SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITES
EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [_]
CHECK THE APPROPRIATE BOX:
[_] PRELIMINARY PROXY STATEMENT
[X] DEFINITIVE PROXY STATEMENT
[_] DEFINITIVE ADDITIONAL MATERIALS
CALMAT CO.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CHRISTINE MC VEIGH
CALMAT CO.
3200 SAN FERNANDO ROAD
LOS ANGELES, CA 90065
(213) 258-2777
(NAME OF PERSON(S) FILING PROXY STATEMENT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] $125 PER EXCHANGE ACT RULES 0-11(c) (1)(ii), 14a-6(i)(1), OR 14a-6(j)(2).
[_] $500 PER EACH PARTY TO THE CONTROVERSY PURSUANT TO EXCHANGE ACT
RULE 14a-6(i)(3).
[ ] FEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT RULES 14a-6(i)(4) AND 0-11.
(1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
(2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES:
(3) PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTIONCOMPUTED PURSUANT TO
EXCHANGE ACT RULE 0-11:*
(4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:
* SET FORTH THE AMOUNT ON WHICH THE FILING FEE IS CALCULATED AND STATE HOW IT
WAS DETERMINED.
[_] CHECK BOX IF ANY PARTY 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,
ON THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.
(1) AMOUNT PREVIOUSLY PAID: _____________________________________
(2) FORM, SCHEDULE OR REGISTRATION NO.: _____________________________________
(3) FILING PARTY: _____________________________________
(4) DATE FILED: _____________________________________
[CALMAT CO] (LOGO STYLE)
P.O. BOX 2950 TERMINAL ANNEX
LOS ANGELES, CALIFORNIA 90051-9552
GENERAL OFFICES: 3200 SAN FERNANDO ROAD
LOS ANGELES, CALIFORNIA 90065
TELEPHONE: (213) 258-2777
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on April 27, 1994
The Annual Meeting of Stockholders of CalMat Co., a Delaware
corporation (the "Company"), will be held in the Pacific Ballroom
of the Los Angeles Hilton Hotel, 930 Wilshire Boulevard,
Los Angeles, California, on Wednesday, April 27, 1994, at 10:00
a.m., for the purpose of:
1. Electing eleven directors to serve during the ensuing
year and until their successors are elected or appointed;
2. Ratifying the selection of the Board of Directors of
auditors for the year 1994;
3. Considering and acting upon a proposal that the
stockholders approve a Stock Option Plan for Officers,
Directors and Key Employees, as recommended by the Board
of Directors; and
4. Transacting such other business as may properly come
before the meeting and any postponements or adjournments
thereof.
The Board of Directors has fixed March 10, 1994, as the record
date for the determination of stockholders entitled to vote at this
meeting. You are cordially invited to attend the stockholders'
meeting. Whether or not you plan to attend, please sign, mark and
return the enclosed proxy card. If you do attend the meeting and
desire to vote in person, your proxy vote can be rescinded at that
time.
A. FREDERICK GERSTELL
Chairman of the Board
Los Angeles, California
March 17, 1994<PAGE>
CALMAT CO.
3200 San Fernando Road
Los Angeles, CA 90065
======================
PROXY STATEMENT
======================
This statement is furnished in connection with the
solicitation of proxies for use at the Annual Meeting of
Stockholders of CalMat Co. (the "Company"), to be held on
Wednesday, April 27, 1994 (the "Annual Meeting"). This
solicitation is made by the Board of Directors of the Company, and
the costs thereof, which will be borne by the Company, are expected
to be nominal. In addition to solicitation of proxies by mail, the
Company may utilize the services of directors, officers and regular
employees of the Company (who will receive no additional
compensation therefor) to solicit proxies personally and by
telephone and facsimile. In addition, Georgeson & Company, Inc.
has been retained by the Company to assist in the solicitation of
proxies. The anticipated fee of this proxy solicitor is $7,000,
plus its out-of-pocket costs and expenses. The proxy may be
revoked by a stockholder at any time prior to its use by delivering
written notice of such revocation to the Secretary of the Company
at its principal executive offices, 3200 San Fernando Road, Los
Angeles, California 90065, by submitting a later dated proxy, or by
attending the Annual Meeting and voting in person.
Brokerage houses, custodians, nominees, and others who hold
stock in their names will be reimbursed for expenses incurred by
them in sending proxy material to their principals.
The approximate date on which this proxy statement and the
form of proxy will first be sent or given to security holders is
March 17, 1994.
The stockholders of record at the close of business on March
10, 1994 are entitled to one vote for each share of stock held by
them. Each stockholder entitled to vote at any election for
directors has the right to cumulate his votes and give one
candidate a number of votes equal to the number of directors to be
elected multiplied by the number of votes to which his shares are
entitled, or to distribute his votes on the same principle among as
many candidates as he wishes. The proxy solicited by the Board of
Directors confers discretionary authority on the proxies to
cumulate votes so as to elect the maximum number of nominees.
Stockholders who wish to cumulate their votes must so indicate on
the form of proxy. Proxies cannot be voted for a greater number of
persons than the number of nominees named. A majority of the stock
issued and outstanding, represented in person or by proxy,
constitutes a quorum for the transaction of business at the
meeting.
On February 25, 1994, there were outstanding 23,136,077 shares
of the Company's Common Stock, $1 par value, all of which are of
one class.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following shows information with respect to the only
persons known to the Company to be the beneficial owners of more
than 5% of the Company's outstanding stock as of February 25, 1994,
for the officers named in this proxy statement under the caption
"Management Remuneration," and for directors and officers as a
group. For the purpose of this proxy statement, beneficial
ownership of securities is defined in accordance with the rules of
the Securities and Exchange Commission and means generally the
power to vote or dispose of the securities regardless of any
economic interest therein. Unless noted otherwise, beneficial
owners listed have sole voting and investment power with respect to
the shares reported.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
==================================================================================================
<S> <C> <C>
The Dan Murphy Foundation 4,157,247 shares 17.97
Post Office Box 711267
Los Angeles, CA 90071
A. Frederick Gerstell 267,232 shares (a) 1.16
Chairman of the Board,
President, Chief Executive
Officer and Chief Operating
Officer
Scott J Wilcott 109,381 shares (a) (b)
Executive Vice President,
Law & Property
Delbert H. Tanner 1,000 shares (a) (b)
Executive Vice President,
Construction Materials
Paul Stanford 14,424 shares (a) (b)
Senior Vice President -
Administration, General
Counsel and Secretary
Edward J. Kelly 9,249 shares (a) (b)
Senior Vice President,
Treasurer and Chief Accounting
Officer
Directors and officers as a group 1,237,112 shares (a) 5.35
____________
(a) The amounts shown include the following shares that may be acquired within
60 days pursuant to outstanding option grants: A. Frederick Gerstell,
232,550 shares; Scott J Wilcott, 93,250 shares; Delbert H. Tanner, -0-
shares; Paul Stanford, 14,124 shares; Edward J. Kelly 9,249 shares and all
directors and officers as a group, 393,502 shares.
(b) Less than 1%.
</TABLE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Bylaws provide for a Board of Directors,
consisting of from eleven to fifteen directors, with the exact
number to be determined by the Board. In February 1994, the Board
voted to reduce the number of directors from thirteen to eleven,
effective upon the expiration of the term of the then serving
directors at the 1994 Annual Meeting. Accordingly, eleven
directors, who will comprise the entire Board of Directors, will be
elected at the 1994 Annual Meeting. Each of the nominees for
director named below is a member of the present Board of Directors,
and the term of office for which each nominee is a candidate will
expire at the next Annual Meeting or when his successor shall have
been elected or appointed. All shares represented by valid proxies
will be voted in accordance with the instructions contained
therein. In the absence of instructions to the contrary, votes
will be cast for the election of the following as directors,
pursuant to the proxies solicited hereby. In the unanticipated
event that any nominee should become unavailable for election as a
director, the proxies will be voted for any substitute nominee
named by the Board of Directors.
<TABLE>
<CAPTION>
Shares of Company
Position First Stock Beneficially
with Became a Owned as of Percent
Name Age Company Director February 25, 1994(a) of Class
==================================================================================================================
<S> <C> <C> <C> <C> <C>
John C. Argue 62 Director 1990 1,500 *
Harry M. Conger 63 Director 1981 (b) 3,000 *
Rayburn S. Dezember 63 Director 1989 3,600 *
A. Frederick Gerstell 56 Chairman of 1981 (b) 267,232 (c) 1.16
the Board,
President and
Director
Richard A. Grant, Jr. 54 Director 1972 (b) 38,000 (d) *
Grover R. Heyler 67 Director 1978 2,000 *
William T. Huston 66 Director 1978 5,280 *
William Jenkins 74 Director 1973 49,834 *
Thomas L. Lee 51 Director 1990 2,000 *
Thomas M. Linden 50 Director 1978 649,626 (e) 2.81
Stuart T. Peeler 64 Director 1966 (b) 14,000 (f) *
____________
* Less than 1%
(a) Unless otherwise indicated, the beneficial owner (within the meaning of the rules of the
Securities and Exchange Commission) of the shares shown has sole voting and investment power,
subject to applicable community property and similar laws.
(b) Includes service as a director of a predecessor constituent company, California Portland
Cement Company ("CPC"). Each of these nominees for director became a director upon formation
of the Company in 1984 by the combination of CPC and Conrock Co. ("Conrock").
(c) Of the shares shown, 232,550 are shares which Mr. Gerstell has the right to acquire under
existing stock option agreements. Mr. Gerstell disclaims any beneficial interest in the
3,000 shares owned by his wife.
(d) Mr. Grant disclaims any beneficial interest in the 4,157,247 shares owned by The Dan Murphy
Foundation, of which he is Secretary, Treasurer and a Trustee, and in the 302,685 shares
owned by the P.D. Byrne Trust, of which he is a Co-Trustee. Included in the shares shown are
8,000 shares beneficially owned by Mr. Grant's children as to which he has shared voting and
investment power.
(e) Mr. Linden has shared voting and investment power with respect to 306,524 shares of the
shares shown. Mr. Linden disclaims beneficial ownership with respect to 169,976 shares held
by trusts of which his children are beneficiaries, and of which he is Trustee.
(f) Mr. Peeler has shared voting and investment power with respect to the shares shown.
