SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF
THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
/ / Preliminary Information Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
/X/ Definitive Information Statement
ORIGIN INVESTMENT GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock, par value $0.001 per share
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(2) Aggregate number of securities to which transaction applies:
3,855,000 shares of Common Stock
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(3)Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
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ORIGIN INVESTMENT GROUP, INC.
ONE MAGNIFICENT MILE
980 NORTH MICHIGAN AVENUE, SUITE 1400
CHICAGO, ILLINOIS 60611
NOTICE TO STOCKHOLDERS:
We are sending this Information Statement to you and all other holders of
capital stock of Origin Investment Group, Inc. ("Origin") in connection with the
adoption of Origin's 1999 Employee Stock Incentive Plan and the adoption of the
1999 Management Incentive Program through corporate action. As explained more
fully in the accompanying Information Statement, the Board of Directors believes
that the Employee Stock Incentive Plan and the Management Incentive Program are
both essential elements of the Company's comprehensive compensation program.
The Employee Stock Incentive Plan facilitates the Company's efforts to retain
key employees and directors and to provide incentives to these individuals to
promote the financial success of the Company over the long-term, primarily
through the use of stock options that will create value only as value is created
for the Company's stockholders. The Management Incentive Program is designed to
reward key management personnel on an ongoing basis for helping the Company
achieve operating performance goals.
The accompanying Information Statement is furnished pursuant to Section 14(c) of
the Securities Exchange Act of 1934.
We are mailing the Information Statement on or about December 3, 1999 to
stockholders of record of Origin Investment Group, Inc. at the close of business
on November 29, 1999.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
By Order of the Board of Directors
/s/ Omar A. Rizvi, Esq. LL.M.
Omar A. Rizvi, Esq., LL.M.
President and Chairman of the Board
December 1, 1999
<PAGE>
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
ORIGIN INVESTMENT GROUP, INC.
ONE MAGNIFICENT MILE
980 NORTH MICHIGAN AVENUE, SUITE 1400
CHICAGO, ILLINOIS 60611
NOTICE OF ACTION OF MAJORITY SHAREHOLDERS
DECEMBER 1, 1999
This Information Statement is being mailed on or about December 3, 1999 to all
stockholders of record of Origin Investment Group, Inc. ("Origin") on November
29, 1999 in connection with the following corporate actions:
1. Adoption of Origin's 1999 Employee Stock Incentive Plan, which
provides for the granting of Incentive Stock Options ("ISOs"),
Restricted Stock, Stock Awards, Performance Share Awards and
Stock Appreciation Rights ("SARs") to Officers, Directors,
Employees, Non-Employee Directors and other persons who perform
services which contribute to the successful performance of Origin
or its Subsidiaries. The 1999 Employee Stock Incentive Plan
provides for a total number of shares available for grant of
awards under the Plan not to exceed fifteen percent (15%) of the
total issued and outstanding shares as of the date of any Award;
provided that the number of shares available for grant as ISOs
under the Plan shall not exceed an aggregate of 1,000,000 shares
in any given year.
2. Adoption of Origin's 1999 Management Incentive Program, which
will play a central role in providing incentives and rewarding
key management personnel of the Company and its business units
for achieving performance goals that promote the financial
success of the Company and enhance value for the Company's
stockholders. The 1999 Management Incentive Program shall be
administered by a Program Committee designated by the Board of
Directors. The maximum award payable to an executive in any year
will be one million dollars ($1.0 million), which will be paid in
such form as the Program Committee provides.
The Board of Directors of Origin Investment Group, Inc. (the "Board")
approved each of the above actions by unanimous written consent dated as of
November 30, 1999 as it believes that such actions are in the best interests of
Origin and its stockholders. The holders of a majority of the outstanding shares
of Common Stock (the "Majority Common Holders", which comprise ownership of
2,000,000 shares of common stock out of a total of 3,855,000 total shares issued
and outstanding as of the record date of November 29, 1999) approved the
adoption of Origin's 1999 Employee Stock Incentive Plan and 1999 Management
Incentive Program by written consent dated as of November 30, 1999. This
Information Statement is furnished only to inform stockholders of Origin of the
above actions taken by the Majority Common Holders before such actions take
effect in accordance with the Securities Exchange Act of 1934.
WE ARE NOT ASKING YOU FOR A PROXY
AND WE REQUEST THAT YOU DO NOT SEND US A PROXY.
