SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities and Exchange Act
of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ x ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
NBI, Inc.
- --------------------------------------------------------------------------------
(Name of Regsitrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ x ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies:
____________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
____________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchanged Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
____________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
____________________________________________________________________
(5) Total fee paid:
____________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of 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 the registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
____________________________________________________________________
(2) Form, schedule or registration statement number:
____________________________________________________________________
(3) Filing party:
____________________________________________________________________
(4) Date filed:
____________________________________________________________________
<PAGE>
NBI, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 2, 1996
The Annual Meeting of Stockholders of NBI, Inc., a Delaware corporation
(the "Company"), will be held on Monday, December 2, 1996, at 2:00 p.m.,
Pacific Time, at the offices of Equibond, Inc., 100 Wilshire Blvd., Suite
1700, Santa Monica, California, for the following purposes:
1. To elect two directors to the Company's Board of Directors.
2. To approve certain amendments to the Company's Employee and Director
Stock Option Plan.
3. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
All stockholders are cordially invited to attend the meeting, although
only stockholders of record at the close of business on October 8, 1996, will
be entitled to notice of and to vote at the meeting. The minutes of the last
Annual Stockholders' Meeting and the stockholders' list of their share
eligibility to vote at the 1996 Annual Meeting will be open to inspection by
the stockholders at the Company's principal office, 1880 Industrial Circle,
Suite F, Longmont, Colorado 80501, for a period of 10 days prior to the annual
meeting.
Shares can only be voted at the meeting if the holder is present or
represented by proxy. If you do not expect to attend the meeting, you are
urged to date and sign the enclosed proxy and return it in the accompanying
envelope promptly so that your shares may be voted in accordance with your
wishes and the presence of a quorum may be assured. The prompt return of your
signed proxy, regardless of the number of shares you hold, will aid the
Company in reducing the expense of additional proxy solicitation. The giving
of such proxy does not affect your right to vote in person in the event you
attend the meeting.
By Order of the Board of Directors
Marjorie A. Cogan
Secretary
Longmont, Colorado
October 22, 1996
YOUR PROXY
PLEASE SIGN AND RETURN YOUR PROXY PROMPTLY IN THE ENCLOSED POSTPAID ENVELOPE.
SHOULD YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON EVEN THOUGH YOU HAVE
GIVEN A PROXY. THE PROMPT RETURN OF YOUR PROXY WILL BE OF GREAT HELP IN
PREPARATION FOR THE MEETING.
<PAGE>
NBI, INC.
1880 INDUSTRIAL CIRCLE, SUITE F
LONGMONT, COLORADO 80501
PROXY STATEMENT
SOLICITATION, EXERCISE AND REVOCABILITY OF PROXY
The enclosed proxy is solicited by the Board of Directors of NBI, Inc.
(the "Company") for use at the Annual Meeting of Stockholders to be held on
Monday, December 2, 1996, or at any adjournment or postponement thereof. The
meeting will be held at 2:00 p.m., Pacific Time, at the offices of Equibond,
Inc., 100 Wilshire Blvd., Suite 1700, Santa Monica, California. It is
anticipated that this proxy statement and the accompanying form of proxy will
first be mailed to the stockholders of the Company on or about October 22,
1996. The Company's principal executive offices are located at 1880
Industrial Circle, Suite F, Longmont, Colorado 80501, and its telephone number
at those offices is (303) 684-2700.
A proxy is revocable at any time, before it is voted, by written notice
to the Company, grant of a subsequent proxy, or voting at the meeting in
person. Unless contrary instructions are indicated on the proxy, all shares
represented by valid proxies received pursuant to this solicitation (and not
properly revoked before they are voted) will be voted for the election of the
two nominees to the Board of Directors named elsewhere herein, for the
approval of the amendments to the Company's Employee and Director Stock Option
Plan and in the discretion of the Board of Directors as to such other business
as may come before the meeting. In the event a stockholder specifies a
different choice on his proxy, his shares will be voted in accordance with the
specifications so made.
COST OF SOLICITATION
The cost of soliciting proxies will be borne by the Company.
VOTING
Only stockholders of record at the close of business on October 8, 1996,
will be entitled to vote at the meeting. On that date there were 8,000,984
shares of the Company's common stock issued and outstanding, entitled to one
vote per share. Stockholders are not entitled to cumulate their votes in the
election of directors, which means that the holders of more than half the
shares voting for the election of directors can elect all the directors if
they choose to do so. Approval of the amendments to the Company's Employee
and Director Stock Option Plan requires the affirmative vote of a majority of
the shares of common stock outstanding on the record date. On all other
matters, a favorable vote consists of a simple majority of the votes
represented at a meeting at which a quorum is present. The Company believes
that as of October 8, 1996, the approximate number of stockholders of record
of its common stock was 2,850. This includes shares held in nominee or
"street" accounts.
The Board of Directors knows of only three stockholders owning more than
five percent of the outstanding voting securities of the Company: Jay H.
Lustig, the Chairman of the Board and Chief Executive Officer of the Company,
Hakatak Enterprises, Inc., and Harry J. and Patricia S. Brown. See
"Beneficial Ownership of Common Stock." While the Company has no knowledge of
any other stockholders owning more than five percent of the outstanding voting
securities of the Company, the Company believes it is possible such holders
exist as a result of the Company's stock repurchase program.
<PAGE>
ELECTION OF DIRECTORS
At the time of the annual meeting, the Board of Directors will consist of
two incumbent members who are seeking to be elected at the meeting to hold
office until the next meeting of stockholders and until their successors are
elected and qualified.
INFORMATION CONCERNING DIRECTORS
Jay H. Lustig and Martin J. Noonan, both incumbent directors, have been
nominated by the Board of Directors for election. Both nominees have informed
the Company that they are willing to serve, if elected, and management has no
reason to believe that either nominee will be unavailable. In the event a
nominee for director should become unavailable for election, the persons named
in the proxy will vote for the election of any other person who may be
recommended and nominated by the Board for the office of director.
Information regarding nominees and directors is set forth below.
NOMINEES FOR ELECTION AS DIRECTORS
Name Age Principal Occupation Director Since
Jay H. Lustig 41 President, J.H.L. Holdings February 1992
Martin J. Noonan 44 Managing Director of NBI, Inc. April 1994
JAY H. LUSTIG, Chairman of the Board and Chief Executive Officer, has
been President of J.H.L. Holdings, an investment management firm since 1989.
