<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. ____)
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
Preliminary Proxy Statement
/X/ Definitive Proxy Statement
Definitive Additional Materials
Soliciting Materials Pursuant to Sec. 240.14a-11(c) or Sec.
240.14a-12
THE HARPER GROUP, INC.
(Name of Registrant as Specified In Its Charter)
Richard Careaga, Esq.
Orrick, Herrington & Sutcliffe
400 Sansome Street
San Francisco, CA 94111
(415) 773-5797
(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 transaction
computed pursuant to Exchange Act Rule 0-11 (fee
computed under Rule 20a-1(c) of the Investment Company
Act of 1940):
4) Proposed maximum aggregate value of transaction:
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE> 2
[LOGO]
THE HARPER GROUP, INC.
260 TOWNSEND STREET
SAN FRANCISCO, CALIFORNIA 94107
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, MAY 10, 1994, 10:30 A.M.
TO THE STOCKHOLDERS:
Please be advised that the Annual Meeting of Stockholders of The Harper
Group, Inc. will be held at the office of the Company, 260 Townsend Street, San
Francisco, California, on Tuesday, May 10, 1994, at 10:30 a.m. for the following
purposes:
(1) To elect two Class III directors.
(2) To approve the 1994 Omnibus Equity Incentive Plan.
(3) To transact such other business as may properly come before the
meeting.
Only stockholders of record on the books of the Company as of 5:00 P.M.,
March 25, 1994, will be entitled to vote at the meeting and any adjournment
thereof.
San Francisco, California
April 1, 1994
By Order of the Board of Directors
ROBERT H. KENNIS
General Counsel and Secretary
STOCKHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED
PROXY AS PROMPTLY AS POSSIBLE.
<PAGE> 3
THE HARPER GROUP, INC.
260 TOWNSEND STREET
SAN FRANCISCO, CALIFORNIA 94107
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of The Harper
Group, Inc. (the "Company") to be used at the Annual Meeting of Stockholders on
May 10, 1994, for the purposes set forth in the foregoing notice. This proxy
statement and the enclosed form of proxy were first sent to stockholders on or
about April 1, 1994.
If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If the proxy does not specify how the shares
represented thereby are to be voted, the proxy will be voted as recommended by
the Board of Directors. Any stockholder signing a proxy in the form accompanying
this Proxy Statement has the power to revoke it prior to or at the Annual
Meeting. A proxy may be revoked by a writing delivered to the Secretary of the
Company stating that the proxy is revoked, by a subsequent proxy signed by the
person who signed the earlier proxy, or by attendance at the Annual Meeting and
voting in person.
VOTING SECURITIES
Only stockholders of record on the books of the Company as of 5:00 P.M.,
March 25, 1994, will be entitled to vote at the Annual Meeting.
As of the close of business on March 25, 1994, there were outstanding
16,626,553 shares of Common Stock of the Company, entitled to one vote per
share. The holders of a majority of the outstanding shares of the Common Stock
of the Company, present in person or by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting or any adjournment thereof.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the election inspectors appointed for the meeting and will determine whether or
not a quorum is present. The election inspectors will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum but as unvoted for purposes of determining the approval of
any matter submitted to the stockholders for a vote. If a broker indicates on
the proxy that it does not have discretionary authority as to certain shares to
vote on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.
ELECTION OF DIRECTORS
The Certificate of Incorporation and By-laws of the Company provide for a
Board of Directors consisting of not less than three members, divided into three
classes. The size of the Board of Directors may be determined subject to the
foregoing minimum from time to time by the Board of Directors of the Company.
The size of the Board of Directors has currently been established at seven.
Directors elected into a class at the annual meeting of stockholders in
each year serve three-year terms and until their successors have been duly
elected. Directors appointed by the Board of Directors of the Company to fill
vacancies or newly created directorships serve for the remainder of the term of
the class to which they are appointed. The Class III directors elected at the
Annual Meeting will serve until the 1997 Annual Meeting; as described below two
of the three Class II directors elected at last year's Annual Meeting will serve
until the 1996 Annual Meeting; and Class I directors elected at the 1992 Annual
Meeting will serve until the 1995 Annual Meeting.
The persons named below are the nominees to serve as Class III directors
until the 1997 Annual Meeting of Stockholders and until their successors have
been elected and qualified or until death, retirement, resignation or removal.
Of the two nominees, Ray C. Robinson, Jr. was elected at the Annual Meeting held
in
<PAGE> 4
May 1991 and presently serves as Class III director, and John M. Kaiser was
elected at the Annual Meeting held in May 1993 and presently serves as a Class
II director. In order to equalize the number of directors in each class, Mr.
Kaiser has been nominated to serve as a Class III director.
In the absence of instructions to the contrary, shares represented by the
proxy will be voted and the proxies will vote for the election of both such
nominees to the Board of Directors. If either of such persons is unable or
unwilling to be a candidate for the office of director at the date of the Annual
Meeting, or any adjournment thereof, the proxies will vote for such substitute
nominee as shall be designated by the proxies. The management has no reason to
believe that either of such nominees will be unable or unwilling to serve if
elected a director. Set forth below is certain information concerning the
nominees which is based on data furnished by them.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
OWNED AS OF
FEBRUARY 15, 1994
----------------------
SERVED AS NUMBER
BUSINESS EXPERIENCE DURING PAST DIRECTOR OF
NOMINEES FOR DIRECTOR AGE FIVE YEARS AND OTHER INFORMATION SINCE SHARES PERCENT
- ---------------------------- --- ------------------------------------- --------- -------- -------
<S> <C> <C> <C> <C> <C>
Ray C. Robinson, Jr......... 73 Secretary of the Company from 1971 1971 1,750,297(2) 10.5%
until January 1986.(1)
John M. Kaiser.............. 54 Private businessman and real estate 1993 16,000(3) --
developer. From 1979 to 1988,
President of Expeditors International
of Washington, Inc. (international
freight forwarder).
</TABLE>
Set forth below is certain information concerning the other directors which is
based on data furnished by them.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
OWNED AS OF
FEBRUARY 15, 1994
----------------------
SERVED AS NUMBER
BUSINESS EXPERIENCE DURING PAST DIRECTOR OF
CONTINUING DIRECTORS AGE FIVE YEARS AND OTHER INFORMATION SINCE SHARES PERCENT
- ---------------------------- --- ------------------------------------- --------- -------- -------
<S> <C> <C> <C> <C> <C>
Peter Gibert................ 51 Chairman of the Board of Directors 1992 1,165,000(3)(5) 7.0%
and Chief Executive Officer. From
February, 1984 to May 1991, Mr.
Gibert was President and Chief
Executive Officer of Darrell J. Sekin
and Co. (international freight for-
warder).(1)
John H. Robinson............ 71 Private businessman and investor. 1970 1,290,317(4) 7.8%
From 1970 to 1992, Chairman of the
Board of Directors and Chief
Executive Officer of the Company.(1)
Wesley J. Fastiff........... 61 President of Littler, Mendelson, 1971 75,433(3)(6) 0.5%
Fastiff & Tichy, a law firm which was
retained by the Company to perform
legal services in 1993.
Frank J. Wezniak............ 61 Venture capital investor and business 1987 6,685(3) --
consultant. President of Computer
Identics (manufacturer of bar code
identification and data collection
systems) from 1987 to 1992.
