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
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
FLEETCLEAN SYSTEMS, INC.
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(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
FLEETCLEAN SYSTEMS, INC.
BOX 727, HIGHWAY 834 EAST .7 MILES
HARDIN, TEXAS 77561
PHONE (409) 298-9835 FACSIMILE (409) 298-2769
May 3, 2000
Dear Stockholder:
You are cordially invited to attend our 2000 Annual Meeting of
Stockholders of Fleetclean Systems, Inc. to be held on Wednesday, May 31, at
3:00 p.m. at Highway 834 East, .7 mile, Hardin, Texas 77561. We look forward to
this opportunity to update you on developments at Fleetclean Systems, Inc.
We hope you will attend the meeting in person. Whether you expect to be
present and regardless of the number of shares you own, please mark, sign and
mail the enclosed proxy in the envelope provided. Matters on which action will
be taken at the meeting are explained in detail in the notice and proxy
statement following this letter.
Sincerely,
Kenneth A. Phillips
President
<PAGE>
FLEETCLEAN SYSTEMS, INC.
BOX 727, HIGHWAY 834 EAST .7 MILES
HARDIN, TEXAS 77561
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 31, 2000
To the Stockholders of Fleetclean Systems, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of
Fleetclean Systems, Inc., will be held at Highway 834 East, .7 mile, Hardin,
Texas 77561, at 3:00 p.m. on Wednesday, May 31, 2000 for the following purposes:
1. ELECT THREE DIRECTORS. The Board has nominated for re-election
Kenneth A. Phillips, Jay G. Phillips, and Richard R. Royall as
directors until the next annual meeting.
2. RATIFY AND APPROVE THE BOARD'S APPOINTMENT OF MCMANUS & CO., P.C. AS
THE COMPANY'S INDEPENDENT AUDITORS FOR FISCAL YEAR 2000. McManus &
Co., P.C. served in this capacity for fiscal year 1999.
3. ADOPTION OF 2000 STOCK OPTION PLAN. The Board seeks approval of the
2000 Stock Option Plan.
4. ADOPTION OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION. The
Board seeks approval to amend and restate the company's articles of
incorporation.
5. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on April 12, 2000
will be entitled to notice of and to vote at the meeting.
Stockholders unable to attend the Annual Meeting in person are requested
to read the enclosed Proxy Statement and then complete and deposit the proxy
together with the power of attorney or other authority, if any, under which it
was signed, or a notarized certified copy, with the Company at Box 727, Highway
834 East .7 miles Hardin, Texas 77561, at least 48 hours (excluding Saturdays
and Sundays) before the time of the Annual Meeting or with the chairman of the
Annual Meeting prior to the commencement of the Annual Meeting.
Unregistered stockholders who received the proxy through an intermediary
must deliver the proxy in accordance with the instructions given by such
intermediary.
BY ORDER OF THE BOARD OF DIRECTORS
Kenneth A. Phillips, President
May 3, 2000
THE PROXY STATEMENT WHICH ACCOMPANIES THIS NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS CONTAINS MATERIAL INFORMATION CONCERNING THE MATTERS TO BE
CONSIDERED AT THE MEETING, AND SHOULD BE READ IN CONJUNCTION WITH THIS NOTICE.
<PAGE>
FLEETCLEAN SYSTEMS, INC.
BOX 727, HIGHWAY 834 EAST .7 MILES
HARDIN, TEXAS 77561
(PRINCIPAL EXECUTIVE OFFICE)
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PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
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INTRODUCTION
This Proxy Statement is being furnished to stockholders in connection with
the solicitation of proxies by and on behalf of the Board of Directors of
Fleetclean Systems, Inc. for use at the 2000 Annual Meeting of Stockholders
("Meeting") to be held at Highway 834 East, .7 mile, Hardin, Texas 77561, at
3:00 p.m. on Wednesday, May 31, 2000, for the purpose of considering and voting
upon the matters set forth in the accompanying Notice of Annual Meeting of
Stockholders. This Proxy Statement and the accompanying form of proxy are first
being mailed to stockholders on or about May 3, 2000.
The close of business on April 12, 2000, has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
Meeting. As of the record date, there were 12,140,014 shares of the Company's
common stock, par value $.001 per share ("Common Stock"), issued and
outstanding. Each share of common stock entitles the holder thereof to one vote
upon any proposal submitted for a vote at the Meeting, except for election of
directors, in which cumulative voting is permitted. The presence, in person or
by proxy, of a majority of the outstanding shares of Common Stock on the record
date is necessary to constitute a quorum at the Meeting. Abstentions and broker
non-votes will be counted towards a quorum. Abstentions will have the same
effect as a vote against a proposal.
Brokers who hold shares in street name for customers are required to vote
those shares in accordance with instructions received from the beneficial
owners. Broker non-votes will have no effect on any of the proposals.
All shares represented by properly executed proxies, unless such proxies
previously have been revoked, will be voted at the Meeting in accordance with
the directions on the proxies.
If no direction is indicated, the shares will be voted:
1. FOR election of all the nominated directors;
2. FOR ratification of McManus & Co., P.C. as the Company's auditors;
3. FOR ratification of the Company's 2000 Stock Option Plan;
4. FOR adoption of the Amended and Restated Articles of Incorporation;
and
4. TO transact such other business as may properly come before the
meeting.
The enclosed proxy, even though executed and returned, may be revoked at
any time prior to the voting of the proxy by any one of the following methods:
(a) execution and submission of a revised proxy,
(b) written notice to the Secretary of the Company, or
(c) voting in person at the Meeting.
<PAGE>
ANNUAL REPORT
A copy of the Company's 1999 Annual Report on Form 10-KSB is being mailed
with this Proxy Statement. The Annual Report does not form any part of the
material for solicitation of proxies.
The Company will provide, without charge, a copy of any exhibits to the
Company's Form 10-KSB, upon written request to Kenneth A. Phillips, at Box 727,
Highway 834 East .7 miles Hardin, Texas 77561.
PROPOSAL 1
ELECTION OF DIRECTORS
Pursuant to the Company's By-Laws, the members of the Board of Directors
serve for one-year terms. The number of directors constituting the whole Board
is currently three and the selected nominees are listed below. Each of the
nominees is currently a director of the Company. Unless authority to vote for
any nominee is withheld in the proxy, the persons named in the accompanying
proxy intend to vote FOR the election of the three nominees for director listed
below.
All nominees have indicated a willingness to serve as directors, but if
any of them should decline or be unable to act as a director, the persons named
in the proxy will vote for the election of such nominee or nominees as may be
recommended by the Board of Directors. Under Texas Corporation Law, each of the
nominees must receive a plurality of the votes of shares of Common Stock present
in person or by proxy at the meeting to be elected as a director. A plurality
means receiving the largest number of votes, regardless of whether that is a
majority. Abstentions will be counted as shares present at the meeting. The
Company anticipates that the holders of a majority of the outstanding common
stock will be present in person or by proxy at the Meeting. Cumulative voting is
permitted for the election of directors. Cumulative voting allows a shareholder
to cast all of his votes for company directors (determined by multiplying the
number of his shares by the number of director positions being filled) for just
one director.
The following biographical information is furnished with respect to each
of the nominees. The information includes the individual's present position with
the Company, period served as a director, and other business experience during
the past five years.
DIRECTORS NOMINATED FOR ELECTION
KENNETH A. PHILLIPS is the Company's founder and has served as a Director
and as President since the Company was founded in 1986.
JAY G. PHILLIPS has served as Vice-President, Customer Service since May
1998. Mr. Phillips began working for the Company part time while in high school
and became a full time customer service representative in January 1994, where he
was responsible for the Company's business in the eastern United States,
servicing customers from the Statesville, North Carolina warehouse. In June
1995, Mr. Phillips was elected as a Director of the Company. In April 1998, Mr.
Phillips assumed his current duties in Texas where he supervises four customer
service representatives across the eastern half of the country.
RICHARD R. ROYALL has served as a Director since June 1996. Mr. Royall
has been a partner in the accounting firm of Royall & Fleschler, certified
public accountants, for the past twelve years. Since April 1997, Mr. Royall
has served as Chief Financial Officer of Eagle Wireless International, Inc.
During the fiscal year ended December 31, 1999, the Company's Board of
Directors held one meeting. No incumbent director attended fewer than 75% of the
meetings. The Company has no audit, compensation, or nominating committees.
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own beneficially
more than ten percent of the common stock of the Company, to file reports of
ownership and changes of ownership with the Securities and Exchange Commission.
Based solely on the reports received by the Company and on written
representations from certain reporting persons, the Company believes that the
directors, executive officers, and greater than ten percent beneficial owners
have complied with all applicable filing requirements, except for Kenneth A.
Phillips who filed an amended Form 3 disclosing certain warrants.
THE BOARD OF DIRECTORS HAS NOMINATED THE ABOVE-REFERENCED DIRECTORS FOR
ELECTION BY THE STOCKHOLDERS AND RECOMMENDS A VOTE FOR SUCH ELECTION. THE
ELECTION OF THE DIRECTORS REQUIRES A PLURALITY OF THE VOTES OF THE SHARES OF
COMMON STOCK PRESENT IN PERSON OR REPRESENTED BY PROXY AT THE MEETING.
PROPOSAL 2
RATIFICATION AND APPROVAL OF MCMANUS & CO., P.C. AS THE COMPANY'S
INDEPENDENT AUDITORS
The Board of Directors has approved the engagement of McManus & Co.,
P.C. as independent auditors for the Company. The Board of Directors wishes
to obtain from the stockholders a ratification of the Board's action in
appointing McManus & Co., P.C. as independent auditors of the Company.
In the event the appointment of McManus & Co., P.C. as independent
auditors is not ratified by the stockholders, the adverse vote will be
considered as a direction to the Board of Directors to select other auditors
for the following year.
Representatives of McManus & Co., P.C. are not expected to be present
at the meeting. Representative of McManus & Co., P.C. will be given the
opportunity to make a written statement if they desire to do so. Such
representatives are also not expected to be available to respond to questions.
THE BOARD OF DIRECTORS HAS RECOMMENDED THE RATIFICATION OF MCMANUS &
CO., P.C. AS INDEPENDENT AUDITORS. SUCH RATIFICATION REQUIRES THE AFFIRMATIVE
VOTE OF THE MAJORITY OF OUTSTANDING SHARES OF COMMON STOCK PRESENT AT THE
MEETING OR REPRESENTED BY PROXY.
PROPOSAL 3
ADOPTION OF THE 2000 STOCK OPTION PLAN
The 2000 Stock Option Plan was adopted by the Board of Directors in March
2000, subject to shareholder approval. The Plan will allow stock option grants,
performance stock awards, restricted stock awards, and stock appreciation rights
("SAR") as determined by the Company's compensation committee. The Board has
reserved 5,000,000 shares of common stock for issuance pursuant to the Plan. The
purpose of the Plan is to foster and promote the financial success of the
Company and increase stockholder value by enabling eligible key employees and
others to participate in the long-term growth and financial success of the
company. A summary of the Plan is set forth below, and the full text of the Plan
is attached hereto as Exhibit "A."
ELIGIBILITY. The Plan is open to key employees (including officers and
directors) and consultants of the company and its affiliates ("Eligible
Persons").
TRANSFERABILITY. The grants are not transferable.
<PAGE>
CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The Plan will not effect the right
of the company to authorize adjustments, recapitalizations, reorganizations or
other changes in the company's capital structure. In the event of an adjustment,
recapitalization or reorganization the award shall be adjusted accordingly. In
the event of a merger, consolidation, or liquidation, the Eligible Person will
be eligible to receive a like number of shares of stock in the new entity he
would have been entitled to if immediately prior to the merger he had exercised
his option. The Board may waive any limitations imposed under the Plan so that
all options are immediately exercisable. All outstanding options may be
cancelled by the Board upon written notice to the Eligible Person and by
granting a period in which the options may be exercised.
