SCHEDULE 14A
(Rule 14a-101)
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant
to Rule 14a-11(c) or Rule 14a-12
Icon CMT Corp.
----------------------------------------------
(Name of Registrant as Specified in Its Charter)
-------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
<PAGE>
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
ICON CMT CORP.
1200 Harbor Boulevard
Weehawken, New Jersey 07087
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 17, 1998
To the Stockholders of Icon CMT Corp.:
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders
(the "Meeting") of Icon CMT Corp., a Delaware corporation (the "Company"), will
be held at the Company's headquarters, 1200 Harbor Boulevard, Eighth Floor,
Weehawken, New Jersey, on Thursday, September 17, 1998 at 10:30 a.m., Eastern
Daylight Time, to consider and act upon the following matters:
(1) The election of two Class I directors to serve until the annual meeting
of stockholders scheduled to be held in the year 2001 and until their
respective successors are elected and qualified;
(2) The approval of an amendment to the Company's 1995 Stock Option Plan
(the "1995 Option Plan") to permit the grant of stock options to
non-employee directors;
(3) The approval of an amendment to the 1995 Option Plan to increase the
number of shares for which options may be granted thereunder;
(4) The ratification and approval of the appointment of
PricewaterhouseCoopers LLP as the Company's independent accountants for
the fiscal year ending December 31, 1998; and
(5) The transaction of such other business as may properly come before the
Meeting or any adjournment or postponement thereof.
Information regarding the matters to be acted upon at the Meeting is
contained in the accompanying Proxy Statement.
The close of business on August 21, 1998 has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the Meeting or any adjournment or postponement thereof.
By Order of the Board of Directors,
/s/ RICHARD M. BROWN
Secretary
Weehawken, New Jersey
August 24, 1998
- --------------------------------------------------------------------------------
It is important that your shares be represented at the Meeting. Each stockholder
is urged to sign, date and return the enclosed proxy card which is being
solicited on behalf of the Board of Directors. An envelope addressed to the
Company's transfer agent is enclosed for that purpose and needs no postage if
mailed in the United States.
- --------------------------------------------------------------------------------
<PAGE>
ICON CMT CORP.
1200 Harbor Boulevard
Weehawken, New Jersey 07087
PROXY STATEMENT
This Proxy Statement is furnished to the holders of Common Stock, par
value $.001 per share ("Common Stock"), of Icon CMT Corp., a Delaware
corporation (the "Company"), in connection with the solicitation by and on
behalf of its Board of Directors of proxies ("Proxy" or "Proxies") for use at
the 1998 Annual Meeting of Stockholders (the "Meeting") to be held on Thursday,
September 17, 1998, at 10:30 a.m., Eastern Daylight Time, at the Company's
headquarters, 1200 Harbor Boulevard, Weehawken, New Jersey and at any
adjournment or postponement thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. The cost of preparing,
assembling and mailing the Notice of Annual Meeting of Stockholders, this Proxy
Statement and Proxies is to be borne by the Company. The Company will also
reimburse brokers who are holders of record of Common Stock for their expenses
in forwarding Proxies and Proxy soliciting material to the beneficial owners of
such shares. In addition to the use of the mails, Proxies may be solicited
without extra compensation by directors, officers and employees of the Company
by telephone, telecopy, telegraph or personal interview. The approximate mailing
date of this Proxy Statement is August 26, 1998.
Unless otherwise specified, all Proxies, in proper form, received by
the time of the Meeting will be voted for the election of all nominees named
herein to serve as directors and in favor of each of the proposals set forth in
the accompanying Notice of Annual Meeting of Stockholders and described below.
A Proxy may be revoked by a stockholder at any time before its exercise
by filing with Richard M. Brown, the Secretary of the Company, at the address
set forth above, an instrument of revocation or a duly executed proxy bearing a
later date, or by attendance at the Meeting and electing to vote in person.
Attendance at the Meeting will not, in and of itself, constitute revocation of a
Proxy.
The close of business on August 21, 1998 has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
stockholders entitled to notice of, and to vote at, the Meeting and any
adjournment thereof. As of the Record Date, there were 15,884,378 shares of
Common Stock outstanding. Each share of Common Stock outstanding on the Record
Date will be entitled to one vote on all matters to come before the Meeting.
A majority of the shares entitled to vote, represented in person or by
proxy, is required to constitute a quorum for the transaction of business.
Proxies submitted that contain abstentions or broker nonvotes will be deemed
present at the Meeting for determining the presence of a quorum.
-1-
<PAGE>
------------------------
PROPOSAL 1
ELECTION OF DIRECTORS
------------------------
The Company's Certificate of Incorporation provides that the Board of
Directors (the "Board") shall be divided into three classes, with such classes
to be as nearly equal in number as the then total number of directors
constituting the entire Board permits. The Board currently consists of five
members, with two members in each of Class I and II and one member in Class III.
The term of office of the current Class I, II and III directors is scheduled to
expire at the annual meetings of stockholders to be held in the years 1998, 1999
and 2000, respectively. At each annual meeting, directors are elected to succeed
those in the class whose term expires at that annual meeting, such newly elected
directors to hold office until the third succeeding annual meeting and the
election and qualification of their respective successors. Any director elected
by the Board to fill an existing vacancy in the Board will hold office until the
next meeting of shareholders at which the election of directors is in the
regular order of business and until his or her successor has been elected and
qualified.
At the Meeting, stockholders will elect two Class I directors to
serve until the annual meeting of stockholders scheduled to be held in the year
2001 and until their respective successors are elected and qualified. Unless
otherwise directed, the persons named in the Proxy intend to cast all Proxies
received for the election of Messrs. Baxter and Weisman (the "nominees") to
serve as Class I directors upon their nomination at the Meeting. Messrs. Baxter,
Brown and Harmolin were each elected by stockholders. Messrs. Plum and Weisman
were each elected pursuant to the terms of a stock purchase agreement among the
Company, SCP Private Equity Partners, L.P. ("SCP") and Messrs. Baxter, Brown and
Harmolin. Each of the nominees has advised the Company of his or her willingness
to serve as a director of the Company. In case any nominee should become
unavailable for election to the Board of Directors for any reason, the persons
named in the Proxies have discretionary authority to vote the Proxies for one or
more alternative nominees who will be designated by the Board of Directors.
Information About Nominees
The following is a description of the nominees (ages as of August
18, 1998):
Class I Directors
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Scott A. Baxter................ 35 President, Chief Executive Officer and Chairman of the
Board of Directors
Wayne B. Weisman............... 42 Director
</TABLE>
Scott A. Baxter, a founder of the Company, has served as President,
Chief Executive Officer and Chairman of the Board of Directors of the Company
since its inception in 1991. From June 1987 to February 1991, Mr. Baxter was an
account executive at Sun Microsystems, Inc. From 1984 to 1987, Mr. Baxter was an
account executive at Data General Corporation ("Data General").
Wayne B. Weisman has been a director of the Company since May 1997
and a partner of the general partner of SCP, a private equity investment fund,
since its inception in August 1996. He has been Vice President of CIP Capital,
L.P., a licensed Small Business Investment Company, since its formation in 1990.
From January 1992 to May 1994, Mr. Weisman was an Executive Vice President of
Affinity Biotech, Inc., a healthcare technology company, and Vice President and
General Counsel of its successor, IBAH, Inc., a clinical trials management
company. He formerly practiced law with the Philadelphia firm of Saul, Ewing,
Remick & Saul. Mr. Weisman is a director of Microleague Multimedia, Inc. and
CinemaStar Luxury Theaters, Inc.
-2-
<PAGE>
Information About Directors Whose Terms of Office Continue After the Meeting
The following is a description of each director whose term of office
continues after the meeting (ages as of August 18, 1998):
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Richard M. Brown............... 49 Vice President -- Information Technologies, Secretary and Director
Scott Harmolin................. 39 Senior Vice President, Chief Technology Officer and Director
Samuel A. Plum................. 54 Director
</TABLE>
Class II Directors
Richard M. Brown, a founder of the Company, has served as Vice
President -- Information Technologies, Secretary and a director of the Company
since its inception in 1991. From November 1986 to February 1991, Mr. Brown was
President of Custom Applied System Techniques Inc., a consulting firm that
specialized in computer systems.
Scott Harmolin, a founder of the Company, has served as Senior Vice
President, Chief Technology Officer and a director of the Company since its
inception in 1991. From November 1986 to February 1991, Mr. Harmolin was Vice
President of Custom Applied System Techniques Inc., a consulting firm that
specialized in computer systems.