<PAGE>
Voting Securities and Principal Holders Thereof
The Company currently has only one class of voting securities, its common
stock, that has been issued and is outstanding as of the date of this
Information Statement. Each holder of common stock is entitled to one vote for
each common stock so held. As of November 29, 1999, the record date established
by the Board of Directors for the actions by the majority common stock holders,
there were a total of 3,855,000 shares of common stock issued and outstanding of
the Company held by 323 shareholders.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Awards Payouts
<S> <C> <C> <C> <C> <C> <C> <C> <C>
========================= ====== ======= ====== =============== =============== ============ ======= =============
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name Securities
and Other Restricted Underlying
Principal Annual Stock Options/ LTIP All Other
Position Year Salary Bonus Compensation Awards SARs Payouts Compensation
========================= ====== ======= ======= =============== ================ ============ ======= =============
Gregory H. Laborde 1999 0 0 0 - 200,000 - -
CEO, Director 1998 - - - - - - -
1997 - - - - - - -
========================= ====== ======= ======= =============== ================ ============ ======= =============
Omar A. Rizvi 1999 0 0 0 - 200,000 - -
Chairman, President 1998 - - - - - - -
1997 - - - - - - -
========================= ====== ======= ======= =============== ================ ============ ======= =============
Scott K. Lindenberger 1999 0 0 0 - 50,000 - -
Corporate Secretary 1998 - - - - - - -
1997 - - - - - - -
========================= ====== ======= ======= =============== ================ ============ ======= =============
</TABLE>
Footnotes
(1) General Note: The Company was formed in April 1999 and as such had no
operations prior to its fiscal year 1999 or in any of the two prior fiscal years
(including 1998 and 1997). The Company was not a reporting company pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ("the Exchange
Act") during any part of fiscal years 1998 or 1997. No information for fiscal
years 1998 or 1997 was required to be provided to the Securities and Exchange
Commission ("the Commission"), and the Company was not subject to any filing
requirements until the filing of its Form 10 in August 1999.
(b) The Company was formed in April 1999 and as such had no operations
prior to its fiscal year 1999 or in any of the two prior fiscal years (including
1998 and 1997).
(c) To date, pursuant to the Company's August 5, 1999 Offering Circular, no
salaries payable in the form of cash or cash equivalents have been paid to any
Executive Officer or Director of the Company. The Company recently adopted an
Employee Stock Incentive Plan. Salary is not calculable at this time as
specified in Item 402(b)(2)(iii)(A) under Regulation S-K. No salaries have been
deferred by any Executive Officer or Director of the Company to date pursuant to
Section 401(k) of the Internal Revenue Code. Salaries will be disclosed as
appropriate in subsequent fiscal years.
(d) Pursuant to the Company's August 5, 1999 Offering Circular, no bonuses
payable in the form of cash or cash equivalents have been paid to any Executive
Officer or Director of the Company. The Company recently adopted an Employee
Stock Incentive Plan. Bonuses are not calculable at this time as specified in
Item 402(b)(2)(iii)(B) under Regulation S-K. No bonuses have been deferred by
any Executive Officer or Director of the Company to date pursuant to Section
401(k) of the Internal Revenue Code. Bonuses will be disclosed as appropriate in
subsequent fiscal years.
(e) No perquisities, personal benefits, above-market interest on deferred
or long-term compensation, or reimbursements for the payment of taxes were
realized by any Executive Officer or Director of the Company during the
Company's latest fiscal year in connection with awards made pursuant to the
election of any Executive Officer or Director of the Company. No deferred
earnings, dividends or dividend equivalents on deferred stock were received by
any Executive Officer or Director of the Company that might be deemed
"preferential earnings" as specified in Item 402(b)(2)(ii)(c)(2) under
Regulation S-K.
(f) There were no restricted stock awards made to any of the Executive
Officers and/or Directors of the Company at the end of the latest fiscal year.
The Company has not been in operation for an entire fiscal year as of the date
of this Information Statement.
(g) The Options were granted to the Executive Officers of the Company
pursuant to the 1999 Employee Stock Incentive Plan. The options expiring on
12/23/02 vest fully on December 23, 1999 and the options expiring on 5/23/03
shall vest upon the Company entering into its first definitive financing
transaction with an Eligible Portfolio Company as that term is defined under the
Investment Company Act of 1940 and upon the Company raising sufficient
additional capital to finance such investment pursuant to a future equity sale
of its securities or otherwise that is in conformance with its investment
policies. Notwithstanding the occurrence of these two performance events, the
5/23/03 options will vest within six months of the date of grant or on 5/23/00
and will remain valid for a period of three calendar years therefrom.
(h) The Compensation Committee and the Board are currently in the process
of developing performance targets and goals both for the Company as a whole and
for each Executive Director or Officer of the Company in connection with its
LTIP awards. Such performance targets will become more certain as the Company
grows beyond its current development stage. These targets and goals have not
been waived as of the date of this Information Statement.
(i) No additional compensation has been paid to any Executive Officer or
Director of the Company as specified in Item 402(b)(2)(iv) under Regulation S-K
of the Securities Act of 1933.
<TABLE>
<CAPTION>
OPTIONS/SARs GRANTED IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------- -------------------------------
(a) (b) (c) (d) (e) (f) (g) (f)
Number of
Securities % Total
Underlying Options/SARs Exercise
Options/ Granted to or Base
SARs Employees Price Expiration
Name Granted in Fiscal Year ($/Sh) Date
- ------------------------- ----------- ---------------- -------- ------------ -------------------- ----------
Grant
Date
Present
5% 10% Value
- ------------------------- ----------- ---------------- -------- ------------ ---------- --------- ----------
Gregory H. Laborde 100,000 22.22% $.10 12/23/02 - - 10,000.00
CEO, Director 100,000 22.22% $.20 05/23/03 20,000.00
- ------------------------- ----------- ---------------- -------- ------------ ---------- --------- ----------
Omar A. Rizvi 100,000 22.22% $.10 12/23/02 - - 10,000.00
Chairman, President 100,000 22.22% $.20 05/23/03 20,000.00
- ------------------------- ----------- ---------------- -------- ------------ ---------- --------- ----------
Scott K. Lindenberger 25,000 5.55% $.10 12/23/02 - - 2,500.00
Corporate Secretary 25,000 5.55% $.20 05/23/03 5,000.00
- ------------------------- ----------- ---------------- -------- ------------ ---------- --------- ----------
</TABLE>
Footnotes: (1) General Note: The terms of the Options/SARs granted to
Executive Officers and Directors of the Company are as follows: The Options
listed herein were granted to the Chief Executive Officer, the President and the
Corporate Secretary of the Company pursuant to the 1999 Employee Stock Incentive
Plan. The first set of options which expire on December 23, 2002 are exercisable
upon the payment of $0.10 per share, the equivalent value paid by the public for
the Company's common stock during the Company's most recent Offering pursuant to
Regulation E. The second set of options, which expire on May 23, 2003, are
performance based and will vest upon the Company entering into its first
definitive financing transaction with an Eligible Portfolio Company, as that
term is defined under the Investment Company Act of 1940 and upon the Company
raising sufficient additional capital to finance such investment pursuant to a
future equity sale of its securities or otherwise that is in conformance with
its investment policies. Notwithstanding the occurrence of these two performance
events, the 05/23/03 options will vest within six months of the date of grant or
on 5/23/00 and will remain valid for a period of three calendar years therefrom.
