in Ownership occurs to the purchase of the
whole shares of Common Stock at eighty-five (85%) percent of the lower of (a)
the fair market value of the Common Stock on the purchaser's entry date into the
Offering period in which such Change in Ownership occurs; or (b) the fair market
value of the Common Stock immediately prior to the effective date of such Change
in Ownership. However, the applicable share limitations as stated above shall
continue to apply to any such purchase, and the clause (a) amount above shall
not, for any participant whose entry date for the Offering period is other than
the start date of that Offering period, be less than the fair market value of
the Common Stock on such start date. The Company shall use its best efforts to
provide at least ten days prior written notice of the occurrence of any Change
in Ownership, and participants shall, following the receipt of such notice, have
the right to terminate their outstanding purchase rights.
No participant in the 1997 Employee's Plan shall be entitled to accrue
rights to acquire Common Stock pursuant to any purchase right outstanding under
the 1997 Employee's Plan if and to the extent such accrual, when aggregated with
(i) rights to purchase Common Stock accrued under any other purchase right
outstanding under the 1997 Employee's Plan and (ii) similar rights accrued under
other employee stock purchase plans of the Company or its corporate affiliate,
would otherwise permit such participant to purchase more than Twenty-Five
Thousand ($25,000.00) Dollars worth of stock of the Company or any corporate
affiliate (determined on the basis of the fair market value of such stocks on
the date or dates such rights are granted) for each calendar year such rights
are at any time outstanding. For purposes of
10
<PAGE>
applying such accrual limitations, the right to acquire Common Stock shall
accrue as follows: (a) no right to acquire Common Stock under any outstanding
purchase right shall accrue to the extent the participant has already accrued in
the same calendar year the right to acquire Common Stock under one or more other
purchase rights at a rate equal to Twenty-Five Thousand ($25,000.00) Dollars
worth of Common Stock (determined on the basis of the fair market value on the
date or dates of grant) for each calendar year during which one or more of those
purchases were at any time outstanding; and (b) if by reason of such accrual
limitations, any purchase right of a participant does not accrue for a
particular semi-annual period of participation, then the payroll deductions
which the participant made during that semi-annual period of participation in
excess of such accrual limitations shall be promptly refunded.
The Board of Directors of the Company may alter, amend, suspend or
discontinue the 1997 Employee's Plan following the close of any semi-annual
period of participation; provided, however, that the Board may not, without the
approval of the Company's stockholders: (i) increase the number of shares
issuable under the Plan or the maximum number of shares purchasable per
participant on any one semi-annual purchase date, except that the Plan
Administrator shall have the authority, exercisable without such stockholder
approval, to effect adjustments to the extent necessary to reflect changes in
the Company's capital structure; (ii) alter the purchase price formula so as to
reduce the purchase price payable for the shares purchasable under the 1997
Employee's Plan; or (iii) materially increase the benefits accruing to
participants under the Plan or materially modify the requirements for
eligibility to participate in the Plan. The Company shall have the right,
exercisable in the sole discretion of the Plan Administrator, to terminate all
outstanding purchase rights under the Plan immediately following the close of
any semi-annual period of participation. Should the Company elect to exercise
such right, the Plan shall terminate in its entirety. No further purchase rights
shall thereafter be granted or exercised, and no further payroll deductions
shall thereafter be collected under the 1997 Employee's Plan.
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 4.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of February 28, 1997 (i) by each
person who is known to the Company to be the owner of more than five percent
(5%) of the Company's Common Stock, (ii) by each of the Company's Directors,
(iii) by each of the Company's executive officers, and (iv) by all Directors and
executive officers of the Company as a group. As of February 28, 1997, there
were issued and outstanding 4,745,654 shares of Common Stock of the Company.
11
<PAGE>
<TABLE>
<CAPTION>
Numbers of Percentage
Name and Address Shares of Stock of Shares
of Beneficial Owner(1)(2) Beneficially Owned Outstanding
- ------------------------- ------------------ -----------
<S> <C> <C>
Walker Trust(3) 748,477 15.8%
The Spindler Family Trust(4) 750,478 15.8%
East Ocean Limited Partnership (5) 740,478 15.6%
Dr. Jack Borsting 10,595 *
Dr. Thomas Lutri 105,950 2.2%
Mr. Maurice R. Johnson 13,243 *
All directors and officers
as a group (7 persons) 2,369,221 49.9%
- ----------
*Less than one percent
</TABLE>
(1) Unless otherwise indicated below, the persons in the table above have sole
voting and investment power with respect to all shares shown as
beneficially owned by them, subject to community property laws where
applicable.
(2) Unless otherwise indicated below, the address of each person is c/o the
Company at 18201 Von Karman Avenue, Suite 305, Irvine, California 92612.
(3) All of the 748,477 shares held of record by the Walker Trust are
beneficially owned by Mr. Walker, the President, Chief Executive Officer
and a director of the Company. Mr. Walker has direct or indirect voting or
investment power for the Walker Trust.
