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:
<TABLE>
<CAPTION>
<S> <C>
[_] Preliminary Proxy Statement [_] Confidential, For Use of the Commission Only
(As Permitted by Rule 14a-6(e)(2))
</TABLE>
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ABLE ENERGY, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
<PAGE>
ABLE ENERGY, INC.
344 Route 46
Rockaway, New Jersey 07866
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 23, 2000
Rockaway, New Jersey
May 30, 2000
The Annual Meeting of Stockholders (the "Annual Meeting") of Able
Energy, Inc., a Delaware corporation (the "Company"), will be held at The
Sagamore Hotel, 110 Sagamore Road, Bolton Landing, New York, on Friday, June 23,
2000 at 1:00 PM (local time) for the following purposes:
1. To elect six directors to the Corporation's Board of Directors, each to
hold office until his successor is elected and qualified or until his earlier
resignation or removal (Proposal No. 1);
2. To approve the Company's 2000 Employee Stock Purchase Plan and to
reserve up to 350,000 shares of Common Stock for issuance thereunder (Proposal
No. 2);
3. To approve the Company's 2000 Employee Stock Bonus Plan and to reserve
up to 350,000 shares of Common Stock for issuance thereunder (Proposal No. 3);
4. To consider and act upon a proposal to ratify the Board of Directors'
selection of Simontacchi & Company LLP as the Company's independent auditors for
the fiscal year ending December 31, 2000 (Proposal No. 4); and
5. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business, including the nominees for directors,
are more fully described in the Proxy Statement which is attached and made a
part of this Notice.
The Board of Directors has fixed the close of business on May 26, 2000
as the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you expect to attend the Annual Meeting in
person, you are urged to mark, date, sign and return the enclosed proxy card as
promptly as possible in the postage-prepaid envelope provided to ensure your
representation and the presence of a quorum at the Annual Meeting. If you send
in your proxy card and then decide to attend the Annual Meeting to vote your
shares in person, you may still do so. Your proxy is revocable in accordance
with the procedures set forth in the Proxy Statement.
By Order of the Board of Directors,
/s/ TIMOTHY HARRINGTON
Timothy Harrington,
Secretary
IMPORTANT
---------
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. IF A QUORUM IS NOT REACHED, THE COMPANY WILL HAVE THE ADDED EXPENSE OF
RE-ISSUING THESE PROXY MATERIALS. IF YOU ATTEND THE MEETING AND SO DESIRE, YOU
MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
THANK YOU FOR ACTING PROMPTLY
<PAGE>
ABLE ENERGY, INC.
344 Route 46
Rockaway, New Jersey 07866
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors (the "Board") of Able Energy, Inc., a Delaware
corporation (the "Company"), of proxies in the enclosed form for use in voting
at the Annual Meeting of Stockholders (the "Annual Meeting") to be held at The
Sagamore Hotel, 110 Sagamore Road, Bolton Landing, New York on Friday, June 23,
2000 at 1:00 PM (local time), and any adjournment or postponement thereof. Only
holders of record of the Company's common stock, $.001 par value per share (the
"Common Stock"), on May 26, 2000 (the "Record Date") will be entitled to vote at
the Meeting. At the close of business on the Record Date, the Company had
outstanding 2,000,000 shares of Common Stock.
Any person giving a proxy in the form accompanying this Proxy Statement
has the power to revoke it prior to its exercise. Any proxy given is revocable
prior to the Meeting by an instrument revoking it or by a duly executed proxy
bearing a later date delivered to the Secretary of the Company. Such proxy is
also revoked if the stockholder is present at the Meeting and elects to vote in
person.
The Company will bear the entire cost of preparing, assembling,
printing and mailing the proxy materials furnished by the Board of Directors to
stockholders. Copies of the proxy materials will be furnished to brokerage
houses, fiduciaries and custodians to be forwarded to the beneficial owners of
the Common Stock. In addition to the solicitation of proxies by use of the mail,
some of the officers, directors and regular employees of the Company may
(without additional compensation) solicit proxies by telephone or personal
interview, the costs of which the Company will bear.
This Proxy Statement and the accompanying form of proxy is being sent
or given to stockholders on or about May 30, 2000.
Stockholders of the Company's Common Stock are entitled to one vote for
each share held. Such shares may not be voted cumulatively.
Each validly returned proxy (including proxies for which no specific
instruction is given) which is not revoked will be voted "FOR" each of the
proposals as described in this Proxy Statement and, at the proxy holders'
discretion, on such other matters, if any, which may come before the Meeting
(including any proposal to adjourn the Meeting).
Determination of whether a matter specified in the Notice of Annual
Meeting of Stockholders has been approved will be determined as follows. Those
persons will be elected directors who receive a plurality of the votes cast at
the Meeting in person or by proxy and entitled to vote on the election.
Accordingly, abstentions or directions to withhold authority will have no effect
on the outcome of the vote. For each other matter specified in the Notice of
Annual Meeting of Stockholders, the affirmative vote of a majority of the shares
of Common Stock present at the Meeting in person or by proxy and entitled to
vote on such matter is required for approval. Abstentions will be considered
shares present in person or by proxy and entitled to vote and, therefore, will
have the effect of a vote against the matter. Broker non-votes will be
considered shares not present for this purpose and will have no effect on the
outcome of the vote. Directions to withhold authority to vote for directors,
abstentions and broker non-votes will be counted for purposes of determining
whether a quorum is present for the Meeting.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Nominees
At the Annual Meeting, the stockholders will elect six directors to
serve until the next Annual Meeting of Stockholders or until their respective
successors are elected and qualified. In the event any nominee is unable or
unwilling to serve as a director at the time of the Annual Meeting, the proxies
may be voted for the balance of those nominees named and for any substitute
nominee designated by the present Board or the proxy holders to fill such
vacancy, or for the balance of the nominees named without nomination of a
substitute, or the size of the Board may be reduced in accordance with the
Bylaws of the Company. The Board has no reason to believe that any of the
persons named below will be unable or unwilling to serve as a nominee or as a
director if elected.
Assuming a quorum is present, the six nominees receiving the highest
number of affirmative votes of shares entitled to be voted for them will be
elected as directors of the Company for the ensuing year. Unless marked
otherwise, proxies received will be voted "FOR" the election of each of the six
nominees named below. In the event that additional persons are nominated for
election as directors, the proxy holders intend to vote all proxies received by
them in such a manner as will ensure the election of as many of the nominees
listed below as possible, and, in such event, the specific nominees to be voted
for will be determined by the proxy holders.
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Name Age Position
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Timothy Harrington 31 Chief Executive Officer, Chairman of the Board and Secretary
Christopher P. Westad 45 President, Chief Financial Offcier
James Purcaro 37 Director
Gregory Sichenzia 37 Director
Patrick O'Neill 39 Director
Edward C. Miller, Jr. 32 Director
</TABLE>
The following information with respect to the principal occupation or
employment of each nominee for director, the principal business of the
corporation or other organization in which such occupation or employment is
carried on, and such nominee's business experience during the past five years,
has been furnished to the Company by the respective director nominees:
TIMOTHY HARRINGTON, serves as the Company's Chief Executive Officer,
Chairman of the Board, and Secretary. In 1989, Mr. Harrington founded Able Oil
Company, Inc., and since that time, has served as Able Oil's President, Chief
Executive Officer and Chairman of the Board. Mr. Harrington has also served as
the Chief Executive Officer and Chairman of the Board of Directors of Able
Energy, Able Melbourne and Able Propane since their respective inception.
CHRISTOPHER P. WESTAD, serves as the President, Chief Financial Officer and
a Director of the Company. Since September 1996, Mr. Westad has served as the
President of Able Energy and Able Propane. From 1991 through 1996, Mr. Westad
was a market manager for Ferrellgas Partners, L.P., a company engaged in the
retail distribution of liquefied petroleum gas. From 1977 through 1991, Mr.
Westad served in a number of management positions with RJR Nabisco. In 1975, Mr.
Westad received a Bachelor of Arts in Business and Public Management from Long
Island University--Southampton.
JAMES PURCARO, has served as a director to the Company since September
1996. Since 1986, Mr. Purcaro has served as the president and chief executive
officer of Kingsland Trade Print Group, Inc., a commercial printing company.
GREGORY SICHENZIA, has served as a director to the Company since August
1999. Mr. Sichenzia is a partner of the law firm of Sichenzia, Ross & Friedman
LLP in New York, New York and has been since May 1998. He had been a partner of
Singer Zamansky LLP in New York, New York, since November 1996. Prior thereto
and
<PAGE>
since August 1994, he had been an associate attorney at Schneck Weltman Hashmall
& Mischel LLP in New York City.
PATRICK O'NEILL, has served as a director to the Company since August 1999.
Mr. O'Neill has served as the President of Fenix Investment and Development,
Inc., a real estate company based in Parsippany, New Jersey for the past five
years. Prior to this, Mr. O'Neill served as Vice President of Business
Development for AvisAmerica, a Pennsylvania based home manufacturer. Mr. O'Neill
holds a B.S. from the United States Military Academy, and has been awarded the
Army Achievement Medal for his work with the Army Corps of Engineers.
EDWARD C. MILLER, JR., is proposed to be elected to his first term as a
Director of the Company. He has been the Director of Marketing for the law firm
Norris, McLaughlin & Marcus, P.A. in Somerville, New Jersey since July 1999.
From May 1991 to July 1999, Mr. Miller served as Practice Development
Coordinator for the Morristown, New Jersey law firm Riker, Danzig, Scherer,
Hyland & Perretti, LLP. Mr. Miller received his Bachelor of Science in Marketing
Management from the Syracuse University School of Management in 1991.
Directors serve until the next annual meeting of stockholders or until
their successors are elected and qualified. Officers serve at the discretion of
the Board of Directors.
Compensation of Directors
The Company has not paid compensation to any director for acting in
such capacity. The Company is currently reviewing its policy on compensation of
outside directors and may pay outside directors in the future.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 1999, the Board of Directors
held one meeting and acted by unanimous written consent on one occasion. No
director attended fewer than 75% of the total number of meetings of the Board of
Directors during the last fiscal year.
The Board of Directors has established a Compensation Committee and an
Audit Committee, each consisting of at least two directors who are not salaried
officers of the Company.
