SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule
14(a)-12
THE BETHLEHEM CORPORATION
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
THE BETHLEHEM CORPORATION
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(Name of Person(s) filing Proxy Statement)
Payment of filing fee (check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(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 0-11:1
- -------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------------
- ------------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE>
/X/ 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:
$125.00
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(2) Form, schedule or registration statement no.:
Preliminary Proxy Statement
- -------------------------------------------------------------------------------
(3) Filing party:
THE BETHLEHEM CORPORATION
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(4) Date filed:
October 23, 1995
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<PAGE>
THE BETHLEHEM CORPORATION
--------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 12, 1995
--------------
To the Stockholders of The Bethlehem Corporation:
NOTICE IS HEREBY GIVEN that the 1995 Annual Meeting of Stockholders
(the "Meeting") of The Bethlehem Corporation, a Pennsylvania corporation (the
"Company"), will be held on Tuesday, December 12, 1995 at 3:00 p.m. local time
at the Holiday Inn, Route 512, Bethlehem, Pennsylvania, for the following
purposes:
1. To approve an amendment to the Company's Articles of
Incorporation to increase the authorized common stock of the Company
from 4,000,000 to 20,000,000 shares of common stock, no par value;
2. To approve an amendment to the Company's Articles of
Incorporation to increase the authorized preferred stock of the Company
from 1,000,000 to 5,000,000 shares of preferred stock, no par value;
3. To elect four directors, each to serve for a term of
one year or until the next Meeting of Stockholders and until their
successors are duly elected and qualified;
4. To approve the adoption of the Company's 1994 Stock
Option Plan (the "1994 Stock Option Plan");
5. To amend the Company's Equity Incentive Plan for
Directors (the "Directors Option Plan") to increase the term of options
granted under the Directors Option Plan and to increase the period
after termination of service during which an outstanding option may be
exercised.
6. To ratify an amendment to the Company's By-laws to
eliminate the provision establishing four classes of directors and to
provide that all directors shall be elected annually to serve one year
terms;
7. To ratify the appointment of Sobel & Co. as
independent auditors of the Company for the fiscal year ending May 31,
1996; and
8. To transact such other business as may properly come
before the Meeting and any adjournment thereof according to the proxies
discretion.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. The Board of Directors has fixed the close
of business on October 11, 1995 as the record date (the "Record Date") for the
Meeting. Only stockholders of record of the Company's common stock, no par
value, on the Company's stock transfer books on the close of business on the
Record Date are entitled to vote at the Meeting.
By Order of the Board of Directors
B. ORD HOUSTON
Secretary
November 13, 1995
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, YOU ARE URGED TO FILL
IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
THE BETHLEHEM CORPORATION
25th and Lennox Streets
Easton, Pennsylvania 18045
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 12, 1995
----------------
INTRODUCTION
This Proxy Statement is being furnished to stockholders by the Board of
Directors of The Bethlehem Corporation, a Pennsylvania corporation (the
"Company"), in connection with the solicitation of the accompanying proxy (each
a "Proxy" and collectively, the "Proxies") for use at the 1995 Annual Meeting of
Stockholders of the Company (the "Meeting") to be held Tuesday, December 12,
1995 at 3:00 p.m. local time at the Holiday Inn, Route 512, Bethlehem,
Pennsylvania or at any adjournment thereof.
The principal executive offices of the Company are located at 25th and
Lennox Streets, Easton, Pennsylvania 18045. The approximate date on which this
Proxy Statement and the accompanying Proxy will first be sent or given to
stockholders is November 13, 1995.
RECORD DATE AND VOTING SECURITIES
As of the close of business on October 11, 1995, the record date for
the Meeting (the "Record Date"), there were 1,888,520 outstanding shares of the
Company's common stock, no par value (the "Common Stock"). Except as indicated
below, Holders of Common Stock have one vote per share on each matter to be
acted upon. Only holders of Common Stock (the "Stockholders") of record at the
close of business on the Record Date will be entitled to vote at the Meeting and
at any adjournment thereof. The presence, in person or by proxy, of Stockholders
entitled to cast at least a majority of the votes that all Stockholders are
entitled to cast on a particular matter to be acted upon at the meeting shall
constitute a quorum for purposes of consideration and action on such matter. For
purposes of determining the presence of a quorum and counting votes on the
matters presented, shares represented by abstentions and "broker non-votes" will
be counted as present, but not as votes cast, at the Meeting.
In the election of directors, each Stockholder shall have the right to
multiply the number of votes to which he may be entitled by the total number of
directors to be elected in the election of directors and he may cast the whole
number of his votes for one candidate or he may distribute them among any two or
more candidates. The amendments to the Company's Articles of Incorporation
described in Proposal I and Proposal II below require the affirmative vote of
the holders of a majority of the outstanding Common Stock of the Company
entitled to vote at the Meeting for approval. All other matters expected to be
brought before the Meeting require the affirmative vote of the holders of a
majority of the Company's Common Stock represented and voting at the Meeting for
approval.
<PAGE>
VOTING OF PROXIES
Shares of Common Stock represented by Proxies, which are properly
executed, duly returned and not revoked, will be voted in accordance with the
instructions contained therein. If no specification is indicated on the Proxy,
the shares of Common Stock represented thereby will be voted: (i) for the
proposed amendment to the Company's Articles of Incorporation to increase the
authorized Common Stock of the Company; (ii) for the proposed amendment to the
Company's Articles of Incorporation to increase the authorized preferred stock
of the Company; (iii) for the election as Directors of the four persons who have
been nominated by the Executive Committee of the Board of Directors; (iv) to
approve the adoption of the Company's 1994 Stock Option Plan (the "1994 Stock
Option Plan"); (v) to amend the Company's Equity Incentive Plan for Directors
(the "Directors Option Plan"); (vi) to ratify an amendment to the Company's
By-laws to eliminate a provision establishing four classes of directors and to
provide for annual election of directors; (vii) to ratify the appointment of
Sobel & Co. as independent auditors of the Company for the year ending May 31,
1996 (the "1996 Fiscal Year"); and (viii) for any other matter that may properly
be brought before the Meeting in accordance with the judgment of the person or
persons voting the Proxies.
The execution of a Proxy will in no way affect a Stockholder's right to
attend the Meeting and vote in person. Any Proxy executed and returned by a
Stockholder may be revoked at any time thereafter if written notice of
revocation is given to the Secretary of the Company prior to the vote to be
taken at the Meeting, or by execution of a subsequent proxy which is presented
before the Meeting, or if the Stockholder attends the Meeting and votes by
ballot, except as to any matter or matters upon which a vote shall have been
cast pursuant to the authority conferred by such Proxy prior to such revocation.
For purposes of determining the presence of a quorum for transacting business at
the Meeting, abstentions and broker "non-votes" (i.e., proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are present but which have not been voted.
The cost of solicitation of the Proxies being solicited on behalf of
the Board of Directors will be borne by the Company. In addition to the use of
the mail, proxy solicitation may be made by telephone, telegraph and personal
interview by officers, directors and employees of the Company. The Company will,
upon request, reimburse brokerage houses and persons holding Common Stock in the
names of their nominees for their reasonable expenses in sending soliciting
material to their principals.
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<PAGE>
PROPOSAL I--APPROVAL OF THE AMENDMENT
TO THE COMPANY'S ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK
PROPOSAL II--APPROVAL OF THE AMENDMENT
TO THE COMPANY'S ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF PREFERRED STOCK
The Board of Directors has unanimously approved and recommends that the
Stockholders adopt amendments to the Company's Articles of Incorporation: (a) to
increase its authorized Common Stock from 4,000,000 shares to 20,000,000 shares
(the "Common Stock Charter Amendment"); and (b) to increase its authorized
preferred stock, no par value, ("Preferred Stock") from 1,000,000 shares to
5,000,000 shares (the "Preferred Stock Charter Amendment" and together with the
Common Stock Charter Amendment, the "Charter Amendments") . The relative rights
and limitations of the Common Stock and Preferred Stock would remain unchanged
under the Charter Amendments. The Preferred Stock may be issued by the Board of
Directors from time to time without stockholder approval, in one or more classes
or series with such designations and preferences and voting and other rights as
the Board of Directors deems appropriate.
On the Record Date the Company had 1,888,520 shares of Common Stock
issued and outstanding. In addition, (i) 280,000 shares of Common Stock are
reserved for issuance under the Company's 1989 Equity Incentive Plan and the
Directors Option Plan, (ii) 1,450,000 shares of Common Stock are reserved for
issuance pursuant to an option granted to Universal Process Equipment, Inc.
("UPE") (see "Certain Transactions" below) and (iii) 140,000 shares of Common
Stock are reserved for issuance pursuant to an option granted to certain
unaffiliated third parties. Accordingly, on the Record Date, there remain only
241,480 authorized and unissued shares of Common Stock not reserved for
issuance.
The increase in the authorized Common Stock and Preferred Stock has
been adopted by the Board of Directors to assure that an adequate supply of
authorized unissued shares is available for general corporate needs, such as
future stock dividends or stock splits or issuance under the Company's stock
option plans. The additional authorized shares of Common Stock and Preferred
Stock could also be used for such purposes as raising additional capital for the
operations of the Company or financing acquisitions of other businesses. The
terms of any series of Preferred Stock to be issued will be dependent largely on
market conditions and other factors existing at the time of issuance and sale.
There are currently no plans or arrangements to issue any of the additional
shares of Common Stock proposed to be authorized, other than pursuant to the
1994 Stock Option Plan, or to issue any shares of Preferred Stock. However, all
such shares would be available for issuance without further action by the
Stockholders, unless required by the Company's Articles of Incorporation or
Bylaws or by applicable law. At present there are no such provisions in the
Company's Articles of Incorporation or By-laws.