</TABLE>
1994 NOMINEES FOR DIRECTOR
John C. Argue. Senior partner of the Los Angeles law firm of
Argue, Pearson, Harbison & Myers where he has practiced law since
1972. He is a Director of Avery Dennison, Inc. and a Trustee of
TCW Funds, Inc., the TCW/DW Family of Funds and Term Trusts 2000,
2002, 2003.
Harry M. Conger. Chairman of the Board and Chief Executive Officer
of Homestake Mining Company since 1986. He was also its President
from 1982 to 1986. Mr. Conger is also a Director of ASA, Ltd.,
Baker Hughes, Inc., and Pacific Gas and Electric Company.
Rayburn S. Dezember. Serves on the boards of Wells Fargo and
Company, Wells Fargo Bank and Tejon Ranch Co. Mr. Dezember served
as Chairman of the Board and Chief Executive Officer of Central
Pacific Corp. from 1981 to 1990.
A. Frederick Gerstell. Chairman of the Board, President, Chief
Executive Officer and Chief Operating Officer of the Company.
Prior to 1991, Mr. Gerstell was President, Chief Executive Officer
and Chief Operating Officer. From 1984 to 1988, Mr. Gerstell was
President and Chief Operating Officer of the Company. From 1981 to
1984, he was President and Chief Operating Officer and a Director
of CPC and, prior to 1981, a Vice President of CPC.
Richard A. Grant, Jr. Private investor and co-trustee of M. B.
Scott trusts. Mr. Grant is Secretary, Treasurer and a Trustee of
the Dan Murphy Foundation, a nonprofit foundation which owns
4,157,247 shares of the Company's Common Stock.
Grover R. Heyler. Retired partner of the law firm of Latham &
Watkins, where he had practiced law since 1952. Since his
retirement at the end of 1992, he has been "of counsel" to the
firm. The Company retained the services of Latham & Watkins during
1993 and has retained such services in 1994.
William T. Huston. Chairman of the Board of Watson Land Company
since January 1, 1994, formerly known as Watson Industrial
Properties, a real estate development company. From 1963 to 1985,
he was its President and Chief Executive Officer, and from 1986
through 1993, he was its Chairman and Chief Executive Officer.
William Jenkins. Retired as Chairman of the Board of the Company
at the end of 1990. Prior to 1988, Mr. Jenkins was Chairman of the
Board and Chief Executive Officer and, prior to 1984, President,
Chief Executive Officer and a Director of Conrock.
Thomas L. Lee. Has served as Chief Executive Officer, as a
Director, and since July 1989 as Chairman of The Newhall Land and
Farming Company, a publicly-traded California limited partnership.
He served as its President and Chief Executive Officer from 1987 to
1989, and as President and Chief Operating Officer from 1985 to
1987. He also is a Director of First Interstate Bancorp and of
First Interstate Bank of California.
Thomas M. Linden. Private investor. He was Executive Vice
President and General Manager - Properties Division of the Company
from May 1985 through May 1989. Before that time, he was a partner
with Smith, Linden and Basso, certified public accountants.
Stuart T. Peeler. Petroleum industry consultant and independent
oil and gas producer since the beginning of 1989. He was Chairman
of the Board and Chief Executive Officer of Statex Petroleum, Inc.,
from 1982 through 1989 and was its President from 1983 to 1986.
Mr. Peeler is also a Director of Chieftain International, Inc.,
Chieftain International Funding Corp., Homestake Mining Company and
Homestake Gold of Australia, Ltd.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
During 1993, the Board of Directors met ten times. Directors
who are not Company employees are paid a quarterly retainer fee of
$3,500 for service on the Board -- $4,000 if the director also
serves as a Committee Chairman. In addition, a fee of $800 is paid
to each non-employee director for each Board or Committee meeting
attended. The Board meeting attendance fee has been increased to
$1,200 effective January 1, 1994.
The Board of Directors has an Audit Committee, a Management
Development and Compensation Committee ("Compensation Committee"),
and a Nominating Committee. During 1993, the Audit and
Compensation Committees met three times and four times,
respectively. The Nominating Committee did not meet in 1993. With
the exception of Mr. Oscar T. Lawler, who passed away in September
of 1993, all directors attended more than 75% of all Board and
Committee meetings.
Audit Committee
Members
John C. Argue, Chairman
Rayburn S. Dezember
Grover R. Heyler
William T. Huston
Stuart T. Peeler
The Audit Committee recommends the selection of independent
auditors and approves their fee arrangement. The Audit Committee
reviews the plan and scope of the audit and the resulting audit
report and management letter. The Audit Committee also discusses
with management and the outside auditors the effect of recently
issued accounting standards on the Company's financial statements.
Management Development and Compensation Committee
Members
Stuart T. Peeler, Chairman
John C. Argue
Harry M. Conger
William Jenkins
Thomas L. Lee
Thomas M. Linden
The Management Development and Compensation Committee
("Compensation Committee") approves, and recommends to the Board of
Directors, remuneration for senior management of the Company, the
adoption of any compensation plans and the granting of stock
options or other benefits under such plans. The Compensation
Committee also makes recommendations to the Board concerning
director compensation.
Nominating Committee
Members
Thomas L. Lee, Chairman
Harry M. Conger
Richard A. Grant, Jr.
Grover R. Heyler
William T. Huston
The Nominating Committee recommends to the Board of Directors
nominees to fill Board vacancies, and a slate of nominees for
election at the annual meeting of stockholders. The Nominating
Committee has no formal procedures for consideration of
recommendations for nominees which may be submitted by
stockholders.
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 directors and executive officers, and persons who own
more than ten percent of the Company's Common Stock, to file with
the Securities and Exchange Commission and the New York Stock
Exchange initial reports of ownership and reports of changes in
ownership of the Common Stock of the Company. Officers, directors
and greater than ten-percent stockholders are required to furnish
the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the
copies of such reports furnished to the Company and written
representations that no other reports were required, during the
fiscal year ended December 31, 1993, all Section 16(a) filing
requirements applicable to its officers, directors and greater than
ten-percent beneficial owners were complied with, except that
Thomas M. Linden, a director of the Company, filed a late report
covering two exempt transactions effected by a trust of which Mr.
Linden is a co-trustee. Neither Mr. Linden nor any member of his
immediate family had any beneficial interest in the two
transactions which were reported late.
MANAGEMENT REMUNERATION
The Summary Compensation Table following shows the
remuneration paid or accrued by the Company during the fiscal years
ended December 31, 1993, 1992 and 1991 to the named individuals for
services rendered in all capacities. The tables following the
Summary Compensation Table show option grants and exercises during
the last fiscal year, and year-end information with respect to
outstanding options. A graph showing performance of the Company's
stock during the latest five (5) fiscal years is also included.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Annual Compensation (A) Compensation
============================ ============ All Other
Salary Bonus Options Options Compensation
Name and Principal Position Year ($) ($) (#) (B, C)
=============================================================================================================
<S> <C> <C> <C> <C> <C>
A. Frederick Gerstell (D) 1993 $430,000 $100,000 50,000 $79,837
Chairman of the Board, 1992 $430,000 $ 66,000 40,000 $76,322
President, Chief Executive 1991 $410,000 $200,000 60,000 ---
Officer, Chief Operating
Officer, and Director
Scott J Wilcott 1993 $232,500 $25,000 20,000 $47,685
Executive Vice President, 1992 $232,500 --- 15,000 $41,603
Law and Property 1991 $225,000 $60,000 25,000 ---
Delbert H. Tanner* 1993 $118,267 $60,000 35,000 $82,920
Executive Vice President, 1992 --- --- --- ---
Construction Materials 1991 --- --- --- ---
Paul Stanford 1993 $182,731 $30,000 20,000 $31,256
Senior Vice President - 1992 $164,846 $20,000 15,000 $27,678
Administration, General 1991 $150,401 $25,000 8,750 ---
Counsel and Secretary
Edward J. Kelly 1993 $129,766 $22,500 10,000 $21,422
Senior Vice President, 1992 $124,201 $15,000 6,500 $21,303
Treasurer, and Chief 1991 $115,000 $18,000 6,250 ---
Accounting Officer
* Mr. Tanner joined the Company on July 7, 1993
(A) Amounts shown include cash compensation earned and received by executive officers as well as
amounts earned but deferred at the election of those officers.
(B) The amounts shown in this column for the last fiscal year include the following items: (i)
Mr. Gerstell: $21,006 - Company accrual to the Thrift and Profit-Sharing Retirement Plan and
Money Purchase Pension Plan for Employees of CalMat Co., a defined contribution plan (DCP);
$48,739 - Company accrual to the Non-qualified Deferred Compensation Plan for Selected
Executives of CalMat Co., a non-qualified defined contribution plan (NDCP); $7,290 - Company
paid term life insurance (TLI); (ii) Mr. Wilcott: $21,006 - Company accrual to DCP; $22,944
- Company accrual to NDCP; $3,735 - Company paid TLI; (iii) Mr. Tanner: Not eligible for
Company accrual to DCP; not eligible for Company accrual to NDCP; $37,500 - Company accrual
to a deferred compensation plan; $383 - Company paid TLI; $36,556 Company paid moving
expenses; $8,481 Company paid housing allowance; (iv) Mr. Stanford: $21,006 - Company accrual
to DCP; $8,522 Company accrual to NDCP; $1,728 - Company paid TLI; (v) Mr. Kelly $21,159 -
Company accrual to DCP; no Company accrual to NDCP; $263 - Company paid TLI.
(C) Information for years ending prior to December 15, 1992 is not required to be disclosed.
(D) Under the Supplemental Executive Retirement Agreement, a defined benefit supplemental
retirement plan, Mr. Gerstell will receive, at age 65, a supplemental benefit added to
amounts received from Social Security, the DCP and the NDCP, such that the total will
approximate 70% of final average pay. During 1993, $93,865 was paid to a Company trust
created to fund this benefit.
</TABLE>
EMPLOYMENT AGREEMENTS
An employment agreement between the Company and Mr. Gerstell
currently provides for compensation at an annual rate of $460,000.
In addition to providing benefits in the case of disability, the
agreement provides that the compensation and other benefits
(including bonus, retirement plan contributions and insurance
coverages) shall continue unabated for four years from the date of
notice of termination by the Company. In the event the Company
significantly reduces the importance of his responsibilities,
reduces his compensation or benefits, relocates the Company's
principal executive offices outside Los Angeles or reassigns him to
a location other than the principal executive offices, Mr. Gerstell
may terminate the agreement and receive the salary and benefits
that would have been provided to him under the agreement for four
years.