All directors and executive
officers as a group
(13 persons).............. 4,346,782(3) 26.1%
</TABLE>
- ------------
(1) The address of John H. Robinson, Ray C. Robinson, Jr. and Peter Gibert is
260 Townsend Street, San Francisco, California 94107. John H. Robinson and
Ray C. Robinson, Jr. are brothers. With the exception of John H. Robinson,
Ray C. Robinson, Jr. and Peter Gibert, the only stockholders who are known
by the Company to own beneficially more than 5% of the Company's Common
Stock are RCM
2
<PAGE> 5
Capital Management which owned beneficially 1,563,550 shares (9.4%) on
December 31, 1993, and Quest Advisory Corp. which owned beneficially 888,086
shares (5.4%) on December 31, 1993. The address of RCM Capital Management is
Four Embarcadero Center, Suite 2900, San Francisco, California 94111; and
the address of Quest Advisory Corp. is 1414 Avenue of the Americas, New
York, New York 10019.
(2) Consists of 1,750,297 shares held by Ray C. Robinson, Jr. and Craig Howard
Robinson as trustees of a revocable trust for the benefit of Ray C.
Robinson, Jr., his wife, and their descendants.
(3) Includes shares subject to stock options exercisable within 60 days.
(4) Excludes 600,000 shares (3.6%) held by First Interstate Bancorp, as trustee
of an irrevocable trust for the benefit of the children of John H. Robinson
and their descendants. As to such excluded shares, Mr. Robinson disclaims
any beneficial interest.
(5) Excludes 147,451 shares (0.9%) held by Jeffrey L. Oerke, as trustee of an
irrevocable trust for the benefit of the children of Peter Gibert and their
descendants. As to such excluded shares, Mr. Gibert disclaims any beneficial
interest.
(6) Includes 69,433 shares held by Wesley J. Fastiff and Bonnie B. Fastiff as
co-trustees of a revocable trust for the benefit of Wesley J. Fastiff, his
wife and their descendants.
FURTHER INFORMATION CONCERNING
THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD
During 1993, the Board of Directors held six meetings. The Company has an
Audit Committee, a Strategic Planning Committee and a Human Resources and
Compensation Committee, but does not have a Nominating Committee.
The members of the Audit Committee are Frank J. Wezniak (Chairman), Marvin
L. Manheim and Wesley J. Fastiff. Among the functions performed by the Audit
Committee are to make recommendations to the Board of Directors with respect to
the engagement or discharge of independent auditors, to review with the
independent auditors the plan and results of the auditing engagement, to review
the Company's internal auditing procedures and system of internal accounting
controls and to make inquiries into matters within the scope of its functions.
During 1993, the Audit Committee held six meetings.
The members of the Strategic Planning Committee are Marvin L. Manheim
(Chairman), John H. Robinson, Peter Gibert and Frank J. Wezniak. The principal
function of the Strategic Committee is to assist in the development of long-term
strategic plans for the Company's business. During 1993, the Strategic Planning
Committee did not meet.
The members of the Human Resources and Compensation Committee are Wesley J.
Fastiff (Chairman), Ray C. Robinson, Jr., Frank J. Wezniak and John M. Kaiser.
Among the functions of the Human Resources and Compensation Committee are to
review and make recommendations to the Board of Directors concerning the
compensation of the key management employees of the Company and to administer
the Company's stock option plans. During 1993, the Human Resources and
Compensation Committee held six meetings.
COMPENSATION OF DIRECTORS
Directors are paid directors fees consisting of $12,000 per year and $500
for each Board meeting attended. Directors who attend meetings of the Audit,
Strategic Planning or Human Resources and Compensation Committee receive an
additional $400 for each meeting. In addition, the Company has a Stock Option
Plan for non-employee directors pursuant to which Messrs. Fastiff, Kaiser,
Manheim and Wezniak have each been granted options to purchase 6,000 shares of
Common Stock; under the terms of this plan, no additional stock options may be
granted to any of the Company's present directors.
3
<PAGE> 6
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1993, the Company retained the law firm of Littler, Mendelson,
Fastiff & Tichy to perform legal services for it. Mr. Fastiff, a director of the
Company and a member of the Human Resources and Compensation Committee, serves
as president of Littler, Mendelson, Fastiff & Tichy.
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The compensation paid to the Company's Chief Executive Officer and four
other most highly compensated executive officers for services in all capacities
to the Company and its subsidiaries during the last three fiscal years is set
forth below.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
OTHER -------------
ANNUAL SECURITIES ALL OTHER
COMPENSA- UNDERLYING COMPENSA-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) TION($)(1) OPTIONS(#) TION($)(3)
- ---------------------------------- ------- --------- -------- --------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Peter Gibert...................... 1993 $ 240,000 $43,000 $22,900(4) -- $5,500
President since May 1991, and 1992 $ 224,000 $43,000 $47,946(4) -- $6,850
Chief Executive Officer since
June 1992
Jack P. Edwards................... 1993 $ 215,000 $40,000 $ 7,500 50,000 $4,700
President and Chief Operating
Officer of North American
operating subsidiaries
Stuart O. Keirle.................. 1993 $ 135,800 $40,000 $ 6,000 -- $3,000
Vice President and Chief 1992 $ 135,800 $35,000 $ 6,000 -- $3,770
Investment Officer 1991 $ 135,800 $38,000 $ 6,000 -- $2,980
Michael E. Cromar................. 1993 $ 150,000 $40,000 $ 5,400 10,000 $3,300
Vice President and Chief
Financial Officer
Martin R. Collins................. 1993 $ 150,000 $40,000 $ 5,400 -- $3,300
Vice President and Treasurer 1992 $ 110,400 $35,000 $ 4,725 30,000(2) $3,070
</TABLE>
- ------------
(1) While the named executive officers enjoy certain perquisites, for fiscal
years 1992 and 1993 these did not exceed the lesser of $50,000 or 10% of
each officer's salary and bonus. Information for years prior to fiscal 1992
is not required to be disclosed.
(2) Includes options held by Mr. Collins to purchase 10,000 shares, which were
repriced during 1993.
(3) The amounts shown consist of Company contributions under the Company's
profit sharing plan which has been qualified under sections 401 and 501 of
the Internal Revenue Code of 1986, as amended, and covers employees who, as
of any December 31, have completed at least one year of service.
(4) Includes directors fees and for 1992 relocation expenses.
4
<PAGE> 7
OPTIONS GRANTED TO EXECUTIVE OFFICERS
The following table sets forth certain information regarding stock options
granted during 1993 to the executive officers named in the foregoing Summary
Compensation Table.
OPTION GRANTS
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
---------------------------------------------------- ANNUAL RATES OF
NUMBER OF STOCK PRICE
SECURITIES PERCENT OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED EXERCISE OR OPTION TERM(4)
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME GRANTED(1) FISCAL YEAR ($/SH)(2) DATE(3) 5%($) 10%($)
- ----------------------- --------- ---------------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Peter Gibert........... -- -- -- -- -- --
Jack P. Edwards........ 50,000 39.7% $ 14.25 2001 $ 340,187 $ 814,807
Stuart O. Keirle....... -- -- -- -- -- --
Michael E. Cromar...... 10,000 7.9% $ 14.25 2001 $ 68,037 $ 162,961
Martin R. Collins...... -- -- -- -- -- --
</TABLE>
- ------------
(1) All options granted in fiscal 1993 are exercisable in annual increments at
25%, commencing three years from date of grant. Under the terms of the
Company's Stock Option Plan, the Human Resources and Compensation Committee
retains discretion, subject to plan limits, to modify the terms of
outstanding options.
