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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement.
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2)).
INTEGRATED BUSINESS SYSTEMS AND SERVICES, INC.
(Name of Registrant as Specified in Its Charter)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(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:
(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:
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INTEGRATED BUSINESS SYSTEMS AND SERVICES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 28, 2000
Notice is hereby given that the Annual Meeting of Shareholders of
Integrated Business Systems and Services, Inc. will be held at the Company's
Headquarters, 115 Atrium Way, Suite 228, Columbia, South Carolina on Friday,
April 28, 2000, at 11:00 a.m. for the following purposes:
(1) To elect three members to the Board of Directors;
(2) To approve an amendment to the Company's Stock Option Plan;
(3) To ratify the appointment of Scott McElveen, LLP as the Company's
independent auditors for the fiscal year ending December 31, 2000; and
(4) To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
Only shareholders whose names appeared of record on the books of the
Company on March 17, 2000 will be entitled to notice of, and to vote at, the
Annual Meeting or any adjournment thereof.
You are cordially invited and urged to attend the Annual Meeting in
person, but if you are unable to do so, please date, sign and promptly return to
the Company's stock transfer agent the enclosed proxy card in the enclosed,
self-addressed, postage-paid envelope. If you attend the Annual Meeting and
desire to revoke your proxy and vote in person, you may do so. In any event, a
proxy may be revoked at any time before it is exercised.
By Order of the Board of Directors,
Harry P. Langley
President, Chief Executive Officer
and Director
Columbia, South Carolina
March 24, 2000
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INTEGRATED BUSINESS SYSTEMS AND SERVICES, INC.
SUITE 228, 115 ATRIUM WAY
COLUMBIA, SOUTH CAROLINA 29223
PROXY STATEMENT
GENERAL
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Integrated Business Systems and
Services, Inc. (the "Company") to be used in voting at the Annual Meeting of
Shareholders of the Company to be held at the Company's Headquarters, at 115
Atrium Way, Suite 228, Columbia, South Carolina on Friday, April 28, 2000, at
11:00 a.m., and at any adjournment thereof. The purposes of the Annual Meeting
are (a) to elect three members to the Board of Directors, (b) to approve an
amendment to the Company's Stock Option Plan to increase the number of
authorized shares under the Plan; (c) to ratify the appointment of Scott
McElveen, LLP, as the Company's independent auditors for the fiscal year ending
December 31, 2000, and (d) to transact such other business as may properly come
before the Annual Meeting or any adjournments thereof. This Proxy Statement and
the accompanying form of proxy are being mailed to shareholders commencing on or
about March 27, 2000.
Any shareholder who has signed the proxy referred to in this Proxy
Statement may revoke it at any time before it is exercised at the Annual Meeting
by (i) delivering to the Secretary of the Company a written notice, bearing a
date later than the proxy, stating that the proxy is revoked, (ii) signing and
so delivering a proxy relating to the same shares and bearing a later date prior
to the vote at the Annual Meeting or (iii) attending the Annual Meeting and
voting in person (although attendance at the Annual Meeting will not, by itself,
revoke a proxy). Whether or not you plan to attend the Annual Meeting, you are
urged to sign and return the enclosed proxy.
The cost of preparing, assembling and mailing this Proxy Statement and
the form of proxy will be borne by the Company. Directors, officers and
employees of the Company may also solicit proxies personally or by mail,
telephone or telegram. No compensation will be paid for such solicitations. In
addition, the Company may request banking institutions, brokerage firms,
custodians, nominees and fiduciaries to forward the Company's proxy solicitation
materials to the beneficial owners of the Company's common stock (the "Common
Stock") held of record by such entities, and the Company will reimburse their
reasonable forwarding expenses.
VOTING SECURITIES OUTSTANDING
The Board of Directors has fixed March 17, 2000 as the record date (the "Record
Date") for the determination of shareholders entitled to notice of, and to vote
at, the Annual Meeting or at any adjournments thereof. As of the Record Date,
there were 13,734,399 issued and outstanding shares of the Common Stock held by
approximately 47 shareholders of record. All of such shares are eligible to be
voted on each matter currently scheduled to come before the Annual Meeting, and
there are no other outstanding shares of capital stock of the Company eligible
to be voted at the Annual Meeting. Cumulative voting for the election of
directors is not available under the Company's Articles of Incorporation.
Consequently, each share of Common Stock is entitled to one vote on each matter
to be voted upon at the Annual Meeting.
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QUORUM
The presence in person or by proxy of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum at the Annual Meeting or any adjournment
thereof. Directions to withhold authority to vote for directors, abstentions and
broker non-votes will be considered shares present in person or by proxy and
entitled to vote and, therefore, will be counted for purposes of determining
whether there is a quorum at the Annual Meeting. (A broker non-vote occurs when
a broker or other nominee holding shares for a beneficial owner votes on one
proposal, but does not vote on another proposal because the broker or nominee
does not have the discretionary voting power and has not received voting
instructions from the beneficial owner.) If a quorum is not present or
represented at the Annual Meeting, the shareholders entitled to vote, present in
person or represented by proxy, have the power to adjourn the meeting from time
to time, without notice other than an announcement at the meeting, until a
quorum is present or represented. Directors, officers and regular employees of
the Company may solicit proxies for the reconvened meeting in person or by mail,
telephone or telegraph. At any such reconvened meeting at which a quorum is
present or represented, any business may be transacted that might have been
transacted at the meeting as originally scheduled.
PROPOSAL ONE
ELECTION OF DIRECTORS
Three directors are to be elected at the Annual Meeting. The Company's
Articles of Incorporation provide for a classified Board of Directors so that,
as nearly as possible, one-third of the members of the Board of Directors are
elected at each annual meeting to serve until the third annual shareholder's
meeting after their election. At the date of the Annual Meeting, the Board of
Directors will consist of seven directorships divided into one class of three
directors whose terms expire at the Annual Meeting and two classes of two
directors each whose terms expire at the annual meetings expected to be held in
each of 2001 and 2002. In February 2000, the Board of Directors expanded the
size of the director class expiring at the Annual Meeting from two to three
directors. R. Michael Campbell II was appointed to fill the vacancy created by
that expansion.
Stuart E. Massey, Russell C. King, Jr. and R. Michael Campbell II have
been nominated by the Board of Directors for election as directors at the Annual
Meeting for terms expiring at the third annual meeting of shareholders after the
date of their election. All of the nominees are currently members of the Board
of Directors whose current terms as directors expire at the Annual Meeting. For
additional information on each of these nominees, see the information set forth
elsewhere in this Proxy Statement under the heading "Management-Directors and
Executive Officers."
In accordance with the Bylaws of the Company, those three nominees
receiving the greatest number of votes cast (although not necessarily a majority
of votes cast) at the Annual Meeting will be elected to the Board of Directors.
Accordingly, directions to withhold authority, abstentions and broker non-votes
will have no effect on the outcome of the vote. Cumulative voting in the
election of directors is not permitted by the Company's Articles of
Incorporation.
The persons named in the accompanying proxy have been designated by the
Board of Directors, and unless authority is specifically withheld, they intend
to vote for the election of the nominees listed above. A shareholder executing
the enclosed proxy may vote for any or all of the nominees or may
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withhold such vote from any or all nominees. In each case where the shareholder
has appropriately specified how the proxy is to be voted, it will be voted in
accordance with such shareholder's specifications. Although it is not
contemplated that any of the nominees will become unable to serve prior to the
Annual Meeting, the persons named on the enclosed proxy will have the authority
to vote for the election of other persons in accordance with their best
judgement.
THE PERSONS NAMED IN THE FORM OF PROXY WILL VOTE THE PROXY AS
SPECIFIED. IF NO SPECIFICATION IS MADE, THE PROXY WILL BE VOTED "FOR" THE
ELECTION OF THE NOMINEES LISTED ABOVE.
PROPOSAL TWO
APPROVAL OF AMENDMENT TO THE COMPANY'S STOCK OPTION PLAN
General. On February 25, 2000, the Board of Directors approved an
amendment (the "Amendment") to the Integrated Business Systems and Services,
Inc. Stock Option Plan (the "Stock Plan"), subject to the approval of the
Amendment by the shareholders at the Annual Meeting. The Amendment increases the
number of shares of Common Stock that may be issued under the Stock Plan from
1,360,000 shares to 1,860,000 shares. The increase in such number of issuable
shares is expected to be sufficient for the remainder of the term of the Stock
Plan, thereby removing the need for any future shareholder approval of the
number of shares issuable under the Stock Plan. The Board of Directors approved
the Amendment to be effective February 25, 2000. The approval of the Amendment
requires the affirmative vote of the holders of a majority of the shares of
Common Stock present or represented by properly executed and delivered proxies
at the Annual Meeting. Abstentions and shares held in street name voted as to
any matter at the Annual Meeting will be included in determining the number of
votes present or represented at the Annual Meeting. If the Amendment is not
approved by the shareholders, the Stock Plan will remain in effect without the
Amendment. The following discussion of the Stock Plan, as amended by the
proposed Amendment, is qualified in its entirety by reference to the Stock Plan.
The Company will provide promptly, upon request and without charge, a copy of
the full text of the Stock Plan to each shareholder to whom a copy of this Proxy
Statement is delivered. Requests should be directed to: Ms. Sharon Gambrell,
Integrated Business Systems and Services, Inc., Suite 228, 115 Atrium Way,
Columbia, South Carolina 29223 (803) 736-5595.
Purpose. The Stock Plan was approved by the shareholders of the Company
to be effective April 29, 1997. The Stock Plan is intended to provide the
Company with maximum flexibility to meet the evolving needs of the Company in
providing stock-based incentives and rewards to officers, directors and
employees of the Company, and to consultants and advisors to the Company, who
are and have been in a position to contribute materially to improving the
Company's profits. The enhanced employment incentives available through the
Stock Plan are expected to promote the interests of the Company and its
shareholders by strengthening the Company's ability to attract and retain key
officers and employees. Through the operation of the Stock Plan, such present
and future officers and employees may be encouraged to acquire, or to increase
their acquisition of, Common Stock, thus maintaining their personal and
proprietary interests in the Company's continued success and progress.
Administration. The Board of Directors has designated its Compensation
and Human Resources Committee as the committee (the "Committee") to oversee and
carry out the provisions of the Stock Plan, and to assume such other duties as
are contemplated for such Committee under the terms of the Stock Plan. The
Committee is currently composed of Mr. Stuart E. Massey, Mr. Carl Joseph Berger,
Jr., and Mr. Russell C. King, Jr. The Committee is responsible to the Board of
Directors for the operation of the
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Stock Plan and makes recommendations to the Board of Directors with respect to
participation in the Stock Plan by officers, directors and employees of, and
consultants and advisors to, the Company, and with respect to the extent of that
participation. The interpretation and construction by the Committee of any
provisions of the Stock Plan or of any award granted under it are final. All
awards made under the Stock Plan are evidenced by written agreements between the
Company and the participant.