OPTIONS AND SARS. The company may grant incentive or nonqualified stock
options.
OPTION PRICE. Incentive options shall be not less than the greater of (i) 100%
of fair market value on the date of grant, or (ii) the aggregate par value of
the shares of stock on the date of grant. The compensation committee, at its
option, may provide for a price greater than 100% of fair market value. The
price for 10% or more stockholders shall be not less than 110% of fair market
value.
DURATION. No Option or SAR may be exercisable after the period of 10 years.
In the case of 10% or more stockholder no incentive option may be exercisable
after the expiration of five years.
AMOUNT EXERCISABLE -INCENTIVE OPTIONS. No option may be exercisable within six
months from its date of grant unless a shorter time is designated by the Board.
In the event an Eligible Person exercises incentive options during the calendar
year whose aggregate fair market value exceeds $100,000, the exercise of options
over $100,000 will be considered non qualified stock options.
EXERCISE OF OPTIONS. Options may be exercised by written notice to the
compensation committee with:
o Cash, certified check, bank draft, or postal or express money order
payable to the order of the Company for an amount equal to the option
price of the shares;
o Stock at its fair market value on the date of exercise;
o An election to make a cashless exercise through a registered
broker-dealer (if approved in advance by the compensation committee).
o Any other form of payment which is acceptable to the compensation
committee, including with limitation, payment in the form of a promissory
note, and specifying the address to which the certificates for the shares
are to be mailed.
SARS. SARs may, at the discretion of the compensation committee, be included in
each option granted under the Plan to permit the Eligible Person to surrender
that option, or a portion of the part which is then exercisable, and receive in
exchange an amount equal to the excess of the fair market value, in cash, or
partly in cash and partly in shares of stock, as the compensation committee
determines. SARs may be exercised only when the fair market value of the stock
covered by the option surrendered exceeds the exercise price of the stock. In
the event of the surrender of an option, or a portion of it, to exercise the
SARs, the shares represented by the option or that part of it which is
surrendered, shall not be available for reissuance under the Plan. Each SAR
issued in tandem with an option (a) will expire no later than the expiration of
the underlying option, (b) may be for no more than 100% of the difference
between the exercise price of the underlying option and the fair market value of
a share of stock at the time the SAR is exercised, (c) is transferable only when
the underlying option is transferable, and under the same conditions, and (d)
may be exercised only when the underlying option is eligible to be exercised.
TERMINATION OF OPTIONS OR SARS. Unless expressly provided in the option or SAR
agreement, options or SARs shall terminate one day less than three months after
an employees severance of employee with the company other than death, disability
or retirement.
DEATH. Unless the option or SAR expires sooner, the option or SAR will expire
one year after the death of the Eligible Person.
<PAGE>
DISABILITY. Unless the option or SAR expires sooner, the option or SAR will
expire one day less than one year after the disability of the Eligible Person.
RETIREMENT. Unless it is expressly provided otherwise in the option agreement,
before the expiration of an incentive option, the employee shall be retired in
good standing from the employ of the company under the then established rules of
the company, the incentive option shall terminate on the earlier of the options
expiration date or one day less than one year after his retirement; provided, if
an incentive option is not exercised within specified time limits prescribed by
the Internal Revenue Code, it will become a nonqualified option by operation of
law. Unless it is expressly provided otherwise in the option agreement, if
before the expiration of a nonqualified option, the employee shall be retired in
good standing from the employ of the company under the then established rules of
the company, the nonqualified option shall terminate on the earlier of the
nonqualified option's expiration date or one day less than one year after his
retirement. In the event of retirement, the employee shall have the right prior
to the termination of the nonqualified option to the extent to which he was
entitled to exercise it immediately prior to his retirement, unless it is
expressly provided otherwise in the option agreement. Upon retirement, a SAR
shall continue to be exercisable for the remainder of the term of the SAR
agreement.
RELOAD OPTIONS. The Board or compensation committee shall have the authority
(but not an obligation) to include as part of any option agreement a provision
entitling the Eligible Person to further option (a "Reload Option") in the event
the Eligible Person exercises the option in accordance with the Plan and the
terms and conditions of the option agreement. Any such Reload Option (a) shall
be for a number of shares equal to the number of shares surrendered as part or
all of the exercise price of such option, (b) shall have an expiration date
which gave rise to such Reload Option, and (c) shall have an exercise price
which is equal to one hundred percent (100%) of the fair exercise of the
original option. Notwithstanding the foregoing, a Reload Option which is an
incentive option and which is granted to a 10% Stockholder, shall have an
exercise price which is equal to one hundred ten percent (110%) of the fair
market value of the stock subject to the Reload Option on the date of exercise
of the original option and shall have a term which is no longer than five (5)
years.
RESTRICTED STOCK AWARDS. The compensation committee may issue shares of stock to
an Eligible Person subject to the terms of a restricted stock agreement. The
restricted stock may be issued for no payment by the Eligible Person or for a
payment below the fair market value on the date of grant. Restricted stock shall
be subject to restrictions as to sale, transfer, alienation, pledge or other
encumbrance and generally will be subject to vesting over a period of time
specified in the restricted stock agreement. The compensation committee shall
determine the period of vesting, the number of shares, the price, if any, of
stock included in a restricted stock award, and the other terms and provisions
which are included in the restricted stock agreement.
AWARD OF PERFORMANCE STOCK The compensation committee may award shares of stock,
without any payment for such shares, to designated Eligible Persons if specified
performance goals established by the Compensation Committee are Satisfied. The
terms and provisions herein relating to these performance based awards are
intended to satisfy Section 162(m) of the Code and regulations issued
thereunder. The designation of an employee eligible for a specific performance
stock award shall be made by the compensation committee in writing prior to the
beginning of the period for which the performance is measured (or within such
period as permitted by IRS regulations).
AMENDMENT OR TERMINATION OF THE PLAN. The Board may amend, terminate or suspend
the Plan at any time, in its sole and absolute discretion; provided, however,
that to the extent required to qualify the Plan under Rule 16b-3 promulgated
under Section 16 of the Exchange Act, no amendment that would (a) materially
increase the number of shares of stock that may be issued under the Plan, (b)
materially modify the requirements as to eligibility for the participation in
the Plan, or (c) otherwise materially increase the benefits accruing to
participants under the Plan, shall be made without the approval of the company's
Stockholders; provided further, however, that to the extent required to maintain
the status of any incentive option under the Code, no amendment that would (a)
change the aggregate number of shares of stock which may be used under incentive
options, or (c) decreases the option price for incentive options below the fair
market value of the stock at the time it is granted, shall be made without the
approval of the Stockholders. Subject to the preceding sentence, the Board shall
have the power to make any changes in the Plan and in the regulations and
administrative provisions under it or in any
<PAGE>
outstanding incentive option as in the opinion of counsel for the company may be
necessary or appropriate from time to time to enable any incentive option
granted under this Plan to continue to qualify as an incentive stock option or
such other stock option as may be defined under the Code so as to receive
preferential federal income tax treatment.
FEDERAL INCOME TAX CONSEQUENCES. Under present federal income tax
laws, awards under the Plan will have the following consequences:
o The grant of an award will not, by itself, result in the recognition of
taxable income to the participant nor entitle the Company to a deduction
at the time of such grant.
o The exercise of a stock option which is an incentive option within the
meaning of Section 422 of the Code will generally not, by itself,
result in the recognition of taxable income to the participant
nor entitle the Company to a deduction at the time of such
exercise. However, a participant must generally include in
alternative minimum taxable income the amount by which the fair
market value on the date of exercise exceeds the exercise price.
The basis of the stock for alternative minimum tax purposes is
adjusted to reflect the gain realized so that the participant
will receive a corresponding deduction for alternative minimum
tax purposes in the year the stock is sold. No alternative
minimum tax consequences result for the Company.
o If the shares acquired upon exercise of an incentive option are not
held for at least one year after transfer of such shares to the
participant or two years after the grant of the incentive option,
whichever is later (disqualifying disposition), the participant
will recognize ordinary income upon the disposition of the shares
in an amount equal to excess of fair market value on the date of
exercise over the exercise price. However, the amount reportable
as compensation is limited to the actual gain realized on the
sale in cases where the sales prices is less than the fair market
value of the stock on the date of exercise. In addition, where a
loss is realized on the sale, no income is reported as
compensation. Where the sales price is in excess of the exercise
price, the participant will also recognize capital gain or loss
in an amount equal to the difference between the sales price and
the basis in the stock increased by any income reported as
compensation. In cases where the exercise price is in excess of
the sales price, the participant will recognize capital loss in
an amount equal to the difference between the sales price and the
exercise price. Capital gains or losses will be characterized as
short-term if the shares were not held for more than one year
after the exercise date of the incentive option and as long-term
if the shares were held for more than one year after the exercise
date of the incentive option.
o Where a disqualifying disposition occurs and the participant recognizes
income, the Company will generally be entitled to a corresponding
deduction. The Company will not be entitled to a corresponding deduction
for any capital gain or loss recognized by the participant.
o If the shares acquired upon exercise of an incentive option are held by
the participant for one year after the incentive option is
exercised and two years after the incentive option was granted,
the participant will recognize a capital gain or loss upon
disposition of the shares in an amount equal to the difference
between the sale price and the exercise price; such capital gain
or loss will be characterized as short-term if the shares were
not held for more than one year after the exercise of the
incentive option and long-term if the shares were held for more
than one year after the exercise of the incentive option. The
Company will not be entitled to a corresponding deduction for
such capital gain or loss.
o The exercise of a non-qualified stock option will result in the
recognition of ordinary income by the participant on the date of exercise
in an amount equal to the difference between the exercise price and the
fair market value on the date of exercise of the option shares acquired
pursuant to the stock option.
<PAGE>
o The Company will be allowed a deduction at the time, and in the amount of
any ordinary income recognized by the participant upon the exercise of a
non-qualified stock option, provided the Company meets its federal
withholding tax obligations.
o Upon sale of the shares acquired upon exercise of a non-qualified stock
option, any appreciation or depreciation in the value of such
shares from the time of exercise will result in the recognition
of a capital gain or loss by the participant. Such capital gain
or loss will be short-term if the shares were not held by the
participant for more than one year after the exercise of the
non-qualified stock option and long-term if the participant held
the shares for more than one year following exercise of the
non-qualified stock option.
AWARDS UNDER THE STOCK OPTION PLAN. At the present time, the Company has not
determined if any options under the 2000 Stock Option Plan will be issued to the
chief executive officer, any executives, any directors, or any employees. To
date, no options have been issued under the Plan.
THE BOARD OF DIRECTORS HAS RECOMMENDED THE ADOPTION OF THE 2000 STOCK OPTION
PLAN. SUCH RATIFICATION REQUIRES THE AFFIRMATIVE VOTE OF THE MAJORITY OF
OUTSTANDING SHARES OF COMMON STOCK PRESENT AT THE MEETING OR REPRESENTED BY
PROXY.
PROPOSAL 4
ADOPTION OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION
In March 2000, the Company's Board of Directors approved amending
and restating the Company's Articles of Incorporation, subject to shareholder
approval. The amendments to the Articles of Incorporation will: (a) allow the
Board of Directors to issue preferred stock, (b) permit the Company to take
actions without a meeting and sets forth the persons that may call a special
meeting of the shareholders, (c) permits the same level of indemnification as is
permitted in the Company's Bylaws, and (d) prevents cumulative voting. A summary
of the amended provisions of the Articles of Incorporation are summarized below,
and the full text of the Amended and Restated Articles of Incorporation are set
forth in Exhibit "B."