(2) All options were granted at fair market value (average of high and low stock
prices for the Company's common stock as reported in the Western edition of
The Wall Street Journal) at date of grant.
(3) All options granted in fiscal 1993 were granted for a term of eight years.
(4) Realizable values are reported net of the option exercise price. The dollar
amounts under these columns are the result of calculations at the 5% or 10%
rates (determined from the price at the date of grant, not the stock's
current market value) set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if any,
of the Company's stock price. Actual gains, if any, on stock option
exercises are dependent on the future performance of the Common Stock as
well as the optionholder's continued employment through the vesting period.
The potential realizable value calculation assumes that the optionholder
waits until the end of the option term to exercise the option.
REPORT OF THE HUMAN RESOURCES AND COMPENSATION COMMITTEE ON REPRICING OF OPTIONS
Although the Company has historically relied principally on salary and
bonus, rather than stock options, to compensate its executives, the Human
Resources and Compensation Committee (the "Committee") nonetheless considers
stock options to be an important compensation tool for motivating and retaining
key executives. During 1993, management advised the Committee that the
effectiveness of certain stock options previously granted on March 23, 1991 to
the Company's employees had been diminished as a result of the decline in the
price of the Company's stock below $22 per share, the price at which such
options had been previously granted. The Committee considered this problem and
concluded that such options should be repriced in order to achieve their purpose
of providing a long-term incentive to key employees, most of whom were employed
in field offices in operations and sales positions. At its meeting held on
December 14, 1993, the Committee determined that the most effective way to deal
with the problem and to realign the interests of the options holders with those
of the Company's current stockholders would be to reduce the price of the
outstanding options granted on March 23, 1992 to the then prevailing market
value. Accordingly, on December 14, 1993, the Company amended the terms of
outstanding option agreements governing an aggregate of 146,450 shares to reduce
the exercise price from $22 to $16. Among the optionees whose options
5
<PAGE> 8
were repriced were two executive officers: Messrs. Collins (options to purchase
10,000 shares) and Kennis (options to purchase 3,500 shares).
Human Resources and Compensation
Committee
WESLEY J. FASTIFF, CHAIRMAN
FRANK J. WEZNIAK
RAY C. ROBINSON, JR.
JOHN M. KAISER
February 28, 1994
The Company has not previously repriced options to purchase stock during
the prior ten years. Set forth below is certain information regarding the
repricing of options held by the two executive officers whose options were
repriced.
TEN-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
ORIGINAL
MARKET PRICE EXERCISE OPTION TERM
NUMBER OF OF STOCK AT PRICE REMAINING
OPTIONS/SARS TIME OF AT TIME OF NEW AT DATE OF
REPRICED OR REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME DATE AMENDED(#) AMENDMENT($) AMENDMENT($) PRICE($) AMENDMENT
- ------------------------ --------- ------------ ------------ ------------ -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Martin R. Collins....... 12/14/93 10,000 $16.00 $22.00 $16.00 6.25 years
Robert H. Kennis........ 12/14/93 3,500 $16.00 $22.00 $16.00 6.25 years
</TABLE>
There were no option exercises during 1993 by any of the executive officers
listed. The following table sets forth certain information with respect to stock
options held by each of the listed executive officers as of December 31, 1993.
YEAR-END OPTION VALUE TABLE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END($) OPTIONS AT FY-END($)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------------------------------------------------------ -------------------------
<S> <C> <C>
Peter Gibert....................... 37,500/-- $ 25,000/--
Jack P. Edwards.................... --/50,000 --/$187,500
Stuart O. Keirle................... 17,250/ 2,250 $141,782/$ 16,782
Michael E. Cromar.................. --/10,000 --/$ 37,500
Martin R. Collins.................. --/30,000 --/$ 85,000
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has employment agreements with two of the executive officers
named in the foregoing compensation table. The Company has an employment
agreement with Peter Gibert, expiring in May 1996, pursuant to which Mr. Gibert
is employed as the Company's President and Chief Executive Officer. Under the
terms of this agreement, Mr. Gibert is guaranteed a minimum salary of $16,000
per month subject to future increases in the discretion of the Board of
Directors and a bonus equal to the greater of (i) $43,000 or (ii) 10% of the
amount by which the Company's consolidated net profit before taxes exceeds 110%
of the consolidated profit before taxes for the prior year. The agreement with
Mr. Gibert provides for severance pay equal to six months salary plus the
minimum bonus of $43,000 in the event that the agreement expires at the end of
its term and Mr. Gibert's employment with the Company is not continued. Further
details regarding Mr. Gibert's compensation are described in the report of the
Human Resources and Compensation Committee on Executive Compensation set forth
below. The Company has an employment agreement with Stuart Keirle expiring in
September 1997 pursuant to which Mr. Keirle is employed as a Vice President.
Under the terms of this agreement, Mr. Keirle is guaranteed a minimum base
salary of $8,334 per month subject to annual review in accordance with existing
corporate policies and a bonus to be determined by the Board of Directors.
6
<PAGE> 9
In addition, the Company has entered into a consulting agreement with John
H. Robinson which provides for Mr. Robinson to serve as a consultant to the
Company until December 31, 1994. The agreement provides that Mr. Robinson will
be paid at the rate of $10,000 per month and will also be entitled to receive
certain other benefits, including the use of an office and secretary in the
Company's headquarters.
TRANSACTIONS WITH THE COMPANY
John Robinson serves as a Director of Intercargo Corporation
("Intercargo"), which is engaged in the business of underwriting specialized
insurance coverages for international trade, including U.S. Customs bonds. John
Robinson owns 19,800 shares of common stock of Intercargo, and the Company
previously owned 1,006,484 shares of common stock of Intercargo, all of which
were sold during 1993. During 1993, the Company placed approximately $691,700 of
insurance business with Intercargo and received $267,000 in insurance
commissions and fees from Intercargo.
In February 1989, Peter Gibert executed a Promissory Note (the "Note") in
the principal amount of $717,944 in favor of Darrell J. Sekin & Co. ("Sekin").
The Note provides for semi-monthly payments of principal and interest (accruing
annually at 9.25%) and a maturity date of February 15, 1994. Payments under the
Note terminated in May 1991 when the Company acquired all of the outstanding
shares of Sekin. In June, 1993 the Company agreed to defer the payments of
principal and interest until the termination of the Employment Agreement between
Mr. Gibert and the Company which is described in the Human Resources and
Compensation Committee Report on Executive Compensation. Additionally, the
interest rate on the Note was reduced to 5% effective June, 1993. As of December
31, 1993, unpaid principal and accrued interest on the Note aggregated $313,335.
HUMAN RESOURCES AND COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Human Resources and Compensation Committee (the "Committee") of the
Board of Directors is composed entirely of independent directors, none of whom
is an officer or employee of the Company or any of its subsidiaries. The
Committee is responsible for establishing the Company's compensation policies,
administering the Company's stock option plans, and reviewing the Company's
salary, profit sharing and incentive arrangements generally. In addition, the
Committee reviews the compensation levels of the executive officers of the
Company, including the Chief Executive Officer, and evaluates their performance.
The Committee reviews with the Board the significant aspects of compensation for
the executive officers of the Company.