(c) The percentages in this column are based on a total of 450,000
options/SARs granted to Executive Officers and Directors of the Company during
the Company's latest fiscal year pursuant to its 1999 Employee Stock Incentive
Plan.
(d) The Exercise Price of the options issued pursuant to the Company's 1999
Employee Stock Incentive Plan is $.10 per share for options expiring on December
23, 2002 and $0.20 per share for options expiring on May 23, 2003. The Company's
common stock is not currently traded on a recognized exchange and therefore has
no market. The Compensation Committee has the discretion to amend the Program
Rules of the Employee Stock Incentive Plan and may, at its discretion, include
provisions in the grant agreement relating to a change of control that provide
for a change in the exercise price upon such change of control.
(f) Because the Company's common stock does not have a market, there is no
determinable value of the common stock and as such, the value of options
exercisable into such common stock cannot be ascertained at the present time.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<S> <C> <C> <C> <C>
- ------------------------------- ----------------- ------------------ ------------------- --------------------
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End at FY-End ($)
Shares
Acquired on Exercisable/ Exercisable/
Name Exercise (#) Value Realized ($) Unexercisable Unexercisable
- ------------------------------- ----------------- ------------------ ------------------- --------------------
Gregory H. Laborde 0 $0.00 0/0 0/0
CEO, Director
- ------------------------------- ----------------- ------------------ ------------------- --------------------
Omar A. Rizvi 0 $0.00 0/0 0/0
Chairman, President
- ------------------------------- ----------------- ------------------ ------------------- --------------------
Scott K. Lindenberger 0 $0.00 0/0 0/0
Corporate Secretary
- ------------------------------- ----------------- ------------------ ------------------- --------------------
</TABLE>
Footnotes
(c) No payments have been made by the Company in reimbursement of tax
obligations incurred by any Executive Officer or Director of the Company as
defined in Item 402(b)(2)(iii)(C)(4) under Rule S-K of the Exchange Act.
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
<S> <C> <C> <C> <C> <C>
- ------------------------------- ----------------- ------------------- -------------- ---------- -------------
(a) (b) (c) (d) (e) (f)
Estimate Future Payouts
under Non-Stock Price-based Plans
Number of Performances or
Shares, Units Other Period Until
or Other Maturation or Threshold Target Maximum
Name Rights (#) Payout ($ or #) ($ or #) ($ or #)
- ------------------------------- ----------------- ------------------- -------------- ---------- -------------
Gregory H. Laborde 0 6 mo. - - -
CEO, Director
- ------------------------------- ----------------- ------------------- -------------- ---------- -------------
Omar A. Rizvi 0 6 mo. - - -
Chairman, President
- ------------------------------- ----------------- ------------------- -------------- ---------- -------------
Scott K. Lindenberger 0 6 mo. - - -
Corporate Secretary
- ------------------------------- ----------------- ------------------- -------------- ---------- -------------
</TABLE>
Footnotes
(c) The long-term stock incentive awards granted under the Company's 1999
Employee Stock Incentive Plan provide for a maturation period where 50% of the
total options granted to the Executive Officers and Directors thus far shall
vest immediately upon effectiveness of the consent to action on 12/23/99 and the
remaining 50% shall vest upon entering into a financing commitment for a
majority interest in one or more eligible portfolio companies that meet or
exceed the Company's investment objectives. The remaining 50% of the awards will
fully vest upon the six (6) month anniversary of the date of issuance if no
investment has been completed according to the Company's investment objectives
and policies.
(d) The awards for the 1999 fiscal year have been based on the
determination of the Compensation Committee regarding each individual's prior
service and performance with the Company, both throughout its initial
organizational stages and its early operations. Such awards were made in
compliance with 162(m) of the Internal Revenue Code.
Pension Plans
The Company currently has no defined benefit or actuarial plans which would
contribute to the compensation of any executive officer of the Company.
