April 18, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of CASCO INTERNATIONAL, INC. on Tuesday, May 23, 2000. The meeting will begin at
9:00 a.m., Eastern Standard Time, at the Company's executive offices located at
13900 Conlan Circle, Suite 150, Charlotte, North Carolina 28277.
Information regarding the matters to be voted upon at the Annual
Meeting is contained in the attached Proxy Statement. We urge you to read the
Proxy Statement carefully.
Because it is important that your shares be voted at the Annual
Meeting, whether or not you plan to attend in person, we urge you to complete,
date and sign the enclosed proxy card and return it as promptly as possible in
the accompanying envelope. If you do attend the meeting and wish to vote your
shares in person, even after returning your proxy, you still may do so.
We look forward to seeing you in Charlotte, North Carolina on May 23,
2000.
Very truly yours,
Charles R. Davis
President
<PAGE>
CASCO INTERNATIONAL, INC.
4205 East Dixon Boulevard
Shelby, North Carolina 28150
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on May 23, 2000
To the Stockholders of CASCO INTERNATIONAL, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
of CASCO INTERNATIONAL, INC. (the "Company") will be held at the Company's
executive offices located at 13900 Conlan Circle, Suite 150, Charlotte, North
Carolina 28277, on May 23, 2000 at 9:00 a.m., Eastern Standard Time, to consider
and take action on the following matters:
1. To elect seven Directors to serve on the Board of Directors of the Company
for one year and until their successors are duly elected and shall qualify;
2. To approve the Company's 2000 Stock Option Plan; and
3. To transact such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
Stockholders of record at the close of business on April 18, 2000 are
entitled to notice of and to vote at the meeting or any adjournment or
postponement thereof. Information relating to the matters to be considered and
voted on at the Annual Meeting is set forth in the proxy statement accompanying
this notice. A list of stockholders entitled to notice of and to vote at the
meeting may be examined at the executive offices of the Company at 13900 Conlan
Circle, Suite 150, Charlotte, NC 28277.
So that we may be sure your vote will be included, please date, sign
and return the enclosed proxy promptly. For your convenience, a postage paid
return envelope is enclosed for your use in returning your proxy. If you attend
the meeting, you may revoke your proxy and vote in person.
If you would like to attend the meeting and your shares are held by a
broker, bank or other nominee, you must bring to the meeting a recent brokerage
statement or a letter from the nominee confirming your beneficial ownership of
the shares. You must also bring a form of personal identification. In order to
vote your shares at the meeting, you must obtain from the nominee a proxy issued
in your name.
Dated April 18, 2000 By Order of the Board of Directors
/s/Jeffrey A. Ross
Jeffrey A. Ross, Secretary
<PAGE>
CASCO INTERNATIONAL, INC.
PROXY STATEMENT
For Annual Meeting of Stockholders
To be held on May 23, 2000
Summary
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of CASCO INTERNATIONAL, INC. (the
"Company") for use at its Annual Meeting of Stockholders (the "Annual Meeting")
to be held on Wednesday, May 23, 2000 at 9:00 a.m., Eastern Standard at the
Company's executive offices located at 13900 Conlan Circle, Suite 150,
Charlotte, North Carolina 28277, as set forth in the accompanying Notice of
Annual Meeting of Stockholders and at any adjournments thereof. This Proxy
Statement, the form of proxy and the Company's annual report on Form 10-K for
the fiscal year ended December 31, 1999 are first being mailed to Stockholders
entitled to vote at the meeting on or about April 24, 2000.
The Annual Meeting has been called to consider and take action on the
election of seven Directors to serve on the Board of Directors of the Company
for one year and until their successors have been duly elected and shall
qualify.
The close of business on April 18, 2000 (the "Record Date"), has been
fixed as the record date for the determination of Stockholders entitled to
notice of, and to vote at, the Annual Meeting and any adjournments thereof. The
stock transfer books will not be closed.
Solicitation and Revocation of Proxies
This Proxy Statement is being furnished to Stockholders in connection
with the solicitation of proxies by the Board of Directors of the Company for
use at the Annual Meeting of Stockholders to be held at the time, place, and for
the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders and at any adjournments thereof.
As of the Record Date, there were 1,783,200 of the Company's Common
Stock, $.01 par value ("Common Stock") issued and outstanding. As of the Record
Date, all of the present directors and executive officers of the Company, a
group of eight persons, owned beneficially 1,066,628 shares of Common Stock. The
Company believes that such officers and directors intend to vote their shares of
Common Stock for each of the nominees to be elected as Directors named in this
Proxy and/or the approval of the Company's 2000 Stock Option Plan.
The Company's Bylaws provide that a quorum is present if the holders of
a majority of the issued and outstanding shares of Common Stock entitled to vote
at the meeting are present in person or represented by proxy. Under Delaware
law, if a quorum exists, directors are elected by a
<PAGE>
plurality of the votes cast by the shares entitled to vote in the election. The
proposal set forth herein to approve the Plan will be adopted if a majority of
the shares present in person or represented by proxy at the meeting and entitled
to vote at the Annual Meeting vote in favor of such proposal.
Proxies given by Stockholders for use at the meeting may be revoked at
any time prior to the exercise of the powers conferred by giving notice of
revocation to the Company in writing or at the meeting or by delivering to the
Company a later appointment which supersedes the earlier one. Abstentions and
broker non-votes will be counted only for the purpose of determining the
existence of a quorum, but have the affect of a no vote on matters other than
director elections. Votes cast by proxy or in person at the Annual Meeting will
be tabulated by the Inspector of Elections appointed for that purpose.
ALL PROXIES RECEIVED WILL BE VOTED IN ACCORDANCE WITH THE CHOICES
SPECIFIED IN SUCH PROXIES. ALL VALID PROXIES OBTAINED WILL BE VOTED AT THE
DISCRETION OF THE BOARD OF DIRECTORS WITH RESPECT TO ANY OTHER BUSINESS THAT MAY
COME BEFORE THE MEETING IF THE COMPANY DID NOT HAVE NOTICE OF THE MATTER AT
LEAST 45 DAYS PRIOR TO APRIL 18, 2000.
