OBIE MEDIA CORPORATION
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
APRIL 21, 2000
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OBIE MEDIA CORPORATION
4211 West 11th Avenue
Eugene, Oregon 97402
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 21, 2000
To the shareholders of
Obie Media Corporation:
The annual meeting of the shareholders of Obie Media
Corporation, an Oregon corporation (the "Company"), will be held at 3 p.m. on
April 21, 2000, at the offices of the Company, located at 4211 West 11th Avenue,
Eugene, Oregon, for the following purposes:
1. To elect two Class 2 directors to serve until the
2003 annual meeting of shareholders.
2. To approve the Company's Employee Share Purchase
Plan.
3. To approve an amendment to the Company's Restated
1996 Stock Incentive Plan increasing the number of shares issuable under the
Plan.
4. To transact such other business as may be properly
brought before the meeting.
The foregoing items of business are more fully described in
the proxy statement accompanying this notice.
All shareholders are invited to attend the meeting.
Shareholders of record at the close of business on March 15, 2000, the record
date fixed by the Board of Directors, are entitled to notice of and to vote at
the meeting. Shareholders may vote in person or by proxy.
By order of the Board of Directors
Delores M. Mord
Secretary
Eugene, Oregon
March 16, 2000
YOUR VOTE IS IMPORTANT. Whether or not you intend to be present at the meeting,
please sign and date the enclosed proxy and return it in the accompanying
envelope to ensure that your shares will be voted.
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OBIE MEDIA CORPORATION
PROXY STATEMENT
2000 Annual Meeting of Shareholders
INTRODUCTION
The enclosed proxy is solicited by the Board of Directors of
Obie Media Corporation (the "Company" or "Obie Media"), to be used at the annual
meeting of shareholders to be held at 3 p.m. on April 21, 2000, and at any
adjournment or postponement thereof. The meeting will be held at the Company's
offices located at 4211 West 11th Avenue, Eugene, Oregon 97402. A copy of the
notice of the meeting is attached. The Company expects to mail this proxy
statement and the proxy to shareholders on or about March 16, 2000.
The persons named in the enclosed proxy will vote in the
manner directed and, in the absence of such direction, will vote for the
election of both of the named nominees for director, for the approval of the
Employee Share Purchase Plan, and for the approval of the amendment to the
Company's Restated 1996 Stock Incentive Plan increasing the number of shares
issuable under that Plan. As to other items of business that may arise at the
meeting, the proxyholders will vote in accordance with their best judgment.
Any proxy submitted by a shareholder may be revoked by the
shareholder at any time before its use by giving notice of such revocation to
the Secretary of the Company. If a shareholder attends the meeting and desires
to vote in person, his or her proxy will not be used.
The solicitation of proxies is being handled by the Company at
its own cost, principally through the use of the mails. Brokers, dealers, banks
and other nominees will be requested to forward soliciting material to the
beneficial owners of the shares and to obtain authorization for the execution of
proxies. The Company will reimburse brokerage firms, banks and other custodians,
nominees and fiduciaries for their reasonable expenses incurred in forwarding
proxies and proxy material to the beneficial owners of stock held of record by
such persons.
A copy of the Company's Annual Report to Shareholders for the
fiscal year ended November 30, 1999 is enclosed. A copy of the Company's Form
10-KSB, filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), is included in the Annual Report to Shareholders.
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VOTING RIGHTS
All holders of record of the Company's Common Stock, without
par value ("Common Stock"), at the close of business on March 15, 2000 will be
entitled to vote in person or by proxy at the annual meeting. On that date,
5,884,253 shares of Common Stock were outstanding and entitled to vote. The
holders of the Common Stock are entitled to one vote for each share of Common
Stock held. The presence, in person or by proxy, of a majority of the
outstanding shares of Common Stock at the annual meeting will constitute a
quorum for the transaction of business.
A majority of the outstanding Common Stock must be represented
at the meeting in person or by proxy in order to constitute a quorum for the
transaction of business. Brokers are permitted to vote the shares held by them
in "street name" on routine matters without receiving specific directions from
the beneficial owners of the shares, but brokers must receive specific
directions from beneficial owners before they may vote on nonroutine matters.
Thus, brokers enter a "broker nonvote" on nonroutine matters with respect to
shares where the broker has not received direction from the beneficial owner.
These broker nonvotes, as well as "abstentions" and "withheld" votes, are
counted in determining whether a quorum is present, but are not counted for or
against the proposal at issue.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The following table shows, as of February 1, 2000, the number
and percentage of outstanding shares of the Company's Common Stock beneficially
owned by each person known by the Company to beneficially own 5% or more of the
Company's Common Stock, by each director, by each of the executive officers
named in the Summary Compensation Table, and by all directors and executive
officers of the Company as a group.
Name and Address Amount and Nature Percentage of
of Beneficial Owner of Beneficial Ownership (1) Common Stock
- ------------------- ----------------------- ------------
Brian B. Obie 1,977,735 (2)(3) 33.6%
Eugene, Oregon
Randall C. Pape' 576,972 (4)(5) 9.8
Eugene, Oregon
Delores M. Mord 318,386 (2)(3) 5.4
Eugene, Oregon
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T. Rowe Price Associates, Inc. 293,450 (6) 5.0
Baltimore, Maryland
Wayne P. Schur 75,500 (5) 1.3
Langhorne, Pennsylvania
Stephen A. Wendell 14,641 (2)(5) *
Eugene, Oregon
Richard C. Williams 39,149 (2)(5) *
Eugene, Oregon
Steven F. Grover 2,420 (5) *
Eugene, Oregon
James W. Callahan 15,741 (5) *
Eugene, Oregon
All directors and executive officers 3,002,851 (2)(3)(4)(5) 50.3
as a group (8 persons)
- ------------------
*Less than 1% of the outstanding shares.
(1) A person is considered to "beneficially own" any shares: (a) over which
such person exercises sole or shared voting or investment power; or (b) of
which such person has the right to acquire ownership at any time within 60
days (e.g., through exercise of stock options). Voting and investment power
relating to the shares referenced in the table above is exercised solely by
the beneficial owner, except as indicated otherwise.
(2) Includes shares owned by the spouses of the named persons as follows: Brian
B. Obie, 22,275 shares; Delores M. Mord, 104,277 shares; Stephen A.
Wendell, 3,872 shares; Richard C. Williams, 4,611 shares; and for all
directors and executive officers as a group, 135,035 shares. All named
persons disclaim beneficial ownership of shares owned by their spouses.
(3) Includes 26,809 shares owned by the Company's profit sharing and 401(k)
plan. Brian B. Obie and Delores M. Mord serve on the administrative
committee with responsibility for plan decisions.
(4) Includes 561,000 shares owned by The Pape' Group, Inc. Mr. Pape' is
President, Chief Executive Officer and controlling shareholder of The Pape'
Group, Inc.
(5) Includes shares subject to options exercisable within 60 days after
February 1, 2000, as follows: Randall C. Pape', 2,662 shares; Wayne P.
Schur, 60,500 shares; Stephen A. Wendell, 2,662 shares; Richard C.
Williams, 2,662 shares; Stephen F. Grover, 2,420 shares; James W. Callahan,
11,979 shares; and for all officers and directors as a group, 82,885
shares.
(6) As reported by the shareholder in a Schedule 13G filed with the Securities
and Exchange Commission (the "SEC") in February 2000. These shares are
owned by various individual and institutional investors which T. Rowe Price
Associates, Inc. ("Price Associates") serves as investment adviser with
power to direct investments and/or sole power to vote the shares. For
purposes of the reporting requirements of the Exchange Act, Price
Associates is deemed to be a beneficial owner of such shares; however,
Price Associates expressly disclaims that it is, in fact, the beneficial
owner of such shares.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Restated Articles of Incorporation (the "Articles")
provide that, when the Company has six or more directors, the Board of Directors
will be divided into three classes (Class 1, Class 2 and Class 3), with the
members of each class serving for staggered three-year terms. The Company has
six directors. Accordingly, at each annual meeting of the Company's
shareholders, the number of directors equal to the
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number of the directors in the class whose term expires at the time of the
meeting will be elected to hold office until the third succeeding annual
meeting. The Articles limit the number of directors to nine. Class 1, Class 2
and Class 3 directors serve for terms expiring at the annual meeting of Obie
Media shareholders in 2002, 2000 and 2001, respectively.
Two Class 2 directors will be elected at the 2000 annual
meeting of shareholders. They will serve until the annual meeting in 2003, or
until their respective successors are elected and qualified. Management's
nominees for Class 2 director are Randall Pape' and Stephen Wendell. Mr. Pape'
and Mr. Wendell are current members of the Board.
Any nomination for director submitted by a shareholder must be made
in accordance with the Company's Bylaws. Under the Company's Bylaws, any
nomination for director submitted by a shareholder must be received by the
Secretary no later than March 22, 2000. A shareholder submitting a director
nomination must set forth as to each person whom the shareholder proposes to
nominate: (a) the name, age, business address and residence address of the
nominee; (b) the principal occupation or employment of the nominee; (c) the
class or series and number of shares of capital stock of the Corporation owned
beneficially or of record by the nominee; and (d) any other information relating
to the nominee that would be required to be disclosed in a proxy statement or
other filings required to be made in connection with solicitations of proxies
for election of directors pursuant to Section 14 of the Exchange Act, and the
rules and regulations promulgated thereunder. The shareholder notice must be
accompanied by a signed written consent of each proposed nominee to being named
as a nominee and to serve as a director if elected. If shareholders wish to
submit nominations for consideration at any subsequent annual shareholder
meeting, such submission must be received by the Company's Secretary not less
than 30 days before the date of that annual meeting.