The issuance of additional shares of Common Stock may, among other
things, have a dilutive effect on earnings per share and on the equity and
voting power of existing holders of Common Stock. Until the Board of Directors
determines the specific rights, preferences and limitations of any shares of
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<PAGE>
Preferred Stock to be issued, the actual effect on the holders of Common Stock
of the issuance of such shares cannot be ascertained. However, such effects
might include restrictions on dividends on the Common Stock if dividends on
Preferred Stock are in arrears, dilution of the voting power of Common Stock to
the extent that any series of Preferred Stock has voting rights, and reduction
of amounts available on liquidation as a result of any liquidation preference
granted to any series of preferred stock.
The issuance of additional shares of Common Stock by the Company also
may potentially have an antitakeover effect by making it more difficult to
obtain stockholder approval of various actions, such as a merger or removal of
management. Issuance of authorized shares of Preferred Stock could also make it
more difficult to obtain stockholder approval of such actions, particularly in
light of the power of the Board of Directors to specify certain rights and
preferences of the Preferred Stock. The Board of Directors, by issuing such
Common Stock or Preferred Stock could adversely affect the voting power of the
outstanding shares of Common Stock and discourage an attempt to gain control of
the Company.
The increase in authorized shares of Common Stock and Preferred Stock
has not been proposed for an anti-takeover-related purpose and the Company has
no knowledge of any current efforts to obtain control of the Company or to
accumulate its Common Stock. At present, the Board of Directors does not intend
to propose further amendments to the Company's Articles of Incorporation or
By-laws that might affect attempts to take over or change control of the
Company.
VOTES REQUIRED
The affirmative vote of the holders of a majority of all outstanding
shares of Common Stock entitled to vote at a meeting of stockholders, in person
or by proxy, is required for approval of the proposed Common Stock Charter
Amendment and for the approval of the proposed Preferred Stock Charter
Amendment. Broker non-votes and proxy cards marked "abstain" with respect to
this proposal will be counted towards a quorum. However, since the proposed
Charter Amendments require the approval of a majority of all outstanding shares
of Common Stock entitled to vote at a meeting of stockholders, abstentions and
broker non-votes will have the effect of a vote against this proposal.
RECOMMENDATIONS OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
COMMON STOCK CHARTER AMENDMENT AND "FOR" THE PREFERRED STOCK CHARTER AMENDMENT.
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<PAGE>
SECURITY OWNERSHIP
HOLDERS OF MORE THAN FIVE PERCENT BENEFICIAL OWNERSHIP
The following table sets forth, as of the Record Date, information
regarding all persons who are known to the Company to be the beneficial owner of
more than 5% of the Company's outstanding Common Stock.
<TABLE>
<CAPTION>
Percent of
Name and Address of Beneficial Owner Shares Owned Beneficially Outstanding Shares
- ------------------------------------ ------------------------- -------------------
<S> <C> <C>
James L. Leuthe 223,624(1) 11.8%
25th & Lennox Streets
Easton, PA 18045
Universal Process 1,831,600(2)(3)(4) 54.9
Equipment, Inc.
P.O. Box 338
Roosevelt, NJ 08555
Robert F. Bacigalupo 150,901(5) 7.9
2433 S. Oakley Avenue
Chicago, IL 60608
</TABLE>
- -------------------
(1) Of this total, 52,281 shares are owned by Nikki, Inc., a corporation in
which Mr. Leuthe is an officer, director and the sole stockholder, 161,343
shares are owned by Mr. Leuthe and 10,000 shares are purchasable by Mr. Leuthe
upon exercise of options granted under the Directors Option Plan. This total
does not include 640 shares owned by Mr. Leuthe's children, of which he
disclaims beneficial ownership.
(2) Includes 1,450,000 shares issuable pursuant to an option granted to
Universal Process Equipment, Inc. by the Company on December 22, 1993.
(3) According to information provided to the Company by UPE, Ronald H. Gale
and Jan Gale are officers, directors and principal stockholders of UPE, and may
be deemed to beneficially own the shares owned by UPE. In addition to shares
they beneficially own through UPE, (i) Ronald H. Gale individually owns 72,000
shares of Common Stock and has the right to purchase 10,000 shares upon the
exercise of options granted under the Directors Option Plan and (ii) Jan Gale
individually owns 70,000 shares and has the right to purchase 10,000 shares upon
the exercise of options granted under the Directors Option Plan.
(4) Information obtained from Amendment No. 1 to Schedule 13D which was
filed with the Securities and Exchange Commission on or about December 23, 1993.
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<PAGE>
(5) Of this total, 140,901 shares are owned by Mr. Bacigalupo and 10,000
shares are purchasable upon the exercise of options granted under the Directors
Option Plan. This total does not include 2,331 shares owned by Mr. Bacigalupo's
wife, 1,000 shares held in trust for the benefit of his son and 5,000 shares
held in trust for the benefit of his mother. Mr. Bacigalupo is the trustee of
the two trusts, and he disclaims beneficial ownership of these 8,331 shares.
BENEFICIAL OWNERSHIP BY MANAGEMENT AND DIRECTORS
The following table sets forth, as of the Record Date, information
regarding the ownership of the outstanding Common Stock of the Company for each
director, each Named Executive Officer and all directors and executive officers
of the Company as a group.
<TABLE>
<CAPTION>
Shares Owned Percent of Outstanding
Name of Beneficial Owner Beneficially Shares
- ------------------------------------------- --------------- -----------------------
<S> <C> <C>
James L. Leuthe(1)(2) 223,624 11.8%
Alan H. Silverstein (3) 10,000 *
Robert F. Bacigalupo (1)(2) 150,901 7.9
D.B. Cahoon (2) 10,000 *
O. Karl Dieckmann (2) 46,686 2.5
Ronald H. Gale (1)(2)(4) 1,913,600 57.1
Jan Gale (1)(2)(4) 1,911,600 57.1
B. Ord Houston (2) 14,865 *
John W. Pike (2) 40,000 2.1
Antoinette L. Martin --- ---
Anthony Chiarella --- ---
All directors and executive officers as a 2,489,676 72.3%
group (11 persons)
</TABLE>
- -----------------
* Less than 1.0%.
(1) Reference is made to "Holders of More than Five Percent Beneficial
Ownership" above.
(2) Includes 10,000 shares issuable pursuant to options exercisable within
60 days of the date hereof pursuant to the terms of the Directors Option Plan.
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<PAGE>
(3) Includes 10,000 shares issuable pursuant to options exercisable within
60 days of the date hereof pursuant to the terms of the Directors Option Plan.
Does not include (a) 200,000 shares issuable pursuant to options granted under
the 1994 Stock Option Plan, the exercise of which is subject to approval by the
stockholders at the Meeting or (b) 50,000 shares exercisable upon the exercise
of options not exercisable until January 1, 1996. See "Proposal IV - Adoption of
the 1994 Stock Option Plan" below.
(4) Includes 1,831,600 shares beneficially owned by UPE, in which the
individual is an officer, director and principal shareholder. See "Security
Ownership of Certain Beneficial Owners and Management - Holders of More Than
Five Percent Beneficial Ownership."
PROPOSAL III--ELECTION OF DIRECTORS
NOMINEES
Section 10.3 of the Company's By-laws provides for the organization of
the Board of Directors into four classes with directors in each class serving
for four year terms. The Board of Directors has approved, and will submit to the
Stockholders for their ratification at the Meeting, an amendment to the By-laws
(the "By-laws Amendment") that amends this provision and creates a Board of
Directors whose entire membership is elected annually. The By-laws Amendment
will not affect the terms of incumbent directors who were elected in prior years
whose terms do not expire at the Meeting. These incumbent directors will
continue to serve as directors until the expiration of their respective terms
and until their successors are elected and qualified. See "Proposal
VI--Ratification of Amendment to the By-laws."
It is proposed that four nominee directors, B. Ord Houston, Ronald H.
Gale, Salvatore J. Zizza and Harold Bogatz (the "Nominees"), be elected to serve
until the 1996 annual meeting of stockholders of the Company and until their
successors are elected and qualified. Unless otherwise specified, all Proxies
received will be voted in favor of the election of the Nominees as directors of
the Company. Two Nominees, Mr. Houston and Mr. Ronald H. Gale, are currently
directors of the Company. There are no family relationships among any of the
Nominees.
Each Nominee has consented to serve if elected. In the event that any
of the Nominees should be unable to serve, the Proxies will vote for such
substitute nominee or nominees as they, in their discretion, shall determine.
The Board of Directors has no reason to believe that any of the Nominees named
herein will be unable to serve. Any vacancy occurring on the Board of Directors
for any reason may be filled by a majority vote of the directors then in office,
and each person so elected shall serve until the next annual Meeting of the
Stockholders of the Company and until his successor is elected and qualified.
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<PAGE>
The following table sets forth information regarding the current ages,
terms of office and business experience of the current directors and the
Nominees:
<TABLE>
<CAPTION>
Year First
Became a Year Term
Director Will Expire
Name Age Principal Occupation --------------- ---------------
- ---- --- --------------------
<S> <C> <C> <C> <C>
James L. Leuthe 53 Chairman of the Board of 1976 1997
Directors since 1977;
President and Chief
Executive Officer of the
Company from February
1979 to November 1983;
Chief Executive Officer
since November 1983;
Chairman of the Board of
First Lehigh Corporation, a
bank holding company
Alan H. Silverstein 46 President and Chief 1994 1997
Operating Officer of the
Company since February
1994; from 1991 to
present, President of Earth
Environmental Services,
Inc., a presently inactive
solid waste remediation
firm and developer of
solid waste co-generation
projects; from July 1992 to
February 1994, President
of Universal Envirogenics,
Inc., a rebuilder of
industrial gas plants
Jan P. Gale 40 Vice President since 1978 1991 1996
of UPE, an international
supplier
of complete process plants
and equipment and
manufacturer of new
equipment in the United
States and Europe(1)
O. Karl Dieckmann 82 Investment manager and 1960 1997
consultant, retired for at
least the past five years
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
Year First
Became a Year Term
Director Will Expire
Name Age Principal Occupation --------------- ---------------
- ---- --- --------------------
<S> <C> <C> <C> <C>
B. Ord Houston* 82 Secretary of the Company 1976 1995
since June 1983, otherwise
retired for at least the last
five years; held various
positions with the
Company since 1966, most
recently as Executive Vice
President
Ronald H. Gale* 44 President and Chief 1990 1995
Executive Officer of UPE
since 1978(1)
Salvatore J. Zizza* 49 Chairman of The Lehigh ---- ---
Group: a public company
that is listed on the New
York Stock Exchange
which has a subsidiary in
the distribution of
electrical products and
until 1991 included major
interior construction,
asbestos abatement and
heavy equipment
manufacturing
Harold Bogatz* 57 Vice President and General ---- ---
Counsel of UPE since
1987
</TABLE>
- ---------------
* Nominee
(1) Ronald H. Gale, a Nominee, and Jan P. Gale, an incumbent director, are
brothers.