The Compensation Committee consists of Timothy Harrington, Patrick
O'Neill and James Purcaro. The Committee is responsible for overseeing the
compensation of the executive officers and directors, including annual executive
salaries, bonuses and cash incentives and long-term equity incentives, to ensure
that such officers and directors receive adequate and fair compensation. The
Compensation Committee also administers the Company's stock option plans. The
Compensation Committee met once during the last fiscal year.
The Board does not have a nominating committee or a committee
performing the functions of a nominating committee. Although there are no formal
procedures for stockholders to nominate persons to serve as directors, the Board
will consider nominations from stockholders, which should be addressed to the
Company's address set forth above.
The Audit Committee consists of Patrick O'Neill, James Purcaro and
Gregory Sichenzia. The Audit Committee is responsible for (a) recommending the
engagement and termination of the independent public accountants to audit the
financial statements of the Company, (b) overseeing the scope of the external
audit services, (c) reviewing adjustments recommended by the independent public
accountant and address disagreements between the independent public accountants
and management, (d) reviewing the adequacy of internal controls and management's
handling of identified material inadequacies and reportable conditions in the
internal controls over financial reporting and compliance with laws and
regulations, and (e) supervising the internal audit function, which may include
approving the selection, compensation and termination of internal auditors. The
Audit Committee met once during the last fiscal year.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Forms 3, 4 and 5, and amendments thereto,
furnished to the Company during fiscal year 1999, the Company is not aware of
any director, officer or beneficial owner of more than ten percent of the
Company's Common Stock that failed to file reports required by Section 16(a) of
the Securities Exchange Act of 1934 on a timely basis during fiscal year 1999.
<PAGE>
The proxy holders intend to vote the shares represented by proxies for
all of the board's nominees, except to the extent authority to vote for the
nominees is withheld.
RECOMMENDATION OF THE BOARD:
---------------------------
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE.
PROPOSAL NO. 2
APPROVAL OF THE 2000 EMPLOYEE STOCK PURCHASE PLAN
At the Annual Meeting, the Company's stockholders are being asked to
approve the 2000 Employee Stock Purchase Plan (the "2000 Purchase Plan") and to
authorize 350,000 shares of Common Stock for issuance thereunder. The following
is a summary of principal features of the 2000 Purchase Plan. The summary,
however, does not purport to be a complete description of all the provisions of
the 2000 Purchase Plan, a copy of which is attached hereto.
GENERAL
The Company's 2000 Purchase Plan is designed to encourage the purchase
by participants of shares of Common Stock. The 2000 Purchase Plan is intended to
comply with the requirements of Section 423 of the Code, and to assure the
participants of the tax advantages provided thereby (and described below in the
section entitled "Certain Federal Income Tax Consequences"). In order for the
transfer of stock under the 2000 Purchase Plan to qualify for this treatment,
the 2000 Purchase Plan must be approved by stockholders of the Company within 12
months of the plan's adoption. A total of 200,000 shares of Common Stock will be
authorized for issuance under the 2000 Purchase Plan.
The number of shares of Common Stock initially authorized for issuance
under the related 2000 Purchase Plan are subject to adjustment by the Committee
in the event of a recapitalization, stock split, stock dividend or similar
corporate transaction.
ELIGIBILITY
Subject to certain procedural requirements, all employees of the
Company who have at least one year of service and work more than 20 hours per
week will be eligible to participate in the 2000 Purchase Plan, except that
employees who are "highly compensated" within the meaning of Section 414(q) of
the Code and employees who are five percent or more stockholders of the Company
or any subsidiary of the Company will not be eligible to participate.
Pursuant to the 2000 Purchase Plan, each eligible employee will be
permitted to purchase shares of the Common Stock through regular payroll
deductions (and/or cash payments) in an amount equal to 10% of the employee's
base pay (as elected by the employee) for each payroll period. Participating
employees will be able to purchase shares of Common Stock with such accumulated
payroll deductions (and/or cash payments) at the end of a semi-annual cycle at a
purchase price equal to the lesser of: (i) 85 percent of the fair market value
of the Common Stock on the date the semi-annual cycle begins or (ii) 85 percent
of the fair market value of Common Stock on the date the semi-annual cycle ends.
Under the 2000 Purchase Plan, the fair market value of the shares of the Common
Stock which may be purchased by any employee during any calendar year may not
exceed $25,000.
PURPOSE
The purpose of the 2000 Purchase Plan is to align employee and shareholder
long-term interests by facilitating the purchase of Common Stock by employees
and to enable employees to develop and maintain significant ownership of Common
Stock. An additional purpose of the 2000 Purchase Plan is to comply with the
requirements of Section 423 of the Code, and thus to obtain for the participants
the tax advantages provided thereby (described below in the section entitled
"Certain Federal Income Tax Consequences").
<PAGE>
ADMINISTRATION
The 2000 Purchase Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan
PARTICIPATION
Subject to certain procedural requirements, all employees of the
Company who have at least one year of service and work more than 20 hours per
week will be eligible to participate in the 2000 Purchase Plan, except that
employees who are "highly compensated" within the meaning of Section 414(q) of
the Code and employees who are five percent or more stockholders of the Company
or any subsidiary of the Company will not be eligible to participate.
Designations of corporations participating in the 2000 Purchase Plan may be made
from time to time by the Compensation Committee from among the subsidiary
corporations of the Company, including corporations which become subsidiaries
after the adoption and approval of the 2000 Purchase Plan.
PURCHASE OF SHARES
Pursuant to the 2000 Purchase Plan, each eligible employee will be
permitted to purchase shares of the Common Stock through regular payroll
deductions (and/or cash payments) in an aggregate amount equal to up to 10% of
the employee's base pay (as elected by the employee) for each payroll period.
Under the 2000 Purchase Plan, the fair market value of the shares of Common
Stock which may be purchased by any employee during any calendar year may not
exceed $25,000.
STOCK PURCHASE PRICE
Participating employees will be able to purchase shares of Common
Stock with payroll deductions and/or cash payments) at the end of a semi-annual
cycle at a purchase price equal to the lesser of: (i) 85 percent of the fair
market value of Common Stock on the date the semi-annual cycle begins or (ii) 85
percent of the fair market value of Common Stock on the date the semi-annual
cycle ends.
NONTRANSFERABLE RIGHT TO PURCHASE
A right to purchase shares of a Common Stock which is granted to a
participant under the 2000 Purchase Plan is not transferable otherwise than by
will or the laws of descent and distribution, and is exercisable, during the
participant's lifetime, only by the participant.
TERM
No right to purchase shares may be granted under the 2000 Purchase
Plan with respect to any fiscal year after fiscal 2010. Rights to purchase
shares which are granted before or during fiscal 2010, however, may extend
beyond the end of fiscal 2010, and the provisions of the 2000 Purchase Plan will
continue to apply thereto.
AMENDMENTS TO OR DISCONTINUANCE OF THE 2000 PURCHASE PLAN
The Board may from time to time amend or terminate the 2000 Purchase Plan;
provided, however, that (i) no such amendment or termination may adversely
affect the rights of any participant without the consent of such participant and
(ii) to the extent required by Section 423 of the Code or any other law,
regulation or stock exchange rule, no such amendment shall be effective without
the approval of stockholders entitled to vote thereon. Additionally, the Board
may make such amendments as it deems necessary to comply with applicable laws,
rules and regulations.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING IS A BRIEF SUMMARY OF THE EFFECT OF FEDERAL INCOME
TAXATION UPON THE PARTICIPANTS AND THE COMPANY WITH RESPECT TO THE PURCHASE OF
SHARES UNDER THE 2000 PURCHASE PLAN. THIS SUMMARY DOES NOT PURPORT TO BE
COMPLETE AND DOES NOT ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES TO TAXPAYERS
WITH SPECIAL TAX STATUS. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS THE
PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY
IN WHICH THE PARTICIPANT MAY RESIDE, AND DOES NOT DISCUSS ESTATE, GIFT OR OTHER
TAX CONSEQUENCES OTHER THAN INCOME TAX CONSEQUENCES. THE COMPANY ADVISES EACH
PARTICIPANT TO CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES
OF PARTICIPATION IN THE 2000 OPTION PLAN AND FOR REFERENCE TO APPLICABLE
PROVISIONS OF THE CODE.
<PAGE>
The 2000 Purchase Plan is intended to qualify as an "employee stock
purchase plan" as defined in Section 423 of the Code. Assuming such
qualification, a participant will not recognize any taxable income as a result
of participating in the 2000 Purchase Plan, exercising options granted pursuant
to the 2000 Purchase Plan or receiving shares of Common Stock purchased pursuant
to such options. A participant may, however, be required to recognize taxable
income as described below.
If a participant disposes of any share of Common Stock purchased
pursuant to the 2000 Purchase Plan after the later to occur of (i) two years
from the grant date for the related option and (ii) one year after the exercise
date for the related option (such disposition, a "Qualifying Transfer"), or if
he or she dies (whenever occurring) while owning any share purchased under the
2000 Purchase Plan, the participant generally will recognize compensation
income, for the taxable year in which such disposition or death occurs, in an
amount equal to the lesser of (i) the excess of the market value of the disposed
share at the time of such disposition over its purchase price, and (ii) 15% of
the market value of the disposed share on the grant date for the option to which
such disposed share relates. In the case of a Qualifying Transfer, (a) the basis
of the disposed share will be increased by an amount equal to the amount of
compensation income so recognized, and (b) the participant will recognize a
capital gain or loss, as the case may be, equal to the difference between the
amount realized from the disposition of the shares and the basis for such
shares.
If the participant disposes of any share other than by a Qualifying
Transfer, the participant generally will recognize compensation income in an
amount equal to the excess of the market value of the disposed share on the date
of disposition over its purchase price. In such event, the Company will be
entitled to a tax deduction equal to the amount of compensation income
recognized by the participant. Otherwise, the Company will not be entitled to
any tax deduction with respect to the grant or exercise of options under the
2000 Purchase Plan or the subsequent sale by participants of shares purchased
pursuant to the 2000 Purchase Plan. A transfer by the estate of the participant
of shares purchased by the participant under the 2000 Purchase Plan has the same
federal income tax effects on the Company as a Qualifying Transfer.