Mr. Wilcott has a three-year employment agreement with the
Company which currently provides for annual compensation of
$232,500. Mr. Stanford has a two-year employment agreement which
currently provides for annual compensation of $200,000. In
addition to providing benefits in the case of disability, each
agreement provides that compensation and other benefits (including
bonus, retirement plan contributions and insurance coverages) shall
continue unabated for the period specified from the date of any
notice of termination by the Company and that, in the event the
Company reduces the importance of the executive's responsibilities,
reduces his compensation or benefits, relocates the Company's
principal executive offices outside Los Angeles or reassigns him to
a location other than the principal executive offices, the
executive may terminate the agreement and receive the salary and
benefits for the period specified that would have been provided to
him under the agreement.
Mr. Tanner has an agreement with the Company with respect to
severance which provides that he will receive twelve months salary
($250,000) upon termination for any reason.
<TABLE>
OPTIONS GRANT TABLE
<CAPTION>
Number of % of Total
Securities Options
Underlying Granted Exercise or Grant Date
Options to Employees Base Price Expiration Present Value
Name Granted (A) in Fiscal Year ($/Share)(B) Date (C)
==============================================================================================================
<S> <C> <C> <C> <C> <C>
A. Frederick Gerstell 50,000 12.1 $17.50 11-23-03 $367,650
Scott J Wilcott 20,000 4.8 $17.50 11-23-03 147,060
Delbert H. Tanner 35,000 8.5 $17.63 (D) 258,855
Paul Stanford 20,000 4.8 $17.50 11-23-03 147,060
Edward J. Kelly 10,000 2.4 $17.50 11-23-03 73,530
(A) Options granted in 1993 are exercisable starting at 12 months after the grant date, with 25%
of the shares covered thereby becoming exercisable at that time and with an additional 25%
of the option shares becoming exercisable on each successive anniversary date, with full
vesting occurring on the fourth anniversary date. The options were granted for a term of 10
years, however, no portion of any option which is unexercisable at termination of employment
will become exercisable.
(B) The exercise price may be paid by cash, by delivery of shares of the Company's Common Stock
owned by the Optionee or, with consent of the Compensation Committee, by delivery of a
full-recourse promissory note.
(C) The Modified Black-Scholes Option Valuation Model modifies the Black-Scholes formula to
include the impact of cash dividend payments and the right to exercise options prior to
maturity. The volatility factor and risk-free rate of return used in the modified model were
26% and 5.79%, respectively. The dividend yield at December 31, 1993 for the Company of 1.9%
was used in the modified model. The model assumes that options are held until maturity.
(D) 10,000 shares granted at $17.75 per share on July 7, 1993 will expire July 7, 2003; and
25,000 shares granted at $17.50 per share on November 23, 1993 will expire November 23, 2003.
</TABLE>
<TABLE>
OPTION EXERCISES AND YEAR-END VALUE TABLE
Aggregated Option Exercises in Last Fiscal Year and
FY-End Option Values
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options
Value Realized at FY-End at FY-End (B)
Shares Acquired at Date of Exercisable/ Exercisable/
Name on Exercise Exercise (A) Unexercisable Unexercisable
=================================================================================================================
<S> <C> <C> <C> <C>
A. Frederick Gerstell --- --- 232,550/121,250 $294,325/233,750
Scott J. Wilcott 23,150 $141,743 93,250/48,750 $118,875/94,375
Delbert H. Tanner --- --- --- /35,000 $ --- /124,375
Paul Stanford --- --- 14,124/37,626 $7,655/80,158
Edward J. Kelly --- --- 9,249/19,501 $5,467/41,721
(A) Market value of the underlying securities at exercise date minus the exercise price of the
options.
(B) Market value of the underlying securities at year-end minus the exercise price of
in-the-money options.<PAGE>
</TABLE>
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE
TOTAL STOCKHOLDER RETURN
AMONG CALMAT CO., S & P 500,
AND PEER GROUP COMPOSITE
<CAPTION>
Measurement period S&P 500 Peer
(Fiscal year covered) CalMat Index Composite *
- - --------------------- ------ -------- ---------
<C> <C> <C> <C>
Measurement PT -
12/31/88 $100.00 $100.00 $100.00
FYE 12/31/89 $109.30 $131.64 $104.94
FYE 12/31/90 $ 70.26 $127.61 $ 72.28
FYE 12/31/91 $ 88.51 $166.36 $ 82.33
FYE 12/31/92 $ 88.43 $179.05 $ 88.70
FYE 12/31/93 $ 84.87 $197.04 $111.60
</TABLE>
* The Peer Group Composite is comprised of Dravo Corp., Florida
Rock Industries, Granite Construction, Inc., Lafarge Corp.,
Southdown, Inc., Texas Industries, Inc., Vulcan Materials Co. and
CalMat Co.<PAGE>
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Management Development and Compensation Committee (the
"Compensation Committee") is responsible for setting and
administering the policies which govern both annual compensation
and incentive programs for key managerial executives. The
Committee usually meets three times annually for the purpose of
granting salary increases, bonus awards, and stock options. It
evaluates corporate and individual performance, current
compensation, and share ownership of the managerial group. The
employees of the Company who participate in the bonus and stock
option plans are those who, in the estimation of the Compensation
Committee, have a substantial opportunity to enhance stockholder
value over time.
The Committee's purpose is to ensure that management is
enabled to attract and retain well-qualified employees who are
capable of managing for the benefit of stockholders and
contributing to the Company's success. To accomplish this goal,
compensation is intended to be competitive both within the industry
as a whole and when compared to like-size companies in the
geographical areas served by the Company. Inflation, the cost of
living, and business conditions are taken into consideration.
Additionally, the Company surveys other construction materials
companies and obtains compensation information from approximately
twenty industry participants. All of the companies included in the
Peer Group Composite of the performance graph are included in these
compensation surveys. Because the Company competes for talent with
a broader group of companies, other than those appropriate for
inclusion in the performance graph, the surveys include these other
companies. A broader group of nonconstruction-related companies
operating in the major population centers where the Company
operates are also surveyed. The Company utilizes professional
surveys from firms such as William M. Mercer, Inc., American
Compensation Association, and The Wyatt Company to obtain a wider
perspective for the Compensation Committee. These professional
firms survey industry, in general, and the mining industry,
specifically, as well as regions where the Company has a presence.
The final determination of base salary adjustments and
incentive bonus awards is made solely by the Compensation Committee
after consultation with the Chief Executive Officer. Stock Option
Grants are made by the Stock Option Committee, a subcommittee of
the Compensation Committee. In setting an executive's base salary
and bonus and in granting stock options, consideration is given to
maintenance of internal equity, the executive's level of
responsibility, and the performance of the executive's area of
responsibility. Stock options were granted considering the
cyclical nature of the industry and the desirability of long-term
employee incentives. Bonuses are paid from an annual bonus fund
which is a direct function of the operating earnings of the
Company, excluding extraordinary gains and losses and gains from
assets held for sale. The fund is then distributed to participants
at the discretion of the Compensation Committee, based on
individual performance. Bonus awards are paid shortly following
fiscal year end and represent awards for the preceding year. The
1993 bonus fund was approximately twice the value of the 1992 bonus
fund reflecting the year-to-year improvement in operating earnings,
while the business climate in which the Company operates remained
depressed.
With respect to compensation of the Chief Executive Officer
("CEO"), the Compensation Committee meets without him being present
to evaluate his performance and reports on that evaluation to the
independent directors of the Board. The Compensation Committee
exercises greater discretion with respect to CEO compensation than
with other key executives, and considers the performance of the
Company relative to the business cycle, recognizing that the
Company is in a cyclical industry, and relative to the Company's
profit goals. Because the Company is in a cyclical industry,
performance for both the most recent fiscal year and over a longer
period is considered. The Compensation Committee also considers
the short- and long-term performance of the Company relative to
industry peers and to similar industries. Major weight is given to
operating earnings, as with other managers. Finally, the
Compensation Committee considers particular accomplishments of the
CEO which are judged to contribute to long-term stockholder value.
The Committee considered the Company's improved 1993 results in
difficult markets in which overall construction spending declined.
Also considered was the dramatic improvement in the earnings of the
Concrete and Aggregates Division. Other factors which influence
the CEO's compensation include his establishment of clear and sound
objectives and the achievement of those objectives, his ability to
create overall management strength, his development of successor
management, his performance in communicating and in causing top
managers to communicate effectively with the Board and his use of
the Board as a resource to aid effective management. The Committee
does not evaluate these factors by a predetermined formula or
weighting, but reaches its conclusions based on the judgments of
its members. After considering these factors, CEO base
compensation was raised from $430,000 annually to $460,000
annually. The CEO received a 1993 bonus of $100,000.
Compensation Committee Members:
Stuart T. Peeler, Chairman
John C. Argue
Harry M. Conger
William Jenkins
Thomas L. Lee
Thomas M. Linden
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
None of the members of the Compensation Committee are present
or former members of management except Mr. William Jenkins, who is
a retired Chairman of the Board of Directors and was CEO of the
Company from July 1984 to January 1988, and Mr. Thomas M. Linden,
who was Executive Vice President and General Manager - Properties
Division of the Company from May 1985 through May 1989.
PROPOSAL 2
INDEPENDENT ACCOUNTANTS
Upon recommendation of the Audit Committee, the Board of
Directors has selected the firm of Coopers & Lybrand, certified
public accountants, to audit the books and records of the Company
and its subsidiaries for the year 1994 and to perform such other
services as may be required of them. The firm is considered to be
well qualified. Ratification by the stockholders of the selection
of such firm is therefore recommended. The Company's financial
statements for 1993 were examined by Coopers & Lybrand. As in the
past, a representative of Coopers & Lybrand is expected to be
present at the stockholders' meeting, and this representative will
have the opportunity to make a statement and respond to appropriate
questions.
