<PAGE> 1
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SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
METATEC CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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<PAGE> 2
METATEC CORPORATION
[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 24, 1996
To the Shareholders of
METATEC CORPORATION:
Notice is hereby given that the Annual Meeting of Shareholders of Metatec
Corporation (the "Company") will be held at the Company's principal executive
offices located at 7001 Metatec Boulevard, Dublin, Ohio 43017, on Wednesday,
April 24, 1996, at 1:00 p.m., local time, for the following purposes:
1. To consider and vote upon an amendment to the Company's 1990 Stock
Option Plan which would increase the number of shares available for which
options may be granted from 510,000 to 1,010,000;
2. To consider and vote upon an amendment to the Company's 1992
Directors' Stock Option Plan which would provide for the annual option
grants to directors to continue through the 1998 annual meeting of the
shareholders;
3. To elect two Class III directors; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on February 26, 1996, has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the meeting and any adjournment thereof.
In order that your shares may be represented at this meeting and to assure
a quorum, please sign and return the enclosed proxy promptly. A return addressed
envelope, which requires no postage, is enclosed. In the event you are able to
attend and wish to vote in person, at your request we will cancel your proxy.
By Order of the Board of Directors
WILLIAM H. LARGENT
Secretary
Dated: March 21, 1996
<PAGE> 3
METATEC CORPORATION
PROXY STATEMENT
GENERAL
This Proxy Statement is being furnished to the holders of common shares,
$.10 par value, of Metatec Corporation, a Florida corporation (the "Company"),
in connection with the solicitation of proxies by the Board of Directors of the
Company to be used at the Company's Annual Meeting of Shareholders to be held at
the Company's principal executive offices located at 7001 Metatec Boulevard,
Dublin, Ohio 43017, on Wednesday, April 24, 1996, at 1:00 p.m., local time, for
the purposes set forth on the accompanying Notice of Annual Meeting. The
approximate date on which this Proxy Statement and the form of proxy will be
first sent to shareholders is March 21, 1996.
All shares represented by properly executed proxies will be voted at the
Annual Meeting in accordance with the choices indicated on the proxy. If no
choices are indicated, the shares will be voted in favor of the proposals set
forth in the Notice of Annual Meeting as more fully described in this Proxy
Statement. Any proxy may be revoked at any time prior to its exercise by
delivery to the Company of a subsequently dated proxy or by giving notice of
revocation to the Company in writing or in open meeting. A shareholder's
presence at the Annual Meeting does not by itself revoke the proxy.
The close of business on February 26, 1996, has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the Annual Meeting and any adjournment thereof. On the record date, there were
7,053,979 of the Company's common shares outstanding and entitled to vote. Each
common share is entitled to one vote.
ADOPTION OF AMENDMENT TO THE 1990 STOCK OPTION PLAN
The directors and shareholders of the Company have adopted the Metatec
Corporation 1990 Stock Option Plan and three amendments to such Plan
(collectively, the "Option Plan"). The purposes of the Option Plan are to assist
the Company and its subsidiaries in attracting and retaining highly qualified
employees, to provide employees with a proprietary interest in the Company, and
to stimulate the interests of employees in the development and financial success
of the Company.
At the Annual Meeting, shareholders will be asked to approve Amendment No.
4 to the Option Plan, which was adopted by the directors on October 26, 1995.
Pursuant to the requirements of the Option Plan, and in order to be effective
under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
and to qualify under Rule 16b-3 of the Securities Exchange Act of 1934, the
proposed amendment must be approved by the Company's shareholders within 12
months after its adoption by the Board of Directors. At the Annual Meeting,
unless otherwise indicated, proxies will be voted for the adoption of the
proposed amendment. The following discussion of the Option Plan and of Amendment
No. 4 are qualified in their entirety by reference to the full text of the
Option Plan, including the proposed amendment, which are attached hereto as
Appendix A.
A total of 510,000 common shares have been reserved for issuance (subject
to anti-dilution adjustments) under the Option Plan. As of February 26, 1996,
options for 495,800 of these shares had been granted under the Option Plan, of
which options for 309,975 shares had not been exercised. Additional common
shares need to be added to the Option Plan in order to enable it to continue to
function. Management desires to have the Option Plan available to incentivize
employees because the grant of options serves to link an employee's
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<PAGE> 4
interest in the Company with that of a shareholder's, namely to see the value of
his or her shares appreciate. If approved, Amendment No. 4 will increase the
total number of common shares reserved for issuance under the Option Plan by
500,000 shares to a total of 1,010,000.
Persons eligible to receive options under the Option Plan are all officers
and full-time employees of the Company and its subsidiaries and, in the case of
options not intended to qualify as incentive stock options under Section 422 of
the Code ("Nonqualified Options"), directors of subsidiaries of the Company
(other than directors of such subsidiaries who are also directors of the
Company). As of February 26, 1996, the Company and its subsidiaries had a total
of 340 employees eligible to receive options under the Option Plan.
The Company's Compensation Committee (the "Committee") administers the
Option Plan. The members of the Compensation Committee are not eligible to
participate in the Option Plan while serving on the Committee and each must be a
disinterested person as defined in Rule 16b-3 under the Securities Exchange Act
of 1934. The Committee designates from time to time, in its discretion, eligible
persons to whom options will be granted under the Option Plan, the number of
shares which will be the subject of each option, and the terms and conditions
under which each option is granted under the Option Plan. The Committee has the
authority to grant Nonqualified Options and options intended to qualify as
incentive stock options under Section 422 of the Code ("Incentive Options").
The purchase price for shares subject to an Incentive Option may not be
less than the fair market value of the shares at the time the Incentive Option
is granted. If the grantee, at the time the Incentive Option is granted, owns
stock representing more than 10% of the total combined voting power of all
classes of stock of the Company or its subsidiaries, then the purchase price of
the shares subject to the Incentive Option must be at least 110% of the fair
market value of the shares at the time the Incentive Option is granted. For
purposes of the Option Plan, the fair market value of the common shares means,
as of any given date: (a) the mean between the highest and lowest bid and ask
prices, as reported by the National Association of Securities Dealers, Inc., on
the most recent previous reporting day; (b) the last reported sale price in the
Nasdaq National Market system on the most recent previous reporting day; or (c)
the last reported sale price on any stock exchange on which the shares are
listed on the most recent previous reporting day, whichever is applicable. The
aggregate fair market value (determined at the time of the grant of the option)
of the shares with respect to which Incentive Options are exercisable for the
first time by any eligible person during any calendar year (under all incentive
stock option plans of the Company) may not exceed $100,000. Each Incentive
Option granted under the Option Plan must be evidenced by a written incentive
option agreement in a form approved by the Committee. All Incentive Options
granted under the Option Plan must be granted within 10 years from June 21,
1990, and exercised within 10 years from the date granted.
Incentive Options are not transferable by the grantee other than by will or
the laws of descent and distribution. Incentive option agreements may contain
restrictions on the exercisability of Incentive Options and the transferability
of shares subject to Incentive Options. Except upon the discharge for cause of
any grantee of an Incentive Option (in which case all unexercised Incentive
Options granted to such grantee shall lapse), if the grantee of an Incentive
Option ceases to be an employee of the Company or any of its subsidiaries by
reason of his or her death, disability, retirement, resignation, replacement, or
any other reason, then the Incentive Option or any unexercised portion of the
Incentive Option which otherwise is exercisable terminates unless it is
exercised within three months after the date such grantee ceases to be an
employee. If the reason for cessation of such employment is death, the
three-month period is instead a one-year period.
The purchase price for shares subject to Nonqualified Options is determined
by the Committee, provided that the price cannot be less than 50% of the fair
market value of the shares at the time the Nonqualified Option is granted.
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<PAGE> 5
Each Nonqualified Option granted under the Option Plan must be evidenced by
a written nonqualified option agreement in a form approved by the Committee. The
Nonqualified Options are not exercisable after the expiration of 10 years from
the date granted and are not transferable by the grantee other than by will or
the laws of descent and distribution. Each nonqualified option agreement may
contain restrictions on the exercisability of the Nonqualified Options and the
transferability of the shares subject to the Nonqualified Options. Except upon
the discharge for cause of any grantee of a Nonqualified Option (in which case
all unexercised Nonqualified Options granted to such grantee shall lapse), if
the grantee of a Nonqualified Option ceases to be an officer or employee of the
Company or any of its subsidiaries or a director of a subsidiary of the Company
by reason of his or her disability, retirement, resignation, replacement, or any
other reason, then the Nonqualified option or any unexercised portion of the
Nonqualified Option which otherwise is exercisable terminates unless it is
exercised within three months after the date such grantee ceases to be an
officer, employee or director. If the reason for cessation of employment or
cessation of the relationship as a director is death, the three-month period is
instead a one-year period.
No consideration is received by the Company or its subsidiaries for the
granting of options under the Option Plan.
The market value of the shares subject to options outstanding under the
Option Plan was $2,828,522 as of February 26, 1996.
No option is exercisable and no shares are deliverable under the Option
Plan except in compliance with all applicable federal and state securities laws
and regulations. Shares purchased upon exercise of an option may not be sold
before at least six months have elapsed from the date such option was granted.
The Company's Board of Directors, without further action on the part of the
shareholders of the Company, may from time to time alter, amend, or suspend the
Option Plan or may at any time terminate the Option Plan, provided that: (a) no
such action may materially and adversely affect any outstanding options without
the consent of the grantees of the options; and (b) except for certain
adjustments in the event of a change in capital structure of the Company, no
amendment may be made by board action without shareholder approval if (i) the
amendment would (A) materially increase the benefits accruing to participants
under the Option Plan, (B) materially increase the number of shares which may be
issued under the Option Plan, or (C) materially modify the requirements as to
eligibility for participation in the Option Plan, or (ii) the approval would be
required with respect to Incentive Options to preserve the status of the Option
Plan as an incentive stock option plan and the qualifications of any options as
incentive stock options under Section 422 of the Code.
Federal income taxation of the various events related to the options
(option grant, option exercise, and sale of shares) under the Option Plan is
different for Nonqualified Options and Incentive Options.
Nonqualified Options -- In general, for federal income tax purposes under
present law:
(a) The grant of a Nonqualified Option, by itself, will not result in
income to the optionee.
(b) Except as provided in (e) below, the exercise of a Nonqualified
Option (in whole or in part, according to its terms) will result in
ordinary income to the optionee at that time in an amount equal to the
excess (if any) of the fair market value of the shares on the date of
exercise over the exercise price.
(c) Except as provided in (e) below, the optionee's tax basis of the
shares acquired upon the exercise of a Nonqualified Option, which will be
used to determine the amount of any capital gain or loss on a future
taxable disposition of such shares, will be the fair market value of the
shares on the date of exercise.
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<PAGE> 6
(d) No deduction will be allowable to the employer corporation upon
the grant of a Nonqualified Option, but upon the exercise of a Nonqualified
Option, a deduction will be allowable to the employer corporation at that
time in an amount equal to the amount of ordinary income realized by the
optionee exercising such Nonqualified Option if the employer corporation
deducts and withholds appropriate federal withholding tax.
(e) With respect to the exercise of a Nonqualified Option and the
payment of the exercise price by the delivery of shares, to the extent that
the number of shares received does not exceed the number of shares
surrendered, no taxable income will be realized by the optionee at that
time, the tax basis of the shares received will be the same as the tax
basis of the shares surrendered, and the holding period of the optionee in
the shares received will include his or her holding period in the shares
surrendered. To the extent that the number of shares received exceeds the
number of shares surrendered, ordinary income will be realized by the
optionee at that time in the amount of the fair market value of such excess
shares, the tax basis of such shares will be equal to the fair market value
of such shares at the time of exercise, and the holding period of the
optionee in such shares will begin on the date such shares are transferred
to the optionee.
Incentive Options -- In general, for federal income tax purposes under
present law:
(a) Neither the grant nor the exercise of an Incentive Option, by
itself, will result in income to the optionee; however, the excess of the
fair market value of the shares at the time of exercise over the exercise
price is (unless there is a disposition of the shares acquired upon
exercise of an Incentive Option in the taxable year of exercise) includable
in alternative minimum taxable income which may, under certain
circumstances, result in an alternative minimum tax liability to the
optionee.
(b) If the shares acquired upon exercise of an Incentive Option are
disposed of in a taxable transaction after the later of two years from the
date on which the Incentive Option is granted or one year from the date on
which such shares are transferred to the optionee, long-term capital gain
or loss will be realized by the optionee in an amount equal to the
difference between the amount realized by the optionee and the optionee's
basis which, except as provided in (e) below, is the exercise price.
(c) Except as provided in (e) below, if the shares acquired upon the
exercise of an Incentive Option are disposed of within the two-year period
from the date of grant or the one-year period after the transfer of the
shares to the optionee upon exercise of the Incentive Option (a
"disqualifying disposition"):
(i) Ordinary income will be realized by the optionee at the time of
the disqualifying disposition in the amount of the excess, if any, of
the fair market value of the shares at the time of such exercise over
the exercise price, but not in an amount exceeding the excess, if any,
of the amount realized by the optionee over the exercise price.