REQUIRED VOTE
The approval of the 2000 Option Plan and the reservation of [ ],000
shares for issuance requires the affirmative vote of the holders of a majority
of the shares of the Company's Common Stock present at the Annual Meeting in
person or by proxy and entitled to vote and constituting at least a majority of
the required quorum.
The proxy holders intend to vote the shares represented by proxies to
approve, the 2000 Purchase Plan.
RECOMMENDATION OF THE BOARD:
---------------------------
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE 2000 EMPLOYEE STOCK OPTION PLAN.
PROPOSAL NO. 3
APPROVAL OF THE 2000 EMPLOYEE STOCK BONUS PLAN
At the Annual Meeting, the Company's stockholders are being asked to
approve the 2000 Employee Stock Bonus Plan (the "2000 Bonus Plan") and to
authorize 350,000 shares of Common Stock for issuance thereunder. The following
is a summary of principal features of the 2000 Bonus Plan. The summary, however,
does not purport to be a complete description of all the provisions of the 2000
Bonus Plan, a copy of which is attached hereto.
GENERAL
The Company's 2000 Bonus Plan is designed to comply with the requirements
of Section 423 of the Code, and to assure the participants of the tax advantages
provided thereby (and described below in the section entitled "Certain Federal
Income Tax Consequences"). In order for the transfer of stock under the 2000
Bonus Plan to qualify for this treatment, the 2000 Bonus Plan must be approved
by stockholders of the Company within 12 months of the plan's adoption. A total
of 350,000 shares of Common Stock will be authorized for issuance under the 2000
Bonus Plan.
<PAGE>
The number of shares of Common Stock initially authorized for issuance
under the 2000 Bonus Plan are subject to adjustment by in the event of a
recapitalization, stock split, stock dividend or similar corporate transaction.
ELIGIBILITY
Employees, officers, directors, consultants, independent contractors
and advisors of the Company (and of any subsidiaries and affiliates) are
eligible to receive awards under the 2000 Bonus Plan (the "Participants"). No
Participant is eligible to receive more than 100,000 shares of common stock in
any calendar year under the 2000 Bonus Plan
The purpose of the 2000 Bonus Plan is to offer eligible persons an
opportunity to participate in the Company's future performance through grants of
restricted stock awards and stock bonus awards.
SHARES SUBJECT TO THE 2000 BONUS PLAN
The stock subject to issuance under the 2000 Bonus Plan consists of
shares of the Company's authorized but unissued common stock. The Board has
reserved an aggregate of 350,000 shares of Common Stock for issuance under the
2000 Bonus Plan.
ADMINISTRATION
The Compensation Committee of the Board of Directors (the "Committee")
will administer the 2000 Bonus Plan. Subject to the terms of the Incentive Plan,
the Committee determines the persons who are to receive awards, the number of
shares subject to each award and the terms and conditions of awards. The
Committee also has the authority to construe and interpret any of the provisions
of the Incentive Plan or any awards granted thereunder.
STOCK BONUS AWARDS
The Committee may grant Participants stock bonus awards either in
addition to, or in tandem with, other awards under the 2000 Bonus Plan, under
such terms, conditions and restrictions as the Committee may determine.
In the event of a merger, consolidation, dissolution or liquidation of
the Company, the sale of substantially all of the assets of the Company or any
other similar corporate transaction, the successor corporation may assume,
replace or substitute equivalent awards in exchange for those granted under the
Incentive Plan or provide substantially similar consideration, shares or other
property as was provided to stockholders of the Company (after taking into
account provisions of the awards). In the event that the successor corporation
does not assume or substitute awards, such awards will expire upon the closing
of such transaction at the time and upon the conditions as the Board determines.
AMENDMENT TO THE 2000 BONUS PLAN
The Board may at any time terminate or amend the 2000 Bonus Plan,
including amending any form of award agreement or instrument to be executed
pursuant to the Incentive Plan. However, the Board may not amend the 2000 Bonus
Plan in any manner that requires stockholder approval pursuant to the Code or
the regulations promulgated thereunder.
TERM OF THE 2000 BONUS PLAN
Unless terminated earlier as provided in the 2000 Bonus Plan, the Plan
will expire in May 2010, ten years after the date the Board adopted the 2000
Bonus Plan.
FEDERAL INCOME TAX INFORMATION
THE FOLLOWING IS A BRIEF SUMMARY OF THE EFFECT OF FEDERAL INCOME
TAXATION UPON THE PARTICIPANTS AND THE COMPANY WITH RESPECT TO THE GRANT OF
SHARES UNDER THE 2000 BONUS PLAN. THIS SUMMARY DOES NOT PURPORT TO BE COMPLETE
AND DOES NOT ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES TO TAXPAYERS WITH
SPECIAL TAX STATUS. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS THE PROVISIONS OF
THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE
PARTICIPANT MAY RESIDE, AND DOES NOT DISCUSS ESTATE, GIFT OR OTHER TAX
CONSEQUENCES OTHER THAN INCOME TAX CONSEQUENCES. THE COMPANY ADVISES EACH
PARTICIPANT TO CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES
OF PARTICIPATION IN THE 2000 BONUS PLAN AND FOR REFERENCE TO APPLICABLE
PROVISIONS OF THE CODE.
<PAGE>
Stock bonus awards will generally be subject to tax at the time of
receipt, unless there are restrictions that enable the Participant to defer tax.
At the time the tax is incurred, the tax treatment will be similar to that
discussed above for non-qualified stock options. The maximum tax rate applicable
to ordinary income is 39.6%. Long-term capital gain is taxed at a maximum rate
of 20%. To receive long-term capital gain treatment, the stock must be held for
more than one year. Capital gains may be offset by capital losses and up to
$3,000 of capital losses may be offset annually against ordinary income.
Tax Treatment of the Company.
The Company generally will be entitled to a deduction in connection
with the receipt of stock bonus by a Participant to the extent that the
Participant recognizes ordinary income, provided that the Company timely reports
such income to the Internal Revenue Service.
ERISA. The Incentive Plan is not subject to any of the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA") and is not
qualified under Section 401(a) of the Code.
REQUIRED VOTE
The approval of the 2000 Bonus Plan and the reservation of 350,000
shares for issuance requires the affirmative vote of the holders of a majority
of the shares of the Company's Common Stock present at the Annual Meeting in
person or by proxy and entitled to vote and constituting at least a majority of
the required quorum.
The proxy holders intend to vote the shares represented by proxies to
approve, the 2000 Purchase Plan.
RECOMMENDATION OF THE BOARD:
---------------------------
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE 2000 EMPLOYEE STOCK BONUS PLAN.
PROPOSAL NO. 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Simontacci & Company LLP has served as the Company's independent
auditors since 1994 and has been appointed by the Board to continue as the
Company's independent auditors for the fiscal year ending December 31, 2000. In
the event that ratification of this selection of auditors is not approved by a
majority of the shares of Common Stock voting at the Annual Meeting in person or
by proxy, the Board will reconsider its selection of auditors. Simontacci &
Company LLP has no interest, financial or otherwise, in the Company.
A representative of Simontacci & Company is not expected to be present
at the Annual Meeting.
The proxy holders intend to vote the shares represented by proxies to
ratify the Board of Directors' selection of Simontacci & Company LLP as the
Corporation's independent auditors for the fiscal year ending December 31, 2000.
RECOMMENDATION OF THE BOARD:
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF SIMONTACCI &
COMPANY LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2000.
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding ownership
of the Company's Common Stock as of December 31, 1999, with respect to (i) each
person known to the Company to own 5% or more of the outstanding shares of
Common Stock, (ii) each director of the Company, and (iii) all directors and
officers of the Company as a group:
<TABLE>
<CAPTION>
Number of Shares Approximate
Beneficially Percentage of
Name* Owned Common Stock**
<S> <C> <C>
Timothy Harrington 1,000,000 50%
Christopher P. Westad -0- -0-
James Purcaro -0- -0-
Gregory Sichenzia -0- -0-
Patrick O'Neill -0- -0-
Edward C. Miller, Jr. -0- -0-
All Officers and Directors
as a Group (6 persons) 1,000,000 50.0%
</TABLE>
* Except as noted above, the address for the above identified officers and
directors of the Company is c/o Able Energy, Inc., 344 Route 46, Rockaway, New
Jersey 7866.
** Percentages are based upon the assumption that the shareholder has exercised
all of the options he or she owns and that no other shareholder has exercised
any options he or she owns.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain summary information with respect
to the compensation paid to the Company's Chief Executive Officer and President
for services rendered in all capacities to the Company for the fiscal period
ended December 31, 1999. Other than as listed below, the Company had no
executive officers whose total annual salary and bonus exceeded $100,000 for
that fiscal year:
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
AWARDS PAYOUTS
Name and Year Salary Bonus ($) Other Annual Restricted Securities LTIP All Other
Principal Position ($) Compensation Stock Underlying Payouts Compensation
($) Award Options / ($) ($)
SARs (#)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Timothy
Harrington, Chief
Executive Officer 1999 225,000 30,000 17,000 (1) - - - -
1998 103,000 - - - - - -
1997 100,000 80,000 - - - - -
Christopher P.
Westad, President 1999 100,000 25,000 5,700 (2) - - - -
1998 - - - - - - -
1997 - - - - - - -
</TABLE>
---------------
<PAGE>
(1) Represents $7,400 in car allowance, and $9,600 in travel expenses
pursuant to his employment agreement with the Company.
(2) Represents $5,700 in car allowance pursuant to his employment agreement
with the Company.
No option grants were made to named executive officers during fiscal
year ended December 31, 1999, and no named executive held unexercised options as
at December 31, 1999.
Employment Arrangements
Timothy Harrington and Christopher P. Westad have three year employment
agreements with the Company. Timothy Harrington is retained as Chief Executive
Officer of the Company at an annual salary of $225,000. Christopher Westad is
retained as President of the Company at an annual salary of $100,000. Each of
the Messrs. Harrington and Westad are entitled to bonuses pursuant to their
employment agreements if the Company meets certain financial targets based on
sales, profitability and good management goals as predetermined by the Board of
Directors or compensation committee and other subjective criteria as determined
by the Board of Directors or compensation committee. Such bonuses, plus all
other bonuses payable to the executive management of the Company, shall not
exceed in the aggregate, a "bonus pool" which shall equal up to 5% of the
Company's earnings before taxes, depreciation and amortization ("EBITDA") for
1999, provided the Company achieves at least $800,000 in EBITDA, 10% of EBITDA
for 2,000 and 2001, provided the Company achieves at least $3,000,000 and
$5,000,000, respectively, of EBITDA in each of such years. The employment
agreements also provide for reimbursement of reasonable business expenses.