In discharging our responsibilities as members of the Human Resources and
Compensation Committee, our objective is to establish policies which will
enhance the long-term performance and growth of the Company, enable the Company
to attract and retain outstanding executives and employees, and provide
meaningful incentives without subjecting the Company to excessive costs. The
Company has historically relied principally on cash payments in the form of
salary and incentive payments to motivate its key executives and managers, and
secondarily on employee stock options.
The compensation policy of the Company, which is endorsed by the Committee,
is that a substantial portion of the annual compensation of each officer should
relate to and be contingent upon the performance of the Company, as well as the
individual contribution of each officer. As a result, a substantial portion of
each executive officer's compensation is "at risk" in the form of incentive
compensation, which is awarded based on performance of the individual and the
Company (or the appropriate business unit managed by the executive officer) for
the year in question. The determination of incentive compensation is based on a
qualitative evaluation of the individual's contribution to the Company's
performance, and is also tied to meeting or exceeding business plan income
projections.
Peter Gibert's base salary for 1993 was based on his rights under his
five-year employment agreement with the Company dated May 21, 1991 (the
"Employment Agreement") described elsewhere in the Company's proxy statement.
The Employment Agreement established Mr. Gibert's initial and minimum
7
<PAGE> 10
annual base salary at $192,000, subject to annual review by the Committee. The
Committee concluded that it was appropriate to increase Mr. Gibert's salary to
$20,000 per month effective May 1, 1992 -- an increase of $4,000 per month from
the minimum level specified in the Employment Agreement. This continues to be
Mr. Gibert's base salary. In addition, the Employment Agreement provides that
for 1993 Mr. Gibert is entitled to receive a bonus equal to the greater of (i)
$43,000 or (ii) 10% of the amount by which the Company's consolidated net profit
before taxes for 1993 exceeds 110% of the consolidated net profit before taxes
for 1992. For 1993, the bonus will be $43,000. (Mr. Gibert's aggregate salary
and bonus for 1993 was approximately 30% below the average of salaries and
bonuses for CEO's in the peer group companies presented in the stock price
performance graph, based on data reported for the year 1992 in the proxy
statements of such companies.)
The perquisites and other benefits received by Mr. Gibert that are reported
in the Summary Compensation Table are provided pursuant to his Employment
Agreement. No stock options were granted to Mr. Gibert in 1992 or 1993, although
options to purchase 37,500 shares of Common Stock were granted to Mr. Gibert
upon the execution of his Employment Agreement in May 1991.
Human Resources and Compensation
Committee
WESLEY J. FASTIFF, Chairman
FRANK J. WEZNIAK
RAY C. ROBINSON, JR.
JOHN M. KAISER
February 28, 1994
8
<PAGE> 11
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total stockholder return on its Common Stock with the cumulative
total return of the NASDAQ Market Index and a peer group index consisting of the
Company, Expeditors International of Washington, Inc., Intertrans Corporation,
Air Express International Corporation and Airborne Freight Corporation. The
performance graph shown below is not necessarily indicative of future
performance.
<TABLE>
<CAPTION>
Measurement Period The Harper NASDAQ Market Peer Group
(Fiscal Year Covered) Group Index Index
<S> <C> <C> <C>
1988 100 100 100
1989 134 121 143
1990 130 103 128
1991 228 165 213
1992 167 192 230
1993 184 219 283
</TABLE>
OWNERSHIP OF MANAGEMENT
The following table indicates, as to each named executive officer, the
number of shares and percentage of the Company's Common Stock beneficially owned
as of December 31, 1993.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY
OWNED
AS OF DECEMBER 31, 1993
---------------------------
NUMBER
OF
NAME SHARES PERCENT
- ------------------------------------------------------- -------- -------
<S> <C> <C>
Peter Gibert........................................... 1,165,000(1)(2) 7.0%
Jack P. Edwards........................................ 17,000 --
Stuart O. Keirle....................................... 18,250(3) --
Michael E. Cromar...................................... -- --
Martin R. Collins...................................... -- --
</TABLE>
- ------------
(1) Excludes 147,451 shares (0.9%) held by Jeffrey L. Oerke, as trustee of an
irrevocable trust for the benefit of the children of Peter Gibert and their
descendants. As to such excluded shares, Mr. Gibert disclaims any beneficial
interest.
(2) Includes 37,500 shares issuable upon exercise of outstanding options
exercisable within 60 days of December 31, 1993.
(3) Includes 17,250 shares issuable upon exercise of outstanding options
exercisable within 60 days of December 31, 1993.
9
<PAGE> 12
PROPOSAL TO APPROVE THE 1994 OMNIBUS EQUITY INCENTIVE PLAN
On February 28, 1994, the Company established the 1994 Omnibus Equity
Incentive Plan (the "Plan") pursuant to which an aggregate of 750,000 shares of
the Company's Common Stock was reserved for issuance to key employees and
consultants of the Company and its subsidiaries. The Plan is subject to
stockholder approval at the Annual Meeting. The following summary of the
principal features of the Plan is qualified in its entirety by the full text of
the Plan, which appears as Exhibit A to this Proxy Statement.
General
The Plan provides for the granting of stock options, stock appreciation
rights ("SARs"), restricted stock awards, performance unit awards and
performance share awards (collectively, "Awards") to key employees and
consultants of the Company and its subsidiaries (i.e., any corporation or other
entity in which the Company owns, directly or indirectly, at least 50% of the
total combined voting power or other equity thereof). In general, if an Award
expires or is cancelled, without having been fully exercised or vested, the
shares covered thereby are again available for grant.
Purpose
The purpose of the Plan is to promote the success, and enhance the value,
of the Company by linking the personal interests of participating employees and
consultants to those of the Company's stockholders and by providing such
employees and consultants with an incentive for outstanding performance. The
Plan is further intended to provide flexibility to the Company in its ability to
motivate, attract and retain the services of participating employees and
consultants upon whose judgment, interest and special efforts the Company is
largely dependent for the successful conduct of its operations.
Eligibility to Receive Awards
Key employees of the Company and its subsidiaries, and persons who provide
significant services to the Company or its subsidiaries, but who are neither
employees of the Company or its subsidiaries nor directors of the Company
("consultants") are eligible to be granted Awards under the Plan. However,
incentive stock options (see below) may be granted only to employees. The
Company and its subsidiaries have approximately 3,025 employees. The actual
number of employees and consultants who will receive Awards under the Plan is
not determinable because eligibility for participation in the Plan is in the
discretion of the Committee (see below).
Administration, Amendment and Termination
The Plan is administered by the Human Resources and Compensation Committee
of the Board of Directors of the Company (the "Committee"). Members of the
Committee generally are not eligible to receive options or stock under the Plan
or any other plan of the Company or any subsidiary. The Committee has the sole
discretion to determine the key employees and consultants who shall be granted
Awards, the size and types of such Awards, the terms and conditions of such
Awards, and to construe and interpret the Plan and the written Award agreements.
The Company's Board of Directors may alter, amend or terminate the Plan at any
time and for any reason, provided that certain material amendments (for example,
a significant increase in benefits) must be approved by stockholders.