He is also President of Equibond, Inc., a stock brokerage firm formed in 1995.
In addition, he is Chairman of the Board of National Bancshares of Texas, a
three-bank holding company in Laredo, Texas.
MARTIN J. NOONAN, Director, has been Managing Director for NBI, Inc.
since June 1993 with the responsibility for managing the day-to-day activities
within the Company. He has been with the Company for ten years in various
management positions including General Manager of the systems integration
operation from June 1992 to June 1993, and Director of Marketing from
September 1986 to June 1992.
Any stockholder who desires to propose a candidate for board membership
to be considered at the 1997 Annual Meeting of Stockholders should send, to
the attention of the Secretary of the Company, a signed letter of
recommendation containing the name and address of the proposing stockholder
and the proposed candidate (see "Stockholder Proposals") and setting forth the
complete business, professional and educational background of the proposed
candidate.
COMMITTEES, ATTENDANCE, NOMINATIONS
The Company has standing audit, compensation and nominating committees,
each of which consists of Mr. Lustig and Mr. Noonan. The nominating committee
is responsible for the nomination of persons whose names shall appear on the
ballot for election of directors. The audit committee recommends engagement
of the Company's independent accountants, approves services performed by such
accountants, and reviews and evaluates the Company's accounting system of
internal controls. The compensation committee approves salaries and other
compensation arrangements for the officers of the Company; however, Mr. Lustig
does not vote on matters relating to his compensation. These committees did
not meet during fiscal year 1996; however, these issues were discussed at
regular board meetings.
The Company's Board of Directors met two times during fiscal year 1996,
including telephone meetings. Both directors participated by personally or
telephonically attending, during fiscal year 1996, both Board of Directors
meetings.
<PAGE>
EXECUTIVE OFFICERS
JAY H. LUSTIG is the Chairman of the Board and Chief Executive Officer of
the Company (the "Named Officer"). He has been on the Board since February
1992. Mr. Lustig has performed the functions of a chief executive officer
since September 25, 1992, but only assumed the title of Chief Executive
Officer on October 1, 1993, the effective date of his employment agreement
with the Company. Prior to October 1, 1993, Mr. Lustig received no
compensation for performing the functions of the chief executive officer.
The Company has no other executive officers as defined under the
Securities Exchange Act of 1934.
EXECUTIVE COMPENSATION
Set forth below is information regarding the compensation of the Named
Officer. The Company has no executive officers whose total annual salary and
bonus exceeded $100,000.
The summary compensation table set forth below contains information
regarding the compensation of the Named Officer for services rendered in all
capacities during fiscal years 1996, 1995 and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Annual Compensation Long Term Compensation
------------------------- ------------------------------
Securities All
Other Restricted Under- Other
Name and Annual Stock lying Compen-
Principal Fiscal Salary Bonus Compensa- Award(s) Options sation
Position Year ($) ($) tion ($) ($) (#) ($)
- --------------- ------- --------- ------ --------- ---------- ---------- -------
Jay H. Lustig, 1996 $60,000 -- -- -- -- --
Chief Executive 1995 $60,000 -- -- -- -- --
Officer (1) 1994 $51,000(2) -- -- -- 400,000(3) --
<FN>
(1) Mr. Lustig acted in the capacity of a chief executive officer, though he
did not hold that title, from September 25, 1992, until October 1, 1993. On
that date, Mr. Lustig entered into an employment agreement with the Company by
which he was appointed as Chief Executive Officer of the Company. Mr. Lustig
received no salary for acting in the capacity of a chief executive officer prior
to October 1, 1993.
(2) This compensation consists of $45,000 paid to Mr. Lustig as Chief
Executive Officer for the period October 1, 1993 through June 30, 1994, and
$6,000 paid as director compensation for the period July 1, 1993 through
September 30, 1993.
(3) These options were granted to Mr. Lustig on October 1, 1993, in accordance
with his employment agreement with the Company, in connection with his services
as Chief Executive Officer. See "Employment and Severance Agreements".
</TABLE>
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
No options were granted to the Named Officer during the fiscal year ended
June 30, 1996.
The following table shows that the Named Officer did not exercise stock
options during the fiscal year ended June 30, 1996 and states the number of
shares covered by both exercisable and non-exercisable stock options as of
June 30, 1996. Also reported are the values for "in-the-money" options which
represent the positive spread between the exercise price of any such existing
stock options and the year-end price of Common Stock.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Value of Unexercised
Acquired Number of Securities In-the-Money Options
on Value Underlying Unexercised at FY-End ($) Exer-
Exercise Realized Options at FY-End (#) -cisable/Unexercisable
Name (#) ($) Exercisable/Unexercisable (1)
- ------------- -------- -------- ------------------------- ----------------------
Jay H. Lustig 0 0 225,000(2) 200,000 $15,531 $2,250
<FN>
(1) The market value of one share of the Company's Common Stock at the
end of fiscal 1996 was $.78125.
(2) Includes director stand-alone options for 25,000 shares granted by
the Company's Board of Directors during fiscal 1993 and 200,000 shares
underlying options issued during fiscal 1994 in conjunction with the Named
Officer's employment agreement. All options expire five years after the date
of grant.
</TABLE>
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive an annual retainer
of $8,000, a fee of $2,000 per meeting attended, $1,500 per committee meeting
attended (except when attended in conjunction with a Board meeting) and
reimbursement of expenses incurred in attending meetings. There is no
compensation for telephonic meetings. This is the only arrangement for
compensation of directors. No directors' fees were incurred during fiscal
1996, as all directors were also employees of the Company.
EMPLOYMENT AND SEVERANCE AGREEMENTS
The Company entered into an employment agreement effective October 1,
1993, with Jay H. Lustig (the "CEO Agreement"). Pursuant to the terms of the
CEO Agreement, Mr. Lustig became an employee and Chief Executive Officer of
the Company as of October 1, 1993. Under the terms of this agreement, the
Company pays Mr. Lustig an annual salary of $60,000. As CEO of the Company,
Mr. Lustig is no longer considered an outside director and consequently is no
longer eligible to receive director's compensation.