If the Nominees are elected at the Meeting and the proposal described
under the heading "Proposal VI--Ratification of Amendment to the By-laws" is
approved by the Stockholders, the Nominees will each hold office until the next
annual meeting of stockholders and until their successors are elected and are
qualified. If the Nominees are elected at the Meeting and Proposal VI is not
approved by the Stockholders, the Nominees will each hold office for respective
terms expiring at the Annual Meeting of Stockholders to be held for the
following years: Mr. Zizza - 1996; Mr. Houston - 1998; Mr. Ronald Gale - 1998;
and Mr. Bogatz - 1999.
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<PAGE>
VOTE REQUIRED
In voting for directors, each Stockholder is entitled to four votes for
each share of Common Stock held, one for each of four directors to be elected. A
Stockholder may cast his votes evenly for all Nominees or may cumulate his votes
and cast them for one Nominee or distribute his votes among two or more
Nominees. The four persons receiving the highest number of votes cast in person
or by proxy shall be elected to the Board of Directors. Abstentions from voting
and broker non-votes on the election of directors will have no effect since they
will not represent votes cast at the Meeting for the purpose of electing
directors.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF
THE NOMINEES.
BOARD MEETINGS -- COMMITTEES OF THE BOARD
The Board of Directors met once during the fiscal year ended May 31,
1995 (the "1995 Fiscal Year"). The Board of Directors presently maintains an
Executive Committee, an Audit Committee, a Compensation Committee and a
Nominating Committee. None of the directors of the Company attended fewer than
75% of the aggregate of the total number of meetings of the Board of Directors
held plus the total number of meetings held by all committees of the Board on
which he served during 1995 Fiscal Year.
The Executive Committee currently consists of Messrs. Houston, Leuthe
and Silverstein and is appointed annually by the Board of Directors to exercise
all powers of the Board of Directors, to the extent permitted by law, between
meetings of the Board. The Executive Committee met four times during the 1995
Fiscal Year.
The Audit Committee currently consists of Messrs. J. Gale, Houston and
Leuthe and is appointed annually by the Board of Directors to recommend the
selection of independent auditors, review the scope and results of the audit,
review the adequacy of the Company's accounting, financial and operating
controls and supervise special investigations. The Audit Committee did not meet
during the 1995 Fiscal Year.
The Compensation Committee is appointed annually by the Board of
Directors to recommend to the Board of Directors remuneration arrangements for
senior management and directors, the adoption of compensation plans in which
officers and directors are eligible to participate and the granting of options
or other benefits under such plans. The Compensation Committee did not meet
during the 1995 Fiscal Year.
The Nominating Committee currently is comprised of Messrs. Bacigalupo
and Leuthe and is appointed annually by the Board of Directors to recommend to
the Board of Directors nominees for election as directors. The Nominating
Committee did not meet during the 1995 Fiscal Year.
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<PAGE>
EXECUTIVE COMPENSATION TABLE
The following table summarizes the compensation paid or accrued by the
Company for services rendered during the years ended December 31, 1992 and 1993,
during the five-month transition period ended May 31, 1994 and during the 1995
Fiscal Year to the Company's Chief Executive Officer and to each of the
Company's executive officers whose total salary and bonus exceeded $100,000
during the 1995 Fiscal Year (the "Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
-------------------------------------- ------------------------------
Name and Other Annual Stock Option All Other
Principal Position Year Salary Bonus Compensation(s) Awards Compensation
- --------------------- -------- -------- --------- ----------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
James L. Leuthe 1995 -- -- -- -- $672(2)
Chairman and Chief 1994(3) -- -- -- -- 280(2)
Executive Officer(1) 1993 -- -- -- -- 672(2)
1992 $2,616 -- $8,387(4) -- 672(2)
Alan H. Silverstein 1995 110,000 30,000 5,472(4) 250,000 11,925(2)
President and Chief 1994(3) 36,667 - 1,824(4) 10,000 224(2)
Operating Officer(5)
</TABLE>
- ------------------------
(1) Mr. Leuthe was not compensated for his services during the Company's
fiscal year ended December 31, 1993, the transition period ended May 31, 1994 or
1995 Fiscal Year.
(2) Represents life insurance premiums paid by the Company.
(3) Includes compensation received only during the transition period
January 1 to May 31, 1994.
(4) Includes lease and insurance costs paid by the Company with respect to
use of an automobile.
(5) Mr. Silverstein was elected President and Chief Operating Officer of
the Company in February 1994. Prior to that time, Mr. Silverstein served as a
consultant to the Company.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning options granted
during the 1995 Fiscal Year to the Named Executive Officers.
<TABLE>
<CAPTION>
Number of
Securities Percentage of Total Per Share
Underlying Options Granted to Exercise
Name Options Granted Employees Price Expiration Date
- ----------------------------- ----------------- -------------------- ------------- ----------------------
<S> <C> <C> <C> <C>
Alan H. Silverstein 250,000 100.0% $0.9375 December 29, 2004
</TABLE>
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<PAGE>
AGGREGATED FISCAL YEAR-END OPTIONS
The following table sets forth certain information regarding
unexercised stock options held by each of the Named Executive Officers as of May
31, 1995. No stock options were exercised by any such officer during the 1995
Fiscal Year.
AGGREGATED FISCAL YEAR-END OPTION VALUES
Number of Value of Unexercised
Unexercised Options in-the-Money Options
at May 31, 1995 at May 31, 1995 ($)(1)
Exercisable/ Exercisable/
Unexercisable Unexercisable
Name --------------------- ------------------------
- ----
James L. Leuthe 10,000/0 0/0
Alan H. Silverstein (2) 10,000/250,000 0/296,875
- ----------------
(1) On the Record Date, the last reported sales price of the Company's
Common Stock as reported by the American Stock Exchange was $3.75 per
share.
(2) The 250,000 options referenced are not exercisable until approval by
stockholders at the Annual Meeting and, further, as to 50,000 of such
options, until January 1, 1996.
COMPENSATION OF DIRECTORS
Directors are not compensated for their services as a director but are
entitled to reimbursement of expenses incurred in connection with their
attendance at all meetings.
The Company maintains the Directors Option Plan for directors. Under
the Directors Option Plan: (i) each person who was a director of the Company on
March 21, 1991 received an option for 10,000 shares under the Directors Option
Plan and (ii) each individual who becomes a director of the Company after March
21, 1991 is granted an option for 10,000 shares. The exercise price of each
option granted under the Directors Option Plan is the greater of $3.15 per share
or 100% of the fair market value of a share of the Company's Common Stock on the
date the option is granted. No option granted under the Directors Option Plan
may be exercised during the six months after its grant; thereafter, the option
becomes exercisable in full. Options are not assignable. No option may be
exercised after five years from the date of grant. See Proposal V--"Amendment to
the Company's Equity Incentive Plan for Directors" for the terms of a proposed
amendment to the Directors Option Plan.
For information with respect to options outstanding under the Directors
Option Plan, see "Proposal IV -- Amendment to the Company's Equity Incentive
Plan for Directors."
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Mr. Alan Silverstein is employed by the Company pursuant to an
agreement (the "Employment Agreement") dated February 1, 1994. The Employment
Agreement provides for a five year term, with automatic renewal for successive
terms of two years, subject to a mutual right, exercisable within 120 days prior
to the expiration of any term, not to renew the Employment Agreement. The salary
paid to Mr. Silverstein for the first year under the Employment Agreement is
$110,000, increasing to $165,000 in the fifth year. Mr. Silverstein is entitled
to a quarterly bonus based on the earnings of the Company, with a minimum
guaranteed bonus for the first 18 months of $30,000.
PROPOSAL IV--ADOPTION OF THE 1994 STOCK OPTION PLAN
The Board of Directors has adopted the 1994 Stock Option Plan, which
provides for the granting of non-qualified and incentive stock options and stock
appreciation rights (collectively, the "Options") for up to 400,000 shares of
the Common Stock (or the number and kind of shares of stock or other securities
which are substituted for those shares or to which those shares are adjusted by
reason of a reclassification, recapitalization, merger, consolidation,
reorganization, issuance of warrants or rights, stock dividend, stock split or
reverse stock split, combination or exchange of shares, repurchase of shares,
change in corporate structure or otherwise) to certain officers, non-employee
directors and key employees (collectively, the "Key Employees") of the Company
and its subsidiaries whose substantial contributions are essential to the
continued growth and success of the Company's business. Incentive options are
intended to qualify as options described in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"). The 1994 Stock Option Plan is
administered by a committee of outside directors appointed by the Board of
Directors (the "Committee"). All Key Employees, as identified by the Committee,
are eligible to participate in the 1994 Stock Option Plan, subject to the
Committee's discretion to designate Key Employees who are to receive Options. As
of the date hereof, approximately 15 Key Employees are eligible to participate
in the 1994 Stock Option Plan. As of May 30, 1995, Options to purchase an
aggregate of 250,000 shares of Common Stock had been granted to a Key Employee
of the Company. A total of 200,000 Options is currently exercisable, subject to
stockholder approval of the 1994 Stock Option Plan.