Operation. The Stock Plan provides for the grant of incentive stock
options ("ISOs") and nonqualified stock options ("NSOs"). The Stock Plan is
effective for a term of ten years after the date of its adoption by the Board of
Directors (until April 28, 2007). As amended by the proposed Amendment, a
maximum of 1,860,000 shares of Common Stock may be issued pursuant to awards
granted under the Stock Plan, and the Board of Directors has reserved 1,860,000
shares for this purpose. The number of shares reserved for issuance under the
Stock Plan will be adjusted in the event of an adjustment in the capital
structure of the Company affecting the Common Stock (in connection with a
merger, consolidation, reorganization, recapitalization, reclassification,
combination or exchange of shares, stock dividend, stock split, spin-off,
spin-out, or other distribution of assets materially affecting the price of the
Common Stock, or any assumption or conversion to the Stock Plan of an acquired
Company's outstanding option grants), and the Committee is authorized to adjust
the terms of awards under the Stock Plan in the event of a change in the capital
stock in order to prevent dilution or enlargement of awards under the Stock
Plan. If the proposed Amendment is approved by the shareholders at the Annual
Meeting, the Company intends to file with the Securities and Exchange Commission
an amendment to its previously filed Registration Statement on Form S-8 with
respect to the Stock Plan in order to register under the Securities Act of 1933
the 500,000 additional shares of Common Stock reserved under the Stock Plan.
All obligations of the Company under the Stock Plan or under any award
granted under the Stock Plan are binding upon any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase of all or substantially all of the business or assets of the Company,
or a merger, consolidation or otherwise.
Eligibility. Each officer, director and employee of the Company or any
of its subsidiaries is eligible to participate in the Stock Plan, and awards
under the Stock Plan may also be granted from time to time to persons serving as
consultants or advisors to the Company or any of its subsidiaries. The Committee
is responsible for selecting the individuals who will participate in the Stock
Plan. On the date of this Proxy Statement, seven directors, approximately 27
employees and three consultants and advisors were eligible to participate in the
Stock Plan. The Board of Directors, upon recommendation of the Committee, may
grant awards under the Stock Plan to any director, officer or other employee of,
or any consultant or advisor to, the Company or any of its subsidiaries. Awards
that are granted at the same or at different times under the Stock Plan are not
required to contain similar provisions. No participant is entitled to receive in
any one year grants under the Stock Plan with respect to more than 50,000
shares.
No awards may be granted under the Stock Plan after April 28, 2007. The
Board of Directors may terminate the Stock Plan sooner without further action by
the shareholders. The Board of Directors also may amend the Stock Plan without
shareholder approval, except that no amendment that increases the number of
shares of Common Stock that may be issued under the Stock Plan or changes the
class of individuals who may be selected to participate in the Stock Plan or
otherwise materially increases the benefits accruing to participants under the
Stock Plan will become effective until it is approved by the shareholders.
Exercise Price. The Stock Plan permits the granting of non-transferable
ISOs that qualify as incentive stock options under Section 422A(b) of the
Internal Revenue Code and non-transferable NSOs
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that do not so qualify. The option exercise price of each option is determined
by the Committee in its sole discretion, but may not be less than the greater of
(a) the fair market value of the Common Stock on the trading day preceding the
date the option is granted and (b) the average of the fair market value of the
Common Stock for the ten trading days preceding the date the option is granted.
Further, the Committee shall not grant an Incentive Stock Option to any person
who, at the time the Incentive Stock Option is granted owns or is considered to
own stock possessing at least 10% of the total combined voting power of all
classes of stock of the Company or any of its Parent or Subsidiary corporations;
provided however, that this limitation shall not apply if at the time an
Incentive Stock Option is granted the Exercise Price is at least 110% of the
Fair Market Value of the Stock subject to such Option and such Option by its
terms would not be exercisable after five years from the date on which the
Option is granted. On March 17, 2000, the reported closing price of the Common
Stock on the over-the-counter bulletin board was $12.00.
Change of Control. Unless otherwise specifically prohibited by the
terms of any award or under any applicable laws, rules or regulations, the
Committee may determine, at the time of granting an option or thereafter, that
such option will become exercisable on an accelerated basis in the event of a
change in control of the Company. Under the Stock Plan, events constituting a
change in control include the acquisition by any third party or group of 15% or
more of the outstanding Common Stock; the change of the makeup of a majority of
the members of the Board of Directors from those directors serving at the date
of adoption of the Stock Plan or appointed or nominated by such directors; a
tender offer to acquire 15% or more of the outstanding Common Stock; and the
asset sale, consolidation, merger, or other transaction involving the sale or
other transfer of substantially all of the assets or business of the Company.
Option Term. The term of each option is fixed by the Committee, but may
not exceed ten years from the date of grant. The Committee determines at what
time or times each option may be exercised. Options may be made exercisable in
installments, and the exercisability of options may be accelerated by the
Committee. The option exercise price of options granted under the Stock Plan
must be paid in cash or by delivery of shares of Common Stock or a combination
of cash and shares.
Option Termination. Except as otherwise provided below, upon
termination of a participant's employment, an option will terminate upon the
earliest to occur of the full exercise of the option, the expiration of the
option by its terms, and the date three months following the date of employment
termination. Should termination of employment (a) result from the death or
permanent and total disability of a participant, such three-month termination
period will extend to one year, or (b) be for cause, the option will terminate
on the date of employment termination. The employment of a consultant or advisor
will be deemed terminated upon the Company's notice to the participant that the
Company will no longer transact business with the consultant or advisor. An
option will also terminate in the event the participant provides services to a
competitor of the Company where the services are of a nature that could
reasonably be expected to involve the skills and experience of used or developed
by the participant while an employee of the Company.
To qualify as ISOs, options must currently meet additional Federal tax
requirements, including limits on the value of shares subject to ISOs first
exercisable annually to any participant, and a shorter exercise period and
higher minimum exercise price in the case of certain large shareholders. To the
extent these special requirements are changed or eliminated, the Stock Plan will
be amended accordingly.
Federal Income Tax Consequences. The Company has been advised that
under the Federal income tax laws currently in effect:
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Incentive Stock Options: For regular income tax purposes, no taxable
income is realized by the optionee upon the grant or exercise of an ISO. As long
as no disposition of shares issued upon exercise of the ISO is made by the
optionee within two years from the date of grant or within one year after the
transfer of such shares to the optionee, then (a) upon sale of such shares, any
amount realized in excess of the option price will be taxed to the optionee as a
long-term capital gain, and any loss sustained will be a long-term capital loss,
and (b) no deductions will be allowed to the Company for Federal income tax
purposes. However, the exercise of an ISO will give rise to an item of tax
preference that may result in alternative minimum tax liability for the
optionee.
If shares acquired upon the exercise of an ISO are disposed of prior to
the expiration of the holding periods described above (a "disqualifying
disposition"), generally (a) the optionee will realize ordinary income in the
year of disposition in an amount equal to the excess (if any) of the fair market
value of the shares at exercise (or, if less, the amount realized on a sale of
such shares) over the option price thereof, and (b) the Company will be entitled
to deduct such amount. Any further gain realized will be taxed as short-term or
long-term capital gain and will not result in any deduction by the Company.
Special rules apply when all or a portion of the exercise price of the ISO is
paid by tendering shares of Common Stock, and special rules may also apply where
the optionee is subject to Section 16(b) of the Securities Exchange Act of 1934.
A disqualifying disposition will eliminate the item of tax preference associated
with the exercise of the ISO if it occurs in the same taxable year as the
exercise of the ISO.
Nonqualified Stock Options: No income is realized by the optionee at
the time an NSO is granted. Generally, (a) at exercise, ordinary income is
realized by the optionee in an amount equal to the difference between the option
price and the fair market value of the shares on the date of exercise, and the
Company receives a tax deduction for the same amount, and (b) at disposition,
appreciation or depreciation after the date of the exercise is treated as either
short-term or long-term capital gain or loss, depending on how long the shares
have been held. Special rules could apply in some situations if the optionee is
subject to Section 16(b) of the Securities Exchange Act of 1934.
The foregoing discussion is provided for the information of
shareholders and is not a complete description of the Federal tax consequences
in respect of transactions under the Stock Plan, nor does it describe state or
local tax consequences.
Currently Outstanding Awards. Set forth below are the numbers of shares
underlying options which have been awarded under the Stock Plan to the persons
and groups identified since the initial adoption of the Stock Plan. As a
consequence of exercises of options, the numbers below are greater than the
numbers of shares underlying currently outstanding options held by these option
holders. The number and value of awards that may be granted under the Stock Plan
in the future to directors, officers and other employees of, and consultants and
advisors to, the Company or any of its subsidiaries cannot currently be
determined and will be within the discretion of the Committee.
Number of Shares
Underlying
Name and Position Options Granted
- ----------------- ----------------
Harry P. Langley
President and Chief Executive Officer 157,000
George E. Mendenhall
Executive Vice President 150,000
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Stuart E. Massey
Vice President of Engineering 157,000
All current executive officers, as a group
(including the persons named above) 701,000
All current directors and director nominees who
are not executive officers, as a group 185,000
All employees, including all current officers
who are not executive officers, as a group 319,200
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE COMPANY'S STOCK OPTION PLAN. THE PERSONS NAMED IN THE FORM OF
PROXY WILL VOTE THE PROXY AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE PROXY
WILL BE VOTED "FOR" THE APPROVAL OF THE AMENDMENT TO THE COMPANY'S STOCK OPTION
PLAN.
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed the firm of Scott McElveen, LLP,
as independent auditors to make an examination of the accounts of the Company
for the fiscal year ending December 31, 2000, subject to shareholder
ratification. If the shareholders do not ratify this appointment, other
certified public accountants will be considered by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL. THE
PERSONS NAMED IN THE FORM OF PROXY WILL VOTE THE PROXY AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE PROXY WILL BE VOTED "FOR" THE RATIFICATION OF THE
COMPANY'S INDEPENDENT AUDITORS.
A representative of Scott McElveen, LLP is expected to be in attendance
at the Annual Meeting and will have the opportunity to make a statement and be
available to respond to appropriate questions.
OTHER BUSINESS
The Board of Directors of the Company knows of no other matter to come
before the Annual Meeting. However, if any matter requiring a vote of the
shareholders should arise, it is the intention of the persons named in the
enclosed proxy to vote such proxy in accordance with their best judgement.
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PROPOSALS FOR 2001 ANNUAL MEETING
Shareholder proposals intended to be presented at the 2001 Annual
Meeting of Shareholders must be received by the Company by November 6, 2000 for
possible inclusion in the proxy material relating to such meeting.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is the age and certain biographical information with
respect to each of the Company's directors and executive officers.