Mr. Lustig's position as CEO of the Company is a part-time position to
which he is required to dedicate no less than one-third of normal executive
business hours. In addition to Mr. Lustig's salary, the CEO Agreement
provides that the Company will pay Mr. Lustig an annual bonus of 10% of the
Company's pre-tax profits, if any, derived from all sources, but only to the
extent such 10% figure exceeds Mr. Lustig's base salary. Mr. Lustig remains
eligible for such bonus for twelve months after his termination from the
position of CEO.
In addition to the salary and bonus described above, the CEO Agreement
required that Mr. Lustig be granted a non-qualified stock option to purchase
400,000 shares of the Company's common stock at an exercise price of $.77 per
share. Such price was approximately 400% of certain historic trading levels
of the Company's common stock. This option was effective as of October 1,
1993, and contains four year vesting at 25% per year with vesting continuing
as long as Mr. Lustig is CEO.
<PAGE>
The CEO Agreement runs for one year terms which automatically renew on
July 1, unless terminated in writing by a majority of the Board of Directors
prior to such renewal date. As there was no action to terminate the CEO
Agreement, it automatically renewed for an additional one year term on July 1,
1996.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding the
beneficial ownership of the Company's common stock, as of October 5, 1996 by
(i) persons, including groups, known to the Company to own beneficially more
than five percent (5%) of the outstanding common stock of the Company, (ii)
each director and nominee for director, (iii) each Named Officer and (iv) all
executive officers and directors as a group. A person is deemed to be a
beneficial owner of common stock that can be acquired by such person within 60
days from October 5, 1996 upon the exercise of warrants or options.
<TABLE>
<CAPTION>
<S> <C> <C>
Amount and
Nature of Total as
Name and Address of Beneficial Percent
Beneficial Owner Ownership of Class
- ------------------------------------- -------------- ---------
Jay H. Lustig 1,750,000 (1) 18.90%
P.O. Box 505
Belle Vernon, PA 15012
Martin J. Noonan 100,500 (2) 1.24%
1880 Industrial Circle, Suite F
Longmont, CO 80501
Hakatak Enterprises, Inc. 928,645 (3) 11.61%
PO Box 1623
Pacific Palisades, CA 90272
Harry J. and Patricia S. Brown 1,041,000 (3) 13.01%
16079 Mesquite Circle
Fountain Valley, CA 92708
All Executive Officers and Directors
as a Group (2 persons) 1,850,500 (4) 19.77%
<FN>
(1) Includes 325,000 shares underlying options that are currently exercis-
able and 935,000 shares underlying warrants that are currently exercisable.
The options include director stand-alone options for 25,000 shares granted by
the Company's Board of Directors during fiscal 1993 and 300,000 shares under-
lying options issued during fiscal 1994 in conjunction with the Chief
Executive Officer's employment agreement. The warrants were issued to the CEO
in conjunction with a business acquisition. See "Related Party Transactions".
(2) Consists of 100,500 shares underlying options granted under the
Employee and Director Stock Option Plan that are currently exercisable.
(3) Information based upon Schedules 13D dated March 19, 1996.
(4) Includes 425,500 shares underlying options that are currently exer-
cisable and 935,000 shares underlying warrants that are currently
exercisable.
</TABLE>
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 ("Exchange Act")
requires the Company's officers and directors, and persons who beneficially
own more than 10% of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Officers, directors and greater than 10% stockholders
are required by SEC regulations 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, the Company believes all forms required by Section
16(a) during the fiscal year ended June 30, 1996 were timely filed.
RELATED PARTY TRANSACTIONS
In February 1995, the Company entered into an agreement to acquire 80% of
the outstanding stock of a small children's paint and novelty toy
manufacturing company, (the"Acquired Company") effective as of January 1,
1995. Prior to this agreement the Company's Chief Executive Officer (CEO),
Jay H. Lustig, owned 55% of the outstanding stock of the manufacturer. Under
the purchase agreement, the Company paid $288,000 in cash for the stock,
including $158,000 paid to NBI's CEO. In addition, the sellers are eligible
to receive royalty payments based upon gross margin performance in excess of
specified amounts. NBI's CEO will receive 55% of any such royalty payments.
No royalties were incurred by the Company during the fiscal years ended June
30, 1996 and 1995. In conjunction with the purchase agreement, the sellers
were issued warrants to purchase a total of 1.7 million shares of NBI's common
stock, including warrants to purchase 935,000 shares issued to the Company's
CEO, at a price of $.89 per share. These warrants are exercisable through
December 31, 2002.
During fiscal 1996, the Company utilized a stock brokerage firm, which is
100% owned by its CEO, to execute certain transactions on its behalf.
However, NBI uses another unrelated company to act as custodian and clearing
firm for its investment assets. Gross revenues earned by the brokerage firm
related to investment transactions by NBI in fiscal 1996, totaled $89,000 on
purchase and sale transactions totaling $26,988,000 before fees.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
On August 11, 1995, NBI, Inc., as approved by its Board of Directors,
dismissed the firm of Ernst & Young, LLP and on August 17, 1995, engaged the
firm of BDO Seidman, LLP as its principal accountant. During the two fiscal
years ended June 30, 1994, and the subsequent period preceding the dismissal
of Ernst & Young, LLP, there were no disagreements on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure. The reports of Ernst & Young, LLP, on the financial statements of
the Company at and for the years ended June 30, 1993 and 1994 did not contain
an adverse opinion or a disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principles. The Company
has received a letter from Ernst & Young, LLP addressed to the SEC stating
that it agrees with the above statements. A copy of this letter, dated August
17, 1995, was filed as an exhibit to the Company's report on Form 10-KSB for
the fiscal year ended June 30, 1995.
BDO Seidman, LLP has been selected as the Company's principal accountant
for the fiscal year ending June 30, 1997. A representative of BDO Seidman,
LLP will not be present at the annual meeting and, therefore, will neither
have the opportunity to make a statement nor be available to answer questions.
PROPOSALS FOR VOTING
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors recommends that the stockholders vote FOR the
reelection of the two incumbent directors as discussed under "Election of
Directors."