Class III Director
Samuel A. Plum has been a director of the Company since May 1997 and
a Managing General Partner of the general partner of SCP, a private equity
investment fund, since its inception in August 1996. Mr. Plum was a Managing
Director of Safeguard Scientifics Inc., an information technology company, from
1993 to 1996. From February 1989 to January 1993, Mr. Plum served as President
of Charterhouse Inc. and Charterhouse North America Securities, Inc., the U.S.
investment banking and broker-dealer arms, respectively, of Charterhouse PLC, a
merchant bank in the U.K. From 1973 to 1989, Mr. Plum served in various
capacities at the investment banking division of PaineWebber, Inc. and Blyth
Eastman Dillon & Co., Inc.
Information About Non-Director Executive Officers
The following is a description of each executive officer of the
Company who is not also a director of the Company (ages as of August 18, 1998):
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Kenneth J. Hall................ 40 Senior Vice President, Chief Financial Officer and Treasurer
Susan A. Massaro............... 42 Senior Vice President -- Professional Services
Frank C. Cicio, Jr............. 44 Senior Vice President -- Sales and Business Development
Anthony R. Scrimenti........... 44 Senior Vice President -- Communications Services
David L. Goret................. 34 Vice President -- Business Affairs, General Counsel and Assistant
Secretary
Robert J. Thalman, Jr.......... 45 Vice President -- Strategic Marketing
Michael J. Gold................ 34 Vice President -- Corporate Development
</TABLE>
Kenneth J. Hall has served as the Company's Senior Vice President,
Chief Financial Officer and Treasurer since April 1997. From February 1996 to
March 1997, he was the Chief Financial Officer of Global
-3-
<PAGE>
DirectMail Corp, an international direct marketer of computer products and
office supplies. Prior to such time, Mr. Hall was employed by National Football
League Properties, Inc. as Vice President of Finance and Administration and
Chief Financial Officer from 1992 to 1995 and Director of Finance from 1990 to
1991. Mr. Hall's experience also includes management positions with Price
Waterhouse LLP and Coopers & Lybrand L.L.P.
Susan A. Massaro has served as the Company's Senior Vice President --
Professional Services since March 1996. From January 1979 to March 1996, Ms.
Massaro worked for Data General, a computer hardware and software manufacturer,
where she held many technical and business management positions, including the
U.S. Director of Professional Services, Eastern U.S. Director of Systems
Engineering, Northeast Technical Services Manager, and various Systems
Engineering consultant and management positions. Prior to joining Data General,
Ms. Massaro held Programmer/Analyst positions at LeCroy Research Systems, a test
and measurement instrumentation manufacturer, and STC Systems, a business
application solutions provider and integrator. Ms. Massaro is the spouse of
Anthony R. Scrimenti.
Frank C. Cicio, Jr. has served as the Company's Senior Vice President
- -- Sales and Strategic Business Development since February 1997. Mr. Cicio
served from July 1993 to February 1997 as Executive Vice President of Sales and
Marketing of Logic Works Incorporated, a computer software company. Prior to
joining Logic Works, Mr. Cicio was Director of Strategic Alliances at Bachman
Information, a computer software company, and served in various capacities at
MAI Systems, a manufacturer of application software and hardware products for
the retail, distribution and financial markets, beginning as an engineering
project manager in 1977 and rising to General Manager of the North American
Industry Business Unit in 1989.
Anthony R. Scrimenti has served as the Company's Senior Vice
President -- Communications Services since November 1997 and was its Chief
Information Officer from August 1994 to November 1997. From October 1993 to
August 1994, Mr. Scrimenti was employed by Novell, Inc., a networking software
manufacturer, as a senior systems consultant. From January 1986 to October 1993,
Mr. Scrimenti was employed by Data General, a computer hardware and software
manufacturer, in various capacities, including as Manager, Network Services. Mr.
Scrimenti is the spouse of Ms. Massaro.
David L. Goret has served as the Company's General Counsel since
February 1996 and Vice President -- Business Affairs since February 1997. From
July 1992 to January 1996, Mr. Goret served as Vice President -- Business
Affairs and General Counsel of Interfilm, Inc., a public company that he
co-founded, that produced interactive motion pictures. From May 1991 to July
1992, Mr. Goret served as Director of Business Affairs for Controlled Entropy
Entertainment, an entertainment production company. From October 1989 to July
1992, Mr. Goret served as Director of Business Affairs for Tour-Toiseshell,
Inc., the production company of the Teenage Mutant Ninja Turtles live shows. Mr.
Goret was an attorney at Haythe & Curley from September 1988 to October 1989.
Mr. Goret is admitted to practice in New York and New Jersey.
Robert J. Thalman, Jr. has served as the Company's Vice President --
Strategic Marketing since January 1997. Prior to joining the Company, Mr.
Thalman spent 16 years with Turner Broadcasting System, where he oversaw
strategic marketing for both international (1991-1996) and domestic (1986-1990)
network distribution.
Michael J. Gold has served as the Company's Vice President --
Corporate Development since August 1997. From October 1996 to May 1997, Mr. Gold
was the Chief Executive Officer of Tumble Interactive Media, Inc., an
interactive media agency. From May 1993 to February 1996, he was the President
and founder of Beyond Fitness, a multimedia fitness-information services
company. From August 1986 to April 1993, Mr. Gold was employed by AT&T and Bell
Laboratories in various capacities, including Manager, New Business Development
in the electronic commerce area and District Manager, Sales.
-4-
<PAGE>
During the fiscal year ended December 31, 1997, the Company's Board
of Directors held four meetings and took action by written consent on six
occasions. Each incumbent director attended each meeting of the Board, and each
committee meeting of each committee on which he served, that occurred during his
directorship in fiscal 1997.
Committees
The Company has an Audit Committee of the Board of Directors. The
function of the Audit Committee is to oversee the auditing procedures of the
Company, receive and accept the reports of the Company's independent certified
public accountants, oversee the Company's internal systems of accounting and
management controls and make recommendations to the Board as to the selection
and appointment of the auditors for the Company. The Company also has a
Compensation Committee of the Board. The function of the Compensation Committee
is to administer, upon delegation of the Board of the power to administer, the
Company's stock option plans, make other relevant compensation decisions of the
Company and such other matters relating to compensation as may be prescribed by
the Board. The Compensation Committee held four meetings during fiscal 1997 and
took action by written consent on four occasions.
Compensation Committee Interlocks and Insider Participation
The Company did not have a compensation committee during the fiscal
year ended December 31, 1996; its function was performed by the Stock Option
Committee. Messrs. Baxter, Brown and Harmolin, as the three members of the Board
of Directors, each participated in deliberations concerning executive officer
compensation. In June 1997, the Company established a Compensation Committee and
an Audit Committee. The members of the Compensation Committee are Messrs.
Baxter, Brown, Harmolin and Weisman and the members of the Audit Committee,
which was reconstituted upon completion of the Company's initial public
offering, are Messrs. Harmolin, Plum and Weisman.
Compensation Committee Report
Overview and Philosophy
The Compensation Committee of the Board of Directors is composed of
four directors. The Compensation Committee is responsible for developing and
making recommendations to the Board of Directors with respect to the Company's
executive compensation policies. In addition, the Compensation Committee,
pursuant to authority delegated by the Board of Directors, determines the
compensation to be paid to the Chief Executive Officer and determines guidelines
with respect to each of the other executive officers of the Company.
The objectives of the Company's executive compensation program are
to:
o Support the achievement of desired Company performance.
o Provide compensation that will attract and retain superior talent
and reward performance.
The executive compensation program provides an overall level of
compensation opportunity that is competitive among providers of Internet
services, as well as with a broader group of companies of comparable size and
complexity.
-5-
<PAGE>
Executive Officer Compensation Program
The Company's executive officer compensation program is comprised of
base salary, bonus and long-term incentive compensation in the form of stock
options and various benefits, including medical plans.
Base Salary. Base salary levels for the Company's executive officers
are competitively set relative to companies in the same or similar industries.
In determining salaries, the Compensation Committee also takes into account
individual experience and performance and specific issues particular to the
Company. The Compensation Committee considered each of these factors in
approving the salary increases for Mr. Baxter as well as for certain other of
the Company's executive officers.
Stock Option Program. The stock option program is the Company's
long-term incentive plan for providing an incentive to employees (including
directors and officers who are employees) and to directors.
Benefits. The Company provides to executive officers medical benefits
that generally are available to Company employees. The amount of perquisites, as
determined in accordance with the rules of the Securities and Exchange
Commission relating to executive compensation, did not exceed ten percent of
salary for fiscal 1997.
Scott A. Baxter
Richard M. Brown
Scott Harmolin
Wayne B. Weisman
Members of the Compensation Committee
Compensation of Directors
Directors who are employees of the Company are not entitled to
receive any fees for serving as directors. All directors are reimbursed for
out-of-pocket expenses related to their service as directors. Under the
Company's 1995 Stock Option Plan (the "1995 Option Plan"), non-employee
directors are not currently entitled to receive grants of stock options.