A quorum being present at the shareholder meeting, the two nominees
for Class 2 director receiving the most votes cast in person or by proxy will be
elected as directors for a three-year term. There is no cumulative voting.
Shareholders cannot vote for more than two directors. Directors will hold office
until the 2003 annual meeting of Obie Media shareholders or until their
successors are duly elected and qualified. Both nominees for director have
agreed to serve if elected. If either nominee should become unavailable to serve
as a director prior to the annual meeting, the persons named in the enclosed
proxy will vote for such substitute nominee as may be designated by the Board of
Directors.
Certain information with respect to each person nominated for
election as a director at the annual meeting and each person whose term of
office as a director will continue after the meeting is set forth below:
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<TABLE>
<CAPTION>
Director
Name Principal Occupation Age Since
- ---- -------------------- --- -----
Class 2 Nominees - Terms to Expire in 2003:
<S> <C> <C>
Randall C. Pape' President and Chief Executive Officer of 49 1996
The Pape' Group President and Chief
Executive Officer of Liberty Financial Group
Stephen A. Wendell Registered Representative and Investment 58 1996
Advisory Agent with KMS Financial Services,
Inc.
Class 1 Directors - Terms Expire in 2002:
Delores M. Mord Vice President of Obie Industries 66 1987
Incorporated ("Obie Industries")
Wayne P. Schur Executive Vice President of the Company 55 1998
Class 3 Directors - Terms Expire in 2001:
Brian B. Obie Chairman of the Board, President and Chief 58 1987
Executive Officer of the Company
Richard C. Williams President and Chief Executive Officer of 60 1996
Centennial Bancorp
</TABLE>
Class 2 Nominees - Terms to Expire in 2003
Randall C. Pape' became a director of Obie Media in 1996.
Since 1981, Mr. Pape' has served as President and Chief Executive Officer of The
Pape' Group, Inc., a supplier of capital equipment and services, which operates
as a holding company for Pape' Bros., Inc., Flightcraft, Inc., Hyster Sales
Company, Pape' Properties, Inc. and Industrial Finance Company. He also serves
as President and CEO of Liberty Financial Group, a holding company for
LibertyBank, EcoSort LLC, and Sanipac, Inc. He is also a partner in Pape'
Investment Company and President and CEO of Mt. Bachelor, Inc. Since 1996, Mr.
Pape' has served as a director of Northwest Natural Gas Company, a distributor
of natural gas in Oregon and Washington. He currently serves as President of the
Board of Trustees of the University of Oregon Foundation, is a member of the
Oregon Business Council and is a trustee for the Nature Conservancy of Oregon.
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Stephen A. Wendell became a director of Obie Media in 1996.
Since November 1998, Mr. Wendell has been a registered representative and
investment advisory agent with KMS Financial Services, Inc., an independent
privately owned financial services firm based in Seattle, Washington. From 1995
to February 1998, he was Chief Financial Officer and a director of Umpqua
Feather Merchants, Inc., a manufacturer and distributor of fishing flies and
related accessories. From 1992 to 1995, Mr. Wendell served as a consultant to
Umpqua Feather Merchants, Inc. and other companies, including companies
providing advertising and food services. Since 1993, Mr. Wendell has been the
principal shareholder and President of Continental Land and Cattle Company, a
residential real estate development company.
Class 1 Directors - Terms Expire in 2002
Delores M. Mord is a co-founder of Obie Media and has served
as the Company's Secretary and as a director since the Company's inception in
1987. She served as Vice President of Obie Media until 1996. Ms. Mord has served
as an officer (currently as Vice President) and a director of Obie Industries
since its formation in 1960. Obie Industries, which now operates as a real
estate management company, was Obie Media's parent corporation until 1996. Ms.
Mord has 39 years of experience in the out-of-home advertising industry.
Wayne P. Schur was appointed Executive Vice President of Obie
Media in September 1998. He was appointed a director of Obie Media in October
1998 and is also a director of P & C, one of the Company's wholly owned
subsidiaries. He was the President and sole or principal shareholder of P & C
from 1981 to September 1998, when P & C was acquired by Obie Media. He continues
as President of P & C. Mr. Schur has 25 years of experience in the out-of-home
advertising industry.
Class 3 Directors - Terms Expire in 2001
Brian B. Obie is the Chairman of the Board, President and
Chief Executive Officer of Obie Media. He is a co-founder of Obie Media and has
served as its President and as a director since its inception in 1987. Since
January 2000, he has served as the President of Obie Media Limited, a British
Columbia corporation and one of Obie Media's wholly owned subsidiaries. Since
January 1998, he has been Treasurer of Obie Media Limited and, since September
1998, he has been a director of P & C. Mr. Obie is also employed by and is a
director of Obie Industries, where he has served as President since 1968. Mr.
Obie has 39 years of experience in the out-of-home advertising industry. He has
been Chairman of the Board of Centennial Bancorp, a bank holding company, since
1981. He is a former mayor of Eugene, Oregon.
Richard C. Williams became a director of Obie Media in 1996.
He has served as President, Chief Executive Officer and a director of Centennial
Bancorp since 1981. He has served as Vice Chairman of Centennial Bank, a wholly
owned subsidiary
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of Centennial Bancorp, since 1992, was its Chief Executive Officer from 1992
until January 1998, and was its President from 1977 to 1992. He has been a
director of Centennial Bank since 1977. In 1999, Mr. Williams became a director
of Elmer's Restaurants, Inc., a franchisor and operator of full-service,
family-oriented restaurants.
Board Committees
- ----------------
The Company maintains two standing committees, an Audit
Committee and a Compensation Committee, but does not maintain a standing
nominating committee.
The Audit Committee reviews and makes recommendations to the
Board of Directors with respect to the engagement and discharge of the Company's
independent auditors and the terms of such engagement, reviews the policies and
procedures of the Company and management with respect to maintaining the
Company's books and records, and reviews with the independent auditors the
results of the auditing engagement and any recommendations the auditors may have
with respect to the Company's financial, accounting or auditing systems. Stephen
Wendell, Randall Pape' and Richard Williams serve on the Audit Committee, with
Mr. Wendell serving as Chair. The Committee did not formally meet during fiscal
1999, but the results of the Company's audit were reviewed at the Company's
regular Board meetings. The Audit Committee met in January 2000.
The Compensation Committee determines compensation for elected
officers of the Company and prepares such reports with respect to such
compensation as may be required by law. Richard Williams, Randall Pape' and
Stephen Wendell serve on the Compensation Committee, with Mr. Williams serving
as Chair. The Committee met once during fiscal 1999.
Board Meetings during 1999 Fiscal Year
- --------------------------------------
The Board of Directors met in person four times during the
1999 fiscal year and acted by consent minutes one time. In fiscal 1999, each
director attended at least 75% of the meetings of the Board of Directors and the
committees on which the director served.
Compensation of Directors
- -------------------------
Executive officers receive no compensation for serving as
directors of Obie Media. All nonemployee directors receive $5,000 for each year
they serve as a director. Upon becoming a director, Obie Media grants to each
nonemployee director a nonqualified stock option to purchase 5,000 shares of
Common Stock under the Company's Restated 1996 Stock Incentive Plan. On the date
of each annual shareholder meeting, each nonemployee director is granted an
additional option to purchase 1,000 shares. Options granted to nonemployee
directors have a term of 15 years and an exercise price equal to the fair market
value of the Company's
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Common Stock on the grant date. The options become exercisable by the director
at the rate of 20% per year of service.
PROPOSAL 2
APPROVAL OF EMPLOYEE SHARE PURCHASE PLAN
The shareholders of the Company are being asked to approve the
Employee Share Purchase Plan (the "Employee Plan"). The following summary of the
material features of the Plan is qualified in its entirety by reference to the
full text of the Plan, which is attached as Exhibit A to this proxy statement.
All capitalized terms have the meanings set forth in the Employee Plan.
The Employee Plan provides for the purchase of up to 100,000
shares of the Company's Common Stock (subject to adjustment as provided in the
Plan) by employees of the Company at a discount from market price. The purpose
of the Employee Plan is to provide employees of the Company and its current and
future subsidiaries with a convenient means to purchase shares of Common Stock
of the Company at favorable prices through accumulated payroll deductions and to
thereby encourage ownership in the Company. It is the intention of the Company
to have the Plan qualify as an "employee stock purchase plan" under Section 423
of the Internal Revenue Code of 1986, as amended (the "Code"). The Employee Plan
is not subject to any of the provisions of the Employee Retirement Income
Security Act of 1974, as amended, and is not qualified under Section 401(a) of
the Code.
Eligibility
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All regular employees of the Company and its subsidiaries who
work at least 20 hours per week and who have been employed by the Company for
more than one year are eligible to participate in the Employee Plan, except as
described in the following paragraph. For purposes of the Plan, an individual
will continue to be deemed an eligible employee while the individual is on sick
leave or other leave of absence approved by the Company; provided, however, that
where the period of leave exceeds 90 days, the employee will be deemed to have
been terminated on the 91st day of such leave.
In no event will any employee be granted a right to purchase
shares under the Employee Plan: (a) to the extent that, immediately after the
grant, such employee would beneficially own 5% or more of the Common Stock of
the Company; or (b) to the extent that the employee's rights to purchase stock
under the Employee Plan would accrue at a rate that exceeds $25,000 worth of
stock (determined at the fair market value of the shares at the time such right
is granted) for each calendar year in which the right is outstanding at any
time.
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Administration; Term of Employee Plan
- -------------------------------------
The Employee Plan will be administered by Marianne Dyer, the
Director of Human Resources for the Company (the "Administrator"). The Employee
Plan will continue through 2004, unless terminated earlier by the Board of
Directors.