PREFERRED STOCK. The Company is requesting the shareholders permit the Board of
Directors to issue 5,000,000 million shares of preferred stock, $.01 par value.
The Company wants to permit these shares to be issued solely by a resolution of
its board of directors. The amendment will permit the Company's board of
directors to establish the rights and preferences of the preferred stock by
resolution. The Company believes it is in the best interests of the Company to
grant the board of directors this discretion, as it will give the board of
directors more flexibility in structuring transactions. It is not possible to
state the actual effect of the issuance of any shares of preferred stock on the
rights of holders of the Common Stock until the Board of Directors determines
the specific rights of the holders of the preferred stock. However, these
effects might include: (a) restricting dividends on the Common Stock; (b)
diluting the voting power of the Common Stock; (c) impairing the liquidation
rights of the Common Stock; and (d) delaying or preventing a change in control
of the Company without further action by the stockholders. The Company has no
present plans to issue any shares of preferred stock.
ACTION WITHOUT A MEETING; SPECIAL MEETINGS. The Company is requesting your vote
to amend its Articles of Incorporation to allow it to take any action that would
normally require a stockholder's meeting without a meeting, without notice, and
without a vote, if it already has consents in writing, setting forth the action
so taken, that is signed by the holder or holders of shares having not less than
the minimum number of votes that would be necessary to take the action at a
meeting at which the holders of all shares entitled to vote on the action were
present and voted. The Company believes it is in the best interests of the
Company to make this amendment, as it will allow the Company to complete certain
votes more rapidly, if required. In addition, the Company is limiting the
calling of special meetings to its Board of Directors or a committee thereof,
the Chairman of the Board, the President, or by shareholders holding not less
than 50% of the votes entitled to the vote at the special meeting. The
<PAGE>
limiting of special meetings to holders of not less than 50% of the votes
entitled to vote at a special meeting will prevent certain minority groups from
calling a special meeting.
INDEMNIFICATION. The Company is requesting your vote to amend its Articles of
Incorporation to set forth its indemnification provisions. The provision will
permit the Company to indemnify its directors and officers to the fullest extent
permitted by Texas law. The Company believes this action is necessary to attract
qualified directors and to retain its current directors. This provision will
limit the remedies available to the stockholder who is dissatisfied with a
decision of the Board of Directors protected by the provision, and the
stockholder's only remedy may be to bring a suit to prevent the action of the
Board. This remedy may not be effective in many situations because stockholders
are often unaware of a transaction or an event before the Board's action. In
these cases, the stockholders and the Company could be injured by a Board's
decision and have no effective remedy.
CUMULATIVE VOTING. The Company is requesting your vote to amend its Articles of
Incorporation to prevent cumulative voting. Cumulative Voting refers to a
particular method of voting shares of stock that can be provided for in a
company's governing documents. It allows a shareholder to cast all of his votes
for company directors (determined by multiplying the number of his shares by the
number of director positions being filled) for just one director. Cumulative
voting can be used to insure a minority shareholder that he will have a seat on
a Company's board of directors. The Company believes cumulative voting will
encourage special interest stockholders to pool their collective voting power to
attempt to elect single issue directors.
THE BOARD OF DIRECTORS HAS RECOMMENDED THE ADOPTION OF THE AMENDED AND RESTATED
ARTICLES OF INCORPORATION. SUCH RATIFICATION REQUIRES THE AFFIRMATIVE VOTE OF
TWO-THIRDS OF OUTSTANDING SHARES OF COMMON STOCK PRESENT AT THE MEETING OR
REPRESENTED BY PROXY.
<PAGE>
EXECUTIVE OFFICERS
The Company's directors and executive officers are:
NAME AGE POSITION
- ---- --- --------
Kenneth A. Phillips 55 Director and President
Jay G. Phillips 26 Director and Vice - President, Customer Service
Richard R. Royall 54 Director
Kathryn M. Phillips 52 Secretary and Treasurer
Jason Lay 34 Vice-President, Technical Services
Please refer to page 2 of this proxy statement for biographies on Messrs.
Kenneth A. Phillips, Jay G. Phillips, and Royall.
KATHRYN M. PHILLIPS has served as the Company's Secretary and Treasurer
since the founding of the company in 1986. Ms. Phillips is a graduate of Texas
Tech University and has for the past 25 years held positions in general business
accounting and controllership. From February 1986 until January 1997, Ms.
Phillips was plant controller for Akzo Nobel Chemical Co., and worked part-time
for the Company. Ms. Phillips has been a full-time employee of the Company since
January 1997.
JASON LAY is Vice-President, Technical Services, a position held since May
1998. Mr. Lay is responsible for design and implementation of all equipment
systems. Mr. Lay joined the Company in June 1994 as a technician.
Kathryn M. Phillips is the wife of Kenneth A. Phillips. Jay G. Phillips is
the son of Kenneth and Kathryn Phillips. There are no other family
relationships. Pursuant to the company's by-laws, each director is elected
annually by the company's stockholders at the company's annual meeting. The
company's officers serve at the discretion of the Board of Directors.
EXECUTIVE COMPENSATION
The following tables contain compensation data for the President of
the Company for the fiscal year ended December 31, 1999. No executive officer or
director received in excess of $100,000 in compensation during the fiscal year
ended December 31, 1999. As the Company was not subject to the SEC reporting
requirements before fiscal 1999, only information for fiscal 1999 has been
included.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL
COMPENSATION LONG TERM COMPENSATION
------------ --------------------------------------------
AWARDS
--------------------------------------------
NAME AND RESTRICTED SECURITIES UNDERLYING ALL OTHER
PRINCIPAL POSITIONS YEAR SALARY ($) STOCK AWARD(S) ($) OPTIONS/SARS (#) COMPENSATION ($)
- ------------------- ---- ---------- ------------------ --------------------- ----------------
<S> <C> <C> <C> <C> <C>
Kenneth A. Phillips, President 1999 $83,500 $55,000 -- $12,036
1998 $77,000 -- -- --
</TABLE>
Mr. Phillips restricted stock award consists of 500,000 shares of common
stock issued in July 1999 for services. The value is based on the closing market
price on the date of grant of $.11 per share. At December 31, 1999, the value of
the shares was $35,000 based on the closing market price on that date of $.07
per share. Mr. Phillips' other compensation consists of a car payment and a life
insurance policy. The
<PAGE>
table above does not include perquisites and other personal
benefits in amounts of less than 10% of the total annual salary and bonus of the
named executive officer.
EMPLOYMENT AGREEMENTS
In July 1996, Kenneth A. Phillips entered into a two-year employment
agreement with the Company, which was renewed for an additional two-year period
in July 1998. The employment agreement called for a monthly salary of $9,000
plus an amount equal to 10% of the pretax profit of the Company. The Company and
Mr. Phillips have amended the employment agreement to allow the Company to pay
Mr. Phillips a lesser salary, with the agreement that Mr. Phillips will receive
his salary as set forth in the employment agreement, as the Company becomes
financially able to pay such salary. Any salary pursuant to the original
employment agreement that is unpaid is lost, as the parties have agreed not to
accrue such salary. The employment agreement provides for a vehicle to be
provided by the Company, as well as health insurance. The employment agreement
may be terminated by the Company, upon the death or disability of Mr. Phillips.
The Company does not have any employment agreements with any other
of its officers or directors. The Company does not maintain life insurance on
any of its directors, officers, or employees.
STOCK OPTIONS AND WARRANTS
The Company did not issue any warrants or options to its directors,
officers, or employee during the year ended December 31, 1999 for compensation.
The Company did issue Mr. Kenneth A. Phillips warrants in connection with a loan
made by Mr. Phillips to the Company. This transaction is more fully discussed in
the "Certain Relationships and Related Transactions" section of this proxy
statement.
As of December 31, 1999, the Company had outstanding warrants to purchase
an aggregate of 974,998 shares of common stock at exercise prices ranging from
$.05 to $2.00 per share. Of these warrants, Mr. Kenneth A. Phillips holds a
warrant to purchase 100,000 shares of common stock at an exercise price of $1.00
per share expiring December 31, 2001 and three warrants to each purchase 83,333
shares of common stock at an exercise price of $.05 per share expiring on
December 15, 2000, 2001, and 2002, respectively.
The Company does not have any options outstanding. The Company is
requesting shareholders adopt the 2000 Stock Option Plan during this annual
meeting. See Proposal 3 - Adoption of the 2000 Stock Option Plan.
<TABLE>
<CAPTION>
AGGREGATED WARRANT EXERCISES IN LAST FISCAL YEAR AND FY-END WARRANT VALUES
VALUE OF UNEXERCISED
SHARES ACQUIRED ON VALUE NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY
NAME EXERCISE (#) REALIZED ($) UNEXERCISED OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)
- ---- ------------------ ------------ --------------------------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C>
Exercisable Unexercisable Exercisable Unexercisable
Kenneth A. Phillips -- -- 100,000 -- -- --
249,999 -- $5,000 --
</TABLE>
The table above includes only warrants as no options are outstanding. The
values given to the warrants in the table above are based on the differences
between the closing market price of $.07 as of December 31, 1999 and the
aggregate exercise prices of the warrants.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 31, 2000 the number and
percentage of outstanding shares of Company Common Stock owned by:
o each person known to the Company to beneficially own more than 5% of
its outstanding Common Stock;
o each director;
o each named executive officer; and
o all executive officers and directors as a group.
NUMBER OF SHARES OF
NAME AND ADDRESS OF COMMON STOCK PERCENTAGE OF
BENEFICIAL OWNER BENEFICIALLY OWNED OWNERSHIP
- ----------------- ------------------- -------------
Kenneth A. Phillips 4,724,997 37.8%
Jay G. Phillips 414,971 3.4%
Richard R. Royall 387,500 3.2%
All executive officers and
directors as a group (5
persons) 5,605,468 44.9%
The address of each person listed is the same as the address of the
Company's principal executive office, except for Mr. Royall whose business
address is 1331 Lamar Street #1375, Houston, Texas 77010.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In July 1999, the Company issued Kenneth A. Phillips 500,000 shares of
common stock, Jay G. Phillips 100,000 shares of common stock, Jason Lay 100,000
shares of common stock, and Richard Royall 75,000 shares of common stock for
services rendered. In October 1999, the Company issued Kenneth A. Phillips three
warrants to each purchase 83,333 shares of common stock at an exercise price of
$.05 per share expiring on December 15, 2000, 2001, and 2002, respectively.
These warrants were issued as part of a loan agreement between the Company and
Kenneth A. Phillips, in which Mr. Phillips loaned the Company $175,000 at an
interest rate of 10% per annum due on demand. In March 2000, Kenneth A. Phillips
purchased 1,450,000 shares of common stock from the Company at a purchase price
of $.20 per share. In December 1999, the Company issued Mr. Royall 262,500
shares of common stock for services rendered.
VOTING PROCEDURES
The Company has one class of voting shares outstanding, namely Common
Stock, of which there were 12,140,014 outstanding at the close of business on
April 12, 2000 (the "Record Date"). Each shareholder present or represented at
the Meeting will be entitled to one vote per share. Shareholder action requires
the affirmative vote by the holders of a majority of the Common Stock voting at
the Meeting.
COST OF SOLICITATION
The Company will bear the cost of the solicitation of proxies from its
stockholders. In addition to the use of mail, proxies may be solicited by
directors, officers, and regular employees of the Company in person or by
telephone or other means of communication. The directors, officers, and
employees of the Company will not be compensated additionally for the
solicitation, but may be reimbursed for out-of-pocket expenses in connection
with this solicitation.