Before the Company's Board of Directors amended the 1995 Option Plan
in July 1998, an option to purchase 3,273 shares was automatically granted to
each non-employee director when he or she was elected or appointed to the Board
(the "Initial Grant"), and an option to purchase an additional 2,182 shares was
automatically granted immediately following each annual meeting of stockholders
at which directors were elected after the Initial Grant (the "Subsequent Grant")
where such person was re-elected as a director of the Company. As of the Record
Date, such options had not been granted to Messrs. Plum and Weisman.
The Board of Directors has proposed amending the 1995 Option Plan to
provide for the discretionary grant of stock options to non-employee directors.
See "Proposal 2 -- Approval of an Amendment to the 1995 Stock Option Plan to
Permit the Grant of Stock Options to Non-Employee Directors."
-6-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
ownership of the Common Stock as of August 18, 1998 by (i) each person or entity
who owns of record or beneficially five percent or more of the Company's Common
Stock, (ii) each director and executive officer of the Company and (iii) all
directors and executive officers of the Company as a group. To the knowledge of
the Company, each of such stockholders has sole voting and investment power as
to the shares shown unless otherwise noted. Unless otherwise noted, the address
of each beneficial owner named below is the Company's corporate address.
<TABLE>
<CAPTION>
Number of
Beneficial Owner Shares(a) Percent
---------------- --------- -------
<S> <C> <C>
Scott A. Baxter(b).......................................................... 2,203,636 13.9%
Richard M. Brown............................................................ 2,181,818 13.7
Scott Harmolin.............................................................. 2,181,818 13.7
Kenneth J. Hall(c).......................................................... 26,800 *
Susan A. Massaro(d)......................................................... 17,092 *
Frank C. Cicio, Jr.(e)...................................................... 27,273 *
Anthony R. Scrimenti(f)..................................................... 13,091 *
David L. Goret(g)........................................................... 14,910 *
Robert J. Thalman, Jr.(h)................................................... 10,909 *
Michael J. Gold(i).......................................................... 9,090 *
Samuel A. Plum(j)(k)........................................................ 2,499,639 14.9
Wayne B. Weisman(j)......................................................... -- --
SCP Private Equity Partners, L.P.(j)(l)..................................... 2,499,639 14.9
Paul Tudor Jones, II(m)..................................................... 875,040 5.5
Mellon Ventures, L.P.(n).................................................... 830,220 5.2
MVMA, Inc.(n)(o)............................................................ 830,220 5.2
All directors and executive officers as a group
(12 persons)(p)........................................................ 9,186,126 54.5%
</TABLE>
- --------------------
* Less than 1%.
(a) Pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), includes shares of Common Stock
that may be purchased within 60 days of August 18, 1998 upon exercise of
outstanding options.
(b) Includes 21,818 shares of Common Stock that may be issued upon exercise
of options.
(c) Includes 21,819 shares of Common Stock that may be issued upon exercise
of options.
(d) Includes 17,092 shares of Common Stock that may be issued upon exercise
of options.
(e) Includes 27,273 shares of Common Stock that may be issued upon exercise
of options.
(f) Includes 13,091 shares of Common Stock that may be issued upon exercise
of options.
(g) Includes 14,910 shares of Common Stock that may be issued upon exercise
of options.
(h) Includes 10,909 shares of Common Stock that may be issued upon exercise
of options.
(i) Includes 9,090 shares of Common Stock that may be issued upon exercise of
options.
(j) The address for the beneficial owner is 800 The Safeguard Building, 435
Devon Park Drive, Wayne, Pennsylvania 19087.
(k) Includes 839,199 shares of Common Stock that may be issued upon exercise
of warrants and are beneficially owned by SCP. Mr. Plum is a general
partner of the general partner of SCP and disclaims beneficial ownership
of all of the Company's securities beneficially owned by SCP.
(l) Includes 839,199 shares of Common Stock that may be issued upon exercise
of warrants.
(footnotes continued on next page)
-7-
<PAGE>
(m) The address for the beneficial owner is c/o Tudor Investment Corporation,
40 Rowes Wharf, Boston, Massachusetts 02110. Includes: 477,827 shares of
Common Stock and 23,784 shares of Common Stock that may be issued upon
exercise of warrants, all of which securities are beneficially owned by
Tudor BVI Futures, Ltd. ("Tudor BVI"); 77,191 shares of Common Stock and
3,862 shares of Common Stock that may be issued upon exercise of
warrants, all of which securities are beneficially owned by The Raptor
Global Fund L.P. ("Raptor L.P."); 109,521 shares of Common Stock and
5,437 shares of Common Stock that may be issued upon exercise of
warrants, all of which securities are beneficially owned by The Raptor
Global Fund Ltd. ("Raptor Ltd."); and 168,990 shares of Common Stock and
8,428 shares of Common Stock that may be issued upon exercise of
warrants, all of which securities are beneficially owned by Tudor
Arbitrage Partners L.P. ("TAP"). Mr. Jones is the Chairman and indirect
principal equity owner of the general partner of TAP and the Chairman and
principal equity owner of Tudor Investment Corporation, the investment
advisor and/or general partner of each of Tudor BVI, Raptor L.P. and
Raptor Ltd. As a result, Mr. Jones may be deemed to be the beneficial
owners of the shares of Common Stock beneficially held by Tudor BVI,
Raptor L.P., Raptor Ltd. and TAP. Mr. Jones disclaims beneficial
ownership of all of the Company's securities beneficially owned by such
entities.
(n) The address for the beneficial owner is Plymouth Meeting Executive
Campus, 610 West Germantown Pike, Suite 200, Plymouth Meeting,
Pennsylvania 19462.
(o) MVMA, Inc. ("MVMA") is the general partner of the general partner of
Mellon Ventures L.P. ("Mellon Ventures"). MVMA disclaims beneficial
ownership of shares of Common Stock owned by Mellon Ventures.
(p) Includes options to purchase 136,002 shares of Common Stock that may be
issued upon exercise of options and 839,199 shares of Common Stock that
may be issued upon exercise of warrants. Mr. Plum disclaims beneficial
ownership of all of the Company's securities beneficially owned by SCP.
-8-
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following summary compensation table specifies the components of
the compensation packages of the Company's Chief Executive Officer and the four
other most highly compensated executive officers (the "named executive
officers") for the fiscal years ended December 31, 1997 and December 31, 1996.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long term compensation
Compensation(a) awards
-------------- -------
Number of
Shares
Underlying
Fiscal Salary Bonus Options All other
Name and Principal Position Year ($) ($) (#) compensation
- --------------------------- ---- --- ------ ------------ ------------
<S> <C> <C> <C> <C>
Scott A. Baxter.................................. 1997 185,000 120,000 -- 1,275
Chief Executive Officer and President 1996 176,981 120,000 109,091 --
Richard M. Brown................................. 1997 173,807 40,000 -- 1,361
Vice President -- Information 1996 157,077 35,000 -- 5,376
Technologies and Secretary
Frank C. Cicio, Jr............................... 1997 171,539 50,000 109,091 --
Senior Vice President -- Sales and 1996 -- -- -- --
Business Development
Scott Harmolin................................... 1997 173,807 40,000 -- 1,286
Senior Vice President and Chief 1996 157,577 35,000 -- 5,820
Technology Officer
Robert J. Thalman, Jr............................ 1997 169,615 40,000 32,727 --
Vice President -- Strategic Marketing 1996 -- -- --
</TABLE>
- --------------------
(a) Does not indicate supplementary compensation amounts less than the
greater of 10% of the named executive officer's salary and bonus or
$50,000.
Option Grants in Last Fiscal Year
The following table contains information concerning the stock option grants made
to the named executive officers for the year ended December 31, 1997:
<TABLE>
<CAPTION>
Number Percent of
of total option Potential realizable
securities granted to value at assumed
underlying employees Per share annual rates of stock
options in sexercise Expiration price valuation for
Name granted fiscal year price date option term
---- ------- ----------- ----- ---- -----------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
Frank C. Cicio, Jr.................. 109,091 21.3% $6.02(a) 2/17/07 $1,120,000 $2,173,000
Robert J. Thalman, Jr............... 32,727 6.4 6.02(a) 1/15/07 336,000 652,000
</TABLE>
- --------------------
(a) Reflects the repricing of such options in June 1997 when the exercise
price of such options was reduced from $14.27 to $6.02 per share.