Offerings; Purchase Price
- -------------------------
The Employee Plan will be implemented by consecutive
three-month offering periods (each of which is referred to herein as an
"Offering Period"). As of the first day of each Offering Period (the "Offering
Commencement Date"), each eligible employee participating in such Offering
Period will be granted an option to purchase on the last day of each Offering
Period (the "Purchase Date") up to a number of shares determined by dividing
such employee's payroll deductions accumulated prior to such Purchase Date and
retained in the employee's account as of the Purchase Date by the applicable
Exercise Price. The applicable Exercise Price will be an amount equal to between
90% and 100% of the fair market value of a share of Common Stock on the Offering
Commencement Date or on the Purchase Date, whichever is lower, as determined
under the Employee Plan.
Each eligible employee may participate in an Offering by
filing a payroll deduction authorization form with the Company. The amount
deducted from an employee's paycheck may not exceed 10% of the employee's base
pay on each payday as of the beginning of the Offering Period. A participating
employee my withdraw his or her payroll deductions credited to his or her
account at any time prior to the Purchase Date for the Offering. Such withdrawal
will not affect the employee's ability to participate in any succeeding Offering
under the Employee Plan.
Unless a participating employee withdraws from the Employee
Plan, his or her option for the purchase of shares will be exercised
automatically on the Purchase Date, and the maximum number of full shares
subject to option will be purchased for such employee participant at the
applicable Exercise Price with the accumulated payroll deductions in his or her
account. No fractional shares will be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share will be returned to the employee, without interest.
Changes in Capital Structure; Certain Corporate Transactions
- ------------------------------------------------------------
If any reorganization, merger, recapitalization,
reclassification, stock dividend, stock split or similar transaction causes the
outstanding Common Stock of the Company to increase or decrease or to be changed
into a different number or kind of securities of the Company, the Administrator
will make appropriate adjustments to the maximum shares available under the
Employee Plan, and are subject to purchase under outstanding options, and on the
option exercise price.
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In the event of a dissolution of the Company, or of a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of substantially all of the property or shares of the Company,
holders of outstanding options under the Employee Plan will be entitled to
receive at the next Offering Termination Date, the cash, securities and/or
property that a holder of such number of shares of the Common Stock was entitled
to receive at the time of such transaction.
Transferability
- ---------------
A participant may not assign, transfer or otherwise dispose of
(other than by will and the laws of descent and distribution) payroll deductions
credited to the participant's account or any right of the participant to
exercise an option to purchase shares under the Employee Plan. Shares of Common
Stock acquired under the Employee Plan generally will be freely transferable.
The Board of Directors of the Company may at any time and for
any reason terminate or amend the Employee Plan, except no such termination can
affect options previously granted, provided that the Board of Directors will
not, without shareholder approval: (a) increase the maximum number of shares
that may be issued in any Offering; or (b) amend the requirements as to the
class of employees eligible to purchase shares under the Employee Plan.
Certain Federal Income Tax Consequences
- ---------------------------------------
The following discussion is intended only as a general summary
of certain of the federal income tax consequences arising from the purchase of
Common Stock pursuant to the Employee Plan and the subsequent disposition of
such Common Stock. Federal income tax consequences will vary as a result of
individual circumstances. State, local and foreign tax consequences may be
substantially different than the federal income tax consequences described
herein. Also, this discussion does not discuss the tax consequences arising in
the context of a participant's death.
Grant and Purchase
Under applicable provisions of the Code, participants are
taxed on all compensation, including the amount of payroll deductions used to
purchase shares pursuant to the Employee Plan. However, participants will
recognize no additional compensation income upon being granted a right to
purchase shares. Furthermore, assuming that the Employee Plan qualifies under
Section 423 of the Code, participants will not recognize taxable income upon
purchase of shares, even though they will pay less than fair market value for
their shares. The Company will not be entitled to a deduction for tax purposes
as a result of granting rights to purchase shares or as a result of participants
purchasing shares.
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Sale of Common Stock
Assuming the Employee Plan qualifies under Section 423 of the
Code, the tax treatment of a participant who sells shares purchased under the
Employee Plan depends on how long the participant holds the shares. If a
participant sells shares in a qualifying disposition (a sale more than the later
of two years from the applicable Offering Commencement Date and one year from
the Purchase Date), for a price in excess of the Exercise Price, the Participant
generally will recognize ordinary income equal to the lesser of the excess of
(i) the fair market value of the shares on the Offering Commencement Date over
the Exercise Price and (ii) the amount realized on the sale over the Exercise
Price. Any additional gain generally will be taxed as capital gain. In the case
of a qualifying disposition, the Company will not be entitled to any deduction
as the result of such sale.
If a participant sells the shares before the expiration of the
holding period described above, the sale is deemed to be a disqualifying
disposition. In such a case, the participant will recognize ordinary income
generally measured as the excess of the fair market value of the shares on the
Purchase Date over the Exercise Price, even if the shares are actually sold for
less than the fair market value on the Purchase Date. If the shares are sold for
less than the fair market value on the Purchase Date, the participant can claim
a capital loss for the decline in value. In the case of a disqualifying
disposition, the Company will be entitled to a deduction equal to the amount the
participant reports as ordinary income.
Expenses
- --------
The Company will pay all costs and expenses of administering
the Employee Plan.
Future Participation in the Employee Plan
- -----------------------------------------
At February 29, 2000, approximately 80 employees (including
officers) would be eligible to participate in the Employee Plan. Because the
price of shares to be purchased will not be established until the end of the
first Offering Period, and because benefits to be received depend on
participants' decisions to participate throughout the Offering Periods, the
benefits to be received under the Employee Plan by the foregoing persons is not
determinable at the date of this proxy statement. The closing sale price of the
Company's Common Stock on the Nasdaq National Market on March 7, 2000 was $9.38
per share.
Registration of Shares
- ----------------------
Assuming the shareholders approve the Employee Plan, the
Company expects to register the shares of Common Stock covered by the Employee
Plan under the Securities Act of 1933 as soon as practicable after such approval
is obtained.
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Vote Required
- -------------
Approval of the Employee Plan requires that a quorum be
present and that the number of votes cast in favor of the Employee Plan exceed
the number of votes cast in opposition to the Plan. The Board of Directors
unanimously recommends a vote FOR the Employee Share Purchase Plan.
PROPOSAL 3
APPROVAL OF AMENDMENT TO RESTATED 1996 STOCK INCENTIVE PLAN
INCREASING SHARES ISSUABLE UNDER THE PLAN
The Board has unanimously approved an amendment to the
Company's Restated 1996 Stock Incentive Plan (the "Incentive Plan"), contingent
upon shareholder approval, increasing the aggregate number of shares authorized
for issuance under the Incentive Plan from 399,300 to 549,300 (subject to
adjustment as described below). The following summary description of the
Incentive Plan is qualified in its entirety by reference to the full text of the
Incentive Plan, as proposed to be amended, and to agreements entered into
pursuant to the Incentive Plan. (A copy of the Incentive Plan may be obtained
without charge from Michael E. Hubbard, the Company's Corporate Controller.)
At February 29, 2000, options covering an aggregate of 295,147
shares were outstanding under the Incentive Plan. Only 68,851 shares are
currently available for new awards under the Incentive Plan.
The purpose of the Incentive Plan and the proposed amendment
is to promote the best interests of the Company and its shareholders by
providing employees, directors and consultants of the Company and its
subsidiaries with an opportunity to acquire a proprietary interest in the
Company. The Incentive Plan is intended to promote continuity by increasing
retention of employees, directors and consultants, and assisting in securing the
services of new employees, directors and consultants. Management believes the
Incentive Plan also provides incentives for such persons to exert maximum
efforts for the success of the Company. The Incentive Plan provides for the
issuance of shares pursuant to: (a) incentive stock options within the meaning
of Section 422 of the Code ("ISOs"); (b) nonqualified stock options ("NQOs");
(c) stock bonuses; and (d) direct sales of stock.
The Incentive Plan was originally adopted by the Board, and
approved by the Company's sole shareholder, on October 2, 1996. Should the
proposed amendment not be approved, the Incentive Plan will remain in full force
and effect, without the increase in the number of shares issuable under the
Plan.
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Administration
- --------------
The Incentive Plan may be administered by a committee of the
Board of Directors, but currently is administered by the full Board of
Directors. The Board determines the persons to whom awards will be made under
the Incentive Plan, when awards will be granted, the amount of the awards, and
other terms and conditions of the awards, except that the authority to grant
certain awards to non-officer employees has been delegated to certain officers
of the Company. The Board may also waive or modify any restriction with respect
to an award. The Board promulgates rules and regulations for the operation of
the Incentive Plan, interprets the Plan and related agreements and generally
supervises the administration of the Plan.
Eligibility
- -----------
Employees, directors (including nonemployee directors) and
consultants are eligible to participate in the Plan. Only employees are eligible
to receive ISOs.
At February 29, 2000, approximately 80 employees (including
officers) and four nonemployee directors of the Company are eligible to
participate in the Incentive Plan. Each person to receive an award under the
Incentive Plan must be a person the Board believes has made or will make an
important contribution to the Company. In determining to make awards under the
Incentive Plan, the Board may take into account the nature of the services
rendered by the individual, the person's present and potential contribution to
the success of the Company, and such other factors as the Board deems relevant.
Number Of Shares Covered By Incentive Plan
- ------------------------------------------
The Incentive Plan currently provides that up to 399,300
shares (after adjustment for stock splits) of Common Stock are available for
issuance pursuant to the Plan. If the shareholders approve this amendment to the
Incentive Plan, a total of 549,300 shares of Common Stock will be available for
issuance under the Plan.