(4) All of the 750,478 shares held of record by The Spindler Family Trust are
beneficially owned by Mr. Spindler, the Chairman of the Board, Executive
Vice President and Secretary of the Company. Mr. Spindler has direct or
indirect voting or investment power for the Spindler Trust.
(5) All of the 740,478 shares held of record by East Ocean Limited Partnership
are beneficially owned by Mr. Cohen, the Vice Chairman of the Board,
Executive Vice President and Treasurer of the Company. Mr. Cohen has direct
or indirect voting or investment power for East Ocean.
Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent (10%) of a
registered class of the Company's equity securities, to file with the Commission
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Officers, directors and greater than
ten percent (10%) stockholders are required by Commission regulation to furnish
the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1996, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent (10%) beneficial owners were completed.
12
<PAGE>
EXECUTIVE COMPENSATION
The following tables present information concerning the cash
compensation and stock options provided to the Company's Chief Executive Officer
and each additional executive officer whose total annualized compensation
exceeded $100,000 for the period from inception (April 3, 1996) to December 31,
1996. The notes to these tables provide more specific information regarding
compensation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
Awards
Securities
Underlying
Other Annual Options All Other
Name and Fiscal Salary Bonus Compensation /SARs Compensation
Principal Position Year ($) ($) ($) (#) ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Richard H. Walker 1996 $74,293 -- -- 100,000 --
President, Chief
Executive Officer
& Director
Maurice R. Johnson(a) 1996 $50,000 $37,500(b) -- 37,500 $1,495(c)
Vice President,
Director (also
President of CRI)
</TABLE>
(a) Amounts disclosed for Mr. Johnson represent compensation earned subsequent
to the commencement of his employment with the Company on July 1, 1996.
(b) Under the terms of Mr. Johnson's employment agreement, subject to the sole
discretion of the Board of Directors as to whether he has performed his
duties satisfactorily, the Company will pay him a guaranteed minimum bonus
of $50,000 per annum; such bonus of $25,000 was paid to Mr. Johnson in 1996
for the period from July 1, 1996 to December 31, 1996. In addition, Mr.
Johnson was paid a bonus of $12,500 by the Company upon the Company's
completion of its acquisition of Cash Registers, Inc. ("CRI"), a
wholly-owned subsidiary of the Company. (c) Amount represents the Company's
matching contribution to the CRI 401(k) plan.
Employment Agreements
The Company has entered into employment agreements Richard H. Walker and
Maurice Johnson. Mr. Walker's employment agreement provides that he will receive
a salary of $225,000 per year, subject to upward revision during the term of the
agreement. Beginning April 3, 1997, Mr. Walker's salary increased to $247,500
per year. Mr. Walker's employment agreement terminates on December 31, 2001. Mr.
Johnson's employment agreement provides that he will receive a salary of
$100,000, plus a minimum guaranteed bonus of $50,000 per year, subject to the
sole discretion of the Board of Directors. Mr.
13
<PAGE>
Johnson's agreement has an initial term of five years, which terminates on June
30, 2001. Both employment agreements contain confidentiality provisions and
covenants not to compete.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following tables set forth certain information concerning options
granted as of December 31, 1996. The Company has not granted any SARs to date.
<TABLE>
<CAPTION>
Number of % of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees in Base Price Expiration
Name Granted(a)(#) Fiscal Year ($/Share) Date
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard H. Walker 39,400 10.02% $6.00 7/31/01
60,600 15.41% $6.60 7/31/01
Maurice R. Johnson 37,500 9.54% $6.00 7/31/06
</TABLE>
(a) All options vest and become exercisable at the rate of 25% per year
commencing on the first anniversary of the date of grant.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised in-the-
Options/SARs at Money Options/SARs at
Fiscal Year-End (#) Fiscal Year-End($)(1)
------------------------------ ---------------------------
Shares Value
Acquired on Realized
Name Exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Richard H. Walker -- -- -- 100,000 -- $526,140
Maurice R. Johnson -- -- -- 37,500 -- $210,938
- -----------------------
</TABLE>
(1) The average of the high ask and low bid quotations for the Company's Common
Stock as reported by NASDAQ on December 31, 1996 was 11 11/16 and the
closing bid quotation for the Company's Common Stock as reported by The
Wall Street Journal on April 1, 1997 was 11 1/4.
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
The Company was incorporated on April 3, 1996, and in connection with
its initial capitalization issued an aggregate of 2,648,745 shares of Common
Stock for $.007 per share in the following manner: (i) 785,794 shares were
issued to East Ocean Limited Partnership ("East Ocean"), an investor affiliated
14
<PAGE>
with Lawrence Cohen; (ii) 732,819 shares were issued to the Walker Family Trust,
an investor affiliated with Richard H. Walker; (iii) 732,820 shares were issued
to the Spindler Family Trust dated February 1, 1994, an investor affiliated with
Paul Spindler; and (iv) the remaining 397,312 shares were issued to two other
stockholders of the Company. In August 1996, East Ocean transferred 17,658
shares to each of the Walker Trust and the Spindler Trust for $.007 per share.