(ii) Short-term or long-term capital gain will be realized by the
optionee at the time of the disqualifying disposition in an amount equal
to the excess, if any, of the amount realized over the fair market value
of the shares at the time of such exercise.
(iii) Short-term or long-term capital loss will be realized by the
optionee at the time of the disqualifying disposition in an amount equal
to the excess, if any, of the exercise price over the amount realized.
(d) No deduction will be allowed to the employer corporation with
respect to Incentive Options granted or shares transferred upon exercise
thereof, except that if a disposition is made by the optionee within the
two-year period referred to above, the employer corporation will be
entitled to a deduction in
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the taxable year in which the disposition occurred in an amount equal to
the amount of ordinary income realized by the optionee making the
disposition.
(e) With respect to the exercise of an Incentive Option and the
payment of the option price by the delivery of shares to the extent that
the number of shares received does not exceed the number of shares
surrendered, no taxable income will be realized by the optionee at that
time, the tax basis of the shares received will be the same as the tax
basis of the shares surrendered, and the holding period (except for
purposes of the one-year period referred to in (c) above) of the optionee
in the shares received will include his or her holding period in the shares
surrendered. To the extent that the number of shares received exceeds the
number of shares surrendered, no taxable income will be realized by the
optionee at that time, such excess shares will be considered Incentive
Option stock with a zero basis, and the holding period of the optionee in
such shares will begin on the date such shares are transferred to the
optionee. If the shares surrendered were acquired as the result of the
exercise of an Incentive Option and the surrender takes place within two
years from the date the option relating to the surrendered shares was
granted or within one year from the date of such exercise, the surrender
will result in a disqualifying disposition and the optionee will realize
ordinary income at the time of exercise of the shares surrendered over the
basis of such shares. If any of the shares received are disposed of within
one year after the shares are transferred to the optionee, the optionee
will be treated as first disposing of the shares with a zero basis.
Set forth below is the number of shares which may be received by the
following executive officers and other groups of optionees upon the exercise of
options which have been granted under the Option Plan and were outstanding as of
December 31, 1995. Such option grants are not subject to shareholder approval of
Amendment No. 4 to the Option Plan.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME SUBJECT TO OPTION GRANTS
---------------------------------------------------- ------------------------
<S> <C>
Gregory T. Tillar 50,000
William H. Largent 40,000
Christopher L. Winslow 20,000
All executive officers as a group (7 persons) 172,500
All employees, other than executive officers, as a
group (189 persons) 137,475
</TABLE>
If approved by shareholders, Amendment No. 4 to the Option Plan will make
available an additional 500,000 shares for which options may be granted under
the Option Plan. The Company has made option grants for a portion of such
additional shares, which grants are subject to shareholder approval of such
amendment. Set forth below is the number of shares which may be received by the
following executive officers
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<PAGE> 8
and other groups of optionees upon the exercise of options which have been
granted subject to such shareholder approval.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME SUBJECT TO OPTION GRANTS
---------------------------------------------------- ------------------------
<S> <C>
Jeffrey M. Wilkins 25,000
Gregory T. Tillar 50,000
William H. Largent 25,000
Christopher L. Winslow 25,000
All executive officers as a group (7 persons) 133,000
All employees, other than executive officers, as a
group (9 persons) 45,000
</TABLE>
The affirmative vote of the holders of at least a majority of the
outstanding common shares present or represented at the Annual Meeting and
entitled to vote thereat is necessary to adopt the proposed amendment.
Abstentions and non-votes by brokers holding common shares in street name will
have the same effect as shares cast against the proposed amendment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE AMENDMENT TO
THE OPTION PLAN.
ADOPTION OF AMENDMENT TO 1992 DIRECTORS' STOCK OPTION PLAN
The directors and shareholders of the Company have adopted the Metatec
Corporation 1992 Directors' Stock Option Plan and two amendments to such Plan
(collectively, the "Directors' Plan"). The purposes of the Directors' Plan are
to encourage directors of the Company who are not employees of the Company or
any of its subsidiaries (each an "Eligible Director") to acquire a proprietary
interest in the Company, to further promote the interest of such directors in
the development and financial success of the Company, and to assist the Company
in attracting and retaining highly qualified directors through the granting of
stock options to purchase common shares of the Company. The options provided for
under the Directors' Plan are not intended to qualify as incentive stock options
under the Code.
At the Annual Meeting, shareholders will be asked to approve Amendment No.
3 to the Directors' Plan, which was adopted by the directors on January 24,
1996. Pursuant to the requirements of the Directors' Plan, and in order to
qualify under Rule 16b-3 of the Securities Exchange Act of 1934, the proposed
amendment must be approved by the Company's shareholders within 12 months after
its adoption by the Board of Directors. At the Annual Meeting, unless otherwise
indicated, proxies will be voted for the adoption of the proposed amendment. The
following discussion of the Directors' Plan and of Amendment No. 3 are qualified
in their entirety by reference to the full text of the Directors' Plan,
including the proposed amendment, which are attached hereto as Appendix B.
Under the Directors' Plan, following each annual meeting of shareholders of
the Company, each Eligible Director is automatically granted an option to
purchase 2,500 common shares. These options are fully vested at the time of
grant. In addition, each person who was an Eligible Director immediately
following the 1994 annual meeting of shareholders and each person who for the
first time becomes an Eligible Director after the 1994 annual meeting of
shareholders and before the day after the 1996 annual meeting of shareholders is
automatically granted an option, on a one-time basis, to purchase 10,000 common
shares (the "One-Time
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Options"). The One-Time Options have five-year terms and vest in equal annual
installments over a four-year period.
The annual option grants to Eligible Directors under the Directors' Plan
will terminate after options are granted to Eligible Directors following the
Annual Meeting. Management desires to have the Directors' Plan continue in place
in order to incentivize directors because the grant of options serves to link
each director's interest in the Company with that of each shareholder's, namely
to see the value of his or her shares appreciate. If approved, Amendment No. 3
will provide for the continuation of these annual option grants through the
Company's 1998 annual meeting of shareholders.
A total of 160,000 common shares have been reserved for issuance (subject
to anti-dilution adjustments) under the Directors' Plan. As of February 26,
1996, options for 117,425 shares had been granted under the Directors' Plan, of
which options for 93,002 shares had not been exercised. As of February 26, 1996,
the market value of the unexercised options was $848,643.
The price to be paid to purchase common shares upon exercise of an option
granted under the Directors' Plan is the fair market value of the common shares
at the time the option is granted. For purposes of the Directors' Plan, the fair
market value of the common shares means, as of any given date: (a) the mean
between the highest and lowest bid and ask prices, as reported by the National
Association of Securities Dealers, Inc., on the most recent previous reporting
day, (b) the last reported sale price in the Nasdaq National Market system on
the most recent previous reporting day, or (c) the last reported sale price on
any stock exchange on which the common shares are listed on the most recent
previous reporting day, whichever is applicable. Each option granted under the
Directors' Plan must be evidenced by a written stock option agreement between
the Eligible Director to whom such option was granted and the Company.
Each option, other than a One-Time Option, is fully vested on the date such
option is granted. One-Time Options vest over a four-year period at the rate of
25% on each anniversary of the date the option was granted. However, if a
director who has reached the age of 70 thereafter ceases to be an Eligible
Director for any reason other than death or discharge for cause, then any
unvested portion of the One-Time Option previously granted to that director will
automatically vest and become exercisable at any time prior to the expiration of
the term of that option. If a tender offer or exchange offer for shares (other
than such an offer by the Company or approved by the Company's Board of
Directors) is commenced, or if the shareholders of the Company approve an
agreement providing for a transaction in which the Company will cease to be an
independent publicly owned entity or for a sale or other disposition of all or
substantially all the assets of the Company, and such event had not been
approved by the Company's Board of Directors, then all One-Time Options
theretofore granted and not fully exercisable will thereupon become exercisable
in full.
No option may be exercised more than five years after the date of grant. An
option may only be exercised by the grantee to whom it was granted during such
grantee's lifetime. Upon the death of the grantee, the option will be
exercisable (subject to any other applicable restrictions on exercise) by the
executor or administrator of the grantee's estate, and such option must be
exercised within one year of the grantee's death (but not later than the
original expiration date of the option).
If a grantee of an option ceases to be an Eligible Director for any reason
other than death or discharge for cause, then the option must be exercised
within six months after the date the grantee ceases to be an Eligible Director.
However, if a director who has reached the age of 70 thereafter ceases to be an
Eligible Director for any reason other than death or discharge for cause, then
any options which are then exercisable by that director (including the One-Time
Option which became automatically vested, as described above) will not terminate
six months thereafter as originally provided under the Directors' Plan, but will
continue to be exercisable for the original remaining terms of the respective
options. However, if a former director thereafter
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<PAGE> 10
dies, then such director's options will terminate unless exercised as provided
under the Directors' Plan with respect to the death of a director. Upon the
discharge of a grantee as a director of the Company for cause, all unexercised
options granted to such grantee will immediately lapse and be of no further
force or effect.
Shares purchased upon exercise of an option may not be sold before at least
six months has elapsed from the date the option was granted.
In general, for federal income tax purposes under present law:
(a) The grant of an option, by itself, will not result in income to
the optionee.
(b) Except as provided in (e) below, the exercise of an option (in
whole or in part, according to its terms) will result in ordinary income to
the optionee at that time in an amount equal to the excess (if any) of the
fair market value of the common shares on the date of exercise over the
exercise price.
(c) Except as provided in (e) below, the optionee's tax basis of the
shares acquired upon the exercise of an option, which will be used to
determine the amount of any capital gain or loss on a future taxable
disposition of such shares, will be the fair market value of the shares on
the date of exercise.
(d) No deduction will be allowable to the Company upon the grant of an
option, but upon the exercise of an option, a deduction will be allowable
to the Company at that time in an amount equal to the amount of ordinary
income realized by the optionee exercising such option.
(e) With respect to the exercise of an option and the payment of the
exercise price by the delivery of shares, to the extent that the number of
shares received does not exceed the number of shares surrendered, no
taxable income will be realized by the optionee at that time, the tax basis
of the shares received will be the same as the tax basis of the shares
surrendered, and the holding period of the optionee in the shares received
will include his or her holding period in the shares surrendered. To the
extent that the number of shares received exceeds the number of shares
surrendered, ordinary income will be realized by the optionee at that time
in the amount of the fair market value of such excess shares, the tax basis
of such excess shares will be equal to the fair market value of such shares
at the time of exercise, and the holding period of the optionee in such
shares will begin on the date such shares are transferred to the optionee.
The affirmative vote of the holders of at least a majority of the
outstanding common shares present or represented at the Annual Meeting and
entitled to vote thereat is necessary to adopt the proposed amendment.
Abstentions and non-votes by brokers holding common shares in street name will
have the same effect as shares cast against the proposed amendment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE AMENDMENT TO
THE DIRECTORS' PLAN.
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<PAGE> 11
ELECTION OF DIRECTORS
The number of directors currently is fixed at nine. The Board of Directors
is divided into three classes, Class I, Class II, and Class III, with three
directors in each class. The directors in each class are elected to three-year
terms. The terms of office of one class of directors expire each year at the
annual meeting of shareholders and at such time as their successors are duly
elected and qualified. The term of office of the Class III directors expires
concurrently with the holding of the Annual Meeting, and the two incumbent
directors in such Class have been nominated for re-election. There is presently
one vacancy in Class III due to the resignation of Dan R.E. Thomas in April
1995. There is no cumulative voting in the election of directors, and those
nominees receiving the highest number of votes will be elected. Abstentions and
broker non-votes will not be counted in determining the votes cast in the
elections of director and will not have a positive or negative effect on the
election.
At the Annual Meeting, common shares represented by proxies, unless
otherwise specified, will be voted to elect the nominees named below as Class
III directors for a three-year term expiring in 1999. In the event that any
nominee named below as a Class III director is unable to serve (which is not
anticipated), the persons named in the proxy may vote for another nominee of
their choice.
The reason for nominating a lesser number of persons to fill the number of
director positions in Class III is that the Company believes it is desirable to
have a vacancy available which could be filled by the Board of Directors without
the time and expense involved in holding a special meeting of shareholders
should a person who could make a valuable contribution as a director of the
Company become available. No decision has been made to fill the vacancy, nor has
any candidate been considered or approved by the Board of Directors.
Proxies cannot be voted at the Annual Meeting for a greater number of
persons than the two nominees named in this Proxy Statement.
CLASS III DIRECTORS
(NOMINEES FOR ELECTION)
<TABLE>
<CAPTION>
COMMON SHARES
NAME OF BENEFICIALLY
NOMINEE/DIRECTOR A DIRECTOR OF OWNED AS OF
AND POSITION(S) PRINCIPAL OCCUPATION(S) DURING THE COMPANY FEBRUARY 26, % OF
WITH COMPANY AGE THE PAST FIVE YEARS SINCE 1996(1) CLASS
- ---------------------------- ---- -------------------------------- ------------- ------------- -----
<S> <C> <C> <C> <C> <C>
A. Grant Bowen, 65 Financial Consultant since March 1991 24,873 *
Director 1986. Mr. Bowen is a director of
W. W. Williams Co. and State
Savings Bank.