DIRECTOR NOMINEES FOR TERMS EXPIRING IN 2003:
R. MICHAEL CAMPBELL, II, 31, has served since 1998 as a consultant to
HIE, Inc., formerly Thermo Information Solutions. He is one of the founders of
RDS Solutions, Inc., and has served on its Board of Directors since July 1998.
HIE, Inc., and RDS Solutions, Inc. are technology companies which develop,
design, implement and integrate services for state retirement systems. From
November 1994 through January 1998, Mr. Campbell served in various positions
with Telequest Corporation, an electronic commerce and bill payment corporation.
Since January 1995, Mr. Campbell has been a co-owner of a chain of fast food
restaurants throughout South Carolina. Mr. Campbell became a director of the
Company in February 2000.
RUSSELL C. KING, JR., 65, retired in 1994 from Sonoco Products Company,
a New York Stock Exchange listed diversified paper and packaging company
("Sonoco"), having served as President and Chief Operating Officer of Sonoco
since 1990. He served in a variety of sales, marketing and manufacturing
positions with Sonoco before assuming the titles of Division Vice President,
Vice President and General Manager, Corporate Officer, Group Vice President and
Senior Vice President. Mr. King received his degree in Economics and Business
Administration from Wofford College, where he currently serves as Chairman of
the Board of Trustees. He also completed the Harvard University Advanced
Management Program and the University of North Carolina Executive Program. Mr.
King serves on the Board of Directors of Independent Colleges and Universities
of South Carolina, Inc., the Board of Directors of United Dominion Industries
and the advisory board of Crescent Capital Fund, L.P. He has served as a
director of the Company since June 1998.
STUART E. MASSEY, 40, has served as Vice President of Engineering and a
director of the Company since April of 1991. Mr. Massey is also the Company's
Secretary. His responsibilities include the day-to-day management and
coordination of large projects, including the continuing maintenance of the
Synapse software configuration tool. Mr. Massey received a Bachelor of Science
degree in Electrical and Computer Engineering from the University of South
Carolina in 1986. Before joining the Company, Mr. Massey managed the
implementation of an inter-bank financial transaction switch for automated
teller machine and point-of-sale systems and assisted in the design of financial
transaction processing software products for Applied Communications, Inc., among
other things. Mr. Massey's experience in the industrial automation industry
includes the design of a variety of computer control systems, such as airport
lighting, industrial machine tool control, inventory control and shop floor
control systems.
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DIRECTORS WHOSE TERMS EXPIRE IN 2002:
C. JOSEPH BERGER, JR., 64, retired in 1997 from Springs Industries,
Inc., a New York Stock Exchange listed manufacturer and marketer of home
furnishings and specialty fabrics ("Springs"), after serving for eight years as
Corporate Director for Electronic Data Interchange. During his thirty years with
Springs, Mr. Berger served the company in various positions, including Director
of Distribution. Prior to his service with Springs, he worked in various
positions with Milliken and Company and M. Lowenstein Corporation, both major
textile manufacturers and marketers. Mr. Berger received a master's degree in
Business Administration from Winthrop University and a Bachelor's degree from
the University of Georgia. He has served on numerous boards and committees,
including the District Three school board in Rock Hill, South Carolina, where he
also served for ten years as Treasurer. Mr. Berger has been a director of the
Company since June 1998.
HARRY P. LANGLEY, 42, has served as the President, Chief Executive
Officer, Treasurer, Chief Financial Officer, Chairman of the Board and a
director of the Company since the Company's incorporation in 1990. Mr. Langley
attended Midlands Technical College in Columbia, South Carolina and received an
Associates degree in Computer Sciences in 1987. Mr. Langley first began working
in the area of computer software integration as an on-site project coordinator
in South Carolina for Synergistic Business Infrastructures Corporation ("SBI").
SBI was a computer systems integrator based in Fort Wayne, Indiana that
specialized, among other things, in the conceptualization, design and
implementation of manufacturing shop floor systems, data collection systems and
material tracking systems.
DIRECTORS WHOSE TERMS EXPIRE IN 2001:
RAYMOND M. BURDIAK, 59, has served since January 1999 as General
Territory Manager for Inprise, Inc., a developer and marketer of CORBRA. Mr.
Burdiak has over 26 years of experience in selling and managing data processing
products, including hardware, operating systems, software analysis and design
tools, and other application software used in the automotive, health care,
retail distribution and software development industries. Prior to joining
Inprise, Inc., Mr. Burdiak served as Account Manager for Aonix, Inc., a company
which was also a developer and marketer to the automotive-related industries,
from 1996 to 1999, and as an Account Manager for Winthrop Stewart Associates,
Inc., a document management company, from June 1995 to April 1996, and as
Account Executive for Wang Laboratories, Inc. from March 1992 to June 1995. Mr.
Burdiak's experience also includes serving as National Account Manager for
Tandem Computer, Inc. and Honeywell Information Systems, Inc. He has been a
director of the Company since June 1999.
GEORGE E. MENDENHALL, PH.D., 62, became an employee of the Company in
February 1994, serving as the director of industrial consulting. In May 1995,
Dr. Mendenhall became the Executive Vice President and a director of the Company
and has also served as Vice President of Application Development since January
1998. Dr. Mendenhall's responsibilities include overseeing the day-to-day
management of the FIS System business unit. Dr. Mendenhall received a Bachelor
of Science degree in Economics from Manchester College in 1960 and a masters
degree and a Ph.D. in Economics from Indiana University in 1968 and 1978,
respectively. Dr. Mendenhall has conducted academic research and taught
economics and other courses at Indiana University and Indiana Institute of
Technology. In addition, he has published articles concerning research and
evaluation techniques and has been quoted in such periodicals as Computer World
and Industry Week. Before joining the Company, Dr. Mendenhall provided
consulting services and computer systems to various large manufacturing
companies on an independent basis and, from 1990 through February 1994, provided
consulting services to the Company. From 1984 until 1989, Dr. Mendenhall was the
President of SBI.
10
<PAGE> 12
OTHER EXECUTIVE OFFICERS
JAMES V. HOPKINS, 48, has served as Vice President of Operations since
April 13, 1999. Prior to his promotion to Vice President, he served as senior
account manager since joining the Company in October 1995. Mr. Hopkins is
responsible for customer related projects, including project management, account
management, programming, quality assurance, training and documentation. From
1993 until he joined the Company, Mr. Hopkins served as Vice President of
Information Systems of Association Membership Services, Inc. (d/b/a Electronic
Merchant Services), where he was responsible for directing the development of
credit card and other payment card processing systems. Prior to Mr. Hopkins'
employment with Electronic Merchant Services, Mr. Hopkins served as Director of
Operations for the Division of Computing and Information Technology, a
large-scale service bureau at Clemson University, from 1983 to 1993.
DONALD R. FUTCH, 49, has served as Vice President of Business
Development since April 13, 1999. Prior to that date, he served as Vice
President of Operations since joining the Company in January 1998. Mr. Futch is
responsible for marketing and strategic relationships with business partners and
distribution channels. Mr. Futch received a masters degree in business
administration with an emphasis in marketing research from the University of
South Carolina in 1974. From October 1994 until he joined the Company, Mr. Futch
served as Chief Information Officer for Telequest Corporation. Mr. Futch was
awarded a patent for the creation of a telecommunications-based home banking
system in August 1997. From May 1992 until joining Telequest Corporation in
October 1994, Mr. Futch served as Vice President of Association Membership
Services, Inc. (d/b/a Electronic Merchant Services), where he served primarily
as an electronic payments system integrator to the hotel industry. From January
1983 through April 1992, Mr. Futch was a Technical Consultant for AT&T.
JOSEPH R. DUNKLEY, 59, has served as Vice President of Sales since
December 1999. Mr. Dunkley is responsible for managing the corporate sales
division. Mr. Dunkley has thirty-two years of experience in process
manufacturing and information systems consulting. From February 1996 until he
joined the Company, Mr. Dunkley served as Executive Vice President at Osprey
Systems, Inc., where he was responsible for Osprey's Industrial Solutions
Division. From 1967 through 1996, Mr. Dunkley was employed by Hoechst Celanese
Corporation, where he progressed in responsibility from engineering to senior
management, holding a variety of senior executive positions, as well as those of
Plant Manager and Product Direct. Mr. Dunkley received a Bachelor of Science
degree from the Virginia Military Institute in 1962.
BOARD MEETINGS AND COMMITTEES
During 1999, the Board of Directors of the Company met as a board or
acted pursuant to unanimous written consent a total of six times. No director
attended fewer than 75 percent of the total of such Board meetings and the
meetings of the committees upon which the director served.
Pursuant to the Bylaws of the Company, the Board of Directors has
established an Audit and Risk Management Committee, and a Compensation Committee
and Human Resources Committee. The Board of Directors has not established a
separate committee to perform the functions traditionally associated with a
nominating committee. Such functions are currently performed by the Board of
Directors acting as a whole. The Board of Directors will consider nominees
recommended by the shareholders for election as directors at any annual meeting
of the Company, provided the nomination is made in writing, properly identifies
the shareholder making the nomination as a shareholder of record entitled to
vote at such meeting, includes the consent of the nominee to serve, if elected,
and the representation of the nominating
11
<PAGE> 13
shareholder to appear in person or by proxy to nominate the identified nominee,
provides pertinent information concerning the nominee's background, experience
and any arrangement or understanding between the nominating shareholder and the
nominee pursuant to which the nomination is made, and is delivered to the
Secretary of the Company no later than ninety days prior to the annual meeting,
unless the Company notifies the shareholders otherwise.
The Audit and Risk Management Committee currently is composed of
Messrs. Berger, King and Mendenhall. The functions of the Audit and Risk
Management Committee include recommending to the Board of Directors the
retention of independent auditors, reviewing the scope of the annual audit
undertaken by the Company's independent auditors and the progress and results of
their work, and reviewing the financial statements of the Company and its
internal accounting and auditing procedures. This committee met a total of two
times during 1999.
The Compensation and Human Resources Committee, formerly the
Compensation Committee, is currently composed of Messrs. Berger, King and
Massey. The functions of the Compensation and Human Resources Committee include
reviewing and approving executive compensation policies and practices, reviewing
salaries and bonuses for certain officers of the Company, administrating the
Company's Stock Option Plan, making recommendations to the Board with respect to
the participation in such plan by directors, officers and employees of, and
consultants to the Company and the extent of that participation, and considering
such other matters as may from time to time be referred to the Compensation and
Human Resources Committee by the Board of Directors. No directors of the Company
who are also executive officers of the Company participate in deliberations of
such committee concerning the compensation of such executive officers. During
1999, the Board assigned to this Committee the duties and functions formerly
held by the Stock Option Committee which was terminated. This committee met a
total of five times during 1999.