OTHER MATTERS
The Board of Directors and management of the Company know of no other
matters to be brought before the Meeting. If a shareholder proposal that was
excluded from this Proxy Statement in accordance with Rule 14a-8 of the Exchange
Act is properly brought before the Meeting, it is intended that the proxy
holders will use their
<PAGE>
discretionary authority to vote the proxies against such proposal. If any other
matters should arise at the Meeting, shares represented by proxies will be voted
at the discretion of the proxy holders.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Under Rule 14a-8 of the Exchange Act, proposals that shareholders intend
to have included in the Company's proxy statement and form of proxy for the 2001
Annual Meeting of Stockholders must be received by the Company no later than
January 3, 2001. However, if the date of the 2001 Annual Meeting of Shareholders
changes by more than 30 days from the date of the 2000 Annual Meeting of
Shareholders, the deadline is a reasonable time before the Company begins to
print and mail its proxy materials, which deadline will be set forth in a
quarterly report on Form 10-QSB or will otherwise be communicated to
shareholders. Shareholder proposals must also be otherwise eligible for
inclusion.
Moreover, with respect to any proposal by a shareholder not seeking to
have the proposal included in the proxy statement but seeking to have the
proposal considered at the 2001 Annual Meeting of Stockholders, such stockholder
must provide written notice of such proposal to the Secretary of the Company at
the principal executive offices of the Company by March 19, 2001. With respect
to a proposal not to be included in the proxy statement, in the event notice is
not timely given to the Company, the persons who are appointed as proxies may
exercise their discretionary voting authority with respect to such proposals, if
the proposal is considered at the 2001 Annual Meeting of Stockholders, even if
the stockholders have not been advised of the proposal. In addition,
stockholders must comply in all respects with the rules and regulations of the
Securities and Exchange Commission then in effect and the procedural
requirements of the Company's Bylaws.
BY ORDER OF THE BOARD OF DIRECTORS
Kenneth A. Phillips, President
May 3, 2000
<PAGE>
APPENDIX A
Fleetclean Systems, Inc.
2000 STOCK OPTION PLAN
ARTICLE I - PLAN
1.1 PURPOSE. This Plan is a plan for key Employees (including officers
and employee directors) and Consultants of the Company and its Affiliates and is
intended to advance the best interests of the Company, its Affiliates, and its
stockholders by providing those persons who have substantial responsibility for
the management and growth of the Company and its Affiliates with additional
incentives and an opportunity to obtain or increase their proprietary interest
in the Company, thereby encouraging them to continue in the employ of the
Company or any of its Affiliates.
1.2 RULE 16B-3 PLAN. The Company is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and therefore the Plan is intended to comply with all applicable
conditions of Rule 16b-3 (and all subsequent revisions thereof) promulgated
under the 1934 Act. To the extent any provision of the Plan or action by the
Board of Directors or Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee. In
addition, the Board of Directors may amend the Plan from time to time as it
deems necessary in order to meet the requirements of any amendments to Rule
16b-3 without the consent of the shareholders of the Company.
1.3 EFFECTIVE DATE OF PLAN. The Plan shall be effective June 2000 (the
"Effective Date"), provided that within one year of the Effective Date, the Plan
shall have been approved by at least a majority vote of stockholders. No
Incentive Option, Nonqualified Option, Stock Appreciation Right, Restricted
Stock Award or Performance Stock Award shall be granted pursuant to the Plan ten
years after the Effective Date.
ARTICLE II - DEFINITIONS
The words and phrases defined in this Article shall have the meaning
set out in these definitions throughout this Plan, unless the context in which
any such word or phrase appears reasonably requires a broader, narrower, or
different meaning.
2.1 "AFFILIATE" means any parent corporation and any subsidiary
corporation. The term "parent corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time of the action or transaction, each of the corporations other than the
Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain. The term
"subsidiary corporation" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
action or transaction, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.
2.2 "AWARD" means each of the following granted under this Plan:
Incentive Option, Nonqualified Option, Stock Appreciation Right, Restricted
Stock Award or Performance Stock Award.
2.3 "BOARD OF DIRECTORS" means the board of directors of the Company.
2.4 "CHANGE IN CONTROL" shall mean and include the following
transactions or situations:
(a) A sale, transfer, or other disposition by the Company
through a single transaction or a series of transactions of securities of the
Company representing thirty (30%) percent or more of the combined voting power
of the Company's then outstanding securities to any "Unrelated Person" or
"Unrelated Persons" acting
A-1
<PAGE>
in concert with one another. For purposes of this definition, the term "Person"
shall mean and include any individual, partnership, joint venture, association,
trust corporation, or other entity (including a "group" as referred to in
Section 13(d)(3) of the 1934 Act). For purposes of this definition, the term
"Unrelated Person" shall mean and include any Person other than the Company, a
wholly-owned subsidiary of the Company, or an employee benefit plan of the
Company; provided however, a sale to underwriters in connection with a public
offering of the Company's securities pursuant to a firm commitment shall not be
a Change of Control.
(b) A sale, transfer, or other disposition through a single
transaction or a series of transactions of all or substantially all of the
assets of the Company to an Unrelated Person or Unrelated Persons acting in
concert with one another.
(c) A change in the ownership of the Company through a single
transaction or a series of transactions such that any Unrelated Person or
Unrelated Persons acting in concert with one another become the "Beneficial
Owner," directly or indirectly, of securities of the Company representing at
least thirty (30%) percent of the combined voting power of the Company's then
outstanding securities. For purposes of this definition, the term "Beneficial
Owner" shall have the same meaning as given to that term in Rule 13d-3
promulgated under the 1934 Act, provided that any pledgee of voting securities
is not deemed to be the Beneficial Owner thereof prior to its acquisition of
voting rights with respect to such securities.
(d) Any consolidation or merger of the Company with or into an
Unrelated Person, unless immediately after the consolidation or merger the
holders of the common stock of the Company immediately prior to the
consolidation or merger are the beneficial owners of securities of the surviving
corporation representing at least fifty (50%) percent of the combined voting
power of the surviving corporation's then outstanding securities.
(e) During any period of two years, individuals who, at the
beginning of such period, constituted the Board of Directors of the Company
cease, for any reason, to constitute at least a majority thereof, unless the
election or nomination for election of each new director was approved by the
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period.
(f) A change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the 1934 Act, or any successor regulation of similar
importance, regardless of whether the Company is subject to such reporting
requirement.
2.5 "CODE" means the Internal Revenue Code of 1986, as amended.
2.6 "COMMITTEE" means the Compensation Committee of the Board of
Directors or such other committee designated by the Board of Directors. The
Committee shall be comprised solely of at least two members who are both
Disinterested Persons and Outside Directors or by the Board of Directors in its
entirety.
2.7 "COMPANY" means Fleetclean Systems, Inc.
2.8 "CONSULTANT" means any person, including an advisor, engaged by
the Company or Affiliate to render services and who is compensated for such
services.
2.9 "DISINTERESTED PERSON" means a "disinterested person" as that term
is defined in Rule 16b-3 under the 1934 Act.
2.10 "ELIGIBLE PERSONS" shall mean, with respect to the Plan, those
persons who, at the time that an Award is granted, are (i) key personnel
(including officers and directors) of the Company or Affiliate, or (ii)
A-2
<PAGE>
Consultants or independent contractors who provide valuable services to the
Company or Affiliate as determined by the Committee.
2.11 "EMPLOYEE" means a person employed by the Company or any
Affiliate to whom an Award is granted.
2.12 "FAIR MARKET VALUE" of the Stock as of any date means (a) the
average of the high and low sale prices of the Stock on that date on the
principal securities exchange on which the Stock is listed; or (b) if the Stock
is not listed on a securities exchange, the average of the high and low sale
prices of the Stock on that date as reported on the NASDAQ National Market
System; or (c) if the Stock is not listed on the NASDAQ National Market System,
the average of the high and low bid quotations for the Stock on that date as
reported by the National Quotation Bureau Incorporated; or (d) if none of the
foregoing is applicable, an amount at the election of the Committee equal to
(x), the average between the closing bid and ask prices per share of Stock on
the last preceding date on which those prices were reported or (y) that amount
as determined by the Committee in good faith.
2.13 "INCENTIVE OPTION" means an option to purchase Stock granted
under this Plan which is designated as an "Incentive Option" and satisfies the
requirements of Section 422 of the Code.
2.14 "NONQUALIFIED OPTION" means an option to purchase Stock granted
under this Plan other than an Incentive Option.
2.15 "OPTION" means both an Incentive Option and a Nonqualified Option
granted under this Plan to purchase shares of Stock.
2.16 "OPTION AGREEMENT" means the written agreement by and between the
Company and an Eligible Person which sets out the terms of an Option.
2.17 "OUTSIDE DIRECTOR" means a member of the Board of Directors
serving on the Committee who satisfies Section 162(m) of the Code.
2.18 "PLAN" means the Fleetclean Systems, Inc. 2000 Stock Option Plan,
as set out in this document and as it may be amended from time to time.
2.19 "PLAN YEAR" means the Company's fiscal year.
2.20 "PERFORMANCE STOCK AWARD" means an award of shares of Stock to be
issued to an Eligible Person if specified predetermined performance goals are
satisfied as described in Article VI.
2.21 "RESTRICTED STOCK" means Stock awarded or purchased under a
Restricted Stock Agreement entered into pursuant to this Plan, together with (i)
all rights, warranties or similar items attached or accruing thereto or
represented by the certificate representing the stock and (ii) any stock or
securities into which or for which the stock is thereafter converted or
exchanged. The terms and conditions of the Restricted Stock Agreement shall be
determined by the Committee consistent with the terms of the Plan.
2.22 "RESTRICTED STOCK AGREEMENT" means an agreement between the
Company or any Affiliate and the Eligible Person pursuant to which the Eligible
Person receives a Restricted Stock Award subject to Article VI.
2.23 "RESTRICTED STOCK AWARD" means an Award of Restricted Stock.
A-3
<PAGE>
2.24 "RESTRICTED STOCK PURCHASE PRICE" means the purchase price, if
any, per share of Restricted Stock subject to an Award. The Restricted Stock
Purchase Price shall be determined by the Committee. It may be greater than or
less than the Fair Market Value of the Stock on the date of the Stock Award.
2.25 "STOCK" means the common stock of the Company, $.001 par value
or, in the event that the outstanding shares of common stock are later changed
into or exchanged for a different class of stock or securities of the Company or
another corporation, that other stock or security.
2.26 "STOCK APPRECIATION RIGHT" and "SAR" means the right to receive
the difference between the Fair Market Value of a share of Stock on the grant
date and the Fair Market Value of the share of Stock on the exercise date.
2.27 "10% STOCKHOLDER" means an individual who, at the time the Option
is granted, owns Stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of any Affiliate. An individual
shall be considered as owning the Stock owned, directly or indirectly, by or for
his brothers and sisters (whether by the whole or half blood), spouse,
ancestors, and lineal descendants; and Stock owned, directly or indirectly, by
or for a corporation, partnership, estate, or trust, shall be considered as
being owned proportionately by or for its stockholders, partners, or
beneficiaries.
ARTICLE III - ELIGIBILITY
The individuals who shall be eligible to receive Awards shall be those
Eligible Persons of the Company or any of its Affiliates as the Committee shall
determine from time to time. However, no member of the Committee shall be
eligible to receive any Award or to receive Stock, Options, Stock Appreciation
Rights or any Performance Stock Award under any other plan of the Company or any
of its Affiliates, if to do so would cause the individual not to be a
Disinterested Person or Outside Director. The Board of Directors of Directors
may designate one or more individuals who shall not be eligible to receive any
Award under this Plan or under other similar plans of the Company.