PROPOSAL 3
STOCK OPTION PLAN
The Company has three existing stock option plans: the Stock
Option Plan for Executive and Key Employees of CalMat Co. (the
"CalMat Plan"), the 1987 Stock Option Plan for Executive and Key
Employees of CalMat Co. (the "1987" Plan"), and the 1990 Stock
Option Plan for Executive and Key Employees of CalMat Co. (the
"1990" Plan"), approved by Company's stockholders on June 27, 1984,
April 15, 1987 and April 25, 1990, respectively. Under these
plans, 400,000 shares, 1,000,000 shares, and 600,000 shares,
respectively, of the Company's Common Stock were authorized for
grants by the Compensation Committee to key employees as incentive
and non-qualified stock options. All options have an exercise
price equal to the fair market value at the date of grant. There
are presently approximately 130 executives or other key employees
of the Company or its subsidiaries eligible to receive incentive
stock options and non-qualified stock options, and 10 independent
directors of the Company who are eligible to receive non-qualified
stock options.
As of November 23, 1993, the number of shares of the Company's
Common Stock available for grant under the CalMat Plan, the 1987
Plan, and the 1990 Plan were 70,270, 159,238, and 101,250,
respectively. In order that the Company may continue to obtain and
retain the services of key professional, technical and managerial
employees, the Board of Directors believes that the Company should
be in a position to continue to grant stock options. Accordingly,
on November 23, 1993, the Board adopted the 1993 Stock Option Plan
for Executive and Key Employees of CalMat Co. (the "1993 Plan"),
covering 900,000 shares of Common Stock. On January 25, 1994, the
Compensation Committee amended the 1993 Plan to include Company
directors. The Amended and Restated 1993 Stock Option Plan for
Officers, Directors, and Key Employees of CalMat Co. (the "Plan")
is summarized below. The Board recommends the Plan's approval in
order to authorize the issuance of options to officers, directors
and key employees covering an aggregate of 900,000 shares of Common
Stock. The summary of the Plan below is qualified in its entirety
by reference to the Plan itself, which appears as Exhibit "A" to
this proxy statement. Copies of the Plan will be available at the
Annual Meeting and can also be obtained by making a written request
to the Company's Secretary.
PLAN SUMMARY
General
The Plan authorizes the granting of "incentive stock options"
(as defined in Section 422 of the Internal Revenue Code (the
"Code") and non-qualified stock options.
Shares Subject to the Plan
A maximum of 900,000 shares of the Company's Common Stock may
be issued upon exercise of options granted under the Plan. The
Plan provides for appropriate adjustments in the number and kind of
shares subject to the Plan and to outstanding options in the event
of a stock split, stock dividend or certain other similar changes
in the Company's Common Stock and in the event of a merger,
reorganization, consolidation or certain other types of
recapitalizations.
If any option granted under the Plan expires or terminates
without having been exercised in full, the number of shares as to
which such option was not exercised prior to its expiration or
cancellation may again be optioned under the Plan.
Administration of the Plan
The Plan is to be administered by the Compensation Committee
consisting of at least three members of the Board of Directors,
appointed from time to time (and removable) by the Board of
Directors. No person is eligible to serve on the Compensation
Committee unless such person is then a "disinterested person" as
defined by Rule 16(b)-3 under the Securities Exchange Act of 1934,
as amended. Options may not be granted under the Plan to any
member of the Compensation Committee during the term of his or her
membership on the Compensation Committee except in accordance with
the provisions of the Plan controlling the grant of options to non-
employee directors ("Independent Directors").
In addition to administering the Plan, the Compensation
Committee is also authorized to interpret the Plan and the options
thereunder, to adopt such rules for the administration,
interpretation and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules. The
Board of Directors, in its absolute discretion, may at any time
exercise any and all rights or duties of the Compensation Committee
under the Plan, other than the right to select employees for
participation and to determine the timing, pricing and amount of
grants to employees under the Plan.
The full Board of Directors, acting by a majority of its
members in office, shall conduct the general administration of the
Plan with respect to options granted to independent directors.
Members of the Compensation Committee will receive such
compensation for their services as may be determined by the Board
of Directors. All expenses and liabilities that the members of the
Compensation Committee incur in connection with the administration
of the Plan will be borne by the Company.
Eligibility to Receive Options
Any executive or other key employee of the Company or any
corporation which is then a parent corporation or subsidiary of the
Company (as defined in the Plan) will be eligible to be granted
options. The Compensation Committee is authorized to select from
among eligible executive or other key employees the individuals to
whom options are to be granted and to determine the number of
shares to be subject to the options, whether such options are to be
incentive stock options or non-qualified stock options, and the
terms and conditions of the options, consistent with the Plan.
More than one option may be granted to an employee; provided,
however, that the aggregate number of shares which may be issued
upon exercise of options granted to the Company's Chief Executive
Officer and the four most highly compensated officers of the
Company other than the Chief Executive Officer whose total
compensation is required to be reported to the Company's
stockholders under the Securities Exchange Act of 1934, as amended,
shall not exceed 500,000 shares of Common Stock during any calendar
year or in total. Subject to such limitation, there is no
restriction as to the number of options or as to the maximum or
minimum number of shares that may be granted to any one employee
under the Plan.
Independent Directors will be eligible only to receive non-
qualified options. Each Independent Director was automatically
granted an option to purchase 3,000 shares of Common Stock on
January 25, 1994. During the term of the Plan, each then current
Independent Director will automatically be granted on January 25 of
each year an option to purchase 3,000 shares of Common Stock. Each
new Independent Director initially elected on or before July 25 of
a given year will automatically be granted an option to purchase
3,000 shares of Common Stock on the date of his or her initial
election to the Board. Independent Directors initially elected
after July 25 of any given year will not receive an initial option
grant.
Terms of Options
Each option shall be evidenced by a written stock option
agreement (a "Stock Option Agreement") executed the optionee and an
authorized officer of the Company which shall contain such terms
and conditions as the Compensation Committee (or the Board of
Directors, in the case of options to Independent Director) shall
determine, consistent with the Plan.
The price of the shares of Common Stock subject to both
incentive stock options and non-qualified stock options shall be
set by the Compensation Committee and must be at least 100% of the
fair market value of the shares on the date the option is granted;
provided, however, in the case of an incentive stock option, the
price per share must be at least 110% of the fair market value of
such share on the date the option is granted, in the case of an
individual then owning (within the meaning of Section 424(d) of the
Code) more than 10% of the total combined voting power of all
classes of the Company's stock (or the stock of any subsidiary or
any parent corporation); provided further, the price of shares
subject to options granted to Independent Directors shall equal
100% of the fair market value of the shares on the date the option
is granted, without variation. For purposes of the Plan, the fair
market value of a share of the Common Stock as of a given date will
be the closing price of a share of Common Stock on the principal
exchange on which such shares are then trading, if any, on the
trading day immediately preceding such date, or, if the shares are
not traded on such date, then on the next preceding trading date
during which a sale occurred.
Except as the Compensation Committee may otherwise provide, in
consideration of the granting of an option, the optionee must agree
to remain in the employ of the Company, a parent corporation or one
of its subsidiaries (or to serve as an Independent Director of the
Company), for at least one year after the option is granted (or
until the next annual meeting of the stockholders of the Company,
in the case of an Independent Director).
The Compensation Committee (or the full Board of Directors, in
the case of options granted to Independent Directors) may provide,
in the terms and conditions of an option, that it will terminate
upon the dissolution or liquidation of the Company, the merger or
consolidation of the Company by another corporation, or the
acquisition by another corporation of all or substantially all of
the Company's assets or 80% or more of the Company's then
outstanding voting stock; but, in such event, the Compensation
Committee must also give optionees the right to exercise their
outstanding options in full during some period prior to such event,
even though the options have not yet become fully exercisable.
No option or right granted under the Plan may be assigned or
transferred by the optionee, except upon death. No option or
interest or right therein or part thereof will be liable for the
debts, contracts or engagements of the optionee or the optionee's
successors in interest or will be subject to disposition by
transfer, alienation, pledge, encumbrance, assignment or any other
means, whether voluntary, involuntary or by operation of law.
The holders of options will not be, nor have any of the rights
or privileges of, a stockholder of the Company as to shares covered
by the option until such shares are issued by the Company and
delivered to such holders.
The Compensation Committee (or the Board of Director, in the
case of options to Independent Directors), in its discretion, may
impose such restrictions on the transferability of shares
purchasable upon exercise of an option as it deems appropriate.
Any such restriction shall be set forth in the respective Stock
Option Agreement and may be referred to on the certificates
evidencing such shares. The Compensation Committee may require the
employee to give prompt notice of any disposition of shares of
Common Stock, acquired by exercise of an incentive stock option,
within two years from the date of granting such option or one year
after the transfer of such shares to such employee. The
Compensation Committee may require that the certificates evidencing
shares acquired by exercise of an incentive stock option refer to
such requirement to give prompt notice of disposition.
Exercise of Options
During the lifetime of the optionee, the option may be
exercised only by such optionee. Except in the case of death or
disability (within the meaning of Section 22(e)(3) of the Code), no
option may be exercised in whole or in part during the first six
months after such option is granted. Thereafter, options granted
under the Plan will become exercisable at such times and in such
installments (which may be cumulative) as the Compensation
Committee shall provide in the terms of the option. The
Compensation Committee may determine to accelerate the time at
which an option becomes exercisable. To the extent that the
aggregate fair market value of stock with respect to which
"incentive stock options" (within the meaning of Section 422 of the
Code, but without regard to Section 422(d) of the Code) are first
exercisable during any calendar year (and all other incentive stock
option plans of the Company, any subsidiary and any parent
corporation) exceeds $100,000, such options shall be taxed as non-
qualified options. The rule set forth in the preceding sentence
shall be applied by taking options into account in the order in
which they were granted. For this purpose, the fair market value
of the stock shall be determined as of the time the option with
respect to such stock is granted. Options granted to Independent
Directors shall become exercisable in cumulative annual
installments of 25% on each of the first, second, third and fourth
anniversaries of the date of option grant, subject to acceleration
in the event of retirement.
Options may be exercised by compliance with certain prescribed
procedures, and the option price must be paid in full at the time
of exercise. The option price may be paid in cash or by check, by
tendering Common Stock of the Company with a fair market value on
the date of delivery equal to the aggregate option price, by
tendering a full-recourse promissory note (in the case of options
granted to employees), or by a combination of these methods.