CRI presently leases office space in London, Kentucky on a
month-to-month basis from Coye D. King, a director of CRI. Rent paid to Coye D.
King for the period from inception (April 3, 1996) to December 31, 1996 was
$15,000. In connection with its proposed move from its current location in
London, Kentucky, CRI has agreed to negotiate in good faith a definitive lease
agreement with Stephen King and Andrew King, Vice Presidents of CRI, as lessors,
whereby the latter will lease to CRI up to 12,000 square feet of office and
warehouse space in a new, yet to be constructed, office complex in London,
Kentucky. Certain terms of the lease have already been agreed to, and it is
expected that when signed, the lease will be for ten years and the base rental
rate will be $6.00, $8.00 and $10.00 per square feet for years one, two and
three through ten, respectively. Management believes that the aforementioned
base rental rates are as favorable to the Company as those that could be
obtained from unrelated third parties. Upon commencement of the lease for the
new office complex, the monthly lease for CRI's current space in London,
Kentucky will be terminated without penalty.
The Company purchases insurance coverage for its corporate office and
its CRI subsidiary through an insurance broker who is the brother-in-law of Mr.
Walker. The Company paid premiums totaling $121,634 during the period from
inception (April 3, 1996) to December 31, 1996 for insurance coverage expiring
at various dates through November 1997.
Maurice Johnson, a director and officer of the Company and an officer
of CRI, has made two identical loans to CRI. Each loan is in the principal
amount of $20,000 and bears interest at a rate of prime plus 1%. Both principal
and interest are due on demand. The Company expects the loans to be paid off in
April 1997.
At December 31, 1996, the Company had an outstanding receivable balance
from Michael J. Pollastro in the amount of $60,028. This receivable originated
through transactions entered into by ARS in the normal course of business with
affiliated companies owned by Mr. Pollastro. The Company also has a receivable
balance from a company owned by Mr. Pollastro in the amount of $7,000 at
December 31, 1996.
On June 3, 1996 and in connection with a private placement of the
Company's Common Stock, the Company issued 105,950 shares to Dr. Thomas Lutri, a
director of the Company, at a price of $0.94 per share. On June 28, 1996, the
Company issued 13,243 shares to Mr. Maurice Johnson, Vice President of the
Company, and on July 1, 1996 the Company issued 10,595 shares to Dr. Jack
Borsting, a director of the Company, in each case at a price of $0.94 per share.
The Board of Directors of the Company determined the price of the shares issued
to Messrs. Lutri, Johnson and Borsting based on the then current financial
condition of the Company and the per share price for such shares equaled the
price per share of Common Stock issued on June 28, 1996 to third parties in
connection with the private placement of the Company's Common Stock.
15
<PAGE>
OTHER MATTERS
Expenses of Solicitation
The accompanying proxy is solicited by and on behalf of the Board of
Directors of the Company, and the entire cost of such solicitation will be borne
by the Company. In addition to the use of the mails, proxies may be solicited by
directors, officers and employees of the Company, by personal interview,
telephone and telegraph. Arrangements will be made with brokerage houses and
other custodians, nominees and fiduciaries for the forwarding of solicitation
material and annual reports to the beneficial owners of stock held of record by
such persons, and the Company will reimburse them for reasonable out-of-pocket
and clerical expenses incurred by them in connection therewith.
Financial and Other Information
All financial information is incorporated by reference to the
information contained in the Financial Statements included in the Company's
Annual Report on Form 10-KSB enclosed herewith.
Stockholder Proposals
Proposals of stockholders that are intended to be presented at the
Company's 1998 Annual Meeting of Stockholders must be received by the Company no
later than January 20, 1998, in order to be included in the proxy statement and
proxy relating to that Annual Meeting.
Discretionary Authority
The Annual Meeting is called for the specific purposes set forth in the
Notice of Annual Meeting as discussed above, and also for the purpose of
transacting such other business as may properly come before the Annual Meeting.
At the date of this Proxy Statement the only matters which management intends to
present, or is informed or expects that others will present for action at the
Annual Meeting, are those matters specifically referred to in such Notice. As to
any matters which may come before the Annual Meeting other than those specified
above, the proxy holder will be entitled to exercise discretionary authority.
BY ORDER OF THE BOARD OF DIRECTORS
Paul Spindler, Secretary
Dated: April 14, 1997
Irvine, California
16
<PAGE>
[PROXY]
BRISTOL TECHNOLOGY SYSTEMS, INC.
18201 Von Karman Avenue, Suite 305, Irvine CA 92612
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Richard H. Walker and Paul Spindler as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them, to represent and vote, as designated on the reverse, all shares of Common
Stock of BRISTOL TECHNOLOGY SYSTEMS, INC. (the "Company") held of record by the
undersigned on April 9, 1997, at the Annual Meeting of Stockholders to be held
on May 20, 1997 or any adjournment thereof.
(To Be Signed on Reverse Side.)
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
BRISTOL TECHNOLOGY SYSTEMS, INC.
May 20, 1997
<TABLE>
<CAPTION>
A |X| Please mark your
votes as in this
example.