MANAGEMENT COMPENSATION
EXECUTIVE COMPENSATION
The following table is a summary of the compensation earned by the
Company's President and Chief Executive Officer. No executive officer of the
Company earned compensation for services rendered to the Company in excess of
$100,000 in any of the three most recently completed fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation
Compensation ----------------
Name and Principal ------------------------- Securities Under All Other
Position Year Salary Options Compensation
------------------ ---- ------ ---------------- ------------
<S> <C> <C> <C> <C>
Harry P. Langley 1997 $ 72,497 50,000 (1) $ 17,703(2)
President, Chief Executive Officer 1998 66,667 50,000 (3) -0-
Treasurer, Chief Financial Officer 1999 70,000 50,000 (4) -0-
</TABLE>
12
<PAGE> 14
(1) Amount represents shares of Common Stock as to which Mr. Langley was
granted options to purchase at an exercise price of $1.00 (Cdn.) per
share. All of such options granted to Mr. Langley vested and became
exercisable on April 7, 1998.
(2) Amount represents funds withdrawn by Mr. Langley as permitted by
Subchapter S of the United States Internal Revenue Code ("Subchapter
S"). The Company's shareholders had elected to have the income tax
treatment provided by Subchapter S until April 18, 1997. Effective
April 18, 1997, the Company's Subchapter S corporation status was
terminated.
(3) Amount represents shares of Common Stock as to which Mr. Langley was
granted options to purchase at an exercise price of $0.89 (Cdn.) per
share. All of such options granted to Mr. Langley vested and became
exercisable on June 14, 1999.
(4) Amount represents shares of Common Stock as to which Mr. Langley was
granted options to purchase 7,000 shares of Common Stock at an exercise
price of $0.98 (Cdn.) per share, all of which options vested and became
exercisable on July 25, 1999, and options to purchase 43,000 shares of
Common Stock at an exercise price of US$2.13, all of which options will
vest and become exercisable on June 3, 2000.
DIRECTOR COMPENSATION
The directors of the Company who are executive officers of the Company
are not separately compensated for serving as directors of the Company. All
directors of the Company are reimbursed by the Company for all out-of-pocket
expenses reasonably incurred by them in the discharge of their duties as
directors, including out-of-pocket expenses incurred in attending meetings of
the Board of Directors and its committees.
OPTION GRANTS
The following table sets forth certain information with respect to
Common Stock purchase options granted during the fiscal year ended December 31,
1999 to Mr. Langley.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
-----------------
Number of Percent of Total Options
Securities Underlying Granted to Employees in Exercise Expiration
Name Options Granted Fiscal Year Price Date
- ---- --------------------- ------------------------ -------- ----------
<S> <C> <C> <C> <C>
Harry P. Langley 7,000 1.12% $0.98 (Cdn.) 01/25/04
43,000 6.89% $2.13 (US) 12/03/04
</TABLE>
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information with respect to the
options exercised by Mr. Langley during the fiscal year ended December 31, 1999
and with respect to unexercised Common Stock
13
<PAGE> 15
purchase options held at December 31, 1999 by Mr. Langley. The exercise price of
each of the exercisable options reflected in the table below is $0.98 (Cdn.) or
$0.67 (US) using the exchange rate between the Canadian Dollar and the US Dollar
of C$0.6881 = US$1.00 on December 31, 1999. The exercise price of each of the
unexercisable options reflected in the table below is US$2.13. The value amounts
in the table have been calculated on the basis of the US$12.00 per share closing
price of the Common Stock on December 31, 1999 as reported on the
over-the-counter bulletin board.
Aggregated Option Exercises and December 31, 1999 Option Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of Securities Underlying In-the-Money Options
Shares Unexercised Options at 12/31/99 at 12/31/99
Acquired ------------------------------- --------------------
On Value
Name Exercise Realized Exercised Unexercisable Exercisable Unexercisable
- ---- -------- -------- --------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Harry P. Langley 100,000 $112,500 7,000 43,000 $79,332 $424,410
</TABLE>
EMPLOYMENT CONTRACTS
Each of the Company's executive officers has entered into an employment
contract with the Company which renews automatically for successive one-year
terms unless the Company or the executive officer provides written notice of
termination at least 90 days before the end of the current term. The following
paragraphs describe the material features of those employment contracts.
Messrs. Langley, Mendenhall and Massey have each been a party to
employment contracts with the Company since January 1, 1997. Each of these
contracts has been amended from time to time. Under the terms of these
employment contracts as currently in effect, Messrs. Langley, Mendenhall and
Massey agree to act as the Company's President and Treasurer, Executive Vice
President and Vice President, respectively, in exchange for annual compensation
each of $70,000. If the contract is terminated by the Company without cause, the
Company will be required to pay the affected executive officer an amount equal
to the greater of (1) the total salary and benefits due to the executive officer
for the remainder of the term of the employment contract or (2) one year's total
salary and benefits.
Mr. Futch has been a party to an employment contract with the Company
since January 1, 1998, which has since been amended. Under the terms of his
employment contract as currently in effect, Mr. Futch agrees to act as the
Company's Vice President of Business Development in exchange for annual
compensation of $75,000. The contract with Mr. Futch included a signing bonus in
the form of the grant of a stock option under the Company's Stock Plan for the
purchase of 20,000 shares of Common Stock and the grant of 25,000 and 37,500
stock options in the years 1998 and 1999, respectively, under the Company's
Stock Option Plan The exercise price on all of the options covered by the
contract is the fair market value of the Common Stock on the date of grant.
One-half of the stock options vests six months from the date of grant with the
balance vesting one year from the date of grant.
Mr. Hopkins has been a party to an employment contract with the Company
since October 1995. He and the Company entered into a new employment contract
effective April 13, 1999. Under the terms of his new employment contract, Mr.
Hopkins agrees to act as the Company's Vice President of Operations in exchange
for annual compensation of $75,000. The contract with Mr. Hopkins includes the
14
<PAGE> 16
May 1, 1999 grant of a stock option under the Company's Stock Plan for the
purchase of 20,000 shares of Common Stock at an exercise price equal to the
closing market value of the Common Stock on the date of grant. One-half of the
stock option vests six months from the date of grant with the balance vesting
one year from the date of grant.
Mr. Dunkley has been a party to an employment contract with the Company
since December 1999. Under the terms of his employment contract, Mr. Dunkley
agrees to act as the Company's Vice President of Sales in exchange for annual
compensation of $70,000. The contract with Mr. Dunkley included the grant in
1999 of stock options under the Company's Stock Plan for the purchase of 40,000
shares of Common Stock and the grant in 2000 of stock options under the
Company's Stock Plan for the purchase of 40,000 shares of Common Stock. The
exercise price on all of the options covered by the contract is the fair market
value of the Common Stock on the date of grant. One-half of the stock options
vest six months from the date of grant with the balance vesting one year from
the date of grant.
Messrs. Mendenhall and Massey may receive a bonus at the discretion of
the Company's President. Messrs. Langley, Futch and Hopkins may receive a bonus
at the discretion of the Company's Board of Directors. In addition to the
foregoing, the Company has also agreed to provide each executive officer with
life insurance, medical insurance, vacation leave, sick leave and other
benefits, such as stock options, as may be approved by the Board of Directors.
Each executive officer is also eligible to participate in the Company's employee
benefit plans, including any established retirement, profit sharing or deferred
compensation plan.
Each of the Company's employment contracts contains a non-competition
clause restricting the employee's ability to compete with the business of the
Company during the term of the contract and for a period of one to two years
thereafter in those states where the Company had clients when the employment
contract was terminated. Each contract also contains a provision limiting the
disclosure of confidential or trade secret information of the Company.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information known to the Company
regarding the beneficial ownership of the Common Stock as of March 17, 2000.
Information is presented for (a) each shareholder known by the Company to own
five percent or more of the Common Stock, (b) each director, director nominee
and executive officer of the Company, individually, and (c) all directors and
executive officers of the Company, as a group. Except as otherwise specified in
the notes to the following table, each of the shareholders named in the table
has indicated to the Company that such shareholder has sole voting and
investment power with respect to all shares of Common Stock beneficially owned
by that shareholder.
<TABLE>
<CAPTION>
Number of Shares Percentage
Name of Beneficial Owner Beneficially Owned (1) Ownership
- ------------------------- ---------------------- ---------
<S> <C> <C>
C. Joseph Berger, Jr. 37,500 (2) *
Raymond M. Burdiak 17,500 (3) *
R. Michael Campbell, II -0- *
Joseph R. Dunkley 1,335 *
Donald R. Futch 87,500 (2) *
James V. Hopkins 58,350 (2) *
Russell C. King, Jr. 50,000 (2) *
</TABLE>
15
<PAGE> 17
<TABLE>
<S> <C> <C>
Harry P. Langley (4) 1,268,879 (5) (6) 9.2%
Stuart E. Massey (4) 1,302,500 (5) 9.5%
George E. Mendenhall (4) 1,293,488 (5) 9.4%
All executive officers and directors as a group (10 persons) 4,117,052 29.5%
</TABLE>
* Amount represents less than 1.0 percent
(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission (the "Commission"). Shares of Common
Stock subject to options or warrants currently exercisable or
exercisable within 60 days are deemed to be outstanding for computing
the percentage beneficially owned by such holder but are not deemed
outstanding for purposes of computing the percentage beneficially owned
by any other person. As of March 17, 2000, 13,734,399 shares of Common
Stock of the Company were issued and outstanding.
(2) All shares are issuable upon exercise of stock options.
(3) Includes 5,000 shares held by a family member.
(4) The address of Messrs. Langley, Mendenhall and Massey is Suite 228, 115
Atrium Way, Columbia, South Carolina 29223.
(5) Includes 9,879 shares issuable upon exercise of common stock warrant
agreement for Mr. Langley, and 988 shares issuable upon exercise of
common stock warrant agreement for each of Messrs. Massey and
Mendenhall.
(6) Includes 1,000 shares held by a family member.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
requires the Company's directors and executive officers to file reports of
holdings and transactions in the Company's securities with the Securities and
Exchange Commission. On the basis of Company records and other information, the
Company believes that all filing requirements under Section 16(a) of the 1934
Act applicable to its officers and directors were satisfied with respect to the
Company's fiscal year ended December 31, 1999.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1999, each of Messrs. Langley, Massey and Mendenhall exercised
stock options for the purchase of 100,000 shares of Common Stock of the Company.
The purchase price for the shares acquired upon exercise was paid by the
delivery to the Company by Messrs. Langley, Massey, and Mendenhall of three-year
promissory notes in the amounts of $64,592.75, $64,592.75, and $64,024.03,
respectively. Each of the notes bears interest at the prime rate. At December
31, 1999 the amounts outstanding under the notes from Messrs. Langley, Massey
and Mendenhall were $59,720.19, $65,781.39, and $65,298.86, respectively.