The cost of solicitation of Proxies by mail on behalf of the Board of
Directors will be borne by the Company. Proxies also may be solicited by
personal interview or by telephone, in addition to the use of the mails, by
directors, officers and regular employees of the Company without additional
compensation therefor. The Company may reimburse brokerage firms and others for
their expenses in forwarding proxy materials to the beneficial owners and
soliciting them to execute proxies.
Voting Rights
Stockholders of record at the close of business on the Record Date, are
entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof. Each Common Share of record as of the Record Date is entitled to one
vote in all matters properly brought before the meeting.
Item 1. Election of seven directors to serve for one year and until
their successors have been duly elected and shall qualify.
The Board of Directors has concluded that the re-election of S. Robert
Davis, Charles R. Davis, David J. Richards, Michael P. Beauchamp, Randall J.
Asmo, Rodney L. Taylor and Philip Shasteen as Directors is in the best interests
of the Company and recommends their election. The Board of Directors has no
reason to believe that the nominees named below will be unavailable, or if
elected, will decline to serve. Biographical information concerning Messrs. S.
Robert Davis, Charles Davis, Richards, Beauchamp, Asmo, Taylor and Shasteen can
be found under "Directors and Executive Officers of the Company."
Unless otherwise instructed or unless authority to vote is withheld,
the enclosed proxy will be voted for the election of the nominees listed herein.
Although the Board of Directors of the Company does not contemplate that any of
such nominees will be unable to serve, if such situation exists prior to the
Annual Meeting, the persons named in the enclosed proxy will vote for the
election of such other persons as may be nominated by the Board of Directors.
The Board of Directors unanimously recommends a vote FOR the election
of the nominees listed above. Unless indicated to the contrary, the enclosed
Proxy will be voted "FOR" such nominees.
Directors and Executive Officers of the Company.
The following table sets forth certain information concerning the
directors and executive officers of the Company:
Director or
Executive
Name Age Position Officer Since
- ---- --- -------- -------------
S. Robert Davis (1) ..... 61 Chairman of the Board 1990
Charles R. Davis (1) .... 38 President and Director 1990
Jeffrey A. Ross ......... 32 Chief Financial Officer and Secretary 1996
David J. Richards ....... 47 Director 1997
Michael P. Beauchamp .... 53 Director 1997
Randall J. Asmo ......... 35 Director 1999
Rodney L. Taylor ........ 44 Director 1999
Philip Shasteen ......... 51 Director 2000
(1) S. Robert Davis is the father of Charles R. Davis.
Executive officers are appointed by the Board of Directors and serve until their
successors are duly elected and qualify, subject to earlier removal by the Board
of Directors. Directors are elected at the annual meeting of shareholders to
serve for one year and until their respective successors are duly elected and
qualify, or until their earlier resignation, removal from office, or death. The
remaining directors may fill any vacancy in the Board of Directors for an
unexpired term.
<PAGE>
Business Experience Of Directors And Executive Officers
S. ROBERT DAVIS is the Chairman of the Board and President of Media
Source, Inc. (formerly known as Pages, Inc.), a Company with a class of
securities registered pursuant to Section 12 of the Securities Exchange Act of
1934 ("Media Source") and the former parent of the Company. Prior to his
election to the Board of Directors of Media Source, he served as Assistant to
the President of Media Source from January 1988, to March 1990, on a part-time
basis. Additionally, during the past five years Mr. Davis has operated several
private businesses involving the developing, sale, and/or leasing of real
estate.
CHARLES R. DAVIS was elected President of the Company in September 1992.
Additionally, during the past five years Mr. Davis has operated several private
businesses involving the developing, sale and/or leasing of real estate but
devotes substantially all of his business time to the Company.
JEFFREY A. ROSS is a certified public accountant. He joined the Company as
its controller in June 1993 and was promoted to Chief Financial Officer in
November 1996. Mr. Ross was employed as an accountant by Hausser + Taylor, a
large public accounting and consulting firm from September 1989, until June
1993.
DAVID J. RICHARDS has been the President and a director of NetMed, Inc. for
over five years. NetMed is not a parent, subsidiary or other affiliate of the
Company. NetMed is a company with a class of securities registered pursuant to
section 12 of the Securities Exchange Act of 1934.
MICHAEL P. BEAUCHAMP has been the President of Beauvestco, a management
consulting firm, since 1989. Beauvestco is not a parent, subsidiary, or other
affiliate of the Company.
RANDALL J. ASMO was elected Director on February 19, 1999. He currently
serves as Executive Vice President, Secretary and Director of Media Source.
Since 1992, Mr. Asmo has served as Vice President of Media Source and Director
since 1997. Prior to that, he served as Assistant to the President for two
years. Additionally, since 1987, Mr. Asmo has served as Vice President of
Mid-States Development Corp., a privately-held real estate development and
leasing company, as Vice President of American Home Building Corp., a
privately-held real estate development company, and as an officer of several
other small business enterprises.
RODNEY L. TAYLOR was elected Director on February 19, 1999. He currently
serves as General Manager of Family Ford Lincoln Mercury in Columbus, Ohio. From
1994 to 1997 Mr. Taylor was General Sales Manager at Bobb Chevrolet.
Additionally, Mr. Taylor also owned an automotive and equipment leasing company
based out of Columbus, OH.
PHILIP SHASTEEN was elected Director on March 22, 2000. Since 1992 he
has been an attorney with and shareholder and director of Johnson Blakely Pope
Bokor Ruppel & Burns, P.A., a law firm located in Tampa, Florida. He is also a
director of Dixon Ticonderoga Company, an American Stock Exchange traded
company.
<PAGE>
The Board of Directors
The Company's Bylaws provide that the number of Directors which shall
constitute the whole Board of Directors shall be as from time to time determined
by resolution of the Board of Directors, but the number shall not be less than
three. The Board of Directors currently consists of seven members. The Board of
Directors held three meetings during the fiscal year ended December 31, 1999.