ARTICLE IV - GENERAL PROVISIONS RELATING TO AWARDS
4.1 AUTHORITY TO GRANT AWARDS. The Committee may grant to those
Eligible Persons of the Company or any of its Affiliates as it shall from time
to time determine, Awards under the terms and conditions of this Plan. Subject
only to any applicable limitations set out in this Plan, the number of shares of
Stock to be covered by any Award to be granted to an Eligible Person shall be
determined by the Committee.
4.2 DEDICATED SHARES. The total number of shares of Stock with respect
to which Awards may be granted under the Plan shall be 5,000,000 shares. The
shares may be treasury shares or authorized but unissued shares. The maximum
number of shares subject to options or stock appreciation rights which may be
issued to any eligible person under the plan during each plan year shall be
determined by the compensation committee. The maximum number of shares subject
to restricted stock awards which may be granted to any eligible person under the
plan during each plan year shall be determined by the compensation committee.
The maximum number of shares subject to performance stock awards which may be
granted to any eligible person during each plan year shall be determined by the
compensation committee. The number of shares stated in this Section 4.2 shall be
subject to adjustment in accordance with the provisions of Section 4.5. In the
event that any outstanding Award shall expire or terminate for any reason or any
Award is surrendered, the shares of Stock allocable to the unexercised portion
of that Award may again be subject to an Award under the Plan.
A-4
<PAGE>
4.3 NON-TRANSFERABILITY. Awards shall not be transferable by the
Eligible Person otherwise than by will or under the laws of descent and
distribution, and shall be exercisable, during the Eligible Person's lifetime,
only by him. Restricted Stock shall be purchased by and/or become vested under a
Restricted Stock Agreement during the Eligible Person's lifetime, only by him.
Any attempt to transfer an Award other than under the terms of the Plan and the
Agreement shall terminate the Award and all rights of the Eligible Person to
that Award.
4.4 REQUIREMENTS OF LAW. The Company shall not be required to sell or
issue any Stock under any Award if issuing that Stock would constitute or result
in a violation by the Eligible Person or the Company of any provision of any
law, statute, or regulation of any governmental authority. Specifically, in
connection with any applicable statute or regulation relating to the
registration of securities, upon exercise of any Option or pursuant to any
Award, the Company shall not be required to issue any Stock unless the Committee
has received evidence satisfactory to it to the effect that the holder of that
Option or Award will not transfer the Stock except in accordance with applicable
law, including receipt of an opinion of counsel satisfactory to the Company to
the effect that any proposed transfer complies with applicable law. The
determination by the Committee on this matter shall be final, binding and
conclusive. The Company may, but shall in no event be obligated to, register any
Stock covered by this Plan pursuant to applicable securities laws of any country
or any political subdivision. In the event the Stock issuable on exercise of an
Option or pursuant to an Award is not registered, the Company may imprint on the
certificate evidencing the Stock any legend that counsel for the Company
considers necessary or advisable to comply with applicable law. The Company
shall not be obligated to take any other affirmative action in order to cause
the exercise of an Option or vesting under an Award, or the issuance of shares
pursuant thereto, to comply with any law or regulation of any governmental
authority.
4.5 CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.
(a) The existence of outstanding Options or Awards shall not
affect in any way the right or power of the Company or its stockholders to make
or authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Stock or its rights, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise. If the Company shall effect a
subdivision or consolidation of shares or other capital readjustment, the
payment of a Stock dividend, or other increase or reduction of the number of
shares of the Stock outstanding, without receiving compensation for it in money,
services or property, then (a) the number, class, and per share price of shares
of Stock subject to outstanding Options under this Plan shall be appropriately
adjusted in such a manner as to entitle an Eligible Person to receive upon
exercise of an Option, for the same aggregate cash consideration, the equivalent
total number and class of shares he would have received had he exercised his
Option in full immediately prior to the event requiring the adjustment; and (b)
the number and class of shares of Stock then reserved to be issued under the
Plan shall be adjusted by substituting for the total number and class of shares
of Stock then reserved, that number and class of shares of Stock that would have
been received by the owner of an equal number of outstanding shares of each
class of Stock as the result of the event requiring the adjustment.
(b) If the Company is merged or consolidated with another
corporation and the Company is not the surviving corporation, or if the Company
is liquidated or sells or otherwise disposes of substantially all its assets
while unexercised Options remain outstanding under this Plan:
(i) subject to the provisions of clause (c) below, after
the effective date of the merger, consolidation, liquidation, sale or other
disposition, as the case may be, each holder of an outstanding Option shall be
entitled, upon exercise of the Option, to receive, in lieu of shares of Stock,
the number and class or classes of shares of stock or other securities or
property to which the holder would have been entitled if, immediately prior
A-5
<PAGE>
to the merger, consolidation, liquidation, sale or other disposition, the holder
had been the holder of record of a number of shares of Stock equal to the number
of shares as to which the Option shall be so exercised;
(ii) the Board of Directors may waive any limitations set
out in or imposed under this Plan so that all Options, from and after a date
prior to the effective date of the merger, consolidation, liquidation, sale or
other disposition, as the case may be, specified by the Board of Directors,
shall be exercisable in full; and
(iii) all outstanding Options may be canceled by the Board
of Directors as of the effective date of any merger, consolidation, liquidation,
sale or other disposition, if (i) notice of cancellation shall be given to each
holder of an Option and (ii) each holder of an Option shall have the right to
exercise that Option in full (without regard to any limitations set out in or
imposed under this Plan or the Option Agreement granting that Option) during a
period set by the Board of Directors preceding the effective date of the merger,
consolidation, liquidation, sale or other disposition and, if in the event all
outstanding Options may not be exercised in full under applicable securities
laws without registration of the shares of Stock issuable on exercise of the
Options, the Board of Directors may limit the exercise of the Options to the
number of shares of Stock, if any, as may be issued without registration. The
method of choosing which Options may be exercised, and the number of shares of
Stock for which Options may be exercised, shall be solely within the discretion
of the Board of Directors.
(c) After a merger of one or more corporations into the Company
or after a consolidation of the Company and one or more corporations in which
the Company shall be the surviving corporation, each Eligible Person shall be
entitled to have his Restricted Stock and shares earned under a Performance
Stock Award appropriately adjusted based on the manner the Stock was adjusted
under the terms of the agreement of merger or consolidation.
(d) In each situation described in this Section 4.5, the
Committee will make similar adjustments, as appropriate, in outstanding Stock
Appreciation Rights.
(e) The issuance by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class, for cash or
property, or for labor or services either upon direct sale or upon the exercise
of rights or warrants to subscribe for them, or upon conversion of shares or
obligations of the Company convertible into shares or other securities, shall
not affect, and no adjustment by reason of such issuance shall be made with
respect to, the number, class, or price of shares of Stock then subject to
outstanding Awards.
4.6 ELECTION UNDER SECTION 83(B) OF THE CODE. No Employee shall
exercise the election permitted under Section 83(b) of the Code without written
approval of the Committee. Any Employee doing so shall forfeit all Awards issued
to him under this Plan.
ARTICLE V - OPTIONS AND STOCK APPRECIATION RIGHTS
5.1 TYPE OF OPTION. The Committee shall specify at the time of grant
whether a given Option shall constitute an Incentive Option or a Nonqualified
Option. Incentive Stock Options may only be granted to Employees.
5.2 OPTION PRICE. The price at which Stock may be purchased under an
Incentive Option shall not be less than the greater of: (a) 100% of the Fair
Market Value of the shares of Stock on the date the Option is granted or (b) the
aggregate par value of the shares of Stock on the date the Option is granted.
The Committee in its discretion may provide that the price at which shares of
Stock may be purchased under an Incentive Option shall be more than 100% of Fair
Market Value. In the case of any 10% Stockholder, the price at which shares of
Stock may be purchased under an Incentive Option shall not be less than 110% of
the Fair Market Value of the Stock on
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the date the Incentive Option is granted. The price at which shares of Stock may
be purchased under a Nonqualified Option shall be such price as shall be
determined by the Committee in its sole discretion but in no event lower than
the par value of the shares of Stock on the date the Option is granted.
5.3 DURATION OF OPTIONS AND SARS. No Option or SAR shall be
exercisable after the expiration of ten (10) years from the date the Option or
SAR is granted. In the case of a 10% Stockholder, no Incentive Option shall be
exercisable after the expiration of five years from the date the Incentive
Option is granted.
5.4 AMOUNT EXERCISABLE -- INCENTIVE OPTIONS. Each Option may be
exercised from time to time, in whole or in part, in the manner and subject to
the conditions the Committee, in its sole discretion, may provide in the Option
Agreement, as long as the Option is valid and outstanding, and further provided
that no Option may be exercisable within six (6) months of the date of grant,
unless otherwise stated in the Option Agreement. To the extent that the
aggregate Fair Market Value (determined as of the time an Incentive Option is
granted) of the Stock with respect to which Incentive Options first become
exercisable by the optionee during any calendar year (under this Plan and any
other incentive stock option plan(s) of the Company or any Affiliate) exceeds
$100,000, the portion in excess of $100,000 of the Incentive Option shall be
treated as a Nonqualified Option. In making this determination, Incentive
Options shall be taken into account in the order in which they were granted.
5.5 EXERCISE OF OPTIONS. Each Option shall be exercised by the
delivery of written notice to the Committee setting forth the number of shares
of Stock with respect to which the Option is to be exercised, together with:
(a) cash, certified check, bank draft, or postal or express
money order payable to the order of the Company for an amount equal to the
option price of the shares,
(b) Stock at its Fair Market Value on the date of exercise, (if
approved in advance by the Committee),
(c) an election to make a cashless exercise through a registered
broker-dealer (if approved in advance by the Committee),
(d) an election to have shares of Stock, which otherwise would
be issued on exercise, withheld in payment of the exercise price (if approved in
advance by the Committee), and/or
(e) any other form of payment which is acceptable to the
Committee, including without limitation, payment in the form of a promissory
note, and specifying the address to which the certificates for the shares are to
be mailed.
As promptly as practicable after receipt of written notification and
payment, the Company shall deliver to the Eligible Person certificates for the
number of shares with respect to which the Option has been exercised, issued in
the Eligible Person's name. If shares of Stock are used in payment, the
aggregate Fair Market Value of the shares of Stock tendered must be equal to or
less than the aggregate exercise price of the shares being purchased upon
exercise of the Option, and any difference must be paid by cash, certified
check, bank draft, or postal or express money order payable to the order of the
Company. Delivery of the shares shall be deemed effected for all purposes when a
stock transfer agent of the Company shall have deposited the certificates in the
United States mail, addressed to the Eligible Person, at the address specified
by the Eligible Person.
Whenever an Option is exercised by exchanging shares of Stock owned by
the Eligible Person, the Eligible Person shall deliver to the Company
certificates registered in the name of the Eligible Person representing a number
of shares of Stock legally and beneficially owned by the Eligible Person, free
of all liens, claims, and
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encumbrances of every kind, accompanied by stock powers duly endorsed in blank
by the record holder of the shares represented by the certificates (with
signature guaranteed by a commercial bank or trust company or by a brokerage
firm having a membership on a registered national stock exchange). The delivery
of certificates upon the exercise of Options is subject to the condition that
the person exercising the Option provide the Company with the information the
Company might reasonably request pertaining to exercise, sale or other
disposition.