Payment by promissory note requires the consent of the Compensation
Committee and is permitted only where such an extension of credit
is not prohibited by law. The Compensation Committee will
prescribe the form of such note and the security to be given by the
optionee, and such note will bear interest at such rate as to
preclude the imputation of interest under the Code. In no event
will shares of Common Stock be issued until the purchase price has
been paid in full.
The Compensation Committee may, as a condition of the exercise
of any option or rights, require that the optionee deliver such
representations and documents as it deems necessary to effect
compliance with applicable federal and state securities laws and
regulations. The Compensation Committee may also take whatever
action it deems appropriate to effect such compliance.
No option granted to any employee may be exercised to any
extent by anyone after the first to occur of the following events:
(1) the expiration of ten years from the date the option was
granted, or (2) in the case of an incentive stock option, five
years from the date the option was granted in the case of any
optionee owning (within the meaning of Section 424(d) of the Code)
more than 10% of the total combined voting power of all classes of
Company stock (or the stock of any subsidiary or any parent
corporation) at the time the incentive stock option is granted, or
(3) the expiration of one year from the date the optionee's
employment terminates by reason of death or disability, or the
expiration of three months from the date of an employment
termination for any reason other than death or disability (unless
the optionee dies during this three-month period); provided that
any incentive stock option exercised more than three months
following termination of employment by reason of retirement, or
more than one year following termination of employment by reason of
disability, will be taxed, under the Code, as a non-qualified stock
option. No option granted to any Independent Director may be
exercised to any extent by anyone after the first to occur of the
following events: (i) ten years from the date of option grant, or
(ii) three months from the date of termination of directorship (for
any reason other than death), or (iii) one year from the date of
such Independent Director's death. Subject to the foregoing, the
Compensation Committee shall provide, in the terms of each
individual option, when such option expires and becomes
unexercisable; and the Compensation Committee may provide in the
terms of individual options that said options expire immediately
upon a termination of employment for any reason.
Amendment and Termination of the Plan
Amendments of the Plan to increase the aggregate share limit
on the stock which may be issued on exercise of options granted
under the Plan (except for adjustments resulting from stock splits,
etc.), to reduce the minimum option price requirements, to extend
the period during which options may be granted or to change the
eligibility requirements, would each require the approval of the
Company's stockholders within twelve months before or after such
amendment. In all other respects, the Plan can be amended,
modified, suspended or terminated by the Board of Directors.
Notwithstanding the foregoing, the Plan may not be amended more
than once every six months, other than to comport with changes in
the Code or the Employee Retirement Income Security Act of 1974, as
amended,or the respective rules thereunder.
Federal Income Tax Consequences
The Plan is neither a qualified pension, profit sharing or
stock bonus plan under Section 401(a) of the Code nor an "employee
benefit plan" subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended. The following discussion
is a general summary of the material U.S. federal income tax
consequences to U.S. participants in the Plan. The discussion is
based on the Code, regulations thereunder, rulings and decisions
now in effect, all of which are subject to change. The summary
does not discuss all aspects of federal income taxation that may be
relevant to a particular participant in light of such participant's
personal investment circumstances. Also, alternative minimum tax
and state and local taxes are not discussed and may vary from
locality to locality.
Non-qualified Stock Options
Holders of non-qualified stock options do not realize income
as a result of the grant of such an option, but normally realize
compensation income upon exercise of such an option to the extent
that the fair market value of the shares on the date of exercise of
the option exceeds the aggregate option price. The Company is
entitled to a tax deduction (subject to the limits of Section
162(m) of the Code which limits the deductibility of certain
compensation in excess of $1,000,000), in an amount equal to the
compensation income realized by an optionee as a result of the
exercise of a non-qualified stock option, subject to tax
withholding.
In the discretion of the Compensation Committee, in lieu of
payment in cash of withholding amounts, the optionee may, subject
to certain restrictions, pay all or a portion of the federal, state
and local taxes, including FICA tax, withheld in connection with
the exercise of one or more non-qualified options granted under the
Plan, by electing (i) to have the Company withhold shares subject
to such non-qualified option, (ii) to deliver shares received in
connection with the exercise of such non-qualified option, or (iii)
to deliver other previously acquired shares, having a fair market
value approximately equal to the amount to be withheld.
The tax consequence resulting from the exercise of a non-
qualified stock option through delivery of already-owned Company
shares are not completely certain. In published rulings, the
Internal Revenue Service has taken the position that, to the extent
an equivalent value of shares is acquired, the employee will
recognize no gain and the employee's basis in the stock acquired
upon such exercise is equal to the employee's basis in the
surrendered shares, that any additional shares acquired upon such
exercise are compensation to the employee taxable under the rules
described above and that the employee's basis in any such
additional shares is their then-fair market value.
Incentive Stock Options
Holders of incentive stock options will not be considered to
have received taxable income upon either the grant of such an
option or its exercise. Upon the sale or other taxable disposition
of the shares acquired upon the exercise of an incentive stock
option, the full amount of gain will normally be treated as long-
term capital gain if sale or other disposition of the shares has
not taken place within either (a) two years from the date of the
grant of the option or (b) one year from the date of exercise of
the option. If the stock is sold or otherwise disposed of before
the one- or two-year period, the gain will be taxed as ordinary
income to the extent of the difference between the option price and
the fair market value of the shares on the date of the exercise of
the option; the balance of the gain, if any, will be taxed as a
capital gain. If the stock is disposed of at a loss before the
expiration of the one- or two-year period, the employee's ordinary
income is limited to the amount realized, less the option exercise
price paid. The Company (or other employer corporation) is
entitled to a tax deduction (subject to the limits of Section
162(m) of the Code), in the case of an incentive stock option only
to the extent that an optionee recognizes ordinary income with
respect to such option. Thus, the Company (or other employer
corporation) will not be entitled to a tax deduction in regard to
stock acquired under an incentive stock option and held the
requisite one- and two-year periods. If an option originally
granted as an incentive stock option is exercised by the optionee
more than three months after the optionee's retirement or one year
after the optionee's termination of employment by reason of
permanent and total disability, the option will be taxed under the
rules applicable to non-qualified stock options rather than
incentive stock options.
Upon the exercise of an incentive stock option, the amount by
which the fair market value of the purchased shares at the time of
exercise exceeds the option price will be an "item of tax
preference" for purposes of computing the optionee's alternative
minimum tax for the year of exercise. If the shares so acquired
are disposed of in the same year, there should be no "item of tax
preference" arising from the option exercise. In addition, if an
employee transfers shares acquired upon the exercise of an
incentive stock option to acquire other shares in connection with
the exercise of an incentive stock option, the employee will
recognize income from the transaction if the transferred shares
have not been held for the required holding periods.
The tax consequences resulting from the exercise of an
incentive stock option through delivery of already-owed shares of
Common stock are not completely certain. In published rulings and
proposed regulations, the Internal Revenue Service has taken the
position that generally the employee will recognize no income upon
such stock-for-stock exercise (subject to the discussion above),
that, to the extent an equivalent number of shares is acquired, the
employee's basis in the shares acquired upon such exercise is equal
to the employee's basis in the surrendered shares increased by any
compensation income recognized by the employee, that the employee's
basis in any additional shares acquired upon such exercise is zero
and that any sale or other disposition of the acquired shares
within the one- or two-year period described above will be viewed
first as a disposition of the shares with the lowest basis.
FORM 10-K
A copy of the Company's Annual Report on Form 10-K will be
furnished without charge to stockholders upon request to the
Company, at 3200 San Fernando Road, Los Angeles, California 90065,
attention: Paul Stanford, Secretary. Telephone (213) 258-2777.
DATE FOR RECEIPT OF STOCKHOLDERS PROPOSALS
Stockholder proposals must be received by the Company at its
address for inclusion in the proxy materials relating to the 1995
Annual Meeting by November 17, 1994.
VOTE REQUIRED FOR APPROVAL
The eleven nominees for director receiving a plurality of the
votes cast at the meeting in person or by proxy shall be elected.
All other matters require for approval the favorable vote of a
majority of shares cast either at the meeting in person or by
proxy.
Under the Company's By-laws and Delaware law, shares
represented by proxies that reflect abstentions or "broker non-
votes" (i.e., shares held by a broker or nominee which are
represented at the Annual Meeting, but with respect to which such
broker or nominee is not empowered to vote on a particular
proposal) will be counted as shares that are present and entitled
to vote for purposes of determining the presence of a quorum.
Directors will be elected by a favorable vote of a plurality of the
Common Stock present and entitled to vote, in person or by proxy,
at the Annual Meeting. Accordingly, abstentions or broker non-
votes as to the election of directors will not affect the election
of the candidates receiving the plurality of votes. All other
proposals to come before the Annual Meeting require the approval of
a majority of the shares of stock having voting power present.
Abstentions as to a particular proposal will have the same effect
as votes against such proposal. Broker non-votes, however, will be
treated as unvoted for purposes of determining approval of such
proposal and will not be counted as votes for or against such
proposal.
OTHER MATTERS
The Company is not aware of any matters that may come before
the meeting other than those referred to in the Notice of Annual
Meeting of Stockholders. If any other matters shall properly come
before the meeting, the persons named in the accompanying form of
Proxy intend to vote thereon in accordance with their best
judgment.
Paul Stanford
Secretary
Los Angeles, California
March 17, 1994<PAGE>
PROXY
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
UNLESS A CONTRARY DIRECTION IS INDICATED, THE PROXIES WILL BE VOTED FOR THE
ELECTION OF ALL DIRECTORS AND FOR PROPOSALS 2 AND 3.
(1) Election of Directors. (see reverse)
FOR [_] WITHHELD [_]
For, except vote withheld from the following nominee(s):
________________________________________________________
(2) Ratification of the selection by the Board of Directors of auditors for the
year 1994.
FOR [_] AGAINST [_] ABSTAIN [_]
(3) Consideration for approval of the Amended and Restated 1993 Stock Option
Plan for Officers, Directors and Key Employees of CalMat Co., as
recommended by the Board of Directors.
FOR [_] AGAINST [_] ABSTAIN [_]
(4) Any other matter that may properly come before the meeting.
Management is not aware of any other matters that will be presented for
action at the meeting.
CHANGE OF ADDRESS ON REVERSE SIDE [_]
The undersigned hereby acknowledges receipt of Notice of Annual Meeting of
Stockholders, dated March 17, 1994, and of the Proxy Statement of the same
date furnished therewith.