Timothy Harrington also receive additional compensation including Company
automobile, insurance and retirement savings matched contributions by the
Company and such other perquisites as are customary. The employment agreements
for each of Messrs. Harrington and Westad contain a covenant not to compete
whereby Messrs. Harrington and Westad agree, for the term of the employment
agreements and until one year following the termination of the agreements, not
to (i) persuade any customer of the Company to cease or reduce the amount of
business it does with the Company; (ii) solicit the Company's customers for
their own benefit; or (iii) persuade any of the Company's employees to leave the
employ of the Company.
In the event that there is a change in control of the Company, through
an acquisition where any person acquires more than 50% of the shares of the
Company, a consolidation or merger with another corporation resulting in at
least 50% of the voting shares of the surviving corporation being controlled by
a new acquirer or the sale directly or otherwise of all of the assets of the
Company to a third party in a non-distress situation, then the Company shall pay
to each of Timothy Harrington and Christopher P. Westad a lump sum payment equal
to one year's salary.
Employee Bonus Pool
The Company has adopted an Employee Bonus Pool, pursuant to which
Management may, at its own discretion, award employees for exemplary
performance. The Company has allocated $25,000, $40,000 and $50,000 for the
years 1999, 2000 and 2001, respectively, for such purposes. Management may not,
however, award employees bonuses from the Employee Bonus Pool (i) if such
bonuses would result in negative earning before taxes for the year in which such
bonuses are to be granted, or (ii) if the Company does not have net profits in
such year.
TRANSACTIONS WITH MANAGEMENT
None.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Proposals of stockholders intended to be presented at next year's
Annual Meeting of Stockholders must be received by Timothy Harrington,
Secretary, Able Energy, Inc., 344 Route 46, Rockaway, New Jersey 07866, no later
than January 31, 2001.
OTHER PROPOSED ACTION
The Board of Directors is not aware of any other business which will
come before the Meeting, but if any such matters are properly presented, the
proxies solicited hereby will be voted in accordance with the best judgment of
the persons holding the proxies. All shares represented by duly executed proxies
will be voted at the Meeting.
<PAGE>
AVAILABILITY OF CERTAIN DOCUMENTS REFERRED TO HEREIN
THIS PROXY STATEMENT REFERS TO CERTAIN DOCUMENTS OF THE COMPANY THAT
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS ARE AVAILABLE TO
ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROXY STATEMENT IS
DELIVERED, UPON ORAL OR WRITTEN REQUEST, WITHOUT CHARGE, DIRECTED TO TIMOTHY
HARRINGTON, ABLE ENERGY, INC., 344 ROUTE 46, ROCKAWAY, NEW JERSEY 07866,
TELEPHONE NUMBER (973) 625-1012. IN ORDER TO ENSURE TIMELY DELIVERY OF THE
DOCUMENTS, SUCH REQUESTS SHOULD BE MADE BY JUNE 10, 2000.
OTHER MATTERS
The Board of Directors knows of no other business that will be
presented to the Annual Meeting. If any other business is properly brought
before the Annual Meeting, proxies in the enclosed form will be voted in respect
thereof as the proxy holders deem advisable.
It is important that the proxies be returned promptly and that your
shares be represented. Stockholders are urged to mark, date, execute and
promptly return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors,
/s/ TIMOTHY HARRINGTON
Timothy Harrington
Secretary
Rockaway, New Jersey
May 30, 2000
<PAGE>
PROXY PROXY
ABLE ENERGY, INC.
PROXY FOR ANNUAL MEETING TO BE HELD ON JUNE 23, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Timothy Harrington and Christopher P.
Westad, or either of them, as proxies, each with the power to appoint his
substitute, to represent and to vote all the shares of common stock of Able
Energy, Inc. (the "Company"), which the undersigned would be entitled to vote,
at the Company's Annual Meeting of Stockholders to be held on June 23, 2000 and
at any adjournments thereof, subject to the directions indicated on the reverse
side hereof.
In their discretion, the Proxies are authorized to vote upon any other
matter that may properly come before the meeting or any adjournments thereof.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE,
BUT IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
ALL NOMINEES AND FOR THE PROPOSALS LISTED ON THE REVERSE SIDE.
IMPORTANT--This Proxy must be signed and dated on the reverse side.
<PAGE>
THIS IS YOUR PROXY
YOUR VOTE IS IMPORTANT!
Dear Stockholder:
We cordially invite you to attend the Annual Meeting of Stockholders of
Able Energy, Inc. to be held at The Sagamore Hotel, 110 Sagamore Road, Bolton
Landing, New York on Friday, June 23, 2000 at 1:00 PM (local time).
Please read the proxy statement which describes the proposals and
presents other important information, and complete, sign and return your proxy
promptly in the enclosed envelope.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1-4
<TABLE>
<CAPTION>
1. ELECTION OF DIRECTORS -- For Withhold
Nominees:
<S> <C> <C>
Timothy Harrington [_] [_]
Christopher P. Westad [_] [_]
James Purcaro [_] [_]
Gregory Sichenzia [_] [_]
Patrick O'Neill [_] [_]
Edward C. Miller, Jr. [_] [_]
</TABLE>
(Except nominee(s) written above)
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C> <C>
2. Proposal to approve the Company's 2000 [_] [_] [_]
Employee Stock Purchase Plan.
For Against Abstain
3. Proposal to approve the Company's 2000 [_] [_] [_]
Employee Stock Bonus Plan.
For Against Abstain
4. Proposal to ratify Simontacci & Company [_] [_] [_]
LLP as independent auditors.
</TABLE>
If you plan to attend the Annual Meeting please mark this box [_]
Dated:________________, 2000
Signature ______________________________________________________________________
Name (printed) _________________________________________________________________
Title __________________________________________________________________________
Important: Please sign exactly as name appears on this proxy. When signing
as attorney, executor, trustee, guardian, corporate officer, etc., please
indicate full title.
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
ABLE ENERGY, INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common Stock of
the Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Internal Revenue Code of 1986, as amended. The provisions of
the Plan, accordingly, shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.
2. Definitions.
a. "Board" shall mean the Board of Directors of the Company.
b. "Code" shall mean the Internal Revenue Code of 1986, as amended.
c. "Common Stock" shall mean the Common Stock of the Company.
d. "Company" shall mean Able Energy, Inc., a Delaware corporation and
any Designated Subsidiary of the Company.
e. "Compensation" shall mean all base straight time gross earnings and
commissions, exclusive of payments for overtime, shift premium, incentive
compensation, incentive payments, bonuses and other compensation.
f. "Designated Subsidiary" shall mean any Subsidiary which has been
designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
g. "Employee" shall mean any individual who is an Employee of the
Company for tax purposes whose customary employment with the Company is at
least twenty (20) hours per week and more than five (5) months in any
calendar year. For purposes of the Plan, the employment relationship shall
be treated as continuing intact while the individual is on sick leave or
other leave of absence approved by the Company. Where the period of leave
exceeds 90 days and the individual's right to reemployment is not
guaranteed either by statute or by contract, the employment relationship
shall be deemed to have terminated on the 91st day of such leave.
h. "Enrollment Date" shall mean the first day of each Offering Period.
i. "Exercise Date" shall mean the last day of each Offering Period.
j. "Fair Market Value" shall mean, as of any date, the value of Common
Stock determined as follows:
i. If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq
Stock Market, its Fair Market Value shall be the closing sales price
for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or system for the last market trading day on
the date of such determination, as reported in The Wall Street Journal
or such other source as the Board deems reliable, or;
<PAGE>
ii. If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market
Value shall be the mean of the closing bid and asked prices for the
Common Stock on the date of such determination, as reported in The
Wall Street Journal or such other source as the Board deems reliable,
or;
iii. In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith
by the Board.
k. "Offering Period" shall mean a period of approximately six (6)
months during which an option granted pursuant to the Plan may be
exercised, commencing on the first Trading Day on or after [__________] and
terminating on the last Trading Day in the period ending the following
[__________], or commencing on the first Trading Day on or after
[_________] and terminating on the last Trading Day in the period ending
the following [__________]; provided, however, that the first Offering
Period under the Plan shall commence with the first Trading Day on or after
the date on which the Securities and Exchange Commission declares the
Company's Registration Statement effective and ending on the last Trading
Day on or before [ _____________ ]. The duration of Offering Periods may be
changed pursuant to Section 4 of this Plan.
l. "Plan" shall mean this Employee Stock Purchase Plan.
m. "Purchase Price" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower; provided, however, that the Purchase
Price may be adjusted by the Board pursuant to Section 20.
n. "Reserves" shall mean the number of shares of Common Stock covered
by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance
under the Plan but not yet placed under option.
o. "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.
p. "Trading Day" shall mean a day on which national stock exchanges
and the Nasdaq System are open for trading.
3. Eligibility.
a. Any Employee employed by the Company for at least one year who
shall be employed by the Company on a given Enrollment Date shall be
eligible to participate in the Plan.
b. Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the
Code) would own capital stock of the Company and/or hold outstanding
options to purchase such stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of the capital stock of
the Company or of any Subsidiary, or (ii) to the extent that his or her
rights to purchase stock under all employee stock purchase plans of the
Company and its subsidiaries accrues at a rate which exceeds Twenty-Five
Thousand Dollars ($25,000) worth of stock (determined at the fair market
value of the shares at the time such option is granted) for each calendar
year in which such option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by consecutive Offering
Periods with a new Offering Period commencing on the first Trading Day on or
after [__________] and [__________] each year, or on such other date as the
Board shall determine, and continuing thereafter until terminated in accordance
with Section 20 hereof; provided, however, that the first Offering Period under
<PAGE>
the Plan shall commence with the first Trading Day on or after the date on which
the Securities and Exchange Commission declares the Company's Registration
Statement effective and ending on the last Trading Day on or before [
_____________ ]. The Board shall have the power to change the duration of
Offering Periods (including the commencement dates thereof) with respect to
future offerings without stockholder approval if such change is announced at
least five (5) days prior to the scheduled beginning of the first Offering
Period to be affected thereafter.