Term Of Incentive Plan; Amendment Of Incentive Plan
- ---------------------------------------------------
The Incentive Plan will remain in effect until all awards
granted under the Plan have been satisfied or expired. However, no awards may be
granted under the Plan after October 1, 2006. To the extent that an award lapses
or terminates, any shares of Common Stock subject to such award will again be
available for the grant of a future award under the Incentive Plan.
Generally, the Board of Directors may amend, modify or
terminate the Incentive Plan at any time subject to the requirement for
shareholder approval of certain material changes.
13
<PAGE>
Stock Options
- -------------
The term of each option granted under the Incentive Plan will
be as specified by the Board at the date of grant, except that no ISO will have
a term of more than ten years from the date of grant. No ISO may be granted to
an individual who owns more than 10% of the total combined voting power of all
classes of stock of the Company unless the exercise price is at least 110% of
the fair market value of the Common Stock at the time of the grant and the term
of the option is no more than five years from the date of grant.
The Board will determine the exercise price for all stock
options. The exercise price for ISOs may not be less than the fair market value
of the underlying Common Stock on the date of grant, and the exercise price for
NQOs may not be less than 85% of the fair market value of the underlying shares
on the date of grant. The exercise price of an option or portion thereof must be
paid in full at the time of exercise in the manner prescribed by the Board.
In the event of the death or other termination of an
optionee's employment with the Company, the Plan provides that the optionee's
options may be exercised for specified periods thereafter (one year in the case
of termination by reason of death or disability and three months in the case of
termination for any other reason), but only if and to the extent the optionee
was entitled to exercise the option at the date of such termination. The Plan
also provides that, at the time of grant or at any time thereafter, the Board
may extend the three-month and one-year post-termination exercise periods for
any period up to the expiration date of the option and may increase the portion
of the option that is exercisable.
Stock Sales and Bonuses
- -----------------------
The Board may grant awards of Common Stock under the Plan. The
Board will determine the persons to receive stock awards and will determine the
amount and form of any payment due for the shares. The stock awards will be
subject to such restrictions as the Board may determine. Such awards may be
subject to forfeiture for breach of the terms and conditions of the stock
agreement entered into at the time of such award.
Transferability
- ---------------
Options granted under the Incentive Plan are not transferable
or assignable by the optionee except by will or by the laws of descent and
distribution; provided, however, that, with the consent of the Board, NQOs may
be assigned or transferred, subject to certain requirements, to the optionee's
immediate family, to trusts for the benefit of the optionee's immediate family
members, and pursuant to qualified domestic relations orders. An ISO may be
exercised during the lifetime of the optionee only by the optionee, the
optionee's guardian or legal representative.
14
<PAGE>
Changes In Capital Structure; Certain Corporate Transactions
- ------------------------------------------------------------
If any reorganization, merger, consolidation, plan of
exchange, recapitalization, reclassification, stock split-up, combination of
shares or stock dividend causes the outstanding Common Stock to increase or
decrease or to be changed into a different number or kind of securities of the
Company or any other corporation, the Board will make appropriate adjustments in
the number and kind of shares available for awards under the Incentive Plan and
in the number and kind of shares as to which outstanding options will be
exercisable, so that the participant's proportionate interest before and after
the event is maintained.
In the event of the dissolution of the Company, or of a
merger, consolidation, or plan of exchange affecting the Company, in lieu of
providing for options as provided in the preceding paragraph or in lieu of
having the options continue unchanged, the Board may, in its sole discretion,
provide a 30-day period prior to such event during which holders will have the
right to exercise options in whole or in part without any limitation on
exercisability, and upon the expiration of this 30-day period, all unexercised
options will immediately terminate.
The existence of the Incentive Plan and the awards granted
under the Plan does not affect the right or power of the Board or shareholders
to make or authorize any change in the Company's capital structure, or to do or
authorize any other corporate act or proceeding. Further, except as specifically
provided in the Incentive Plan, the Company's issuance of stock or securities
convertible into stock will not affect the number of shares of Common Stock
subject to awards already granted at the time the subsequent issuance is made or
the exercise price of the shares subject to these previously granted awards.
Certain Federal Income Tax Consequences
- ---------------------------------------
The following description of U.S. federal income tax
consequences is intended merely to provide basic information with respect to the
tax treatment applied to various grants and awards under the Incentive Plan. The
exact consequences to any particular participant will depend upon the
participant's particular circumstances, including the terms of his or her award
agreement. State and local tax laws may vary from federal law. The federal
income tax rules and regulations discussed below are subject to change by
legislative actions and judicial decisions, and may be subject to differing
interpretations.
Incentive Stock Options
Certain options authorized to be granted under the Incentive
Plan are intended to qualify as ISOs for federal income tax purposes. Under
current federal income tax law, an optionee generally does not recognize taxable
income upon the grant or exercise of an ISO if certain holding periods are
satisfied. However, the amount by which the fair market value of the shares at
the time of exercise exceeds the
15
<PAGE>
exercise price constitutes an "item of adjustment" for purposes of the
alternative minimum tax. Exercise of an ISO may significantly increase the
likelihood that the optionee will be required to pay the alternative minimum tax
for the year of exercise. If the optionee pays the alternative minimum tax, the
optionee may, in a subsequent year, receive a credit for the alternative minimum
tax paid.
If the optionee does not dispose of shares acquired upon the
exercise of an ISO for two years after the date of grant and one year after the
date of exercise (the "holding periods"), then upon the sale of the shares, any
amount realized in excess of the exercise price is taxed to the optionee as
long-term capital gain and any loss sustained will be long-term capital loss.
Generally, if an optionee disposes of shares acquired upon
exercise of an ISO within the holding periods, the optionee will have ordinary
income for the year of disposition equal to the lesser of (a) the excess of the
fair market value of the shares on the date of exercise over the exercise price,
or (b) the amount of gain realized upon the disposition. The Company will not be
allowed any deduction for federal income tax purposes at either the time of
grant or the time of exercise of an ISO. Upon any disposition of shares within
the holding periods by an optionee, the Company will be entitled to a deduction
in the year in which the disposition occurs to the extent the optionee realizes
ordinary income.
Although the Company believes that the options designated as
ISOs granted under the Incentive Plan will qualify under Section 422 of the
Code, there can be no assurance that their status as such might not be
successfully challenged by the Internal Revenue Service (the "IRS"). Any stock
option found to be nonqualifying would not be eligible to receive the tax
treatment described above. Instead, the option would be a NQO and receive the
tax treatment described below.
Nonqualified Stock Options
Certain options authorized to be granted under the Plan will
be treated as NQOs for federal income tax purposes. The tax treatment of NQOs is
different from the tax treatment of ISOs with respect to the time when income is
recognized and the characterization of such income. For a NQO, an optionee
generally recognizes income upon exercising the option. The amount of income
recognized upon exercise constitutes ordinary income and equals the excess of
the fair market value of the shares at the date of exercise over the exercise
price. Any gain or loss recognized on the subsequent sale or exchange of the
shares generally constitutes a short-term or long-term capital gain or loss, as
applicable. Income tax withholding is provided for in the option agreements. The
Company is entitled to a deduction in an amount equal to the ordinary income
recognized by the optionee. To the extent required by the Code and Regulations,
the Company will report the optionee's income to the IRS and will withhold
income and employment taxes for the optionee's income (or require payment by
optionee to the Company of such withholding taxes.)
16
<PAGE>
Stock Sales and Bonuses
If shares sold or awarded as bonuses under the Incentive Plan
are transferable or are not subject to a substantial risk of forfeiture, the
participant will recognize ordinary income equal to the excess of the fair
market value of the shares received (determined as of the date of the award)
over the amount, if any, paid for the shares. The Company will be entitled to a
tax deduction in the same amount.
In the case of restricted shares that are not transferable and
are subject to a substantial risk of forfeiture on the date of issuance, the
participant will generally recognize ordinary income equal to the excess of the
fair market value of shares received (determined as of the date on which the
shares either become transferable or are not subject to a substantial risk of
forfeiture) over the amount, if any, paid for the shares. The Company will be
entitled to a tax deduction in the same amount. A participant may elect to
recognize income when the shares are received, rather than upon the expiration
of the transfer restriction or risk of forfeiture, and, in such event, the
amount of ordinary income will be determined as of the date of issuance rather
than upon expiration of the applicable restriction. The Company's tax deduction
will be determined at the same time.
To the extent required by the Code and the Regulations, the
Company will report the participant's income to the IRS and will withhold income
and employment taxes from the participant's income (or require payment by the
participant to the Company of such withholding taxes).
Expenses
- --------
The Company will pay all the costs and expenses of
administering the Incentive Plan.
Future Awards Under The Incentive Plan
- --------------------------------------
As of the date of this proxy statement, the Board has not
decided to make any particular awards under the Incentive Plan. Therefore, the
number and type of awards to be granted under the Incentive Plan to any
particular individual cannot be determined at this time.
Shareholder Approval
- --------------------
Approval of the proposal to amend the Incentive Plan to
increase the number of shares available for issuance under the Plan to 549,300
shares requires that a quorum be present and that the number of votes cast in
favor of that proposal exceed the number of votes cast in opposition to the
proposal. The Board of Directors unanimously recommends a vote FOR the proposed
amendment to the Incentive Plan.
17
<PAGE>
INFORMATION REGARDING MANAGEMENT
Executive Officers
- ------------------
Each officer serves at the discretion of the Company's Board
of Directors. No officer, other than Mr. Schur, is subject to an agreement that
requires the officer to serve Obie Media for a specified number of years. Mr.
Schur is also subject to a noncompetition agreement. There are no family
relationships among any of the Company's directors or executive officers, except
that Mr. Obie and Ms. Mord are cousins.