<PAGE>
PROPOSAL 2: APPROVAL OF AMENDMENTS TO THE COMPANY'S EMPLOYEE AND DIRECTOR
STOCK OPTION PLAN
The Board of Directors has approved, and recommends that stockholders
approve, certain amendments to the Company's Employee and Director Stock
Option Plan (the "Plan"). The Plan was originally adopted in February 1992 in
connection with the Company's reorganization. In December 1995, the Board of
Directors determined that certain amendments should be made in the Plan to
make options to be granted more meaningful, given the Company's active
operations and employee force at the subsidiary level. The primary purposes
of those amendments are to permit the grant of incentive stock options and
provide the ability to grant options at fair market value (now that there is
an active and fairly steady public market for the stock). In September 1996,
the Board adopted an additional amendment that makes clear that stockholder
approval of amendments is required only if required by law or the rules of an
exchange or trading system on which the common stock is traded. The
amendments to the Plan are set forth below and a copy of the Amended and
Restated Employee and Director Stock Option Plan is attached as Exhibit A to
this Proxy Statement.
1. The last sentence of Section 1 of the Plan was amended to read:
The options granted under the Plan are intended to be either incentive or
non-qualified stock options, as those terms are understood in the Internal
Revenue Code of 1986, a amended (the "Code").
2. Section 3 of the Plan was amended to add in the fourth line
thereof before the word "granted" the word "initially."
3. Section 4(a) of the Plan was amended so that the first sentence
thereof reads:
(a) The Plan shall be administered by the Board of Directors of the
Corporation (the "Board"), or if available, a committee of "disinterested"
members of the Board consisting of not less than two members appointed by the
Board and serving at the Board's pleasure (the "Committee").
4. The first part of the second sentence of Section 4(b) of the Plan
was amended to read:
"The Board shall have the power to interpret or amend or discontinue the
Plan, except that any amendment which, under state or federal law or the
applicable rules of any exchange or trading system on which the common stock
is traded, would require stockholder approval shall take effect only upon such
approval;
5. Section 5(a) of the Plan was amended in the first sentence to remove
the word "Non-Qualified" and as follows in the third sentence thereof:
The purchase price per share of an Employee Option shall be no less than the
"fair market value" (as that term is defined in Section 9, below) and no more
than 150% of the "fair market value" of the common Stock on the date of grant
of such Employee Option (except if the "fair market value" is determined
pursuant to clause (iv) of Section 9, the purchase price per share shall be
150% of the "fair market value" on the date of grant).
6. Section 5 (a) was further amended so that after the chart in the
second paragraph thereof, the words "unless otherwise provided by the Board"
were added.
7. Section 9 was amended in clause (iii) thereof to read "(iii) if
the Company's Common Stock is reported or listed on any regional or other
system or exchange, the closing price per share of Common Stock, as reported
by such system or exchange, or".
8. Sections 3, 5, 7, 8 and 10 (c) were amended by deleting certain
references to Director and Management Options.
<PAGE>
DESCRIPTION OF THE PLAN
General. The Plan was adopted for the purpose of granting employees
and directors options to purchase common stock so that they may have the
opportunity to participate in the growth of the Company and to provide them
with an increased incentive to promote the interests of the Company.
Administration of the Plan. The plan is administered by the Board of
Directors (the "Board") or, if available, a committee of disinterested members
of the Board. The Board may from time to time adopt such rules and
regulations as it deems advisable for the administration of the Plan, and may
alter, amend or rescind any such rules and regulations in its discretion. The
Board has the power to interpret, amend or discontinue the Plan.
Grant of Options. Options may be granted under the Plan for a total of
2,000,000 shares of Common Stock. Of these, 1,100,000 were granted to
officers and directors in 1992, all of which have expired. Any additional
grants of options may be made only to employees of the Company and any parent
or subsidiary. The Board determines the terms of options granted under the
Plan, including the type of option (which can be incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or non-qualified stock options), the exercise price, the
number of shares subject to the option, and the exercisability thereof. The
Board also determines, at the time of grant, the period during which the
option will be exercisable.
Terms and Conditions of Options. The Board may impose on an option any
additional terms and conditions which it deems advisable and which are not
inconsistent with the Plan. The exercise price of any stock option granted
under the Plan must not be less than 100% or more than 150% of the fair market
value of a share of Common Stock on the date of grant, except that as to an
optionee who at the time an incentive stock option is granted owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, the exercise price of such incentive stock option must
be at least equal to 110% of the fair market value of the shares as of the
date prior to the date of the grant. In addition, no incentive stock option
can be granted to any employee where the aggregate fair market value of the
shares (determined at the date of such option grant) for which such incentive
stock options are exercisable for the first time in any calendar year exceeds
$100,000. In connection with a merger, sale of all of the Company's assets,
or other transaction which results in the replacement of the Company's Common
Stock with the stock of another corporation, the Board may terminate stock
options, accelerate the exercise date of stock options, or provide for the
assumption or replacement of stock options with comparable options of such
other corporation.
Exercise of Options. An optionee may exercise less than all of the
matured portion of an option, in which case such unexercised, matured portion
shall continue to remain exercisable, subject to the terms of the Plan, until
the option terminates.
FEDERAL INCOME TAX CONSEQUENCES.
Incentive Stock Options. The Company anticipates that all options
granted under the Plan and treated by the Company as "incentive stock
options," that is, a stock option described in Section 422 of the Code, will
have the following anticipated (but not guaranteed) federal income tax
consequences, among others:
The optionee will recognize no income at the time of grant.
Upon exercise of the incentive stock option, no income will result to any
party.
If there is no disposition of the shares until a date that is both (i) two
years from the grant of an incentive stock option and (ii) one year from its
exercise, no amount will be ordinary income and, upon disposition in a taxable
transaction, the employee will receive long-term capital gain or loss
treatment equal to the difference between his amount realized and the option
price. Any gain realized upon a disposition other than as set forth above may
result in ordinary income tax treatment to the optionee.
Generally, the Company receives no deduction in connection with the
transaction.
<PAGE>
Certain optionees may incur alternative minimum tax treatment under the Code
upon exercise of an incentive stock option.
Non-qualified Stock Options. The Company anticipates that all
non-qualified stock options granted under the Plan will have the following
anticipated (but not guaranteed) federal income tax consequences, among
others;
The optionee will recognize no income at the time of grant.
Upon exercise of the non-qualified stock option, the individual to whom the
option is granted should be deemed to receive ordinary income at the time of
exercise equal to the excess, if any, of the fair market value of the acquired
shares at such time over the option price for such shares.