-9-
<PAGE>
Fiscal Year-End Value of Unexercised Options
The following table contains information concerning the value of
unexercised options (which includes the value of such options after giving
effect to the repricing of such options in June 1997) of the named executive
officers at December 31, 1997:
<TABLE>
<CAPTION>
Number of securities
underlying unexercised Value of unexercised in-
options the-money options
------- -----------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Scott A. Baxter.............................. -- 109,091 -- $368,000
Frank C. Cicio, Jr........................... -- 109,091 -- 434,000
Robert J. Thalman, Jr........................ -- 32,727 -- 130,000
</TABLE>
Employment Agreements
In December 1995, the Company entered into five-year employment
agreements with Messrs. Baxter, Brown and Harmolin. In May 1997, each of the
agreements was amended to extend the employment term until May 2002. The
agreements provide for Mr. Baxter to serve as the Company's Chief Executive
Officer and President, for Mr. Brown to serve as the Company's Vice President --
Information Technologies and Secretary and for Mr. Harmolin to serve as the
Company's Senior Vice President and Chief Technology Officer at a minimum annual
base salary of $185,000, $180,000 and $180,000, respectively. Mr. Baxter's
agreement also provides for the payment of a guaranteed quarterly bonus in the
amount of $30,000, and Mr. Brown's and Mr. Harmolin's agreements each provide
for the payment of a guaranteed quarterly bonus in the amount of $10,000. Each
also receives additional salary increases and bonuses as the Board of Directors
may grant, as well as those benefits generally provided to other executive
officers of the Company, and an automobile allowance. In the event of
termination of employment of any of such executives following a change of
control (as defined in such employment agreements) of the Company, the Company
has agreed to pay the respective executive severance in an amount equal to 2.99
multiplied by his base amount (as defined in section 280G(b)(3) of the Internal
Revenue Code of 1986, as amended (the "Code")). Each executive has also agreed
not to compete against the Company during the term of his employment, and not to
solicit or perform services for any customers or solicit any employee of the
Company during the term of his employment and for a period of 12 months after
the termination of his employment.
In February and March 1997, the Company entered into employment
agreements with Messrs. Cicio and Hall, respectively, pursuant to which they are
employees-at-will. The agreements provide for each to be paid a minimum annual
base salary of $200,000 and a performance-based bonus. If either is terminated
without cause, he is entitled to receive his salary compensation otherwise
payable for a period of six months; provided, however, that if the Company has
extended such employee's related non-compete agreement, then such employee is
entitled to receive his salary compensation otherwise payable for a period of 12
months. Pursuant to such agreements, Messrs. Cicio and Hall were each granted an
option to purchase 109,091 and 87,273 shares of Common Stock, respectively.
Agreements With Employees
Each employee of the Company is required to enter into an agreement
with the Company pursuant to which such person agrees (i) to assign to the
Company any inventions relating to such person's employment conceived during
such person's employment by the Company, (ii) not to disclose confidential
information to third parties, (iii) not to engage in any business that is
competitive with the Company during the term of such person's employment, (iv)
not to hire any employee of the Company during such person's employment and for
a period of 12 months following the termination of such person's employment and
(v) not to perform services for any customer of the Company for a period of 12
months following the termination of such person's employment. The
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<PAGE>
agreement also provides that the employee is an "at will" employee and that
either the Company or the employee may terminate employment with the Company at
any time with or without cause.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 30, 1995, the Company made loans of $50,000 to Messrs.
Baxter, Brown and Harmolin. Interest accrues at an annual rate of 7%. The loans
including accrued interest are due on demand.
On March 19, 1997, Tudor BVI , as agent and holder on behalf of
itself and each of Raptor L.P., Raptor Ltd. and TAP, loaned to the Company an
aggregate principal amount of $1.0 million pursuant to a convertible note
bearing interest at a rate of 10% per annum. In consideration for such loan, the
Company granted to such lenders a warrant to purchase an aggregate of 41,511
shares of Common Stock at an exercise price of $6.02 per share. On May 30, 1997,
such lenders converted the $1.0 million note and $20,000 of accrued but unpaid
interest thereon into an aggregate of 10,200 shares of the Company's 10% PIK
Series B Convertible Participating Preferred Stock, par value $.01 per share
("Series B Preferred Stock"). Such Series B Preferred Stock converted into an
aggregate of 169,364 shares of Common Stock upon consummation of the Company's
initial public offering.
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------------------------------------------------------
PROPOSAL 2
APPROVAL OF AN AMENDMENT TO THE 1995 STOCK OPTION PLAN
TO PERMIT THE GRANT OF STOCK OPTIONS TO NON-EMPLOYEE DIRECTORS
--------------------------------------------------------------
General
In October 1995, the Board of Directors adopted and the stockholders of
the Company approved the 1995 Option Plan. The 1995 Option Plan, as subsequently
amended and restated, provides for the grant of options that are intended to
qualify as incentive stock options ("Incentive Stock Options") within the
meaning of Section 422 of the Code, and nonqualified stock options that do not
so qualify ("Nonqualified Stock Options"). The 1995 Option Plan provides for the
grant of such options to key employees (including directors and officers who are
key employees) of, and consultants to, the Company and its subsidiaries. The
total number of shares of Common Stock for which options may be granted under
the 1995 Option Plan is 2,181,818 shares. The Board of Directors has proposed
increasing the total number of shares of Common Stock for which options may be
granted under the 1995 Option Plan. See "Proposal 3 -- Approval of an Amendment
to the 1995 Stock Option Plan to Increase the Number of Shares For Which Options
May Be Granted."
In July 1998, the Board of Directors eliminated the right of
non-employee directors to receive the Initial Grant and the Subsequent Grant and
adopted, subject to the approval of the Company's stockholders, an amendment
(the "Amendment") to the 1995 Option Plan that provides for the discretionary
grant of stock options to non-employee directors. The Board of Directors
believes that the approval of the Amendment by the Company's stockholders will
enable the Company to provide a stronger identity of interest between the
interests of the Company, its non-employee directors and its stockholders, as
well as to provide a means to attract and retain high caliber and committed
non-employee directors. Accordingly, the Board of Directors unanimously
recommends that stockholders approve the adoption of the Amendment. If the
Amendment is not approved by stockholders, the Board of Directors will not be
able to grant any options to non-employee directors.
Description of the Plan
The following summary of the 1995 Option Plan, incorporating the
Amendment, is qualified in its entirety by reference to Exhibit A to this Proxy
Statement, which contains the complete text of the 1995 Option Plan.
The 1995 Option Plan is administered by the Board of Directors, which
has the authority to determine to whom options are granted, the number of shares
subject to such options, and the terms, exercise prices and other terms and
conditions of the exercise thereof. Upon approval by the Company's stockholders
of the Amendment, non-employee directors of the Company will be permitted to
receive grants of options under the 1995 Option Plan upon terms and conditions
approved by the Board of Directors.
The exercise price of any Incentive Stock Option granted under the 1995
Option Plan must be at least equal to the fair market value of the shares
subject to such option on the date of grant, while the exercise price of any
Incentive Stock Option granted to any participant who owns stock possessing more
than 10% of the total combined voting power of the Company's outstanding capital
stock must be at least equal to 110% of the fair market value of the shares
subject to such option on the date of grant. The fair market value of the
Company's Common Stock is equal to the average of the high and low sales price
for the Company's Common Stock on the date of grant. The term of each Incentive
Stock Option granted pursuant to the 1995 Option Plan cannot exceed ten years,
while the term of any Incentive Stock Option granted to a participant who owns
stock possessing more than 10% of the total combined voting power of the
Company's outstanding capital stock cannot exceed five years. Options become
exercisable at such times and in such installments as is provided in the option
contract
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<PAGE>
for each individual option. No option granted under the 1995 Option Plan is
transferable by the optionee other ]than by will or the laws of descent and
distribution and each option is exercisable during the lifetime of the optionee
only by such optionee or the optionee's legal representative.
As of August 18, 1998, under the 1995 Option Plan, the Company had
granted to certain of its current and now former employees options to purchase
up to 1,615,249 shares of Common Stock at exercise prices between $6.02 and
$18.50 per share, of which options with respect to 129,681 shares had been
exercised on or before August 18, 1998, options with respect to 314,051 shares
were exercisable on August 18, 1998 and options with respect to the balance
thereof become exercisable at various times thereafter.
Federal Income Tax Consequences
The following is a general summary of the Federal income tax
consequences of the grant and exercise of nonqualified and incentive stock
options awarded under the 1995 Option Plan, and the disposition of shares
purchased pursuant to the exercise of such stock options, is intended to reflect
the current provisions of the Code, and the regulations thereunder. This summary
is not intended to be a complete statement of applicable law, nor does it
address state or local income or other tax consequences inherent in the
ownership and exercise of stock options and the ownership and disposition of the
underlying shares.