The executive officers of the Company as of the date of this
proxy statement are as follows:
Name Age Office Has Served in
- ---- --- ------ Present Office
--------------
Brian B. Obie 58 Chairman of the Board, President and Since 1987
Chief Executive Officer
Wayne P. Schur 54 Executive Vice President Since 1998
See "Election of Directors" for biographical information
concerning Mr. Obie and Mr. Schur.
Other Significant Employees
Scott A. Calderwood, 32, was appointed Vice President of the
Company in October 1998. He was Obie Media's Production Manager from 1995 to
1996 and a Region Manager for Oregon and Washington from 1996 to 1998. Mr.
Calderwood now serves as the Company's Vice President, Western Region.
Brad L. Falk, 34, was appointed Vice President of the Company
in 1999. He was the Sales Manager for the Company's Dallas market from 1997 to
1999, and was a sales representative in Obie Media's Portland and Salem, Oregon
markets in 1994 and 1995. Mr. Falk now serves as the Company's Vice President,
Northeastern Region.
Cherie L. McGrath, 45, was appointed Vice President of the
Company in October 1998. She was the Company's Portland, Oregon Market Manager
in 1996. From 1997 to 1998, she served as Obie Media's Southwest Regional
Manager. Since 1998, Ms. McGrath has served as the Company's Vice President,
Southeastern Region.
Sandy L. Trahan, 34, was appointed Vice President of Obie
Media Limited, the Company's wholly owned subsidiary that operates in Canada, in
1998.
18
<PAGE>
From 1996 to 1998, he served as Sales Manager for the Company's Portland, Oregon
market. Mr. Trahan was a sales representative in the Portland market from 1994
to 1996.
Executive Compensation
- ----------------------
The following table summarizes the compensation Obie Media
paid during each of the last three fiscal years to its Chief Executive Officer
and other executive officers whose salary and bonus exceeded $100,000 during
fiscal 1999 (the "Named Executive Officers"):
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Awards
-
Securities All Other
Fiscal Salary Bonus Underlying Compensation
Name and Principal Position Year ($) ($) Options ($)(1)
- --------------------------- ------ ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Brian B. Obie, 1999 $166,632 $40,000 558 $6,149
Chairman of the Board, 1998 166,632 25,000 502 3,749
President and 1997 157,200 25,000 - 3,568
Chief Executive Officer
Wayne P. Schur, 1999 $147,169 - - $5,656
Executive Vice President (2) 1998 37,500 - 151,250 250
1997 - - - -
Stephen F. Grover, 1999 $120,000 $15,000 458 $5,188
Vice President and 1998 109,360 25,774 12,356 3,558
General Manager (3) 1997 96,000 18,000 - 3,020
James W. Callahan, 1999 $99,996 $ 8,000 282 $4,765
Chief Financial Officer and 1998 84,270 16,000 260 2,326
Treasurer (4) 1997 79,500 15,000 - -
</TABLE>
(1) Represents contributions made by the Company under its profit sharing and
401(k) plan on behalf of the applicable Named Executive Officers.
(2) Mr. Schur did not receive any compensation from the Company until September
1, 1998. P & C paid him an annual base salary of $200,000 in each of calendar
years 1997 and 1998 (paid through August 31, 1998), with bonuses of $110,000 and
$30,000 in 1997 and 1998, respectively. In addition, P & C contributed $4,000
and $4,396 on his behalf under a P & C profit sharing and 401(k) plan for 1997
and 1998, respectively. Pursuant to Mr. Schur's employment agreement with the
Company, as amended, his annual salary from September 1999 to September 2000 is
$116,673, with his salary increasing by $16,668 each year through the remaining
three years of his five-year employment agreement.
(3) Mr. Grover resigned his employment with the Company, effective in December
1999. Mr. Grover is subject to a noncompetition agreement that continues for 12
months after his termination.
(4) Mr. Callahan resigned as the Company's Chief Financial Officer, effective in
February 2000.
19
<PAGE>
Stock Option Information
- ------------------------
None of the Named Executive Officers exercised any options
during fiscal 1999.
The following table sets forth certain information regarding
options granted to the Named Executive Officers during fiscal 1999:
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
% of Total Potential Realizable Value at
Options Market Assumed Annual Rates of Stock
Granted to Per-Share Price Price Appreciation for Option
-----------------------------
on Term
----
Options Employee Exercise Grant Expiration
Name Granted in 1999 Price Date Date 0% 5% ($) 10%
($) ($)
- ------------------ --------------- ----------- --------- -------- ---------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Brian B. Obie 502 (1) 0.5% $14.89 $14.89 1/1/14 - $15,540 $31,224
Wayne P. Schur -
Stephen F. Grover 458 (1)(2) 0.5% 14.89 14.89 1/1/14 - 14,178 28,487
James W. Callahan 282 (1)(2) 0.3% 14.89 14.89 1/1/14 - 8,729 17,540
</TABLE>
(1) These options have a 15-year term and the shares subject to the options
become exercisable at a rate of 25%, 35% and 40%, respectively, on the third,
fourth and fifth anniversaries of the date of grant.
(2) Because these employees have terminated their employment with the Company,
these options will not become exercisable.
The following table sets forth certain information regarding
options held by the Named Executive Officers at November 30, 1999:
Aggregated Option Values at End of Fiscal Year
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
November 30, 1999 November 30, 1999 ($)(1)
---------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ----
------------ -------------- ------------ -------------
Brian B. Obie - 1,060 - $ 884
Wayne P. Schur 60,500 90,750 $189,873 284,810
Stephen F. Grover 22,385 23,804 108,610 73,033
James W. Callahan 11,979 8,528 65,166 43,902
1) On November 30, 1999, the market price of the Company's Common Stock was
$10.44 per share. For purposes of the foregoing table, stock options with an
exercise price less than that amount are considered to be "in-the-money" and are
considered to have a value equal to (i) the difference between that amount and
the exercise price of the option multiplied by (ii) the number of the shares
covered by the stock option.
20
<PAGE>
Incentive Plan
- --------------
The Incentive Plan provides for the issuance of 399,300 shares
of Common Stock to the Company's employees, directors and consultants. Shares
may be issued pursuant to: (a) ISOs; (b) NQOs; (c) stock bonuses; and (d) direct
sales of stock. ISOs may be issued only to the Company's employees and will have
a maximum term of 10 years from the date of grant. The exercise price for ISOs
may not be less than 100% of the fair market value of the Company's Common Stock
at the time of the grant, and the aggregate fair market value (as determined at
the time of the grant) of shares issuable upon the exercise of ISOs for the
first time in any one calendar year may not exceed $100,000. In the case of ISOs
granted to holders of more than 10% of the Company's Common Stock, the exercise
price may not be less than 110% of the fair market value of the Company's Common
Stock at the time of the grant, and the term of the option may not exceed five
years. Under the Incentive Plan, NQOs have a maximum term of 15 years from the
date of grant and must be granted at an exercise price not less than 85% of the
fair market value of the Company's Common Stock at the date of grant. Options
become exercisable in whole or in part from time to time as determined by the
Board of Directors.
At November 30, 1999, options covering 276,369 shares were
outstanding under the Incentive Plan, with a weighted average exercise price of
$8.24 per share. An additional 107,594 shares remained available for future
issuances under the Incentive Plan on that date. See "Proposal 3," which seeks
approval of an amendment to the Incentive Plan increasing the number of shares
issuable under the Plan by 150,000 shares.
SCHUR EMPLOYMENT AND NONCOMPETITION AGREEMENT;
CHANGE-IN-CONTROL ARRANGEMENT
Schur Employment and Noncompetition Agreement
- ---------------------------------------------
In connection with Obie Media's acquisition of P & C in
September 1998, the Company entered into a five-year employment and
noncompetition agreement with Wayne Schur, the Executive Vice President and a
director of Obie Media and the former shareholder of P & C. The agreement was
amended on September 1, 1999 to reflect a reduction in Mr. Schur's hours of
employment from full-time to three days per week and a decrease in his salary.
Under the agreement, as amended, Mr. Schur's annual salary, commencing September
1, 1999, is $116,673 and will increase by $16,668 in each of the third through
fifth years of his employment. Prior to the amendment, his annual salary,
commencing September 1, 1999, would have been $175,000 with increases of $25,000
in each remaining year of the agreement. The agreement contains noncompetition
and nondisclosure provisions.
The agreement provides that the Company may terminate Mr.
Schur's agreement at any time after September 1, 2001 without "cause," as
defined in the
21
<PAGE>
agreement. In that case, the Company generally would be liable to Mr. Schur for
a severance benefit payment equal to his annual salary for the then upcoming
contract year. The agreement further provides that the Company may terminate his
contract at any time for cause. In such case, the Company would be liable to him
only for salary and benefits earned by him through the date of such termination.
Pursuant to Mr. Schur's employment agreement, on September 1, 1998, the Company
granted him an NQO for 151,250 shares of the Company's Common Stock (the "Option
Shares"), of which 30,250 Option Shares were exercisable upon the grant date.
The remaining 121,000 Option Shares are exercisable in equal increments on the
first, second, third and fourth anniversaries of September 1, 1998. If Mr. Schur
terminates his employment with Obie Media during the first three years of his
employment agreement, other than for breach of the agreement by the Company, he
will forfeit any Option Shares not exercisable as of the date of such
termination. Termination of Mr. Schur's employment for any other reason will not
affect his right to acquire the Option Shares.