Jeffrey M. Wilkins, 51 Chairman of the Board and Chief 1989 626,619 8.9 %
Chairman of the Board, Executive Officer of the Company
Chief Executive Officer since 1989.
and Director
</TABLE>
-9-
<PAGE> 12
Set forth below is information relating to directors whose terms will
continue after the Annual Meeting:
CLASS I DIRECTORS
(TERMS EXPIRING IN 1997)
<TABLE>
<CAPTION>
COMMON SHARES
NAME OF BENEFICIALLY
DIRECTOR A DIRECTOR OF OWNED AS OF
AND POSITION(S) PRINCIPAL OCCUPATION(S) DURING THE COMPANY FEBRUARY 26, % OF
WITH COMPANY AGE THE PAST FIVE YEARS SINCE 1996(1) CLASS
- ---------------------------- ---- -------------------------------- ------------- ------------- -----
<S> <C> <C> <C> <C> <C>
William H. Largent, 40 Chief Financial Officer of the 1990 47,711 *
Executive Vice President, Company since March 1993,
Treasurer, Chief Financial Treasurer of the Company since
Officer, Secretary and May 1993, and Executive Vice
Director President and Secretary of the
Company since October 1995;
President of Liebert Capital
Management Corporation, an
investment management company,
from October 1992 to March 1993;
Executive Vice President of L
Corporation, an affiliate of
Liebert Capital Management
Corporation, from April 1990 to
September 1992. Mr. Largent is
also a director of AmeriLink
Corporation.
E. David Crockett, 59 General Partner of Aspen 1994 14,000 *
Director Venturers, a venture capital
firm for high technology
start-up companies, since April
1991; Vice President of 3i
Ventures, which provided similar
services, from December 1987 to
April 1991. Mr. Crockett is also
a director of Herman Miller,
Inc. and chairman of Cornerstone
Imaging, Inc.
Peter J. Kight, 39 Chairman, Chief Executive 1994 10,000 *
Director Officer and President of
Checkfree Corporation, a company
that provides a nationwide
electronic bill paying system,
since January 1981. Mr. Kight is
also a director of Danninger
Medical Technology, Inc.
</TABLE>
-10-
<PAGE> 13
CLASS I DIRECTORS
(TERMS EXPIRING IN 1998)
<TABLE>
<CAPTION>
COMMON SHARES
NAME OF BENEFICIALLY
DIRECTOR A DIRECTOR OF OWNED AS OF
AND POSITION(S) PRINCIPAL OCCUPATION(S) DURING THE COMPANY FEBRUARY 26, % OF
WITH COMPANY AGE THE PAST FIVE YEARS SINCE 1996(1) CLASS
- ---------------------------- ---- -------------------------------- ------------- ------------- -----
<S> <C> <C> <C> <C> <C>
Jerry D. Miller, 60 President of D&D Properties, 1976 106,000(2) 1.5 %
Director Inc. and President of MGB, Inc.,
two companies engaged in the
real estate business since May
1992; President and Treasurer of
the Company from the Company's
incorporation in 1976 to May
1993, and Chairman of the Board
from June 1978 to August 1989.
Gregory T. Tillar, 42 President of the Company since 1995 60,286 *
President, Chief Operating February 1995, and Chief
Officer and Director Operating Officer of the Company
since April 1993; Vice President
with Company, responsible for
various operating and sales
functions, from May 1990 to
April 1993.
James V. Pickett, 54 Managing Director of the real 1995 18,100 *
Director estate investment group of Banc
One Capital Corp., a subsidiary
of Banc One Holding Corporation,
since February 1993; President
of Pickett Realty Advisors,
Inc., an asset management firm
for hotel owners, since December
1991; President of a group of
affiliated companies and
partnerships, collectively known
as The Pickett Companies,
involved in the development,
management, and ownership of
hotels, since 1965. In February
1991, a group of these entities,
PH Management Corporation,
("PHMC"), DCP Development
Company ("DCP"), PHA Limited
Partnership ("PHA"), and PC
Development Limited Partnership
("PCD") filed a Chapter 11
petition with the United States
Bankruptcy Court for
reorganization. In April 1992,
the consolidated plan of
reorganization for these
entities was confirmed by the
Bankruptcy Court. PHMC and PCD
are continuing entities carrying
out the plan of reorganization.
PHA and DCP were dissolved as
part of the plan. Mr. Pickett is
also a Director of Wendys
International, Inc.
</TABLE>
-11-
<PAGE> 14
- ---------------
*Less than 1%.
(1) Except as otherwise indicated in the notes to this table, the persons named
in the table have sole voting and investment power with respect to all
common shares owned by them. This table does not include options for common
shares which are not currently exercisable or not exercisable within 60
days of February 26, 1996, or options the grant of which are conditioned
upon the approval of the proposed amendment to the Option Plan. See
"Adoption of Amendment to the 1990 Stock Option Plan." As of February 26,
1996, the number of common shares owned by all directors and executive
officers of the Company as a group (12 persons) was 1,008,131 (14.3%).
(2) Does not include 175,986 common shares owned by the adult children or
grandchildren of Mr. Miller, for which Mr. Miller disclaims beneficial
ownership.
BOARD OF DIRECTORS COMMITTEES AND MEETINGS
The Board of Directors has established an Executive Committee, a
Compensation Committee, and a Finance and Audit Committee. The Board of
Directors has no standing nominating committee or committee performing similar
functions.
The members of the Executive Committee are Jeffrey M. Wilkins, Gregory T.
Tillar, William H. Largent, and A. Grant Bowen. The Executive Committee, which
may exercise all of the authority of the Board of Directors between its
meetings, did not take any action or hold any meetings during 1995. The members
of the Compensation Committee are A. Grant Bowen, E. David Crockett, Jerry D.
Miller, and James V. Pickett. The Compensation Committee, which is responsible
for administering the Company's two stock option plans and which may exercise
the authority of the Board of Directors with respect to the compensation of
employees of the Company, held three meetings during 1995. The members of the
Audit and Finance Committee are A. Grant Bowen, Peter J. Kight, Jerry D. Miller,
and James V. Pickett. The Audit and Finance Committee, which is responsible for
the appointment of the independent auditors, the annual audit of the Company's
accounts by the independent auditors, and all related matters, along with other
activities undertaken by such committee, held two meetings during 1995.
The Board of Directors held six meetings and took action one time by
written consent during 1995. Each director attended at least 75% of the meetings
held by the Board of Directors and the committees on which he served during
1995.
COMPENSATION OF DIRECTORS
Employee directors receive no additional compensation for service on the
Board of Directors or its committees. Directors of the Company who are not also
employees of the Company receive a fee of $500 per board or committee meeting
attended in person and $125 per board or committee meeting attended through
telephonic communication. In addition, directors of the Company who are not
officers or employees of the Company or any of its subsidiaries receive stock
options pursuant to the Directors' Plan. See "Adoption of Amendment to 1992
Directors' 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 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors, and
greater than 10% shareholders are required by the Securities and Exchange
Commission's regulations to
-12-
<PAGE> 15
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on a review of the copies of such forms furnished to the Company, the
Company believes that during 1995 all Section 16(a) filing requirements
applicable to its officers and directors were complied with by such persons.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth certain information as of December 31, 1995,
with respect to the only persons known by the Company to be the beneficial
owners of 5% or more of the Company's common shares:
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME AND ADDRESS OF OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP OWNERSHIP
- ------------------------------- ----------------- ---------
<S> <C> <C>
Jeffrey M. Wilkins 626,619 8.9%
7001 Metatec Boulevard
Dublin, Ohio 43017
State of Wisconsin 430,000 6.1%
Investment Board
P.O. Box 7842
Madison, Wisconsin 53707
</TABLE>
-13-
<PAGE> 16
EXECUTIVE COMPENSATION
Set forth below is summary information regarding the annual and long-term
compensation of the Company's chief executive officer and its only other
executive officers whose annual compensation exceeded $100,000 during 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------- ALL
NAME AND -------------------- SHARES UNDERLYING OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS GRANTED(2) COMPENSATION(3)
- ---------------------------- ----- -------- -------- ------------------- ---------------
<S> <C> <C> <C> <C> <C>
Jeffrey M. Wilkins 1995 $250,000 $225,544 25,000 $ 2,149
Chairman of the 1994 $250,000 $127,286 $ 1,230
Board and Chief 1993 $250,000 $ 57,447 $ 1,225
Executive Officer
Gregory T. Tillar 1995 $158,692 $105,165 50,000 $ 2,044
President and 1994 $125,231 $ 82,000 20,000 $ 1,622
Chief Operating 1993 $100,000 $ 57,956 10,000 $ 1,042
Officer
William H. Largent 1995 $123,846 $ 64,268 25,000 $ 1,811
Executive Vice 1994 $108,231 $ 65,000 20,000 $ 900
President, 1993 $ 82,696 $ 15,393 20,000
Treasurer, Chief Financial
Officer and Secretary
Christopher L. Winslow 1995 $ 84,000 $ 34,276 32,500 $ 1,168
Vice President, 1994 $ 72,846 $ 32,000 7,500 $ 958
Manufacturing Services 1993 $ 65,539 $ 19,672 $ 767
</TABLE>
- ---------------
(1) Bonuses, other than for Mr. Wilkins which are paid pursuant to his
employment agreement with the Company, were earned pursuant to an Incentive
Compensation Plan for certain key executives of the Company selected by the
chief executive officer. Pursuant to this plan, an individual target
incentive amount for each executive and a target amount for the Company's
net income was established. Each participating executive was paid a bonus in
an amount ranging from 65% to 140% of his target incentive amount based on
his percentage of the target net income actually achieved by the Company.
(2) This column sets forth the number of common shares subject to options
granted during the indicated year pursuant to the Option Plan. The options
granted during 1995, except for 7,500 granted to Christopher L. Winslow,
were granted subject to the approval of the proposed amendment to the Option
Plan. See "Adoption of Amendment to 1990 Stock Option Plan."
(3) Represents amounts contributed by the Company as matching contributions to
its 401(k) retirement plan.
-14-
<PAGE> 17
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth all grants of stock options to the executive
officers named in the Summary Compensation Table during 1995:
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE AT
- --------------------------------------------------------------------------------- ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SHARES OPTIONS EXERCISE PRICE APPRECIATION
UNDERLYING GRANTED TO PRICE FOR OPTION TERM(3)
OPTIONS EMPLOYEES IN PER EXPIRATION -------------------
NAME GRANTED(1) FISCAL YEAR SHARE(2) DATE 5% 10%
- ---------------------------------------- ------------- -------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey M. Wilkins............ 25,000 12.2% $ 9.75 11/03/05 $153,300 $388,500
Gregory T. Tillar............. 50,000 24.4% $ 9.75 11/03/05 $306,600 $777,000
William H. Largent............ 25,000 12.2% $ 9.75 11/03/05 $153,300 $388,500
Christopher L. Winslow........ 25,000 12.2% $ 9.75 11/03/05 $153,300 $388,500
Christopher L. Winslow........ 7,500 3.7% $ 9.37 01/25/05 $ 44,200 $112,000
</TABLE>
- ---------------
(1) The options granted during 1995, except for 7,500 granted to Christopher L.
Winslow, were granted subject to the approval of the proposed amendment to
the Option Plan. See "Adoption of Amendment to 1990 Stock Option Plan."
(2) The per share exercise price is equal to the fair market value of the
Company's common shares on the date of grant.
(3) The dollar amounts under the 5% and 10% columns in the table are the result
of calculations required by the rules of the Securities and Exchange
Commission. Although permitted by these rules, the Company did not use an
alternate formula for a grant date valuation because the Company is not
aware of a formula which would determine with reasonable accuracy a present
value based on future unknown factors.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END OPTION VALUES
The following table sets forth stock option exercises during 1995 by the
executive officers named in the Summary Compensation Table and the value of
in-the-money stock options held by those individuals as of December 31, 1995:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS
12/31/95 AT 12/31/95(3)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED(1) UNEXERCISABLE(2) UNEXERCISABLE
- ----------------------------- ---------------- ---------- -------------- ----------------
<S> <C> <C> <C> <C>
Jeffrey M. Wilkins........... -0- -0- -0-/25,000 $ -0-/$31,250
Gregory T. Tillar............ -0- -0- 30,000/50,000 $240,000/$62,500
William H. Largent........... -0- -0- 20,000/25,000 $110,000/$31,250
Christopher L. Winslow....... -0- -0- 12,500/25,000 $ 49,725/$31,250
</TABLE>
- ---------------
(1) Aggregate market value of the common shares covered by the option less the
aggregate price paid by the executive officer.
-15-
<PAGE> 18
(2) A portion of such options were granted subject to the approval of the
proposed amendment to the Option Plan. See "Adoption of Amendment to 1990
Stock Option Plan."
(3) The value of in-the-money options was determined by subtracting the exercise
price from the closing price of the Company's common shares as of December
31, 1995.