Options
The price of the shares of the Company's Common Stock subject to each
option (the "option price") is set by the Committee but may not be less than 50%
of the fair market value on the date of grant in the case of an option that is
not an incentive stock option (a "nonqualified stock option"), and not less than
100% of the fair market value in the case of an incentive stock option. However,
the exercise price of an incentive stock option may not be less than 110% of the
fair market value on the date of grant if, at the time of grant, the optionee
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any of its subsidiaries. Also, the aggregate
fair market value of the shares (determined at the time
10
<PAGE> 13
of grant) with respect to which incentive stock options are exercisable for the
first time by any optionee during any calendar year (under all plans of the
Company and its subsidiaries) may not exceed $100,000.
Options granted under the Plan are exercisable at the times and on the
terms established by the Committee, provided that options granted to officers
who are subject to section 16(b) of the Securities and Exchange Act of 1934 (the
"Exchange Act") may not be exercised until six months following the date of
grant. Subject to the foregoing limitation, the Committee may accelerate the
exercisability of any option.
Options expire at the times established by the Committee but may not be
exercised after the expiration date set forth in the related stock option
agreement. In addition, no incentive stock option may be exercised after the
expiration of 10 years from the date of its grant or after the expiration of
five years from the date of its grant if granted to an employee who owns stock
possessing more than 10% of the total combined voting power of all classes of
the stock of the Company or any of its subsidiaries. The Committee, in its
discretion, may extend the maximum term of any option granted under the Plan.
Manner of Exercise of Options
The option price must be paid in full in cash or its equivalent at the time
of exercise. The Committee also may permit payment of the option price by the
tender of previously acquired shares of the Company's stock or such other legal
consideration which the Committee determines to be consistent with the Plan's
purpose and applicable law. Any taxes required to be withheld also must be paid
at the time of exercise.
Stock Appreciation Rights
The Plan permits the grant of three types of SARs: Affiliated SARs,
Freestanding SARs, Tandem SARs, or any combination thereof. An Affiliated SAR is
an SAR that is granted in connection with a related option and which will be
deemed to automatically be exercised simultaneous with the exercise of the
related option. A Freestanding SAR is an SAR that is granted independently of
any options. A Tandem SAR is an SAR that is granted in connection with a related
option, the exercise of which requires a forfeiture of the right to purchase a
share under the related option (and when a share is purchased under the option,
the SAR is similarly cancelled).
The Committee has complete discretion to determine the number of SARs
granted to any optionee or recipient and the terms and conditions pertaining to
such SARs. However, the grant price must be at least equal to the fair market
value of a share of the Company's Common Stock on the date of grant in the case
of a Freestanding SAR and equal to the option price of the related option in the
case of an Affiliated or Tandem SAR. An SAR that is granted to an officer who is
subject to section 16(b) of the Exchange Act ("Section 16(b)") may not be
exercised until at least six months following the date of grant.
Exercise of SARs
A Tandem SAR may be exercised only with respect to the shares for which its
related option is then exercisable. Affiliated SARs will be deemed to be
exercised upon the exercise of the related options. The deemed exercise of
Affiliated SARs will not necessitate a reduction in the number of related
options. Freestanding SARs will be exercisable on such terms and conditions as
are determined by the Committee.
Payment of SAR Amount
Upon exercise of an SAR, an optionee or recipient will be entitled to
receive payment from the Company in an amount determined by multiplying: (a) the
difference between the fair market value of a share on the date of exercise over
the grant price; times (b) the number of shares with respect to which the SAR is
exercised. Any such payment may be in cash, shares of Common Stock, or in some
combination thereof, as determined by the Committee.
11
<PAGE> 14
Restricted Stock Awards
The Plan permits the grant of restricted stock awards which are restricted
Common Stock bonuses that vest in accordance with terms established by the
Committee. Restricted Stock granted to an officer subject to Section 16(b) may
not vest prior to six months following the date of its grant. The Committee may
impose restrictions and conditions on the shares, including, without limitation,
restrictions based upon the achievement of specific performance goals
(Company-wide, divisional and/or individual), and/or restrictions under
applicable federal or state securities laws. The Committee may accelerate the
time at which any restrictions lapse, and/or remove any restrictions. During the
lifetime of the recipient, all rights with respect to the restricted stock
granted to the recipient under the Plan will be available only to such
recipient.
Performance Unit/Share Awards
The Plan permits the grant of performance unit and performance share awards
which are bonuses credited to an account established for the recipient and
payable in cash, Common Stock, or a combination thereof. Each performance unit
has an initial value that is established by the Committee at the time of its
grant. Each performance share has an initial value equal to the fair market
value of a share of the Company's Common Stock on the date of its grant. The
number and/or value of performance units/shares that will be paid out to
recipients will depend upon the extent to which performance goals established by
the Committee are satisfied. The payment date for performance unit/share awards
granted to officers and directors subject to Section 16(b) may not be less than
six months from the date of grant.
After a performance unit/share award has vested, the recipient will be
entitled to receive a payout of the number of performance units/shares earned by
the recipient, to be determined as a function of the extent to which the
corresponding performance goals have been achieved. The Committee also may waive
the achievement of any performance goals for such performance unit/share.
Subject to the applicable award agreement, performance units/shares awarded
to recipients will be forfeited to the Company upon the earlier of the
recipient's termination of employment or the date set forth in the award
agreement.
Nontransferability of Awards
Awards granted under the Plan may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
applicable laws of descent and distribution. However, an optionee or recipient
may designate one or more beneficiaries to receive any exercisable or vested
Awards following his or her death.
Tax Aspects
Based on management's understanding of current federal income tax laws, the
tax consequences of the grant of Awards under the Plan are as follows.
A recipient of an option or SAR under the Plan will not have taxable income
at the time of grant, but will have ordinary income upon the exercise of such
option or right in an amount equal to the excess of the fair market value of the
shares over the option price (the "appreciation value") on the date of exercise.
Any gain or loss recognized upon any later disposition of the shares generally
will be capital gain or loss.
Purchase of shares upon the exercise of an incentive stock option generally
will not result in any taxable income to the optionee. If the optionee holds the
shares transferred upon exercise for a specified period, then any gain or loss
recognized by the optionee on a later sale or other disposition generally will
be long-term capital gain or loss. If the optionee does not hold the shares for
such period, the optionee generally will recognize ordinary income for the year
in which the disposition occurs in the amount (if any) by which the lesser of
the fair market value of such shares on the date of the exercise of the option
or the amount realized from the sale exceeds the option price.
12
<PAGE> 15
A recipient of a restricted stock award under the Plan will not have
taxable income upon the receipt of the restricted stock but instead will
recognize ordinary income when the shares vest, unless the recipient elects to
be taxed at the time of grant of the restricted stock. The amount of ordinary
income will be equal to the fair market value of the shares when they become
vested (or the value on the grant date should the recipient elect to be taxed at
the time of grant).
A recipient of a performance unit/share award will not realize taxable
income at the time of grant. Instead, the recipient generally will recognize
ordinary income on the payment date equal to the fair market value of the shares
and/or cash received. Any gain or loss recognized upon the sale or exchange of
shares acquired pursuant to a performance unit/share award generally will be
treated as capital gain or loss and will be long-term or short-term depending
upon the holding period of the shares.
The Company will be entitled to a tax deduction in connection with an Award
under the Plan only in an amount equal to the ordinary income realized by the
optionee or recipient and at the time such optionee or recipient recognizes such
income, and if applicable withholding requirements are met.
New Plan Benefits
Regulations recently adopted by the Securities and Exchange Commission
require disclosure of benefits to the executive officers of the Company named in
the summary compensation table and to certain other categories of award
recipient, if such benefits are determinable. Although it is likely that
substantial grants will be made to the Company's executive officers and others
during the life of the Plan, it is impossible to determine the amount or terms
of such future grants.