No income will be realized by an optionee upon grant of a nonqualified
stock option. Upon exercise of a nonqualified stock option, the optionee will
recognize ordinary compensation income in an amount equal to the excess, if any,
of the fair market value of the underlying stock over the option exercise price
(the "Spread") at the time of exercise. The Spread will be deductible by the
Company (provided the Company complies with certain reporting requirements) for
federal income tax purposes subject to the possible limitations on deductibility
under sections 280G, 162(a)(1) and 162(m) of the Code of compensation paid to
optionees designated in those sections. The optionee's tax basis in the
underlying shares acquired by exercise of a nonqualified stock option will equal
the exercise price plus the amount taxable as compensation to the optionee. Upon
sale of the shares received by the optionee upon exercise of the nonqualified
stock option, any gain or loss is generally long-term or short-term capital gain
or loss, depending on the holding period. The optionee's holding period for
shares acquired pursuant to the exercise of a nonqualified stock option will
begin on the date of exercise of such option.
Pursuant to currently applicable rules under Section 16(b) of the
Exchange Act, the grant of an option (and not its exercise) to a person who is
subject to the reporting and "short swing" profit provisions under section 16 of
the Exchange Act (a "Section 16 Person") begins the six-month period of
potential short-swing liability. The taxable event for the exercise of an option
that has been outstanding at least six months ordinarily will be the date of
exercise. If an option is exercised by a Section 16 Person within six months
after the date of grant, however, taxation ordinarily will be deferred until the
date which is six months after the date of grant, unless the person has filed a
timely election pursuant to section 83(b) of the Code to be taxed on the date of
exercise. The six month period of potential short-swing liability may be
eliminated if the option grant (i) is approved in advance by the Board of
Directors (or a committee composed solely of two or more non-employee directors)
or (ii) approved in advance, or subsequently ratified by the Company's
shareholders no later than the next annual meeting of shareholders.
Consequently, the taxable event for the exercise of an option that satisfies
either of the conditions described in clauses (i) or (ii) above will be the date
of exercise.
The payment by an optionee of the exercise price, in full or in part,
with previously acquired shares will not affect the tax treatment of the
exercise described above. No gain or loss generally will be recognized by the
optionee upon the surrender of the previously acquired shares to the Company,
and shares received by the optionee, equal in number to the previously
surrendered shares, will have the same tax basis as the shares surrendered to
the Company and will have a holding period that includes the holding period of
the shares surrendered. The value of shares received by the optionee in excess
of the number of shares surrendered to the Company will be taxable to the
optionee. Such additional shares will have a tax basis equal to the fair market
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<PAGE>
value of such additional shares as of the date ordinary income is recognized,
and will have a holding period that begins on the date ordinary income is
recognized.
The Code requires that, for incentive stock option treatment, shares
acquired through exercise of an incentive stock option cannot be disposed of
before two years from the date of grant and one year from the date of transfer
of the shares to him. Incentive stock option holders will generally incur no
federal income tax liability at the time of grant or upon exercise of such
options. However, the Spread will be an adjustment that may give rise to
alternative minimum tax liability at the time of exercise. If the optionee does
not dispose of the shares before two years from the date of grant and one year
from the date of exercise, the difference between the exercise price and the
amount realized upon disposition of the shares will constitute long term capital
gain or loss, as the case may be. Assuming both the holding periods are
satisfied, no deduction will be allowable to the Company for federal income tax
purposes in connection with the grant or exercise of the option. If, within two
years of the date of grant or within one year from the date of exercise, the
holder of shares acquired through the exercise of an incentive stock option
disposes of such shares, the optionee will generally realize ordinary taxable
compensation at the time of such disposition equal to the difference between the
fair market value of the stock on the date of grant and the exercise price, but
not more than the gain realized on the subsequent disposition, and such amount
will generally be deductible by the Company (provided the Company complies with
certain reporting requirements) for federal income tax purposes, subject to the
possible limitations on deductibility under sections 28OG, 162(a)(1) and 162(m)
of the Code for compensation paid to executives designated in those sections.
The foregoing constitutes a brief summary of the principal federal
income tax consequences of the transactions based on current federal income tax
laws. This summary is not intended to be exhaustive and does not describe state,
local or foreign tax consequences. Grantees in the 1995 Option Plan are urged to
consult their own tax advisors with respect to the consequences of their
participation in the 1995 Option Plan.
The Board of Directors unanimously recommends that stockholders vote
FOR this proposal.
------------------------------------------------------
PROPOSAL 3
APPROVAL OF AN AMENDMENT TO THE 1995 STOCK OPTION PLAN
TO INCREASE THE NUMBER OF SHARES FOR WHICH OPTIONS MAY BE GRANTED
-------------------------------------------------------------------
In July 1998, the Board of Directors approved an amendment to the 1995
Option Plan and directed that the amendment be submitted to the Company's
stockholders for approval at the Meeting. The amendment provides for an increase
of 818,182, from 2,181,818 to 3,000,000, in the number of shares of Common Stock
for which options may be granted under the 1995 Option Plan. The Board of
Directors adopted such amendment upon evaluating the Company's existing
compensation programs and the Company's long-range goals and expansion plans.
The Board concluded that the increase in the number of shares of Common
Stock covered by the 1995 Option Plan was necessary for the Company to continue
to attract, motivate and retain qualified employees and directors. Within six
months of the date of the Meeting, if Proposal 3 is approved, the Company
intends to include the additional shares covered by Proposal 3 in an amendment
to the Company's registration statement on Form S-8 pertaining to the 1995
Option Plan.
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<PAGE>
For a description of the 1995 Option Plan, see "Proposal 2 --
Ratification of an Amendment to the 1995 Stock Option Plan to Permit the Grant
of Stock Options to Non-Employee Directors" and Exhibit A to this Proxy
Statement, which contains the complete text of the 1995 Option Plan.
The Board of Directors unanimously recommends that stockholders vote
FOR this proposal.
----------------------------------------------
PROPOSAL 4
RATIFICATION AND APPROVAL OF APPOINTMENT
OF INDEPENDENT ACCOUNTANTS
----------------------------------------------
PricewaterhouseCoopers LLP, including one of its predecessors, Price
Waterhouse LLP, has been the Company's independent accountants since 1995. In
addition to auditing the Company's financial statements, PricewaterhouseCoopers
LLP provides the Company with advice concerning tax matters and potential
acquisitions. The Board of Directors has, subject to ratification by
stockholders, appointed that firm to act as its independent accountants for the
Company's fiscal year ending December 31, 1998. Accordingly, management will
present to the Meeting a resolution proposing the ratification and approval of
the appointment of PricewaterhouseCoopers LLP as the Company's independent
accountants for the fiscal year ending December 31, 1998.
Representatives of PricewaterhouseCoopers LLP are expected to be
present at the Meeting with the opportunity to make a statement and are expected
to be available to respond to appropriate questions asked by stockholders.
The Board of Directors unanimously recommends that stockholders vote
FOR this proposal.
VOTING REQUIREMENTS
Directors are elected by a plurality of the votes cast at the Meeting
(Proposal 1). The affirmative vote of a majority of votes cast at the Meeting
will be required to approve the Amendment (Proposal 2), to approve the increase
in the number of shares of Common Stock for which options may be granted under
the 1995 Option Plan (Proposal 3) and to ratify and approve the appointment of
PricewaterhouseCoopers LLP as independent accountants of the Company for the
fiscal year ending December 31, 1998 (Proposal 4). Abstentions with respect to
any matter are considered as present for determining a quorum and present and
entitled to vote with respect to any matter (abstentions are counted as votes
against any matter). Broker nonvotes with respect to any matter are considered
as present for determining a quorum but are not entitled to vote on that matter.
The Board of Directors unanimously recommends a vote FOR each Nominee
named in the Proxy and FOR Proposals 2, 3 and 4.
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<PAGE>
MISCELLANEOUS
Stockholder Proposals
If a stockholder intends to present a proposal at the Company's 1999
Annual Meeting of Stockholders and wants that proposal to be included in the
Company's Proxy Statement and form of proxy for that meeting, the proposal must
be received at the Company's principal executive offices not later than April
28, 1999. As to any proposal that a stockholder intends to present to
stockholders without including it in the Company's proxy statement for the
Company's 1999 Annual Meeting of Stockholders, the proxies named in Management's
proxy for that meeting will be entitled to exercise their discretionary
authority on that proposal unless the Company receives notice of the matter to
be proposed not later than July 12, 1999. Even if proper notice is received on
or prior to July 12, 1999, the proxies named in Management's proxy for that
meeting may nevertheless exercise their discretionary authority with respect to
such matter by advising stockholders of such proposal and how they intend to
exercise their discretion to vote on such matter, unless the stockholder making
the proposal solicits proxies with respect to the proposal to the degree
required by Rule 14a-4(c)(2) of the Exchange Act.