There are no material proceedings to which any Director, officer or
affiliate of the Company, any owner of record or beneficially of more than five
percent of any class of voting securities of the Company, or any associate of
any such Director, officer, affiliate of the Company, or security holder is a
party adverse to the Company or any of its subsidiaries or has a material
interest adverse to the Company or any of its subsidiaries.
Committees of the Board of Directors
Audit Committee. The Audit Committee consisted of David J. Richards,
Randall J. Asmo and Rodney L. Taylor during the last fiscal year. The Audit
Committee is responsible for making recommendations to the Board of Directors
concerning the selection and engagement of the Company's independent certified
public accountants and reviewing the scope of the annual audit, audit fees, and
results of the audit. The Audit Committee also reviews and discusses with
management and the Board of Directors such matters as accounting policies and
internal accounting controls, and procedures for preparation of financial
statements. The Audit Committee held one meeting during 1999.
Compensation Committee. The Compensation Committee consisted of S. Robert
Davis, David J. Richards, Michael P. Beauchamp and Rodney L. Taylor during the
last fiscal year. Neither Mr. Davis, Mr. Richards, Mr. Beauchamp or Mr. Taylor
serves as an employee of the Company. The Compensation Committee is responsible
for establishing the compensation of the Company's directors and executive
officers. The Compensation Committee held one meeting during 1999.
Compensation Committee Interlocks and Insider Participation. Neither
Messrs. S. Robert Davis, Richards or Beauchamp, the Compensation Committee
members, are officers or employees of the Company and none have interlocking
relationships with any other entities, including any of the type that would be
required to be disclosed herein.
The Company has no nominating committee or any committee performing a
similar function.
<PAGE>
Stock Ownership
The following table sets forth, to the best of the Company's knowledge,
certain information with respect to the beneficial ownership of shares of the
Company's common stock owned beneficially by (i) each person who beneficially
owns more than 5% of the outstanding Common Stock, (ii) each director of the
Company, (iii) and President of the Company (the only executive officers of the
Company whose cash and non-cash compensation for services rendered to the
Company for the year ended December 31, 1999, exceeded $100,000) and (iv) all
directors and executive officers of the Company as a group:
Amount and Nature of Percent of
Name and Address Beneficial Ownership (1) Class (2)
- ---------------- ------------------------ ---------
S. Robert Davis 370,754 (3) 15.9%
15350 Amberly Drive
Suite 2014
Tampa, Florida 33347
Charles R. Davis 412,066 (4) 17.7%
4205 East Dixon Blvd.
Shelby, North Carolina 28150
David J. Richards 63,609 (5) 2.7%
6189 Memorial Drive
Dublin, OH 43017
Michael P. Beauchamp 46,480 (5) 2.0%
7422 Carmel Executive Park
Suite 107
Charlotte, NC 28226
Randall J. Asmo 102,075 (5) 4.4%
5720 Avery Road
Dublin, OH 43016
Rodney L. Taylor 23,000 0%
P. O. Box 725
Marietta, OH 45750
Philip Shasteen 11,569 0%
100 N. Tampa Street
Suite 1800
Tampa, FL 33602
All directors and executive officers 1,066,628 (5) 45.6%
as a group (8 persons)
<PAGE>
1) Represents sole voting and investment power unless otherwise indicated.
2) Based on 1,783,200 shares of Company common stock outstanding as of
December 31, 1999, plus, as to each person listed, that portion of the
557,780 unissued shares of Company common stock subject to outstanding
options which may be exercised by such person within the next 60 days;
and as to all directors and executive officers as a group, unissued
shares of common stock as to which the members of such group have the
right to acquire beneficial ownership upon the exercise of stock
options within the next 60 days.
3) Includes 4,066 shares owned by Mr. Davis' wife as to which Mr. Davis
disclaims beneficial ownership and includes 110,000 unissued shares of
Company Common Stock as to which Mr. Davis has the right to acquire
beneficial ownership upon the exercise of stock options within the
next 60 days.
4) Includes 10,000 shares owned by Mr. Davis' wife and 2,411 shares owned
by Mr. Davis' children as to which Mr. Davis disclaims beneficial
ownership and includes 287,800 unissued shares of Company common stock
as to which Mr. Davis has the right to acquire beneficial ownership
upon the exercise of stock options within the next 60 days.
5) The number of shares of Common Stock beneficially owned by all
directors and executive officers as a group includes all the shares of
Common Stock listed above including 123,500 unissued shares of Common
Stock as to which the Company's four non-employee directors have the
right to acquire beneficial ownership upon the exercise of stock
options within the next 60 days, 28,209 shares of Common Stock owned
by Mr. Richards, a director of the Company, and 11,080 shares of
Common Stock owned by Mr. Beauchamp, a director of the Company, and
79,375 shares of Common Stock owned by Mr. Asmo, a director of the
Company, and 2,095 shares of Common Stock owned by Jeffrey A. Ross, an
executive officer of the Company and includes 36,480 unissued shares
of Company Common Stock as to which Mr. Ross has the right to acquire
beneficial ownership upon the exercise of stock options within the
next 60 days, and 1,569 shares of Common Stock owned by Mr. Shasteen,
a director of the Company.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 as amended (the
"Exchange Act") requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership of equity
securities of the Company with the Securities and Exchange Commission ("SEC").
Officers, directors, and greater than ten percent shareholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.
<PAGE>
Based solely upon a review of such forms furnished to the Company
pursuant to Rule 16a-3 under the Exchange Act, the Company believes that all
such forms required to be filed pursuant to Section 16(a) of the Exchange Act
were timely filed, as necessary, by the officers, directors and security holders
required to file the same.
Compensation of Executive Officers and Directors
Director Compensation - Each director who is not an officer of the Company
receives a fee of $500 for attendance at each Board meeting, a fee of $250 for
attendance at each telephonic Board meeting, and a fee of $250 for attendance at
each meeting of a Board committee of which he is a member. Directors who are
also officers of the Company receive no additional compensation for their
services as directors. The Company has adopted a Non-Employee Director Stock
Option Plan, which provides for the grant, at the discretion of the Company's
Board of Directors, of options to purchase up to 90,000 shares of Company common
stock upon such terms as are determined by the Board in its discretion. In June,
1997, options to purchase 10,800 shares of common stock at a purchase price of
$4.17 per share were granted under the Director Option Plan. In addition, the
Company's 1999 Stock Option Plan allows option grants to directors.