Required Vote
The adoption of the Plan requires the affirmative vote of a majority of the
shares represented and voting, in person or by proxy, at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE 1994 OMNIBUS EQUITY INCENTIVE STOCK PLAN.
SECTION 16(A) INFORMATION
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent 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 ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the period from
January 1, 1993 to December 31, 1993 all filing requirements applicable to its
officers, directors, and greater than ten-percent beneficial owners were
complied with except that John Robinson failed to report the total number of
shares sold in an open market transaction and corrected this by filing a late
report.
AUDITORS
Deloitte & Touche, independent certified public accountants, serves as the
Company's principal accountants. Representatives of Deloitte & Touche will be
present at the Annual Meeting with the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
13
<PAGE> 16
OTHER MATTERS
As of the date of this Proxy Statement, there are no other matters which
management intends to present or has reason to believe others will present to
the meeting. If other matters properly come before the meeting, those who act as
proxies will vote in accordance with their judgment.
STOCKHOLDER PROPOSALS
If any stockholder intends to present a proposal for action at the
Company's 1995 Annual Meeting and wishes to have such proposal set forth in
management's proxy statement, such stockholder must forward the proposal to the
Company so that it is received on or before December 2, 1994. Proposals should
be addressed to the Company at 260 Townsend Street, San Francisco, California
94107, Attention: Corporate Secretary.
COST OF SOLICITATION
All expenses in connection with the solicitation of this proxy, including
the charges of brokerage houses and other custodians, nominees or fiduciaries
for forwarding documents to stockholders, will be paid by the Company.
Dated: April 1, 1994.
By Order of the Board of Directors
ROBERT H. KENNIS, Secretary
14
<PAGE> 17
EXHIBIT A
THE HARPER GROUP, INC.
1994 OMNIBUS EQUITY INCENTIVE PLAN
SECTION 1
ESTABLISHMENT, PURPOSE AND DURATION
1.1 Establishment of the Plan. The Harper Group, Inc., a Delaware
corporation (the "Company"), hereby establishes an incentive compensation plan
to be known as the "The Harper Group, Inc. 1994 Omnibus Equity Incentive Plan"
(the "Plan"). The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, SARs, Restricted Stock, Performance Units, and
Performance Shares. The Plan is effective as of February 28, 1994, subject to
ratification by an affirmative vote of the holders of a majority of Shares.
Grants of Awards under the Plan may be made prior to receipt of such vote;
provided, however, that such grants shall be null and void if such vote is not
received.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
success, and enhance the value, of the Company by linking the personal interests
of Participants to those of Company shareholders, and by providing Participants
with an incentive for outstanding performance.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants upon whose
judgment, interest, and special effort the successful conduct of its operation
largely is dependent.
1.3 Duration of the Plan. The Plan shall commence on the date specified
in Section 1.1, and shall remain in effect, subject to the right of the Board of
Directors to terminate the Plan at any time pursuant to Section 13 until all
Shares subject to the Plan have been purchased or acquired pursuant to the
provisions of the Plan. However, without further stockholder approval, no
Incentive Stock Option may be granted under the Plan on or after February 28,
2004.
SECTION 2
DEFINITIONS
The following terms shall have the meanings set forth below, unless plainly
required by the context:
2.1 "Affiliated SAR" means a SAR that is granted in connection with a
related Option, and which will be deemed to automatically be exercised
simultaneous with the exercise of the related Option.
2.2 "Award" means, individually or collectively, a grant under the Plan of
Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock,
Performance Units, or Performance Shares.
2.3 "Award Agreement" means an agreement entered into by each Participant
and the Company, setting forth the terms and provisions applicable to Awards
granted to Participants under this Plan.
2.4 "Board" or "Board of Directors" means the Board of Directors of the
Company.
2.5 "Code" means the Internal Revenue Code of 1986, as amended. Reference
to a specific section of the Code shall include such section, any valid
regulation promulgated thereunder, and any comparable provision of any future
legislation amending, supplementing or superseding such section.
2.6 "Committee" means the committee, as specified in Section 3, appointed
by the Board to administer the Plan with respect to grants of Awards.
2.7 "Company" means The Harper Group, Inc., a Delaware corporation, or any
successor thereto.
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<PAGE> 18
2.8 "Consultant" means any consultant, independent contractor, or other
person who provides significant services to the Company or its Subsidiaries, but
who is neither an employee of the Company or its Subsidiaries, nor a Director of
the Company.
2.9 "Director" means any individual who is a member of the Board of
Directors of the Company.
2.10 "Disability" means a permanent and total disability within the
meaning of Code Section 22(e)(3).
2.11 "Employee" means any employee of the Company or of the Company's
subsidiaries, whether such employee is so employed at the time the Plan is
adopted or becomes so employed subsequent to the adoption of the Plan. Directors
who are not otherwise employed by the Company shall not be considered Employees.
2.12 "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor Act thereto. Reference to a specific section
or regulation of the Exchange Act shall include such section or regulation, any
valid regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such section or
regulation.
2.13 "Fair Market Value" means the average of the highest and lowest
quoted selling prices for Shares on the relevant date, or if there were no sales
on such date, the weighted average of the means between the highest and lowest
quoted selling prices on the nearest day before and the nearest day after the
relevant date, as determined by the Committee.
2.14 "Freestanding SAR" means a SAR that is granted independently of any
Options.
2.15 "Incentive Stock Option" or "ISO" means an option to purchase Shares,
which is designated as an Incentive Stock Option and is intended to meet the
requirements of Section 422 of the Code.
2.16 "Insider" shall mean an Employee who, on the relevant date, is a
Company director, Company officer (within the meaning of Rule 16a-1 promulgated
under the Exchange Act), or beneficial owner of 10% or more of the Shares.
2.17 "Nonqualified Stock Option" or "NQSO" means an option to purchase
Shares which is not intended to be an Incentive Stock Option.
2.18 "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
2.19 "Option Price" means the price at which a Share may be purchased by a
Participant pursuant to an Option, as determined by the Committee.
2.20 "Participant" means an Employee of the Company who has outstanding an
Award granted under the Plan.
2.21 "Performance Unit" means an Award granted to an Employee pursuant to
Section 9.
2.22 "Performance Share" means an Award granted to an Employee, pursuant
to Section 9 herein.
2.23 "Period of Restriction" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance goals, or upon the occurrence of other events as
determined by the Committee, in its discretion), and the Shares are subject to a
substantial risk of forfeiture, as provided in Section 8.
2.24 "Restricted Stock" means an Award granted to a Participant pursuant
to Section 8.
2.25 "Retirement" shall have the meaning for each respective individual
Participant ascribed to it in the pension plan of the Company applicable to each
such respective Participant.
2.26 "Shares" means the shares of common stock of the Company.
2.27 "Stock Appreciation Right" or "SAR" means an Award, granted alone or
in connection with a related Option, designated as a SAR, pursuant to the terms
of Section 7.
2.28 "Subsidiary" means any corporation in which the Company owns
directly, or indirectly through subsidiaries, at least fifty percent (50%) of
the total combined voting power of all classes of stock, or any other
A-2
<PAGE> 19
entity (including, but not limited to, partnerships and joint ventures) in which
the Company owns at least fifty percent (50%) of the combined equity thereof.