Compensation of Directors
Currently no directors or officers of the Company receive any salary from
the Company and will not do so until the Company has raised additional funding
pursuant to a second offering and has entered into one or more binding letters
of intent to acquire an equity investment interest within an eligible portfolio
company. The Company's Advisory Directors will not receive any remuneration for
their services from the Company's recently completed first offering pursuant to
an exemptive provision of Regulation E, but will receive an annual fee between
$3,000.00 to $10,000.00 upon the Company successfully raising additional capital
pursuant to a second offering and having assisted in locating one or more
probably eligible portfolio companies in which the Company may likely invest. At
such time, such directors will also be reimbursed by the Company for their
expenses in attending meetings of the Board of Directors or any Committee
thereof and will receive a fee for attendance in person at any meeting at a per
diem rate of $500.00.
REPRICING OF OPTIONS/SARS
Prior to November 29, 1999, the Company had not paid any executive officer
or employee compensation pertaining to the award of cash or cash-equivalents
such as options, SARs or other incentives based upon performance or other
objectives determined by the Board, and as such no options or SARs were repriced
during the Company's most recent fiscal year. Since the company only commenced
operations in April 1999, there have been no options or SARs held by any
executive officer within the last ten completed fiscal years.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Commitee has met once to initially delineate certain key
policies of the 1999 Employee Stock Incentive Plan and initially adopted
policies to be utilized to govern the Program Committee which will adopt and
implement incentive programs pursuant to the Management Incentive Program. Other
than the award of the 12/23/02 options and the 5/23/03 performance based
options, the Compensation Committee has not adopted any further awards to the
Executive Officers and/or Directors of the Company.
<TABLE>
<CAPTION>
(3) Amount and
Nature of
(2) Name and Address of Beneficial (4) Percent of
(1) Title of Class Beneficial Owner Ownership Class
<S> <C> <C> <C>
- --------------------------- ------------------------------------------- ------------------- -----------------
Common Restricted Gregory H. Laborde 1,000,000 25.00%
- --------------------------- ------------------------------------------- ------------------- -----------------
Common Restricted Omar A. Rizvi 1,000,000 25.00%
- --------------------------- ------------------------------------------- ------------------- -----------------
</TABLE>
Footnotes
(3) The Officers and Directors indicated in Column (3) have the right to
acquire beneficial ownership of any class the Company's stock.
Currently there are no arrangements or pledges of securities by any
person known to the Company that may result in a change of control of the
Company.
(4) Percentages based on the Company's completion of its current Reg. E
exempt offering for 2,000,000 shares of common stock. Information on this
offering is available in the Company's Offering Circular dated August 5, 1999.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company meets on a regular basis to
supervise, review, and direct the business and affairs of the Company. During
the Company's 1999 fiscal year, the Board held two meetings. Generally however,
the Board has acted through unanimous written consent for a majority of its
corporate responsibilities. The Board of Directors has established an Executive
Committee, an Audit Committee, and a Compensation Committee to which it has
assigned certain responsibilities in connection with the governance and
management of the Company's affairs. The Company has no standing nominating
committee or other committee performing similar functions at the present time
but may choose to establish such committees in the future. The Company currently
has two openings on its Board to be filled by disinterested Advisory Directors.
The Board of Directors anticipate nominating individuals to fill these positions
within the next several weeks.
Executive Committee. The Executive Committee, pursuant to authority
delegated by the Board, from time to time considers certain matters in lieu of
convening a meeting of the full Board, subject to any restrictions in applicable
law related to the delegation of certain powers to a committee of the Board.
Messrs. Rizvi and Laborde comprise the members of the Executive Committee. The
Executive Committee has not held any meeting during fiscal year 1999 to date.
Audit Committee. The Audit Committee recommends the appointment of
independent public accountants, reviews the scope of audits proposed by the
independent public accountants, reviews internal audit reports on various
aspects of corporate operations, and periodically consults with the independent
public accountants on matters relating to internal financial controls and
procedures. Messrs. Rizvi and Laborde comprise the members of the Audit
Committee. An additional member of the Board will be nominated for this
committee within the next several months. The Audit Committee has not held any
meetings during fiscal year 1999 to date.
Compensation Committee. The Compensation Committee is responsible for the
review and approval of compensation of employees above a certain salary level,
the review of management recommendations relating to incentive compensation
plans, the administration of the Company's stock option and stock purchase
plans, the review of compensation of directors, and consultation with management
and the Board on senior executive continuity and organizational matters. Messrs.
Rizvi, Laborde, and Sear comprised the membership of the Compensation Committee
during fiscal 1999 to date. In November 1999, Dr. Sear was appointed to serve on
the Compensation Committee. The Compensation Committee held one meeting during
fiscal 1999 to date.
DIRECTORS' COMPENSATION
No directors or officers of the Company receive any salary from the Company
and will not do so until the Company has raised additional funding pursuant to a
second offering and has entered into one or more binding letters of intent to
acquire an equity investment interest within an eligible portfolio company. The
Company's Advisory Directors will not receive any remuneration for their
services from the Company's recently completed first offering pursuant to an
exemptive provision of Regulation E, but will receive an annual fee between
$3,000.00 to $10,000.00 upon the Company successfully raising additional capital
pursuant to a second offering and each such Advisory Director having assisted in
locating one or more probably eligible portfolio companies in which the Company
may invest. At such time, such directors will also be reimbursed by the Company
for their expenses in attending meetings of the Board of Directors or any
Committee thereof and will receive a fee for attendance in person at any meeting
at a per diem rate of $500.00.