EMPLOYMENT AGREEMENT WITH MR. WILKINS
The Company and Mr. Wilkins are parties to an Amended and Restated
Employment Agreement (the "Employment Agreement") pursuant to which Mr. Wilkins
is serving as Chairman of the Board and Chief Executive Officer of the Company.
The Employment Agreement continues until terminated by the parties. The
Employment Agreement may be terminated by the Company for "Cause" (defined as
dishonesty constituting a felony) or because of Mr. Wilkins' "Long-Term
Disability," by Mr. Wilkins for "Good Reason" (defined as any material reduction
in authority, title, or responsibility, any reduction in compensation or
benefits or any assignment of additional duties), or by either party upon at
least one year's notice. Under the Employment Agreement, Mr. Wilkins is entitled
to an annual base salary of $250,000, fringe benefits to be determined by the
Board of Directors of the type which are typically provided to chief executive
officers of similarly situated companies, and an annual bonus equal to five
percent of the net pre-tax profit of the Company (calculated without
consideration of any such bonuses paid or payable to Mr. Wilkins) during each
fiscal year beginning with fiscal year 1993. Upon termination of the Employment
Agreement, unless the termination is by the Company for Cause or unless the
termination is a voluntary termination by Mr. Wilkins without Good Reason, Mr.
Wilkins is entitled to receive a single payment equal to his full annual salary
in effect at the time, he is entitled to continue receiving the annual bonuses
for the three fiscal years of the Company ending after the date of termination,
and the Company is to continue providing group life and group health insurance
coverage for a one-year period after the date of termination.
The Company has the option to purchase all of Mr. Wilkins' common shares at
fair market value upon Mr. Wilkins' death or Long-Term Disability or upon his
voluntary termination other than for Good Reason or upon the Company's
termination for Cause. For a period of three years after termination of his
employment, Mr. Wilkins is prohibited from competing against the Company unless
he is terminated by the Company without Cause or he voluntarily resigns for Good
Reason.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are A. Grant Bowen, E.
David Crockett, Jerry D. Miller, and James V. Pickett. Until May 1993, prior to
his appointment to the Compensation Committee, Mr. Miller served as President of
the Company. There are no interlocking relationships between any executive
officers of the Company and any entity whose directors or executive officers
serve on the Company's board or Compensation Committee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors regularly reviews
executive compensation policies and levels and evaluates the performance of
management in the context of the Company's performance. The Compensation
Committee is composed entirely of independent outside directors.
The Committee believes that compensation must be designed to attract,
retain, reward, and motivate highly qualified individuals to manage the Company
to meet corporate growth and earnings objectives and maximize shareholder value.
-16-
<PAGE> 19
BASE SALARY. The major component of compensation for executive officers of
the Company is their annual base salaries. With respect to executive officers,
other than the chief executive officer, the Committee reviews the recommendation
of the chief executive officer with respect to the annual base salary to be paid
to each such officer and then makes a subjective determination based upon
various factors, including the position held by such executive officer, his or
her accomplishments during the year, level of responsibility and experience, and
the relationship of such salary to the salaries of other managers and associates
of the Company, in establishing the amount of such salary. The annual base
salary of Mr. Wilkins, chairman and chief executive officer, which is paid
pursuant to his employment agreement, was $250,000 for 1995. The Board of
Directors has the authority to increase Mr. Wilkins' annual base salary. The
Committee believes that Mr. Wilkins' base salary is currently adequate and has
not recommended to the Board of Directors an increase in his base salary for
1996.
ANNUAL INCENTIVE. The Compensation Committee also believes it is desirable
to provide selected significant employees with incentive compensation based on
the Company's actual performance during a fiscal year. Mr. Wilkins, in addition
to his base salary, is paid pursuant to his employment agreement an annual bonus
equal to five percent of the net pretax profit of the Company (calculated
without consideration of any such bonuses paid or payable to Mr. Wilkins) during
each fiscal year beginning with fiscal year 1993. In addition, in February 1992,
the Company instituted an Incentive Compensation Plan for certain key employees
of the Company selected by the chief executive officer of the Company. At the
beginning of each year, the chief executive officer establishes an individual
target incentive amount for the selected employee and a target amount for the
Company's net operating income. Each selected employee is to receive a bonus in
an amount ranging from 65% to 140% of this target incentive amount based on the
percentage of the target income actually earned by the Company. No amounts will
be paid if actual net income is less than 80% of the target net income and
maximum amounts will be paid for results equaling or exceeding 130% of target
income. All bonuses under the Incentive Compensation Plan require approval by
the Compensation Committee.
LONG-TERM STOCK INCENTIVES. In addition to the Incentive Compensation
Plan, the Company has established the Option Plan designed to align a portion of
the executive and key associates compensation package with the long-term
interests of shareholders. The Option Plan, other than the proposed amendment,
has been approved by the Company's shareholders. See "Adoption of Amendment to
1990 Stock Option Plan." All options are granted by the Compensation Committee,
whose members are not eligible to participate in such Plan. The Company's
associates are granted options in amounts subjectively determined by the
Compensation Committee to be appropriate given the relative positions and
responsibilities of such persons.
DEDUCTIBLE COMPENSATION. In 1993, the Revenue Reconciliation Act of 1993
was adopted. Under Section 162(m) of the Code, as amended by this Act, certain
compensation of executives in excess of $1,000,000 is not deductible by public
companies. Under Section 162(m), the Company could attempt to qualify certain of
its compensation plans and arrangements for exceptions from this provision by
amendments adopted by the shareholders. Although the Committee may decide to do
so in the future, it has not currently recommended that action be taken to
qualify for exceptions from Section 162(m), because applicable compensation
arrangements appear to be either grandfathered, due to their adoption prior to
the Act, or not currently a significant difficulty.
<TABLE>
<S> <C>
A. Grant Bowen E. David Crockett
Jerry D. Miller, Chairman James V. Pickett
</TABLE>
-17-
<PAGE> 20
PERFORMANCE GRAPH
The following graph provides a comparison of the five-year cumulative total
return (assuming reinvestment of dividends) from the Company, the NASDAQ
Computer and Data Processing Services Index, and the NASDAQ Stock Market Index
- -- United States:
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
METATEC CORPORATION, THE NASDAQ COMPUTER AND DATA
PROCESSING SERVICES STOCK INDEX, AND THE
NASDAQ STOCK MARKET INDEX -- UNITED STATES
<TABLE>
<CAPTION>
MEASUREMENT PERIOD METATEC NASDAQ NASDAQ STOCK
(FISCAL YEAR COVERED) CORPORATION COMPUTER & DP MRKT - US
<S> <C> <C> <C>
12/90 100 100 100
12/91 183 202 161
12/92 333 217 187
12/93 967 231 215
12/94 642 279 210
12/95 733 425 296
</TABLE>
The foregoing graph and above amounts assume $100 invested on December 31,
1990, in the Company's common shares or applicable stock index, including
reinvestment of dividends with the year ending December 31. The foregoing graph
is not, nor is it intended to be, indicative of future performance of the
Company's common shares.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the Company's 1990 acquisition of all of the shares of
Metatec/Discovery Systems, Inc. ("Discovery") held by two former directors of
the Company and by Mr. Wilkins, and in exchange for Mr. Wilkins' surrender of an
option to purchase 48% of the shares of Discovery, the Company agreed to issue
an indefinite number of common shares of the Company to Mr. Wilkins on a
deferred basis pursuant to an escrow arrangement intended to continue until the
first quarter of 1996. In March 1993, the Company and Mr. Wilkins agreed to
terminate this deferred share arrangement and effectively cap the number of
shares which could be received by Mr. Wilkins as a result of the termination of
his original option by issuing 600,000
-18-
<PAGE> 21
common shares to him. These shares were issued to Mr. Wilkins subject to a risk
that he will forfeit the shares if his employment is terminated by the Company
for Cause or by Mr. Wilkins without Good Reason (as these terms are defined in
Mr. Wilkins' employment agreement with the Company) on or before February 29,
1996, and subject to a risk that he will forfeit all or part of the shares under
a formula based primarily on the pre-tax profits of Discovery. As of December
31, 1995, which was the end of the formula period, all 600,000 common shares had
been earned by Mr. Wilkins. All of these shares became fully vested on March 1,
1996. In addition, the Company has agreed to (a) register any unforfeited shares
at Mr. Wilkins' request, (b) pay Mr. Wilkins a bonus in an amount equal to any
tax savings resulting to the Company from the issuance of the shares and the
payment of such bonus, up to the amount of Mr. Wilkins' individual tax liability
with respect to the issuance of the shares to him, and (c) use its best efforts
to effect an underwriting of a number of the unforfeited shares sufficient to
enable Mr. Wilkins to cover any related tax liability to the extent not covered
by the bonus described in (b), above. However, the Company does not anticipate
the need to pay Mr. Wilkins the above described bonus or to effect an
underwriting with respect to the issuance of the unforfeited shares.
In January 1996, the Company purchased from Olde Poste Properties, an Ohio
general partnership, approximately five acres of land adjacent to the Company's
office and manufacturing facility located in Dublin, Ohio (the "Dublin
Facility"), for the purpose of expanding the Dublin Facility. The purchase price
for the land was $451,100 and the Company paid expenses in connection with the
purchase totaling approximately $33,800, including the commission payable to the
seller's broker, the conveyance fee, and the premium for owner's title
insurance. Mr. Wilkins is a general partner in Olde Poste Properties; however,
Mr. Wilkins did not participate in the negotiations of any of the terms of the
acquisition. Such terms were established by other partners of Olde Poste
Properties and other officers of the Company, and the Company believes the terms
of the transaction were no less favorable to it than it could obtain from
independent third parties.
During 1995, E. David Crockett, a director of the Company, was paid a
consulting fee by the Company in the amount of $8,000 for providing business
planning services to the Company.
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP has been selected by the Board of Directors as the
independent public accountants for the Company for its fiscal year ending
December 31, 1996.
It is expected that a representative of Deloitte & Touche LLP will be
present at the Annual Meeting and will be given an opportunity to make a
statement if desired and to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1997 annual
meeting of shareholders must be received by the Company for inclusion in the
proxy statement and form of proxy on or prior to 120 days in advance of the
first anniversary of the date of this Proxy Statement.
OTHER MATTERS
Management does not know of any other matters which may come before the
Annual Meeting. However, if any other matters properly come before the Annual
Meeting, it is the intention of the persons named in the accompanying form of
proxy to vote the proxy in accordance with their judgment on such matters.
-19-
<PAGE> 22
The Company will bear the cost of solicitation of proxies. In addition to
the use of the mails, proxies may be solicited by officers, directors, and
regular employees, personally or by telephone or telegraph, and the Company will
reimburse banks, brokers, and nominees for their out-of-pocket expenses incurred
in sending proxy materials to the beneficial owners of shares held by them. If
there are follow-up requests for proxies, the Company may employ other persons
for such purpose.
WILLIAM H. LARGENT
Secretary
-20-
<PAGE> 23
APPENDIX A
METATEC CORPORATION
1990 STOCK OPTION PLAN
Section 1. PURPOSE OF PLAN.
The purposes of 1990 Stock Option Plan (the "Plan") of METATEC Corporation
(the "Company") are to advance the interests of the Company and its shareholders
by providing a means of attracting and retaining individuals with experience and
expertise as directors, officers, and key employees for the Company and its
subsidiaries, providing these individuals with a proprietary interest in the
Company, and stimulating the interest of these individuals in the development
and financial success of the Company.
Section 2. ADMINISTRATION OF PLAN.
The Plan shall be administered by the Company's Compensation Committee (the
"Committee"), which shall consist of not less than three directors of the
Company appointed by the Company's Board of Directors (the "Board"). The members
of the Committee shall serve at the pleasure of the Board, which may remove
members from the Committee or appoint new members to the Committee from time to
time, and members of the Committee may resign by written notice to the Chairman
of the Board or the Secretary of the Company. The members of the Committee shall
not be eligible to participate in the Plan while serving on the Committee, and
each member shall be a "disinterested person" within the meaning of Rule 16b-3
under the Securities and Exchange Act of 1934, as amended. The Committee may
adopt any rules it considers appropriate for the conduct of its business or the
administration of the Plan, make interpretations of the Plan, take any other
actions it considers appropriate in connection with the Plan, and shall have
such additional authority as the Board may determine to be desirable from time
to time.
No member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
under the Plan. The members of the Committee and other members of the Board
shall be indemnified by the Company against all costs and expenses reasonably
incurred by them in connection with any action, suit, or proceeding to which
they or any of them may be a party by reason of any action taken or failure to
act under or in connection with the Plan, or any Option (defined in Section 5,
below) granted thereunder, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by legal counsel selected by the
Company) or paid by them in satisfaction of a judgment in any such action, suit,
or proceeding, except a judgment based upon a finding of bad faith. Upon the
institution of any such action, suit or proceeding, the Board or Committee
member shall promptly notify the Company in writing, and the Company shall have
the right to assume the defense thereof at its expense. The provisions of this
paragraph with respect to liability and indemnification of members of the Board
and the Committee are in addition to, and not in limitation of, the provisions
with respect to the liability and indemnification of members of the Board and
Committee (a) contained in the Articles of Incorporation or By-Laws of the
Company, (b) contained in any indemnification agreements between any members of
the Board and the Company, or (c) provided by law; provided that the foregoing
provisions shall be construed in a manner consistent with applicable law.