5. Participation.
a. An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the
form of Exhibit A to this Plan and filing it with the Company's payroll
office prior to the applicable Enrollment Date.
b. Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless
sooner terminated by the participant as provided in Section 10 hereof.
6. Payroll Deductions.
a. At the time a participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding ten percent (10%) of
the Compensation which he or she receives on each pay day during the
Offering Period.
b. All payroll deductions made for a participant shall be credited to
his or her account under the Plan and shall be withheld in whole
percentages only. A participant may not make any additional payments into
such account.
c. A participant may discontinue his or her participation in the Plan
as provided in Section 10 hereof, or may increase or decrease the rate of
his or her payroll deductions during the Offering Period by completing or
filing with the Company a new subscription agreement authorizing a change
in payroll deduction rate. The Board may, in its discretion, limit the
number of participation rate changes during any Offering Period. The change
in rate shall be effective with the first full payroll period following
five (5) business days after the Company's receipt of the new subscription
agreement unless the Company elects to process a given change in
participation more quickly. A participant's subscription agreement shall
remain in effect for successive Offering Periods unless terminated as
provided in Section 10 hereof.
d. Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
payroll deductions may be decreased to zero percent (0%) at any time during
an Offering Period. Payroll deductions shall recommence at the rate
provided in such participant's subscription agreement at the beginning of
the first Offering Period which is scheduled to end in the following
calendar year, unless terminated by the participant as provided in Section
10 hereof.
e. At the time the option is exercised, in whole or in part, or at the
time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise
upon the exercise of the option or the disposition of the Common Stock. At
any time, the Company may, but shall not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to
make available to the Company any tax deductions or benefits attributable
to sale or early disposition of Common Stock by the Employee.
<PAGE>
7. Grant of Option. On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on the Exercise Date of such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Offering Period more than 2,500
shares (subject to any adjustment pursuant to Section 19), and provided further
that such purchase shall be subject to the limitations set forth in Sections
3(b) and 12 hereof. Exercise of the option shall occur as provided in Section 8
hereof, unless the participant has withdrawn pursuant to Section 10 hereof. The
Option shall expire on the last day of the Offering Period.
8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in Section 10 hereof, his or her option for the purchase of shares
shall be exercised automatically on the Exercise Date, and the maximum number of
full shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Offering Period, subject to earlier withdrawal by the participant as provided in
Section 10 hereof. Any other monies left over in a participant's account after
the Exercise Date shall be returned to the participant. During a participant's
lifetime, a participant's option to purchase shares hereunder is exercisable
only by him or her.
9. Delivery. As promptly as practicable after each Exercise Date on which a
purchase of shares occurs, the Company shall arrange the delivery to each
participant, as appropriate, the shares purchased upon exercise of his or her
option.
10. Withdrawal.
a. A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his
or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the participant's
payroll deductions credited to his or her account shall be paid to such
participant promptly after receipt of notice of withdrawal and such
participant's option for the Offering Period shall be automatically
terminated, and no further payroll deductions for the purchase of shares
shall be made for such Offering Period. If a participant withdraws from an
Offering Period, payroll deductions shall not resume at the beginning of
the succeeding Offering Period unless the participant delivers to the
Company a new subscription agreement.
b. A participant's withdrawal from an Offering Period shall not have
any effect upon his or her eligibility to participate in any similar plan
which may hereafter be adopted by the Company or in succeeding Offering
Periods which commence after the termination of the Offering Period from
which the participant withdraws.
11. Termination of Employment. Upon a participant's ceasing to be an
Employee for any reason, he or she shall be deemed to have elected to withdraw
from the Plan and the payroll deductions credited to such participant's account
during the Offering Period but not yet used to exercise the option shall be
returned to such participant or, in the case of his or her death, to the person
or persons entitled thereto under Section 15 hereof, and such participant's
option shall be automatically terminated. The preceding sentence
notwithstanding, a participant who receives payment in lieu of notice of
termination of employment shall be treated as continuing to be an Employee for
the participant's customary number of hours per week of employment during the
period in which the participant is subject to such payment in lieu of notice.
<PAGE>
12. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.
13. Stock.
a. Subject to adjustment upon changes in capitalization of the Company
as provided in Section 19 hereof, the maximum number of shares of the
Company's Common Stock which shall be made available for sale under the
Plan shall be [ ] hundred thousand ( ,000) shares. If, on a given Exercise
Date, the number of shares with respect to which options are to be
exercised exceeds the number of shares then available under the Plan, the
Company shall make a pro rata allocation of the shares remaining available
for purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.
b. The participant shall have no interest or voting right in shares
covered by his option until such option has been exercised.
c. Shares to be delivered to a participant under the Plan shall be
registered in the name of the participant or in the name of the participant
and his or her spouse.
14. Administration. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.
15. Designation of Beneficiary.
a. A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to
such participant of such shares and cash. In addition, a participant may
file a written designation of a beneficiary who is to receive any cash from
the participant's account under the Plan in the event of such participant's
death prior to exercise of the option. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be required
for such designation to be effective.
b. Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant
and in the absence of a beneficiary validly designated under the Plan who
is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the
estate of the participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any one
or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as
the Company may designate.
16. Transferability. Neither payroll deductions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or as provided in Section 15 hereof) by the participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds from
an Offering Period in accordance with Section 10 hereof.
<PAGE>
17. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
18. Reports. Individual accounts shall be maintained for each participant
in the Plan. Statements of account shall be given to participating Employees at
least annually, which statements shall set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.
19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
Merger or Asset Sale.
a. Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the Reserves, the maximum number of shares
each participant may purchase per Offering Period (pursuant to Section 7),
as well as the price per share and the number of shares of Common Stock
covered by each option under the Plan which has not yet been exercised
shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without receipt of
consideration". Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to
an option.
b. Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then in
progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date"), and shall terminate immediately prior to the consummation
of such proposed dissolution or liquidation, unless provided otherwise by
the Board. The New Exercise Date shall be before the date of the Company's
proposed dissolution or liquidation. The Board shall notify each
participant in writing, at least ten (10) business days prior to the New
Exercise Date, that the Exercise Date for the participant's option has been
changed to the New Exercise Date and that the participant's option shall be
exercised automatically on the New Exercise Date, unless prior to such date
the participant has withdrawn from the Offering Period as provided in
Section 10 hereof.
c. Merger or Asset Sale. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, each outstanding option shall be
assumed or an equivalent option substituted by the successor corporation or
a Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the option, the
Offering Period then in progress shall be shortened by setting a new
Exercise Date (the "New Exercise Date"). The New Exercise Date shall be
before the date of the Company's proposed sale or merger. The Board shall
notify each participant in writing, at least ten (10) business days prior
to the New Exercise Date, that the Exercise Date for the participant's
option has been changed to the New Exercise Date and that the participant's
option shall be exercised automatically on the New Exercise Date, unless
prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.
<PAGE>
20. Amendment or Termination.
a. The Board of Directors of the Company may at any time and for any
reason terminate or amend the Plan. Except as provided in Section 19
hereof, no such termination can affect options previously granted, provided
that an Offering Period may be terminated by the Board of Directors on any
Exercise Date if the Board determines that the termination of the Offering
Period or the Plan is in the best interests of the Company and its
stockholders. Except as provided in Section 19 and Section 20 hereof, no
amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant. To the extent necessary to
comply with Section 423 of the Code (or any other applicable law,
regulation or stock exchange rule), the Company shall obtain shareholder
approval in such a manner and to such a degree as required.
b. Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods,
limit the frequency and/or number of changes in the amount withheld during
an Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding
in excess of the amount designated by a participant in order to adjust for
delays or mistakes in the Company's processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied
toward the purchase of Common Stock for each participant properly
correspond with amounts withheld from the participant's Compensation, and
establish such other limitations or procedures as the Board (or its
committee) determines in its sole discretion advisable which are consistent
with the Plan.
c. In the event the Board determines that the ongoing operation of the
Plan may result in unfavorable financial accounting consequences, the Board
may, in its discretion and, to the extent necessary or desirable, modify or
amend the Plan to reduce or eliminate such accounting consequence
including, but not limited to:
i. altering the Purchase Price for any Offering Period including
an Offering Period underway at the time of the change in Purchase
Price;
ii. shortening any Offering Period so that Offering Period ends
on a new Exercise Date, including an Offering Period underway at the
time of the Board action; and
iii. allocating shares.
Such modifications or amendments shall not require stockholder
approval or the consent of any Plan participants.
21. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
<PAGE>
22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
23. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the stockholders of
the Company. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 20 hereof.
<PAGE>
EXHIBIT A
ABLE ENERGY, INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application Enrollment Date: __________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1._____________________________________ hereby elects to participate in the
Able Energy, Inc. 2000 Employee Stock Purchase Plan (the "Employee Stock
Purchase Plan") and subscribes to purchase shares of the Company's Common Stock
in accordance with this Subscription Agreement and the Employee Stock Purchase
Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount
of ____% of my Compensation on each payday (from 1 to _____%) during the
Offering Period in accordance with the Employee Stock Purchase Plan. (Please
note that no fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price determined
in accordance with the Employee Stock Purchase Plan. I understand that if I do
not withdraw from an Offering Period, any accumulated payroll deductions will be
used to automatically exercise my option.