<PAGE>
COMPENSATION PLANS
PURPOSE OF THE EMPLOYEE STOCK INCENTIVE PLAN
The Board of Directors and a majority of the shareholders of the Company's
common stock through written consent on November 30, 1999 voted to adopt the
Employee Stock Incentive Plan. The Board of Directors believes that the Employee
Stock Incentive Plan plays an integral role in the ability of the Company to
attract and retain key employees and directors and to provide incentives for
such persons to promote the financial success of the Company. The following
description of the material features of the Employee Stock Incentive Plan is a
summary and is qualified in its entirety by reference to the Employee Stock
Incentive Plan, a copy of which will be provided to any stockholder upon written
request to the Company.
DESCRIPTION OF AWARDS
Awards granted under the Employee Stock Incentive Plan may be "incentive
stock options" ("ISOs"), as defined in Section 422 of the IRC, "nonqualified
stock options" ("NQSOs"), shares of Common Stock subject to terms and conditions
set by the Board of Directors ("restricted stock awards"), stock appreciation
rights ("SARs"), or other forms of awards that use (or are based on) shares of
Common Stock. ISOs may be granted only to full-time employees (including
officers) of the Company, including its subsidiaries. NQSOs, restricted stock
awards, SARs, and other permitted forms of awards may be granted to any person
employed by or performing services for the Company, including directors. The
Employee Stock Incentive Plan provides for the issuance of an aggregate number
of shares of Common Stock equal to 15% of the Company's fully diluted shares of
Common Stock outstanding from time to time, subject to the issuance of a maximum
of 1,000,000 shares pursuant to ISOs.
ISOs are also subject to certain limitations prescribed by the IRC,
including the requirement that such options may not be granted to employees who
own more than 10% of the combined voting power of all classes of voting stock (a
"principal stockholder") of the Company, unless the option price is at least
110% of the fair market value of the Common Stock subject to the option. In
addition, an ISO granted to a principal stockholder may not be exercisable more
than five years from its date of grant.
ADMINISTRATION AND ELIGIBILITY
The Compensation Committee of the Board of Directors (or a subcommittee of
the Compensation Committee comprised solely of "outside directors" within the
meaning of Section 162(m) of the IRC, in the case of option grants to the
Company's Chief Executive Officer and the four other most highly compensated
executive officers of the Company) otherwise generally has discretion to set the
terms and conditions of options and restricted stock awards, including the term,
exercise price, and vesting conditions, if any; to select the persons who
receive such grants and awards; and to interpret and administer the Employee
Stock Incentive Plan. The Employee Stock Incentive Plan limits the number of
shares of Common Stock with respect to which options may be granted to any
individual during any calendar year to 450,000. Any key employee of the Company
or any Subsidiary of the Company, including non-employee Directors, and any
other person who performs services for the Company or a Subsidiary, whose
judgment, initiative and efforts contribute or may be expected to contribute
materially to the successful performance of the Company or any Subsidiary shall
be eligible to receive an Award under the Plan. At the present time, there are
approximately six (6) individuals within the Company that are eligible to
receive Awards under the 1999 Employee Stock Incentive Plan. However, the
Company anticipates that, subject to entering into definitive purchase and
financing transactions with eligible portfolio companies during the next fiscal
year, where such eligible portfolio companies will in essence become its
subsidiaries, several additional individuals will be eligible for receipt of
Awards underneath the Employee Stock Incentive Plan as well as the Management
Incentive Program.
COMPLIANCE WITH SECTION 162(M) OF THE INTERNAL REVENUE CODE
Section 162(m) of the IRC denies a deduction by an employer for certain
compensation in excess of $1.0 million per year paid by a publicly traded
corporation to the chief executive officer or any of the four most highly
compensated executive officers other than the chief executive officer (the
"Designated Executive Officers"). Compensation with respect to stock options,
including upon exercise of an NQSO or upon a disqualifying disposition of an
ISO, as described below under "Certain Federal Income Tax Consequences", or
other compensation pursuant to the Employee Stock Incentive Plan, will be
excluded from this deduction limit if it satisfies certain requirements. The
requirements include: (i) the stock option must be granted at an exercise price
not lower than fair market value at date of grant; (ii) the stock option grant
must be made by a committee composed of two or more "outside directors" within
the meaning of Section 162(m); (iii) the plan under which the stock option is
granted must state the maximum number of shares with respect to which options
may be granted during a specified period to any individual; and (iv) the
material terms pursuant to which the compensation is to be paid must be
disclosed to, and approved by, the public stockholders of the corporation in a
separate vote prior to payment. The Employee Stock Incentive Plan meets the
requirements of paragraphs (i) through (iii) above, and approval of the Employee
Stock Incentive Plan by the Company's public stockholders is being proposed in
order to comply with requirement (iv) so that compensation with respect to stock
options may be excluded from the deduction limit under 162(m) of the IRC.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Under current tax law, a holder of an ISO under the Employee Stock
Incentive Plan does not, as a general matter, realize taxable income upon the
grant or exercise thereof. (Depending upon the holder's income tax situation,
however, the exercise of the ISO may have alternative minimum tax implications.)
In general, a holder of an ISO will only recognize gain at the time that Common
Stock acquired through exercise of the ISO is sold or otherwise disposed of. In
that situation, the amount of gain that the optionee must recognize is equal to
the amount by which the value of the Common Stock on the date of the sale or
other disposition exceeds the option price. If the optionee disposes of the
stock after the required holding period - that is, no earlier than a date that
is two years after the date of grant of the option and one year after the date
of exercise - the gain is capital gain income. If disposition occurs prior to
expiration of the holding period, the gain is ordinary income, and the Company
is entitled to a tax deduction equal to the amount of income recognized by the
optionee.