If any outstanding Options or any portions thereof for any reason
expire or are cancelled or otherwise terminated, the shares of Common Stock
subject to the unexercised portion of such Option or Options are again available
for grants under the 1994 Stock Option Plan as if no Option had been granted
with respect to such shares, provided, however, that any such terminated Option
shall count against the maximum number of shares that may be granted to any Key
Employee. The maximum number of shares that may be granted to one person
pursuant to the Plan is 250,000 shares. In addition, the aggregate fair market
value (determined as of the date an option is granted) of the shares with
respect to which incentive stock options are exercisable by any single employee
during any calendar year cannot exceed $100,000.
Within the limitations of the 1994 Stock Option Plan, the Committee
will determine the individuals to whom Options shall be granted (the
"Optionees"), the number of shares subject to each Option, the Option price and
the other terms and conditions of the Option. No Option may be granted after the
termination date of the 1994 Stock Option Plan, which is December 23, 2004.
No payments or contributions are required to be made by the Optionees
other than in connection with the exercise of the Options. An Optionee may
exercise each Option granted to such Optionee in such installments as the
Committee shall determine at the time of grant thereof. Except as
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otherwise set forth in the 1994 Stock Option Plan or the applicable agreement,
an Option may be exercised in whole or in part at any time or from time to time,
except that not less than 100 shares may be purchased at any time unless the
number of shares so purchased constitutes the total number of shares then
purchasable under the Option. Upon exercise of an Option, the purchase price
therefor shall be payable in full in cash or check or, at the discretion of the
Committee and upon such terms as determined by the Committee, by transferring
shares of Common Stock to the Company or by a cashless exercise procedure.
Options are nontransferable and are subject to forfeiture or limitations upon
termination of employment, as set forth in the 1994 Stock Option Plan.
The purchase price for the shares of Common Stock to be purchased upon
the exercise of Options shall be established by the Committee. Except as
otherwise set forth in the 1994 Stock Option Plan, the Option price shall not be
less than the fair market value of the Common Stock on the date of grant, which
is presently equal to the last sale price per share as reported by the American
Stock Exchange on that date.
The 1994 Stock Option Plan also provides, with certain exceptions, that
each non-employee director who, after December 1, 1994, is elected to the Board
of Directors for the first time at any meeting of stockholders will, at the time
of such election, automatically be granted an option to purchase 10,000 shares
of Common Stock. In addition, on the date of each annual meeting of stockholders
subsequent to January 1, 1995, each continuing non-employee director will
automatically granted an option to purchase 500 shares of Common Stock.
A copy of the 1994 Stock Option Plan is attached as Annex A to this
Proxy Statement.
TAX CONSEQUENCES
Under current federal income tax laws, the grant of a non-qualified
Option pursuant to the 1994 Stock Option Plan generally has no tax effect on the
Company or the Optionee. Exercise of a non-qualified Option under the 1994 Stock
Option Plan will result in taxable compensation income to the Optionee in the
amount by which the fair market value of the Common Stock issued pursuant to the
exercise, at the time of the exercise, exceeds the purchase price of such Common
Stock under the non-qualified Option, and the Company generally will be entitled
to a tax deduction equal to the amount of compensation income taxable to the
Optionee upon exercise of a non-qualified Option. Any transfer of Common Stock
acquired upon exercise of a non-qualified Option may result in taxable income.
The grant of an incentive Option pursuant to the 1994 Stock Option Plan
generally has no tax effect on the Company or the Optionee. Exercise of an
incentive Option under the 1994 Stock Option Plan will not be subject to the
regular federal income tax, but may be subject to the alternative minimum tax.
The Company will not be entitled to a tax deduction upon the exercise of an
incentive Option. Any transfer of Common Stock acquired upon exercise of an
incentive Option may result in taxable income, and the character of any such
income as capital gain or ordinary income will depend on whether certain holding
period requirements have been satisfied.
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<PAGE>
PLAN BENEFITS UNDER THE PLAN
The Company received no consideration for the grant of Options under
the 1994 Stock Option Plan. As of the Record Date, the last reported sales price
of the Company's Common Stock on the American Stock Exchange was $3.75 per
share.
VOTE REQUIRED
The approval of the 1994 Stock Option Plan requires the affirmative
vote of a majority of the votes cast by all Stockholders represented and
entitled to vote thereon. An abstention, withholding of authority to vote or
broker non-vote, therefore, will not have the same legal effect as an "against"
vote and will not be counted in determining whether the proposal has received
the requisite stockholder vote.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF 1994 STOCK OPTION PLAN.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors. and persons who own
more than 10% of a registered class of the Company's equity securities to file
with the Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of equity securities of the
Company. Executive officers, directors and greater than 10% shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms which they file.
To the Company's knowledge, based solely on a review of the copies of
such forms received by it, or written representations from certain reporting
persons that no other reports were required for those persons, the Company
believes that all filing requirements applicable to its executive officers,
directors and greater than 10% stockholders were complied with during the fiscal
year ended December 31, 1993, the transition period ended May 31, 1994 and the
1995 Fiscal Year, except that Jan P. Gale and Ronald H. Gale each filed one Form
4 and one Form 5 late and D.B. Cahoon filed one Form 4 late.
CERTAIN RELATIONSHIPS AND CERTAIN TRANSACTIONS
Ronald H. Gale and Jan Gale are directors and stockholders of the
Company and are officers, directors and principal stockholders of UPE, a
corporation which is a stockholder of the Company. UPE and/or Ronald H. Gale
and/or Jan Gale are also majority stockholders or otherwise affiliated with
other companies that engage in transactions with the Company. UPE and related
entities purchased processing equipment manufactured by the Company as well as
utilized the Company's remanufacturing services. The approximate total revenues
derived from sales to UPE and related parties were $2.4 million for the fiscal
year ended May 31, 1995, $290,000 for the transition period from January to May
1994 and $740,000 for the fiscal year ended December 31, 1993. The terms of
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<PAGE>
such sales were at least as favorable to the Company as could have been obtained
from unaffiliated third parties.
On December 22, 1993, UPE was granted 300,000 shares of the Company's
Common Stock and an option to purchase an additional 1,450,000 shares pursuant
to an agreement (the "UPE Agreement") between the Company and UPE. Such stock
was granted in consideration of UPE's (i) services in structuring and
negotiating a settlement agreement among The Harrisburg Authority
("Harrisburg"), the Company and UPE with respect to a judgment in the amount of
$2,127,071 which Harrisburg had obtained against the Company; (ii) payments on
behalf of the Company to Harrisburg under the settlement agreement; (iii)
providing a guaranty of and surety for the Company's full and timely payment to
Harrisburg of $650,000 in specified installments; and (iv) granting to
Harrisburg security interests in certain equipment held for sale by UPE and in a
percentage of the proceeds from the sale of such equipment in the ordinary
course of UPE's business.
Beginning in July, 1993 through January, 1994, Alan H. Silverstein was
retained as a consultant to the Company. In that capacity he played a key
advisory role in the structure and negotiation of the final settlement agreement
with the Harrisburg Authority and the resolution of several other potential
litigation matters. Mr. Silverstein was paid $69,939 in consulting fees and
expenses for services during that time.
In October 1995, Robert F. Bacigalupo resigned as a director of the
Company. Following his resignation, the Executive Committee of the Board of
Directors designated Mr. Bacigalupo honorary director emeritus in recognition of
his many years of service as a director. Mr. Bacigalupo will serve in such
capacity as an advisor to the Board of Directors.
PROPOSAL V--AMENDMENT TO THE COMPANY'S
EQUITY INCENTIVE PLAN FOR DIRECTORS
The Board of Directors has unanimously approved and recommends that the
Stockholders approve an amendment to the Directors Option Plan to (i) extend the
terms of options granted under the Directors Option Plan from five years to six
years; (ii) eliminate provisions by which options automatically terminate one
month from termination of an optionees's service with the Company (other than as
a result of death or disability); and (iii) eliminate provisions by which
options granted under the Directors Option Plan automatically terminate one year
from the death or disability of an optionee.
Pursuant to the Directors Option Plan, options may be granted to
directors and consultants of the Company or any subsidiary of the Company. As of
the Record Date, options to purchase 100,000 shares of Common Stock were
outstanding under the Directors Option Plan and no options had been exercised.
Options to purchase shares of Common Stock have been granted pursuant to the
Directors Option Plan are as follows:
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<PAGE>
<TABLE>
<CAPTION>
Exercise Price Per
Name Date of Grant Number of Shares Share(1)
- ---- ------------------- --------------------- ---------------------
<S> <C> <C> <C>
Robert F. Bacigalupo(2)........................ 3/21/91 10,000 $3.15
O. Karl Dieckmann.............................. 3/21/91 10,000 3.15
Jan Gale....................................... 3/21/91 10,000 3.15
Ronald H. Gale................................. 3/21/91 10,000 3.15
B. Ord Houston................................. 3/21/91 10,000 3.15
James L. Leuthe................................ 3/21/91 10,000 3.15
Joseph T. Posh(2).............................. 3/21/91 10,000 3.15
John W. Pike(2)................................ 2/20/92 10,000 3.15
D.B. Cahoon(2)................................. 2/05/93 10,000 3.15
Alan H. Silverstein............................ 4/12/94 10,000 3.15
</TABLE>
- ---------------
(1) As of the Record Date, the last reported sales price of the Company's
Common Stock as reported on the American Stock Exchange, Inc. was $3.75
per share.
(2) These options will expire if Proposal V is not approved by the
Stockholders.
ADMINISTRATION
The Directors Option Plan is administered by a committee (the
"Committee") which consists of two members of the Board of Directors of the
Company. The members of the Committee are appointed by the Board of Directors
and serve at the pleasure of the Board of Directors. The Committee has the power
to interpret the Directors Option Plan, the options granted thereunder and to
adopt rules for the administration, interpretation and application of the
Directors Option Plan as are consistent therewith and to interpret, amend or
revoke any such rules. The Committee does not have any discretion to determine
who will be granted options or to determine the number of options, the exercise
price of options or the timing of the grant of options to be granted to any
Director. Members of the Committee shall not receive any compensation for their
services as members, but all expenses and liabilities they incur in connection
with the administration of the Directors Option Plan shall be borne by the
Company.