In January 1997 and January 1998 options to purchase 10,800 and 30,000
shares of common stock, respectively at a purchase price of $4.17 and $2.8125,
respectively were granted under the Non-Employee Director Stock Option Plan. In
September 1999 options to purchase 180,000 shares of common stock at a purchase
price of $1.75 were granted under the 1999 Stock Option Plan and on April 5,
2000, an option to purchase 10,000 shares of common stock at an exercise price
of $4.125 per share was granted to a director.
Executive Compensation - The following table shows, for the fiscal years ended
December 31, 1999, 1998, and 1997 the cash compensation paid by the Company, as
well as certain other compensation paid for those years to the Company's
President and Chief Executive Officer. No other executive officers had total
salary and bonus that exceeded $100,000 during the years ended 1999, 1998 and
1997. None of the Company's executive officers have employment agreements with
the Company.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long-Term
Compensation
----------------------- -----------
Name and Other Annual Number of
Principal Position Year Salary Bonus Compensation Options
Awarded(1)
------------------ ---- ------ ----- ----------- ----------
<S> <C> <C> <C> <C> <C>
Charles R. Davis ......... 1999 $250,000 $ 0 $ 0 200,000
President and ............ 1998 $178,325 $ 0 $ 0 50,000
Chief Executive Officer .. 1997 $155,000 $ 25,000 $ 0 37,800(2)
</TABLE>
(1) Stock options previously granted to the named Executive Officers, by
their terms, automatically adjust to reflect certain changes in the
outstanding Common Shares of the Company, including stock dividends.
<PAGE>
(2) On July 17, 1997, the Company agreed to grant to Mr. Davis performance
options to purchase 200,000 shares of Company common stock, 50,000 of which
will be granted if the Company has pre-tax earnings of at least $1 million
in any fiscal year, 75,000 of which will be granted if the Company has
pre-tax earnings of at least $1.5 million in any fiscal year, and 75,000 of
which will be granted if the Company has pre-tax earnings of at least $2
million in any fiscal year, in each case as long as Mr. Davis was employed
by the Company at the end of the applicable fiscal year. The performance
options are exercisable at the market price of the common stock at the date
of grant, which will be the date the Company files its Form 10-K with its
audited financial statements showing that the required earnings plateau is
satisfied. No performance options were granted in 1999.
<TABLE>
<CAPTION>
Stock Option Grants in Last Fiscal Year
Individual Grants
----------------------------------
Potential Realized Value
at Assumed Annual
% of Total Rates of Stock
Number of Options Price Appreciation
Underlying Granted to Exercise for Option Term(1)
Options Employees Price Expiration Term(1)
Name Granted in 1999 per Share Date 5% 10%
- ---- ------- ------- --------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Charles R. Davis ... 200,000(2) 33.3% $1.75 05/27/04 96,699 213,679
</TABLE>
(1) These assumed appreciation rates are not derived from the historical or
projected prices of the Company's Common Stock or results of operations
or financial condition and they should not be viewed as a prediction of
possible prices of value for the Company's Common Stock in the future.
(2) The stock options were granted under the Company's 1999 Employee Stock
Option Plan, and are exercisable commencing May 27, 1999.
<TABLE>
<CAPTION>
Aggregated Options/SAR Exercises with Last Fiscal Year
And Fiscal Year End Options/SAR Values
Number of Shares Value of Unexercised
Shares Underlying Unexercised In-the-Money
Acquired Value Options at FY-End Options at FY-End
on ------------------------- -------------------------
Name Exercised Realized Exercisable Unexercisable Exercisable Unexercisable
---- --------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles
R. Davis None N/A 287,800 0 $62,000 N/A
</TABLE>
<PAGE>
Executive Compensation Committee's Report on Executive Compensation
Under the Rules of the Securities and Exchange Commission, the Company
is required to provide certain information concerning compensation provided to
the Company's Chief Executive Officer and its executive officers. The Executive
Compensation Committee of the Board of Directors has prepared the following
report for inclusion in this Proxy Statement.
The Compensation Committee has designed its executive compensation
policies to provide incentives to its executives to focus on both current and
long-term Company goals, with an overriding emphasis on the ultimate objective
of enhancing stockholder value. The Compensation Committee has followed an
executive compensation program, comprised of cash and equity-based incentives,
which recognizes individual achievement and encourages executive loyalty and
initiative. The Compensation Committee considers equity ownership to be an
important factor in providing executives with a closer orientation to the
Company and its shareholders. Accordingly, the Compensation Committee encourages
equity ownership by its executives through the grant of options to purchase
Common Stock.
The Company believes that providing attractive compensation
opportunities is necessary to assist the Company in attracting and retaining
competent and experienced executives. Base salaries for the Company's executives
are established on a case-by-case basis by the Compensation Committee, based
upon current market practices and the executive's level of responsibility, prior
experience, breadth of knowledge, and salary requirements. The base salaries of
executive officers are reviewed annually by the Compensation Committee.
Adjustments to such base salaries have been made considering: (a) historical
compensation levels; (b) the overall competitive environment for executives; and
(c) the level of compensation necessary to attract and retain executive talent.
Stock options have historically been awarded upon hiring, promotion, or based
upon merit considerations. As the value of a stock option is directly related to
the market price of the Company's Common Stock, the Compensation Committee
believes the grant of stock options to executives encourages executives to take
a view toward the long-term performance of the Company. Other benefits offered
to executives are generally the same as those offered to the Company's other
employees.
The Compensation Committee utilizes the same policies and consideration
enumerated above with respect to compensation decisions regarding the President,
Charles R. Davis. Mr. Davis' 1999 base salary was determined primarily by
reference to historical compensation, scope of responsibility, and the Company's
desire to retain his services. The Compensation Committee believes its
compensation policies with respect to the Company's executive officers promote
the interests of the Company and its shareholders through current motivation of
the executive officers coupled with an emphasis on the Company's long-term
success.