An optionee will not realize income when an NQSO is granted to him or her.
Upon exercise of such option, however, the optionee must recognize ordinary
income to the extent that the fair market value of the Common Stock on the date
the option is exercised exceeds the option price. Any such gain is taxed in the
same manner as ordinary income in the year the option is exercised. Thereafter,
any additional gain recognized upon the disposition of the shares of stock
obtained by the exercise of an NQSO will be taxed at capital gains rates, if the
employee has held the shares of stock for at least one year after the exercise
of the NQSO. The Company will not experience any tax consequences upon the grant
of an NQSO, but will be entitled to take an income tax deduction equal to the
amount that the option holder includes in income (if any) when the NQSO is
exercised.
The grant of a restricted stock award will not be a taxable event for
the holder thereof or result in a tax deduction for the Company at the time of
grant. Upon the lapse or termination of any restrictions on the award, the
holder will recognize ordinary income equal to the fair market value of the
portion of the restricted stock award no longer subject to the restrictions,
less any amount of payment by the holder of such restricted stock award. The
Company will be entitled to an income tax deduction in the same amount at the
time the holder is required to recognize income.
EMPLOYEE STOCK INCENTIVE PLAN BENEFITS
As of the date hereof, 578,250 shares of Common Stock had been granted
under the Employee Stock Incentive Plan, including 450,000 Options for shares of
Common Stock and 128,250 of Restricted Stock shares to various directors and
executive officers of the Company. This amount includes the following: Mr. Greg
H. Laborde, Chief Executive Officer of the Company and Mr. Omar A. Rizvi,
President and Chairman of the Board of the Company each received: (1) Options to
purchase 100,000 shares of common stock at an exercise price of $0.10 per share
and (2) Performance based options to purchase 100,000 shares of common stock
exercisable upon the occurrence of two performance events and payment of an
exercise price of $0.20 per share. Mr. Scott Lindenberger, the corporate
secretary of the Company received Options to purchase 25,000 shares of common
stock at $0.10 per share and options to purchase 25,000 shares of common stock
at an exercise price of $0.20 per share and also subject to the performance
requisites. An award of 128,250 shares of Restricted Stock was made to Mr. Ron
Kaufman, an Advisory Consultant for the Company.
The Company does not have any current plans to grant additional options
to directors and executive officers of the Company, although the Company expects
that the Compensation Committee of the Board will consider such persons, along
with other key personnel of the Company, from time to time, including during
fiscal 2000, to receive grants under the Employee Stock Incentive Plan.
PURPOSE OF MANAGEMENT INCENTIVE PROGRAM
The Board of Directors and a majority of the shareholders of the Company's
common stock through written consent on November 30, 1999 voted to adopt
Origin's 1999 Management Incentive Program (the "Management Incentive Program"),
and was qualified under Section 162(m) of the IRC and thereby allows the Company
to deduct as performance-based compensation for federal income tax purposes all
compensation paid under the Management Incentive Program to the Company's Chief
Executive Officer and the other four most highly compensated executive officers
of the Company (the "Designated Executive Officers").
The Board of Directors believes that the Management Incentive Program
will play a central role in providing incentives and rewarding key management
personnel of the Company and its business units for achieving performance goals
that promote the financial success of the Company and enhance value for the
Company's Stockholders. The following description of the material features of
the Management Incentive Program is a summary and is qualified in its entirety
by reference to the Management Incentive Program, a copy of which will be
provided to any stockholder upon written request to the Company.
ADMINISTRATION AND ELIGIBILITY
The Management Incentive Program will be administered by a committee
designated by the Board of Directors (the "Program Committee") that meets the
requirements of Section 162(m) of the IRC. The Program Committee has the right
to delegate to the Chairman of the Board, Chief Executive Officer, Chief
Operating Officer, or Chief Financial Officer of the Company administration of
certain aspects of the Management Incentive Program as it relates to
participants other than Designated Executive Officers. Persons eligible to
participate in the Management Incentive Program are the executive officers and
other management personnel of the Company, its business units, or its
affiliates, approximately 4 persons at the present time. Presently, the
Compensation Committee of the Board serves as the Program Committee, except that
with respect to decisions concerning the Designated Executive Officers, its
subcommittee comprised of Messrs. Sear and one additional Advisory Director to
be named will serve on the Program Committee.
DETERMINATION OF AWARDS
Prior to, or as soon as practical after, the commencement of each
fiscal year beginning with 2000, the Program Committee will establish the rules
or guidelines applicable under the Management Incentive Program for that fiscal
year (the "Program Rules") for one or more groups of eligible participants.
Program Rules in general will establish performance goals relating to, among
other things, increasing operating income and return on investment, increasing
stockholder value, promoting growth and efficient use of resources, and
achieving specific individual goals. In addition to establishing general Program
Rules for the year, the Program Committee will determine: (a) the individual
executives to whom awards may be granted; (b) the performance targets and the
measurement criteria for individual awards; (c) the percentage of an executive's
base salary that may be paid as an award at specified levels of achievement of
the performance targets; (d) the conditions subject to which any incentive award
may become payable; and (e) the form in which any award will be paid. The
performance criteria applicable to Designated Executive Officers will include
one or more of the following: operating income, return on investment, estimated
earnings, net income, earnings per share, return on equity, return on assets (or
net assets), pre-tax profit, market value of the Company's stock, and total
stockholder return. The maximum incentive award payable to an executive in any
year will be $1.0 million, which will be paid in such form as the Program
Committee provides.