DESCRIPTION OF OPTIONS
Each director as of March 21, 1991 and each person who became a
director after March 21, 1991 was granted an option to purchase 10,000 shares of
Common Stock at an exercise price of $3.15 per share. No option is exercisable
in whole or in part during the six months after the option is granted.
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<PAGE>
PROPOSED AMENDMENT
The proposed amendment is as follows:
Article 4, Subsection (b)(v) of the Company's Equity Incentive
Plan for Directors is hereby amended and restated to read in its
entirety as follows:
"(v) Expiration of Options. Each Option shall terminate upon
the expiration of six years from the date the Option was granted;
except that, a Director's Option shall terminate immediately if said
Director is removed from the Board (A) by action of the shareholders of
the Company or the Board in accordance with the Company's By-laws or
applicable law, (B) by a court of competent jurisdiction, or (C) by
operation of law, in any such case where "cause" is the express reason
for such removal."
VOTE REQUIRED
The approval of the amendment to the Directors Option Plan requires the
affirmative vote of a majority of the votes cast by all Stockholders represented
and entitled to vote thereon. An abstention, withholding of authority to vote or
broker non-vote, therefore, will not have the same legal effect as an "against"
vote and will not be counted in determining whether the proposal has received
the requisite stockholder vote.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE
PROPOSAL TO AMEND THE DIRECTORS OPTION PLAN.
PROPOSAL VI--RATIFICATION OF AMENDMENT TO THE BY-LAWS
The Board of Directors has unanimously approved and adopted the By-laws
Amendment, which amendment would phase out the current Board of Directors
structure consisting of four classes of directors. Pursuant to Section 10.3 of
the current By-laws, the members of each class of directors serve four year
terms, with approximately one-fourth of the Board of Directors elected each
year. The By-laws Amendment amends Section 10.3 by providing for the annual
election of directors. The Bylaw Amendment will not effect the terms of
incumbent directors who were elected in prior years whose terms do not expire at
the Meeting. These incumbent directors will continue to serve as directors until
the expiration of their respective terms and until their successors are elected
and qualified. The directors elected at the Meeting will serve until the next
annual meeting of stockholders and until their successors are duly elected and
qualified. The adoption of the By-laws Amendment permits the Stockholders to
change the entire composition of the Board of Directors at a single annual
meeting of stockholders beginning with the 1997 annual meeting of stockholders.
The Company has no present intention to reintroduce the classified structure in
the future.
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<PAGE>
VOTE REQUIRED
Ratification of the amendment to the Company's By-laws requires the
affirmative vote of a majority of the votes cast by all Stockholders represented
and entitled to vote thereon. An abstention, withholding of authority to vote or
broker non-vote, therefore, will not have the same legal effect as an "against"
vote and will not be counted in determining whether the proposal has received
the requisite stockholder vote.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE AMENDMENT TO THE COMPANY'S BY-LAWS.
PROPOSAL VII--RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected Sobel & Co. to be the independent
auditors of the Company for the year ending May 31, 1996. Although the selection
of auditors does not require ratification, the Board of Directors has directed
that the appointment of Sobel & Co. be submitted to shareholders for
ratification due to the significance of their appointment to the Company. If
shareholders do not ratify the appointment of Sobel & Co., the Board of
Directors will consider the appointment of other certified public accountants. A
representative of Sobel & Co. is expected to be available at the Meeting to make
a statement if such representative desires to do so and to respond to
appropriate questions.
VOTE REQUIRED
Ratification of the appointment of Sobel & Co. requires the affirmative
vote of a majority of the votes cast by all Stockholders represented and
entitled to vote thereon. An abstention, withholding of authority to vote or
broker non-vote, therefore, will not have the same legal effect as an "against"
vote and will not be counted in determining whether the proposal has received
the requisite stockholder vote.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF SOBEL & CO. AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE 1996 FISCAL YEAR.
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ANNUAL REPORT
All stockholders of record as of the Record Date have been sent, or are
concurrently herewith being sent, a copy of the Company's Annual Report for the
1995 Fiscal Year.
ANY STOCKHOLDER OF THE COMPANY MAY OBTAIN WITHOUT CHARGE A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE 1995 FISCAL YEAR (WITHOUT
EXHIBITS), AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BY WRITING TO
STOCKHOLDER INFORMATION, THE BETHLEHEM CORPORATION, 25TH AND LENNOX STREETS,
EASTON, PENNSYLVANIA 18045.
STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the proxy materials to be
distributed in connection with the next Annual Meeting of Stockholders of the
Company, stockholder proposals for such meeting must be submitted to the Company
no later than August 12, 1996.
OTHER MATTERS
As of the date of this Proxy Statement, management knows of no matters
other than those set forth herein which will be presented for consideration at
the Meeting. If any other matter or matters are properly brought before the
Meeting or any adjournment thereof, the persons named in the accompanying Proxy
will have discretionary authority to vote, or otherwise act, with respect to
such matters in accordance with their judgment.
By Order of the Board of Directors,
B. ORD HOUSTON
Secretary
November 13, 1995
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<PAGE>
ANNEX A
to
Proxy Statement
THE BETHLEHEM CORPORATION
1994 STOCK OPTION PLAN
1. PURPOSE. The purpose of the Plan is to provide additional
incentive to those officers and key employees of the Company and its
Subsidiaries whose substantial contributions are essential to the continued
growth and success of the Company's business in order to strengthen their
commitment to the Company and its Subsidiaries, to motivate such officers and
employees to faithfully and diligently perform their assigned responsibilities
and to attract and retain competent and dedicated individuals whose efforts will
result in the long-term growth and profitability of the Company. An additional
purpose of the Plan is to build a proprietary interest among the Company's
Non-Employee Directors and thereby secure for the Company's stockholders the
benefits associated with common stock ownership by those who will oversee the
Company's future growth and success. To accomplish such purposes, the Plan
provides that the Company may grant Incentive Stock Options, Nonqualified Stock
Options, or Stock Appreciation Rights.
2. DEFINITIONS. For purposes of this Plan:
(a) "Agreement" means the written agreement evidencing the
grant of an Option and Stock Appreciation Rights, if applicable, and setting
forth the terms and conditions thereof.
(b) "Board" means the Board of Directors of the Company.
(c) "Cause" means, unless otherwise defined in the particular
Agreement evidencing the grant of an Option (i) the willful neglect or refusal
to perform the Optionee's duties or responsibilities or the willful taking of
actions which materially impair the Optionee's ability to perform the Optionee's
duties or responsibilities which continues after being brought to the attention
of the Optionee (other than any such failure resulting from the Optionee's
incapacity due to physical or mental illness) or (ii) the willful act or failure
to act by the Optionee which is materially injurious to the Company or a
Subsidiary which is brought to the attention of the Optionee in writing not more
than thirty (30) days from the date of its discovery by the Company, a
Subsidiary or the Board.
(d) "Change in Capitalization" means any increase, reduction,
or change or exchange of Shares for a different number or kind of shares or
other securities of the Company by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, issuance of warrants or
rights, stock dividend, stock split or reverse stock split, combination or
exchange of shares, repurchase of shares, change in corporate structure or
otherwise.
(e) "Change in Control" means one of the following events:
(i) any "person" (as defined in Sections 13(d) and 14(d)
of the Exchange Act other than any person who is a stockholder of the Company on
the effective date hereof), other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
any Subsidiary, or any corporation owned, directly or indirectly, by the
stockholders of the Company, in substantially the same proportions as their
ownership of stock of
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the Company, acquires "beneficial ownership" of more than fifteen percent (15%)
of the issued and outstanding Shares of the Company; or (ii) during any period
of not more than two (2) consecutive years, individuals who at the beginning of
such period constitute the Board and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in subsections 2(e)(i), 2(e)(iii) or 2(e)(iv)
hereof) whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or (iii) the stockholders
of the Company approve a merger other than (x) a merger which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity), in combination with the
ownership of any trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any Subsidiary, at least fifty percent (50%) of
the combined voting power of all classes of stock of the Company or such
surviving entity outstanding immediately after such merger or (y) a merger
effected to implement a recapitalization of the Company (or similar transaction)
in which no person (other than any person who is a stockholder of the Company on
the effective date hereof) acquires more than fifty percent (50%) of the
combined voting power of the Company's then outstanding securities; or (iv) the
stockholders of the Company approve a plan of complete liquidation of the
Company or a sale of all or substantially all of the assets of the Company.
(f) "Code" means the Internal Revenue Code of 1986, as
amended.
(g) "Committee" means a committee of two or more Outside
Directors appointed by the Board to administer the Plan and to perform the
functions set forth herein.
(h) "Company" means The Bethlehem Corporation, a Pennsylvania
corporation.
(i) "Disability" means the inability, due to illness or
injury, to engage in any gainful occupation for which the individual is suited
by education, training or experience, which condition continues for at least
twelve (12) months.
(j) "Eligible Employee" means any officer or other key
employee of the Company or a Subsidiary designated by the Committee as eligible
to receive Options or Stock Appreciation Rights subject to the conditions set
forth herein.
(k) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(l) "Fair Market Value" means the fair market value of the
Shares as determined by the Committee in its sole discretion; provided, however,
that (A) if the Shares are admitted to trading on a national securities
exchange, Fair Market Value on any date shall be the last sale price reported
for the Shares on such exchange on such date or on the last date preceding such
date on which a sale was reported, (B) if the Shares are admitted to quotation
on the National Association of Securities Dealers Automated Quotation System
("NASDAQ") or other comparable quotation system and have been designated as a
National Market System ("NMS") security, Fair Market Value on any date shall be
the last sale price reported for the Shares on such system on such
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<PAGE>
date or on the last day preceding such date on which a sale was reported, or (C)
if the Shares are admitted to quotation on NASDAQ and have not been designated a
NMS security, Fair Market Value on any date shall be the average of the highest
bid and lowest asked prices of the Shares on such system on such date.
(m) "Incentive Stock Option" means an Option within the
meaning of Section 422 of the Code.
(n) "Non-Employee Director" means a member of the Board who
is not an employee of the Company or a Subsidiary.