16
<PAGE> 18
ANNUAL REPORT
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED
DECEMBER 31, 1999, WHICH HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, IS BEING DELIVERED TO SHAREHOLDERS CONCURRENTLY WITH THE DELIVERY OF
THIS PROXY STATEMENT. SHAREHOLDERS TO WHOM THIS PROXY STATEMENT IS MAILED WHO
DESIRE AN ADDITIONAL COPY OF THE FORM 10-KSB MAY OBTAIN ONE, WITHOUT CHARGE, BY
MAKING WRITTEN REQUEST TO MS. SHARON GAMBRELL, INTEGRATED BUSINESS SYSTEMS AND
SERVICES, INC., SUITE 228, 115 ATRIUM WAY, COLUMBIA, SOUTH CAROLINA 29223
(803)736-5595.
By Order of the Board of Directors,
Harry P. Langley
President, Chief Executive Officer
and Director
Columbia, South Carolina
March 24, 2000
17
<PAGE> 19
APPENDIX A
INTEGRATED BUSINESS SYSTEMS AND SERVICES, INC.
STOCK OPTION PLAN
(AS AMENDED)
ARTICLE I
DEFINITIONS
As used herein, the following terms have the following meanings unless the
context clearly indicates to the contrary:
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean theft or destruction of property of the Company, a Parent, or
a Subsidiary, disregard of Company rules or policies, or conduct evincing
disregard of the interests of the Company. Such determination shall be made by
the Committee based on information presented by the Company and the Employee and
shall be final and binding on all parties hereto.
"Change in Control" shall mean the occurrence of any of the following events:
(i) any individual or entity: (A) directly or indirectly acquiring beneficial
ownership of 15% or more of the Stock of the Company outstanding from time to
time (other than Messrs. Langley, Mendenhall and Massey); or (B) making a tender
offer for 15% or more of the Stock of the Company outstanding; or (ii)
individuals who constitute a majority of the Company's Board of Directors on the
date of the adoption of this Plan by the Board of Directors, or individuals
elected or nominated directly or indirectly by at least a majority of such
current directors, no longer constitute a majority of the Company's Board of
Directors; or (iii) a merger, consolidation, asset sale or other transaction
involving the sale or other transfer of all or substantially all of the business
or assets of the Company.
"Code" shall mean the United States Internal Revenue Code of 1986, including
effective date and transition rules (whether or not codified). Any reference
herein to a specific section of the Code shall be deemed to include a reference
to any corresponding provision of future law.
"Committee" shall mean a committee of at least two Directors appointed from time
to time by the Board, having the duties and authority set forth herein in
addition to any other authority granted by the Board.
"Company" shall mean Integrated Business Systems and Services, Inc., a South
Carolina corporation.
"Date of Grant" shall mean the date on which an Option is granted.
"Employee" shall mean an employee of the Employer.
<PAGE> 20
"Employer" shall mean the corporation that employs a Grantee.
"Exchange Act" shall mean the Securities Exchange Act of 1934. Any reference
herein to a specific section of the Exchange Act shall be deemed to include a
reference to any corresponding provision of future law.
"Exercise Price" shall mean the price at which an Optionee may purchase a share
of Stock under a Stock Option Agreement.
"Fair Market Value" on any date shall mean (i) where the Stock is listed for
trading on a stock exchange or over the counter market, the closing price of the
Stock on the stock exchange or over the counter market which is the principal
trading market for the Stock, as may be determined for such purpose by the
Committee, or (ii) where the Stock is not listed for trading on a stock exchange
or over the counter market, the value which is determined by the Committee to be
the fair value of the Stock, taking into consideration all factors that the
Committee deems appropriate, including, without limitation, recent sale and
offer prices of the Stock in private transactions negotiated at arm's length.
"Grantee" shall mean a person who is an Optionee.
"Incentive Stock Option" shall mean an option to purchase any stock of the
Company, which complies with and is subject to the terms, limitations and
conditions of Section 422 of the Code and any regulations promulgated with
respect thereto.
"Officer" shall mean a person who constitutes an officer of the Company for the
purposes of Section 16 of the Exchange Act, as determined by reference to such
Section 16 and to the rules, regulations, judicial decisions, and interpretative
or "no-action" positions with respect thereto of the Securities and Exchange
Commission, as the same may be in effect or set forth from time to time.
"Option" shall mean an option, whether or not an Incentive Stock Option, to
purchase Stock granted pursuant to the provisions of Article VI hereof.
"Optionee" shall mean a person to whom an Option has been granted hereunder.
"Parent" shall mean any corporation (other than the Employer) in an unbroken
chain of corporations ending with the Employer if, at the time of the grant (or
modification) of the Option, each of the corporations other than the Employer
owns stock possessing 50 percent or more of the total combined voting power of
the classes of stock in one of the other corporations in such chain.
"Permanent and Total Disability" shall have the same meaning as given to that
term by Code Section 22(e)(3) and any regulations or rulings promulgated
thereunder.
"Plan" shall mean the Integrated Business Systems and Services, Inc. Stock
Option Plan, the
<PAGE> 21
terms of which are set forth herein.
"Purchasable" shall refer to Stock which may be purchased by an Optionee under
the terms of this Plan on or after a certain date specified in the applicable
Stock Option Agreement.
"Qualified Domestic Relations Order" shall have the meaning set forth in the
Code or in the Employee Retirement Income Security Act of 1974, or the rules and
regulations promulgated under the Code or such Act.
"Reload Option" shall have the meaning set forth in Section 6.8 hereof.
"Section 16 Insider" shall mean any person who is subject to the provisions of
Section 16 of the Exchange Act.
"Stock" shall mean the Common Stock, no par value per share, of the Company or,
in the event that the outstanding shares of Stock are hereafter changed into or
exchanged for shares of a different stock or securities of the Company or some
other entity, such other stock or securities.
"Stock Option Agreement" shall mean an agreement between the Company and an
Optionee under which the Optionee may purchase Stock hereunder, a sample form of
which is attached hereto as Exhibit A (which form may be varied by the Committee
in granting an Option).
"Subsidiary" shall mean any corporation (other than the Employer) in an unbroken
chain of corporations beginning with the Employer if, at the time of the grant
(or modification) of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
ARTICLE II
THE PLAN
2.1 Name. This Plan shall be known as the "Integrated Business Systems
and Services, Inc. Stock Option Plan".
2.2 Purpose. The purpose of the Plan is to advance the interests of the
Company, its Subsidiaries and its shareholders by affording certain employees,
officers and Directors of the Company and its Subsidiaries, as well as
consultants to the Company or any Subsidiary, an opportunity to acquire or
increase their proprietary interests in the Company. The objective of the
issuance of the Options is to promote the growth and profitability of the
Company and its Subsidiaries because the Grantees will be provided with an
additional incentive to achieve the Company's objectives through participation
in its success and growth and by encouraging their continued association with or
service to the Company.
2.3 Effective Date. The Plan shall become effective on April 29, 1997;
provided, however, that the Plan shall terminate, and all Options theretofore
granted or awarded shall
<PAGE> 22
become void and may not be exercised, on April 28, 1998, if the shareholders of
the Company shall not by that date have approved the Plan's adoption.
ARTICLE III
PARTICIPANTS
The class of persons eligible to participate in the Plan shall consist
of all persons whose participation in the Plan the Committee determines to be in
the best interests of the Company which shall include, but not be limited to,
Directors, Officers and employees, including but not limited to executive
personnel, of the Company or any Subsidiary, as well as consultants of the
Company or any Subsidiary.
ARTICLE IV
ADMINISTRATION
4.1 Duties and Powers of the Committee. The Plan shall be administered
by the Committee. The Committee shall select one of its members as its Chairman
and shall hold its meetings at such times and places as it may determine. The
Committee shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it may deem necessary. The
Committee shall have the power to act by unanimous written consent in lieu of a
meeting, and to meet telephonically. In administering the Plan, the Committee's
actions and determinations shall be binding on all interested parties. The
Committee shall have the power to grant Options in accordance with the
provisions of the Plan. Subject to the provisions of the Plan, the Committee
shall have the discretion and authority to determine those individuals to whom
Options will be granted and whether such Options shall be accompanied by the
right to receive Reload Options, the number of shares of Stock subject to each
Option, such other matters as are specified herein, and any other terms and
conditions of a Stock Option Agreement. The Committee shall also have the
discretion and authority to delegate to any Officer its powers to grant Options
under the Plan to any person who is an employee of the Company but not an
Officer or Director. To the extent not inconsistent with the provisions of the
Plan, the Committee may give a Grantee an election to surrender an Option in
exchange for the grant of a new Option, and shall have the authority to amend or
modify an outstanding Stock Option Agreement, or to waive any provision thereof,
provided that the Grantee consents to such action.
4.2 Interpretation; Rules. Subject to the express provisions of the
Plan, the Committee also shall have complete authority to interpret the Plan, to
prescribe, amend, and rescind rules and regulations relating to it, to determine
the details and provisions of each Stock Option Agreement, and to make all other
determinations necessary or advisable for the administration of the Plan,
including, without limitation, the amending or altering of the Plan and any
Options granted hereunder as may be required to comply with or to conform to any
federal, state, or local laws or regulations.
4.3 No Liability. Neither any member of the Board nor any member of the
Committee shall be liable to any person for any act or determination made in
good faith with respect to the Plan or any Option granted hereunder.
<PAGE> 23
4.4 Majority Rule. A majority of the members of the Committee shall
constitute a quorum, and any action taken by a majority at a meeting at which a
quorum is present, or any action taken without a meeting evidenced by a writing
executed by all the members of the Committee, shall constitute the action of the
Committee.
4.5 Company Assistance. The Company shall supply full and timely
information to the Committee on all matters relating to eligible persons, their
employment, death, retirement, disability, or other termination of employment,
and such other pertinent facts as the Committee may require. The Company shall
furnish the Committee with such clerical and other assistance as is necessary in
the performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
5.1 Limitations. Subject to any antidilution adjustment pursuant to the
provisions of Section 5.2 hereof, the maximum number of shares of Stock that may
be issued hereunder shall be 1,860,000. Any or all shares of Stock subject to
the Plan may be issued in any combination of Incentive Stock Options or
non-Incentive Stock Options and the amount of Stock subject to the Plan may be
increased from time to time in accordance with Article VIII. Shares subject to
an Option may be either authorized and unissued shares or shares issued and
later acquired by the Company. The shares covered by any unexercised portion of
an Option that has terminated for any reason, may again be optioned under the
Plan, and such shares shall not be considered as having been optioned or issued
in computing the number of shares of Stock remaining available for option
hereunder.