Awards shall be approved by the Program Committee, subject to ratification
by the Board of Directors. Any award may be decreased, in the Program
Committee's discretion, based on such factors as the Program Committee may
determine. The Program Committee may in its discretion grant awards to deserving
executives, except those who are Designated Executive Officers, notwithstanding
levels of achievement of performance criteria. The Program Committee may provide
that, upon the occurrence of a Change in Control (as defined in the Management
Incentive Program), the executive's incentive award for that year will be deemed
to have been fully earned for the year, with performance at the target level and
with no reductions for other factors. The Program Committee may also provide for
payment of partial awards in the event of a Change in Control.
FORM AND PAYMENT OF AWARDS
Awards will generally be paid in cash, unless the Program Committee
specifies at the beginning of the year that some or all of the award will be
paid in shares of Common Stock (or that the executive can elect some or all of
the award to be paid in shares). Subject to adjustment for any change in
corporate capitalization, the maximum number of shares that can be issued under
the Management Incentive Program is 500,000 in any given fiscal year. The
Program Committee may also provide that if an executive elects to receive a
portion of his award in shares of Common Stock, the executive will receive an
additional number of shares equal to a certain percentage (not to exceed 100%)
of the number of shares received by reason of his election, plus an additional
cash bonus equal to the fair market value (determined as of the last trading day
of the fiscal year) of the additional shares received multiplied by a percentage
amount to help offset income tax liability. The Program Committee may permit an
executive to defer receipt of all or a portion of his award pursuant to a plan
or program established by the Company.
AMENDMENT OR TERMINATION
The Management Incentive Program may be amended, suspended, or terminated
by the Program Committee at any time, subject to ratification by the Board of
Directors. The Management Incentive Program will remain in effect until
terminated by the Program Committee or the Board of Directors.
MATERIAL FEDERAL TAX CONSEQUENCES
An award under the Management Incentive Program will constitute ordinary
taxable income to the participant in such year that the award is paid. Based on
the Company's interpretation of Section 162(m) of the IRC, the Company will be
entitled to a corresponding deduction.
2000 AWARDS
For fiscal year 2000, each of the Designated Executive Officers and certain
other executives are expected to be granted an opportunity to receive an award
under the Management Incentive Program (subject to approval of the Management
Incentive Program by stockholders). The Program Rules for fiscal 2000 applicable
to the Designated Executive Officers have not been finally established by the
Program Committee. However, any awards to Designated Executive Officers are
expected to be based on, among other criteria, the Company achieving certain
levels of return on investment and increase in operating income, and to be
subject to decrease if the Company does not achieve a certain earnings per
share, if the Designated Executive Officer does not achieve his personal
performance goals, or for such other reasons as the Program Committee in its
discretion may determine.
The future benefits to be received by participants in the Management
Incentive Program are not currently determinable because they are dependent upon
performance criteria and results that are not now known.
GENERAL COMPENSATION PHILOSOPHY
Although the Committee is still developing the programs and policies for
the compensation of the Company's executive officers, the Committee is designing
the programs and policies to link the compensation of executive officers to the
performance of the Company and its business units. The Committee intends that
such a link will align the financial interests of the Company's executive
officers with those of its stockholders.
The Committee has identified several objectives that it expects to reflect
in the Company's compensation programs and policies, and it has determined that
the Company will use a combination of base salary, short-term and long-term
incentive plans, and performance bonus criteria in order to tie executive
compensation to increases in the Company's earnings and return on stockholders'
equity. While specific amounts and parameters will be established after further
review and analysis, the Committee expects that the Company's compensation
programs will consist of the following basic components:
- Competitive base salaries;
- The issuance of performance-based stock options;
- Potentially significant annual incentive bonuses under the
Company's Management Incentive Program; and
- Customary benefits.
The Committee expects to complete its formulation of the Company's
compensation programs and policies for executive officers during 2000, and
thereafter it will review and determine the appropriateness of the compensation
paid to each of the executive officers of the Company from time to time (and at
least annually), with the philosophy described above as its basis. While
promoting initiative and providing incentives for superior performance by
executives on behalf of the Company for the benefit of its stockholders, the
Committee also will seek to assure that the Company is able to compete for and
retain talented personnel who will lead the Company in achieving levels of
financial performance that will enhance stockholder value over the long-term as
well as the short-term.
BASE SALARIES
The Company has established the current base salaries of its executive
officers without reference to specific Company performance criteria. As
discussed above, the base salaries for all three executive officers during
fiscal 1999 were determined by negotiations conducted prior to the constitution
of the Committee. Such base salaries were intended to be set at a level slightly
below the competitive amounts paid to executive officers of similar businesses
in structure, size, and market orientation. The Committee reviews salaries of
the Company's executive officers on an annual basis.