WITHHOLD
FOR AUTHORITY
<S> <C> <C> <C> <C> <C> <C>
1. ELECTION NOMINEES: Richard H. Walker
OF Paul Spindler
DIRECTORS [ ] [ ] Lawrence Cohen
Maurice R. Johnson
Dr. Jack Borsting
Dr. Thomas Lutri
FOR, except vote withheld from the following nominees
_____________________________________________________
FOR AGAINST ABSTAIN
Proposal 2: To ratify the appointment of Ernst & Young LLP as auditors of
the Company's financial statementsfor the fiscal year ending December 31, 1997. [ ] [ ] [ ]
Proposal 3: To approve an increase in the number of shares which may be granted
under the Company's 1996 Equity Participation Plan from 450,000 to 2,450,000. [ ] [ ] [ ]
Proposal 4: To approve the Company's 1997 Employee Stock Purchase Plan. [ ] [ ] [ ]
SIGNATURE ______________________ DATE ___________1997 SIGNATURE __________________________ DATE ___________1997
(IF HELD JOINTLY)
NOTE: Please sign exactly as name appears on stock certificate. When shares
are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee, or guardian, please give full title
as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partner, please sign in
Partnership name by authorized person.
</TABLE>
EXHIBIT A
AMENDMENT TO THE 1996 EQUITY PARTICIPATION PLAN
OF
BRISTOL TECHNOLOGY SYSTEMS, INC.
This Amendment to The 1996 Equity Participation Plan of Bristol Technology
Systems, Inc. (the "Corporation") is effective as of April 7, 1997 for the
benefit of the Corporation's eligible employees, consultants and directors.
W I T N E S S E T H:
WHEREAS, the Corporation has provided certain employees, consultants and
directors the opportunity to participate in the Corporation's 1996 Equity
Participation Plan (the "Plan");
WHEREAS, the Board of Directors of the Corporation believe it is in the
best interest of the Corporation to amend the Plan by the amendment provided
below;
WHEREAS, the remaining terms and conditions of the Plan shall remain in
full force and effect; and
NOW, THEREFORE, in consideration of the mutual promises made herein and in
consideration of the benefit to be received from the mutual observance of the
covenants made herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged the parties agree as
follows:
Article II, Section 2.1(a) shall be amended in its entirety as follows:
2.1 Shares Subject to Plan.
(a) The shares of stock subject to the Options, awards of Restricted Stock,
Performance Awards, Dividend Equivalents, awards of Deferred Stock, Stock
Payments or Stock Appreciation Rights shall be Common Stock, initially
shares of the Company's Common Stock, par value $.001 per share. The
aggregate number of such shares which may be issued upon exercise of such
options or rights or upon any such awards under the Plan shall not exceed
Two Million Four Hundred Fifty Thousand (2,450,000). The shares of Common
Stock issuable upon exercise of such options or rights or upon any such
awards may be either previously authorized but unissued shares or treasury
shares.
IN WITNESS WHEREOF, the Board of Directors of the Corporation has
adopted this Amendment as of the day and year first above-written.
BRISTOL TECHNOLOGY SYSTEMS,INC.
By: /s/Paul Spindler
------------------------
Paul Spindler, Secretary
BRISTOL TECHNOLOGY SYSTEMS, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
I. PURPOSE
A. The Bristol Technology Systems, Inc. 1997 Employee Stock Purchase Plan
(the "Plan") is intended to provide Eligible Employees of the Corporation and
its Corporate Affiliates who become Participating Corporations with the
opportunity to acquire a proprietary interest in the Corporation through
participation in a payroll-deduction based employee stock purchase plan designed
to qualify under Section 423 of the Code.
B. The Plan shall become effective upon its adoption by the Board of
Directors of the Corporation.
II. CERTAIN DEFINITIONS
For purposes of administration of the Plan, the following terms shall have
the meanings indicated:
"Base Salary" means the regular base salary paid to a Participant by one or
more Participating Corporations during such individualis period of participation
in the Plan including any pre-tax contributions made by the Participant to any
Code Section 401(k) salary deferral plan or any Code Section 125 cafeteria
benefit program now or hereafter established by the Corporation or any Corporate
Affiliate. The following items of compensation shall not be included in Base
Salary: (i) all over-time payments, bonuses, commissions (other than those
commissions functioning as base salary equivalents), profit-sharing
distributions and other incentive-type payments; and (ii) any and all
contributions made on the Participantis behalf by the Corporation or one or more
Corporate Affiliates under any employee benefit or welfare plan now or hereafter
established.
"Board" means the Board of Directors of the Corporation.
"Code" means the Internal Revenue Code of 1986, as amended from
time-to-time.
"Common Stock" means shares of the Corporationis common stock, par value
$0.001 per share.
"Corporate Affiliate" means any parent or subsidiary corporation of the
Corporation (as determined in accordance with Code Section 424), including any
parent or subsidiary corporation which becomes such after the Effective Time.
"Corporation" means Bristol Technology Systems, Inc., a Delaware
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of the Corporation which shall by appropriate action
adopt the Plan.
"Effective Time" means [March 1, 1997].