Section 3. SHARES SUBJECT TO PLAN.
The maximum aggregate number of Class A Common Shares, par value $.10 a
share, of the Company ("Shares") with respect to which Options may be granted
under the Plan shall be 260,000 Shares. Such Shares may be authorized but
unissued Shares or issued Shares reacquired by the Company and held as
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treasury Shares. If any Option granted under the Plan expires or terminates for
any reason without having been fully exercised, the unpurchased Shares which had
been subject to that Option shall again be available for other Options to be
granted under the Plan. The aggregate number of Shares shall be subject to
adjustment under Section 6.
Section 4. PARTICIPANTS IN PLAN.
The persons eligible to receive Options under the Plan ("Eligible Persons")
shall include only officers and key employees of the Company or its subsidiary
corporations, and, in the case of Nonqualified Options (defined in Section 5,
below), directors of subsidiaries of the Company (other than directors of such
subsidiaries who are also directors of the Company) who, in the opinion of the
Committee, have responsibilities affecting the management, development, or
financial success of the Company or one or more of its subsidiary corporations.
Section 5. GRANT OF OPTIONS.
(a) General Terms and Conditions of Grants. The Committee shall have the
authority to grant the following types of options for Shares (the "Options"):
(i) options for Shares intended to qualify as incentive stock options under
Section 422A of the Internal Revenue Code of 1986, as amended (the "Code"), as
provided in Section 5(b), below ("Incentive Options"), and (ii) options for
Shares not intended to qualify as incentive stock options under Section 422A of
the Code as provided in Section 5(c), below ("Nonqualified Options"). The
Committee shall designate from time to time, in its discretion, the Eligible
Persons to whom options shall be granted (such persons, "Grantees") under the
Plan, the number of Shares which shall be the subject of each Option granted
under the Plan and the terms and conditions under which each Option is granted
under the Plan. All actions of the Committee under this section shall be
conclusive, and no Eligible Person shall have a right to be granted any Option
unless, and except to the extent, so designated by the Committee.
(b) Incentive Options. Only officers and other key employees of the Company
or its subsidiary corporations shall be eligible for grants of Incentive
Options. The aggregate fair market value (determined at the time of the grant of
the Option) of the Shares with respect to which Incentive Options are
exercisable for the first time by any Eligible Person during any calendar year
(under all incentive stock option plans of his employer corporation and its
parent and subsidiary corporations) shall not exceed $100,000. All Incentive
Options granted under the Plan shall be granted within 10 years from the date
the Plan is adopted or the date the Plan is approved by the shareholders of the
Company, whichever is earlier. The Committee may, as a condition of granting any
Option, require that a Grantee agree to surrender for cancellation one or more
Options previously granted to such Grantee. Each Incentive Option granted
pursuant to the Plan shall be authorized by the Committee and shall be evidenced
by a written Incentive Option Agreement, in form approved by the Committee,
which shall be dated as of the date on which the Option is granted, signed by an
officer of the Company authorized by the Committee, and signed by the Grantee.
The date on which the Committee approves the granting of the Incentive Option
shall be deemed the date on which the Incentive Option is granted. The Incentive
Option Agreement shall be consistent with the Plan, and shall include, without
limitation, the following provisions:
(i) Term. An Incentive Option, by its terms, shall not be exercisable
after the expiration of 10 years from the date an Incentive Option is
granted. If the Grantee, at the time the Option is granted, owns stock
possessing more than 10% of the total combined voting power of all classes
of stock of the employer corporation or its parent or subsidiary
corporation, the Option shall not be exercisable after the expiration of
five years from the date the Option is granted.
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<PAGE> 25
(ii) Purchase Price. The option price of Shares subject to an
Incentive Option shall be not less than the fair market value of the Shares
at the time the Incentive Option is granted. If the Grantee, at the time
the Incentive Option is granted, owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the employer
corporation or its parent or a subsidiary corporation, the option price
shall be at least 110% of the fair market value of the Shares subject to
the Incentive Option at the time the incentive option is granted. For
purposes of this Section 5(b)(ii), the fair market value of the Shares
subject to the Incentive Option shall be: (A) if sales of the Shares are
reported on the National Association of Securities Dealers Automated
Quotation System, then the last sale price of the Shares as reported on
such system prior to the date the Incentive Option is granted, or (B) if
the Shares are listed or admitted for trading on any national securities
exchange, then the last sale price, or the closing bid price if no sale
occurred, on the date the Incentive Option is granted, or (C) if neither of
the preceding clauses (A) and (B) are applicable, then the fair market
value of the Shares as determined by the Committee in good faith.
(iii) Transferability. The Incentive Option, by its terms, shall not
be transferable by the Grantee other than by will or the laws of descent
and distribution. During the lifetime of the Grantee, the Incentive Option,
by its terms, shall be exercisable (subject to any other applicable
restrictions on exercise) only by the Grantee for his own account. Upon the
death of the Grantee, the Incentive Option shall be exercisable (subject to
any other applicable restrictions on exercise) only by the executor or
administrator of the Grantee's estate.
(iv) Method of Exercise. To the extent that the right to exercise the
Incentive Option has accrued under the restrictions, if any, in the
Incentive Option Agreement, the Incentive Option shall be exercisable from
time to time by written notice to the Company stating the number of Shares
with respect to which the Incentive Option is being exercised and the time
during normal business hours for delivery of those Shares, which shall be
more than 15 and less than 30 days after exercise of the Incentive Option.
At the specified time, the Company shall deliver a certificate for such
Shares to the Grantee, at the principal office of the Company, upon receipt
of payment of the full purchase price for such Shares: (a) by certified or
bank cashier's check, or (b) in the discretion of the Committee, by
delivery of Shares with a fair market value equal to the total option price
at the time of exercise, or (c) in the discretion of the Committee, by a
combination of the preceding two methods.
(v) Termination of Employment. Except as otherwise provided in Section
9, below, if the Grantee ceases to be an employee of the Company or any of
its subsidiary corporations by reason of his death, disability, retirement,
resignation, replacement or any other reason, then the Incentive Option or
any unexercised portion of the Incentive Option which otherwise is
exercisable shall terminate unless it is exercised within three months
after the date the Grantee ceases to be such an employee (but in no event
after expiration of the original term of the Option); provided that if the
Grantee ceases to be such an employee by reason of the Grantee's death, the
three-month period shall instead be a one-year period.
(vi) Restrictions. At the time the Incentive Option is granted, the
Committee may determine that the Shares subject to the Incentive Option
shall, upon issuance, be restricted as to transferability or be subject to
repurchase by the Company upon occurrence of certain events determined by
the Committee, in its discretion, and specified in the Incentive Option
Agreement.
(vii) Designation as Incentive Stock Option. The Incentive Option
shall be identified as a stock option intended to qualify as an incentive
stock option under 422A of the Code.
(c) Nonqualified Options. Each Nonqualified Option granted pursuant to the
Plan shall be authorized by the Committee and shall be evidenced by a written
Nonqualified Option Agreement, in form approved by
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<PAGE> 26
the Committee, which shall be dated as of the date on which the Nonqualified
Option is granted, signed by an officer of the Company authorized by the
Committee, and signed by the Grantee. The date on which the Committee approves
the granting of a Nonqualified Option shall be deemed the date on which the
Nonqualified Option is granted. The Committee may, as a condition of granting
any Option, require that a Grantee agree to surrender for cancellation one or
more Options previously granted to such Grantee. The Nonqualified Option
Agreement shall be consistent with the Plan, and shall include, without
limitation, the following provisions:
(i) Term. The Nonqualified Options shall not be exercisable after the
expiration of 10 years from the date the Nonqualified Option is granted.
(ii) Purchase Price. The option price shall be any price so determined
by the Committee, provided that the option Price shall not be less than 50%
of the fair market value of the Shares at the time the Nonqualified Option
is granted.
(iii) Transferability. The Nonqualified Option shall not be
transferable by the Grantee other than by will or the laws of descent and
distribution. During the lifetime of the Grantee, the Nonqualified Option
shall be exercisable (subject to any other applicable restrictions on
exercise) only by the Grantee for his own account. Upon the death of the
Grantee, the Nonqualified Option shall be exercisable (subject to any other
applicable restrictions on exercise) only by the executor or administrator
of the Grantee's estate.
(iv) Method of Exercise. To the extent that the right to exercise the
Nonqualified Option has accrued under the restrictions, if any, in the
Nonqualified Option Agreement, the Nonqualified Option shall be exercisable
from time to time by written notice to the Company stating the number of
Shares with respect to which the Nonqualified Option is being exercised and
the time during normal business hours for delivery of those Shares, which
shall be more than 15 and less than 30 days after exercise of the
Nonqualified Option. At the specified time, the Company shall deliver a
certificate for such Shares to the Grantee, at the principal office of the
Company, upon receipt of payment of the full purchase price for such
Shares: (a) by certified or bank cashier's check, or (b) in the discretion
of the Committee, by delivery of Shares with a fair market value equal to
the total option price at the time of exercise, or (c) in the discretion of
the Committee, by a combination of the preceding two methods.
(v) Termination of Relationship. Except as provided in Section 9,
below, if the Grantee ceases to be an officer or employee of the Company or
any of its subsidiary corporations or a director of a subsidiary
corporation of the Company by reason of his death, disability, retirement,
resignation, replacement, or any other reason, then the Nonqualified Option
or any unexercised portion of the Nonqualified Option which otherwise is
exercisable shall terminate unless it is exercised within three months
after the date the Grantee ceases to be such an officer, employee or
director (but in no event after expiration of the original term of the
Nonqualified Option); provided that if the Grantee ceases to be such an
officer, employee or director by reason of the Grantee's death, the
three-month period shall instead be a one-year period.
(vi) Restrictions. At the time the Nonqualified Option is granted, the
Committee may determine that the Shares subject to the Option shall, upon
issuance, be restricted as to transferability or be subject to repurchase
by the Company upon occurrence of certain events determined by the
Committee, in its discretion, and specified in the Nonqualified Option
Agreement.
(vii) Designation as Nonqualified Stock Option. The Nonqualified
Option shall be identified as a stock option not intended to qualify as an
incentive stock option under Section 422A of the Code.
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Section 6. CHANGE IN CAPITAL STRUCTURE.
In the event the Company changes its outstanding Shares by reason of stock
splits, stock dividends, or any other increase or reduction of the number of
outstanding Shares without receiving consideration in the form of money,
services, or property, the aggregate number of Shares subject to the Plan shall
be proportionately adjusted, and the number of Shares and the option price for
each Share subject to the unexercised portion of any then-outstanding Option
shall be proportionately adjusted with the objective that the Grantee's
proportionate interest in the Company shall remain the same as before the change
without any change in the total option price applicable to the unexercised
portion of the then-outstanding Option.
In the event of any other recapitalization or any merger, consolidation, or
other reorganization of the Company, the Committee shall make such adjustment,
if any, as it may deem appropriate to accurately reflect the number and kind of
Shares deliverable, and the option prices payable, upon subsequent exercise of
any then-outstanding Options.
The Committee's determination of the adjustments appropriate to be made
under this Section 6 shall be conclusive upon all Grantees and other
participants under the Plan. Notwithstanding anything in this Section 6 to the
contrary, any adjustment made under this Section 6 shall be made in a manner
that will not constitute a "modification" within the meaning defined in Section
425 of the Code.
Section 7. COMPLIANCE WITH SECURITIES LAWS; DELIVERY OF SHARES.
No Option shall be exercisable and no Share shall be delivered under the
Plan except in compliance with all applicable federal and state securities laws
and regulations. The Company's obligations to deliver Shares with respect to any
Option shall, if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Grantee to whom such Shares
are to be delivered, in such form as the Committee shall determine to be
necessary or advisable to comply with the provisions of the Securities Act of
1933, as amended, or any other applicable federal or state securities
legislation. It may be provided that any representation requirement shall become
inoperative upon a registration of the Shares or other action eliminating the
necessity of such representation under such Securities Act or other securities
legislation. Each certificate for Shares issued pursuant to the Plan shall be
registered in the name of the Grantee and shall bear appropriate legend(s) with
respect to the restrictions upon such Shares.
In the case of the exercise of an Option by a person or estate acquiring
the right to exercise such Option by bequest or inheritance, the Committee may
require reasonable evidence as to the ownership of such Option and may require
such consents and releases of taxing authorities as the Committee deem
advisable.
Section 8. EFFECT OF CHANGE IN CONTROL.