Change-in-Control Arrangement
- -----------------------------
Under the terms of the acquisition agreement by which the
Company acquired all of the outstanding stock of P & C from Mr. Schur, $1.5
million of the base purchase price and 90,750 shares of Common Stock payable to
Mr. Schur were deferred. The acquisition agreement provides that a portion of
the deferred base purchase price is payable by the Company annually, with the
final payment to be made to Mr. Schur no later than January 1, 2003. However,
the agreement further provides that the entire unpaid purchase price (cash and
stock) is immediately payable to Mr. Schur upon a "Change of Management" of Obie
Media (other than a Change of Management which results from the death or
disability of Brian Obie). Under the agreement, the term "Change of Management"
means that Mr. Obie no longer serves as the Company's Chief Executive Officer or
that Mr. Obie (directly or indirectly through immediate family members) fails to
own at least 25% of the Company's outstanding Common Stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our policy for transactions with affiliates, adopted following
the Company's initial public offering in November 1996, provides that all
proposed transactions by the Company with its directors, officers, 5%
shareholders and their affiliates be entered into only if such transactions are
(a) on terms no less favorable to Obie Media than could be obtained from
unaffiliated parties, (b) reasonably expected to benefit Obie Media and (c)
approved by a majority of the disinterested, independent members of the
Company's Board of Directors. Set forth below are descriptions of certain
transactions between Obie Media and its directors, officers or 5% shareholders
or their affiliates since December 1, 1997.
22
<PAGE>
Outdoor Advertising Displays
- ----------------------------
Until December 31, 1997, Obie Media leased outdoor advertising
displays from MO Partners, in which Brian Obie and Delores Mord hold partnership
interests of approximately 85% and 15%, respectively. The lease agreement
required monthly payments of a minimum base rent plus additional rent equal to
5% of the gross revenues derived by Obie Media from advertising on the displays.
The minimum base rental payments were $9,000 per month in calendar 1997. The
lease expired at the end of calendar 1997. Total lease expenses were $18,000 in
fiscal 1998. On December 31, 1997, the Company exercised its option, granted in
fiscal 1996, to purchase the outdoor advertising displays of MO Partners for
$698,000. Prior to the purchase of the outdoor displays from MO Partners, Obie
Media had guaranteed certain indebtedness of MO Partners, the outstanding
balance of which was $415,000 at November 30, 1997. The Company paid for the
displays with a promissory note. Upon the note's payment in full in April 1998,
the Company's guaranty of the MO Partners debt was released. The Company
believes the option price was at least as favorable to Obie Media as would have
been available from an unrelated party through arms-length negotiations.
MO Partners also leases land to the Company for two outdoor
advertising displays. Lease payments for these properties equal 20% of the
annual revenues Obie Media derives from these displays. Lease payments were
$12,000 in each of fiscal 1998 and 1999. The Company believes that the terms of
these leases are at least as favorable to Obie Media as would be available with
an unrelated third party through arm's-length negotiations.
Office and Production Space
- ---------------------------
In April 1997, the Company consolidated the Company's
operations in Eugene in a headquarters building leased from Obie Industries at
market rates. The Company's rental and lease payments on these properties were
$171,000 and $180,311 in fiscal 1998 and 1999, respectively.
Personal Services
- -----------------
Brian Obie, the Company's Chairman of the Board, President and
Chief Executive Officer, provides limited services to Obie Industries and its
subsidiaries. Mr. Obie is the President, a director and the controlling
shareholder of Obie Industries. It is estimated that Mr. Obie spends on average
less than 5% of his time working on Obie Industries matters.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's
officers, directors and more-than-10% shareholders to file reports of ownership
and changes in ownership with the SEC. Officers, directors and more-than-10%
shareholders are
23
<PAGE>
required by SEC regulations to furnish the Company with all Section 16(a) forms
they file.
Based solely on the Company's review of the copies of such
forms that the Company received and written representations from the Company's
officers and directors, the Company believes that all required forms were timely
filed with respect to fiscal 1999, except that Richard Williams filed two
reports late (covering one sale of shares and the grant of an option).
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, independent public accountants, examined
the financial statements of the Company for fiscal 1999. Representatives of
Arthur Andersen LLP will be at the annual meeting and will have an opportunity
to make a statement if they desire to do so and answer any appropriate questions
concerning their report. However, management has been advised that the
representatives of Arthur Andersen LLP do not plan to make a statement.
The Company will appoint at a later date independent public
accountants to audit the Company's financial statements for the 2000 fiscal
year. The Board of Directors or the Audit Committee will review the scope of any
such audit and other assignments given to the auditors to assess whether such
assignments would affect their independence.
SHAREHOLDER PROPOSALS
Shareholders may only bring business before an annual meeting
if the shareholder proceeds in compliance with the Company's Bylaws. For
business to be properly brought before the 2000 annual meeting by a shareholder,
notice of the proposed business must be given to the Secretary of the Company,
in writing, on or before the close of business on March 22, 2000. In order to be
valid, a shareholder's notice to the Secretary must set forth as to each matter
the shareholder proposes to bring before the annual meeting: (a) a brief
description of the matter proposed to be brought before the meeting; (b) the
name and record address of such shareholder; (c) the number of shares of the
Company's Common Stock which are owned beneficially or of record by such
shareholder; and (d) any material interest of the shareholder in the matter. The
presiding officer at an annual meeting will determine whether any matter was
properly brought before the meeting in accordance with the above provisions. If
the presiding officer determines that any matter has not been properly brought
before the meeting, he or she will so declare at the meeting, and any such
matter will not be considered or acted upon.
To be eligible for inclusion in the Company's proxy materials
for the 2001 annual meeting of shareholders, a proposal intended to be presented
by a shareholder
24
<PAGE>
for action at that meeting must, in addition to complying with the shareholder
eligibility and other requirements of the rules of the SEC governing such
proposals, be received no later than November 16, 2000 by the Secretary of the
Company at the Company's executive offices at 4211 West 11th Avenue, Eugene,
Oregon 97402.
With respect to shareholder nominations of directors, the
procedures prescribed by the Bylaws are described under "Election of Directors"
above.
OTHER MATTERS
While the notice of the annual meeting of shareholders
provides for the transaction of such other business as may properly come before
the meeting, management does not know of any matters to be presented other than
the matter set forth in this proxy statement. If any further business is
presented to the meeting, the persons named in the proxies will vote the shares
represented by such proxies according to their best judgment.
Eugene, Oregon
March 16, 2000
<PAGE>
OBIE MEDIA CORPORATION
Proxy solicited on behalf of the Board of Directors
Annual Meeting of Shareholders April 21, 2000
The undersigned hereby appoints Brian B. Obie and Michael E. Hubbard as
proxies with full power of substitution, to represent and vote, as designated
below, on behalf of the undersigned, all shares which the undersigned may be
entitled to vote at the annual meeting of shareholders of OBIE MEDIA CORPORATION
on April 21, 2000, and any adjournment or postponement thereof, with all powers
that the undersigned would possess if personally present. Either or both of the
proxies may exercise all powers granted hereby.
1. ELECTION OF DIRECTORS
VOTE FOR both nominees for Class 2 director listed below
------ (except as marked to the contrary)
WITHHOLD AUTHORITY to vote for both nominees listed below
------
(Instruction: To withhold authority to vote for either individual
nominee, strike a line through the nominee's name below)
Randall C. Pape Stephen A. Wendell
2. APPROVAL OF EMPLOYEE SHARE PURCHASE PLAN
FOR AGAINST ABSTAIN
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3. APPROVAL OF AMENDMENT TO RESTATED 1996 STOCK INCENTIVE PLAN INCREASING THE
NUMBER OF SHARES ISSUABLE UNDER THE PLAN.
FOR AGAINST ABSTAIN
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THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF
NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES LISTED FOR CLASS 2 DIRECTOR AND FOR APPROVAL OF PROPOSALS 2 AND 3. IN
ADDITION, THE PROXIES MAY VOTE IN THEIR DISCRETION AS TO SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE MEETING.
Please date and sign exactly as your name or names appear below. If
more than one name appears, all should sign. Persons signing as attorney,
executor, administrator, trustee, guardian, corporate officer or in any other
official or representative capacity, should also provide full title. If a
partnership, please sign in full partnership name by authorized person.
Dated: , 2000
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Signature or Signatures
PLEASE SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
EXHIBIT A
OBIE MEDIA CORPORATION
EMPLOYEE SHARE PURCHASE PLAN
Adopted by the Board of Directors
on February 25, 2000
ARTICLE I -- PURPOSE
1.01. Purpose
The Obie Media Corporation Employee Share Purchase Plan is intended to provide a
method whereby Employees of Obie Media Corporation and its Subsidiary
Corporations (hereinafter referred to, unless the context otherwise requires, as
the "Company") will have an opportunity to acquire a proprietary interest in the
Company through the purchase of shares of the Common Stock of the Company. It is
the intention of the Company to have the Plan qualify as an "employee stock
purchase plan" under Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"). The provisions of the Plan shall be construed so as to
extend and limit participation in a manner consistent with the requirements of
that Section of the Code.
ARTICLE II -- DEFINITIONS
2.01. Base Pay
"Base Pay" shall mean W-2 pay, excluding income arising from exercising stock
options.
2.02. Discount Percentage
"Discount Percentage" shall mean that percentage (between 90 and 100%) of the
market value of the Company's shares which the Plan Administrator establishes
for determining the purchase price for shares under the Plan.
2.03. Employee
"Employee" means any person who is customarily employed on a full-time or
part-time basis by the Company and is regularly scheduled to work more than 20
hours per week.
2.04. Offering
"Offering" means a quarterly offering of the rights to purchase shares of the
Company's Common Stock.
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2.05. Offering Commencement Date
"Offering Commencement Date" means the first of any January, April, July or
October, as the case may be, on which the particular Offering begins.
2.06. Offering Termination Date
"Offering Termination Date" means the March 31, June 30, September 30 or
December 31, as the case may be, on which the particular Offering terminates.