No Grantee shall be entitled to receive in any one year grants
hereunder regarding more than 50,000 shares.
Notwithstanding anything else contained in this Section 5.1, throughout
any period of time during which the Stock is listed for trading on the Vancouver
Stock Exchange, the amount of stock reserved for issuance under this Plan shall
be limited as follows:
(a) the number of shares of Stock reserved for issuance to all
Optionees pursuant to Options at any time must not exceed 20% of the issued and
outstanding common shares of the Company;
(b) the number of shares of Stock reserved for issuance to
insiders of the Company at any time must not exceed 10% of the issued and
outstanding common shares of the Company;
(c) the number of shares of Stock reserved for issuance to
insiders of the Company within any one year period must not exceed 10% of the
issued and outstanding common shares of the Company;
<PAGE> 24
(d) the number of shares of Stock reserved for issuance to
insiders of the Company and their associates within any one year period must not
exceed 5% of the issued and outstanding common shares of the Company; and
(e) the number of shares of Stock reserved for issuance to any
one Optionee must not exceed 5% of the issued and outstanding common shares of
the Company at the Date of Grant of such Option.
5.2 Antidilution.
(a) If (x) the outstanding shares of Stock are changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of merger, consolidation, reorganization, recapitalization,
reclassification, combination or exchange of shares, or stock split or stock
dividend, (y) any spin-off, spin-out or other distribution of assets materially
affects the price of the company 's stock, or (z) there is any assumption and
conversion to the Plan by the Company of an acquired company's outstanding
option grants, then:
(i) the aggregate number and kind of shares
of Stock for which Options may be granted hereunder shall be
adjusted proportionately by the Committee; and
(ii) the rights of Optionees under
outstanding Options shall be adjusted proportionately by the
Committee.
(b) If the Company is subject to a transaction in which it does not
survive, involving merger, consolidation, or acquisition of the stock or
substantially all the assets of the Company or other similar transaction, the
Committee, in its discretion, may:
(i) notwithstanding other provisions hereof,
declare that all Options granted under the Plan shall become
exercisable immediately notwithstanding the provisions of the
respective Stock Option Agreements regarding exercisability,
that all such Options shall terminate 30 days after the
Committee gives written notice of the immediate right to
exercise all such Options and of the decision to terminate all
Options not exercised within such 30-day period; and/or
(ii) notify all Grantees that all Options
granted under the Plan shall be assumed by the successor
corporation or substituted on an equitable basis with options
issued by such successor corporation.
The Company shall be deemed not to have survived a transaction if pursuant to
such transaction the Company becomes a wholly-owned subsidiary of another
entity.
(c) If the Company is to be liquidated or dissolved in connection with
a reorganization described in Section 5.2(b), the provisions of such Section
shall apply. In all other instances, the adoption of a plan of dissolution or
liquidation of the Company shall, notwithstanding other
<PAGE> 25
provisions hereof, shall cause every Option outstanding under the Plan to
terminate to the extent not exercised prior to the adoption of the plan of
dissolution or liquidation by the shareholders, provided that, notwithstanding
other provisions hereof, the Committee may declare all Options granted under the
Plan to be exercisable at any time on or before the fifth business day following
such adoption notwithstanding the provisions of the respective Stock Option
Agreements regarding exercisability.
(d) The adjustments described in paragraphs (a) through (c) of this
Section 5.2, and the manner of their application, shall be determined solely by
the Committee. The adjustments required under this Article V shall apply to any
successors of the Company and shall be made regardless of the number or type of
successive events requiring such adjustments.
ARTICLE VI
OPTIONS
6.1 Types of Options Granted. The Committee may, under this Plan, grant
either Incentive Stock Options or Options which do not qualify as Incentive
Stock Options. Within the limitations provided in this Plan, both types of
Options may be granted to the same person at the same time, or at different
times, under different terms and conditions, as long as the terms and conditions
of each Option are consistent with the provisions of the Plan. Without
limitation of the foregoing, Options may be granted subject to conditions based
on the financial performance of the Company or any other factor the Committee
deems relevant.
6.2 Option Grant and Agreement. Each Option granted hereunder shall be
evidenced by minutes of a meeting or the written consent of the Committee and by
a written Stock Option Agreement executed by the Company and the Optionee. The
terms of the Option, including the Option's duration, time or times of exercise,
exercise price, whether the Option is intended to be an Incentive Stock Option,
and whether the Option is to be accompanied by the right to receive a Reload
Option, shall be stated in the Stock Option Agreement. No Incentive Stock Option
may be granted more than ten years after the earlier to occur of the effective
date of the Plan or the date the Plan is approved by the Company's shareholders.
Separate Stock Option Agreements may be used for Options intended to be
Incentive Stock Options and those not so intended, but any failure to use such
separate agreements shall not invalidate, or otherwise adversely affect the
Optionee's interest in, the Options evidenced thereby.
6.3 Optionee Limitations. The Committee shall not grant an Incentive
Stock Option to any person who, at the time the Incentive Stock Option is
granted:
(a) is not an employee of the Company or any of its
Subsidiaries; or
(b) owns or is considered to own stock possessing at least 10%
of the total combined voting power of all classes of stock of the Company or any
of its Parent or Subsidiary corporations; provided, however, that this
limitation shall not apply if at the time an Incentive
<PAGE> 26
Stock Option is granted the Exercise Price is at least 110% of the Fair Market
Value of the Stock subject to such Option and such Option by its terms would not
be exercisable after five years from the date on which the Option is granted.
For the purpose of this subsection (b), a person shall be considered to own: (i)
the stock owned, directly or indirectly, by or for his or her brothers and
sisters (whether by whole or half blood), spouse, ancestors and lineal
descendants; (ii) the stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust in proportion to such person's stock
interest, partnership interest or beneficial interest therein; and (iii) the
stock which such person may purchase under any outstanding options of the
Employer or of any Parent or Subsidiary of the Employer.
6.4 $100.000 Limitation. Except as provided below, the Committee shall
not grant an Incentive Stock Option to, or modify the exercise provisions of
outstanding Incentive Stock Options held by, any person who, at the time the
Incentive Stock Option is granted (or modified), would thereby receive or hold
any Incentive Stock Options of the Employer and any Parent or Subsidiary of the
Employer, such that the aggregate Fair Market Value (determined as of the
respective dates of grant or modification of each option) of the stock with
respect to which such Incentive Stock Options are exercisable for the first time
during any calendar year is in excess of $100,000 (or such other limit as may be
prescribed by the Code from time to time); provided that the foregoing
restriction on modification of outstanding Incentive Stock Options shall not
preclude the Committee from modifying an outstanding Incentive Stock Option if,
as a result of such modification and with the consent of the Optionee, such
Option no longer constitutes an Incentive Stock Option; and provided that, if
the $100,000 limitation (or such other limitation prescribed by the Code)
described in this Section 6.4 is exceeded, the Incentive Stock Option, the
granting or modification of which resulted in the exceeding of such limit, shall
be treated as an Incentive Stock Option up to the limitation and the excess
shall be treated as an Option not qualifying as an Incentive Stock Option.
Notwithstanding the foregoing, the Committee may in its discretion modify any
such Incentive Stock Options without the consent of the Optionee in the event of
a transaction specified in Section 5.2(b).
6.5 Exercise Price The Exercise Price of the Stock subject to each
Option shall be determined by the Committee. Subject to the provisions of
Section 6.3(b) hereof, the Exercise Price of an Option shall be equal to the
greater of (i) the Fair Market Value of the Shares on the trading day preceding
the Date of Grant and (ii) the average of the Fair Market Value of the Shares
for the ten trading days preceding the Date of Grant.
6.6 Exercise Period. The period for the exercise of each Option granted
hereunder shall be determined by the Committee, subject to the rules of any
stock exchange or other regulatory body having jurisdiction, but the Stock
Option Agreement with respect to each Option intended to be an Incentive Stock
Option shall provide that such Option shall not be exercisable after the
expiration of ten years from the date of grant (or modification) of the Option.
So long as required by the Vancouver Stock Exchange and the Stock remains listed
on such exchange, the period for exercise of an Option shall be no more than
five years; except for those Options granted prior to the Company's initial
public offering in British Columbia. With respect to those Options granted prior
to the Company's initial public offering in British Columbia, those Options
shall terminate at the earlier of (i) ten years from the Date of Grant or (ii)
five years from the date that a final
<PAGE> 27
receipt for the Company's prospectus is issued by the British Columbia
Securities Commission in connection with the Company's initial public offering.
In addition, no Option granted to a Section 16 Insider shall be exercisable
prior to the expiration of six months from the date such Option is granted,
other than in the case of the death of the Optionee, and no Option shall be
exercisable prior to shareholder approval of the Plan. In addition, each Stock
Option Agreement shall provide that:
(a) upon the death of the Optionee, the Option may be
exercised by the legal heirs or personal representatives of the Optionee until
the date determined by the Committee which shall not be more than twelve months
from the date of death; and
(b) if the Optionee shall no longer be any of a director,
officer, employee or consultant of the Company or of an affiliate of the
Company, the Option shall terminate on the expiration of the period, not in
excess of 30 days, prescribed by the Committee at the Date of Grant, following
the date that the Optionee ceases to be any of a director, officer, employee or
consultant of either the Company or any affiliate of the Company; provided that
the number of shares of Stock that the Optionee (or his guardian or legal heirs
or personal representatives) shall be entitled to purchase until such date of
termination shall be the number of shares of Stock which the Optionee was
entitled to purchase on the date of death or the date the Optionee ceased to be
a director, officer, employee or consultant of the Company or its affiliate, as
the case may be.
6.7 Option Exercise.
(a) Unless otherwise provided in the Stock Option Agreement or
Section 6.6 hereof, an Option may be exercised at any time or from time to time
during the term of the Option as to any or all full shares which have become
Purchasable under the provisions of the Option, but not at any time as to less
than 100 shares unless the remaining shares that have become so Purchasable are
less than 100 shares. The Committee shall have the authority to prescribe in any
Stock Option Agreement that the Option may be exercised only in accordance with
a vesting schedule during the term of the Option.
(b) An Option shall be exercised by (i) delivery to the
Company at its principal office a written notice of exercise with respect to a
specified number of shares of Stock and (ii) payment to the Company at that
office of the full amount of the Exercise Price for such number of shares in
accordance with Section 6.7(c). If requested by an Optionee, an Option may be
exercised with the involvement of a stockbroker in accordance with the federal
margin rules set forth in Regulation T (in which case the certificates
representing the underlying shares will be delivered by the Company directly to
the stockbroker).