(o) "Nonqualified Stock Option" means an Option which is not
an Incentive Stock Option.
(p) "Option" means an Incentive Stock Option, a Nonqualified
Stock Option, or either or both of them, as the context requires.
(q) "Optionee" means a person to whom an Option has been
granted under the Plan.
(r) "Outside Director" means a member of the Board satisfying
the requirements of Section 162(m)(4)(C)(i) of the Code and the regulations
promulgated thereunder.
(s) "Parent" means any corporation in an unbroken chain of
corporations ending with the Company, if each of the corporations other than the
Company owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock of one of the other corporations in such
chain.
(t) "Plan" means The Bethlehem Corporation 1994 Stock Option
Plan, as amended from time to time.
(u) "Securities Act" means the Securities Act of 1933, as
amended.
(v) "Shares" means shares of the Common Stock, no par value
per share, of the Company (including any new, additional or different stock or
securities resulting from a Change in Capitalization), as the case may be.
(w) "Stock Appreciation Right" means a right to receive all
or some portion of the increase in the value of Shares as provided in Section 7
hereof.
(x) "Subsidiary" means any corporation in an unbroken chain
of corporations, beginning with the Company, if each of the corporations other
than the last corporation in the unbroken chain owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
(y) "Ten-Percent Stockholder" means an Eligible Employee,
who, at the time an Incentive Stock Option is to be granted to such Eligible
Employee, owns (within the meaning of Section 422(b)(6) of the Code) stock
possessing more than ten percent (10%) of the total combined
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voting power of all classes of stock of the Company, a Parent or a Subsidiary
within the meaning of Sections 424(e) and 424(f), respectively, of the Code.
3. ADMINISTRATION.
(a) The Plan shall be administered by the Committee, which
shall hold meetings at such times as may be necessary for the proper
administration of the Plan. The Committee shall keep minutes of its meetings. A
majority of the Committee shall constitute a quorum and a majority of a quorum
may authorize any action. Any decision reduced to writing and signed by a
majority of the members of the Committee shall be fully effective as if it had
been made at a meeting duly held. No member of the Committee shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan, Options, or Stock Appreciation Rights, and all members of
the Committee shall be fully indemnified by the Company with respect to any such
action, determination or interpretation. The Company shall pay all expenses
incurred in the administration of the Plan.
(b) Subject to the express terms and conditions set forth
herein, the Committee shall have the power from time to time:
(i) to determine those Eligible Employees to whom Options
shall be granted under the Plan and the number of
Nonqualified Stock Options, Stock Appreciation Rights and/or
Incentive Stock Options to be granted to each Eligible
Employee and to prescribe the terms and conditions (which
need not be identical) of each Option and Stock Appreciation
Right, including the purchase price per share of each Option;
(ii) to construe and interpret the Plan and the Options
and Stock Appreciation Rights granted hereunder and to
establish, amend and revoke rules and regulations for the
administration of the Plan, including, but not limited to,
correcting any defect or supplying any omission, or
reconciling any inconsistency in the Plan or in any
Agreement, in the manner and to the extent it shall deem
necessary or advisable to make the Plan fully effective, and
all decisions and determinations by the Committee in the
exercise of this power shall be final and binding upon the
Company or a Subsidiary, and the Optionees, as the case may
be;
(iii) to determine the duration and purposes for leaves of
absence which may be granted to an Optionee without
constituting a termination of employment or service for
purposes of the Plan; and
(iv) generally, to exercise such powers and to perform
such acts as are deemed necessary or advisable to promote the
best interests of the Company with respect to the Plan.
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4. STOCK SUBJECT TO PLAN.
(a) The aggregate number of Shares that may be issued or
transferred pursuant to Options or Stock Appreciation Rights granted under the
Plan is 400,000 Shares, and the maximum number of Shares with respect to which
Options or Stock Appreciation Rights may be granted to any Eligible Employee is
250,000 Shares. The Company shall reserve for the purposes of the Plan, out of
its authorized but unissued Shares or out of Shares held in the Company's
treasury, or partly out of each, such number of Shares as shall be determined by
the Board.
(b) Whenever any outstanding Option or portion thereof
expires, is cancelled or is otherwise terminated (other than by exercise of the
Option or any related Stock Appreciation Right), the Shares allocable to the
unexercised portion of such Option may again be the subject of Options and Stock
Appreciation Rights hereunder; provided, however, that any such terminated
option shall count against the maximum numbers of Shares with respect to which
Options or Stock Appreciation Rights may be granted to any Eligible Employee.
(c) The aggregate fair market value of Shares (determined on
the date of grant) for which an Eligible Employee may be granted Incentive Stock
Options which are exercisable for the first time in any particular calendar year
(whether under the terms of the Plan or any other stock option plan of the
Company, a Parent or a Subsidiary) shall not exceed $100,000. To the extent any
Option which is intended to be an Incentive Stock Option is granted to any
Eligible Employee fails to satisfy the requirements of this subsection, the
Incentive Stock Option shall be treated as a Nonqualified Stock Option. This
Section 4 shall be applied by taking Options into account in the order in which
they are granted.
5. ELIGIBILITY. Subject to the provisions of the Plan, the
Committee shall have full and final authority to select those Eligible Employees
who will receive Options and Stock Appreciation Rights.
6. OPTIONS. The Committee may grant Options in accordance with
the Plan, the terms and conditions of which shall be set forth in an Agreement.
Each Option and Agreement shall be subject to the following conditions:
(a) PURCHASE PRICE. The purchase price or the manner in which
the purchase price is to be determined for Shares under each Option shall be set
forth in the Agreement, provided that the purchase price per Share under each
Option shall not be less than the Fair Market Value of a Share at the time the
Option is granted (one hundred ten percent (110%) in the case of an Incentive
Stock Option granted to a Ten-Percent Stockholder).
(b) DURATION. Options granted hereunder shall be for such
term as the Committee shall determine, provided that (i) no Incentive Stock
Option shall be exercisable after the expiration of ten (10) years from the date
it is granted (five (5) years in the case of an Incentive Stock Option granted
to a Ten-Percent Stockholder) and (ii) no Nonqualified Stock Option shall be
exercisable after the expiration of ten (10) years and one (1) day from the date
it is granted. The Committee may, subsequent to the granting of any Option,
extend the term thereof but in no event shall the term as so extended exceed the
maximum term provided for in the preceding sentence.
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(c) NON-TRANSFERABILITY. No Option granted hereunder shall be
transferable by the Optionee to whom granted otherwise than by will or the laws
of descent and distribution, and an Option may be exercised during the lifetime
of such Optionee only by the Optionee or such Optionee's guardian or legal
representative. The terms of such Option shall be binding upon the
beneficiaries, executors, administrators, heirs and successors of the Optionee.
(d) VESTING. Subject to subsection 6(e) below, unless
otherwise set forth in the Agreement, each Option shall become exercisable as to
33-1/3 percent of the Shares covered by the Option on the first anniversary of
the date the Option was granted and as to an additional 33-1/3 percent of the
Shares covered by the Option on each of the following two (2) anniversaries of
such date of grant. To the extent not exercised, installments shall accumulate
and be exercisable, in whole or in part, at any time after becoming exercisable,
but not later than the date the Option expires. The Committee may accelerate the
exercisability of any Option or portion thereof at any time.
(e) ACCELERATED VESTING. Notwithstanding the provisions of
subsection 6(d) above, each Option granted to an Optionee shall become
immediately exercisable in full upon a Change in Control.
(f) Termination of Employment. In the event that an Optionee
ceases to be employed by the Company or a Subsidiary, any outstanding Options
held by such Optionee shall, unless the Agreement evidencing such Option
provides otherwise, terminate as follows:
(i) If the Optionee's termination of employment is due
to his death or Disability, the Option (to the extent
exercisable at the time of the Optionee's termination of
employment) shall be exercisable for a period of one (1)
year following such termination of employment, and shall
thereafter terminate;
(ii) If the Optionee's termination of employment is by
the Company or a Subsidiary for Cause, the Option shall
terminate on the date of the Optionee's termination of
employment; and
(iii) If the Optionee's termination of employment is for
any other reason (including an Optionee's ceasing to be
employed by a Subsidiary as a result of the sale of such
Subsidiary or an interest in such Subsidiary), the Option
(to the extent exercisable at the time of the Optionee's
termination of employment) shall be exercisable for a period
of three (3) months following such termination of
employment, and shall thereafter terminate.
Notwithstanding the foregoing, the Committee may provide, either
at the time an Option is granted or thereafter, that the Option may be exercised
after the periods provided for in this subsection 6(f), but in no event beyond
the term of the Option.
(g) METHOD OF EXERCISE. The exercise of an Option shall be
made only by a written notice delivered to the Secretary of the Company at the
Company's principal executive office, specifying the number of Shares to be
purchased and accompanied by payment therefor and otherwise in accordance with
the Agreement pursuant to which the Option was granted. The purchase price for
any Shares purchased pursuant to the exercise of an Option shall be paid in full
upon such
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exercise in cash, by check, or, at the discretion of the Committee and upon such
terms and conditions as the Committee shall approve, by transferring Shares to
the Company or by a cashless exercise procedure. Any Shares transferred to the
Company as payment of the purchase price under an Option shall be valued at
their Fair Market Value on the day preceding the date of exercise of such
Option. If requested by the Committee, the Optionee shall deliver the Agreement
evidencing the Option and the Agreement evidencing any related Stock
Appreciation Right to the Secretary of the Company, who shall endorse thereon a
notation of such exercise and return such Agreement to the Optionee. Not less
than 100 Shares may be purchased at any time upon the exercise of an Option
unless the number of Shares so purchased constitutes the total number of Shares
then purchasable under the Option.
(h) RIGHTS OF OPTIONEES. No Optionee shall be deemed for any
purpose to be the owner of any Shares subject to any Option unless and until (i)
the Option shall have been exercised pursuant to the terms thereof, (ii) the
Company shall have issued and delivered the Shares to the Optionee, and (iii)
the Optionee's name shall have been entered as a stockholder of record on the
books of the Company. Thereupon, the Optionee shall have full voting, dividend
and other ownership rights with respect to such Shares.