If the shares acquired upon the exercise of a non-qualified stock option are
disposed of in a taxable transaction, the individual disposing of such shares
will have a realized and recognized capital gain or loss equal to the
difference, if any, between the amount realized and the adjusted basis of such
shares to him. Such gain or loss will be long-term or short-term depending on
whether or not such shares are held for longer than six months. The adjusted
basis usually (but not always) will include the option price plus any ordinary
income described in (b) with respect to such shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENTS
TO THE COMPANY EMPLOYEE AND DIRECTOR STOCK OPTION PLAN.
Approval of the amendments to the Company Employee and Director Stock
Option Plan requires the affirmative vote of a majority of the shares of
common stock outstanding on the record date.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters to be
presented at the annual meeting other than those described above. However, if
any other matters properly come before the meeting, it is intended that any
shares voted by proxy will be voted in the discretion of the Board of
Directors.
<PAGE>
STOCKHOLDER PROPOSALS
In accordance with the rules of the Securities and Exchange Commission
("SEC"), any proposal of a stockholder intended to be presented at the
Company's 1997 Annual Meeting of Stockholders must be received by the Company,
to the attention of the Secretary, 1880 Industrial Circle, Suite F, Longmont,
Colorado 80501, by June 24, 1997, in the form and subject to the other
requirements of the applicable rules of the SEC, in order for the proposal to
be considered for inclusion in the Company's notice of meeting, proxy
statement and proxy relating to the 1997 Annual Meeting.
ANNUAL REPORT - FINANCIAL STATEMENTS
A copy of the Company's 1996 Annual Report, including financial
statements for years ended June 30, 1996 and 1995, is being mailed to all
stockholders herewith. The Form 10-KSB is not to be regarded as proxy
solicitation material or as a communication by means of which any solicitation
is to be made.
By order of the Board of Directors
Marjorie A. Cogan
Secretary
Dated: October 22, 1996
<PAGE>
EXHIBIT A
AMENDED AND RESTATED
EMPLOYEE AND DIRECTOR STOCK OPTION PLAN
1. PURPOSE. THE PURPOSE OF THIS EMPLOYEE AND DIRECTOR STOCK
OPTION PLAN (THE "PLAN") IS TO GRANT TO CERTAIN EMPLOYEES AND THOSE ASSOCIATED
AS DIRECTORS WITH NBI, INC., A DELAWARE CORPORATION (THE "CORPORATION"),
OPTIONS TO PURCHASE ITS COMMON STOCK (THE "COMMON STOCK") SO THAT THEY MAY
HAVE THE OPPORTUNITY TO PARTICIPATE IN THE GROWTH OF THE CORPORATION AND TO
PROVIDE SUCH EMPLOYEES AND DIRECTORS WITH AN INCREASED INCEN-TIVE TO PROMOTE
THE INTERESTS OF THE CORPORATION. THE OPTIONS GRANTED UNDER THE PLAN ARE
INTENDED TO BE EITHER INCENTIVE OR NON-QUALIFIED STOCK OPTIONS, AS THOSE TERMS
ARE UNDERSTOOD IN THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
2. ELIGIBLE PERSONS. EMPLOYEES AND DIRECTORS OF THE CORPORATION
OR OF ANY PARENT OR SUBSIDIARY OF THE CORPORATION SHALL BE ELIGIBLE TO BE
GRANTED OPTIONS UNDER THE PLAN. "PARENT" AND "SUBSIDIARY" SHALL HAVE THE
MEANINGS DEFINED IN SECTION 425 OF THE CODE.
3. STOCK SUBJECT TO PLAN. SUBJECT TO THE PROVISIONS OF SECTION
10, THE MAXIMUM AGGREGATE NUMBER OF SHARES FOR WHICH OPTIONS MAY BE GRANTED
AND SOLD UNDER THE PLAN IS 2,000,000 SHARES OF COMMON STOCK, WHICH MAY BE
AUTHORIZED, BUT UNISSUED, OR REACQUIRED COMMON STOCK. OF THE 2,000,000
SHARES, 1,100,000 SHARES SHALL BE INITIALLY GRANTED TO EXISTING MANAGEMENT
("MANAGEMENT OPTIONS") AND MEMBERS OF THE BOARD OF DIRECTORS ("DIRECTOR
OPTIONS"), AND 900,000 MAY BE GRANTED TO ANY EMPLOYEE OF THE CORPORATION. IF
ANY OPTION SHOULD EXPIRE OR BECOME UNEXERCISABLE FOR ANY REASON WITHOUT HAVING
BEEN EXER-CISED IN FULL, THE UN-PURCHASED SHARES WHICH WERE SUBJECT THERETO,
UNLESS THE PLAN HAS BEEN TERMINATED, SHALL BECOME AVAILABLE FOR FUTURE GRANT
AND SALE UNDER THE PLAN AS EMPLOYEE OPTIONS. NO EMPLOYEE OPTION MAY BE
GRANTED UNDER THE PLAN MORE THAN 10 YEARS AFTER THE ADOPTION OF THE PLAN BY
THE BOARD.
4. ADMINISTRATION.
(a) THE PLAN SHALL BE ADMINISTERED BY THE BOARD OF DIRECTORS
OF THE CORPORATION (THE "BOARD"), OR IF AVAILABLE, A COMMITTEE OF
"DISINTERESTED" MEMBERS OF THE BOARD CONSISTING OF NOT LESS THAN TWO MEMBERS
APPOINTED BY THE BOARD AND SERVING AT THE BOARD'S PLEASURE (THE "COMMITTEE").
A "DISINTERESTED" DIRECTOR IS A DIRECTOR WHICH MEETS THE "DISINTERESTED
ADMINISTRATOR" REQUIREMENTS OF RULE 16B-3 OF THE SECURITIES EXCHANGE ACT OF
1934 (THE "EXCHANGE ACT"), INCLUDING THE REQUIREMENT THAT, DURING THE ONE YEAR
PERIOD PRIOR TO SERVICE AS AN ADMINISTRATOR OF THE PLAN, SUCH DIRECTOR HAS NOT
BEEN GRANTED OR AWARDED EQUITY SECURITIES PURSUANT TO THE PLAN OR ANY OTHER
PLAN OF THE COMPANY OR ITS PARENT OR SUBSIDIARIES EXCEPT AS MAY BE PERMITTED
BY RULE 16B-3(C)(2) OF THE EXCHANGE ACT OR ANY SUCCESSOR TO SUCH RULE. AS
USED HEREIN, THE TERM BOARD SHALL ALSO MEAN SUCH COMMITTEE OF THE BOARD.