5.6 STOCK APPRECIATION RIGHTS. All Eligible Persons shall be eligible
to receive Stock Appreciation Rights. The Committee shall determine the SAR to
be awarded from time to time to any Eligible Person. The grant of an SAR to be
awarded from time to time shall neither entitle such person to, nor disqualify
such person, from participation in any other grant of awards by the Company,
whether under this Plan or any other plan of the Company. If granted as a
stand-alone SAR Award, the terms of the Award shall be provided in a Stock
Appreciation Rights Agreement.
5.7 STOCK APPRECIATION RIGHTS IN TANDEM WITH OPTIONS. Stock
Appreciation Rights may, at the discretion of the Committee, be included in each
Option granted under the Plan to permit the holder of an Option to surrender
that Option, or a portion of the part which is then exercisable, and receive in
exchange, upon the conditions and limitations set by the Committee, an amount
equal to the excess of the Fair Market Value of the Stock covered by the Option,
or the portion of it that was surrendered, determined as of the date of
surrender, over the aggregate exercise price of the Stock. The payment may be
made in shares of Stock valued at Fair Market Value, in cash, or partly in cash
and partly in shares of Stock, as the Committee shall decide in its sole
discretion. Stock Appreciation Rights may be exercised only when the Fair Market
Value of the Stock covered by the Option surrendered exceeds the exercise price
of the Stock. In the event of the surrender of an Option, or a portion of it, to
exercise the Stock Appreciation Rights, the shares represented by the Option or
that part of it which is surrendered, shall not be available for reissuance
under the Plan. Each Stock Appreciation Right issued in tandem with an Option
(a) will expire not later than the expiration of the underlying Option, (b) may
be for no more than 100% of the difference between the exercise price of the
underlying Option and the Fair Market Value of a share of Stock at the time the
Stock Appreciation Right is exercised, (c) is transferable only when the
underlying Option is transferable, and under the same conditions, and (d) may be
exercised only when the underlying Option is eligible to be exercised.
5.8 CONDITIONS OF STOCK APPRECIATION RIGHTS. All Stock Appreciation
Rights shall be subject to such terms, conditions, restrictions or limitations
as the Committee deems appropriate, including by way of illustration but not by
way of limitation, restrictions on transferability, requirement of continued
employment, individual performance, financial performance of the Company or
payment of any applicable employment or withholding taxes.
5.9 PAYMENT OF STOCK APPRECIATION RIGHTS. The amount of payment to
which the Eligible Person who reserves an SAR shall be entitled upon the
exercise of each SAR shall be equal to the amount, if any by which the Fair
Market Value of the specified shares of Stock on the exercise date exceeds the
Fair Market Value of the specified shares of Stock on the date of grant of the
SAR. The SAR shall be paid in either cash or Stock, as determined in the
discretion of the Committee as set forth in the SAR agreement. If the payment is
in Stock, the number of shares to be paid shall be determined by dividing the
amount of such payment by the Fair Market Value of Stock on the exercise date of
such SAR.
5.10 EXERCISE ON TERMINATION OF EMPLOYMENT. Unless it is expressly
provided otherwise in the Option or SAR agreement, Options and SAR granted to
Employees shall terminate one day less than three months after severance of
employment of the Employee from the Company and all Affiliates for any reason,
with or without cause, other than death, retirement under the then established
rules of the Company, or severance for disability. Whether authorized leave of
absence or absence on military or government service shall constitute severance
of the employment of the Employee shall be determined by the Committee at that
time.
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5.11 DEATH. If, before the expiration of an Option or SAR, the
Eligible Person, whether in the employ of the Company or after he has retired or
was severed for disability, or otherwise dies, the Option or SAR shall continue
until the earlier of the Option's or SAR's expiration date or one year following
the date of his death, unless it is expressly provided otherwise in the Option
or SAR agreement. After the death of the Eligible Person, his executors,
administrators or any persons to whom his Option or SAR may be transferred by
will or by the laws of descent and distribution shall have the right, at any
time prior to the Option's or SAR's expiration or termination, whichever is
earlier, to exercise it, to the extent to which he was entitled to exercise it
immediately prior to his death, unless it is expressly provided otherwise in the
Option or SAR's agreement.
5.12 RETIREMENT. Unless it is expressly provided otherwise in the
Option Agreement, before the expiration of an Incentive Option, the Employee
shall be retired in good standing from the employ of the Company under the then
established rules of the Company, the Incentive Option shall terminate on the
earlier of the Option's expiration date or one day less than one year after his
retirement; provided, if an Incentive Option is not exercised within specified
time limits prescribed by the Code, it will become a Nonqualified Option by
operation of law. Unless it is expressly provided otherwise in the Option
Agreement, if before the expiration of a Nonqualified Option, the Employee shall
be retired in good standing from the employ of the Company under the then
established rules of the Company, the Nonqualified Option shall terminate on the
earlier of the Nonqualified Option's expiration date or one day less than one
year after his retirement. In the event of retirement, the Employee shall have
the right prior to the termination of the Nonqualified Option to exercise the
Nonqualified Option, to the extent to which he was entitled to exercise it
immediately prior to his retirement, unless it is expressly provided otherwise
in the Option Agreement. Upon retirement, an SAR shall continue to be
exercisable for the remainder of the term of the SAR agreement.
5.13 DISABILITY. If, before the expiration of an Option or SAR, the
Employee shall be severed from the employ of the Company for disability, the
Option or SAR shall terminate on the earlier of the Option's or SAR's expiration
date or one day less than one year after the date he was severed because of
disability, unless it is expressly provided otherwise in the Option or SAR
agreement. In the event that the Employee shall be severed from the employ of
the Company for disability, the Employee shall have the right prior to the
termination of the Option or SAR to exercise the Option, to the extent to which
he was entitled to exercise it immediately prior to his retirement or severance
of employment for disability, unless it is expressly provided otherwise in the
Option Agreement.
5.14 SUBSTITUTION OPTIONS. Options may be granted under this Plan from
time to time in substitution for stock options held by employees of other
corporations who are about to become employees of or affiliated with the Company
or any Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or any Affiliate, or the acquisition by the Company
or any Affiliate of the assets of the employing corporation, or the acquisition
by the Company or any Affiliate of stock of the employing corporation as the
result of which it becomes an Affiliate of the Company. The terms and conditions
of the substitute Options granted may vary from the terms and conditions set out
in this Plan to the extent the Committee, at the time of grant, may deem
appropriate to conform, in whole or in part, to the provisions of the stock
options in substitution for which they are granted.
5.15 RELOAD OPTIONS. Without in any way limiting the authority of the
Board of Directors or Committee to make or not to make grants of Options
hereunder, the Board of Directors or Committee shall have the authority (but not
an obligation) to include as part of any Option Agreement a provision entitling
the Eligible Person to a further Option (a "Reload Option") in the event the
Eligible Person exercises the Option evidenced by the Option Agreement, in whole
or in part, by surrendering other shares of Stock in accordance with this Plan
and the terms and conditions of the Option Agreement. Any such Reload Option (a)
shall be for a number of shares equal to the number of shares surrendered as
part or all of the exercise price of such Option; (b) shall have an expiration
date which is the greater of (i) the same expiration date of the Option the
exercise of which gave rise to such Reload Option or (ii) one year from the date
of grant of the Reload Option; and (c) shall have an exercise price which is
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equal to one hundred percent (100%) of the Fair Market Value of the Stock
subject to the Reload Option on the date of exercise of the original Option.
Notwithstanding the foregoing, a Reload Option which is an Incentive Option and
which is granted to a 10% Stockholder, shall have an exercise price which is
equal to one hundred ten percent (110%) of the Fair Market Value of the Stock
subject to the Reload Option on the date of exercise of the original Option and
shall have a term which is no longer than five (5) years.
Any such Reload Option may be an Incentive Option or a Nonqualified
Option, as the Board of Directors or Committee may designate at the time of the
grant of the original Option; provided, however, that the designation of any
Reload Option as an Incentive Option shall be subject to the one hundred
thousand dollar ($100,000) annual limitation on exercisability of Incentive
Stock Options described in the Plan and in Section 422(d) of the Code. There
shall be no Reload Options on a Reload Option. Any such Reload Option shall be
subject to the availability of sufficient shares under Section 4.2 herein and
shall be subject to such other terms and conditions as the Board of Directors or
Committee may determine which are not inconsistent with the express provisions
of the Plan regarding the terms of Options.
5.16 NO RIGHTS AS STOCKHOLDER. No Eligible Person shall have any
rights as a stockholder with respect to Stock covered by his Option until the
date a stock certificate is issued for the Stock.
ARTICLE VI - RESTRICTED STOCK AWARDS
6.1 RESTRICTED STOCK AWARDS. The Committee may issue shares of Stock
to an Eligible Person subject to the terms of a Restricted Stock Agreement. The
Restricted Stock may be issued for no payment by the Eligible Person or for a
payment below the Fair Market Value on the date of grant. Restricted Stock shall
be subject to restrictions as to sale, transfer, alienation, pledge or other
encumbrance and generally will be subject to vesting over a period of time
specified in the Restricted Stock Agreement. The Committee shall determine the
period of vesting, the number of shares, the price, if any, of Stock included in
a Restricted Stock Award, and the other terms and provisions which are included
in a Restricted Stock Agreement.
6.2 RESTRICTIONS. Restricted Stock shall be subject to the terms and
conditions as determined by the Committee, including without limitation, any or
all of the following:
(a) a prohibition against the sale, transfer, alienation, pledge
or other encumbrance of the shares of Restricted Stock, such prohibition to
lapse (i) at such time or times as the Committee shall determine (whether in
annual or more frequent installments, at the time of the death, disability or
retirement of the holder of such shares, or otherwise);
(b) a requirement that the holder of shares of Restricted Stock
forfeit, or in the case of shares sold to an Eligible Person, resell back to the
Company at his cost, all or a part of such shares in the event of termination of
the Eligible Person's employment during any period in which the shares remain
subject to restrictions;
(c) a prohibition against employment of the holder of Restricted
Stock by any competitor of the Company or its Affiliates, or against such
holder's dissemination of any secret or confidential information belonging to
the Company or an Affiliate;
(d) unless stated otherwise in the Restricted Stock Agreement,
(i) if restrictions remain at the time of severance of
employment with the Company and all Affiliates, other than for reason of
disability or death, the Restricted Stock shall be forfeited; and
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(ii) if severance of employment is by reason of disability
or death, the restrictions on the shares shall lapse and the Eligible Person or
his heirs or estate shall be 100% vested in the shares subject to the Restricted
Stock Agreement.
6.3 STOCK CERTIFICATE. Shares of Restricted Stock shall be registered
in the name of the Eligible Person receiving the Restricted Stock Award and
deposited, together with a stock power endorsed in blank, with the Company. Each
such certificate shall bear a legend in substantially the following form:
The transferability of this certificate and the shares of Stock
represented by it is restricted by and subject to the terms and
conditions (including conditions of forfeiture) contained in the
Fleetclean Systems, Inc. 2000 Stock Option Plan, and an agreement
entered into between the registered owner and the Company. A copy of
the Plan and agreement is on file in the office of the Secretary of
the Company.
6.4 RIGHTS AS STOCKHOLDER. Subject to the terms and conditions of the
Plan, each Eligible Person receiving a certificate for Restricted Stock shall
have all the rights of a stockholder with respect to the shares of Stock
included in the Restricted Stock Award during any period in which such shares
are subject to forfeiture and restrictions on transfer, including without
limitation, the right to vote such shares. Dividends paid with respect to shares
of Restricted Stock in cash or property other than Stock in the Company or
rights to acquire stock in the Company shall be paid to the Eligible Person
currently. Dividends paid in Stock in the Company or rights to acquire Stock in
the Company shall be added to and become a part of the Restricted Stock.