If a tender offer or exchange offer for Shares (other than such an offer by
the Company or approved by the Company's Board of Directors) is commenced, or if
the shareholders of the Company shall approve an agreement providing for a
transaction in which the Company will cease to be an independent publicly owned
entity or for a sale or other disposition of all or substantially all the assets
of the Company and such event shall not have been approved by the Company's
Board of Directors, unless with respect to a Grantee the Committee shall have
otherwise provided in the agreement evidencing the grant of an Option to such
Grantee, then all Options theretofore granted and not fully exercisable shall
(except as otherwise provided in Section 5(b), above) thereupon become
exercisable in full upon the happening of such event and shall remain so
exercisable in accordance with their terms; provided, however, that no Option
shall be exercisable by an officer of the Company within six months of the date
of grant of such Option and no Option which has previously been exercised or
otherwise terminated shall become exercisable.
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Section 9. TERMINATION FOR CAUSE.
Notwithstanding any provision to the contrary in the Plan or in any
agreement in respect of an Option granted under the Plan, upon the discharge for
cause of any Grantee, all unexercised Options granted to such Grantee shall
lapse.
Section 10. WITHHOLDING TAX.
The Company shall have the right to require a Grantee who is entitled to
receive Shares pursuant to the exercise of an Option to pay to the Company the
amount of any taxes which the Company is required to withhold with respect to
such Shares, or, in lieu thereof, to retain, or sell without notice, a number of
such Shares sufficient to cover the amount required to be withheld.
Section 11. NO ENLARGEMENT OF EMPLOYMENT RIGHTS.
The grant of Options, under the Plan to an employee of the Company or any
of its subsidiaries shall not confer any right to the employee to continue in
the employ of the Company or any such subsidiary and shall not restrict or
interfere in any way with the right of his employer to terminate his employment,
with or without cause, at any time. The grant of Option under the Plan to a
director of a subsidiary of the Company shall not confer any right to such
director to continue as a director of a subsidiary of the Company and shall not
restrict or interfere in any way with the right of the shareholder of such
company to terminate such directorship, with or without cause, at any time.
Section 12. ACCELERATION OF RIGHTS.
The Committee shall have the authority, in its discretion, to accelerate
the time at which an Option shall be exercisable whenever it may determine that
such action is appropriate by reason of changes in applicable tax or other laws
or other changes in circumstances occurring after the grant of such Options.
Section 13. RIGHTS AS SHAREHOLDERS.
No Grantee or his executor, administrator, heirs, or legatees shall have
any rights of a shareholder in the Company with respect to the Shares covered by
his Option unless and until a certificate representing such Shares has been duly
issued and delivered to him under the Plan.
Section 14. DEFINITION OF SUBSIDIARY.
The term "subsidiary corporation" when used in the Plan or any stock option
agreement made pursuant to the Plan means a subsidiary corporation as defined in
425 of the Code.
Section 15. AMENDMENT OR TERMINATION OF PLAN.
The Board may amend or terminate the Plan at any time, but: (a) no such
amendment or termination shall affect the rights of a Grantee with respect to a
prior award under the Plan without the consent of the Grantee, and (b) no such
amendment shall be made without the approval of the shareholders of the Company
whenever such approval would be required with respect to Incentive Options to
preserve the status of the Plan as an incentive stock option plan and the
qualifications of any Options as incentive stock options under Section 422A of
the Code, including (i) an increase in the maximum number of Shares that may be
subject to Incentive Options (unless necessary to effect the adjustments
required under Section 6, above), (ii) an
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increase in the benefits to any Grantee under the Plan or (iii) a modification
in the requirements for eligibility under the Plan.
Section 16. GOVERNMENT REGULATIONS.
Notwithstanding any provisions of the Plan or any stock option agreement
made pursuant to the Plan, the Company's obligations under the Plan and any
stock option agreement shall be subject to all applicable laws, rules, and
regulations and to such approvals as may be required by any governmental or
regulatory agencies.
With respect to Incentive Options, the intention of the Plan is to qualify
such Incentive Options as issued pursuant to an incentive stock option plan
under Section 422A of the Code, and the Plan and any Incentive Option Agreements
shall be construed consistently with that intention to the extent possible.
Section 17. GENDERS AND NUMBERS.
When permitted by the context, each pronoun used in the Plan includes the
same pronoun in other genders and numbers.
Section 18. CAPTIONS.
The captions of the various sections of the Plan are not part of the
context of the Plan, but are only labels to assist in locating those sections,
and shall be ignored in construing the Plan.
Section 19. EFFECTIVE DATE.
The Plan shall be effective July 1, 1990. The Plan shall be submitted to
the shareholders of the Company for approval and ratification as soon as
practicable but in any event not later than 12 months after the Plan has been
adopted. If the Plan is not approved and ratified by the shareholders of the
Company within 12 months after the Plan has been adopted, the Plan and all
Options granted under the Plan shall become null and void and have no further
force or effect.
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AMENDMENT NO. 1
TO
METATEC CORPORATION
1990 STOCK OPTION PLAN
The METATEC Corporation 1990 Stock Option Plan (the "Plan") is hereby
amended pursuant to the following provisions:
Section 1. DEFINITIONS.
All capitalized terms used in this amendment which are not otherwise
defined herein shall have the respective meanings given such terms in the Plan.
All references in the Plan to Section 422A of the Code shall be deemed to
be references to Section 422 of the Code, and all references in the Plan to
Section 425 of the Code shall be deemed to be references to Section 424 of the
Code.
For purposes of the Plan, the fair market value of the Shares shall mean,
as of any given date: (a) the mean between the highest and lowest bid and ask
prices, as reported by the National Association of Securities Dealers, Inc., on
the most recent previous reporting day, (b) the last reported sale price in the
NASDAQ National Market System on the most recent previous reporting day, or (C)
the last reported sale price on any stock exchange on which the Shares are
listed on the most recent previous reporting day, whichever shall be applicable.
Section 2. ADMINISTRATION OF PLAN. The second paragraph of Section 2 of the
Plan is hereby amended to read in its entirety as follows:
No member of the Board or the Committee shall be liable for any action
or determination relating to the Plan made in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company. Each member of the Board or the Committee shall be indemnified by
the Company against all costs and expenses reasonably incurred by him in
connection with any action, suit, or proceeding to which he may be a party
by reason of any action taken or failure to act under or in connection with
the Plan, or any Option (defined in Section 5 of the Plan) granted
thereunder, and against all amounts paid by him in satisfaction of a
judgement in any such action, suit, or proceeding, if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company. Upon the institution of any such action,
suit, or proceeding, the Board or Committee member shall promptly notify
the Company in writing, and the Company shall have the right to assume the
defense thereof at its expense. The provisions of this paragraph with
respect to the liability and indemnification of members of the Board and
the Committee are in addition to, and not in limitation of, the provisions
with respect to the liability and indemnification of members of the Board
and the Committee (a) contained in the Articles of Incorporation or By-Laws
of the Company, (b) contained in any indemnification agreements between any
members of the Board and the Company, or (c) provided by law; provided that
all of the foregoing provisions of this paragraph shall be construed in a
manner consistent with applicable law.
Section 3. SIX-MONTH HOLDING PERIOD.
Shares purchased upon exercise of an Option may not be sold before at least
six months have elapsed from the date the Option was granted.
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<PAGE> 31
Section 4. AMENDMENT OR TERMINATION OF PLAN.
Section 15 of the Plan is hereby amended to read in its entirety as
follows:
The Board, without further action on the part of the shareholders of
the Company, may from time to time alter, amend or suspend the Plan or may
at any time terminate the Plan, provided that: (a) no such action shall
materially and adversely affect any outstanding Options without the consent
of the respective Grantees of such Options; and (b) except for the
adjustments provided for in Section 6 of the Plan, no amendment may be made
by Board action without shareholder approval if (i) the amendment would (A)
materially increase the benefits accruing to participants under the Plan,
(B) materially increase the number of Shares which may be issued under the
Plan, or (C) materially modify the requirements as to eligibility for
participation in the Plan, or (ii) such approval would be required with
respect to Incentive Options to preserve the status of the Plan as an
incentive stock option plan and the qualifications of any Options as
incentive stock options under Section 422 of the Code.
Section 5. EFFECTIVE DATE; CONSTRUCTION.
The effective date of this amendment is May 1, 1992, and this amendment
shall be deemed to be a part of the Plan as of such date. In the event of any
inconsistencies between the provisions of the Plan and this amendment, the
provisions of this amendment shall control. Except as modified by the amendment,
the Plan shall continue in full force and effective without change.
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AMENDMENT NO. 2
TO
METATEC CORPORATION
1990 STOCK OPTION PLAN
The METATEC Corporation 1990 Stock Option Plan (the "Original Plan"), as
previously amended by Amendment No. 1 dated May 1, 1992 (collectively, the
"Plan"), is hereby amended pursuant to the following provisions:
Section 1. DEFINITIONS.
All capitalized terms used in this amendment which are not otherwise
defined herein shall have the respective meanings given such terms in the Plan.
Section 2. SHARES SUBJECT TO PLAN.
The maximum aggregate number of Shares with respect to which Options may be
granted under the Plan, as set forth in Section 3 of the Original Plan, is
increased by 100,000 Shares to a total of 360,000 Shares. Such aggregate number
of Shares shall be subject to adjustment as provided in the Plan.
Section 3. EFFECTIVE DATE; CONSTRUCTION.
The effective date of this amendment is February 22, 1993, and this
amendment shall be deemed to be a part of the Plan as of such date. In the event
of any inconsistencies between the provisions of the Plan and this amendment,
the provisions of this amendment shall control. Except as modified by this
amendment, the Plan shall continue in full force and effective without change.
This amendment shall be submitted to the shareholders of the Company for
approval as soon as practicable but in any event not later than 12 months after
this amendment has been adopted by the board of directors of the Company.
Notwithstanding the preceding paragraph or any other provisions of this
amendment to the contrary, if this amendment is not approved by the shareholders
of the Company within such 12-month period, this amendment and all Options
granted with respect to the additional Shares subject to the Plan as a result of
this amendment shall automatically become null and void and have no further
force or effect.
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AMENDMENT NO. 3
TO
METATEC CORPORATION
1990 STOCK OPTION PLAN
The METATEC Corporation 1990 Stock Option Plan (the "Original Plan"), as
previously amended by Amendment No. 1 dated May 1, 1992, and Amendment No. 2
dated February 22, 1993 (together with the Original Plan, collectively, the
"Plan"), is hereby amended pursuant to the following provisions:
Section 1. DEFINITIONS.
As a result of the recapitalization of the Company pursuant to the
Company's Amended and Restated Articles of Incorporation approved by the
Company's shareholders on May 20, 1993, all capitalized terms used in this
amendment which are not otherwise defined herein shall have the respective
meanings given such terms in the Plan.
Section 2. SHARES SUBJECT TO PLAN.
The maximum aggregate number of Shares with respect to which Options may be
granted under the Plan is increased by 150,000 Shares to a total of 510,000
Shares. Such aggregate number of Shares shall be subject to adjustment as
provided in the Plan.
Section 3. ELIGIBLE PARTICIPANTS.
Section 1 of the Original Plan is hereby amended to read in its entirety as
follows:
The purposes of the 1990 Stock Option Plan (the "Plan") of Metatec
Corporation (the "Company") are to advance the interests of the Company and
its shareholders by providing a means of attracting and retaining
individuals with experience and expertise as directors, officers, and
employees for the Company and its subsidiaries, providing these individuals
with a proprietary interest in the Company, and stimulating an interest of
these individuals in the development and financial success of the Company.
In addition, Section 4 of the Original Plan is hereby amended to read in
its entirety as follows:
The persons eligible to receive Options under the Plan ("Eligible
Persons") shall include all officers and all fulltime employees of the
Company and its subsidiaries, and, in the case of Nonqualified Options
(defined in Section 5, below), directors of subsidiaries of the Company
(other than directors of such subsidiaries who are also directors of the
Company).
Section 4. EFFECTIVE DATE; CONSTRUCTION.
The effective date of this amendment is March 21, 1994, and this amendment
shall be deemed to be a part of the Plan as of such date. In the event of any
inconsistencies between the provisions of the Plan and this amendment, the
provisions of this amendment shall control. Except as modified by this
amendment, the Plan shall continue in full force and effective without change.
This amendment shall be submitted to the shareholders of the Company for
approval as soon as practicable but in any event not later than 12 months after
this amendment has been adopted by the board of directors of the Company.
Notwithstanding the preceding paragraph or any other provisions of this
amendment to the contrary, if this amendment is not approved by the shareholders
of the Company within such 12-month period, this amendment and all Options
granted with respect to the additional Shares subject to the Plan as a result of
this amendment shall automatically become null and void and have no further
force or effect.
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AMENDMENT NO. 4
TO
METATEC CORPORATION
1990 STOCK OPTION PLAN
The Metatec Corporation 1990 Stock Option Plan (the "Original Plan"), as
previously amended by Amendment No. 1 dated May 1, 1992, Amendment No. 2 dated
February 22, 1993, and Amendment No. 3 dated March 21, 1994 (together with the
Original Plan, collectively, the "Plan"), is hereby amended pursuant to the
following provisions:
Section 1. DEFINITIONS.