(c) The Exercise Price is to be paid in full in cash upon the
exercise of the Option and the Company shall not be required to deliver
certificates for the shares purchased until such payment has been made;
provided, however, that in lieu of cash, all or any portion of the Exercise
Price may be paid by tendering to the Company shares of Stock duly endorsed for
transfer and owned by the Optionee, or by authorization to the Company to
withhold shares of
<PAGE> 28
Stock otherwise issuable upon exercise of the Option, in each case to be
credited against the Exercise Price at the Fair Market Value of such shares on
the date of exercise (however, no fractional shares may be so transferred, and
the Company shall not be obligated to make any cash payments in consideration of
any excess of the aggregate Fair Market Value of shares transferred over the
aggregate Exercise Price); provided further, that the Board may provide in a
Stock Option Agreement (or may otherwise determine in its sole discretion at the
time of exercise) that, in lieu of cash or shares, all or a portion of the
Exercise Price may be paid by the Optionee's execution of a recourse note equal
to the Exercise Price or relevant portion thereof, subject to compliance with
applicable state and federal laws, rules and regulations.
(d) In addition to and at the time of payment of the Exercise
Price, the Optionee shall pay to the Company in cash the full amount of any
federal, state, and local income, employment, or other withholding taxes
applicable to the taxable income of such Optionee resulting from such exercise;
provided, however, that in the discretion of the Committee any Stock Option
Agreement may provide that all or any portion of such tax obligations, together
with additional taxes not exceeding the actual additional taxes to be owed by
the Optionee as a result of such exercise, may, upon the irrevocable election of
the Optionee, be paid by tendering to the Company whole shares of Stock duly
endorsed for transfer and owned by the Optionee, or by authorization to the
Company to withhold shares of Stock otherwise issuable upon exercise of the
Option, in either case in that number of share. having a Fair Market Value on
the date of exercise equal to the amount of such taxes thereby being paid, and
subject to such restrictions as to the approval and timing of any such election
as the Committee may from time to time determine to be necessary or appropriate
to satisfy the conditions of the exemption set forth in Rule 16b-3 under the
Exchange Act, if such rule is applicable.
(e) The holder of an Option shall not have any of the rights
of a shareholder with respect to the shares of Stock subject to the Option until
such shares have been issued and transferred to the Optionee upon the exercise
of the Option.
6.8 Reload Options.
(a) The Committee may specify in a Stock Option Agreement (or
may otherwise determine in its sole discretion) that a Reload Option shall be
granted, without further action of the Committee, (i) to an Optionee who
exercises an Option (including a Reload Option) by surrendering shares of Stock
in payment of amounts specified in Sections 6.7(c) or 6.7(d) hereof, (ii) for
the same number of shares as are surrendered to pay such amounts, (iii) as of
the date of such payment and at an Exercise Price equal to the Fair Market Value
of the Stock on such date, and (iv) otherwise on the same terms and conditions
as the Option whose exercise has occasioned such payment, except as provided
below and subject to such other contingencies, conditions, or other terms as the
Committee shall specify at the time such exercised Option is granted; provided,
that the shares surrendered in payment as provided above must have been held by
the Optionee for at least six months prior to such surrender.
(b) Unless provided otherwise in the Stock Option Agreement, a
Reload Option may not be exercised by an Optionee (i) prior to the end of a
one-year period from the date that
<PAGE> 29
the Reload Option is granted, and (ii) unless the Optionee retains beneficial
ownership of the shares of Stock issued to such Optionee upon exercise of the
Option referred to above in Section 6.8(a)(i) for a period of one year from the
date of such exercise.
6.9 Nontransferability of Option. No Option shall be transferable by an
Optionee other than by will or the laws of descent and distribution and no
Option shall be transferable by an Optionee who is a Section 16 Insider prior to
shareholder approval of the Plan. During the lifetime of an Optionee, Options
shall be exercisable only by such Optionee (or by such Optionee's guardian or
legal representative, should one be appointed).
6.10 No Employment Rights. Nothing in the Plan or in any Stock Option
Agreement shall confer on any person any right to continue in the employ of the
Company or any of its Subsidiaries, or shall interfere in any way with the right
of the Company or any of its Subsidiaries to terminate such person's employment
at any time.
6.11 Certain Successor Options. To the extent not inconsistent with the
terms, limitations and conditions of Code section 422 and any regulations
promulgated with respect thereto, an Option issued in respect of an option held
by an employee to acquire stock of any entity acquired, by merger or otherwise,
by the Company (or any Subsidiary of the Company) may contain terms that differ
from those stated in this Article VI, but solely to the extent necessary to
preserve for any such employee the rights and benefits contained in such
predecessor option, or to satisfy the requirements of Code section 424(a).
6.12 Effect of Change in Control. The Committee may determine, at the
time of granting an Option or thereafter, that such Option shall become
exercisable on an accelerated basis in the event that a Change in Control occurs
with respect to the Company (and the Committee shall have the discretion to
modify the definition of a Change in Control in a particular Option Agreement).
If, at any time, the Committee finds that there is a reasonable possibility
that, within six months or less, a Change in Control will occur with respect to
the Company, then the Committee may determine that all outstanding Options shall
be exercisable on an accelerated basis.
ARTICLE VII
STOCK CERTIFICATES
The Company shall not be required to issue or deliver any certificate
for shares of Stock purchased upon the exercise of any Option granted hereunder
or any portion thereof, prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which the Stock is then listed;
(b) The completion of any registration or other qualification of such
shares which the Committee shall deem necessary or advisable under any federal
or state law or under the rulings or regulations of the Securities and Exchange
Commission or any other governmental regulatory
<PAGE> 30
body;
(c) The obtaining of any approval or other clearance from any federal
or state governmental agency or body which the Committee shall determine to be
necessary or advisable: and
(d) The lapse of such reasonable period of time following the exercise
of the Option as the Board from time to time may establish for reasons of
administrative convenience.
Stock certificates issued and delivered to Grantees shall bear such
restrictive legends as the Company shall deem necessary or advisable pursuant to
applicable federal and state securities laws.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Termination and Amendment. The Board may at any time terminate the
Plan, and may at any time and from time to time and in any respect amend the
Plan; provided, however, that the Board (unless its actions are approved or
ratified by the shareholders of the Company within twelve months of the date
that the Board amends the Plan) may not amend the Plan to:
(a) Increase the total number of shares of Stock issuable
pursuant to Incentive Stock Options under the Plan or materially increase the
number of shares of Stock subject to the Plan, in each case except as
contemplated in Section 5.2 hereof;
(b) Change the class of employees eligible to receive
Incentive Stock Options that may participate in the Plan or materially change
the class of persons that may participate in the Plan; or
(c) Otherwise materially increase the benefits accruing to
participants under the Plan.
8.2 Effect on Grantee's Rights. No termination, amendment, or
modification of the Plan shall affect adversely a Grantee's rights under a Stock
Option Agreement without the consent of the Grantee or his legal representative.
8.3 Term of Plan. No Option shall be granted on or after April 28,
2007, but Options granted prior to April 28, 2007, may extend beyond that date.
ARTICLE IX
RELATIONSHIP TO OTHER COMPENSATION PLANS
The adoption of the Plan shall not affect any other stock option,
incentive, or other compensation plans in effect for the Company or any of its
Subsidiaries; nor shall the adoption of the Plan preclude the Company or any of
its Subsidiaries from establishing any other form of
<PAGE> 31
incentive or other compensation plan for employees, Officers or Directors of the
Company or any of its Subsidiaries.
ARTICLE X
MISCELLANEOUS
10.1 Replacement or Amended Grants. At the sole discretion of the
Committee, and subject to the terms of the Plan, the Committee may modify
outstanding Options or accept the surrender of outstanding Options and grant new
Options in substitution for them. However no modification of an Option or Award
shall adversely affect a Grantee's rights under a Stock Option Agreement without
the consent of the Grantee or his legal representative.
10.2 Forfeiture for Competition. If a Grantee provides services to a
competitor of the Company or any of its Subsidiaries, whether as an employee,
officer, director, independent contractor, consultant, agent, or otherwise, such
services being of a nature that can reasonably be expected to involve the skills
and experience used or developed by the Grantee while an Employee, then that
Grantee's rights under any Options outstanding hereunder shall be forfeited and
terminated, subject in each case to a determination to the contrary by the
Committee.
10.3 Plan Binding on Successors. The Plan shall be binding upon the
successors and assigns of the Company.
10.4 Singular, Plural; Gender. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender.
10.5 Headings, etc., No Part of Plan. Headings of Articles and Sections
hereof are inserted for convenience and reference; they do not constitute part
of the Plan.
10.6 Interpretation. With respect to Section 16 Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan or action by the Plan administrators fails to so comply, it shall be
deemed void to the extent permitted by law and deemed advisable by the Plan
Administrators.
10.7 Approvals. The Plan is subject to the approval of the Vancouver
Stock Exchange and, if required, of any other stock exchange or over the counter
market on which the Company's common shares are listed for trading or any other
required regulatory authority. No Options granted prior to such approvals may be
exercised unless such approvals, if required, are given.
* * * *
<PAGE> 32
INTEGRATED BUSINESS SYSTEMS AND SERVICES, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement"), entered into as of this
____ day of ________, ____, by and between Integrated Business Systems and
Services, Inc., (the "Company"), and (the "Optionee").
WHEREAS, on April 29, 1997, the Board of Directors of the Company
adopted a stock option plan known as the "Integrated Business Systems and
Services, Inc. Stock Option Plan" (the "Plan"), and recommended that the Plan be
approved by the Company's shareholders; and
WHEREAS, the Committee has granted the Optionee a stock option to
purchase the number of shares of the Company's common stock as set forth below,
and in consideration of the granting of that stock option the Optionee intends
to remain in the employ of the Company; and
WHEREAS, the Company and the Optionee desire to enter into a written
agreement with respect to such option in accordance with the Plan.
NOW, THEREFORE, as an employment incentive and to encourage stock
ownership, and also in consideration of the mutual covenants contained herein,
the parties hereto agree as follows.
1. Incorporation of Plan. This option is granted pursuant to the
provisions of the Plan and the terms and definitions of the Plan are
incorporated herein by reference and made a part hereof. A copy of the Plan has
been delivered to, and receipt is hereby acknowledged by, the Optionee.
2. Grant of Option. Subject to the terms, restrictions, limitations and
conditions stated herein, the Company hereby evidences its grant to the
Optionee, not in lieu of salary or other compensation, of the right and option
(the "Option") to purchase all or any part of the number of shares of the
Company's Common Stock, no par value per share (the "Stock"), set forth on
Schedule A attached hereto and incorporated herein by reference. The Option
shall be exercisable in the amounts and at the time specified on Schedule A. The
Option shall expire and shall not be exercisable on the date specified on
Schedule A or on such earlier date as determined pursuant to Section 8 hereof.
Schedule A states whether the Option is intended to be an Incentive Stock
Option.