SIGNATURE(S)_____________________________________________ DATE_______________
Note: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof.
================================================================================
PROXY
CALMAT CO.
This Proxy is solicited on Behalf of the Board of Directors of CalMat Co.
I hereby constitute and appoint A. Frederick Gerstell and William Jenkins, and
each of them, with full power of substitution and revocation to each, as my
proxies, to vote all shares of the Company held or owned by me at the Annual
Meeting of Stockholders of CalMat Co. to be held in the Pacific Ballroom of the
Los Angeles Hilton Hotel, 930 Wilshire Boulevard, Los Angeles, California, at
10:00 a.m., on Wednesday, the 27th day of April, 1994, and at any and all
adjournments thereof, upon the following matters:
Election of Directors: Nominees:
John C. Argue, Harry M. Conger, Rayburn S. Dezember, A. Frederick Gerstell,
Richard A. Grant, Jr., Grover R. Heyler, William T. Huston, William Jenkins,
Thomas L. Lee, Thomas M. Linden and Stuart T. Peeler.
Change of Address
___________________________________
___________________________________
___________________________________
___________________________________
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXY CANNOT
BE VOTED UNLESS YOU SIGN AND RETURN THIS CARD. [SEE REVERSE SIDE]
EXHIBIT "A"
AMENDED AND RESTATED
1993 STOCK OPTION PLAN
FOR OFFICERS, DIRECTORS AND KEY EMPLOYEES
OF
CALMAT CO.
CALMAT CO., a corporation organized under the laws of the
State of Delaware, hereby adopts this 1993 Stock Option Plan for
Officers, Directors and Key Employees of CalMat Co. The purposes
of this Plan are as follows:
(1) To further the growth, development and financial
success of the Company by providing additional incentives to
certain of its officers, directors and key Employees who have
been or will be given responsibility for the management or
administration of the Company's business affairs, by assisting
them to become owners of capital stock of the Company and thus
to benefit directly from its growth, development and financial
success.
(2) To enable the Company to obtain and retain the
services of the type of professional, technical and managerial
employees and directors considered essential to the long-range
success of the Company by providing and offering them an
opportunity to become owners of capital stock of the Company
under options, including options that are intended to qualify
as "incentive stock options" under Section 422 of the Internal
Revenue Code of 1986, as amended.
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Plan, they shall
have the meaning specified below unless the context clearly
indicates to the contrary. The masculine pronoun shall include
the feminine and neuter and the singular shall include the plural,
where the context so indicates.
Section 1.1 - Board
- - -------------------
"Board" shall mean the Board of Directors of the Company.
Section 1.2 - Code
- - ------------------
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
Section 1.3 - Committee
- - -----------------------
"Committee" shall mean the Stock Option Committee of the
Board, appointed as provided in Section 6.1.
Section 1.4 - Company
- - ---------------------
"Company" shall mean CalMat Co., a Delaware corporation.
Section 1.5 - Director
- - ----------------------
"Director" shall mean a member of the Board.
Section 1.6 - Employee
- - ----------------------
"Employee" shall mean any employee (as defined in accordance
with the Regulations and Revenue Rulings then applicable under
Section 3401(c) of the Code) of the Company, or of any corporation
which is then a Parent Corporation or a Subsidiary, whether such
employee is so employed at the time this Plan is adopted or becomes
so employed subsequent to the adoption of this Plan.
Section 1.7 - Executive Officers
- - --------------------------------
"Executive Officers" shall mean (a) the Chief Executive
Officer of the Company (or the individual acting in such capacity)
and (b) the four most highly compensated Officers of the Company
(other than the Chief Executive Officer) whose total compensation
is required to be reported to the Company's stockholders under the
Securities Exchange Act of 1934, as amended.
Section 1.8 - Incentive Option
- - ------------------------------
"Incentive Option" shall mean an Option which qualifies under
Section 422 of the Code and which is designated as an Incentive
Option by the Committee.
Section 1.9 - Independent Director
- - ----------------------------------
"Independent Director" shall mean a member of the Board who is
not an Employee of the Company.
Section 1.10 - Non-Qualified Option
- - -----------------------------------
"Non-Qualified Option" shall mean an Option which is not an
Incentive Option and which is designated as a Non-Qualified Option
by the Committee.
Section 1.11 - Officer
- - ----------------------
"Officer" shall mean an officer of the Company, any Parent
Corporation or any Subsidiary.
Section 1.12 - Option
- - ---------------------
"Option" shall mean an option to purchase capital stock of the
Company, granted under the Plan. "Options" includes both Incentive
Options and Non-Qualified Options.
Section 1.13 - Optionee
- - -----------------------
"Optionee" shall mean an Employee or Independent Director to
whom an Option is granted under the Plan.
Section 1.14 - Parent Corporation
- - ---------------------------------
"Parent Corporation" shall mean any corporation in an unbroken
chain of corporations ending with the Company if each of the
corporations other than the Company then owns stock possessing 50%
or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
Section 1.15 - Plan
- - -------------------
"Plan" shall mean this 1993 Stock Option Plan for Officers,
Directors and Key Employees of CalMat Co.
Section 1.16 - Secretary
- - ------------------------
"Secretary" shall mean the Secretary of the Company.
Section 1.17 - Securities Act
- - -----------------------------
"Securities Act" shall mean the Securities Act of 1933, as
amended.
Section 1.18 - Subsidiary
- - -------------------------
"Subsidiary" shall mean any corporation in an unbroken chain
of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain
then owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in
such chain.
Section 1.19 - Termination Of Directorship
- - ------------------------------------------
"Termination of Directorship" shall mean the time when an
Optionee who was an Independent Director ceases to be a director of
the Company for any reason, including, but not by way of
limitation, a termination by resignation, failure to be elected,
death or retirement. The Board, in its absolute discretion, shall
determine the effect of all other matters and questions relating to
Termination of Directorship.
Section 1.20 - Termination Of Employment
- - ----------------------------------------
"Termination of Employment" shall mean the time when the
employee-employer relationship between the Optionee and the
Company, a Parent Corporation or a Subsidiary is terminated for any
reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death or
retirement, but excluding terminations where there is a
simultaneous reemployment by the Company, a Parent Corporation or
a Subsidiary. The Committee, in it absolute discretion, shall
determine the effect of all other matters and questions relating to
Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from
a discharge for good cause, and all questions of whether particular
leaves of absence constitute Terminations of Employment; provided,
however, that, with respect to Incentive Options, a leave of
absence shall constitute a Termination of Employment if, and to the
extent that, such leave of absence interrupts employment for the
purposes of Section 422(a)(2) of the Code and the then applicable
Regulations and Revenue Rulings under said Section.
ARTICLE II
SHARES SUBJECT TO PLAN
Section 2.1 - Shares Subject To Plan
- - ------------------------------------
The shares of stock subject to Options shall be shares of the
Company's $1.00 par value Common Stock. The aggregate number of
such shares which may be issued upon exercise of Options shall not
exceed 900,000; provided, however, that the aggregate number of
such shares which may be issued upon the exercise of Options
granted to any single Executive Officer under the Plan shall not
exceed 500,000 in any calendar year or in total; and provided
further that shares which may be issued upon exercise of Options
which expire or are cancelled (whether pursuant to Section 3.3(b)
or otherwise) shall, solely to the extent required by Code Section
162(m), be counted against this limitation.
Section 2.2 - Unexercised Options
- - ---------------------------------
If any Option expires or is cancelled without having been
fully exercised, the number of shares subject to such Option but as
to which such Option was not exercised prior to its expiration or
cancellation may again be optioned hereunder, subject to the
limitations of Section 2.1.
Section 2.3 - Changes In Company's Shares
- - -----------------------------------------
In the event that the outstanding shares of Common Stock of
the Company are hereafter changed into or exchanged for a different
number or kind of shares or other securities of the Company, or of
another corporation, by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split-up,
stock dividend or combination of shares, appropriate adjustments
shall be made by the Committee in the number and kind of shares for
the purchase of which Options may be granted, including adjustments
of the limitations in Section 2.1 on the maximum number and kind of
shares which may be issued on exercise of Options, and appropriate
adjustments shall be made by the Board in the number and kind of
shares for the purchase of which Options are granted to Independent
Directors under Section 3.3(c).
ARTICLE III
GRANTING OF OPTIONS
Section 3.1 - Eligibility
- - -------------------------
Any executive or other key Employee of the Company or of any
corporation which is then a Parent Corporation or a Subsidiary
shall be eligible to be granted Options, except as provided in
Sections 3.2 and 6.1(a). Each Independent Director of the Company
shall be eligible to receive Options at the times and in the manner
set forth in Section 3.3(c).
Section 3.2 - Qualification Of Incentive Options
- - ------------------------------------------------
No Incentive Option shall be granted unless such Option, when
granted, qualifies as an "incentive stock option" under Section 422
of the Code. Options granted under the Plan to Independent
Directors do not qualify as "incentive stock options" under Section
422 of the Internal Revenue Code of 1986.
Section 3.3 - Granting Of Options
- - ---------------------------------
(a) The Committee shall from time to time, in its absolute
discretion:
(1) Determine which Employees are executive or other key
Employees and select from among the executive or other key
Employees (including those to whom Options have been
previously granted under the Plan) such of them as in its
opinion should be granted Options; and
(2) Determine the number of shares to be subject to such
Options granted to such selected executive or other key
Employees, and determine whether such Options are to be
Incentive Options or Non-Qualified Options; and
(3) Determine the terms and conditions of such Options,
consistent with the Plan.
(b) Upon the selection of an executive or other key Employee
to be granted an Option, the Committee shall instruct the Secretary
to issue such Option and may impose such conditions on the grant of
such Option as it deems appropriate. Without limiting the
generality of the preceding sentence, the Committee may, in its
discretion and on such terms as it deems appropriate, require as a
condition of the grant of an Option to an Employee that the
Employee surrender for cancellation some or all of the unexercised
Options which have been previously granted to him. An Option the
grant of which is conditioned upon such surrender may have an
option price lower (or higher) than the option price of the
surrendered Option, may cover the same (or a lesser or greater)
number of shares as the surrendered Option, may contain such other
terms as the Committee deems appropriate and shall be exercisable
in accordance with its terms, without regard to the number of
shares, price, option period or any other term or condition of the
surrendered Option.