All capitalized terms used in this amendment which are not otherwise
defined herein shall have the respective meanings given such terms in the Plan.
Section 2. SHARES SUBJECT TO PLAN.
The maximum aggregate number of Shares with respect to which Options may be
granted under the Plan is increased by 500,000 Shares to a total of 1,010,000
Shares. Such aggregate number of Shares shall be subject to adjustment as
provided in the Plan.
Section 3. EFFECTIVE DATE; CONSTRUCTION.
The effective date of this amendment is October 26, 1995, and this
amendment shall be deemed to be a part of the Plan as of such date. In the event
of any inconsistencies between the provisions of the Plan and this amendment,
the provisions of this amendment shall control. Except as modified by this
amendment, the Plan shall continue in full force and effect without change.
This amendment shall be submitted to the shareholders of the Company for
approval as soon as practicable but in any event not later than 12 months after
this amendment has been approved by the board of directors of the Company.
Notwithstanding the preceding paragraph or any other provisions of this
amendment to the contrary, if this amendment is not approved by the shareholders
of the Company within such 12-month period, this amendment and all Options
granted with respect to the additional Shares subject to the Plan as a result of
this amendment shall automatically become null and void and have no further
force or effect.
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APPENDIX B
METATEC CORPORATION
1992 DIRECTORS' STOCK OPTION PLAN
Section 1. PURPOSE.
The purposes of the METATEC Corporation 1992 Directors' Stock Option Plan
(the "Plan") are to encourage directors of METATEC Corporation (the "Company")
who are not employees or officers of the Company or any of its subsidiaries to
acquire a proprietary interest in the Company, to further promote the interest
of such directors in the development and financial success of the Company, and
to assist the Company in attracting and retaining highly qualified directors.
Section 2. ADMINISTRATION OF PLAN.
The Plan shall be administered by the Company's Compensation Committee (the
"Committee") which shall consist of not less than three directors of the Company
appointed by the Company's Board of Directors (the "Board"). The members of the
Committee shall serve at the pleasure of the Board, which may remove members
from the Committee or appoint new members to the Committee from time to time,
and members of the Committee may resign by written notice to the Chairman of the
Board or the Secretary of the Company. The Committee may adopt any rules it
considers appropriate for the conduct of its business or the administration of
the Plan, make interpretations of the Plan, and take any other actions it
considers appropriate in connection with the Plan, all in a manner consistent
with the other provisions of the Plan, and shall have such additional authority
as the Board may determine to be desirable from time to time. The decisions of
the Committee on matters within its jurisdiction under the Plan shall be
conclusive and binding.
No member of the Board or the Committee shall be liable for any action or
determination relating to the Plan made in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company. Each member of the Board or the Committee shall be indemnified by the
Company against all costs and expenses reasonably incurred by him in connection
with any action, suit, or proceeding to which he may be a part by reason of any
action taken or failure to act under or in connection with the Plan, or any
Option (defined in Section 5, below) granted thereunder, and against all amounts
paid by him in satisfaction of a judgement in any such action, suit, or
proceeding, if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company. Upon the institution
of any such action, suit, or proceeding, the Board or Committee member shall
promptly notify the Company in writing, and the Company shall have the right to
assume the defense thereof at its expense. The provisions of this paragraph with
respect to the liability and indemnification of members of the Board and the
Committee are in addition to, and not in limitation of, the provisions with
respect to the liability and indemnification of members of the Board and the
Committee (a) contained in the Articles of Incorporation or By-Laws of the
Company, (b) contained in any indemnification agreements between Directors and
the Company, or (c) provided by law; provided that all of the foregoing
provisions of this paragraph shall be construed in a manner consistent with
applicable law.
Section 3. SHARES SUBJECT TO PLAN.
The maximum aggregate number of Class A Common Shares, par value $.10 a
share, of the Company (the "Shares") allocated to the Plan and available for
Options shall be 130,000 Shares. Such Shares may be authorized but unissued
Shares or issued Shares reacquired by the Company and held as treasury Shares.
If an Option granted under the Plan expires or terminates, the Shares subject to
such expired or terminated option
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shall again be available for other Options to be granted under the Plan. The
aggregate number of Shares allocated to the Plan shall be subject to adjustment
under Section 6.
Section 4. ELIGIBILITY.
The persons eligible to receive Options under the Plan shall include only
individuals who are directors of the Company and not employees or officers of
the Company or any subsidiary of the Company (each such individual an "Eligible
Director").
Section 5. GRANT AND TERMS OF OPTIONS.
Immediately following each of the first five annual meetings of
shareholders of the Company following the effective date of the Plan, each
person who is then an Eligible Director automatically shall be granted an option
(an "Option") to purchase that number of Shares which is equal to the lesser of:
(a) 2,850; or (b) the result obtained when (i) $10,000 is divided by the fair
market value of one Share on the date the Option is granted, and (ii) the
quotient is rounded to the nearest whole number. For purposes of the Plan, the
fair market value of the Shares shall mean, as of any given date: (A) the mean
between the highest and lowest bid and ask prices, as reported by the National
Association of Securities Dealers, Inc., on the most recent previous reporting
day, (B) the last reported sale price in the NASDAQ National Market System on
the most recent previous reporting day, or (C) the last reported sale price on
any stock exchange on which the Shares are listed on the most recent previous
reporting day, whichever shall be applicable. No additional Options shall be
granted under the Plan following the granting of the Options described in this
paragraph.
The Options shall be stock options not intended to qualify as incentive
stock options under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"). Each Option shall be evidenced by a written agreement (an "Option
Agreement") in such form as the Committee shall from time to time approve, and
each Option Agreement shall be dated as of the date on which the Option is
granted, signed by an officer of the Company authorized by the Committee, and
signed by the Eligible Director to whom such Option is granted (Eligible
Directors granted Options hereunder, "Grantees"). All Option Agreements shall be
consistent with the Plan and comply with and be subject to the following terms
and conditions:
(i) VESTING. All Options shall be fully vested on the date of grant.
(ii) OPTION PRICE. The option price of Shares subject to an Option
shall be the fair market value of the Shares on the date the Option is
granted, as determined in accordance with the provisions set forth in the
first paragraph of this Section 5.
(iii) MAXIMUM TERM. Subject to Section 5(iv), below, the term of each
Option shall commence
on the date of grant and shall terminate on the fifth anniversary of such
date.
(iv) TERMINATION OF OPTION. Except as otherwise provided in Section 9,
if a Grantee ceases to be an Eligible Director for any reason, then all
Options or any unexercised portion of such Options which otherwise are
exercisable by such Grantee shall terminate unless such Options are
exercised within six months after the date such Grantee ceases to be an
Eligible Director (but in no event after expiration of the original term of
any such Option); provided, that if such Grantee ceases to be an Eligible
Director by reason of such Grantee's death, the six-month period shall
instead be a one-year period.
(v) TRANSFERABILITY. No Option shall be transferable by a Grantee
other than by will or the laws of descent and distribution. During the
lifetime of a Grantee, an Option, by its terms, shall be exercisable
(subject to any other applicable restrictions on exercise) only by a
Grantee for his own account. Upon the
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death of a Grantee, an Option shall be exercisable (subject to any other
applicable restrictions on exercise) only by the executor or administrator
of the Grantee's estate.
(vi) METHOD OF EXERCISE. To the extent the right to exercise an Option
has accrued, such Option may be exercised from time to time by giving
written notice to the Secretary of the Company (the date such notice is
received by the Company, the "Exercise Date"), stating the number of Shares
(which must be a whole number) with respect to which an Option is being
exercised and the time during normal business hours for delivery of the
Shares with respect to which an Option was exercised, which shall be more
than 15 and less than 30 days after the Exercise Date. Subject to
compliance with all other terms and conditions of the Plan and the Option
Agreement relating to such Option, the Company shall deliver, at the
specified time at the principal office of the Company, a certificate for
such Shares to the person entitled to receive same upon receipt of payment
of the full purchase price for such Shares: (i) by certified or bank
cashier's check, or (ii) by delivery of unrestricted Shares with a fair
market value equal to the total option price at the time of exercise, or
(iii) by a combination of the preceding two methods.
(vii) SIX-MONTH HOLDING PERIOD. Shares purchased upon exercise of an
Option may not be sold before at least six months have elapsed from the
date the Option was granted.
Section 6. CHANGES IN CAPITAL STRUCTURE.
If the Company (a) pays a dividend or makes a distribution in Shares
without receiving consideration in the form of money, services, or property, (b)
subdivides or splits its outstanding Shares into a greater number of Shares, or
(c) combines its outstanding Shares into a smaller number of Shares, then the
aggregate number of Shares reserved for issuance pursuant to the Plan and the
number and option price of Shares subject to the unexercised portions of
then-outstanding Options shall be adjusted so that, assuming that Options had
been previously granted for all of the Shares so reserved, the Grantees would be
entitled to receive for the same aggregate price that number of Shares which
they would have owned after the happening of any of the events described above
had they exercised all of such Options prior to the happening of such event. An
adjustment made pursuant to this paragraph shall become effective immediately
after the record date in the case of a dividend or the effective date in the
case of a subdivision, split, or combination.
If the Company reclassifies or changes the Shares (except for splitting or
combining, or changing par value, or changing from par value to no par value, or
changing from no par value to par value) or participates in a consolidation or
merger (other than a merger in which the Company is the surviving corporation
and which does not result in any reclassification or change of the Shares except
as stated above), the aggregate number of Shares reserved for issuance pursuant
to the Plan and the number and option price of Shares subject to the unexercised
portions of then-outstanding Options shall be adjusted so that, assuming that
Options had been previously granted for all the Shares so reserved, the Grantees
would be entitled to receive for the same aggregate price that number and type
of shares of capital stock which they would have owned after the happening of
any of the events described above had they exercised all of such Options prior
to the happening of such event.
No adjustment pursuant to this section shall be required unless such
adjustment would require an increase or decrease of at least 1% in the number or
price of Shares; provided that any adjustments which by reason of this paragraph
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this section shall be made to
the nearest cent or to the nearest full share, as the case may be. Anything in
this section to the contrary notwithstanding, the Company shall be entitled to
make such reductions in the option price, in addition to those required by this
section, as it, in its discretion, shall determine to be advisable in order that
any stock dividends, subdivisions or splits of shares,
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distribution of rights to purchase shares or securities, or distribution of
securities convertible into or exchangeable for shares hereafter made by the
Company to its shareholders shall not be taxable.
Whenever an adjustment is made pursuant to the preceding provisions of this
section, the Company shall promptly prepare a notice of such adjustment setting
forth the terms of such adjustment and the date on which such adjustment became
effective and shall mail such notice of such adjustment to the Grantees at their
respective addresses appearing on the records of the Company or at such other
address any Grantees may from time to time designate in writing to the Company.
In addition, if any adjustment is made under the preceding provisions of
this section with respect to the aggregate number of Shares reserved for
issuance pursuant to the Plan, then, with respect to any remaining Options to be
granted under the Plan after the date of such adjustment, the number of Shares
specified in clause (a) of the first paragraph of Section 5 also shall be
proportionately adjusted in a manner consistent with the adjustment in the
aggregate number of Shares reserved for issuance pursuant to the Plan.
Section 7. COMPLIANCE WITH SECURITIES LAWS; DELIVERY OF SHARES.
No Option shall be exercisable and no Shares shall be delivered under the
Plan except in compliance with all applicable federal and state securities laws
and regulations. The Company's obligation to deliver Shares with respect to the
exercise of an Option shall, if the Committee so requests, be conditioned upon
the receipt of a representation and warranty as to the investment intention of
the Grantee or other person to whom such Shares are to be delivered, in such
form as the Committee shall determine to be necessary or advisable to comply
with the provisions of the Securities Act of 1933, as amended, or any other
applicable federal or state securities laws. Each certificate for Shares issued
pursuant to the Plan shall be registered in the name of the Grantee or such
other person and shall bear appropriate legend(s) with respect to the
restrictions upon transfer of such Shares.
All certificates for Shares or other securities delivered under the Plan
shall be subject to such stop-transfer orders and other restrictions as the
Company may deem advisable under the rules, regulations, and other requirements
of the Securities and Exchange Commission, any stock exchange upon which the
Shares are then listed, and any applicable federal or state securities law, and
the Company may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
In the case of the exercise of an Option by a person or estate acquiring
the right to exercise such Option by bequest or inheritance, the Committee may
require reasonable evidence as to the ownership of such Option and may require
such consents and releases of taxing authorities as the Committee deems
advisable.
Section 8. WITHHOLDING TAX.
The Company, at its option, shall have the right to require any person who
is entitled to receive Shares pursuant to the exercise of an Option to pay to
the Company an amount equal to all taxes which the Company is required to
withhold with respect to such Shares or make arrangements satisfactory to the
Company regarding the payment of such taxes, or, in lieu thereof, to retain, or
sell without notice, a number of such Shares sufficient to cover the amount
required to be withheld. The obligations of the Company under the Plan shall be
conditional on such payment or other arrangements.
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Section 9. TERMINATION FOR CAUSE.