"Eligible Employee" means any person who is customarily engaged, on a
regularly-scheduled basis of more than twenty (20) hours per week for more than
five (5) months per calendar year and who has been employed for at least 90
days, in the rendition of personal services to the Corporation or any other
Participating Corporation as an employee for earnings considered wages under
Section 3401(a) of the Code.
"Entry Date" means the date an Eligible Employee first joins an offering
period in effect under the Plan. The earliest Entry Date under the Plan shall be
the Effective Time.
"Fair Market Value" means the closing selling price per share of the Common
Stock on the relevant date, as officially quoted on the principal securities
exchange on which the Common Stock is at the time traded or, if not traded on
any securities exchange, the closing selling price per share of the Common Stock
on such date, as reported on the NASDAQ National Market. If there are no sales
of the Common Stock on such date, then the closing selling price per share on
the next preceding day for which such closing selling price is quoted shall be
determinative of Fair Market Value.
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Participant" means any Eligible Employee of a Participating Corporation
who is actively participating in the Plan.
"Participating Corporation" means the Corporation and such Corporate
Affiliate or Affiliates as may be authorized from time-to-time by the Board to
extend the benefits of the Plan to their Eligible Employees. The Corporation,
Cash Registers, Inc., a Kentucky corporation, and Automated Retail Systems,
Inc., a Delaware corporation, are the only Participating Corporations in the
Plan as of the Effective Time.
"Plan Administrator" shall have the meaning given such term in
Article III.
"Semi-Annual Entry Date" means the first business day of March and
September of each calendar year within which an offering period is in effect
under the Plan. The earliest Semi-Annual Entry Date under the Plan shall be the
Effective Time.
"Semi Annual Period of Participation" means each semiannual period for
which the Participant actually participates in an offering period in effect
under the Plan. There shall be a maximum of four (4) semi-annual periods of
participation within each offering period. The first such semi-annual period
shall extend from the Effective Time through the last business day in August
1997. Subsequent semi-annual periods shall be measured from the first business
day of September to the last business day of February each calendar year and
from the first business day of March to the last business day of August in the
succeeding calendar year.
"Semi-Annual Purchase Date" means the last business day of February and
August of each calendar year on which shares of Common Stock are automatically
purchased for Participants under the Plan. The initial Semi-Annual Purchase Date
shall be August 31, 1997.
III. ADMINISTRATION
The Plan Administrator shall have sole and exclusive authority to
administer the Plan and shall consist of a committee (the "Plan Administrator")
of two (2) or more non-employee Board members appointed by the Board. The Plan
Administrator shall have full authority to interpret and construe any provisions
of the Plan and to adopt such rules and
2
<PAGE>
regulations for administering the Plan as it may deem necessary or appropriate
as long as such rules are not inconsistent with this Plan or the requirements of
Code Section 423. Decisions of the Plan Administrator shall be final and binding
on all parties who have an interest in the Plan.
IV. OFFERING PERIODS
A. Shares of Common Stock shall be offered for purchase under the Plan
through a series of successive offering periods until such time as (i) the
maximum number of shares of Common Stock available for issuance under the Plan
shall have been purchased; or (ii) the Plan shall have been sooner terminated in
accordance with Subsection I of Article VII, Subsection A of Article IX, or
Subsection B of Article X.
B. Each offering period shall have a maximum duration of twenty-four
months; provided, however, that the Plan administrator may designate any
duration of an offering period prior to the start date of the offering period
and in the absence of any express determination otherwise, each offering period
shall have a duration of six months and be the same as a single Semi-Annual
Period of Participation. The initial offering period shall run from the
Effective Time to the last business day in August 1997. The next offering period
shall commence on the first business day in September 1997, and subsequent
offering periods shall commence as designated by the Plan Administrator.
C. The Participant shall be granted a separate purchase right for each
offering period in which he or she participates. The purchase right shall be
granted on the Entry Date on which such Participant first joins the offering
period in effect under the Plan and shall be automatically exercised on the last
business day of February and August occurring within the offering period.
D. No purchase rights granted under the Plan shall be exercised, and no
shares of Common Stock shall be issued thereunder, until such time as (i) the
Plan shall have been approved by the stockholders of the Corporation and (ii)
the Corporation shall have complied with all applicable requirements of the 1933
Act (including the registration of the shares of Common Stock issueable under
the Plan on a Form S-8 registration statement filed with the Securities and
Exchange Commission), all applicable listing requirements of any securities
exchange on which the Common Stock is listed for trading and all other
applicable requirements established by law or regulation.
E. Except as otherwise provided in this Plan, the Participantis acquisition
of Common Stock under the Plan on any Semi-Annual Purchase Date shall neither
limit nor require the Participantis acquisition of Common Stock on any
subsequent Semi-Annual Purchase Date.
V. ELIGIBILITY AND PARTICIPATION
A. Each Eligible Employee of a Participating Corporation shall be eligible
to participate in the Plan in accordance with the following provisions:
1. An individual who is an Eligible Employee on the start date of any
offering period under the Plan shall be eligible to commence participation
in that offering period on such start date. That start date shall become
such individualis Entry Date for the offering period, and on that date such
individual shall be granted his/her purchase right for the offering period.