Compensation Committee: S. Robert Davis David J. Richards Michael P. Beauchamp
Rodney L. Taylor
<PAGE>
Stock Price Performance Graph
The following graph represents a comparison of the cumulative total
shareholder return on the Common Stock, assuming dividend reinvestment, with The
NASDAQ Composite Index and The NASDAQ Industrial Index. This graph assumes that
$100 was invested on January 15, 1997, the first day of trading after the
effective date of the spin-off of the Company from Pages, Inc. The Company paid
an 8 percent stock dividend on August 1, 1997, which was included in the 1997
total shareholder return. The stock price performance shown below is not
necessarily indicative of future performance.
<TABLE>
<CAPTION>
1/15/97 6/30/97 12/31/97 6/30/98 12/31/98 6/30/99 12/31/99
<S> <C> <C> <C> <C> <C> <C> <C>
CASCO ............ 100 149.000 90.000 80.000 52.000 63.000 68.000
Nasdaq Composite . 100 108.000 117.691 142.000 164.393 201.000 305.000
Nasdaq Industrials 100 103.000 106.731 117.000 113.986 143.000 196.000
</TABLE>
The stock price performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such acts.
<PAGE>
Item 2. Approval of the 2000 Stock Option Plan
General. There are 27,000 shares available for grant under the
Company's 1996 Incentive Stock Option Plan, 26,000 shares available for grant
under the Company's 1997 Employee Stock Option Plan, and 5,000 shares available
for grant under the Company's 1999 Stock Option Plan. The 2000 Stock Option Plan
(the "Plan) provides for the grant of options in the form of incentive stock
options ("incentive stock options") meeting the applicable statutory
requirements of the Internal Revenue Code of 1986, as amended (the "Code"), and
options not meeting such requirements ("nonqualified stock options"). Each
option granted under the Plan will be evidenced by a written stock option grant
and agreement. The Plan is attached to this Proxy Statement as Exhibit A. The
summary of the Plan set forth herein is qualified in its entirety by reference
to the Plan. The purposes of shareholder approval of the Plan were: (i) to
permit the options to purchase 600,000 shares of Common Stock under the Plan to
qualify for incentive stock option treatment pursuant to Section 422 of the
Code; and (ii) to satisfy the applicable requirements of The Nasdaq Stock
Market.
Shares Subject to Options. The Plan permits options to be granted to
purchase up to 600,000 shares of Common Stock in the aggregate. At this time, it
is not known which eligible directors, officers, employees and consultants, if
any, will receive grants under the Plan or the number of shares which will be
covered by any such grants. Such determinations will be made from time to time
by the Administrator (as hereinafter defied). To the extent that options granted
under the Plan expire or terminate without having been exercised in full, the
Common Stock subject thereto will become available for further options under the
Plan. Provision is made under the Plan for appropriate adjustment in the number
of shares of Common Stock covered by each option granted thereunder and the
related option price, in the event of any change in the Common Stock by reason
of a reorganization, recapitalization, stock split, stock dividend, combination
of shares, merger, consolidation, issuance of rights, or any other change in the
capital structure of the Company.
Administration. The Plan will be administered by the Company's Board of
Directors (the "Board") or a committee (the "Committee") appointed by the Board
(the "Administrator") which must be constituted to comply with applicable laws.
Subject to the provisions of the Plan and, in the case of a Committee,
the specific duties delegated by the Board to the Committee, and subject to the
approval of any relevant authorities, the Administrator has the authority in its
discretion to determine the fair market value of the Company's Common Stock, to
select the persons to whom options may from time to time be granted under the
Plan, to determine the number of shares to be covered by each option, to approve
forms of option grants for use under the Plan, and to determine the terms and
conditions of options granted under the Plan. Such terms and conditions include,
but are not limited to, the exercise price, the time or times when options may
be exercised (which may be based on performance criteria), any vesting,
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any option or the Common Stock relating thereto, based in
each case on such factors as the Administrator, in its discretion, will
determine. The Administrator also has the authority to determine whether and
under what circumstances an option may be settled in cash instead of Common
Stock, to reduce the exercise price of any option to the then fair market value
if the fair market value of the Common Stock covered by the option has declined
since the date the option was granted, to initiate an option exchange program,
to prescribe, amend and rescind rules and regulations relating to the Plan, to
allow optionees to satisfy withholding tax obligations by electing to have the
Company withhold from the shares to be issued upon exercise of an option that
number of shares having a fair market value equal to the amount required to be
withheld and to construe and interpret the terms of the Plan and awards granted
pursuant to the Plan. All decisions, determinations and interpretations of the
Administrator are final and binding on all optionees.
Eligibility. Directors and employees of the Company, including officers
and directors employed by any parent or subsidiary of the Company and persons
who are engaged by the Company or any parent or subsidiary of the Company to
render consulting or advisory services are eligible to receive awards under the
Plan. Such persons are referred to in the Plan as "Service Providers."
Non-statutory stock options may be granted to Service Providers. Incentive stock
options may only be granted to employees and are subject to certain limitations
set forth in the Plan.
Term of Plan. The Plan became effective upon its adoption by the Board
and continues in effect for a term of 10 years unless sooner terminated under
the provisions of the Plan.
Term of Options. The term of each option granted under the Plan must be
stated in the option grant. However, the term can be no more than 10 years after
the date of grant, subject to certain limitations in the case of incentive stock
options.
Option Exercise Price and Consideration. The per share exercise price
for the shares to be issued upon exercise of an option will be such price as is
determined by the Administrator, but in the case of an incentive stock option
granted to an employee who at the time of grant owns stock representing more
than 10% of the voting power of all classes of stock of the Company or any
parent or subsidiary, the exercise price must be no less than 110% of the fair
market value per share on the date of grant. Incentive stock options granted to
other employees must be at a purchase price not less than 100% of the fair
market value per share on the date of grant.
In the case of a non-statutory stock option the exercise price must be
no less than 100% of the fair market value per share on the date of grant.