Other Matters
Management does not intend to bring before the Meeting for action any
matters other than those specifically referred to above and is not aware of any
other matters which are proposed to be presented by others. If any other matters
or motions should properly come before the Meeting, the persons named in the
Proxy intend to vote thereon in accordance with their judgment on such matters
or motions, including any matters or motions dealing with the conduct of the
Meeting.
Proxies
All stockholders are urged to fill in their choices with respect to the
matters to be voted on, sign and promptly return the enclosed form of Proxy.
Annual Report on Form 10-K
Any stockholder that wants to obtain a copy of the Company's annual
report on Form 10-K, as filed with the Commission, may obtain such report,
without charge, upon written request to the Company, Attention: Investor
Relations.
By Order of the Board of Directors,
/s/ RICHARD M. BROWN
---------------------------
RICHARD M. BROWN
Secretary
August 24, 1998
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<PAGE>
Exhibit A
---------
AMENDED AND RESTATED
1995 STOCK OPTION PLAN
OF
ICON CMT CORP.
-------------
1. PURPOSES OF THE PLAN. This stock option plan (the
"Plan") is designed to provide an incentive to key employees (including
directors and officers who are key employees) and to consultants and directors
who are not employees of Icon CMT Corp., a Delaware corporation (the "Company"),
and its present and future Subsidiaries (as defined in Paragraph 19), and to
offer an additional inducement in obtaining the services of such persons. The
Plan provides for the grant of "incentive stock options" ("ISOs") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and nonqualified stock options which do not qualify as ISOs ("NQSOs"),
but the Company makes no representation or warranty, express or implied, as to
the qualification of any option as an "incentive stock option" under the Code.
2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of
Paragraph 12, the aggregate number of shares of common stock, $.001 par value
per share, of the Company ("Common Stock") for which options may be granted
under the Plan shall not exceed 3,000,000. Such shares of Common Stock may, in
the discretion of the Board of Directors of the Company (the "Board of
Directors"), consist either in whole or in part of authorized but unissued
shares of Common Stock or shares of Common Stock held in the treasury of the
Company. Subject to the provisions of Paragraph 13, any shares of Common Stock
subject to an option which for any reason expires, is canceled or is terminated
unexercised or which ceases for any reason to be exercisable shall again become
available for the granting of options under the Plan. The Company shall at all
times during the term of the Plan reserve and keep available such number of
shares of Common Stock as will be sufficient to satisfy the requirements of the
Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be
administered by the Board of Directors. A majority of the members of the Board
of Directors shall constitute a quorum, and the acts of a majority of the
members present at any meeting at which a quorum is present, and any acts
approved in writing by all members without a meeting, shall be the acts of the
Board of Directors.
Subject to the express provisions of the Plan, the Board
of Directors shall have the authority, in its sole discretion, with respect to
Employee Options, Consultant Options and Non-Employee Director Options (each as
defined in Paragraph 19): to determine the key employees who shall be granted
Employee Options and the consultants and advisors who shall be granted
Consultant Options; the times when options shall be granted; whether an Employee
Option shall be an ISO or a NQSO; the number of shares of Common Stock to be
subject to each option; the term of each option; the date each option shall
become exercisable; whether an option shall be exercisable in whole, in part or
in installments and, if in installments, the number of shares of Common Stock to
be subject to each installment, whether the installments shall be cumulative,
the date each installment shall become exercisable and the term of each
installment; whether to accelerate the date of exercise of any option or
installment; whether shares of Common Stock may be issued upon the exercise of
an option as partly paid and, if so, the dates when future installments of the
exercise price shall become due and the amounts of such installments; the
exercise price of each option; the form of payment of the exercise price;
whether to restrict the sale or other disposition of the shares of Common Stock
acquired upon the exercise of an option and, if so, whether to waive any such
restriction; whether to subject the exercise of all or any portion of an option
to the fulfillment of contingencies as specified in the contract referred to in
Paragraph 11 (the "Contract"), including
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<PAGE>
without limitation, contingencies relating to entering into a covenant not to
compete with the Company, any of its Subsidiaries or a Parent (as defined in
Paragraph 19), to financial objectives for the Company, any of its Subsidiaries
or a Parent, a division of any of the foregoing, a product line or other
category, and/or the period of continued employment of the optionee with the
Company, any of its Subsidiaries or a Parent, and to determine whether such
contingencies have been met; whether an optionee is Disabled (as defined in
Paragraph 19); and with respect to Employee Options and Consultant Options, the
amount, if any, necessary to satisfy the Company's obligation to withhold taxes
or other amounts; the fair market value of a share of Common Stock; to construe
the respective Contracts and the Plan; with the consent of the optionee, to
cancel or modify an option, provided, that the modified provision is permitted
to be included in an option granted under the Plan on the date of the
modification, and further, provided, that in the case of a modification (within
the meaning of Section 424(h) of the Code) of an ISO, such option as modified
would be permitted to be granted on the date of such modification under the
terms of the Plan; to prescribe, amend and rescind rules and regulations
relating to the Plan; and to make all other determinations necessary or
advisable for administering the Plan. Any controversy or claim arising out of or
relating to the Plan, any option granted under the Plan or any Contract shall be
determined unilaterally by the Board of Directors in its sole discretion. The
determinations of the Board of Directors on the matters referred to in this
Paragraph 3 shall be conclusive and binding on the parties.
No member or former member of the Board of Directors shall
be liable for any action, failure to act or determination made in good faith
with respect to the Plan or any option hereunder.
4. ELIGIBILITY; GRANTS. The Board of Directors may from
time to time, in its sole discretion, consistent with the purposes of the Plan,
grant Employee Options to key employees (including officers and directors who
are key employees) of, Consultant Options to consultants to, and Non-Employee
Director Options to Non-Employee Directors of, the Company or any of its
Subsidiaries. Such options granted shall cover such number of shares of Common
Stock as the Board of Directors may determine, in its sole discretion; provided,
however, that the maximum number of shares subject to Employee Options that may
be granted to any individual during any calendar year under the Plan (the
"162(m) Maximum") shall not exceed 100,000 shares; and further, provided, that
the aggregate market value (determined at the time the option is granted in
accordance with Paragraph 5) of the shares of Common Stock for which any
eligible employee may be granted ISOs under the Plan or any other plan of the
Company, or of a Parent or a Subsidiary of the Company, which are exercisable
for the first time by such optionee during any calendar year shall not exceed
$100,000. Such limitation shall be applied by taking ISOs into account in the
order in which they were granted. Any option (or the portion thereof) granted in
excess of such amount shall be treated as a NQSO.
5. EXERCISE PRICE. The exercise price of the shares of
Common Stock under each Employee Option, Consultant Option and Non-Employee
Director Option shall be determined by the Board of Directors in its sole
discretion; provided, however, that the exercise price of an ISO shall not be
less than the fair market value of the Common Stock subject to such option on
the date of grant; and further, provided, that if, at the time an ISO is
granted, the optionee owns (or is deemed to own under Section 424(d) of the
Code) stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company, of any of its Subsidiaries or of a Parent, the
exercise price of such ISO shall not be less than 110% of the fair market value
of the Common Stock subject to such ISO on the date of grant.
The fair market value of a share of Common Stock on any
day shall be (a) if the principal market for the Common Stock is a national
securities exchange, the average of the highest and lowest sales prices per
share of Common Stock on such day as reported by such exchange or on a composite
tape reflecting transactions on such exchange, (b) if the principal market for
the Common Stock is not a national securities exchange and the Common Stock is
quoted on The Nasdaq Stock Market ("Nasdaq"), and (i) if actual sales price
information is available with respect to the Common Stock, the average of the
highest and lowest sales prices per share of Common Stock on such day on Nasdaq,
or (ii) if such information is not available, the average of the
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<PAGE>
highest bid and lowest asked prices per share of Common Stock on such day on
Nasdaq, or (c) if the principal market for the Common Stock is not a national
securities exchange and the Common Stock is not quoted on Nasdaq, the average of
the highest bid and lowest asked prices per share of Common Stock on such day as
reported on the OTC Bulletin Board Service or by National Quotation Bureau,
Incorporated or a comparable ser vice; provided, however, that if clauses (a),
(b) and (c) of this Paragraph are all inapplicable, or if no trades have been
made or no quotes are available for such day, the fair market value of the
Common Stock shall be determined by the Board by any method consistent with
applicable regulations adopted by the Treasury Department relating to stock
options.