2.07. Plan Administrator
"Plan Administrator" means the person or persons appointed by the Board of
Directors to administer the Plan in accordance with Article XI.
2.08. Subsidiary Corporation
"Subsidiary Corporation" shall mean any present or future corporation which (i)
would be a subsidiary corporation of Obie Media Corporation as that term is
defined in Section 424 of the Code and (ii) is designated as a participating
employer in the Plan by the Plan Administrator.
ARTICLE III -- ELIGIBILITY AND PARTICIPATION
3.01. Initial Eligibility
All Employees of the Company shall be eligible to participate in the Plan except
as follows:
(a) No Employee who is covered by a collective bargaining
agreement may participate unless the terms of such collective
bargaining agreement provide for participation in this Plan.
(b) Employees who reside outside the United States shall not
participate unless the Board of Directors of the Company, by
duly authorized resolution, authorizes such Employees to
participate.
Any Employee who shall have completed one year of employment and shall be
employed by the Company on the date his or her participation in the Plan is to
become effective shall be eligible to participate in offerings under the Plan,
which commence on or after such one-year period has concluded.
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3.02. Leave of Absence
For purposes of participation in the Plan, a person on leave of absence shall be
deemed to be an Employee for the first 90 days of such leave of absence, and
such Employee's employment shall be deemed to have terminated at the close of
business on the 90th day of such leave of absence, unless such Employee shall
have returned to regular full-time or part-time employment (as the case may be)
prior to the close of business on such 90th day. Termination by the Company of
any Employee's leave of absence, other than termination of such leave of absence
on return to full-time or part-time employment, shall terminate an Employee's
employment for all purposes of the Plan and shall terminate such Employee's
participation in the Plan and right to exercise any option.
3.03. Restrictions on Participation
Notwithstanding any provisions of the Plan to the contrary, no Employee shall be
granted an option to participate in the Plan:
(a) if, immediately after the grant, such Employee would own
shares, and/or hold outstanding options to purchase shares,
possessing 5% or more of the total combined voting power or
value of all classes of shares of the Company (for purposes of
this paragraph, the rules of Section 424(d) of the Code shall
apply in determining share ownership of any Employee); or
(b) which permits his or her rights to purchase shares under all
employee stock purchase plans of the Company to accrue at a
rate which exceeds $25,000 in fair market value of the shares
(determined at the time such option is granted) for each
calendar year in which such option is outstanding.
3.04. Commencement of Participation
An Employee may participate in the Plan by completing an authorization for a
payroll deduction on the form provided by the Company and filing it with the
Plan Administrator on or before the date set therefor by the Plan Administrator,
which date shall be prior to the Offering Commencement Date for the Offering.
Payroll deductions for an Employee shall commence on the applicable Offering
Commencement Date when his or her authorization for a payroll deduction becomes
effective and shall end on the Offering Termination Date of the Offering to
which such authorization is applicable unless sooner terminated by the Employee
as provided in Article VIII.
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ARTICLE IV -- OFFERINGS; TERM OF PLAN
4.01. Quarterly Offerings
The Plan will be implemented by quarterly offerings of rights to purchase shares
of the Company's Common Stock beginning on the 1st day of January, April, July
and October in each of the years 2000, 2001, 2002, 2003 and 2004. Each Offering
shall terminate on the last day of the month before the start of the next
following Offering. The maximum number of shares issued in the respective years
shall be:
For 2000: 25,000 shares.
For 2001: 25,000 shares plus unissued shares from the prior
Offerings, whether offered or not.
For 2002: 25,000 shares plus unissued shares from the prior
Offerings, whether offered or not.
For 2003: 25,000 shares plus unissued shares from the prior
Offerings, whether offered or not.
For 2004: Up to 25,000 shares from any unissued shares from
the prior Offerings, whether offered or not.
4.02. Term of Plan
Unless terminated earlier pursuant to Section 12.05, the Plan shall terminate on
January 1, 2005.
ARTICLE V -- PAYROLL DEDUCTIONS
5.01. Amount of Deduction
At the time an Employee files an authorization for payroll deduction, he or she
shall elect to have deductions made from his or her Base Pay on each payday
during the time he or she is participating in an Offering. The deduction shall
be either:
(a) a specified dollar amount, not to exceed ten percent of Base
Pay in effect at the Offering Commencement Date of such
Offering; or
(b) a whole percentage between one and ten percent of Base Pay in
effect at the Offering Commencement Date of such Offering.
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In the case of a part-time hourly Employee, such Employee's Base Pay during an
Offering shall be determined by multiplying such Employee's hourly rate of pay
in effect on the Offering Commencement Date by the number of regularly scheduled
hours of work for such Employee during such Offering.
5.02. Employee's Account
All payroll deductions made for an Employee shall be credited to his or her
account under the Plan. An Employee may not make any separate cash payment into
such account except when on leave of absence and then only as provided in
Section 5.04.
5.03. Changes in Payroll Deductions
An Employee may discontinue participation in the Plan as provided in Article
VIII, but no other change can be made during an Offering and, specifically, an
Employee may not alter the amount of payroll deductions for that Offering.
5.04. Leave of Absence
If a participating Employee goes on a leave of absence, such Employee shall have
the right to elect: (a) to withdraw the balance in his or her account pursuant
to Section 7.02 and discontinue contributions to the Plan, or (b) continue to
participate in the Plan during such leave of absence, authorizing deductions to
be made from payments by the Company to the Employee during such leave of
absence and undertaking to make cash payments to the Plan at the end of each
payroll period to the extent that amounts payable by the Company to such
Employee are insufficient to meet his or her authorized Plan deductions.
ARTICLE VI -- GRANTING OPTIONS
6.01. Number of Option Shares
On the Offering Commencement Date of each Offering, a participating Employee
shall be deemed to have been granted an option to purchase a maximum number of
shares of the Company equal to an amount determined as follows: an amount equal
to
(a) either (a) the aggregate dollar amount of deductions which he
or she has elected to have withheld during the Offering; or
(b) that percentage of the Employee's Base Pay which he or she
has elected to have withheld multiplied by the Employee's Base
Pay during the period of that Offering;
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(b) divided by the amount which the Plan Administrator establishes
as the purchase price per share for the applicable Offering.
The Plan Administrator shall establish the purchase price as a percentage of the
market value of the Company's shares, determined as provided in Section 6.02
below. An Employee's Base Pay during the period of an Offering shall be
determined by multiplying the normal weekly rate of pay (as in effect on the
last day prior to the Offering Commencement Date of the particular Offering) by
13 or the hourly rate by 520; provided that, in the case of a part-time hourly
Employee, the Employee's Base Pay during the period of an Offering shall be
determined by multiplying such Employee's hourly rate by the number of regularly
scheduled hours of work for such Employee during such Offering.
6.02. Option Price
The option price of shares purchased with payroll deductions made during each
Offering shall be determined by applying a Discount Percentage to the market
value of the shares. The Discount Percentage for each Offering shall be
established by the Plan Administrator and announced to the Employees prior to
the commencement of the Offering Period. The Discount Percentage shall be not
less than 90% and may be any percentage between 100% and 90%, as determined by
the Plan Administrator. The option price of shares shall be the lower of:
(a) the Discount Percentage times the closing price of a share on
the Offering Commencement Date or the nearest prior business
day on which trading occurred on the NASDAQ National Market or
other principal trading market; or
(b) the Discount Percentage for the Offering times the closing
price of a share on the Offering Termination Date or the
nearest prior business day on which trading occurred on the
Nasdaq SmallCap Market.
If the Common Stock of the Company is not admitted to trading on the Nasdaq
National Market or other national trading market on any of the aforesaid dates
for which closing prices of shares are to be determined, then reference shall be
made to the fair market value of the shares on that date, as determined on such
basis as shall be established or specified for the purpose by the Plan
Administrator.
ARTICLE VII -- EXERCISE OF OPTION
7.01. Automatic Exercise
Unless an Employee gives written notice to the Company as hereinafter provided,
his or her option for the purpose of purchasing shares with payroll deductions
made during any offering will
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be deemed to have been exercised automatically on the Offering Termination Date
applicable to such offering, for the purchase of the number of full shares which
the accumulated payroll deductions in his or her account at that time will
purchase at the applicable option price (but not in excess of the number of
shares for which options have been granted to the Employee pursuant to Section
6.01), and any excess in his or her account at that time will be returned to the
participant.
7.02. Withdrawal of Account
By written notice to the Plan Administrator, at any time prior to the Offering
Termination Date applicable to any Offering, a participant may elect to withdraw
all the accumulated payroll deductions in his or her account at such time.
7.03. Fractional Shares
Fractional shares will not be issued under the Plan, and any accumulated payroll
deductions which would have been used to purchase fractional shares will be
returned to any Employee promptly following the termination of an Offering,
without interest.
7.04. Transferability of Option
During an Employee's lifetime, options held by the Employee shall be exercisable
only by that Employee.
7.05. Delivery of Shares
As promptly as practicable after the Offering Termination Date of each Offering,
the Company will deliver to each participating Employee, as appropriate, the
shares purchased upon exercise of the option.
ARTICLE VIII -- WITHDRAWAL
8.01. In General
As indicated in Section 7.02, an Employee may withdraw payroll deductions
credited to his or her account under the Plan at any time by giving written
notice to the Plan Administrator. All of the Employee's payroll deductions
credited to his or her account will be paid to the Employee promptly after
receipt of the notice of withdrawal, and no further payroll deductions will be
made from such Employee's pay during such Offering. The Company may, at its
option, treat any attempt to borrow by an Employee on the security of
accumulated payroll deductions as an election, under Section 7.02, to withdraw
such deductions.