Notwithstanding the foregoing, options may be granted with a per share exercise
price other than as described above pursuant to a merger or other corporate
transaction.
The consideration to be paid for the shares to be issued upon exercise
of an option, including the method of payment, is determined by the
Administrator. Such consideration may consist of cash, check, promissory note,
other shares of Company Common Stock, consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan, or any combination of the foregoing.
Exercise of Options. Options granted under the Plan are exercisable
according to the terms of the Plan at such times and under such conditions as
determined by the Administrator and set forth in the option grant. Unless the
Administrator determines otherwise, vesting of options is tolled during any
unpaid leave of absence.
<PAGE>
If an optionee ceases to be a service provider under the Plan, such
optionee may exercise his or her option within such period of time as is
specified in the option grant (at least 30 days) to the extent that the option
is vested on the date of termination, but in no event later than the expiration
of the term of the option as set forth in the option grant. In the absence of a
specified time in the option grant, the option remains exercisable for three
months following the optionee's termination. If, on the date of termination, the
optionee is not vested as to his or her entire option, the shares covered by the
unvested portion of the option revert to the Plan. If, after termination, the
optionee does not exercise his or her option within the time specified by the
administrator, the option terminates and the shares covered by the option revert
to the Plan.
If an optionee ceases to be a service provider as a result of the
optionee's disability, as defined in Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended, the optionee may exercise his or her option within
such period of time as is specified in the option grant (at least six months) to
the extent the option is vested on the date of termination, but in no event
later than the expiration of the term of the option as set forth in the option
grant. In the absence of a specified time in the option grant, the option
remains exercisable for 12 months following the optionee's termination. If on
the date of termination, the optionee is not vested as to his or her entire
option, the shares covered by the unvested portion of the option revert to the
Plan. If after termination, the optionee does not exercise his or her option
within the time specified in the Plan, the option terminates and the shares
covered by the option revert to the Plan.
If an optionee dies while a service provider, the option may be
exercised within such period of time as is specified in the option grant (at
least six months) to the extent that the option is vested on the date of death
(but in no event later than the expiration of the term of the option as set
forth in the option grant) by the optionee's estate or by a person who acquires
the right to exercise the option by bequest or inheritance. In the absence of a
specified time in the option grant, the option remains exercisable for 12 months
following the optionee's termination. If, at the time of death, the optionee is
not vested as to the entire option, the shares covered by the unvested portion
of the option immediately revert to the Plan. If the option is not so exercised
within the time specified in the Plan, the option terminates and the shares
covered by the option revert to the Plan.
Amendment and Termination of the Plan. The Board may at any time amend,
alter, suspend or terminate the Plan, but no such action will impair the rights
of any optionee, unless mutually agreed otherwise between the optionee and the
Administrator in writing.
<PAGE>
Federal Income Tax Considerations. Under current federal tax law, the
holder of an option that qualifies as an incentive stock option under Section
422 of the Code generally does not recognize income for federal income tax
purposes at the time of the grant or exercise of an incentive stock option (but
the spread between the exercise price and the fair market value of the
underlying shares on the date of exercise generally will constitute a tax
preference item for purposes of the alternative minimum tax). The optionee
generally will be entitled to long-term capital gain treatment upon the sale of
shares acquired pursuant to the exercise of an incentive stock option if the
shares have been held for more than two years from the date of grant of the
option and for more than one year after exercise, and the Company will not be
entitled to any deduction for federal income tax purposes. If the optionee
disposes of the stock before the expiration of either of these holding periods
(a :disqualifying disposition"), the gain realized on disposition will be
compensation income to the optionee to the extent the fair market value of the
underlying stock on the date of exercise (or, if less, the amount realized on
disposition of the underlying stock) exceeds the applicable exercise price and a
corresponding deduction will be allowed to the Company.
Under current federal tax law, an optionee does not recognize income
for federal income tax purposes upon the grant of a nonqualified stock option
but must recognize ordinary income upon exercise to the extent of the excess of
the fair market value of the underlying shares on the date of exercise over the
exercise price of the option. The Company generally will be entitled to a
deduction in the same amount and at the same time as ordinary income is
recognized by the optionee. A subsequent disposition of the shares acquired
pursuant to the exercise of a nonqualified option typically will give rise to
capital gain or loss to the extent the amount realized for the sale differs from
the fair market value of the shares on the date of exercise. This capital gain
or loss will be long-term gain or loss if the shares sold had been held for more
than eighteen months after the date of exercise.
<PAGE>
Independent Public Accountants
The accounting firm of Hausser + Taylor LLP, Columbus, Ohio, is the
Company's principal auditor and accountant for the year ended December 31, 1999.
The Company has not selected an auditor and accountant for the next fiscal year.
Management expects that a representative of Hausser + Taylor LLP will be present
at the Annual Meeting of Stockholders. The Hausser + Taylor representative will
be afforded an opportunity to make a statement at the meeting if desired and is
expected to be available to respond to appropriate questions.
Annual Report
The Company's annual report on Form 10-K for the fiscal year ended
December 31, 1999, which includes financial statements, was mailed to each
shareholder receiving this Proxy Statement.
The Company will provide, without charge, to any person receiving a
copy of this Proxy Statement, upon written or oral request of such person, by
first class mail a copy of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1999, including the financial statements and the
financial statement schedules thereto. Such request should be addressed to
Jeffrey A. Ross, Chief Financial Officer, CASCO INTERNATIONAL, INC., 4205 East
Dixon Boulevard, Shelby, North Carolina 28150.
<PAGE>
Other Proposed Action
The Board of Directors does not intend to bring any other matters
before the meeting nor does the Board of Directors know of any matters which
other persons intend to bring before the meeting. If, however, other matters not
mentioned in this Proxy Statement properly come before the meeting, the persons
named in the accompanying form of proxy will vote thereon in accordance with the
recommendation of the Board of Directors.