6. TERM. he term of each Employee Option, Consultant
Option and Non-Employee Director Option granted pursuant to the Plan shall be
such term as is established by the Board of Directors, in its sole discretion;
provided, however, that the term of each ISO granted pursuant to the Plan shall
be for a period not exceeding 10 years from the date of grant thereof; and
further, provided, that if, at the time an ISO is granted, the optionee owns (or
is deemed to own under Section 424(d) of the Code) stock possessing more than
10% of the total combined voting power of all classes of stock of the Company,
of any of its Subsidiaries or of a Parent, the term of the ISO shall be for a
period not exceeding five years from the date of grant. Employee Options and
Consultant Options shall be subject to earlier termination as hereinafter
provided.
7. EXERCISE. An option (or any part or installment
thereof), to the extent then exercisable, shall be exercised by giving written
notice to the Company at its principal office stating which option is being
exercised, specifying the number of shares of Common Stock as to which such
option is being exercised and accompanied by payment in full of the aggregate
exercise price therefor (or the amount due on exercise if the Contract with
respect to an Employee Option permits installment payments) (a) in cash or by
certified check or (b) in the case of an Employee Option, a Consultant Option or
a Non-Employee Director Option, if the applicable Contract permits, with
previously acquired shares of Common Stock having an aggregate fair market value
on the date of exercise (determined in accordance with Paragraph 5) equal to the
aggregate exercise price of all options being exercised, or with any combination
of cash, certified check or shares of Common Stock.
The Board of Directors may, in its sole discretion, permit
payment of the exercise price of an option by delivery by the optionee of a
properly executed notice, together with a copy of his irrevocable instructions
to a broker acceptable to the Board of Directors to deliver promptly to the
Company the amount of sale or loan proceeds sufficient to pay such exercise
price. In connection therewith, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.
A person entitled to receive Common Stock upon the
exercise of an option shall not have the rights of a stockholder with respect to
such shares of Common Stock until the date of issuance of a stock certificate to
him for such shares; provided, however, that until such stock certificate is
issued, any optionee using previously acquired shares of Common Stock in payment
of an option exercise price shall continue to have the rights of a stockholder
with respect to such previously acquired shares.
In no case may a fraction of a share of Common Stock be
purchased or issued under the Plan.
8. TERMINATION OF RELATIONSHIP. Except as may otherwise be
expressly provided in the applicable Contract, any holder of an Employee Option
or Consultant Option whose relationship with the Company, its Parent and
Subsidiaries as an employee or a consultant has terminated for any reason (other
than in the case of an individual optionee his the death or Disability) may
exercise such option, to the extent exercisable on the date of such termination,
at any time within three months after the date of termination, but not
thereafter and in no event after the date the option would otherwise have
expired; provided, however, that
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if such relationship is terminated either (a) for cause, or (b) without the
consent of the Company, such option shall terminate immediately.
For the purposes of the Plan, an employment relationship
shall be deemed to exist between an individual and a corporation if, at the time
of the determination, the individual was an employee of such corporation for
purposes of Section 422(a) of the Code. As a result, an individual on military,
sick leave or other bona fide leave of absence shall continue to be considered
an employee for purposes of the Plan during such leave if the period of the
leave does not exceed 90 days, or, if longer, so long as the individual's right
to reemployment with the Company (or a related corporation) is guaranteed either
by statute or by contract. If the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed by statute or by contract,
the employment relationship shall be deemed to have terminated on the 91st day
of such leave.
Except as may otherwise be expressly provided in the
applicable Contract, Employee Options and Consultant Options granted under the
Plan shall not be affected by any change in the status of the optionee so long
as the optionee continues to be an employee of, or a consultant or advisor to,
the Company, or any of the Subsidiaries or a Parent (regardless of having
changed from one to the other or having been transferred from one corporation to
another).
Nothing in the Plan or in any option granted under the
Plan shall confer on any optionee any right to continue in the employ of, or as
a consultant or advisor to, the Company, any of its Subsidiaries or a Parent, or
as a director of the Company, or interfere in any way with any right of the
Company, any of its Subsidiaries or a Parent to terminate the optionee's
relationship at any time for any reason whatsoever without liability to the
Company, any of its Subsidiaries or a Parent.
9. DEATH OR DISABILITY OF AN OPTIONEE. Except as may
otherwise be expressly provided in the applicable Contract, if an individual
optionee dies (a) while he is an employee of, or consultant to, the Company, any
of its Subsidiaries or a Parent, (b) within three months after the termination
of such relationship (unless such termination was for cause or without the
consent of the Company) or (c) within one year following the termination of such
relationship by reason of his Disability, his Employee Option or Consultant
Option may be exercised, to the extent exercisable on the date of his death, by
his Legal Representative (as defined in Paragraph 19) at any time within one
year after death, but not thereafter and in no event after the date the option
would otherwise have expired.
Except as may otherwise be expressly provided in the
applicable Contract, any individual optionee whose relationship as an employee
of, or consultant to, the Company, its Parent and Subsidiaries has terminated by
reason of such optionee's Disability may exercise his Employee Option or
Consultant Option, to the extent exercisable upon the effective date of such
termination, at any time within one year after such date, but not thereafter and
in no event after the date the option would otherwise have expired.
10. COMPLIANCE WITH SECURITIES LAWS. The Board of
Directors may require, in its sole discretion, as a condition to the exercise of
any option that either (a) a Registration Statement under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the shares of Common
Stock to be issued upon such exercise shall be effective and current at the time
of exercise, or (b) there is an exemption from registration under the Securities
Act for the issuance of the shares of Common Stock upon such exercise. Nothing
herein shall be construed as requiring the Company to register shares subject to
any option under the Securities Act or to keep any Registration Statement
effective or current.
The Board of Directors may require, in its sole
discretion, as a condition to the exercise of any option that the optionee
execute and deliver to the Company his representations and warranties, in form,
substance and scope satisfactory to the Board of Directors, which the Board of
Directors determines are necessary
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or convenient to facilitate the perfection of an exemption from the registration
requirements of the Securities Act, applicable state securities laws or other
legal requirement, including without limitation that (a) the shares of Common
Stock to be issued upon the exercise of the option are being acquired by the
optionee for his own account, for investment only and not with a view to the
resale or distribution thereof, and (b) any subsequent resale or distribution of
shares of Common Stock by such optionee will be made only pursuant to (i) a
Registration Statement under the Securities Act which is effective and current
with respect to the shares of Common Stock being sold, or (ii) a specific
exemption from the registration requirements of the Securities Act, but in
claiming such exemption, the optionee shall prior to any offer of sale or sale
of such shares of Common Stock provide the Company with a favorable written
opinion of counsel satisfactory to the Company, in form, substance and scope
satisfactory to the Company, as to the applicability of such exemption to the
proposed sale or distribution.
In addition, if at any time the Board of Directors shall
determine, in its sole discretion, that the listing or qualification of the
shares of Common Stock subject to such option on any securities exchange, Nasdaq
or under any applicable law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition to, or in connection
with, the granting of an option or the issue of shares of Common Stock
thereunder, such option may not be exercised in whole or in part unless such
listing, qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Board of Directors.
11. STOCK OPTION CONTRACTS. Each option shall be evidenced
by an appropriate Contract which shall be duly executed by the Company and the
optionee, and shall contain such terms, provisions and conditions not
inconsistent herewith as may be determined by the Board of Directors.
12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK.
Notwithstanding any other provision of the Plan, in the event of a stock
dividend, split-up, combination, reclassification, recapitalization, merger in
which the Company is the surviving corporation, or exchange of shares or the
like which results in a change in the number or kind of shares of Common Stock
which are outstanding immediately prior to such event, the aggregate number and
kind of shares subject to the Plan, the aggregate number and kind of shares
subject to each outstanding option and the exercise price thereof, and the
162(m) Maximum shall be appropriately adjusted by the Board of Directors, whose
determination shall be conclusive and binding on all parties.
In the event of (a) the liquidation or dissolution of the
Company, or (b) a merger in which the Company is not the surviving corporation
or a consolidation, any outstanding options shall terminate upon the earliest of
any such event, unless other provision is made therefor in the transaction.
13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was
adopted by the Board of Directors and approved by the Company's stockholders on
October 23, 1995. No option may be granted under the Plan after October 22,
2005. The Board of Directors, without further approval of the Company's
stockholders, may at any time suspend or terminate the Plan, in whole or in
part, or amend it from time to time in such respects as it may deem advisable,
including, without limitation, in order that ISOs granted hereunder meet the
requirements for "incentive stock options" under the Code, to comply with the
provisions of Rule 16b-3 (or any successor rule or regulation) promulgated under
the Securities Exchange Act of 1934, as amended (as the same may be in effect
and interpreted from time to time, "Rule 16b-3"), Section 162(m) of the Code, or
any change in applicable law, regulations, rulings or interpretations of
administrative agencies; provided, however, that no amendment shall be effective
without the requisite prior or subsequent stockholder approval which would (a)
except as contemplated in Paragraph 12, increase the maximum number of shares of
Common Stock for which options may be granted under the Plan or the 162(m)
Maximum, (b) materially increase the benefits accruing to participants under the
Plan, or (c) change the eligibility requirements to receive options hereunder.