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8.02. Effect on Subsequent Participation
An Employee's withdrawal from any Offering will not have any effect upon his or
her eligibility to participate in any succeeding Offering or in any similar plan
which may hereafter be adopted by the Company.
8.03. Termination of Employment
Upon termination of the Employee's employment for any reason, including
retirement (but excluding death while in the employ of the Company or
continuation of a leave of absence for a period beyond 90 days), the payroll
deductions credited to his or her account will be returned to the Employee, or,
in the case of the death subsequent to the termination of employment, to the
person or persons entitled thereto under Section 12.01.
8.04. Termination of Employment Due to Death
Upon termination of the Employee's employment because of death, the beneficiary
(as defined in Section 12.01) shall have the right to elect, by written notice
given to the Plan Administrator prior to the earlier of the Offering Termination
Date or the expiration of a period of 60 days commencing with the date of the
death of the Employee, either:
(a) to withdraw all of the payroll deductions credited to the
Employee's account under the Plan, or
(b) to exercise the Employee's option for the purchase of shares
on the Offering Termination Date next following the date of
the Employee's death for the purchase of the number of full
shares which the accumulated payroll deductions in the
Employee's account at the date of the Employee's death will
purchase at the applicable option price, and any excess in
such account will be returned to said beneficiary, without
interest.
In the event that no such written notice of election shall be duly received by
the Plan Administrator, the beneficiary shall automatically be deemed to have
elected, pursuant to paragraph (a) above, to withdraw the amounts credited to
the Employee's account.
8.05. Leave of Absence
An Employee on leave of absence shall, subject to the election made pursuant to
Section 5.04, continue to participate in the Plan so long as such person is on
continuous leave of absence. An Employee who has been on leave of absence for
more than 90 days, and who therefore is not an
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Employee for the purpose of the Plan, shall not be entitled to participate in
any offering commencing after the 90th day of such leave of absence.
Notwithstanding any other provisions of the Plan, if an Employee on leave of
absence returns to regular full-time or part-time employment with the Company,
such person may participate in the Plan at the beginning of the next Offering
Period.
ARTICLE IX -- SHARES
9.01. Maximum Shares
The maximum number of shares which shall be issued under the Plan, subject to
adjustment upon changes in capitalization of the Company as provided in Section
12.04, shall be 25,000 shares per year, plus in each Offering all unissued
shares from prior Offerings, whether offered or not, not to exceed 100,000
shares for all Offerings. If the total number of shares for which options are
exercised on any Offering Termination Date in accordance with Article VI exceeds
the maximum number of shares for the applicable Offering, the Company shall make
a pro rata allocation of the shares available for delivery and distribution in
as nearly a uniform manner as shall be practicable and as it shall determine to
be equitable, and the balance of payroll deductions credited to the account of
each Employee under the Plan shall be returned to the Employee as promptly as
possible.
9.02. Employee's Interest in Option Shares
An Employee will have no interest in shares covered by an option until such
option has been exercised.
9.03. Registration of Shares
Shares to be delivered under the Plan will be registered in the name of the
Employee, or, if the Employee so directs by written notice to the Plan
Administrator prior to the Offering Termination Date applicable thereto, in the
names of the Employee and one such other person as may be designated by the
Employee, as joint tenants with rights of survivorship, or as tenants by the
entireties, to the extent permitted by applicable law.
ARTICLE X -- RESTRICTIONS ON SHARES
10.01. Restrictions on Exercise
The Plan Administrator may, in its discretion, require as conditions to the
exercise of any option, that the shares of Common Stock reserved for issuance
upon the exercise of the option shall have
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been duly listed, upon official notice of issuance, upon a stock exchange or
other inter-dealer quotation system, and that either:
(a) a Registration Statement under the Securities Act of 1933, as
amended, with respect to said shares shall be effective, or
(b) the Employee shall have represented at the time of purchase,
in form and substance satisfactory to the Company, that it is
his or her intention to purchase the shares for investment and
not for resale or distribution.
ARTICLE XI -- ADMINISTRATION
11.01. Appointment of Plan Administrator
The Board of Directors shall appoint a Plan Administrator to administer the
Plan.
11.02. Authority of Plan Administrator
Subject to the express provisions of the Plan, the Plan Administrator shall have
plenary authority in its discretion to interpret and construe any and all
provisions of the Plan, to adopt rules and regulations for administering the
Plan, and to make all other determinations deemed necessary or advisable for
administering the Plan. The Plan Administrator's determination on the foregoing
matters shall be conclusive.
11.03. Rules Governing the Administration of the Plan Administrator
If more than one person is appointed to serve as Plan Administrator, the Board
of Directors may from time to time appoint members of the Plan Administrator in
substitution for, or in addition to, members previously appointed and may fill
vacancies, however caused, in the Plan Administrator. The Plan Administrator may
select one of its members as its Chairman and shall hold its meetings at such
times and places as it shall deem advisable and may hold telephonic meetings. A
majority of its members shall constitute a quorum. All determinations of the
Plan Administrator shall be made by a majority of its members. The Plan
Administrator may correct any defect or omission, or reconcile any inconsistency
in the Plan, in the manner and to the extent it shall deem desirable. Any
decision or determination reduced to writing and signed by a majority of the
members of the Plan Administrator shall be as fully effective as if it had been
made by a majority vote at a meeting duly called and held. The Plan
Administrator may appoint a secretary and shall make such rules and regulations
for the conduct of its business as it shall deem advisable.
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ARTICLE XII -- MISCELLANEOUS
12.01. Designation of Beneficiary
An Employee may file a written designation of a beneficiary who is to receive
any shares and/or cash. Such designation of beneficiary may be changed by the
Employee at any time by written notice to the Plan Administrator. Upon the death
of an Employee and upon receipt by the Company of proof of identity and
existence at the Employee's death of a beneficiary validly designated under the
Plan, the Company shall deliver such shares and/or cash to such beneficiary. In
the event of the death of an Employee, and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such Employee's
death, the Company shall deliver such shares and/or cash to the executor or
administrator of the estate of the Employee, or if no such executor or
administrator has been appointed (to the knowledge of the Company), the Company,
in its discretion, may deliver such shares and/or cash to the spouse or to any
one or more dependents of the Employee as the Company may designate. No
beneficiary shall, prior to the death of the Employee, acquire any interest in
the shares or cash credited under the Plan
12.02. Transferability
Neither payroll deductions credited to an Employee's account nor any rights with
regard to the exercise of an option, or to receive shares under the Plan may be
assigned, transferred, pledged or otherwise disposed of in any way other than by
will or the laws of descent and distribution. Any such attempted assignment,
transfer, pledge or other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw funds in accordance with
Section 7.02.
12.03. Use of Funds
All payroll deductions received or held by the Company under this Plan may be
used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such payroll deductions.
12.04. Adjustment Upon Changes in Capitalization
(a) If, while any options are outstanding, the outstanding shares
of Common Stock of the Company have increased, decreased,
changed into or been exchanged for a different number or kind
of shares or securities of the Company through reorganization,
merger, recapitalization, reclassification, stock dividend,
stock split, reverse stock split or similar transaction,
appropriate and proportionate adjustments may be made by the
Plan Administrator in the number and/or kind of shares which
are subject to purchase under outstanding options and on the
option
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exercise price or prices applicable to such outstanding
options. In addition, in any such event, the number and/or
kind of shares which may be offered in the Offerings described
in Article IV hereof shall also be proportionately adjusted.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with
one or more corporations as a result of which the Company is
not the surviving corporation, or upon a sale of substantially
all of the property or shares of the Company to another
corporation, the holder of each option then outstanding under
the Plan will thereafter be entitled to receive at the next
Offering Termination Date upon the exercise of such option for
each share as to which such option shall be exercised, as
nearly as reasonably may be determined, the cash, securities
and/or property which a holder of one share of the Common
Stock was entitled to receive upon and at the time of such
transaction. The Board of Directors shall take such steps in
connection with such transactions as the Board shall deem
necessary to assure that the provisions of this Section 12.04
shall thereafter be applicable, as nearly as reasonably may be
determined, in relation to the said cash, securities and/or
property as to which such holder of such option might
thereafter be entitled to receive.
12.05. Amendment and Termination
The Board of Directors shall have complete power and authority to terminate or
amend the Plan; provided, however, that the Board of Directors shall not,
without the approval of the shareholders of the Corporation (i) increase the
maximum number of shares which may be issued under any Offering (except pursuant
to Section 12.04); or (ii) amend the requirements as to the class of Employees
eligible to purchase shares under the Plan. No termination, modification or
amendment of the Plan may, without the consent of an Employee then having an
option under the Plan to purchase shares, adversely affect the rights of such
Employee under such option.
12.06. Effective Date
The Plan shall become effective as of April 1, 2000, subject to approval by the
holders of the majority of the Common Stock present and represented at a special
or annual meeting of the shareholders held on or before December 31, 2000. If
the Plan is not so approved, the Plan shall not become effective.
12.07. No Employment Rights
The Plan does not, directly or indirectly, create any right for the benefit of
any Employee or class of Employees to purchase any shares under the Plan, or
create in any Employee or class of Employees any right with respect to
continuation of employment by the Company, and it shall not
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be deemed to interfere in any way with the Company's right to terminate, or
otherwise modify, an Employee's employment at any time.
12.08. Effect of Plan
The provisions of the Plan shall, in accordance with its terms, be binding upon,
and inure to the benefit of, all successors of each Employee participating in
the Plan, including, without limitation, such Employee's estate and the
executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such Employee.
12.09. Governing Law
The law of the State of Oregon will govern all matters relating to this Plan
except to the extent it is superseded by the laws of the United States.