3. Purchase Price. The price per share to be paid by the Optionee for
the shares subject to this Option (the "Exercise Price") shall be as specified
on Schedule A.
4. Exercise Terms. The Optionee must exercise the Option for at least
the lesser of 100 shares or the number of shares of Purchasable Stock as to
which the Option remains unexercised. In the event this Option is not exercised
with respect to all or any part of the shares subject to this Option prior to
its expiration, the shares with respect to which this Option was not exercised
i
<PAGE> 33
shall no longer be subject to this Option.
5. Option Non-Transferable. No Option shall be transferable by an
Optionee other than by will or the laws of descent and distribution and no
Option shall be transferable by an Optionee who is a Section 16 Insider prior to
shareholder approval of the Plan. During the lifetime of an Optionee, Options
shall be exercisable only by such Optionee (or by such Optionee's guardian or
legal representative, should one be appointed).
6. Notice of Exercise of Option. This Option may be exercised by the
Optionee, or by the Optionee's administrators, executors or personal
representatives, by a written notice (in substantially the form of the Notice of
Exercise attached hereto as Schedule B) signed by the Optionee, or by such
administrators, executors or personal representatives, and delivered or mailed
to the Company as specified in Section 12 hereof to the attention of the
President or such other officer as the Company may designate. Any such notice
shall (a) specify the number of shares of Stock which the Optionee or the
Optionee's administrators, executors or personal representatives, as the case
may be, then elects to purchase hereunder, (b) contain such information as may
be reasonably required pursuant to Section 10 hereof, and (c) be accompanied by
(i) a certified or cashier's check payable to the Company in payment of the
total Exercise Price applicable to such shares as provided herein, (ii) shares
of Stock owned by the Optionee and duly endorsed or accompanied by stock
transfer powers having a Fair Market Value equal to the total Exercise Price
applicable to such shares purchased hereunder, or (iii) a certified or cashier's
check accompanied by the number of shares of Stock whose Fair Market Value when
added to the amount of the check equals the total Exercise Price applicable to
such shares purchased hereunder. Upon receipt of any such notice and
accompanying payment, and subject to the terms hereof, the Company agrees to
issue to the Optionee or the Optionee's administrators, executors or personal
representatives, as the case may be, stock certificates for the number of shares
specified in such notice registered in the name of the person exercising this
Option.
7. Adjustment in Option. The number of Shares subject to this Option,
the Exercise Price and other matters are subject to adjustment during the term
of this Option in accordance with Section 5.2 of the Plan.
8. Termination of Relationship with Company.
(a) Except as otherwise specified in Schedule A hereto, in the event
the Optionee shall no longer be a director, officer, employee or consultant of
either the Company or any affiliate of the Company due to the termination of
such relationship being for reasons other than (i) for cause, (ii) voluntary on
the part of the Optionee and without written consent of the Company, or (iii)
for reason of death the Optionee may exercise this Option at any time within 30
days after such termination to the extent of the number of shares which were
Purchasable hereunder at the date of such termination.
(b) Except as specified in Schedule A attached hereto, in the event the
Optionee shall no longer be a director, officer, employee or consultant of
either the Company or any affiliate of the Company due to the termination of
such relationship being (i) for cause or (ii)voluntary on the
ii
<PAGE> 34
part of the Optionee and without the written consent of the Company, this
Option, to the extent not previously exercised, shall terminate immediately and
shall not thereafter be or become exercisable.
(c) Unless and to the extent otherwise provided in Exhibit A hereto, in
the event of the death of the Optionee, the Optionee's legal heirs or personal
representatives shall continue to have the right to exercise any Options for
shares which were Purchasable at the date of the Optionee's death for twelve
months from the date of death.
9. Date of Grant. This Option was granted by the Board of Directors of
the Company on the date set forth in Schedule A (the "Date of Grant").
10. Compliance with Regulatory Matters. The Optionee acknowledges that
the issuance of capital stock of the Company is subject to limitations imposed
by federal and state law and the Optionee hereby agrees that the Company shall
not be obligated to issue any shares of Stock upon exercise of this Option that
would cause the Company to violate law or any rule, regulation, order or consent
decree of any regulatory authority (including without limitation the Securities
and Exchange Commission) having jurisdiction over the affairs of the Company.
The Optionee agrees that he or she will provide the Company with such
information as is reasonably requested by the Company or its counsel to
determine whether the issuance of Stock complies with the provisions described
by this Section 10.
11. Restriction on Disposition of Shares. The shares purchased pursuant
to the exercise of an Incentive Stock Option shall not be transferred by the
Optionee except pursuant to the Optionee's will, or the laws of descent and
distribution, until such date which is the later of two years after the grant of
such Incentive Stock Option or one year after the transfer of the shares to the
Optionee pursuant to the exercise of such Incentive Stock Option.
12. Miscellaneous.
(a) This Agreement shall be binding upon the parties hereto and their
representatives, successors and assigns.
(b) This Agreement is executed and delivered in, and shall be governed
by the laws of, the State of South Carolina.
(c) Any requests or notices to be given hereunder shall be deemed
given, and any elections or exercises to be made or accomplished shall be deemed
made or accomplished, upon actual delivery thereof to the designated recipient,
or three days after deposit thereof in the United States mail, registered,
return receipt requested and postage prepaid, addressed, if to the Optionee, at
the address set forth below and, if to the Company, Suite 128, 115 Atrium Way,
Columbia, South Carolina, USA 29223.
(d) This Agreement may not be modified except in writing executed by
each of the parties hereto.
iii
<PAGE> 35
13. No Employment Rights. Nothing in the Plan or in this Stock Option
Agreement shall confer on the Optionee any right to continue in the employ of
the Company or any of its Subsidiaries, or shall interfere in any way with the
right of the Company or any of its Subsidiaries to terminate the Optionee's
employment at any time.
IN WITNESS WHEREOF, this Stock Option Agreement has been executed on
behalf of the Company and the Optionee has executed this Stock Option Agreement,
all as of the day and year first above written.
INTEGRATED BUSINESS SYSTEMS AND SERVICES, INC.
By:
Name:
Title:
OPTIONEE
Name:
Address:
iv
<PAGE> 36
SCHEDULE A
TO
STOCK OPTION AGREEMENT
BETWEEN
INTEGRATED BUSINESS SYSTEMS AND SERVICES, INC.
AND
Dated: ________
1. Number of Shares Subject to Option: __________________ Shares.
2. This Option (Check one) [ ] is [ ] is not an Incentive Stock Option.
3. Option Exercise Price: $_______________ per Share.
4. Date of Grant:
5. Option Vesting Schedule:
Check one:
( ) Options are exercisable with respect to
all shares on or after the date hereof
( ) Options are exercisable with respect to
the number of shares indicated below on or after the
date indicated next to the number of shares:
No. of Shares Vesting Date
------------- ------------
6. Termination Period:
7. Effect of Termination of Employment of Optionee (if different from that
set forth in Section 8 of the Stock Option Agreement):
v
<PAGE> 37
SCHEDULE B
NOTICE OF EXERCISE
The undersigned hereby notifies Integrated Business Systems and
Services, Inc. (the "Company") of this election to exercise the undersigned's
stock option to purchase ______ shares of the Company's common stock, no par
value per share (the "Common Stock"), pursuant to the Stock Option Agreement
(the "Agreement") between the undersigned and the Company dated __________.
Accompanying this Notice is (1) a certified or a cashier's check in the amount
of $______ payable to the Company, and/or (2) _________ shares of the Company's
Common Stock presently owned by the undersigned and duly endorsed or accompanied
by stock transfer powers, having an aggregate Fair Market Value (as defined in
the Integrated Business Systems and Services, Inc. Stock Option Plan) as of the
date hereof of $ , such amounts being equal, in the aggregate, to the purchase
price set forth in Section 3 of the Agreement multiplied by the number of shares
being purchased hereby (in each instance subject to appropriate adjustment
pursuant to Section 5.2 of the Agreement).
IN WITNESS WHEREOF, the undersigned has set his hand, this ____ day of
______________ , 19__.
OPTIONEE [OR OPTIONEE'S
ADMINISTRATOR, EXECUTOR
OR PERSONAL REPRESENTATIVE]
Name:
Position (if other than Optionee):
vi
<PAGE> 38
APPENDIX B
REVOCABLE PROXY
INTEGRATED BUSINESS SYSTEMS AND SERVICES, INC.
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, APRIL 28, 2000 AT THE COMPANY'S HEADQUARTERS, 115 ATRIUM
WAY, SUITE 228, COLUMBIA, SOUTH CAROLINA AT 11:00 A.M. LOCAL TIME.
The undersigned hereby appoints Donald R. Futch and Sharon R. Gambrell, or any
of them acting in the absence of the other, as attorneys and proxies of the
undersigned, with full power of substitution, to vote all of the shares of the
common stock of Integrated Business Systems and Services, Inc., a South Carolina
corporation, held or owned by the undersigned or standing in the name of the
undersigned at the 2000 Annual Meeting of Shareholders of the Company and any
adjournment thereof, and the undersigned hereby instructs said attorneys to vote
as follows:
1. Election of Directors:
For With- For All
Three-year terms: hold Except
Russell C. King, Jr. [ ] [ ] [ ]
Stuart E. Massey
R. Michael Campbell, II
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
all Except" and write that nominee's name in the space provided below.
- ----------------------------------------------------------------------------
2. Approval of an amendment to the Company's For Against Abstain
Stock Option Plan.
[ ] [ ] [ ]
3. Ratification of the appointment of Scott, For Against Abstain
Holloway & McElveen, LLP, as independent
public accountants for the Company for the
fiscal year ending December 31, 2000.
[ ] [ ] [ ]
4. In their discretion, upon any other business
which may properly come before
the meeting or any adjournment thereof.
Please be sure to sign and date this Proxy in the box below.
- --------------------------------------------------------------------------------
Date
- --------------------------------------------------------------------------------
Shareholder sign above Co-holder (if any) sign above
THIS PROXY WILL BE VOTED AS INSTRUCTED. IN THE ABSENCE OF SUCH INSTRUCTIONS,
THIS PROXY WILL BE VOTED "FOR" EACH OF THE PROPOSALS LISTED ABOVE, AND THE
PROXIES HEREIN NAMED WILL VOTE ON OTHER MATTERS THAT MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENT THEREOF IN ACCORDANCE WITH THEIR JUDGMENT.
To be represented at the Meeting, this Proxy must be received at the office of
"PACIFIC CORPORATE TRUST COMPANY" by mail or fax no later than forty-eight
(48) hours (excluding Saturdays, Sundays and holidays) prior to the time of the
Meeting, or adjournment thereof.
The mailing address of Pacific Corporate Trust Company is Suite 830, 625 Howe
Street, Vancouver, British Columbia, V6C 3B8 and its FAX number is (604)
689-8144.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