(b) THE BOARD MAY FROM TIME TO TIME ADOPT SUCH RULES AND
REGULATIONS AS IT MAY DEEM ADVISABLE FOR THE ADMINISTRATION OF THE PLAN, AND
MAY ALTER, AMEND, OR RESCIND ANY SUCH RULES AND REGULATIONS IN ITS DISCRETION.
THE BOARD SHALL HAVE THE POWER TO INTERPRET OR AMEND OR DISCONTINUE THE PLAN,
EXCEPT THAT ANY AMENDMENT WHICH, UNDER STATE OR FEDERAL LAW OR THE APPLICABLE
RULES OF ANY EXCHANGE OR TRADING SYSTEM ON WHICH THE COMMON STOCK IS TRADED,
WOULD REQUIRE STOCKHOLDER APPROVAL SHALL TAKE EFFECT ONLY UPON SUCH APPROVAL;
AND FURTHER PROVIDED THAT WITHOUT THE WRITTEN CONSENT OF AN OPTIONEE, NO
AMENDMENT OR DISCONTINUANCE OF THE PLAN SHALL ALTER OR IMPAIR ANY OPTION
PREVIOUSLY GRANTED TO SUCH OPTIONEE UNDER THE PLAN, SUBJECT TO ANY PROVISIONS
OTHERWISE IN THE PLAN. ALL DECISIONS MADE BY THE BOARD IN THE ADMINISTRATION
AND INTERPRETATION OF THE PLAN SHALL BE BINDING AND CONCLUSIVE FOR ALL
PURPOSES. NO MEMBER OF THE BOARD SHALL BE LIABLE FOR ANY ACTION TAKEN OR
DECISIONS MADE BY HIM OR HER IN GOOD FAITH WITH RESPECT TO THE PLAN OR ANY
OPTIONS GRANTED UNDER IT.
(c) ONCE APPOINTED, THE COMMITTEE SHALL CONTINUE TO SERVE
UNTIL OTHERWISE DIRECTED BY THE BOARD. SUBJECT TO THE FOREGOING AND SECTION
4(A), FROM TIME TO TIME THE BOARD MAY INCREASE THE SIZE OF THE COMMITTEE AND
APPOINT ADDITIONAL MEMBERS THEREOF, REMOVE MEMBERS (WITH OR WITHOUT CAUSE) AND
APPOINT NEW MEMBERS IN SUBSTITU-TION THEREFOR, FILL VACANCIES HOWEVER CAUSED,
OR REMOVE ALL MEMBERS OF THE COMMITTEE AND THEREAFTER DIRECTLY ADMINISTER THE
PLAN.
<PAGE>
5. PRICE, TERMS AND CONDITIONS OF OPTIONS.
(a) EMPLOYEE OPTIONS. EMPLOYEE OPTIONS SHALL BE EVIDENCED
BY A WRITTEN EMPLOYEE STOCK OPTION AGREEMENT IN THE FORM ATTACHED HERETO AND
INCORPORATED HEREIN. THE NUMBER OF SHARES WHICH MAY BE PURCHASED UNDER SUCH
EMPLOYEE OPTION, THE OPTION'S GRANT DATE AND THE PURCHASE PRICE PER SHARE,
SHALL BE DESIGNATED BY THE BOARD AT THE TIME THE OPTION IS GRANTED. THE
PURCHASE PRICE PER SHARE OF AN EMPLOYEE OPTION SHALL BE NO LESS THAN THE "FAIR
MARKET VALUE" (AS THAT TERM IS DEFINED IN SECTION 9, BELOW) AND NO MORE THAN
150% OF THE "FAIR MARKET VALUE" OF THE COMMON STOCK ON THE DATE OF GRANT OF
SUCH EMPLOYEE OPTION (EXCEPT IF THE "FAIR MARKET VALUE" IS DETERMINED PURSUANT
TO CLAUSE (IV) OF SECTION 9, THE PURCHASE PRICE PER SHARE SHALL BE 150% OF THE
"FAIR MARKET VALUE" ON THE DATE OF GRANT).
Employee Options granted under the Plan shall mature and become
exercisable as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Period of Time Percentage of Shares for
After Date Which Employee Options
of Grant May Be Exercised
-------------- -------------------------
12 months 25%
24 months 50%
36 months 75%
48 months 100%
</TABLE>
unless otherwise provided by the Board.
An optionee may exercise less than all of the matured portion of the
option, in which case such unexercised, matured portion shall remain
exercisable, subject to the terms of the Plan, until the option terminates as
provided in Section 8, below. The Board may impose on any option any
additional terms and conditions which it deems advisable and which are not
inconsistent with the Plan.
6. TRANSFERABILITY. AN OPTION GRANTED UNDER THE PLAN SHALL NOT
BE TRANSFER-ABLE BY THE INDIVIDUAL TO WHOM IT IS GRANTED OTHERWISE THAN BY
WILL OR THE LAWS OF DESCENT AND DISTRIBUTION, AND SHALL BE EXERCISABLE, DURING
THE LIFETIME OF SUCH INDIVIDUAL, ONLY BY HIM; PROVIDED, HOWEVER, THAT IF SUCH
INDIVIDUAL BECOMES LEGALLY DISABLED, HIS LEGAL REPRE-SENTATIVE MAY EXERCISE
THE OPTION ON HIS BEHALF.