Stockholder Proposals and Submission
If any Stockholder wishes to present a proposal for inclusion in the
proxy materials to be solicited by the Company's Board of Directors with respect
to the next Annual Meeting of Stockholders, such proposal must be received by
the Company no later than December 12, 2000 to be eligible for inclusion in the
proxy material for that meeting. Notice to the Company of a stockholder proposal
submitted other than pursuant to Securities and Exchange Commission Rule 14a-8
will be considered untimely and you may not bring it before the 2001 Annual
Meeting, if we receive it after March 27, 2001.
<PAGE>
EXHIBIT A
<PAGE>
CASCO INTERNATIONAL, INC.
2000 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Stock Option Plan (the
"Plan") are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees,
Directors and Consultants and to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or Non-Statutory
Stock Options, as determined by the Administrator at the time of grant.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as shall be
administering the Plan in accordance with Section 4 hereof.
(b) "Applicable Laws" means the requirements relating to the administration of
stock option plans under U.S. state corporate laws, U.S. federal and state
securities laws, the Code, any stock exchange or quotation system on which
the Common Stock is listed or quoted and the applicable laws of any other
country or jurisdiction where Options are granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the Board in
accordance with Section 4 hereof.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means CASCO International, Inc., a Delaware corporation.
(h) "Consultant" means any person who is engaged by the Company or any Parent
or Subsidiary to render consulting or advisory services to such entity.
(i) "Director" means a member of the Board of Directors of the Company.
(j) "Disability" means total and permanent disability as defined in Section
22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and Directors, employed by
the Company or any Parent or Subsidiary of the Company. A Service Provider
(defined below) shall not cease to be an Employee in the case of (i) any
leave of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. For purposes of Incentive Stock Options, no
such leave may exceed ninety days, unless reemployment upon expiration of
such leave is guaranteed by statute or contract. If reemployment upon
expiration of a leave of absence approved by the Company is not so
guaranteed, on the 181st day of such leave any Incentive Stock Option held
by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Non-Statutory Stock Option. Neither
service as a director nor payment of a director's fee by the Company shall
be sufficient to constitute "employment" by the Company.
<PAGE>
(l) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(m) "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:
(i) If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair
Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or
system for the last market trading day prior to the time of determination,
as reported in The Wall Street Journal or such other source as the
Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized securities dealer
but selling prices are not reported, its Fair Market Value shall be the
mean between the high bid and low asked prices for the Common Stock on the
last market trading day prior to the day of determination; or
(iii)In the absence of an established market for the Common Stock, the Fair
Market Value thereof shall be determined in good faith by the
Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(o) "Non-Statutory Stock Option" means an Option not intended to qualify as an
Incentive Stock Option.
(p) "Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(q) "Option" means a stock option granted pursuant to the Plan.
(r) "Option Grant" means a written agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant.
The Option Grant is subject to the terms and conditions of the Plan.
(s) "Option Exchange Program" means a program whereby outstanding Options are
exchanged for Options with a lower exercise price.
(t) "Optioned Stock" means the Common Stock subject to an Option.
(u) "Optionee" means the holder of an outstanding Option granted under the
Plan.
(v) "Parent" means a "parent corporation," whether now or hereafter existing,
as defined in Section 424(e) of the Code.
(w) "Plan" means this CASCO International, Inc. 2000 Stock Option Plan.
(x) "Section 16(b)" means Section 16(b) of the Securities Exchange Act of 1934,
as amended.
<PAGE>
(y) "Service Provider" means an Employee, Director or Consultant.
(z) "Share" means a share of the Common Stock, as adjusted in accordance with
Section 11 below.
(aa) "Subsidiary" means a "subsidiary corporation," whether now or hereafter
existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11
of the Plan, the maximum aggregate number of Shares which may be subject to
option and sold under the Plan is 600,000 Shares. The Shares may be authorized
but unissued, or reacquired Common Stock. If an Option expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant
to an Option Exchange Program, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated). However, Shares that have actually been issued under the Plan,
upon exercise of an Option, shall not be returned to the Plan and shall not
become available for future distribution under the Plan.
4. Administration of the Plan.
(a) Administrator. The Plan shall be administered by the Board
or a Committee appointed by the Board, which Committee shall be constituted to
comply with Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of
the Plan and, in the case of a Committee, the specific duties delegated by the
Board to such Committee, and subject to the approval of any relevant
authorities, the Administrator shall have the authority in its discretion: (i)
to determine the Fair Market Value; (ii) to select the Service Providers to whom
Options may from time to time be granted hereunder; (iii) to determine the
number of Shares to be covered by each such award granted hereunder; (iv) to
approve forms of Option Grants for use under the Plan; (v) to determine the
terms and conditions of any Option granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options may be exercised (which may be based on performance criteria), any
vesting, acceleration or waiver of forfeiture restrictions, and any restriction
or limitation regarding any Option or the Common Stock relating thereto, based
in each case on such factors as the Administrator, in its sole discretion, shall
determine; (vi) to determine whether and under what circumstances an Option may
be settled in cash under subsection 9(e) instead of Common Stock; (vii) to
reduce the exercise price of any Option to the then current Fair Market Value if
the Fair Market Value of the Common Stock covered by such Option has declined
since the date the Option was granted; (viii) to initiate an Option Exchange
Program; (ix) to prescribe, amend and rescind rules and regulations relating to
the Plan; (x) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option that number of Shares having a Fair Market Value equal to the
amount required to be withheld. The Fair Market Value of the Shares to be
withheld shall be determined on the date that the amount of tax to be withheld
is to be determined. All elections by Optionees to have Shares withheld for this
purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; and (xi) to construe and
interpret the terms of the Plan and awards granted pursuant to the Plan.
(c) Effect of Administrator's Decision. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all
Optionees.
<PAGE>
5. Eligibility.
(a) Non-Statutory Stock Options may be granted to Service Providers. Incentive
Stock Options may be granted only to Employees.
(b) Each Option shall be designated in the Option Grant as either an Incentive
Stock Option or a Non-Statutory Stock Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are exercisable for
the first time by the Optionee during any calendar year (under all plans of
the Company and any Parent or Subsidiary) exceeds $100,000, such Options
shall be treated as Non-Statutory Stock Options. For purposes of this
Section 5(b), Incentive Stock Options shall be taken into account in the
order in which they were granted. The Fair Market Value of the Shares shall
be determined as of the time the Option with respect to such Shares is
granted.