4. I have received a copy of the complete Employee Stock Purchase Plan. I
understand that my participation in the Employee Stock Purchase Plan is in all
respects subject to the terms of the Plan. I understand that my ability to
exercise the option under this Subscription Agreement is subject to stockholder
approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should be
issued in the name(s) of (Employee or Employee and Spouse only):
6. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Enrollment Date (the first day of the Offering
Period during which I purchased such shares), I will be treated for federal
income tax purposes as having received ordinary income at the time of such
disposition in an amount equal to the excess of the fair market value of the
shares at the time such shares were purchased by me over the price which I paid
for the shares. I hereby agree to notify the Company in writing within 30 days
after the date of any disposition of shares and I will make adequate provision
for Federal, state or other tax withholding obligations, if any, which arise
upon the disposition of the Common Stock. The Company may, but will not be
obligated to, withhold from my compensation the amount necessary to meet any
applicable withholding obligation including any withholding necessary to make
available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by me. If I dispose of such shares at any time
after the expiration of the 2-year holding period, I understand that I will be
treated for federal income tax purposes as having received income only at the
time of such disposition, and that such income will be taxed as ordinary income
only to the extent of an amount equal to the lesser of (1) the excess of the
fair market value of the shares at the time of such disposition over the
purchase price which I paid for the shares, or (2) 15% of the fair market value
of the shares on the first day of the Offering Period. The remainder of the
gain, if any, recognized on such disposition will be taxed as capital gain.
<PAGE>
7. I hereby agree to be bound by the terms of the 2000 Employee Stock
Purchase Plan. The effectiveness of this Subscription Agreement is dependent
upon my eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the Employee
Stock Purchase Plan:
NAME: (Please print) _______________________________________________________
(First) (Middle) (Last)
---------------------------------------------------------------------------
Relationship
--------------------------------------------------
(Address)
Employee's Social
Security Number: _________________________________________________
Employee's Address: _________________________________________________
--------------------------------------------------------------
--------------------------------------------------------------
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated: ___________________ _________________________________________________
Signature of Employee
-------------------------------------------------
Spouse's Signature (If beneficiary other than spouse)
------------------------------------------------
<PAGE>
EXHIBIT B
ABLE ENERGY, INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Able Energy, Inc. 2000
Employee Stock Purchase Plan which began on ___________ 20____ (the "Enrollment
Date") hereby notifies the Company that he or she hereby withdraws from the
Offering Period. He or she hereby directs the Company to pay to the undersigned
as promptly as practicable all the payroll deductions credited to his or her
account with respect to such Offering Period. The undersigned understands and
agrees that his or her option for such Offering Period will be automatically
terminated. The undersigned understands further that no further payroll
deductions will be made for the purchase of shares in the current Offering
Period and the undersigned shall be eligible to participate in succeeding
Offering Periods only by delivering to the Company a new Subscription Agreement.
Name and Address of Participant:
------------------------------------
------------------------------------
------------------------------------
Signature:
------------------------------------
Date: _______________________________
<PAGE>
ABLE ENERGY, INC.
2000 STOCK BONUS PLAN
ARTICLE 1.
PURPOSE AND ADOPTION OF THE PLAN
1.1. Purpose. The purpose of the Able Energy, Inc. 2000 Stock Bonus Plan
(hereinafter referred to as the "Plan") is to assist in attracting and retaining
highly competent key employees, non-employee directors and consultants and to
act as an incentive in motivating key employees, non-employee directors, legal
counsel and consultants of Able Energy, Inc. and its Subsidiaries (as defined
below) to achieve long-term corporate objectives.
1.2. Adoption and Term. The Plan has been approved by the Board of
Directors (hereinafter referred to as the "Board") of Able Energy, Inc.
(hereinafter referred to as the "Company"), to be effective as of May 19, 2000
(the "Effective Date"). The Plan is intended to be a broad based plan which all
employees of the Company are eligible for, therefore the Plan does not require
shareholder approval pursuant to applicable rules and regulations of the Nasdaq
Stock Market. The Plan shall remain in effect until terminated by action of the
Board.
ARTICLE II.
DEFINITIONS
For the purposes of this Plan, capitalized terms shall have the following
meanings:
2.1. Award means any grant to a Participant of one or more of a combination
of Restricted Shares described in Article VII and Performance Awards described
in Article VIII.
2.2. Award Agreement means a written agreement between the Company and a
Participant or a written notice from the Company to a Participant specifically
setting forth the terms and conditions of an Award granted under the Plan.
2.3. Award Period means, with respect to an Award, the period of time set
forth in the Award Agreement during which specified target performance goals
must be achieved or other conditions set forth in the Award Agreement must be
satisfied.
2.4. Beneficiary means an individual, trust or estate who or which, by a
written designation of the Participant filed with the Company or by operation of
law, succeeds to the rights and obligations of the Participant under the Plan
and an Award Agreement upon the Participant's death.
<PAGE>
2.5. Board means the Board of Directors of the Company.
2.6. Change in Control means, and shall be deemed to have occurred upon the
occurrence of, any one of the following events:
(a) The acquisition in one or more transactions by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) (a "Person") of beneficial ownership (within the meaning of
Rule l3d-3 promulgated under the Exchange Act) of shares or other securities (as
defined in Section 3(a)(10) of the Exchange Act) representing 30% or more of
either (i) the Outstanding Common Stock or (ii) the Company Voting Securities;
provided, however, that a Change in Control as defined in this clause (a) shall
not be deemed to occur in connection with any acquisition by the Company, an
employee benefit plan of the Company or any Person who immediately prior to the
Effective Date is a holder of Outstanding Common Stock or Company Voting
Securities (a "Current Stockholder") so long as such acquisition does not result
in any Person other than the Company, such employee benefit plan or such Current
Stockholder beneficially owning shares or securities representing 30% or more of
either the Outstanding Common Stock or Company Voting Securities; or
(b) Any election has occurred of persons as directors of the
Company that causes two-thirds or more of the Board to consist of persons other
than (i) persons who, were members of the Board on the Effective Date and (ii)
persons who were nominated by the Board for election as members of the Board at
a time when at least two-thirds of the Board consisted of persons who were
members of the Board on the Effective Date; provided, however, that any person
nominated for election by the Board when at least two-thirds of the members of
the Board are persons described in subclause (i) or (ii) and persons who were
themselves previously nominated in accordance with this clause (b) shall, for
this purpose, be deemed to have been nominated by a Board composed of persons
described in subclause (ii); or
(c) Approval by the stockholders of the Company of a
reorganization, merger, consolidation or similar transaction (a "Reorganization
Transaction"), in each case, unless, immediately following such Reorganization
Transaction, more than 50% of, respectively, the outstanding shares of common
stock (or similar equity security) of the corporation or other entity resulting
from or surviving such Reorganization Transaction and the combined voting power
of the securities of such corporation or other entity entitled to vote generally
in the election of directors, is then beneficially owned, directly or
indirectly, by the individuals and entities who were the respective beneficial
owners of the Outstanding Common Stock and the Company Voting Securities
immediately prior to such Reorganization Transaction in substantially the same
proportions as their ownership of the Outstanding Common Stock and Company
Voting Securities immediately prior to such Reorganization Transaction; or
(d) Approval by the stockholders of the Company of (i) a
complete liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company to a
corporation or other entity, unless, with respect to such corporation or other
entity, immediately following such sale or other disposition more than 50% of,
respectively, the outstanding shares of common stock (or similar equity
security) of such corporation or other entity and the combined voting power of
<PAGE>
the securities of such corporation or other entity entitled to vote generally in
the election of directors, is then beneficially owned, directly or indirectly,
by the individuals and entities who were the respective beneficial owners of the
Outstanding Common Stock and the Company Voting Securities immediately prior to
such sale or disposition in substantially the same proportions as their
ownership of the Outstanding Common Stock and Company Voting Securities
immediately prior to such sale or disposition.
2.7 Code means the Internal Revenue Code of 1986, as amended. References to
a section of the Code include that section and any comparable section or
sections of any future legislation that amends, supplements or supersedes said
section.
2.8 Committee means the committee established in accordance with Section
3.1.
2. 9. Company means Able Energy, Inc., a Delaware corporation, and its
successors.
2.10 Common Stock means Common Stock of the Company, par value $0.001 per
share.
2.11. Company Voting Securities means the combined voting power of all
outstanding securities of the Company entitled to vote generally in the election
of directors of the Company.
2.12. Date of Grant means the date designated by the Committee as the date
as of which it grants an Award, which shall not be earlier than the date on
which the Committee approves the granting of such Award.
2.13. Effective Date shall have the meaning given to such term in Section
1.2.
2.14. Exchange Act means the Securities Exchange Act of 1934, as amended.
2.15. Merger means any merger, reorganization, consolidation, share
exchange, transfer of assets or other transaction having similar effect
involving the Company.
2.16. Non-Employee Director means a member of the Board who (i) is not
currently an officer or otherwise employed by the Company or a parent or a
subsidiary of the Company, (ii) does not receive compensation directly or
indirectly from the Company or a parent or a subsidiary of the Company for
services rendered as a consultant or in any capacity other than as a director,
except for an amount for which disclosure would not be required pursuant to Item
404(a) of Regulation S-K, (iii) does not possess an interest in any other
transaction for which disclosure would be required pursuant to Item 404(a) of
Regulation S-K, and (iv) is not engaged in a business relationship for which
disclosure would be required pursuant to Item 404(b) of Regulation S-K.
<PAGE>
2.17. Outstanding Common Stock means, at any time, the issued and
outstanding shares of Common Stock.
2.18. Participant means a person designated to receive an Award under the
Plan in accordance with Section 5. 1.
2.19. Performance Awards means Awards granted in accordance with Article
VIII.
2.20. Plan means the Able Energy, Inc. 2000 Stock Bonus Plan as described
herein, as the same may be amended from time to time.
2.21 Restricted Shares means Common Stock subject to restrictions imposed
in connection with Awards granted under Article VII.
2.22. Retirement means early or normal retirement under a pension plan or
arrangement of the Company or one of its Subsidiaries in which the Participant
participates.
2.23. Subsidiary means a subsidiary of the Company within the meaning of
Section 424(f) of the Code.
2.24. Termination of Employment means the voluntary or involuntary
termination of a Participant's employment with the Company or a Subsidiary for
any reason, including death, disability, retirement or as the result of the
divestiture of the Participant's employer or any similar transaction in which
the Participant's employer ceases to be the Company or one of its Subsidiaries.
Whether entering military or other government service shall constitute
Termination of Employment, or whether a Termination of Employment shall occur as
a result of disability, shall be determined in each case by the Committee in its
sole discretion. In the case of a consultant who is not an employee of the
Company or a Subsidiary, Termination of Employment shall mean voluntary or
involuntary termination of the consulting relationship for any reason. In the
case of a Non-Employee Director, Termination of Employment shall mean voluntary
or involuntary termination, non-election, removal or other act which results in
such Non-Employee Director no longer serving in such capacity.