(c) Each Independent Director shall automatically be granted
an Option to purchase 3,000 shares of Common Stock (subject to
adjustment as provided in Section 2.3) on January 25, 1994. During
the term of the Plan, each then current Independent Director shall
automatically be granted, on January 25 of each year, an Option to
purchase 3,000 shares of Common Stock (subject to adjustment as
provided in Section 2.3). When a person is initially elected to
the Board and is then an Independent Director, and the date of such
initial election is on or before July 25 of that year, each such
new Independent Director automatically shall be granted an Option
to purchase 3,000 shares of Common Stock (subject to adjustment as
provided in Section 2.3) on the date of his or her election to the
Board. A person initially elected to the Board as an Independent
Director whose initial election occurs after July 25 of that year
will not receive an initial Option grant pursuant to the preceding
sentence. Members of the Board who are Employees of the Company
who subsequently retire from the Company and remain on the Board
will not receive an initial Option grant pursuant to the second
preceding sentence, but to the extent they are otherwise eligible,
will receive after retirement from the Company Options as described
in the second sentence of this Section 3.3(c). All the foregoing
Option grants authorized by this Section 3.3(c) are subject to
stockholder approval of the Plan at the 1994 Annual Meeting of
Stockholders.
ARTICLE IV
TERMS OF OPTIONS
Section 4.1 - Option Agreement
- - ------------------------------
Each Option shall be evidenced by a written Stock Option
Agreement, which shall be executed by the Optionee and an
authorized Officer of the Company and which shall contain such
terms and conditions as the Committee (or the Board, in the case of
Options granted to Independent Directors) shall determine,
consistent with the Plan. Stock Option Agreements evidencing
Incentive Options shall contain such terms and conditions as may be
necessary to qualify such Options as "incentive stock options"
under Section 422 of the Code.
Section 4.2 - Option Price
- - --------------------------
(a) The price of the shares subject to each Option shall be
set by the Committee; provided, however, that the price per share
shall be not less than 100% of the fair market value of such shares
on the date such Option is granted; provided, further, that, in the
case of an Incentive Option, the price per share shall not be less
than 110% of the fair market value of such shares on the date such
Option is granted in the case of an individual then owning (within
the meaning of Section 424(d) of the Code) more than 10% of the
total combined voting power of all classes of stock of the Company,
any Subsidiary or any Parent Corporation; and provided, further,
that the price of the shares subject to each Option granted to an
Independent Director shall equal 100% of the fair market value of
such shares on the date such Option is granted, without variation
hereunder.
(b) For purposes of the Plan, the fair market value of a
share of the Company's stock as of a given date shall be:
(1) the closing price of a share of the Company's stock
on the principal exchange on which shares of the Company's
stock are then trading, if any, on the day previous to such
date, or, if shares were not traded on the day previous to
such date, then on the next preceding trading day during which
a sale occurred; or
(2) if such stock is not traded on an exchange but is
quoted on NASDAQ or a successor quotation system, (i) the last
sales price (if the stock is then listed as a National Market
Issue under the NASD National Market System) or (ii) the mean
between the closing representative bid and asked prices (in
all other cases) for the stock on the day previous to such
date as reported by NASDAQ or such successor quotation system;
or
(3) if such stock is not publicly traded on an exchange
and not quoted on NASDAQ or a successor quotation system, the
mean between the closing bid and asked prices for the stock,
on the day previous to such date, as determined in good faith
by the Committee (or the Board, in the case of Options granted
to Independent Directors); or
(4) if the Company's stock is not publicly traded, the
fair market value established by the Committee (or the Board,
in the case of Options granted to Independent Directors)
acting in good faith.
Section 4.3 - Commencement Of Exercisability
- - --------------------------------------------
(a) Except in the case of death or disability (within the
meaning of Section 22(e)(3) of the Code), no Option may be
exercised in whole or in part during the six months after such
Option is granted.
(b) Subject to the provisions of Sections 4.3(a), 4.3(c),
4.3(d) and 7.3, Options shall become exercisable at such times and
in such installments (which may be cumulative) as the Committee
shall provide in the terms of each individual Option; provided,
however, that by a resolution adopted after an Option is granted
the Committee may, on such terms and conditions as it may determine
to be appropriate and subject to Sections 4.3(a), 4.3(c), 4.3(d)
and 7.3, accelerate the time at which such Option or any portion
thereof may be exercised; provided, further, that Options granted
to Independent Directors shall become exercisable in cumulative
annual installments of 25% on each of the first, second, third and
fourth anniversaries of the date of Option grant, and the term of
each such Option shall be ten years, without variation or
acceleration hereunder, except that notwithstanding Section 4.3(a),
any Option granted to an Independent Director shall become
immediately exercisable in full upon the retirement of the
Independent Director in accordance with the Company's retirement
policy applicable to directors.
(c) No portion of an Option which is unexercisable at
Termination of Employment or Termination of Directorship shall
thereafter become exercisable.
(d) To the extent that the aggregate fair market value of
stock with respect to which "incentive stock options" (within the
meaning of Section 422 of the Code, but without regard to Section
422(d) of the Code) are exercisable for the first time by an
Optionee during any calendar year (under the Plan and all other
incentive stock option plans of the Company, any Subsidiary and any
Parent Corporation) exceeds $100,000, such options shall be taxed
as Non-Qualified Options. The rule set forth in the preceding
sentence shall be applied by taking options into account in the
order in which they were granted. For purposes of this Section
4.3(d), the fair market value of stock shall be determined as of
the time the option with respect to such stock is granted.
Section 4.4 - Expiration Of Options
- - -----------------------------------
(a) No Option granted to an Employee may be exercised to any
extent by anyone after the first to occur of the following events:
(1) The expiration of ten years from the date the Option
was granted; or
(2) In the case of an Incentive Option granted to an
Optionee owning (within the meaning of Section 424(d) of the
Code), at the time the Incentive Option was granted, more than
10% of the total combined voting power of all classes of stock
of the Company, any Subsidiary or any Parent Corporation, the
expiration of five years from the date the Incentive Option
was granted; or
(3) Except in the case of any Optionee who dies, who
retires in accordance with the terms of a Company retirement
plan or who is disabled (within the meaning of Section
22(e)(3) of the Code), the expiration of three months from the
date of the Optionee's Termination of Employment for any
reason other than such Optionee's death unless the Optionee
dies within said three-month period; provided, however, that
any Incentive Option exercised more than three months
following Termination of Employment by reason of retirement or
more than one year following Termination of Employment by
reason of disability may be taxed, under the Code, as a
Non-Qualified Option.
(b) Subject to the provisions of Section 4.4(a), the
Committee shall provide, in the terms of each individual Option
granted to an Employee, when such Option expires and becomes
unexercisable; and (without limiting the generality of the
foregoing) the Committee may provide in the terms of individual
Options that said Options expire immediately upon a Termination of
Employment for any reason.
(c) No Option granted to an Independent Director may be
exercised to any extent by anyone after the first to occur of the
following events:
(1) The expiration of ten years from the date the Option
was granted; or
(2) The expiration of three months from the date of the
Optionee's Termination of Directorship for any reason other
than such Optionee's death unless the Optionee dies within
said three-month period; or
(3) The expiration of one year from the date of the
Optionee's death.
Section 4.5 - Consideration
- - ---------------------------
In consideration of the granting of the Option, the Optionee
shall agree, in the written Stock Option Agreement, to remain in
the employ of the Company, a Parent Corporation or a Subsidiary (or
to serve as an Independent Director of the Company) for a period of
at least one year after the Option is granted (or until the next
Annual Meeting of Stockholders of the Company, in the case of an
Independent Director). Nothing in this Plan or in any Stock Option
Agreement hereunder shall confer upon any Optionee any right to
continue in the employ of or as a Director of the Company, any
Parent Corporation or any Subsidiary or shall interfere with or
restrict in any way the rights of the Company, its Parent
Corporations and its Subsidiaries, which are hereby expressly
reserved, to discharge any Optionee at any time for any reason
whatsoever, with or without cause.
Section 4.6 - Adjustments In Outstanding Options
- - ------------------------------------------------
In the event that the outstanding shares of the stock subject
to Options are changed into or exchanged for a different number or
kind of shares of the Company or other securities of the Company by
reason of merger, consolidation, recapitalization,
reclassification, stock split-up, stock dividend or combination of
shares, the Committee (or the Board, in the case of Options granted
to Independent Directors) shall make an appropriate and equitable
adjustment in the number and kind of shares as to which all
outstanding Options, or portions thereof then unexercised, shall be
exercisable, to the end that after such event the Optionee's
proportionate interest shall be maintained as before the occurrence
of such event. Such adjustment in an outstanding Option shall be
made without change in the total price applicable to the Option or
the unexercised portion of the Option (except for any change in the
aggregate price resulting from rounding-off of share quantities or
prices) and with any necessary corresponding adjustment in Option
price per share; provided, however, that, in the case of Incentive
Options, each such adjustment shall be made in such manner as not
to constitute a "modification" within the meaning of Section
424(h)(3) of the Code. Any such adjustment made by the Committee
or the Board shall be final and binding upon all Optionees, the
Company and all other interested persons.
Section 4.7 - Merger, Consolidation, Acquisition, Liquidation
Or Dissolution
- - -------------------------------------------------------------
The Committee (or the Board, in the case of Options granted to
Independent Directors) shall provide by the terms of each Option
that, upon or in connection with the merger or consolidation of the
Company with or into another corporation, the acquisition by
another corporation or person of all or substantially all of the
Company's assets or 80% or more of the Company's then outstanding
voting stock or the liquidation or dissolution of the Company, such
Option shall either (a) be (1) assumed or (2) replaced by a
substitute option granted by any successor corporation or (b) be or
become exercisable, for a minimum of 30 days prior to such event,
as to all shares covered thereby, notwithstanding anything to the
contrary in Section 4.3(a), Section 4.3(b) and/or any installment
provisions of such Option, but subject to Section 4.3(d).
ARTICLE V
EXERCISE OF OPTIONS
Section 5.1 - Person Eligible To Exercise
- - -----------------------------------------
During the lifetime of the Optionee, only he may exercise an
Option granted to him, or any portion thereof. After the death of
the Optionee, any exercisable portion of an Option may, prior to
the time when such portion becomes unexercisable under Section 4.4
or Section 4.7, be exercised by his personal representative or by
any person empowered to do so under the deceased Optionee's will or
under the then applicable laws of descent and distribution.