EMPLOYEE STOCK INCENTIVE PLAN
During fiscal 1999, the Company granted options to purchase shares of
Company Common Stock to 4 employees, including the Company's executive officers,
pursuant to its Employee Stock Incentive Plan. Under the Employee Stock
Incentive Plan, the Company is permitted to issue stock options that are
qualified as incentive stock options under the IRC, options that are not so
qualified, direct awards of shares of stock, stock appreciation rights and other
forms of awards that use (or are based on) shares of Common Stock. To date, the
Company has issued only non-qualified stock options under the Employee Stock
Incentive Plan.
Stock options are awarded to executive officers and other persons both to
recognize outstanding contributions that they have made to the Company's
financial performance, and to encourage and provide incentives to continue to
make such contributions. While the Company has the flexibility to grant
below-market options, its policy has been to grant options at fair market value,
with vesting over a period of several years, in order to better align the
personal interests of optionees with those of the stockholders of the Company.
ANNUAL INCENTIVE COMPENSATION
Beginning with fiscal 2000, the Company will provide annual incentive
compensation to executive officers of the Company through its Management
Incentive Program. The Management Incentive Program, which is described in
detail elsewhere in this Proxy Statement, is designed to offer compensation
opportunities that are tied directly to Company performance. In addition, the
Management Incentive Program is designed to foster equity ownership in the
Company by executive officers and all other participants. The Management
Incentive Program, at least as it relates to the Designated Executive Officers
of the Company, will be administered by a subcommittee of the Committee that
will include only those members who qualify as "outside" directors under Section
162(m) of the IRC. Pursuant to the Management Incentive Program, that
subcommittee will establish the specific criteria and performance measures each
year that will be applicable to the Company's Designated Executive Officers for
the purpose of earning incentive compensation or bonuses for such year under the
Management Incentive Program.
<TABLE>
<CAPTION>
New Employee Stock Incentive Plan Benefits
- ---------------------------------------------------- --------------------------------------------------
1999 Employee Stock Incentive Plan
<S> <C> <C>
- ---------------------------------------------------- --------------------------------------------------
Name & Position Dollar Value (1) Number of Units
- --------------- ------------- ---------------
Greg H. Laborde -- 200,000
CEO, Director
- ---------------------------------------------------- -------------------------- -----------------------
Omar A. Rizvi -- 200,000
Chairman, President
- ---------------------------------------------------- -------------------------- -----------------------
Scott K. Lindenberger -- 50,000
Corporate Secretary
- ---------------------------------------------------- -------------------------- -----------------------
Executive Group (2) -- 450,000
- ---------------------------------------------------- -------------------------- -----------------------
Non-Executive Director Group (3) -- 0
- ---------------------------------------------------- -------------------------- -----------------------
Non-Executive Officer Employee Group (4) -- 0
- ---------------------------------------------------- -------------------------- -----------------------
</TABLE>
Footnotes
(1) The dollar value of the Stock Awards and Stock Options are not yet
determinable as there is no current market for the Company's securities. If the
valuation of the common stock is determined to be the same valuation as that of
the offering price of the common stock during the Company's recent Regulation E
offering, the dollar value of the benefits received pursuant to the shares
received under the 1999 Employee Stock Incentive Plan will be as follows: Mr.
Laborde would receive $20,000.00 in benefit, Mr. Rizvi would receive $20,000.00
in benefit, Mr. Lindenberger would receive $5,000 in benefit and Mr. Kaufman
would receive $12,825 in benefit. However, because Mr. Kaufman's award is that
of Restricted Stock, there is a likelihood that his dollar value of benefit
would be considerably less once the non-tradeability aspect of these shares for
the period of one year would be discounted from their value.
(2) The Executive Group comprises Mr. Gregory H. Laborde, Mr. Omar A.
Rizvi, and Mr. Scott K. Lindenberger.
(3) The Non-Executive Director Group comprises Dr. David Sear and Mr. Ron
Kaufman.
(4) The Company currently has no non-executive officer employees.
The Board has not ratified any pension or retirement plans and therefore
has not determined any specifics with respect to the total amount necessary to
fund such plans or the estimate annual payments to be made under such plans.
INTEREST OF CERTAIN PERSONS AND PROPOSALS
Mr. Rizvi and Mr. Laborde each hold a significant equity interest in the
Company and will receive awards in the form of options as a result of the
actions described in this Information Statement. Mr. Lindenberger and Mr.
Kaufman do not currently hold any equity interest in the Company, but will each
receive awards in the form of options as a result of the actions described in
this Information Statement. No associates of any director or officer of the
Company will receive any awards in the form of cash or cash equivalents
resulting from the actions described in this Information Statement
The Company has received no indication from any of its directors or
non-employee directors of any intent to oppose any action to be taken by the
Company. There have been no proposals for action submitted to the Company by any
shareholders other than the proposal described in this Information Statement.
REQUISITE STOCKHOLDER APPROVAL OBTAINED
As of November 29, 1999 Origin had issued and outstanding 3,855,000 shares
of Common Stock. By written consent in lieu of a special meeting dated as of
November 30, 1999, holders representing 2,000,000 shares of the common stock, or
51.88% of the total issued and outstanding shares of common stock, approved the
adoption of the 1999 Employee Stock Incentive Plan and the 1999 Management
Incentive Program. Such actions by written consent are sufficient to satisfy the
applicable requirements of Maryland law that Origin obtain approval of its
stockholders for such actions. Accordingly, the stockholders will not be asked
to take further action on such actions at any future meeting.