2.29 "Tandem SAR" means a SAR that is granted in connection with a related
Option, the exercise of which shall require forfeiture of the right to purchase
a Share under the related Option (and when a Share is purchased under the
Option, a SAR shall similarly be cancelled).
2.30 "Window Period" means the period beginning on the third business day
following the date of public release of the Company's quarterly sales and
earnings information, and ending on the twelfth business day following such
date.
SECTION 3
ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Committee. The
Committee shall consist of not less than two (2) Directors. The members of the
Committee shall be appointed from time to time by, and shall serve at the
pleasure of, the Board of Directors. The Committee shall be comprised solely of
Directors who are "disinterested persons" under Rule 16b-3 under the Exchange
Act.
3.2 Authority of the Committee. The Committee shall have full power,
except as limited by law or by the Certificate of Incorporation or Bylaws of the
Company, and subject to the provisions herein, to determine the size and types
of Awards; to determine the terms and conditions of such Awards in a manner
consistent with the Plan; to construe and interpret the Plan and any Award
Agreement or instrument entered into under the Plan; to establish, amend, or
waive rules and regulations for the Plan's administration; and (subject to the
provisions of Section 13 herein) to amend the terms and conditions of any
outstanding Award to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan. Further, the Committee
shall make all other determinations which may be necessary or advisable for the
administration of the Plan. As permitted by law, the Committee may delegate its
powers; provided, however, that only the Committee may administer the Plan with
respect to Insiders.
3.3 Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board of Directors shall be final, conclusive, and binding on
all persons, including the Company, its shareholders, Employees, Participants,
and their estates and beneficiaries, and shall be given the maximum deference
permitted by law.
SECTION 4
SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment as provided in Section 4.3,
the total number of Shares available for grant under the Plan may not exceed
750,000. These 750,000 Shares may be either authorized but unissued or
reacquired Shares.
The following rules will apply for purposes of the determination of the
number of Shares available for grant under the Plan:
(a) While an Award is outstanding, it shall be counted against the
authorized pool of Shares, regardless of its vested status.
(b) The grant of an Option or Restricted Stock shall reduce the Shares
available for grant under the Plan by the number of Shares subject to
such Award.
(c) The grant of a Tandem SAR shall reduce the number of Shares available
for grant by the number of Shares subject to the related Option (i.e.,
there is no double counting of Options and their related Tandem SARs);
provided, however, that, upon the exercise of such Tandem SAR, the
authorized Share pool shall be credited with the appropriate number of
Shares representing the number of shares reserved for such Tandem SAR
less the number of Shares actually delivered upon exercise
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<PAGE> 20
thereof or the number of Shares having a Fair Market Value equal to the
cash payment made upon such exercise.
(d) The grant of an Affiliated SAR shall reduce the number of Shares
available for grant by the number of Shares subject to the SAR, in
addition to the number of Shares subject to the related Option;
provided, however, that, upon the exercise of such Affiliated SAR, the
authorized Share pool shall be credited with the appropriate number of
Shares representing the number of shares reserved for such Affiliated
SAR less the number of Shares actually delivered upon exercise thereof
or the number of Shares having a Fair Market Value equal to the cash
payment made upon such exercise.
(e) The grant of a Freestanding SAR shall reduce the number of Shares
available for grant by the number of Freestanding SARs granted;
provided, however, that, upon the exercise of such Freestanding SAR,
the authorized Share pool shall be credited with the appropriate number
of Shares representing the number of shares reserved for such
Freestanding SAR less the number of Shares actually delivered upon
exercise thereof or the number of Shares having a Fair Market Value
equal to the cash payment made upon such exercise.
(f) The Committee shall in each case determine the appropriate number of
Shares to deduct from the authorized pool in connection with the grant
of Performance Units and/or Performance Shares.
(g) To the extent that an Award is settled in cash rather than in Shares,
the authorized Share pool shall be credited with the appropriate number
of Shares having a Fair Market Value equal to the cash settlement of
the Award.
4.2 Lapsed Awards. If any Award granted under this Plan is cancelled,
terminates, expires, or lapses for any reason (with the exception of the
termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem SAR),
any Shares subject to such Award again shall be available for the grant of an
Award under the Plan. However, in the event that prior to the Award's
cancellation, termination, expiration, or lapse, the holder of the Award at any
time received one or more "benefits of ownership" pursuant to such Award (as
defined by the Securities and Exchange Commission, pursuant to any rule or
interpretation promulgated under Section 16 of the Exchange Act), the Shares
subject to such Award shall not be made available for regrant under the Plan.
4.3 Adjustments in Authorized Shares. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, Share combination, or other change in the corporate
structure of the Company affecting the Shares, such adjustment shall be made in
the number and class of Shares which may be delivered under the Plan, and in the
number and class of and/or price of Shares subject to outstanding Options, SARs,
and Restricted Stock granted under the Plan, as may be determined to be
appropriate and equitable by the Committee, in its sole discretion, to prevent
dilution or diminishment of Awards; and provided that the number of Shares
subject to any Award shall always be a whole number.
SECTION 5
ELIGIBILITY AND PARTICIPATION
5.1 Eligibility. Persons eligible to participate in this Plan include all
Employees and Consultants of the Company and its Subsidiaries, as determined by
the Committee, including Employees who are members of the Board, but excluding
Directors who are not Employees.
5.2 Actual Participation. Subject to the provisions of the Plan, the
Committee in its sole discretion, shall select from all eligible Employees and
Consultants, those to whom Awards shall be granted, and the Committee, in its
sole discretion, shall determine the nature and amount of each Award.
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<PAGE> 21
SECTION 6
STOCK OPTIONS
6.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Employees and Consultants at any time and from time to
time as shall be determined by the Committee. The Committee shall have
discretion in determining the number of Shares subject to Options granted to
each Participant. The Committee may grant ISOs, NQSOs, or a combination thereof.
6.2 Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, the conditions of exercise of the
Options, and such other provisions as the Committee shall determine. The Award
Agreement also shall specify whether the Option is intended to be an ISO or a
NQSO.
6.3 Option Price. The Option Price for each grant of an Option shall be
determined by the Committee in its sole discretion.
6.3.1 Nonqualified Stock Options. In the case of a Nonqualified Stock
Option, the Option Price shall be not less than fifty percent (50%) of the Fair
Market Value of a Share on the date that the Option is granted.
6.3.2 Incentive Stock Options. In the case of an Incentive Stock Option,
the Option Price shall be not less than one-hundred percent of the Fair Market
Value of a Share on the date that the Option is granted; provided, however, that
if at the time the Option is granted, the Employee (together with persons whose
stock ownership is attributed to the Employee pursuant to Section 424(d) of the
Code) owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any of its Subsidiaries, the Option Price
shall be not less than one-hundred and ten percent (110%) of the Fair Market
Value of a Share on the date that the Option is granted.
6.4 Duration of Options. Each Option shall expire at such time as the
Committee, in its sole discretion, shall determine; provided, however, that no
Incentive Stock Option may be exercised after the expiration of 10 years from
the date the Option was granted; provided, further, no Incentive Stock Option
granted to an Employee who, together with persons whose stock ownership is
attributed to the Employee pursuant to Section 424(d) of the Code, owns stock
possessing more than 10% of the total combined voting power of all classes of
the stock of the Company or any of its Subsidiaries, may be exercised after the
expiration of 5 years from the date the Option was granted. After the Option is
granted, the Committee, in its sole discretion, may extend the maximum term of
such Option.