7. STOCK APPRECIATION RIGHTS. The Committee may, in its
discretion in connection with the grant of an Option, grant Stock Appreciation
Rights in accordance with the Plan, the terms and conditions of which shall be
set forth in an Agreement. A Stock Appreciation Right shall cover the same
shares covered by the Option (or such lesser number of shares as the Committee
may determine) and shall, except as provided in this Section 7, be subject to
the same terms and conditions as the related Option.
(a) STOCK APPRECIATION RIGHTS RELATED TO AN OPTION.
(i) TIME OF GRANT. A Stock Appreciation Right may be
granted only at the time of grant of the related Option.
(ii) PAYMENT. A Stock Appreciation Right shall entitle
the holder thereof, upon exercise of the Stock Appreciation
Right or any portion thereof, to receive payment of an
amount computed pursuant to subsection 7(a)(iv) below.
(iii) EXERCISE. A Stock Appreciation Right shall be
exercisable at such time or times and only to the extent
that the related Option is exercisable, and will not be
transferable except to the extent the related Option may be
transferable. A Stock Appreciation Right granted in
connection with an Incentive Stock Option shall be
exercisable only if the Fair Market Value of a Share on the
date of exercise exceeds the purchase price specified in the
related Incentive Stock Option.
(iv) AMOUNT PAYABLE. Upon the exercise of a Stock
Appreciation Right, the Optionee shall be entitled to
receive an amount determined by multiplying (A) the excess
of the Fair Market Value of a Share on the date of exercise
of such Stock Appreciation Right over the per Share purchase
price under the related Option, by (B) the number of Shares
as to which such Stock Appreciation Right is being
exercised. Notwithstanding the foregoing, the
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Committee may limit in any manner the amount payable with
respect to any Stock Appreciation Right by including such a
limit at the time it is granted.
(v) Treatment of Related Options and Stock Appreciation
Rights Upon Exercise. Upon the exercise of a Stock
Appreciation Right, the related Option shall be cancelled to
the extent of the number of Shares as to which the Stock
Appreciation Right is exercised and upon the exercise of an
Option granted in connection with a Stock Appreciation
Right, the Stock Appreciation Right shall be cancelled to
the extent of the number of Shares as to which the Option is
exercised or surrendered.
(b) METHOD OF EXERCISE. Stock Appreciation Rights shall be
exercised by an Optionee only by a written notice delivered in person or by mail
to the Secretary of the Company at the Company's principal executive office,
specifying the number of Shares with respect to which the Stock Appreciation
Right is being exercised. If requested by the Committee, the Grantee shall
deliver the Agreement evidencing the Stock Appreciation Right being exercised
and the Agreement evidencing any related Option to the Secretary of the Company,
who shall endorse thereon a notation of such exercise and return such Agreements
to the Grantee.
(c) FORM OF PAYMENT. Payment of the amount determined under
subsection 7(a)(iv) above may be made solely in whole Shares in a number
determined based upon their Fair Market Value on the date of exercise of the
Stock Appreciation Right or, alternatively, at the sole discretion of the
Committee, solely in cash, or in a combination of cash and Shares as the
Committee deems advisable. In the event that a Stock Appreciation Right is
exercised within the sixty-day period following a Change in Control, any amount
payable shall be solely in cash. If the Committee decides to make full payment
in Shares, and the amount payable results in a fractional Share, payment for the
fractional Share will be made in cash. Notwithstanding the foregoing, to the
extent required by Rule 16b-3 of the Exchange Act, no payment in the form of
cash may be made upon the exercise of a Stock Appreciation Right pursuant to
subsection 7(a)(iv) above to an officer of the Company or a Subsidiary who is
subject to Section 16(b) of the Exchange Act, unless the exercise of such Stock
Appreciation Right is made during the period beginning on the third business day
and ending on the twelfth business day following the date of release for
publication of the Company's quarterly or annual statements of earnings.
8. LOANS.
(a) The Company or any Subsidiary may make loans to an
Optionee in connection with the exercise of an Option, subject to the following
terms and conditions and such other terms and conditions not inconsistent with
the Plan, including the rate of interest, if any, as the Committee shall impose
from time to time.
(b) No loan made under the Plan shall exceed the sum of
(i) the aggregate purchase price payable pursuant to the Option with respect to
which the loan is made, plus (ii) the amount of the reasonably estimated income
and employment taxes payable by the Optionee with respect to the exercise of the
Option, reduced by (iii) the aggregate par value of the Shares being acquired
pursuant to exercise of the Option. In no event may any such loan exceed the
Fair Market Value, at the date of exercise, of the Shares received pursuant to
such exercise.
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(c) No loan shall have an initial term exceeding ten (10)
years; provided, that loans under the Plan shall be renewable at the discretion
of the Committee; and provided further, that the indebtedness under each loan
shall become due and payable, as the case may be, on a date no later than (i)
one (1) year after termination of the Optionee's employment due to death,
Disability, or retirement or (ii) the date of termination of the Optionee's
employment for any reason other than death, Disability, or retirement.
(d) Loans under the Plan may be satisfied by an Optionee,
as determined by the Committee, in cash or, with the consent of the Committee,
in whole or in part by the transfer to the Company of Shares whose Fair Market
Value on the date of such payment is equal to part or all of the outstanding
balance of such loan.
(e) A loan shall be secured by a pledge of Shares with a
Fair Market Value of not less than the principal amount of the loan. After any
repayment of a loan, pledged Shares no longer required as security may be
released to the Optionee.
(f) Every loan shall meet all applicable laws, regulations
and rules of the Federal Reserve Board and any other governmental agency having
jurisdiction.
9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
(a) In the event of a Change in Capitalization, the
Committee shall conclusively determine the appropriate adjustments, if any, to
the maximum number and class of shares of stock with respect to which Options
and Stock Appreciation Rights may be granted under the Plan, the number and
class of shares of stock as to which Options and Stock Appreciation Rights have
been granted under the Plan, and the purchase price therefor, if applicable.
(b) Any such adjustment in the Shares or other securities
subject to outstanding Incentive Stock Options (including any adjustments in the
purchase price) shall be made in such manner as not to constitute a modification
as defined by Section 424(h)(3) of the Code and only to the extent otherwise
permitted by Sections 422 and 424 of the Code.
10. NON-EMPLOYEE DIRECTOR OPTIONS. Notwithstanding any of the
other provisions of the Plan to the contrary, the provisions of this Section 10
shall apply only to grants of Options to Non-Employee Directors. Except as set
forth in this Section 10, the other provisions of the Plan shall apply to grants
of Options to Non-Employee Directors to the extent not inconsistent with this
Section 10. For purposes of interpreting Section 6 of the Plan, a Non-Employee
Director's service as a member of the Board shall be deemed to be employment
with the Company or its Subsidiaries.
(a) GENERAL. Non-Employee Directors shall receive
Nonqualified Stock Options in accordance with this Section 10 and may not be
granted Stock Appreciation Rights or Incentive Stock Options under this Plan.
The purchase price per Share purchasable under Options granted to Non-Employee
Directors shall be the Fair Market Value of a Share on the date of grant. No
Agreement with any Non-Employee Director may alter the provisions of this
Section 10 and no Option granted to a Non-Employee Director may be subject to a
discretionary acceleration of exercisability.
(b) GRANTS TO NEW NON-EMPLOYEE DIRECTORS. Each
Non-Employee Director who, after December 1, 1994, is elected to the Board for
the first time by stockholders of the
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Company at any special or annual meeting of stockholders and who does not
receive a grant of an option as prescribed in Section 4(a)(ii) of The Bethlehem
Corporation Equity Incentive Plan For Directors, will, at the time such director
is elected and duly qualified, be granted automatically, without action by the
Committee, an Option to purchase 10,000 Shares.
(c) GRANTS TO CONTINUING DIRECTORS. On the date of each
annual meeting of stockholders subsequent to January 1, 1995, each continuing
Non-Employee Director (i.e., a director not being elected by stockholders for
the first time) will be granted automatically, without action by the Committee,
an Option to purchase 500 Shares.
(d) VESTING. Subject to accelerated vesting pursuant to
subsection 6(e)(i) hereof, each Option shall be exercisable as to 33-1/3% of the
Shares covered by the Option on the date the Option is granted and as to an
additional 33-1/3% of the Shares covered by the Option on each of the following
two anniversaries of such date of grant. To the extent not exercised,
installments shall accumulate and be exercisable, in whole or in part, at any
time after becoming exercisable, but not later than the date the Option expires.
Subsections 6(d), 6(e)(ii) and 6(f) hereof shall not apply to Options granted to
Non-Employee Directors.
(e) DURATION. Subject to the immediately following
sentence, each Option granted to a Non-Employee Director shall be for a term of
ten (10) years and one (1) day. Upon the cessation of a Non-Employee Director's
membership on the Board for any reason, Options granted to such Non-Employee
Director shall expire upon the earlier of (i) three (3) years from the date of
such cessation of Board membership or (ii) expiration of the term of the Option.
The Committee may not provide for an extended exercise period beyond the periods
set forth in this subsection 10(e).
11. RELEASE OF FINANCIAL INFORMATION. A copy of the Company's
annual report to stockholders shall be delivered to each Optionee if and at the
time any such report is distributed to the Company's stockholders. Upon request
by any Optionee, the Company shall furnish to such Optionee a copy of its most
recent annual report and each quarterly report and current report filed under
the Exchange Act since the end of the Company's prior fiscal year.