No termination, suspension or amendment of the Plan shall, without the consent
of the holder of an
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existing and outstanding option affected thereby, adversely affect his rights
under such option. The power of the Board of Directors to construe and
administer any options granted under the Plan prior to the termination or
suspension of the Plan nevertheless shall continue after such termination or
during such suspension.
14. NON-TRANSFERABILITY OF OPTIONS. No option granted
under the Plan shall be transferable otherwise than by will or the laws of
descent and distribution, and options may be exercised, during the lifetime of
the optionee, only by the optionee or his Legal Representatives. Except to the
extent provided above, options may not be assigned, transferred, pledged,
hypothecated or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process,
and any such attempted assignment, transfer, pledge, hypothecation or
disposition shall be null and void ab initio and of no force or effect.
15. WITHHOLDING TAXES. The Company may withhold (a) cash,
(b) subject to any limitations under Rule 16b-3, shares of Common Stock to be
issued with respect thereto having an aggregate fair market value on the
exercise date (determined in accordance with Paragraph 5), or (c) any
combination thereof, in an amount equal to the amount which the Board of
Directors determines is necessary to satisfy the Company's obligation to
withhold Federal, state and local income taxes or other amounts incurred by
reason of the grant or exercise of an option, its disposition, or the
disposition of the underlying shares of Common Stock. Alternatively, the Company
may require the holder to pay to the Company such amount, in cash, promptly upon
demand. The Company shall not be required to issue any shares of Common Stock
pursuant to any such option until all required payments have been made.
16. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse
such legend or legends upon the certificates for shares of Common Stock issued
upon exercise of an option under the Plan and may issue such "stop transfer"
instructions to its transfer agent in respect of such shares as it determines,
in its discretion, to be necessary or appropriate to (a) prevent a violation of,
or to perfect an exemption from, the registration requirements of the Securities
Act and any applicable state securities laws, (b) implement the provisions of
the Plan or any agreement between the Company and the optionee with respect to
such shares of Common Stock, or (c) permit the Company to determine the
occurrence of a "disqualifying disposition," as described in Section 421(b) of
the Code, of the shares of Common Stock issued or transferred upon the exercise
of an ISO granted under the Plan.
The Company shall pay all issuance taxes with respect to
the issuance of shares of Common Stock upon the exercise of an option granted
under the Plan, as well as all fees and expenses incurred by the Company in
connection with such issuance.
17. USE OF PROCEEDS. The cash proceeds from the sale of
shares of Common Stock pursuant to the exercise of options under the Plan shall
be added to the general funds of the Company and used for such corporate
purposes as the Board of Directors may determine.
18. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN
CONSTITUENT CORPORATIONS. Anything in this Plan to the contrary notwithstanding,
the Board of Directors may, without further approval by the stockholders,
substitute new options for prior options of a Constituent Corporation (as
defined in Paragraph 19) or assume the prior options of such Constituent Corpo
ration.
19. DEFINITIONS. For purposes of the Plan, the following
terms shall be defined as set forth below:
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<PAGE>
(a) Constituent Corporation. The term "Constituent
Corporation" shall mean any corporation which engages with the Company, any of
its Subsidiaries or a Parent in a transaction to which Section 424(a) of the
Code applies (or would apply if the option assumed or substituted were an ISO),
or any Parent or any Subsidiary of such corporation.
(b) Consultant Option. The term "Consultant
Option" shall mean a NQSO granted pursuant to the Plan to a person who, at the
time of grant, is a consultant to the Company or a Subsidiary of the Company,
and at such time is neither a common law employee of the Company or any of its
Subsidiaries nor a director of the Company.
(c) Disability. The term "Disability" shall mean a
permanent and total disability within the meaning of Section 22(e)(3) of the
Code.
(d) Employee Option. The term "Employee Option"
shall mean an option granted pursuant to the Plan to an individual who, at the
time of grant, is a key employee of the Company or any of its Subsidiaries.
(e) Legal Representative. The term "Legal
Representative" shall mean the executor, administrator or other person who at
the time is entitled by law to exercise the rights of a deceased or
incapacitated optionee with respect to an option granted under the Plan.
(f) Non-Employee Director. The term "Non-Employee
Director" shall mean a person who is a director of the Company, but is not a
common law employee of the Company, any of its Subsidiaries or a Parent.
(g) Non-Employee Director Option. The term
"Non-Employee Director Option" shall mean a NQSO granted pursuant to the Plan to
a person who, at the time of the grant, is a Non-Employee Director.
(h) Parent. The term "Parent" shall have the same
definition as "parent corporation" in Section 424(e) of the Code.
(i) Subsidiary. The term "Subsidiary" shall have
the same definition as "subsidiary corporation" in Section 424(f) of the Code.
20. GOVERNING LAW; CONSTRUCTION. The Plan, such options as
may be granted hereunder and all related matters shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without regard
to conflict of law provisions.
Neither the Plan nor any Contract shall be construed or
interpreted with any presumption against the Company by reason of the Company
causing the Plan or Contract to be drafted. Whenever from the context it appears
appropriate, any term stated in either the singular or plural shall include the
singular and plural, and any term stated in the masculine, feminine or neuter
gender shall include the masculine, feminine and neuter.
21. PARTIAL INVALIDITY. The invalidity, illegality or
unenforceability of any provision in the Plan or any Contract shall not affect
the validity, legality or enforceability of any other provision, all of which
shall be valid, legal and enforceable to the fullest extent permitted by
applicable law.
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PROXY CARD
PROXY PROXY
- ----- -----
ICON CMT CORP.
(Solicited on behalf of the Board of Directors)
The undersigned holder of Common Stock of ICON CMT CORP., revoking all
proxies heretofore given, hereby constitutes and appoints Scott A. Baxter,
Richard M. Brown and Scott Harmolin, and each of them, Proxies, with full power
of substitution, for the undersigned and in the name, place and stead of the
undersigned, to vote all of the undersigned's shares of said stock, according to
the number of votes and with all the powers the undersigned would possess if
personally present, at the 1998 Annual Meeting of Stockholders of ICON CMT
CORP., to be held at 1200 Harbor Boulevard, Eighth Floor, Weehawken, New Jersey,
on Thursday, September 17, 1998 at 10:30 A.M., Eastern Daylight Time, and at any
adjournments or postponements thereof.
The undersigned hereby acknowledges receipt of the Notice of Meeting
and Proxy Statement relating to the meeting and hereby revokes any proxy or
proxies heretofore given.
Each properly executed Proxy will be voted in accordance with the
specifications made on the reverse and in the discretion of the Proxies on any
other matter that may come before the meeting. Where no choice is specified,
this Proxy will be voted FOR all listed nominees to serve as directors and FOR
each of the proposals set forth on the reverse.
<PAGE>
The Board of Directors recommends a vote FOR all listed nominees and FOR
Proposals 2, 3 and 4.
<TABLE>
<CAPTION>
<S> <C> <C>
(1) Election of two Directors. |_| FOR all nominees listed |_| WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all listed nominees
</TABLE>
Nominees: Scott A. Baxter, Wayne B. Weisman
(Instruction: To withhold authority to vote for any
individual nominee, circle that nominee's name in the list
provided above.)
(2) Proposal to ratify the amendment to the Company's 1995 Stock Option Plan to
permit the grant of stock options to non- employee directors.
|_| FOR |_| AGAINST |_| ABSTAIN
(3) Proposal to approve the amendment to the Company's 1995 Stock Option Plan
to increase the number of shares for which options may be granted.
|_| FOR |_| AGAINST |_| ABSTAIN
(4) Proposal to ratify the Board of Director's selection of
PricewaterhouseCoopers LLP as the Company's independent accountants for the
fiscal year ending December 31, 1998.
|_| FOR |_| AGAINST |_| ABSTAIN
The shares represented by this
proxy will be voted in the manner
directed. In the absence of any
direction, the shares will be voted
FOR each nominee named in Proposal 1
and FOR Proposals 2, 3 and 4 and in
accordance with their discretion on
such other matters as may properly
come before the meeting.
Dated _________________________, 1998
--------------------------------------
--------------------------------------
Signature(s) (Signature(s) should
conform to names as registered. For
jointly owned shares, each owner
should sign. When signing as attorney,
executor, administrator, trustee,
guardian or officer of a corporation,
please give full title).
PLEASE MARK AND SIGN ABOVE AND
RETURN PROMPTLY