Should any Eligible Employee not enter the offering period on the start
date, then he/she may not subsequently join that particular offering period
on any later date.
3
<PAGE>
2. If an offering period has a duration of more than six months, the
provisions of this Section V.A.2 shall apply. An individual who first
becomes an Eligible Employee after the start date of any offering period
under the Plan may enter that offering period on the first Semi-Annual
Entry Date on which he/she is an Eligible Employee. Such Semi-Annual Entry
date shall become such individualis Entry Date for the offering period, and
on that date such individual shall be granted his/her purchase right for
the offering period. Should such an Eligible Employee not enter the
offering period on the first Semi-Annual Entry Date on which he/she is
eligible to join the offering period, then he/she may not subsequently join
that particular offering period on any later date.
B. To participate in the Plan for a particular offering period, the
Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator (including a payroll deduction authorization) and file such forms
with the Plan Administrator (or its designate) on or before his/her scheduled
Entry Date.
C. The payroll deduction authorized by the Participant for purposes of
acquiring shares of Common Stock under the Plan may be any multiple of one
percent (1%) of the Base Salary paid to the Participant during each Semi-Annual
Period of Participation, up to a maximum of ten percent (10%). The deduction
rate so authorized shall continue in effect for the remainder of the offering
period, except to the extent such rate is changed in accordance with the
following guidelines:
1. The Participant may, at any time during a Semi-Annual Period of
Participation, reduce his/her rate of payroll deduction to become effective
as soon as possible after filing of the requisite reduction form with the
Plan Administrator; and
2. The Participant may, prior to the commencement of any new
Semi-Annual Period of Participation within the offering period, increase
the rate of his/her payroll deduction by filing the appropriate form with
the Plan Administrator. The new rate (which may not exceed the ten percent
(10%) maximum) shall become effective as of the first day of the first
Semi-Annual Period of Participation following the filing of such form.
D. Payroll deductions will automatically cease upon the termination of the
Participantis purchase right in accordance with the applicable provisions of
Section VII below.
VI. STOCK SUBJECT TO PLAN
A. The common stock purchasable under the Plan shall, solely in the
discretion of the Plan Administrator, be made available for either authorized
but unissued shares of Common Stock or from shares of Common Stock reacquired by
the Corporation, including shares of Common Stock purchased on the open market.
The total number of shares which may be issued under the Plan shall not exceed
[200,000] shares (subject to adjustment under Section VI.B below).
B. In the event any change is made to the Corporationis outstanding Common
Stock by reason of any stock dividend, stock split, exchange or combination of
shares, recapitalization or any other change affecting the Common Stock as a
class without the Corporationis receipt of consideration, appropriate
adjustments shall be made by the Plan Administrator to (i) the class and maximum
number of securities issuable over the term of the Plan; (ii) the class and
maximum number of securities purchasable per Participant on any one Semi-Annual
Purchase Date; and (iii) the class and number of securities and the price per
share in effect under each purchase right at the time outstanding under the
Plan. Such adjustments shall be designed to preclude the dilution or enlargement
of rights and benefits under the Plan.
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VII. PURCHASE RIGHTS
An Eligible Employee who participates in the Plan for a particular offering
period shall have the right to purchase shares of Common Stock, upon the terms
and conditions set forth below and shall execute a purchase agreement embodying
such terms and conditions and such other provisions (not inconsistent with the
Plan) as the Plan Administrator may deem advisable.
A. Purchase Price. Common Stock shall be purchasable on each Semi-Annual
Purchase Date within the offering period at a purchase price equal to
[eighty-five percent (85%)] of the lower of (i) the Fair Market Value per share
of Common Stock on the Participantis Entry Date into that offering period; or
(ii) the Fair Market Value per share on that Semi-Annual Purchase Date. However,
for each Participant whose Entry Date is other than the start date of the
offering period, the clause (i) amount shall in no event be less than the Fair
Market Value of the Common Stock on the start date of that offering period.
B. Number of Purchasable Shares. The number of shares purchasable per
Participant on each Semi-Annual Purchase Date shall be the number of whole
shares obtained by dividing the amount collected from the Participant through
payroll deductions during the Semi-Annual Period of Participation ending with
that Semi-Annual Purchase Date (together with any carry over deductions from the
preceding Semi-Annual Period of Participation) by the purchase price in effect
for the Semi-Annual Purchase Date; provided, however, that the maximum number of
shares of Common Stock purchasable per Participant on any Semi-Annual Purchase
Date shall not exceed [1,000 shares], subject to periodic adjustment under
Section VI.B, above.
Under no circumstances shall purchase rights be granted under the Plan to
any Eligible Employee if such individual would, immediately after the grant, own
(within the meaning of Code Section 424(d)) or hold outstanding options or other
rights to purchase, stock possessing five percent (5%) or more of the total
combined voting power of value of all classes of stock of the Corporation or any
of its Corporate Affiliates.