(c) Neither the Plan nor any Option shall confer upon any Optionee any right
with respect to continuing the Optionee's relationship as a Service
Provider with the Company, nor shall it interfere in any way with his or
her right or the Company's right to terminate such relationship at any
time, with or without cause.
6. Term of Plan. The Plan shall become effective upon its adoption by the
Board. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 13 of the Plan.
7. Term of Option. The term of each Option shall be stated in the
Option Grant; provided, however, that the term shall be no more than ten (10)
years after the date of grant thereof. In the case of an Incentive Stock Option
granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years after the date of grant or such shorter term as may be
provided in the Option Grant.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be issued
upon exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of grant of such Option, owns stock
representing more than 10% of the voting power of all classes of stock of
the Company or any Parent or Subsidiary, the exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of grant.
(B) granted to any other Employee, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Non-Statutory Stock Option, the exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of grant.
(iii)Notwithstanding the foregoing, Options may be granted with a per Share
exercise price other than as required above pursuant to a merger or other
corporate transaction.
<PAGE>
(b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator. Such consideration may consist of (l) cash, (2) check, (3)
promissory note, (4) other Shares which (x) in the case of Shares acquired upon
exercise of an Option, have been owned by the Optionee for more than six months
on the date of surrender, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which such
Option shall be exercised, (5) consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the
Plan, or (6) any combination of the foregoing methods of payment. In making its
determination as to the type of consideration to accept, the Administrator shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
9. Exercise of Options.
(a) Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable according to the terms hereof at
such times and under such conditions as determined by the Administrator and set
forth in the Option Grant. Unless the Administrator provides otherwise, vesting
of Options granted hereunder shall be tolled during any unpaid leave of absence.
An Option may not be exercised for a fraction of a Share. An Option shall be
deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Grant) from the person entitled to exercise the Option, and
(ii) full payment for the Shares with respect to which the Option is exercised.
Full payment may consist of any consideration and method of payment
authorized by the Administrator and permitted by the Option Grant and the
Plan. Shares issued upon exercise of an Option shall be issued in the name
of the Optionee or, if requested by the Optionee, in the name of the
Optionee and his or her spouse. Until the Shares are issued (as evidenced
by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to
the Shares, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the Shares are issued, except as
provided in Section 11 of the Plan. Exercise of an Option in any manner
shall result in a decrease in the number of Shares thereafter available,
both for purposes of the Plan and for sale under the Option, by the number
of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, such Optionee may exercise his or her
Option within such period of time as is specified in the Option Grant (of at
least thirty (30) days) to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of the Option
as set forth in the Option Grant). In the absence of a specified time in the
Option Grant, the Option shall remain exercisable for three (3) months following
the Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.
<PAGE>
(c) Disability of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Grant (of at least six (6) months) to the extent the Option is vested on
the date of termination (but in no event later than the expiration of the term
of such Option as set forth in the Option Grant). In the absence of a specified
time in the Option Grant, the Option shall remain exercisable for twelve (12)
months following the Optionee's termination. If on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If after termination,
the Optionee does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is specified
in the Option Grant (of at least six (6) months) to the extent that the Option
is vested on the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Option Grant) by the Optionee's estate
or by a person who acquires the right to exercise the Option by bequest or
inheritance. In the absence of a specified time in the Option Grant, the Option
shall remain exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not vested as to the
entire Option, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. If the Option is not so exercised within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option previously granted, based
on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.
10. Non-Transferability of Options. The Options may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee.
11. Adjustments Upon Changes in Capitalization, Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required action
by the shareholders of the Company, the number of shares of Common Stock covered
by each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company. The conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option.
<PAGE>
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until fifteen (15) days prior to
such transaction as to all of the Optioned Stock covered thereby, including
Shares as to which the Option would not otherwise be exercisable. In addition,
the Administrator may provide that any Company repurchase option applicable to
any Shares purchased upon exercise of an Option shall lapse as to all such
Shares, provided the proposed dissolution or liquidation takes place at the time
and in the manner contemplated. To the extent it has not been previously
exercised, an Option will terminate immediately prior to the consummation of
such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of all or substantially
all of the assets of the Company, each outstanding Option shall be assumed or an
equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the Option, the Optionee shall
fully vest in and have the right to exercise the Option as to all of the
Optioned Stock, including Shares as to which it would not otherwise be vested or
exercisable. If an Option becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option shall be fully exercisable for a period of fifteen (15) days after the
date of such notice, and the Option shall terminate upon the expiration of such
period. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger or sale of assets, the option or right confers
the right to purchase or receive, for each Share of Optioned Stock subject to
the Option immediately prior to the merger or sale of assets, the consideration
(whether stock, cash, or other securities or property) received in the merger or
sale of assets by holders of Common Stock for each Share held on the effective
date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger or
sale of assets is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option,
for each Share of Optioned Stock subject to the Option, to be solely common
stock of the successor corporation or its Parent equal in fair market value to
the per share consideration received by holders of Common Stock in the merger or
sale of assets.
12. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each grantee to whom an Option is
so granted within a reasonable time after the date of such grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter, suspend
or terminate the Plan.
(b) Shareholder Approval. The Board shall obtain shareholder approval of any
Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Optionee, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to
exercise the powers granted to it hereunder with respect to Options granted
under the Plan prior to the date of such termination.
<PAGE>
14. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares shall comply with Applicable Laws and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
(b) Investment Representations. As a condition to the exercise
of an Option, the Administrator may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.
15. Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
16. Reservation of Shares. The Company, during the term of this Plan, shall at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
17. Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the
Plan is adopted. Such shareholder approval shall be obtained in the degree
and manner required under Applicable Laws.
18. Restriction on Disposition of Shares. Shares acquired upon the exercise of
Options shall not be disposed of by an Optionee before the expiration of
six months after the Option was acquired.
Adopted by the Board of Directors on ______________, 2000.