ARTICLE III.
ADMINISTRATION
3.1. Committee. The Plan shall be administered by a committee of the Board
(the "Committee") comprised of at least one person. The Committee shall have
exclusive and final authority in each determination, interpretation or other
action affecting the Plan and its Participants. The Committee shall have the
sole discretionary authority to interpret the Plan, to establish and modify
administrative rules for the Plan, to impose such conditions and restrictions on
<PAGE>
Awards as it determines appropriate, and to take such steps in connection with
the Plan and Awards granted hereunder as it may deem necessary or advisable. The
Committee may, subject to compliance with applicable legal requirements, with
respect to Participants who are not subject to Section 16(b) of the Exchange
Act, delegate such of its powers and authority under the Plan as it deems
appropriate to designated officers or employees of the Company. In addition, the
Board may exercise any of the authority conferred upon the Committee hereunder.
In the event of any such delegation of authority or exercise of authority by the
Board, references in the Plan to the Committee shall be deemed to refer to the
delegate of the Committee or the Board, as the case may be.
<PAGE>
ARTICLE IV.
SHARES
4.1. Number of Shares Issuable. The total number of shares initially
authorized to be issued under the Plan shall be 350,000 shares of Common Stock.
The number of shares available for issuance under the Plan shall be subject to
adjustment in accordance with Section 9.7. The shares to be offered under the
Plan shall be authorized and unissued shares of Common Stock, or issued shares
of Common Stock which will have been reacquired by the Company.
ARTICLE V.
PARTICIPATION
5.1. Eligible Participants. Participants in the Plan shall be such key
employees, consultants, legal counsel and non-employee directors of the Company
and its Subsidiaries, whether or not members of the Board, as the Committee, in
its sole discretion, may designate from time to time. The Committee's
designation of a Participant in any year shall not require the Committee to
designate such person to receive Awards in any other year. The designation of a
Participant to receive an Award under one portion of the Plan does not require
the Committee to include such Participant under other portions of the Plan. The
Committee shall consider such factors as it deems pertinent in selecting
Participants and in determining the types and amounts of their respective
Awards. Subject to adjustment in accordance with Section 9.7, during any fiscal
year no Participant shall be granted Awards in respect of more than 100,000
shares of Common Stock.
<PAGE>
ARTICLE VI.
INTENTIONALLY LEFT BLANK
ARTICLE VII.
RESTRICTED SHARES
7.1. Restricted Share Awards. The Committee may grant to any Participant an
Award of such number of shares of Common Stock on such terms, conditions and
restrictions, whether based on performance standards, periods of service,
retention by the Participant of ownership of purchased or designated shares of
Common Stock or other criteria, as the Committee shall establish. It is not a
criteria of the Plan that the Restricted Shares be issued pursuant to any
specific criteria. With respect to performance-based Awards of Restricted Shares
intended to qualify for deductibility under Section 162(m) of the Code,
performance targets will include specified levels of one or more of operating
income, return or investment, return on stockholders' equity, earnings before
interest, taxes, depreciation and amortization and/or earnings per share. The
terms of any Restricted Share Award granted under this Plan shall be set forth
in an Award Agreement which shall contain provisions determined by the Committee
and not inconsistent with this Plan.
(a) Issuance of Restricted Shares. As soon as practicable after the
Date of Grant of a Restricted Share Award by the Committee, the Company shall
cause to be transferred on the books of the Company or its agent, shares of
Common Stock, registered on behalf of the Participant, evidencing the Restricted
Shares covered by the Award, subject to forfeiture to the Company as of the Date
of Grant if an Award Agreement with respect to the Restricted Shares covered by
the Award is not duly executed by the Participant and timely returned to the
Company. All shares of Common Stock covered by Awards under this Article VII
shall be subject to the restrictions, terms and conditions contained in the Plan
and the applicable Award Agreements entered into by the appropriate
Participants. Until the lapse or release of all restrictions applicable to an
Award of Restricted Shares the share certificates representing such Restricted
Shares may be held in custody by the Company, its designee, or, if the
certificates bear a restrictive legend, by the Participant. Upon the lapse or
release of all restrictions with respect to an Award as described in Section 7.1
(d), one or more share certificates, registered in the name of the Participant,
for an appropriate number of shares as provided in Section 7.1 (d), free of any
restrictions set forth in the Plan and the related Award Agreement (however
subject to any restrictions that may be imposed by law) shall be delivered to
the Participant.
(b) Stockholder Rights. Beginning on the Date of Grant of a
Restricted Share Award and subject to execution of the related Award Agreement
as provided in Section 7.1 (a), and except as otherwise provided in such Award
Agreement, the Participant shall become a stockholder of the Company with
respect to all shares subject to the Award Agreement and shall have all of the
rights of a stockholder, including, but not limited to, the right to vote such
shares and the right to receive dividends; provided, however, that any shares of
Common Stock distributed as a dividend or otherwise with respect to any
Restricted Shares as to which the restrictions have not yet lapsed, shall be
subject to the same restrictions as such Restricted Shares and held or
restricted as provided in Section 7.1 (a).
<PAGE>
(c) Registration of Shares. None of the Restricted Shares may
be sold, assigned, pledged, hypothecated or transferred without Registration
under the Securities Act of 1933 as amended or exemption there from. It is
anticipated that at the time of issuance the Company will have in effect a
Registration Statement on Form S-8 or such other comparable form such that the
Restricted Shares will be registered for resale upon issuance.
(d) Delivery of Shares Upon Vesting. Upon expiration or
earlier termination of the forfeiture period without a forfeiture and the
satisfaction of or release from any other conditions prescribed by the
Committee, or at such earlier time as provided under the provisions of Section
7.3, the restrictions applicable to the Restricted Shares shall lapse. As
promptly as administratively feasible thereafter, subject to the requirements of
Section 9.5, the Company shall deliver to the Participant or, in case of the
Participant's death, to the Participant's Beneficiary, one or more share
certificates for the appropriate number of shares of Common Stock, free of all
such restrictions, except for any restrictions that may be imposed by law.
7.2. Terms of Restricted Shares.
(a) Forfeiture of Restricted Shares. Subject to Sections
7.2(b) and 7.3, Restricted Shares shall be forfeited and returned to the Company
and all rights of the Participant with respect to such Restricted Shares shall
terminate unless the Participant continues in the service of the Company or a
Subsidiary as an employee until the expiration of the forfeiture period for such
Restricted Shares and satisfies any and all other conditions set forth in the
Award Agreement. The Committee shall determine the forfeiture period (which may,
but need not, lapse in installments) and any other terms and conditions
applicable with respect to any Restricted Share Award.
(b) Waiver of Forfeiture Period. Notwithstanding anything
contained in this Article VII to the contrary, the Committee may, in its sole
discretion, waive the forfeiture period and any other conditions set forth in
any Award Agreement under appropriate circumstances (including the death,
disability or Retirement of the Participant or a material change in
circumstances arising after the date of an Award) and subject to such terms and
conditions (including forfeiture of a proportionate number of the Restricted
Shares) as the Committee shall deem appropriate.
7.3. Change in Control. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all
restrictions applicable to the Restricted Share Award shall terminate fully and
the Participant shall immediately have the right to the delivery of share
certificates for such shares in accordance with Section 7.1 (d).
<PAGE>
ARTICLE VIII.
PERFORMANCE AWARDS
8.1. Performance Awards.
(a) Award Periods and Calculations of Potential Incentive
Amounts. The Committee may grant Performance Awards to Participants. A
Performance Award shall consist of the right to receive a payment (measured by
the Fair Market Value of a specified number of shares of Common Stock, increases
in such Fair Market Value during the Award Period and/or a fixed cash amount)
contingent upon the extent to which certain predetermined performance targets
have been met during an Award Period. Performance Awards may be made in
conjunction with, or in addition to, Restricted Share Awards made under Article
VII. The Award Period shall be two or more fiscal or calendar years as
determined by the Committee. The Committee, in its discretion and under such
terms as it deems appropriate, may permit newly eligible employees, such as
those who are promoted or newly hired, to receive Performance Awards after an
Award Period has commenced.
(b) Performance Targets. The performance targets may include
such goals related to the performance of the Company and/or the performance of a
Participant as may be established by the Committee in its discretion. In the
case of Performance Awards intended to qualify for deductibility under Section
162(m) of the Code, the targets will include specified levels of one or more of
operating income, return on investment, return on stockholders' equity, earnings
before interest, taxes, depreciation and amortization and/or earnings per share.
The performance targets established by the Committee may vary for different
Award Periods and need not be the same for each Participant receiving a
Performance Award in an Award Period. Except to the extent inconsistent with the
performance-based compensation exception under Section 162(m) of the Code, in
the case of Performance Awards granted to employees to whom such section is
applicable, the Committee, in its discretion, but only under extraordinary
circumstances as determined by the Committee, may change any prior determination
of performance targets for any Award Period at any time prior to the final
determination of the value of a related Performance Award when events or
transactions occur to cause such performance targets to be an inappropriate
measure of achievement.
(c) Earning Performance Awards. The Committee, on or as soon
as practicable after the Date of Grant, shall prescribe a formula to determine
the percentage of the applicable Performance Award to be earned based upon the
degree of attainment of performance targets.
(d) Payment of Earned Performance Awards. Payments of earned
Performance Awards shall be made in cash or shares of Common Stock or a
combination of cash and shares of Common Stock, in the discretion of the
Committee. The Committee, in its sole discretion, may provide such terms and
conditions with respect to the payment of earned Performance Awards as it may
deem desirable.
<PAGE>
8.2. Terms of Performance Awards.
(a) Termination of Employment. Unless otherwise provided below
or in Section 8.3, in the case of a Participant's Termination of Employment
prior to the end of an Award Period, the Participant will not have earned any
Performance Awards for that Award Period.
(b) Retirement. If a Participant's Termination of Employment
is because of Retirement prior to the end of an Award Period, the Participant
will not be paid any Performance Award, unless the Committee, in its sole and
exclusive discretion, determines that an Award should be paid. In such a case,
the Participant shall be entitled to receive a pro-rata portion of his or her
Award as determined under subsection (d) of this Section 8.2.