6.5 LAPSE OF RESTRICTIONS. At the end of the time period during which
any shares of Restricted Stock are subject to forfeiture and restrictions on
sale, transfer, alienation, pledge, or other encumbrance, such shares shall vest
and will be delivered in a certificate, free of all restrictions, to the
Eligible Person or to the Eligible Person's legal representative, beneficiary or
heir; provided the certificate shall bear such legend, if any, as the Committee
determines is reasonably required by applicable law. By accepting a Stock Award
and executing a Restricted Stock Agreement, the Eligible Person agrees to remit
when due any federal and state income and employment taxes required to be
withheld.
6.6 RESTRICTION PERIOD. No Restricted Stock Award may provide for
restrictions continuing beyond ten (10) years from the date of grant.
ARTICLE VII - PERFORMANCE STOCK AWARDS
7.1 AWARD OF PERFORMANCE STOCK. The Committee may award shares of
Stock, without any payment for such shares, to designated Eligible Persons if
specified performance goals established by the Committee are satisfied. The
terms and provisions herein relating to these performance based awards are
intended to satisfy Section 162(m) of the Code and regulations issued
thereunder. The designation of an employee eligible for a specific Performance
Stock Award shall be made by the Committee in writing prior to the beginning of
the period for which the performance is measured (or within such period as
permitted by IRS regulations). The Committee shall establish the maximum number
of shares of Stock to be issued to a designated Employee if the performance goal
or goals are met. The Committee reserves the right to make downward adjustments
in the maximum amount of an Award if in its discretion unforeseen events make
such adjustment appropriate.
7.2 PERFORMANCE GOALS. Performance goals determined by the Committee
may be based on specified increases in cash flow, net profits, Stock price,
Company, segment or Affiliate sales, market share, earnings per share, return on
assets, and/or return on stockholders' equity.
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7.3 ELIGIBILITY. The employees eligible for Performance Stock Awards
are the senior officers (i.e., chief executive officer, president, vice
presidents, secretary, treasurer, and similar positions) of the Company and its
Affiliates, and such other employees of the Company and its Affiliates as may be
designated by the Committee.
7.4 CERTIFICATE OF PERFORMANCE. The Committee must certify in writing
that a performance goal has been attained prior to issuance of any certificate
for a Performance Stock Award to any Employee. If the Committee certifies the
entitlement of an Employee to the Performance Stock Award, the certificate will
be issued to the Employee as soon as administratively practicable, and subject
to other applicable provisions of the Plan, including but not limited to, all
legal requirements and tax withholding. However, payment may be made in shares
of Stock, in cash, or partly in cash and partly in shares of Stock, as the
Committee shall decide in its sole discretion. If a cash payment is made in lieu
of shares of Stock, the number of shares represented by such payment shall not
be available for subsequent issuance under this Plan.
ARTICLE VIII - ADMINISTRATION
The Plan shall be administered by the Committee. All questions of
interpretation and application of the Plan and Awards shall be subject to the
determination of the Committee. A majority of the members of the Committee shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members. Any decision or determination reduced to writing and
signed by a majority of the members shall be as effective as if it had been made
by a majority vote at a meeting properly called and held. This Plan shall be
administered in such a manner as to permit the Options which are designated to
be Incentive Options to qualify as Incentive Options. In carrying out its
authority under this Plan, the Committee shall have full and final authority and
discretion, including but not limited to the following rights, powers and
authorities, to:
(a) determine the Eligible Persons to whom and the time or times
at which Options or Awards will be made,
(b) determine the number of shares and the purchase price of
Stock covered in each Option or Award, subject to the terms of the Plan,
(c) determine the terms, provisions and conditions of each
Option and Award, which need not be identical,
(d) accelerate the time at which any outstanding Option or SAR
may be exercised, or Restricted Stock Award will vest,
(e) define the effect, if any, on an Option or Award of the
death, disability, retirement, or termination of employment of the Employee,
(f) prescribe, amend and rescind rules and regulations relating
to administration of the Plan, and
(g) make all other determinations and take all other actions
deemed necessary, appropriate, or advisable for the proper administration of
this Plan.
The actions of the Committee in exercising all of the rights, powers,
and authorities set out in this Article and all other Articles of this Plan,
when performed in good faith and in its sole judgment, shall be final,
conclusive and binding on all parties.
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ARTICLE IX - AMENDMENT OR TERMINATION OF PLAN
The Board of Directors of the Company may amend, terminate or suspend
this Plan at any time, in its sole and absolute discretion; provided, however,
that to the extent required to qualify this Plan under Rule 16b-3 promulgated
under Section 16 of the Securities Exchange Act of 1934, as amended, no
amendment that would (a) materially increase the number of shares of Stock that
may be issued under this Plan, (b) materially modify the requirements as to
eligibility for participation in this Plan, or (c) otherwise materially increase
the benefits accruing to participants under this Plan, shall be made without the
approval of the Company's stockholders; provided further, however, that to the
extent required to maintain the status of any Incentive Option under the Code,
no amendment that would (a) change the aggregate number of shares of Stock which
may be issued under Incentive Options, (b) change the class of employees
eligible to receive Incentive Options, or (c) decrease the Option price for
Incentive Options below the Fair Market Value of the Stock at the time it is
granted, shall be made without the approval of the Company's stockholders.
Subject to the preceding sentence, the Board of Directors shall have the power
to make any changes in the Plan and in the regulations and administrative
provisions under it or in any outstanding Incentive Option as in the opinion of
counsel for the Company may be necessary or appropriate from time to time to
enable any Incentive Option granted under this Plan to continue to qualify as an
incentive stock option or such other stock option as may be defined under the
Code so as to receive preferential federal income tax treatment.
ARTICLE X - MISCELLANEOUS
10.1 NO ESTABLISHMENT OF A TRUST FUND. No property shall be set aside
nor shall a trust fund of any kind be established to secure the rights of any
Eligible Person under this Plan. All Eligible Persons shall at all times rely
solely upon the general credit of the Company for the payment of any benefit
which becomes payable under this Plan.
10.2 NO EMPLOYMENT OBLIGATION. The granting of any Option or Award
shall not constitute an employment contract, express or implied, nor impose upon
the Company or any Affiliate any obligation to employ or continue to employ any
Eligible Person. The right of the Company or any Affiliate to terminate the
employment of any person shall not be diminished or affected by reason of the
fact that an Option or Award has been granted to him.
10.3 FORFEITURE. Notwithstanding any other provisions of this Plan, if
the Committee finds by a majority vote after full consideration of the facts
that an Eligible Person, before or after termination of his employment with the
Company or an Affiliate for any reason (a) committed or engaged in fraud,
embezzlement, theft, commission of a felony, or proven dishonesty in the course
of his employment by the Company or an Affiliate, which conduct damaged the
Company or Affiliate, or disclosed trade secrets of the Company or an Affiliate,
or (b) participated, engaged in or had a material, financial or other interest,
whether as an employee, officer, director, consultant, contractor, stockholder,
owner, or otherwise, in any commercial endeavor in the United States which is
competitive with the business of the Company or an Affiliate without the written
consent of the Company or Affiliate, the Eligible Person shall forfeit all
outstanding Options and all outstanding Awards, and including all exercised
Options and other situations pursuant to which the Company has not yet delivered
a stock certificate. Clause (b) shall not be deemed to have been violated solely
by reason of the Eligible Person's ownership of stock or securities of any
publicly owned corporation, if that ownership does not result in effective
control of the corporation.
The decision of the Committee as to the cause of an Employee's
discharge, the damage done to the Company or an Affiliate, and the extent of an
Eligible Person's competitive activity shall be final. No decision of the
Committee, however, shall affect the finality of the discharge of the Employee
by the Company or an Affiliate in any manner.
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10.4 TAX WITHHOLDING. The Company or any Affiliate shall be entitled
to deduct from other compensation payable to each Eligible Person any sums
required by federal, state, or local tax law to be withheld with respect to the
grant or exercise of an Option or SAR, lapse of restrictions on Restricted
Stock, or award of Performance Stock. In the alternative, the Company may
require the Eligible Person (or other person exercising the Option, SAR or
receiving the Stock) to pay the sum directly to the employer corporation. If the
Eligible Person (or other person exercising the Option or SAR or receiving the
Stock) is required to pay the sum directly, payment in cash or by check of such
sums for taxes shall be delivered within 10 days after the date of exercise or
lapse of restrictions. The Company shall have no obligation upon exercise of any
Option or lapse of restrictions on Stock until payment has been received, unless
withholding (or offset against a cash payment) as of or prior to the date of
exercise or lapse of restrictions is sufficient to cover all sums due with
respect to that exercise. The Company and its Affiliates shall not be obligated
to advise an Eligible Person of the existence of the tax or the amount which the
employer corporation will be required to withhold.
10.5 WRITTEN AGREEMENT. Each Option and Award shall be embodied in a
written agreement which shall be subject to the terms and conditions of this
Plan and shall be signed by the Eligible Person and by a member of the Committee
on behalf of the Committee and the Company or an executive officer of the
Company, other than the Eligible Person, on behalf of the Company. The agreement
may contain any other provisions that the Committee in its discretion shall deem
advisable which are not inconsistent with the terms of this Plan.
10.6 INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS. With
respect to administration of this Plan, the Company shall indemnify each present
and future member of the Committee and the Board of Directors against, and each
member of the Committee and the Board of Directors shall be entitled without
further act on his part to indemnity from the Company for, all expenses
(including attorney's fees, the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit, or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
and/or the Board of Directors, whether or not he continues to be a member of the
Committee and/or the Board of Directors at the time of incurring the expenses,
including, without limitation, matters as to which he shall be finally adjudged
in any action, suit or proceeding to have been found to have been negligent in
the performance of his duty as a member of the Committee or the Board of
Directors. However, this indemnity shall not include any expenses incurred by
any member of the Committee and/or the Board of Directors in respect of matters
as to which he shall be finally adjudged in any action, suit or proceeding to
have been guilty of gross negligence or willful misconduct in the performance of
his duty as a member of the Committee and the Board of Directors. In addition,
no right of indemnification under this Plan shall be available to or enforceable
by any member of the Committee and the Board of Directors unless, within 60 days
after institution of any action, suit or proceeding, he shall have offered the
Company, in writing, the opportunity to handle and defend same at its own
expense. This right of indemnification shall inure to the benefit of the heirs,
executors or administrators of each member of the Committee and the Board of
Directors and shall be in addition to all other rights to which a member of the
Committee and the Board of Directors may be entitled as a matter of law,
contract, or otherwise.
10.7 GENDER. If the context requires, words of one gender when used in
this Plan shall include the others and words used in the singular or plural
shall include the other.
10.8 HEADINGS. Headings of Articles and Sections are included for
convenience of reference only and do not constitute part of the Plan and shall
not be used in construing the terms of the Plan.
10.9 OTHER COMPENSATION PLANS. The adoption of this Plan shall not
affect any other stock option, incentive or other compensation or benefit plans
in effect for the Company or any Affiliate, nor shall the Plan preclude the
Company from establishing any other forms of incentive or other compensation for
employees of the Company or any Affiliate.
A-14
<PAGE>
10.10 OTHER OPTIONS OR AWARDS. The grant of an Option or Award shall
not confer upon the Eligible Person the right to receive any future or other
Options or Awards under this Plan, whether or not Options or Awards may be
granted to similarly situated Eligible Persons, or the right to receive future
Options or Awards upon the same terms or conditions as previously granted.
10.11 GOVERNING LAW. The provisions of this Plan shall be construed,
administered, and governed under the laws of the State of Texas.
A-15
<PAGE>
APPENDIX B
AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
FLEETCLEAN SYSTEMS, INC.