Notwithstanding any provision to the contrary in the Plan or in any Option
Agreement, upon the discharge of any Grantee as a director of the Company for
cause, all unexercised Options granted to such Grantee shall immediately lapse
and be of no further force or effect.
Section 10. TERMINATION AND AMENDMENT OF PLAN.
The Board, without further action on the part of the shareholders of the
Company, may from time to time alter, amend or suspend the Plan or may at any
time terminate the Plan, provided that: (a) no such action shall materially and
adversely affect any outstanding Options without the consent of the respective
Grantees of such Options; (b) except for the adjustments provided for in Section
6, no amendment may be made by Board action without shareholder approval if the
amendment would (i) materially increase the benefits accruing to participants
under the Plan, (ii) materially increase the number of Shares which may be
issued under the Plan, or (iii) materially modify the requirements as to
eligibility for participation in the Plan; and (c) the Plan shall not be amended
more than once every six months, other than to comport with changes in the Code,
the Employee Retirement Income Security Act, or the rules thereunder.
Section 11. NO ENLARGEMENT OF RIGHTS.
The award of Options under the Plan to an Eligible Director shall not
confer any right to such director to continue as a director of the Company and
shall not restrict or interfere in any way with the right of the shareholders of
the Company to terminate such directorship, with or without cause, at any time.
Section 12. RIGHTS AS SHAREHOLDER.
No Grantee or his executor or administrator shall have any rights of a
shareholder in the Company with respect to the Shares covered by an Option
unless and until a certificate representing such Shares has been duly issued and
delivered to him under the Plan.
Section 13. DEFINITION OF SUBSIDIARY.
The term "subsidiary" when used in the Plan or any Option Agreement means a
subsidiary corporation as defined in Section 424 of the Code.
Section 14. GOVERNMENT REGULATIONS.
Notwithstanding any provisions of the Plan or any Option Agreement, the
Company's obligations under the Plan and any such Option Agreement shall be
subject to all applicable laws, rules and regulations and to such approvals as
may be required by any governmental or regulatory agencies.
Section 15. GOVERNING LAW.
The Plan and all Option Agreements shall be governed by and construed in
accordance with the laws of the State of Ohio.
Section 16. GENDERS AND NUMBERS.
When permitted by the context, each pronoun used in the Plan includes the
same pronoun in other genders and numbers, and each noun used in the Plan
includes the same noun in other numbers.
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Section 17. CAPTIONS.
The captions of the various sections of the Plan are not part of the
context of the Plan, but are only labels to assist in locating those sections,
and shall be ignored in construing the Plan.
Section 18. EFFECTIVE DATE.
The Plan shall be effective May 1, 1992. The Plan shall be submitted to the
shareholders of the Company for approval as soon as practicable but in any event
not later than 12 months after the effective date of the Plan. Notwithstanding
anything to the contrary contained herein, no Options shall be exercisable prior
to such approval. If the Plan is not approved by the shareholders of the Company
within 12 months after the effective date of the Plan, the Plan and all Options
granted under the Plan shall become null and void and have no further force or
effect.
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AMENDMENT NO. 1
TO
METATEC CORPORATION
1992 DIRECTORS' STOCK OPTION PLAN
The Metatec Corporation 1992 Directors' Stock Option Plan (the "Plan") is
hereby amended pursuant to the following provisions:
Section 1. DEFINITIONS.
As a result of the recapitalization of the Company pursuant to the
Company's Amended and Restated Articles of Incorporation approved by the
Company's shareholders on May 20, 1993, the term "Shares", as used in the Plan
and this amendment, means the Company's common shares, par value $.10 a share.
All capitalized terms used in this amendment which are not otherwise defined
herein shall have the respective meanings given such terms in the Plan.
Section 2. SHARES SUBJECT TO PLAN.
The maximum aggregate number of Shares with respect to which options may be
granted under the Plan, including the Options (as defined in the Plan) and the
One-Time Options (as defined in Section 4, below), is increased by 30,000 Shares
to a total of 160,000 Shares. Such aggregate number of Shares shall be subject
to adjustment as provided in the Plan.
Section 3. ANNUAL GRANTS.
The formula contained in the first sentence of Section 5 of the Plan shall
not be used for purposes of determining the number of Shares subject to Options
granted under that section after the date of this amendment. Instead, the number
of Shares subject to each such Option shall be 2,500.
Section 4. ADDITIONAL ONE-TIME GRANTS.
Each person who is an Eligible Director immediately following the 1994
annual meeting of the shareholders of the Company, and each person who first
becomes an Eligible Director at any time during the period beginning on the day
after that annual meeting and ending on the day after the 1996 annual meeting of
the shareholders of the Company, automatically shall be granted an option (a
"One-Time Option") to purchase 10,000 Shares. Each One-Time Option, and the
Shares subject to that One-Time Option, shall be subject to all terms and
conditions applicable to Options under the Plan, except as follows:
(a) TERM. Subject to earlier termination as provided below and as
provided in the Plan, the term of each One-Time Option shall begin on the
date it is granted (the "Grant Date") and shall end on the fifth
anniversary of the Grant Date.
(b) VESTING. Each One-Time Option shall vest in four equal
installments on the first four anniversaries of the Grant Date, so that
each One-Time Option may be exercised with respect to the following
percentages of the Shares originally subject to that One-Time Option on and
after the following anniversaries of the Grant Date, respectively (until
termination of that One-Time Option):
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<TABLE>
<CAPTION>
ANNIVERSARY PERCENTAGE
- ------------------------------------- ----------
<S> <C>
First................................ 25%
Second............................... 50%
Third................................ 75%
Fourth............................... 100%
</TABLE>
If a Grantee of a One-Time Option ceases to be an Eligible Director for any
reason, then that One-Time Option shall terminate automatically with
respect to that portion of the One-Time Option which has not become
exercisable as provided above.
(c) EFFECT OF CHANGE IN CONTROL. If a tender offer or exchange offer
for Shares (other than such an offer by the Company or approved by the
Company's Board of Directors) is commenced, or if the shareholders of the
Company shall approve an agreement providing for a transaction in which the
Company will cease to be an independent publicly owned entity or for a sale
or other disposition of all or substantially all the assets of the Company
and such event shall not have been approved by the Company's Board of
Directors, then all One-Time Options theretofore granted and not fully
exercisable shall thereupon become exercisable in full upon the happening
of such event and shall remain so exercisable in accordance with their
terms; provided that no One-Time Option which has previously been exercised
or otherwise terminated shall become exercisable.
The One-Time Options granted to Eligible Directors under this section are
in addition to the Options granted to Eligible Directors under Section 5 of the
Plan.
Section 5. EFFECTIVE DATE; CONSTRUCTION.
The effective date of this amendment is March 21, 1994, and this amendment
shall be deemed to be a part of the Plan as of such date. In the event of any
inconsistencies between the provisions of the Plan and this amendment, the
provisions of this amendment shall control. Except as modified by this
amendment, the Plan shall continue in full force and effect without change.
This amendment shall be submitted to the shareholders of the Company for
their approval as soon as practicable but in any event not later than 12 months
after this amendment has been adopted by the board of directors of the Company.
Notwithstanding the preceding paragraph or any other provisions of this
amendment to the contrary, if this amendment is not approved by the shareholders
of the Company within such 12-month period, this amendment shall automatically
become null and void and have no further force or effect, and the Plan shall
continue in effect without this amendment.
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AMENDMENT NO. 2
TO
METATEC CORPORATION
1992 DIRECTORS' STOCK OPTION PLAN
The Metatec Corporation 1992 Directors' Stock Option Plan (the "Original
Plan"), as previously amended by Amendment No. 1 to the Original Plan
(collectively, the "Plan"), is hereby amended pursuant to the following
provisions:
Section 1. DEFINITIONS.
All capitalized terms used in this amendment which are not otherwise
defined herein shall have the respective meanings given such terms in the Plan.
Section 2. TERM OF OPTIONS.
If, after a Grantee reaches the age of 70, that Grantee ceases to be an
Eligible Director for any reason other than his death or discharge for cause,
then: (a) any unvested portion of any One-Time Option granted to that Grantee
automatically shall vest and become exercisable at that time; and (b) any Option
or portion of an Option (hereinafter, simply an "Option") which is otherwise
then exercisable by that Grantee (including without limitation any unexercised
portion of a One-Time Option) shall not terminate as provided in Section 5(iv)
of the Original Plan and shall continue to be exercisable during the remainder
of the original term of that Option; provided that if such Grantee thereafter
dies, then each such Option shall terminate unless exercised within one year
after the date of that Grantee's death (but in no event after expiration of the
original term of that Option).
The preceding provisions shall not be construed to modify the provisions of
the Plan relating to termination of any unexercised Options held by any Grantee
who ceases to be an Eligible Director as the result of that Grantee's death or
discharge for cause.
Section 3. EFFECTIVE DATE; CONSTRUCTION.
The effective date of this amendment is January 25, 1995, and this
amendment shall be deemed to be a part of the Plan as of such date. In the event
of any inconsistencies between the provisions of the Plan and this amendment,
the provisions of this amendment shall control. Except as modified by this
amendment, the Plan shall continue in full force and effect without change.
This amendment shall be submitted to the shareholders of the Company for
their approval as soon as practicable, but in any event not later than 12 months
after this amendment has been adopted by the board of directors of the Company.
Notwithstanding the preceding paragraph or any other provisions of this
amendment to the contrary, if this amendment is not approved by the shareholders
of the Company within such 12-month period, this amendment shall automatically
become null and void and have no further force or effect, and the Plan shall
continue in effect without this amendment.
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AMENDMENT NO. 3
TO
METATEC CORPORATION
1992 DIRECTORS' STOCK OPTION PLAN
The Metatec Corporation 1992 Directors' Stock Option Plan (the "Original
Plan"), as previously amended by Amendment No. 1 dated March 21, 1994
("Amendment No. 1"), and Amendment No. 2 dated January 25, 1995 (together with
the Original Plan, collectively, the "Plan"), is hereby amended pursuant to the
following provisions:
Section 1. DEFINITIONS.
All capitalized terms used in this amendment which are not otherwise
defined herein shall have the respective meanings given such terms in the Plan.
Section 2. ANNUAL GRANTS.
The annual Option grants provided for in Section 5 of the Original Plan, as
amended by Section 3 of Amendment No. 1, shall continue through the first seven
annual meetings of the shareholders of the Company following the effective date
of the Original Plan.
Section 3. EFFECTIVE DATE; CONSTRUCTION.
The effective date of this amendment is January 24, 1996, and this
amendment shall be deemed to be a part of the Plan as of such date. In the event
of any inconsistencies between the provisions of the Plan and this amendment,
the provisions of this amendment shall control. Except as modified by this
amendment, the Plan shall continue in full force and effect without change.
This amendment shall be submitted to the shareholders of the Company for
their approval as soon as practicable, but in any event not later than 12 months
after this amendment has been approved by the board of directors of the Company.
Notwithstanding the preceding paragraph or any other provisions of this
amendment to the contrary, if this amendment is not approved by the shareholders
of the Company within such 12-month period, this amendment shall automatically
become null and void and have no further force or effect, and the Plan shall
continue in effect without this amendment.
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PROXY METATEC CORPORATION
- -----
---------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jeffrey M. Wilkins and William H.
Largent, and each of them, with full power of substitution, proxies to vote and
act with respect to all Common Shares, $0.10 par value (the "Shares"), of
Metatec Corporation, a Florida corporation (the "Company"), which the
undersigned is entitled to vote at the Annual Meeting of Shareholders to be
held on Wednesday, April 24, 1996, at the Company's principal executive offices
located at 7001 Metatec Boulevard, Dublin, Ohio 43017, at 1:00 p.m., local
time, and at any and all adjournments thereof, with all the powers the
undersigned would possess if present in person, on the following proposals and
any other matters that may properly come before the Annual Meeting.
1. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S 1990 STOCK OPTION PLAN
FOR / / AGAINST / / ABSTAIN / /
2. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S 1992 DIRECTORS' STOCK
OPTION PLAN
FOR / / AGAINST / / ABSTAIN / /
3. WITH / / OR WITHOUT / / AUTHORITY TO ELECT ALL NOMINEES LISTED BELOW AS
CLASS III DIRECTORS (except as marked to the contrary below):
A. Grant Bowen Jeffrey M. Wilkins
Instruction: To withhold authority to vote for any individual nominee, strike a
line through his name.
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
The Shares represented by this Proxy will be voted upon the proposals
listed above in accordance with the instructions given by the undersigned, but
if no instructions are given, this Proxy will be voted FOR the proposal listed
in Item 1 and 2, above, and to elect directors as set forth in Item 3, above,
and in the discretion of the proxies, on any other matter which properly comes
before the Annual Meeting.
Dated _______________________
____________________________________________
(Signature of Shareholder)
____________________________________________
(Signature of Shareholder)
(Please sign legibly exactly as the name is
printed on the left.)
If the registration is as attorney, executor,
administrator, trustee or guardian, please
sign full title as such.
PLEASE DATE, SIGN AND MAIL PROXY PROMPTLY