C. Payment. Payment for the Common Stock purchased under the Plan shall be
effected by means of the Participantis authorized payroll deductions. Such
deductions shall begin on the first pay day following the Participantis Entry
Date into the offering period and shall (unless sooner terminated by the
Participant) continue through the pay date ending with or immediately prior to
the last day of the offering period. The amounts so collected shall be credited
to the Participantis book account under the Plan, but no interest shall be paid
on the balance from time-to-time outstanding in such account. The amounts
collected from the Participant shall not be held in any separate account or
trust fund and may be commingled with the general assets of the Corporation and
used for general corporate purposes.
D. Termination of Purchase Right. The following provisions shall govern the
term of outstanding purchase rights:
1. A Participant may, at any time prior to the next Semi-Annual
Purchase Date, terminate his/her outstanding purchase right under the Plan
by filing the prescribed notification form with the Plan Administrator (or
its designate), and no further payroll deductions shall be collected from
the Participant with respect to the terminated purchase right. Any payroll
deductions collected for the Semi-Annual Period of Participation in which
such termination occurs shall, at the Participantis election, be
immediately refunded or held for the purchase of shares on the Semi-Annual
Purchase Date immediately following such termination. If no such election
is made at the time such purchase right is terminated, then the payroll
deductions collected with respect to the terminated right shall be promptly
refunded;
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2. The termination of such purchase right shall be irrevocable, and
the Participant may not subsequently rejoin the offering period for which
the terminated purchase right was granted. In order to resume participation
in any subsequent offering period, which individual must re-enroll in the
Plan (by making a timely filing of a new stock purchase agreement and
enrollment form) on or before the date he or she is first eligible to join
the new offering period; and
3. Should the Participant cease to remain an Eligible Employee for any
reason including death, disability or change in status while his/her
purchase right remains outstanding, then that purchase right shall
immediately terminate and all of the Participantis payroll deductions for
the Semi-Annual period of Participation in which such cessation of Eligible
Employee status occurs shall be promptly refunded.
E. Stock Purchase. Shares of Common Stock shall automatically be purchased
on behalf of each Participant (other than Participants whose payroll deductions
have previously been refunded in accordance with the Termination of Purchase
Right provisions above) on each Semi Annual Purchase Date. The purchase shall be
effected by applying each Participantis payroll deductions for the Semi-Annual
Period of Participation ending on such Semi-Annual Purchase Date together with
any carryover deductions from the preceding Semi-Annual Period of Participation)
to the purchase of whole shares of Common Stock (subject to the limitation on
the maximum number of purchasable shares imposed under subsection B of this
Article VII) at the purchase price in effect for that Semi-Annual Purchase Date.
Any payroll deductions for each Participant not applied to such purchase because
they are not sufficient to purchase a whole share shall be held for the purchase
of Common Stock on the next Semi-Annual Purchase Date if such Participant has
enrolled for participation in the next succeeding Semi-Annual Period of
Participation that includes such Semi-Annual Purchase Date. Any payroll
deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable by the Participant on the
Semi-Annual Purchase Date shall be promptly refunded to the Participant.
F. Proration of Purchase Rights. Should the total number of shares of
Common Stock which are to be purchased pursuant to outstanding purchase rights
on any particular Semi-Annual Purchase Date exceed the number of shares then
available for issuance under the Plan, the Plan Administrator shall make a
pro-rata allocation of the available shares on a uniform and nondiscriminatory
basis, and the payroll deductions of each Participant to the extent in excess of
the aggregate purchase price payable for the Common Stock pro-rated to such
individual, shall be promptly refunded to such Participant.
G. Rights as Stockholder. A Participant shall have no stockholder rights
with respect to the shares subject to his/her outstanding purchase right until
the shares are actually purchased on the Participantis behalf in accordance with
applicable provisions of the Plan. No adjustments shall be made for dividends,
distributions, or other rights for which the record date is prior to the date of
such purchase.
A Participant shall be entitled to receive, as soon as practicable after
each Semi-Annual Purchase Date, a stock certificate for the number of shares
purchased on the Participantis behalf. Such certificate may, upon the
Participantis request, be issued in the names of the Participant and his/her
spouse as community property or as joint tenants with right of survivorship.
Alternatively, the Participant may request the issuance of such certificate in
istreet namei for immediate deposit in a Corporation-designated brokerage
account.
H. Assignability. No purchase right granted under the Plan shall be
assignable or transferable by the Participant other than by will or by the laws
of descent and
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distribution following the Participantis death, and during the Participantis
lifetime the purchase right shall be exercisable only by the Participant.