(c) Death or Disability. If a Participant's Termination of
Employment is due to death or to disability (as determined in the sole and
exclusive discretion of the Committee) prior to the end of an Award Period, the
Participant or the Participant's personal representative shall be entitled to
receive a pro-rata share of his or her Award as determined under subsection (d)
of this Section 8.2.
(d) Pro-Rata Payment. The amount of any payment to be made to
a ant whose employment is terminated by Retirement, death or disability (under
the circumstances described in subsections (b) and (c)) will be the amount
determined by multiplying (i) the amount of the Performance Award that would
have been earned through the end of the Award Period had such employment not
been terminated by (ii) a fraction, the numerator of which is the number of
whole months such Participant was employed during the Award Period, and the
denominator of which is the total number of months of the Award Period. Any such
payment made to a Participant whose employment is terminated prior to the end of
an Award Period shall be made at the end of such Award Period, unless otherwise
determined by the Committee in its sole discretion. Any partial payment
previously made or credited to a deferred account for the benefit of a
Participant in accordance with Section 8. 1 (d) of the Plan shall be subtracted
from the amount otherwise determined as payable as provided in this Section
8.2(d).
(e) Other Events. Notwithstanding anything to the contrary in
this Article VIII, the Committee may, in its sole and exclusive discretion,
determine to pay all or any portion of a Performance Award to a Participant who
has terminated employment prior to the end of an Award Period under certain
circumstances (including the death, disability or Retirement of the Participant
or a material change in circumstances arising after the Date of Grant), subject
to such terms and conditions as the Committee shall deem appropriate.
8.3. Change in Control. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all Performance
Awards for all Award Periods shall immediately become fully payable to all
Participants and shall be paid to Participants within thirty (30) days after
such Change in Control.
<PAGE>
ARTICLE IX.
TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN
9.1. Plan Provisions Control Award Terms. The terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the Committee
have the power to grant any Award under the Plan the terms of which are contrary
to any of the provisions of the Plan. In the event any provision of any Award
granted under the Plan shall conflict with any term in the Plan as constituted
on the Date of Grant of such Award, the term in the Plan as constituted on the
Date of Grant of such Award shall control. Except as provided in Section 9.3 and
Section 9.7, the terms of any Award granted under the Plan may not be changed
after the Date of Grant of such Award so as to materially decrease the value of
the Award without the express written approval of the holder.
9.2. Award Agreement. No person shall have any rights under any Award
granted under the Plan unless and until the Company and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or the Participant shall have received and acknowledged notice of the
Award authorized by the Committee expressly granting the Award to such person
and containing provisions setting forth the terms of the Award.
9.3. Modification of Award After Grant. No Award granted under the Plan to
a Participant may be modified (unless such modification does not materially
decrease the value of that Award) after its Date of Grant except by express
written agreement between the Company and such Participant, provided that any
such change (a) may not be inconsistent with the terms of the Plan, and (b)
shall be approved by the Committee.
9.4. Limitation on Transfer. Except as provided in Section 7.1(c) in the
case of Restricted Shares, a Participant's rights and interest under the Plan
may not be assigned or transferred other than by will or the laws of descent and
distribution and, during the lifetime of a Participant, only the Participant
personally (or the Participant's personal representative) may exercise rights
under the Plan. The Participant's Beneficiary may exercise the Participant's
rights to the extent they are exercisable under the Plan following the death of
the Participant.
9.5. Taxes. The Company shall be entitled, if the Committee deems it
necessary or desirable, to withhold (or secure payment from the Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or paid by the Company with respect to any amount payable and/or
shares issuable under such Participant's Award and the Company may defer payment
of cash or issuance of shares upon exercise or vesting of an Award unless
indemnified to its satisfaction against any liability for any such tax. The
amount of such withholding or tax payment shall be determined by the Committee
and shall be payable by the Participant at such time as the Committee determines
in accordance with the following rules:
(a) The Participant shall have the right to elect to meet his
or her withholding requirement (i) by having withheld from such Award at the
appropriate time that number of shares of Common Stock, rounded up to the next
whole share, the Fair Market Value of which is equal to the amount of
withholding taxes due, (ii) by direct payment to the Company in cash of the
amount of any taxes required to be withheld with respect to such Award or (iii)
by a combination of withholding such shares and paying cash.
(b) The Committee shall have the discretion as to any Award to
cause the Company to pay to tax authorities for the benefit of the applicable
Participant, or to reimburse such Participant for, the individual taxes which
are due on the grant, exercise or vesting of any Award or the lapse of any
restriction on any Award (whether by reason of such Participant's filing of an
election under Section 83(b) of the Code or otherwise), including, but not
limited to, Federal income tax, state income tax, local income tax and excise
tax under Section 4999 of the Code, as well as for any such taxes as may be
imposed upon such tax payment or reimbursement.
<PAGE>
(c) In the case of Participants who are subject to Section 16
of the Exchange Act, the Committee may impose such limitations and restrictions
as it deems necessary or appropriate with respect to the delivery or withholding
of shares of Common Stock to meet tax withholding obligations.
9. 6. Surrender of Awards. Any Award granted under the Plan may be
surrendered to the Company for cancellation on such terms as the Committee and
the Participant approve.
9. 7 Adjustments to Reflect Capital Changes.
(a) Recapitalization. The number and kind of shares subject to
outstanding Awards, the Purchase Price or Exercise Price for such shares, the
number and kind of shares available for Awards subsequently granted under the
Plan and the maximum number of shares in respect of which Awards can be made to
any Participant in any calendar year shall be appropriately adjusted to reflect
any stock dividend, stock split, combination or exchange of shares, merger,
consolidation or other change in capitalization with a similar substantive
effect upon the Plan or the Awards granted under the Plan. The Committee shall
have the power and sole discretion to determine the amount of the adjustment to
be made in each case.
(b) Merger. After any Merger in which the Company is the
surviving corporation, each Participant shall, at no additional cost, be
entitled upon any exercise of an Option or receipt of any other Award to receive
(subject to any required action by stockholders), in lieu of the number of
shares of Common Stock receivable or exercisable pursuant to such Award prior to
such Merger, the number and class of shares or other securities to which such
Participant would have been entitled pursuant to the terms of the Merger if, at
the time of the Merger, such Participant had been the holder of record of a
number of shares of Common Stock equal to the number of shares of Common Stock
receivable or exercisable pursuant to such Award. Comparable rights shall accrue
to each Participant in the event of successive Mergers of the character
described above. In the event of a Merger in which the Company is not the
surviving corporation, the surviving, continuing, successor or purchasing
corporation, as the case may be (the "Acquiring Corporation), will either assume
the Company's rights and obligations under outstanding Award Agreements or
substitute awards in respect of the Acquiring Corporation's stock for
outstanding Awards, provided, however, that if the Acquiring Corporation does
not assume or substitute for such outstanding Awards, the Board shall provide
prior to the Merger that any unexercisable and/or unvested portion of the
outstanding Awards shall be immediately exercisable and vested as of a date
prior to such merger or consolidation, as the Board so determines. The exercise
and/or vesting of any Award that was permissible solely by reason of this
Section 9.7(b) shall be conditioned upon the consummation of the Merger. Any
Options which are neither assumed by the Acquiring Corporation not exercised as
of the date of the Merger shall terminate effective as of the effective date of
the Merger.
(c) Options to Purchase Shares or Stock of Acquired Companies.
After any merger in which the Company or a Subsidiary shall be a surviving
corporation, the Committee may grant substituted options under the provisions of
the Plan, pursuant to Section 424 of the Code, replacing old options granted
under a plan of another party to the merger whose shares of stock subject to the
old options may no longer be issued following the merger. The manner of
application of the foregoing provisions to such options and any appropriate
adjustments shall be determined by the Committee in its sole discretion. Any
such adjustments may provide for the elimination of any fractional shares which
might otherwise become subject to any Options.
<PAGE>
9.8 No Right to Employment. No employee or other person shall have any
claim of right to be granted an Award under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any of its Subsidiaries.
9.9. Awards Not Includable for Benefit Purposes. Payments received by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any pension, group insurance or other benefit
plan applicable to the Participant which is maintained by the Company or any of
its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.
9.10. Governing Law. All determinations made and actions taken pursuant to
the Plan shall be governed by the laws of the State of Delaware and construed in
accordance therewith.
9.11. No Strict Construction. No rule of strict construction shall be
implied against the Company, the Committee or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Committee.
9.12. Captions. The captions (i.e., all Section headings) used in the Plan
are for convenience only, do not constitute a part of the Plan, and shall not be
deemed to limit, characterize or affect in any way any provisions of the Plan,
and all provisions of the Plan shall be construed as if no captions had been
used in the Plan.
9.13. Severability. Whenever possible, each provision in the Plan and every
Award at any time granted under the Plan shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of the Plan
or any Award at any time granted under the Plan shall be held to be prohibited
by or invalid under applicable law, then (a) such provision shall be deemed
amended to accomplish the objectives of the provision as originally written to
the fullest extent permitted by law and (b) all other provisions of the Plan,
such Award and every other Award at any time granted under the Plan shall remain
in full force and effect.
9.14. Amendment and Termination.
(a) Amendment. The Board shall have complete power and
authority to amend the Plan at any time without the authorization or approval of
the Company's stockholders, unless the amendment (i) materially increases the
benefits accruing to Participants under the Plan, (ii) materially increases the
aggregate number of securities that may be issued under the Plan or (iii)
materially modifies the requirements as to eligibility for participation in the
Plan, but in each case only to the extent then required by the Code or
applicable law, or deemed necessary or advisable by the Board. No termination or
amendment of the Plan may, without the consent of the Participant to whom any
Award shall theretofore have been granted under the Plan, materially adversely
affect the right of such individual under such Award.
<PAGE>
(b) Termination. The Board shall have the right and the power
to terminate the Plan at any time. No Award shall be granted under the Plan
after the termination of the Plan, but the termination of the Plan shall not
have any other effect and any Award outstanding at the time of the termination
of the Plan may be exercised after termination of the Plan at any time prior to
the expiration date of such Award to the same extent such Award would have been
exercisable had the Plan not been terminated.