7. EXERCISE OF OPTIONS. EXERCISE OF AN OPTION SHALL BE
ACCOMPLISHED BY DELIVERY TO THE CORPORATION BEFORE THE OPTION'S EXPIRATION OF
WRITTEN NOTICE, SIGNED BY THE HOLDER OF THE OPTION, SPECIFYING THE NUMBER OF
SHARES WITH RESPECT TO WHICH THE OPTION IS EXERCISED, THE TYPE OF OPTION BEING
EXERCISED, AND BY FULL PAYMENT OF THE PURCHASE PRICE FOR THE SHARES. THE
PURCHASE PRICE MAY, AT THE CORPORATION'S DISCRETION, BE PAID BY (I) ASSIGNMENT
TO THE CORPORATION OF OUTSTANDING SHARES OF COMMON STOCK OF THE CORPORATION
OWNED BY THE OPTIONEE WHICH ARE EQUAL IN VALUE AS OF THE EXER-CISE DATE TO THE
PURCHASE PRICE OR THAT PORTION THEREOF BEING PAID IN OUTSTANDING STOCK, OR
(II) BEING CREDITED BY THE CORPORATION FOR SHARES THE OPTIONEE HAS A RIGHT TO
ACQUIRE IN THE OPTION BEING EXERCISED WHICH ARE EQUAL IN VALUE AS OF THE
EXERCISE DATE TO THE PURCHASE PRICE OR THAT PORTION THEREOF BEING PAID IN
KIND. IN EITHER CASE, THE CERTIFICATE ISSUED SHALL REFLECT THE NUMBER OF
SHARES AFTER PAYMENT OF THE EXERCISE PRICE. AN OPTION MAY NOT BE EXERCISED
FOR A FRACTION OF A SHARE OF COMMON STOCK. AT THE CORPORATION'S REQUEST, THE
NOTICE OF EXERCISE DELIVERED TO IT SHALL CONTAIN A REPRESENTATION THAT THE
SHARES ARE BEING PURCHASED FOR INVESTMENT ONLY AND NOT FOR RESALE OR
DISTRIBUTION. WITHIN A REASONABLE TIME AFTER RECEIPT OF THE PROPERLY EXECUTED
NOTICE OF EXERCISE, THE CORPORATION SHALL CAUSE TO BE ISSUED AND DELIVERED TO
THE HOLDER OF THE OPTION A CERTIFICATE FOR THE NUMBER OF SHARES OF COMMON
STOCK BEING PURCHASED; PROVIDED, HOWEVER, THAT THE CORPORATION MAY IN ITS
DISCRETION ALLOW THE OPTIONEE TO ELECT TO PAY ANY WITHHOLDING TAXES PAYABLE
UPON EXERCISE OF AN OPTION, IN WHOLE OR IN PART, BY TRANSFERRING TO THE
CORPORATION SHARES OF COMMON STOCK OF THE CORPORATION OWNED BY HIM OR BY BEING
CREDITED BY THE CORPORATION FOR SHARES HE HAS A RIGHT TO ACQUIRE IN THE OPTION
BEING EXERCISED WHICH ARE EQUAL IN VALUE TO THE TAXES PAYABLE.
Options shall not be exercisable unless the purchase of such
optioned shares is pursuant to an applicable effective registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), or
unless, in the opinion of counsel to the Corporation, the proposed purchase of
such shares would be exempt from the registration requirements of the
Securities Act and from the registration or qualification require-ments of
applicable state securities laws.
<PAGE>
8. EXPIRATION OF OPTIONS. EACH EMPLOYEE OPTION GRANTED UNDER
THE PLAN SHALL EXPIRE THE EARLIER OF (I) FIVE (5) YEARS FROM THE DATE THE
OPTION IS GRANTED, OR (II) THREE MONTHS FOLLOWING THE TERMINATION, FOR ANY
REASON OTHER THAN DEATH OR DISA-BILITY, OF THE EMPLOYMENT BY THE CORPORATION,
OR BY ITS PARENT OR SUBSIDIARY, OF THE EMPLOYEE TO WHOM THE EMPLOYEE OPTION IS
GRANTED, OR (III) ONE YEAR FOLLOWING THE TERMI-NATION ON ACCOUNT OF DEATH OR
DISABILITY (AS DEFINED IN SECTION 22(E)(3) OF THE CODE) OF THE EMPLOYMENT BY
THE CORPORATION, OR BY ITS PARENT OR SUBSIDIARY, OF THE EMPLOYEE TO WHOM THE
EMPLOYEE OPTION IS GRANTED. IN THE EVENT OF THE TERMINATION OF EMPLOYMENT BY
THE CORPORATION (OF AN EMPLOYEE TO WHOM AN EMPLOYEE OPTION IS GRANTED) ON
ACCOUNT OF HIS DEATH OR DISABILITY, THE EMPLOYEE SHALL FOR PURPOSES OF THE
FOREGOING REQUIREMENT BE CONSIDERED TO HAVE COMPLETED THE NEXT FULL VESTING
PERIOD OF EMPLOYMENT WITH RESPECT TO THE VESTING PERIOD IN WHICH HIS DEATH OR
DISABILITY OCCURS.
9. DEFINITION OF FAIR MARKET VALUE. FOR THE PURPOSES OF THIS
PLAN, "FAIR MARKET VALUE" SHALL MEAN: (I) THE AVERAGE OF THE CLOSING BID AND
ASK PRICE PER SHARE OF COMMON STOCK OF THE CORPORATION ON THE DATE OF GRANT,
AS REPORTED BY THE NATIONAL ASSOCIATION OF SECURITIES DEALERS AUTOMATED
QUOTATION SYSTEM OR (II) IF THE COMPANY'S COMMON STOCK IS LISTED ON A NATIONAL
SECURITIES EXCHANGE, THE CLOSING PRICE AS REPORTED BY THE WALL STREET JOURNAL
ON THE DATE OF GRANT, OR (III) IF THE COMPANY'S COMMON STOCK IS REPORTED OR
LISTED ON ANY REGIONAL OR OTHER SYSTEM OR EXCHANGE, THE CLOSING PRICE PER
SHARE OF COMMON STOCK ON THE DATE OF GRANT, AS REPORTED BY SUCH SYSTEM OR
EXCHANGE, OR (IV) IF THE COMPANY'S COMMON STOCK IS NOT REPORTED PURSUANT TO
(I), (II) OR (III) ABOVE, FOR THE 60 TRADING DAYS REFERENCED IN PARAGRAPH
5(A), THE VALUE OF THE SHARES OF COMMON STOCK SHALL BE DETERMINED BY THE BOARD
OF DIRECTORS BASED UPON SUCH FACTORS AS THE BOARD DEEMS RELEVANT.