I. Change in Ownership. If any of the following transactions (a iChange in
Ownershipi) occur during the offering period:
1. A merger or consolidation in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which
is to change the state in which the Corporation is incorporated;
2. The sale, transfer, or other disposition of all or substantially
all of the assets of the Corporation;
3. A complete liquidation or dissolution of the Corporation; or
4. Any reverse merger in which the Corporation is the surviving entity
but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporationis outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to the merger;
then all outstanding purchase rights under the Plan shall
automatically be exercised immediately prior to the effective date of such
Change in Ownership by applying the payroll deductions of each Participant
for the Semi-Annual Period of Participation in which such Change in
Ownership occurs to the purchase of whole shares of Common Stock at
eighty-five percent (85%) of the lower of (i) the Fair Market Value of the
common Stock on the Participantis Entry Date into the offering period in
which such Change in Ownership occurs; or (ii) the Fair Market Value of the
Common Stock immediately prior to the effective date of such Change in
Ownership. However, the applicable share limitations of Articles VII and
VIII shall continue to apply to any such purchase, and the clause (i)
amount above shall not, for any Participant whose Entry Date for the
offering prior is other than the start date of that offering period, be
less than the Fair Market Value of the Common Stock on such start date.
The Corporation shall use its best efforts to provide at least ten (10)
days prior written notice of the occurrence of any Change in Ownership, and
Participants shall, following the receipt of such notice, have the right to
terminate their outstanding purchase rights in accordance with the applicable
provisions of this Article VII.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire Common
Stock pursuant to any purchase right outstanding under this Plan if and to the
extent such accrual, when aggregated with (i) rights to purchase Common Stock
accrued under any other purchase right outstanding under this Plan; and (ii)
similar rights accrued under other employee stock purchase plans within the
meaning of Code Section 423 of the Corporation or its Corporate Affiliates,
would otherwise permit such Participant to purchase more than $25,000 worth of
stock of the Corporation or any Corporate Affiliate (determined on the basis of
the Fair Market Value of such stock on the date or dates such rights are
granted) for each calendar year such rights are at any time outstanding.
B. For purposes of applying such accrual limitations, the right to acquire
Common Stock pursuant to each purchase right outstanding under the Plan shall
accrue as follows:
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1. No right to acquire Common Stock under any outstanding purchase
right shall accrue to the extent the Participant has already accrued in the
same calendar year the right to acquire Common Stock under one or more
other purchase rights at a rate equal to $25,000 worth of Common Stock
(determined on the basis of the Fair Market Value on the date or dates of
grant) for each calendar year during which one or more of those purchase
rights were at any time outstanding; and
2. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular Semi-Annual Period of
Participation, then the payroll deductions which the Participant made
during that Semi-Annual Period of Participation in excess of such accrual
limitations shall be promptly refunded.
C. In the event there is any conflict between the provisions of this
Article VIII and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article VIII shall be controlling.
IX. AMENDMENT AND TERMINATION
A. The Board may alter, amend, suspend or discontinue the Plan following
the close of any Semi-Annual Period of Participation; provided, however, that
the Board may not, without the approval of the Corporationis stockholders:
1. Increase the number of shares issuable under the Plan or the
maximum number of shares purchasable per Participant on any one Semi-Annual
Purchase Date, except that the Plan Administrator shall have the authority,
exercisable without such stockholder approval, to effect adjustments to the
extent necessary to reflect changes in the Corporationis capital structure
pursuant to Subsection B of Article VI;
2. Alter the purchase price formula so as to reduce the purchase price
payable for the shares purchasable under the Plan; or
3. Materially increase the benefits accruing to Participants under the
Plan or materially modify the requirements for eligibility to participate
in the Plan.
B. The Corporation shall have the right, exercisable in the sole discretion
of the Plan Administrator, to terminate all outstanding purchase rights under
the Plan immediately following the close of any Semi-Annual Period of
Participation. Should the Corporation elect to exercise such right, the Plan
shall terminate in its entirety. No further purchase rights shall thereafter be
granted or exercised, and no further payroll deductions shall thereafter be
collected, under the Plan.
X. GENERAL PROVISIONS
A. The Plan shall become effective upon its adoption by the Board;
provided, however, that no purchase rights granted under the Plan shall be
exercised and no shares of Common Stock shall be issued hereunder, until (i) the
Plan is approved by the stockholders of the Corporation and (ii) the Corporation
complies with all applicable requirements of the 1933 Act, all applicable
listing requirements of any securities exchange on which the Common Stock is
listed for trading and all other applicable legal and regulatory requirements.
In the event such stockholder approval is not obtained, or such Corporation
compliance is not effected, within twelve (12) months after the date on which
the Plan is adopted by the Board, the Plan shall terminate and have no further
force or effect and all sums collected from Participants during the initial
offering period hereunder shall be refunded.
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<PAGE>
B. Unless terminated earlier pursuant to the provisions of the Plan, the
Plan shall terminate on [February 28, 2005], but such termination shall not
affect purchase rights then outstanding under the Plan.
C. All costs and expenses incurred in the administration of the Plan shall
be paid by the Corporation.
D. Neither the action of the Corporation in establishing the Plan, nor any
action taken under the Plan by the Board or the Plan Administrator, nor any
provision of the Plan itself shall be construed so as to grant any person the
right to remain in the employ of the Corporation or any of its Corporate
Affiliates for any period of specific duration, and such personis employment may
be terminated at any time, with or without cause.
E. This Plan is intended to qualify under Section 423 of the Code and shall
be interpreted in a manner consistent therewith.