Section 5.2 - Partial Exercise
- - ------------------------------
At any time and from time to time prior to the time when any
exercisable Option or exercisable portion thereof becomes
unexercisable under Section 4.4 or Section 4.7, such Option or
portion thereof may be exercised in whole or in part; provided,
however, that the Company shall not be required to issue fractional
shares and the Committee (or Board, in the case of Options granted
to Independent Directors) may, by the terms of the Option, require
any partial exercise to be with respect to a specified minimum
number of shares.
Section 5.3 - Manner Of Exercise
- - --------------------------------
An exercisable Option, or any exercisable portion thereof, may
be exercised solely by delivery to the Secretary or his office of
all of the following prior to the time when such Option or such
portion becomes unexercisable under Section 4.4 or Section 4.7:
(a) Notice in writing signed by the Optionee or other
person then entitled to exercise such Option or portion,
stating that such Option or portion is exercised, such notice
complying with all applicable rules established by the
Committee (or Board, in the case of Options granted to
Independent Directors); and
(b) Full payment for the shares with respect to which
such Option or portion is thereby exercised:
(1) In cash or by check; or
(2) By delivery of shares of the Company's Common
Stock owned by the Optionee duly endorsed for transfer to
the Company with a fair market value (as determined under
Section 4.2(b)) on the date of delivery equal to the
aggregate Option price of the shares with respect to
which such Option or portion is thereby exercised; or
(3) In the case of Options granted to Employees,
and with the consent of the Committee, by delivery of a
full recourse promissory note bearing interest (at least
such rate as shall then preclude the imputation of
interest under the Code or any successor provision) and
payable upon such terms as may be prescribed by the
Committee. The Committee may also prescribe the form of
such note and the security to be given for such note. No
Option may, however, be exercised by delivery of a
promissory note or by a loan from the Company when or
where such loan or other extension of credit is
prohibited by law; or
(4) By means of any combination of the
consideration provided in the foregoing subsections (1),
(2) and (3); and
(c) Such representations and documents as the Committee
or Board, in its absolute discretion, deems necessary or
advisable to effect compliance with all applicable provisions
of the Securities Act and any other federal or state
securities laws or regulations. The Committee or Board may,
in its absolute discretion, also take whatever additional
actions it deems appropriate to effect such compliance
including, without limitation, placing legends on share
certificates and issuing stop-transfer orders to transfer
agents and registrars; and
(d) In the event that the Option or portion thereof
shall be exercised pursuant to Section 5.1 by any person or
persons other than the Optionee, appropriate proof of the
right of such person or persons to exercise the Option or
portion thereof.
Section 5.4 - Conditions To Issuance Of Stock Certificates
- - ----------------------------------------------------------
The shares of stock issuable and deliverable upon the exercise
of an Option, or any portion thereof, may be either previously
authorized but unissued shares or issued shares which have then
been reacquired by the Company. The Company shall not be required
to issue or deliver any certificate or certificates for shares of
stock purchased upon the exercise of any Option or portion thereof
prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed; and
(b) The completion of any registration or other
qualification of such shares under any state or federal law or
under the rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body,
which the Committee or Board shall, in its absolute
discretion, deem necessary or advisable; and
(c) The obtaining of any approval or other clearance
from any state or federal governmental agency which the
Committee or Board shall, in its absolute discretion,
determine to be necessary or advisable; and
(d) The payment to the Company (or other employer
corporation) of all amounts which it is required to withhold
under federal, state or local law in connection with the
exercise of the Option; and
(e) The lapse of such reasonable period of time
following the exercise of the Option as the Committee or Board
may establish from time to time for reasons of administrative
convenience.
Section 5.5 - Rights As Stockholders
- - ------------------------------------
An Optionee shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any
shares purchasable upon the exercise of any part of an Option
unless and until certificates representing such shares have been
issued by the Company to such Optionee.
Section 5.6 - Transfer Restrictions
- - -----------------------------------
The Committee (or Board, in the case of Options granted to
Independent Directors), in its absolute discretion, may impose such
restrictions on the transferability of the shares purchasable upon
the exercise of an Option as it deems appropriate. Any such
restriction shall be set forth in the respective Stock Option
Agreement and may be referred to on the certificates evidencing
such shares. The Committee may require the Employee to give the
Company prompt notice of any disposition of shares of stock,
acquired by exercise of an Incentive Option, within two years from
the date of granting such Option or one year after the transfer of
such shares to such Employee. The Committee may direct that the
certificates evidencing shares acquired by exercise of an Option
refer to such requirement to give prompt notice of disposition.
ARTICLE VI
ADMINISTRATION
Section 6.1 - Stock Option Committee
- - ------------------------------------
(a) The Stock Option Committee shall consist of at least
three Directors, appointed by and holding office during the
pleasure of the Board. No Options may be granted to any member of
the Committee, except pursuant to Section 3.3(c), during the term
of his membership on the Committee. No person shall be eligible to
serve on the Committee unless he is then a "disinterested person"
within the meaning of Rule 16(b)-3 which has been adopted by the
Securities and Exchange Commission under the Securities Exchange
Act of 1934, if and as such Rule is then in effect.
(b) All members of the Committee shall be Directors.
(c) Appointment of Committee members shall be effective upon
acceptance of appointment. Committee members may resign at any
time by delivering written notice to the Board. Vacancies in the
Committee shall be filled by the Board.
Section 6.2 - Duties And Powers Of Committee
- - --------------------------------------------
It shall be the duty of the Committee to conduct the general
administration of the Plan in accordance with its provisions. The
Committee shall have the power to interpret the Plan and the
Options and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules. Any
such interpretations and rules in regard to Incentive Options shall
be consistent with the basic purpose of the Plan to grant
"incentive stock options" within the meaning of Section 422 of the
Code. Notwithstanding the foregoing, the full Board, acting by a
majority of its members in office, shall conduct the general
administration of the Plan with respect to Options granted to
Independent Directors. In its absolute discretion, the Board may
at any time and from time to time exercise any and all rights and
duties of the Committee under the Plan, other than the right to
select Employees for participation and to determine the timing,
pricing and amount of grants to Employees under Sections 3.3(a),
3.3(b), 4.2 and 4.3 of the Plan.
Section 6.3 - Majority Rule
- - ---------------------------
The Committee shall act by a majority of its members in
office. The Committee may act either by vote at a meeting or by a
memorandum or other written instrument signed by a majority of the
Committee.
Section 6.4 - Compensation; Professional Assistance;
Good Faith Actions
- - ----------------------------------------------------
Members of the Committee shall receive such compensation for
their services as members as may be determined by the Board. All
expenses and liabilities incurred by members of the Committee or
Board in connection with the administration of the Plan shall be
borne by the Company. The Committee may, with the approval of the
Board, employ attorneys, consultants, accountants, appraisers,
brokers or other persons. The Committee, the Board, the Company
and its Officers and Directors shall be entitled to rely upon the
advice, opinions or valuations of any such persons. All actions
taken and all interpretations and determinations made by the
Committee or the Board in good faith shall be final and binding
upon all Optionees, the Company and all other interested persons.
No member of the Committee or the Board shall be personally liable
for any action, determination or interpretation made in good faith
with respect to the Plan or the Options, and all members of the
Committee and the Board shall be fully protected by the Company in
respect to any such action, determination or interpretation.
ARTICLE VII
OTHER PROVISIONS
Section 7.1 - Options Not Transferable
- - --------------------------------------
No Option or interest or right therein or part thereof shall
be liable for the debts, contracts or engagements of the Optionee
or his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment
or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including
bankruptcy), and any attempted disposition thereof shall be null
and void and of no effect; provided, however, that nothing in this
Section 7.1 shall prevent transfers by will or by the applicable
laws of descent and distribution.
Section 7.2 - Amendment, Suspension Or Termination Of The Plan
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The Plan may be wholly or partially amended or otherwise
modified, suspended or terminated at any time or from time to time
by the Board. However, without approval of the Company's
stockholders given within 12 months before or after the action by
the Board, no action of the Board may, except as provided in
Section 2.3, increase any limit imposed in Section 2.1 on the
maximum number of shares which may be issued on exercise of
Options, modify the eligibility requirements of Section 3.1, reduce
the minimum Option price requirements of Section 4.2(a) or extend
the limit imposed in this Section 7.2 on the period during which
Options may be granted. Notwithstanding the foregoing, the Plan
shall not be amended more than once every six months, other than to
comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act or the respective rules thereunder.
Neither the amendment, suspension nor termination of the Plan
shall, without the consent of the holder of the Option, alter or
impair any rights or obligations under any Option theretofore
granted. No Option may be granted during any period of suspension
nor after termination of the Plan, and in no event may any Option
be granted under this Plan after the first to occur of the
following events:
(a) The expiration of ten years from the date the
Plan is adopted by the Board; or
(b) The expiration of ten years from the date the
Plan is approved by the Company's stockholders under
Section 7.3.
Section 7.3 - Approval Of Plan By Stockholders
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This Plan will be submitted for the approval of the Company's
stockholders within 12 months after the date of the Board's initial
adoption of the Plan. Options may be granted prior to such
stockholder approval; provided, however, that such Options shall
not be exercisable prior to the time when the Plan is approved by
the stockholders; provided, further, that if such approval has not
been obtained at the end of said 12-month period, all Options
previously granted under the Plan shall thereupon be cancelled and
become null and void.
Section 7.4 - Effect Of Plan Upon Other Option And
Compensation Plans
- - --------------------------------------------------
The adoption of this Plan shall not affect any other
compensation or incentive plans in effect for the Company, any
Parent Corporation or any Subsidiary. Nothing in this Plan shall
be construed to limit the right of the Company, any Parent
Corporation or any Subsidiary (a) to establish any other forms of
incentives or compensation for employees or directors of the
Company, any Parent Corporation or any Subsidiary or (b) to grant
or assume options otherwise than under this Plan in connection with
any proper corporate purpose, including, but not by way of
limitation, the grant or assumption of options in connection with
the acquisition by purchase, lease, merger, consolidation or
otherwise, of the business, stock or assets of any corporation,
firm or association.
Section 7.5 - Titles
- - --------------------
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Plan.
* * * *