Fleetclean Systems, Inc. ("Corporation"), a corporation formed in the
State of Texas on June 16, 1986, hereby adopts the following Amended and
Restated Articles of Incorporation pursuant to the provisions of Article 4.07 of
the Texas Business Corporations Act, adopts these Amended and Restated Articles
of Incorporation, which accurately copy the Articles of Incorporation and all
amendments in effect to date. The Articles of Incorporation, as restated and
amended by these restated Articles of Incorporation are set forth below and
contain no other changes in any provision.
The number of shares of the corporation outstanding at the time of the
adoption was 12,140,014; and the number of shares entitled to vote on the
amendment was 12,140,014. The following amendments and additions to the Articles
of Incorporation were adopted by the shareholders who voted __________ shares in
favor of the adoption and _______ shares against the adoption out of 12,140,041
shares outstanding and entitled to vote on April 12, 2000.
I.
The name of the Corporation is Fleetclean Systems, Inc.
II.
Each statement made by these Restated Articles of Incorporation has been
effected in conformity with the provisions of the Texas Business Corporation
Act. These Restated Articles of Incorporation and each amendment made by these
Restated Articles of Incorporation were adopted by the shareholders of the
corporation on May 31, 2000.
The amendment alters Article IV the Amended Articles of Incorporation to
reads as follows:
ARTICLE IV
The total number of shares of stock which the Corporation shall have
authority to issue is 50,000,000 consisting of 50,000,000 shares of common
stock, par value $.01 per share ("Common Stock"), and 5,000,000 shares of
preferred stock, par value $.01 per share ("Preferred Stock").
Shares of Preferred Stock of the Corporation may be issued from time to
time in one or more classes or series, each of which class or series shall have
such voting powers, full or limited, or no voting powers, and such designations,
preferences and relative, participating, optional or other special rights and
such qualifications, limitations or restrictions thereof, as shall be stated in
a resolution or resolutions providing for the issue of such class or series of
Preferred Stock as may be adopted from time to time by the Board of Directors
prior to the issuance of any shares thereof pursuant to the authority hereby
expressly vested in it, all in accordance with the laws of the State of Texas.
The amendment alters Article VII the Amended Articles of Incorporation to
reads as follows:
ARTICLE VII
The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors consisting of not less than one nor more
than 10 directors, the exact number of directors to be determined from time to
time by resolution adopted by the Board of Directors. The number of
<PAGE>
directors may be increased or decreased, but in no case will a decrease in the
number of directors shorten the term of any incumbent director. A director shall
hold office until his successor is elected and qualified, subject, however, to
his prior death, resignation, retirement, disqualification or removal from
office. Any vacancy on the Board of Directors howsoever resulting, may be filled
by a majority of the directors then in office, although less than a quorum, or
by a sole remaining director. The number of directors constituting the current
Board of Directors is three and the name and address of each person who is to
serve as director until the next annual meeting of shareholders, or until his
successor is elected and qualified is:
Kenneth A. Phillips Box 727, Highway 834 East .7 miles,
Hardin, Texas 77561
Jay G. Phillips Box 727, Highway 834 East .7 miles,
Hardin, Texas 77561
Richard R. Royall 1331 Lamar Street #1375,
Houston, Texas 77010
The amendment Article VIII is an addition to the Amended Articles of
Incorporation and the full text of the provision added reads as follows:
ARTICLE VIII
Any action required by the Texas Business Corporation Act, as amended, to
be taken at any annual or special meeting of shareholders of the Corporation, or
any action which may be taken at any annual or special meeting of shareholders
of the Corporation, may be taken without a meeting, without prior notice, and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by the holder or holders of shares having not less than
the minimum number of votes that would be necessary to take such action at a
meeting at which the holders of all shares entitled to vote on the action were
present and voted.
Special meetings of the stockholders of the Corporation for any purpose or
purposes may only be called at any time by the Board of Directors or a committee
thereof, the Chairman of the Board, the President, or by shareholders holding
not less than 50% of the votes entitled to the vote at the special meeting.
The amendment alters Article X the Amended Articles of Incorporation to
reads as follows:
ARTICLE X
Cumulative voting shall not be permitted. Preemptive rights shall not be
permitted.
The amendment Article XI is an addition to the Amended Articles of
Incorporation and the full text of the provision added reads as follows:
ARTICLE XI
No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for any breach of fiduciary
duty by such director as a director. Notwithstanding the foregoing sentence, a
director shall be liable to the extent provided by applicable law (i) for any
breach of the director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) pursuant to Section 2.41 of the
Texas Business Corporation Act, or (iv) for any transaction from which such
director derived an improper personal benefit. No amendment to or repeal of this
Article IX shall apply to or have any effect on the liability or alleged
liability of any director of the Corporation for or with respect to any acts or
omissions of such director occurring prior to such amendment or repeal. The
Corporation shall indemnify
<PAGE>
all current and former directors and officers of the Corporation to the fullest
extent of the applicable law, including, without limitation, Article 2.02-1 of
the Texas Business Corporation Act.
III.
The Articles of Incorporation and all amendments and supplements to them
are superseded by the following Amended and Restated Articles of Incorporation,
which accurately copy the entire text as well as incorporate the amendments set
forth above:
ARTICLE I
The name of the Corporation is Fleetclean Systems, Inc.
ARTICLE II
The address of the Corporation's registered office in the State of Texas
is Route 1 Box 289, Liberty, Texas 77575, and the name of its registered agent
at such address is Kenneth A. Phillips.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the Texas Business Corporation Act
including but not limited to operating and managing a sales business, owning,
buying and selling real and personal property, and conducting all business
reasonably associated therewith.
ARTICLE IV
The period of duration of the Corporation is perpetual.
ARTICLE V
The total number of shares of stock which the Corporation shall have
authority to issue is 50,000,000 consisting of 50,000,000 shares of common
stock, par value $.001 per share ("Common Stock"), and 10,000,000 shares of
preferred stock, par value $.001 per share ("Preferred Stock").
Shares of Preferred Stock of the Corporation may be issued from time to
time in one or more classes or series, each of which class or series shall have
such voting powers, full or limited, or no voting powers, and such designations,
preferences and relative, participating, optional or other special rights and
such qualifications, limitations or restrictions thereof, as shall be stated in
a resolution or resolutions providing for the issue of such class or series of
Preferred Stock as may be adopted from time to time by the Board of Directors
prior to the issuance of any shares thereof pursuant to the authority hereby
expressly vested in it, all in accordance with the laws of the State of Texas.
ARTICLE VI
Registered Office and Agent: The street address of the registered
office of the corporation is 611 Melody Lane, Friendswood, TX 77546, and the
name of its registered agent at that address is Kenneth A. Phillips.
ARTICLE VII
The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors consisting of not less than one nor more
than 10 directors, the exact number of directors
<PAGE>
to be determined from time to time by resolution adopted by the Board of
Directors. The number of directors may be increased or decreased, but in no case
will a decrease in the number of directors shorten the term of any incumbent
director. A director shall hold office until his successor is elected and
qualified, subject, however, to his prior death, resignation, retirement,
disqualification or removal from office. Any vacancy on the Board of Directors
howsoever resulting, may be filled by a majority of the directors then in
office, although less than a quorum, or by a sole remaining director. The number
of directors constituting the current Board of Directors is three and the name
and address of each person who is to serve as director until the next annual
meeting of shareholders, or until his successor is elected and qualified is:
Kenneth A. Phillips Box 727, Highway 834 East .7 miles,
Hardin, Texas 77561
Jay G. Phillips Box 727, Highway 834 East .7 miles,
Hardin, Texas 77561
Richard R. Royall 1331 Lamar Street #1375,
Houston, Texas 77010
ARTICLE VIII
Any action required by the Texas Business Corporation Act, as amended, to
be taken at any annual or special meeting of shareholders of the Corporation, or
any action which may be taken at any annual or special meeting of shareholders
of the Corporation, may be taken without a meeting, without prior notice, and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by the holder or holders of shares having not less than
the minimum number of votes that would be necessary to take such action at a
meeting at which the holders of all shares entitled to vote on the action were
present and voted.
Special meetings of the stockholders of the Corporation for any purpose or
purposes may only be called at any time by the Board of Directors or a committee
thereof, the Chairman of the Board, the President, or by shareholders holding
not less than 50% of the votes entitled to the vote at the special meeting.
ARTICLE IX
Bylaws: The initial bylaws shall be adopted by the Board of Directors. The
power to alter, amend or repeal the bylaws or adopt new bylaws is vested in the
Board Directors, subject to repeal of change by action of the shareholders.
ARTICLE X
Cumulative voting shall not be permitted. Preemptive rights shall not be
permitted.
ARTICLE XI
No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for any breach of fiduciary
duty by such director as a director. Notwithstanding the foregoing sentence, a
director shall be liable to the extent provided by applicable law (i) for any
breach of the director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) pursuant to Section 2.41 of the
Texas Business Corporation Act, or (iv) for any transaction from which such
director derived an improper personal benefit. No amendment to or repeal of this
Article IX shall apply to or have any effect on the liability or alleged
liability of any director of the Corporation for or with respect to any acts or
omissions of such director occurring prior to such amendment or repeal. The
Corporation shall indemnify
<PAGE>
all current and former directors and officers of the Corporation to the fullest
extent of the applicable law, including, without limitation, Article 2.02-1 of
the Texas Business Corporation Act.
IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated
Articles of Incorporation to be signed by its president this 1st day of June,
2000.
FLEETCLEAN SYSTEMS, INC.
By ______________________________
Kenneth A. Phillips, President
<PAGE>
FLEETCLEAN SYSTEMS, INC.
ANNUAL MEETING OF STOCKHOLDERS
May 31, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SPORTAN UNITED
INDUSTRIES, INC. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH THE CHOICES SPECIFIED BELOW.
The undersigned stockholder of FLEETCLEAN SYSTEMS, INC. (the "Company") hereby
appoints Kathryn M. Phillips, the true and lawful attorney, agent and proxy of
the undersigned with full power of substitution for and in the name of the
undersigned, to vote all the shares of Common Stock of the Company which the
undersigned may be entitled to vote at the Annual Meeting of Stockholders of the
Company to be held at the Company's principal executive offices at Highway 834
East, .7 mile, Hardin, Texas 77561, on Wednesday, May 31, 2000 at 3:00 p.m., and
any and all adjournments thereof, with all of the powers which the undersigned
would possess if personally present, for the following purposes:
FOR AGAINST ABSTAIN
--- ------- -------
1. To elect Kenneth A. Phillips as director. [ ] [ ] [ ]
2. To elect Jay G. Phillips as director. [ ] [ ] [ ]
3. To elect Richard R. Royall as director [ ] [ ] [ ]
4. To ratify the appointment of McManus & Co., P.C. as the [ ] [ ] [ ]
Company's independent public accountants.
5. To adopt the 2000 Stock Option Plan. [ ] [ ] [ ]
The proxies are authorized to vote as they determine in their discretion
upon such other matters as may properly come before the meeting.
THIS PROXY WILL BE VOTED FOR THE CHOICE SPECIFIED. IF NO CHOICE IS
SPECIFIED FOR EACH ITEM, THIS PROXY WILL BE VOTED FOR THAT ITEM.
The undersigned hereby acknowledges receipt of the Notice of Meeting and
Proxy Statement.
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE.
DATED:_________________ ____________________________________________
[Signature]
____________________________________________
[Signature if jointly held]
____________________________________________
[Printed Name]
Please sign exactly as name appears on stock certificate(s). Joint owners
should each sign. Trustees and others acting in a representative capacity should
indicate the capacity in which they sign.