12. TERMINATION AND AMENDMENT OF THE PLAN. The Plan shall
terminate on the day preceding the tenth anniversary of its effective date,
except with respect to Options and Stock Appreciation Rights outstanding on such
date, and no Options or Stock Appreciation Rights may be granted thereafter. The
Board may sooner terminate or amend the Plan at any time, and from time to time;
provided, however, that, except as provided in Section 9 hereof, no amendment
shall be effective unless approved by the stockholders of the Company where
stockholder approval of such amendment is required (a) to comply with Rule 16b-3
under the Exchange Act subsequent to the registration of a class of equity
securities of the Company under Section 12 of the Exchange Act or (b) to comply
with any other law, regulation or stock exchange rule. Notwithstanding anything
in this Section 12 to the contrary, subsequent to the registration of a class of
equity securities of the Company under Section 12 of the Exchange Act, Section
10 hereof shall not be amended more than once in any six-month period, other
than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules or regulations thereunder.
Except as provided in Section 9 hereof, rights and
obligations under any Option granted before any amendment of the Plan shall not
be adversely altered or impaired by such amendment, except with the consent of
the Optionee.
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13. NON-EXCLUSIVITY OF THE PLAN. The adoption of the Plan by
the Board shall not be construed as amending, modifying or rescinding any
previously approved incentive arrangement or as creating any limitations on the
power of the Board to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock options
otherwise than under the Plan, and such arrangements may be either applicable
generally or only in specific cases.
14. LIMITATION OF LIABILITY. As illustrative of the
limitations of liability of the Company, but not intended to be exhaustive
thereof, nothing in the Plan shall be construed to:
(a) give any person any right to be granted an Option or
Stock Appreciation Right other than at the sole discretion of the Committee;
(b) give any person any rights whatsoever with respect to
Shares except as specifically provided in the Plan;
(c) limit in any way the right of the Company or its
Subsidiaries to terminate the employment of any person at any time; or
(d) be evidence of any agreement or understanding,
expressed or implied, that the Company or its Subsidiaries will employ any
person in any particular position, at any particular rate of compensation or for
any particular period of time.
15. REGULATIONS AND OTHER APPROVALS; GOVERNING LAW.
(a) This Plan and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of the
Commonwealth of Pennsylvania without giving effect to the choice of law
principles thereof.
(b) The obligation of the Company to sell or deliver
Shares with respect to Options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.
(c) Any provisions of the Plan inconsistent with Rule
16b-3 under the Exchange Act shall be inoperative and shall not affect the
validity of the Plan.
(d) Except as otherwise provided in Section 12 hereof, the
Board may make such changes as may be necessary or appropriate to comply with
the rules and regulations of any government authority or to obtain for Optionees
granted Incentive Stock Options, the tax benefits under the applicable
provisions of the Code and regulations promulgated thereunder.
(e) Each Option and Stock Appreciation Right is subject to
the requirement that, if at any time the Committee determines, in its absolute
discretion, that the listing, registration or qualification of Shares issuable
pursuant to the Plan is required by any securities exchange or under any state
or federal law, or the consent or approval of any governmental regulatory body
is necessary or desirable as a condition of, or in connection with, the grant of
an Option or Stock Appreciation Right or the issuance of Shares, no Options or
Stock Appreciation Rights shall be granted or payment made or Shares issued, in
whole or in part, unless listing, registration,
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qualification, consent or approval has been effected or obtained free of any
conditions as acceptable to the Committee.
(f) In the event that the disposition of Shares acquired
pursuant to the Plan is not covered by a then current registration statement
under the Securities Act and is not otherwise exempt from such registration,
such Shares shall be restricted against transfer to the extent required by the
Securities Act or regulations thereunder, and the Committee may require an
Optionee receiving Shares pursuant to the Plan, as a condition precedent to
receipt of such Shares, to represent to the Company in writing that the Shares
acquired by such Optionee are acquired for investment only and not with a view
to distribution.
16. MISCELLANEOUS.
(a) Multiple Agreements. The terms of each Option or Stock
Appreciation Right may differ from other Options or Stock Appreciation Rights
granted under the Plan at the same time, or at any other time. The Committee may
also grant more than one Option or Stock Appreciation Right to a given Optionee
during the term of the Plan, either in addition to, or in substitution for, one
or more Options or Stock Appreciation Rights previously granted to that
Optionee. The grant of multiple Options or Stock Appreciation Rights may be
evidenced by a single Agreement or multiple Agreements, as determined by the
Committee.
(b) Withholding of Taxes. The Company shall have the right
to deduct from any payment of cash to any Optionee an amount equal to the
federal, state and local income and employment taxes and other amounts required
by law to be withheld with respect to any Option or Stock Appreciation Right.
Notwithstanding anything to the contrary contained herein, if an Optionee is
entitled to receive Shares upon exercise of an Option or Stock Appreciation
Right, the Company shall have the right to require such Optionee, prior to the
delivery of such Shares, to pay to the Company the amount of any federal, state
or local income and employment taxes and other amounts which the Company is
required by law to withhold. The Agreement evidencing any Incentive Stock Option
granted under this Plan shall provide that if the Optionee makes a disposition,
within the meaning of Section 424(c) of the Code and regulations promulgated
thereunder, of any Share or Shares issued to such Optionee pursuant to such
Optionee's exercise of the Incentive Stock Option, and such disposition occurs
within the two-year period commencing on the day after the date of grant of such
Option or within the one-year period commencing on the day after the date of
transfer of the Share or Shares to the Optionee pursuant to the exercise of such
Option, such Optionee shall, within ten (10) days of such disposition, notify
the Company thereof and thereafter immediately deliver to the Company any amount
of federal, state or local income and employment taxes and other amounts which
the Company informs the Optionee the Company is required to withhold.
(c) Designation of Beneficiary. Each Optionee may, with
the consent of the Committee, designate a person or persons to receive in the
event of such Optionee's death, any Option or Stock Appreciation Right and/or
amounts payable pursuant thereto, to which such Optionee would then be entitled.
Such designation will be made upon forms supplied by and delivered to the
Company and may be revoked or changed in writing. In the event of the death of
an Optionee and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such Optionee's death, the Company shall
deliver such Options, Stock Appreciation Rights and/or amounts payable to the
executor or administrator of the estate of the Optionee, or if no such executor
or administrator has been appointed (to the knowledge of the Company), the
Company, in its discretion,
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may deliver such Options, Stock Appreciation Rights and/or amounts payable to
the spouse or to any one or more dependents or relatives of the Optionee, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.
17. EFFECTIVE DATE. The Plan shall become effective upon
adoption by the Board, subject, however, to its further approval by the
requisite vote of the shareholders of the Company within twelve (12) months
after the date the Plan is adopted by the Board, at a regular meeting of the
stockholders or at a special meeting of the stockholders called and held for
such purpose. Grants of Incentive Stock Options, Nonqualified Stock Options and
Stock Appreciation Rights may be made prior to such stockholder approval, but
all grants made prior to such stockholder approval shall be subject to the
obtaining of such approval and, if such approval is not obtained, such grants
shall not be effective for any purpose.
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE BETHLEHEM CORPORATION
Proxy - Annual Meeting of Stockholders
December 12, 1995
The undersigned, a stockholder of The Bethlehem Corporation, a
Pennsylvania corporation (the "Company"), does hereby appoint B. Ord Houston and
Alan H. Silverstein and each of them, the true and lawful attorneys and proxies
with full power of substitution, for and in the name, place and stead of the
undersigned, to vote all of the shares of Common Stock of the Company which the
undersigned would be entitled to vote if personally present at the 1995 Annual
Meeting of Stockholders of the Company to be held Tuesday, December 12, 1995 at
3:00 p.m. local time at the Holiday Inn, Route 512, Bethlehem, Pennsylvania or
at any adjournment thereof.
The undersigned hereby instructs said proxies or their substitutes:
1. INCREASE IN AUTHORIZED COMMON STOCK
To approve an amendment to the Company's Articles of Incorporation
to increase the authorized Common Stock of the Company to a total of 20,000,000
shares of Common Stock.
______ FOR _____ AGAINST _____ ABSTAIN
2. INCREASE IN AUTHORIZED PREFERRED STOCK
To approve an amendment to the Company's Articles of Incorporation
to increase the authorized Preferred Stock of the Company to a total 5,000,000
shares of Preferred Stock.
______ FOR _____ AGAINST _____ ABSTAIN
3. ELECTION OF DIRECTORS
To vote for the election of Messrs. B. Ord Houston, Ronald H.
Gale, Salvatore J. Zizza and Harold Bogatz as directors.
FOR ALL WITHHOLD
NOMINEES AUTHORITY CUMULATIVE VOTES FOR ONE OR MORE
LISTED ABOVE FOR ALL NOMINEES AS FOLLOWS:
NOMINEES
_____ ____
B. Ord Houston ________
INSTRUCTIONS: To withhold authority to vote for Ronald H. Gale ________
any individual Nominee, write that Salvatore J. Zizza ________
Nominee's name on the line Harold Bogatz ________
provided below:
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4. 1994 STOCK OPTION PLAN
To approve the adoption of the Company's 1994 Stock Option Plan:
______ FOR _____ AGAINST _____ ABSTAIN
5. AMENDMENT OF THE DIRECTORS OPTION PLAN
To amend the Company's Equity Incentive Plan for Directors to
increase the term of options granted under the Directors Option Plan, to
increase the period during which outstanding options may be exercised and to
modify certain termination provisions.
______ FOR _____ AGAINST _____ ABSTAIN
6. RATIFICATION OF BY-LAWS AMENDMENT
To ratify an amendment to the Company's By-laws providing for the
elimination of the classification of the Board of Directors.
______ FOR _____ AGAINST _____ ABSTAIN
7. RATIFICATION OF APPOINTMENT OF AUDITORS
To ratify the appointment of Sobel & Co. as the Company's
independent auditors for the 1996 Fiscal Year.
______ FOR _____ AGAINST _____ ABSTAIN
8. DISCRETIONARY AUTHORITY
To transact such other business as may properly come before the
Meeting and any adjournment thereof according to the proxies discretion and in
their discretion.
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<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 THROUGH 8.
Please mark, date and sign exactly as
your name appears on this proxy card.
When shares are held jointly, both
holders should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
full title. If the holder is a
corporation or partnership, the full
corporate or partnership name should be
signed by a duly authorized officer.
---------------------------------------
Signature
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Signature, if shares held jointly
Dated _______________________ 1995
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