10. STOCK SPLITS, DISSOLUTIONS, MERGERS, ETC.
(a) IN CASE OF ANY STOCK SPLIT, STOCK DIVIDEND OR SIMILAR
TRANSACTION WHICH INCREASES OR DECREASES THE NUMBER OF OUTSTANDING SHARES OF
THE CORPORATION'S COMMON STOCK, APPROPRIATE ADJUSTMENT WILL BE MADE TO BOTH
THE NUMBER OF SHARES WHICH MAY BE PURCHASED UNDER THE PLAN AND THE NUMBER AND
EXERCISE PRICE PER SHARE OF COMMON STOCK WHICH MAY BE PURCHASED UNDER ANY
OUTSTANDING OPTIONS.
(b) IN THE EVENT OF THE PROPOSED DISSOLUTION OR LIQUIDATION OF
THE COMPANY, ALL OPTIONS WILL BE DEEMED TERMINATED IMMEDIATELY PRIOR TO THE
CONSUMMATION OF SUCH PROPOSED ACTION, UNLESS OTHERWISE PROVIDED BY THE BOARD.
THE BOARD MAY, IN THE EXERCISE OF ITS SOLE DISCRETION IN SUCH INSTANCES, GIVE
EACH OPTIONEE THE RIGHT TO EXERCISE HIS OPTION PRIOR TO THE CONSUMMATION OF
SUCH ACTION AS TO ALL OR ANY PART OF THE COMMON STOCK SUBJECT TO SUCH OPTION,
INCLUDING SHARES AS TO WHICH THE OPTION WOULD NOT OTHERWISE BE EXERCISABLE.
(c) IN THE CASE OF ANY SALE OF ALL OR SUBSTANTIALLY ALL OF THE
ASSETS OF THE CORPORATION, OR OF ANY MERGER OR OTHER TRANSACTION WHICH RESULTS
IN THE REPLACEMENT OF THE CORPORATION'S COMMON STOCK WITH THE STOCK OF ANOTHER
CORPORATION, THE BOARD MAY PROVIDE FOR THE EXPIRATION OF ANY EMPLOYEE OPTION,
FOR THE ACCELERATION OF THE EXERCISE DATE OF ANY EMPLOYEE OPTION TO THE DAY
IMMEDIATELY PRECEDING THE CLOSING DAY OF SUCH EVENT, OR FOR THE ASSUMPTION OR
REPLACEMENT OF ANY EMPLOYEE OPTIONS WITH COMPARABLE OPTIONS TO PURCHASE THE
STOCK OF SUCH OTHER CORPORATION.
11. RIGHTS AS OPTION HOLDER. NO PERSON SHALL HAVE ANY RIGHTS AS
A STOCKHOLDER WITH RESPECT TO ANY SHARES COVERED BY AN OPTION UNTIL THE DATE
OF THE ISSUANCE OF A STOCK CERTIFICATE(S) FOR THE SHARES FOR WHICH THE OPTION
HAS BEEN EXERCISED. NO ADJUSTMENTS SHALL BE MADE FOR DIVIDENDS OR
DISTRIBUTIONS OR OTHER RIGHTS FOR WHICH THE RECORD DATE IS PRIOR TO THE DATE
SUCH STOCK CERTIFICATE(S) ARE ISSUED, EXCEPT AS PROVIDED IN SECTION 10.
NOTHING IN THIS PLAN OR IN ANY OPTION AGREEMENT SHALL CONFER UPON ANY OPTIONEE
ANY RIGHTS TO CONTINUE IN THE EMPLOY OF THE CORPORATION OR SHALL AFFECT THE
CORPORATION'S ABILITY TO TERMINATE THE OPTIONEE'S EMPLOYMENT AT ANY TIME.
12. EFFECTIVE DATE. THE PLAN SHALL TAKE EFFECT UPON THE FIRST
BUSINESS DAY THAT IS AT LEAST ELEVEN (11) DAYS (AS CALCULATED PURSUANT TO
BANKRUPTCY RULE 9006A) AFTER THE DATE OF CONFIRMATION OF THE CORPORATION'S
PLAN OF REORGANIZATION BY THE U.S. BANKRUPTCY COURT FOR THE DISTRICT OF
COLORADO.
EFFECTIVE DATE: February 17, 1992
AMENDED: December 11, 1995
AMENDED: September 30, 1996
<PAGE>
APPENDIX TO PROXY STATEMENT
FORM OF PROXY
PROXY SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF NBI, INC.
For Annual Meeting on December 2, 1996
The undersigned hereby appoints Marjorie A. Cogan and Jay H. Lustig, or
either of them, attorneys and proxies for the undersigned, with full power of
substitution, to vote all shares of capital stock of NBI, Inc. (the "Company")
held of record by the undersigned on October 8, 1996, at the Annual Meeting of
Stockholders of NBI, Inc., to be held at the offices of Equibond, Inc., 100
Wilshire Boulevard, Suite 1700, Santa Monica, California, on Monday, December
2, 1996, at 2:00 p.m. Pacific Time, and at any adjournment or postponement
thereof. The undersigned hereby revokes any proxy or proxies heretofore given
in respect to the same shares of stock.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED ON THE
REVERSE SIDE BY THE UNDERSIGNED WITH RESPECT TO PROPOSALS 1 AND 2. IF NO
DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR SUCH PROPOSALS, AND SUCH
SHARES WILL BE VOTED IN THE DISCRETION OF THE BOARD OF DIRECTORS UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
TO ENSURE A QUORUM, YOU ARE URGED TO DATE AND SIGN THIS PROXY ON THE LINE
PROVIDED AND MAIL IT PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE
SIDE
<PAGE>
X Please Mark votes as in this example
The Board of Directors recommends a VOTE FOR proposals 1 and 2.
1. Election of Directors
Nominees: Jay H. Lustig and Martin J. Noonan.
For Both Nominees
Withheld From Both
Nominees
For all nominees
except as noted above
2. Amendments to the Company's Employee and Director Stock Option Plan.
For
Against
Abstain
3. In their discretion, the above-named proxies are authorized to vote upon
such other business as may properly come before the meeting or any adjournment
or postponement thereof.
MARK HERE
FOR ADDRESS
CHANGE AND
NOTE AT LEFT _____
Please sign as name appears hereon. When shares are held by joint tenants,
both should sign. When signing as attorney, executor, administrator, trustee
or guardian, please give full title as such. If a corporation, please sign in
full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Signature Date
Signature Date