6.5 Exercise of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee, in its sole discretion, shall determine. After an Option is
granted, the Committee, in its sole discretion, may accelerate the
exercisability of the Option. However, in no event may any Option granted to an
Insider be exercisable until six (6) months following the date of its grant.
6.6 Payment. Options shall be exercised by the Participant's delivery of
a written notice of exercise to the Secretary of the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full in cash or its equivalent. The Committee, in its sole
discretion, also may permit exercise (a) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to the total
Option Price (provided that the Shares which are tendered must have been held by
the Participant for at least six (6) months prior to their tender to satisfy the
Option Price), or (b) by any other means which the Committee, in its sole
discretion, determines to provide legal consideration for the Shares, and to be
consistent with the Plan's purpose and applicable law.
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As soon as practicable after receipt of a written notification of exercise
and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).
6.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option under
the Plan, as it may deem advisable, including, without limitation, restrictions
under applicable Federal securities laws, under the requirements of any national
securities exchange or system upon which such Shares are then listed and/or
traded, and under any blue sky or state securities laws applicable to such
Shares.
6.8 Certain Additional Provisions for Incentive Stock Options.
6.8.1 Exercisability. The aggregate Fair Market Value (determined at the
time the Option is granted) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by any Employee during any calendar
year (under all plans of the Company and its Subsidiaries) shall not exceed
$100,000.
6.8.2 Termination of Employment. No Incentive Stock Option may be
exercised more than three months after the Participant's termination of
employment for any reason other than Disability or death, unless (a) the
Participant dies during such three-month period, and (b) the Award Agreement
permits later exercise. No Incentive Stock Option may be exercised more than one
year after the Participant's termination of employment on account of Disability,
unless (a) the Participant dies during such one-year period, and (b) the Award
Agreement permits later exercise.
6.8.3 Employees Only. Incentive Stock Options may be granted only to
persons who are Employees at the time of grant. Consultants shall not be
eligible to receive Incentive Stock Options.
6.9 Nontransferability of Options. No Option granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will, the laws of descent and distribution, or as allowed under
Section 10. All Options granted to a Participant under the Plan shall be
exercisable during his or her lifetime only by such Participant.
SECTION 7
STOCK APPRECIATION RIGHTS
7.1 Grant of SARs. Subject to the terms and conditions of the Plan, a SAR
may be granted to an Employee or Consultant at any time and from time to time as
shall be determined by the Committee, in its sole discretion. The Committee may
grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination
thereof.
The Committee shall have complete discretion to determine the number of
SARs granted to any Participant, and consistent with the provisions of the Plan,
the terms and conditions pertaining to such SARs. However, the grant price of a
Freestanding SAR shall be at least equal to the Fair Market Value of a Share on
the date of grant of the SAR. The grant price of Tandem or Affiliated SARs shall
equal the Option Price of the related Option. In no event shall any SAR granted
to an Insider become exercisable within the first six (6) months after the date
it was granted.
7.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Price of the underlying ISO
and the Fair Market Value of the Shares subject to the underlying ISO at the
time the Tandem SAR is exercised; and (iii) the Tandem
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SAR may be exercised only when the Fair Market Value of the Shares subject to
the ISO exceeds the Option Price of the ISO.
7.3 Exercise of Affiliated SARs. Affiliated SARs shall be deemed to be
exercised upon the exercise of the related Options. The deemed exercise of
Affiliated SARs shall not necessitate a reduction in the number of related
Options.
7.4 Exercise of Freestanding SARs. Freestanding SARs shall be exercisable
on such terms and conditions as shall be determined by the Committee, in its
sole discretion.
7.5 SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the grant price, the term of the SAR, the
conditions of exercise and such other provisions as the Committee, in its sole
discretion, shall determine.
7.6 Term of SARs. The term of a SAR granted under the Plan shall be
determined by the Committee, in its sole discretion.
7.7 Payment of SAR Amount. Upon exercise of a SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The difference between the Fair Market Value of a Share on the date of
exercise over the grant price; times
(b) The number of Shares with respect to which the SAR is exercised.
At the discretion of the Committee, the payment upon SAR exercise may be in
cash, in Shares of equivalent value, or in some combination thereof.
7.8 Rule 16b-3 Requirements. Notwithstanding any other provision of the
Plan, the Committee may impose such conditions on exercise of a SAR (including,
without limitation, the right of the Committee to limit the time of exercise to
specified periods) as may be required to satisfy the requirements of Rule 16b-3
promulgated under the Exchange Act.
For example, if the Participant is an Insider, the ability of the
Participant to exercise SARs for cash will be limited to the Window Periods
during each year. However, if the Committee determines that the Participant no
longer is an Insider, or if the Federal securities laws change to permit
Insiders greater freedom of exercise of SARs, then the Committee may permit
Insiders to exercise SARs at other times.
7.9 Nontransferability of SARs. No SAR granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will, the laws of descent and distribution, or as permitted under
Section 10. Further, all SARs granted to a Participant under the Plan shall be
exercisable during his or her lifetime only by such Participant.
SECTION 8
RESTRICTED STOCK
8.1 Grant of Restricted Stock. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to eligible Employees and Consultants in such amounts as the
Committee, in its sole discretion, shall determine.
8.2 Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by an Award Agreement that shall specify the Period (or Periods) of
Restriction, the number of Restricted Stock Shares granted, and such other terms
and conditions as the Committee, in its sole discretion, shall determine.
8.3 Transferability. Except as provided in this Section 8, Shares of
Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Period of Restriction
established by the Committee and specified in the Award Agreement, or upon
earlier satisfaction of any other conditions, as specified by the Committee in
its sole discretion and set forth in the Award Agreement. However, in no event
may any Restricted Stock granted to an Insider become vested in a
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Participant prior to six (6) months following the date of its grant. All rights
with respect to the Restricted Stock granted to a Participant under the Plan
shall be available during his or her lifetime only to such Participant.
8.4 Other Restrictions. The Committee, in its sole discretion, may impose
such other restrictions on any Shares of Restricted Stock as it may deem
advisable including, without limitation, restrictions based upon the achievement
of specific performance goals (Company-wide, divisional, and/or individual),
and/or restrictions under applicable Federal or state securities laws; and may
legend the certificates representing Restricted Stock to give appropriate notice
of such restrictions.
8.5 Certificate Legend. In addition to any legends placed on certificates
pursuant to Section 8.4, each certificate representing Shares of Restricted
Stock shall bear the following legend:
"The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set forth in the The Harper
Group, Inc. 1994 Omnibus Equity Incentive Plan, and in a Restricted Stock
Agreement. A copy of the Plan and such Restricted Stock Agreement may be
obtained from the Secretary of The Harper Group, Inc."
8.6 Removal of Restrictions. Except as otherwise provided in this Section
8, Shares of Restricted Stock covered by each Restricted Stock grant made under
the Plan shall become freely transferable by the Participant after the last day
of the Period of Restriction. The Committee, in its discretion, may accelerate
the time at which any restrictions shall lapse, and/or remove any restrictions.
After the Shares are released from restrictions, the Participant shall be
entitled to have the legend or legends required by Section 8.4 and 8.5 removed
from his or her Share certificate.
8.7 Voting Rights. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares unless otherwise provided in the Award Agreement.
8.8 Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
those Shares while they are so held, unless otherwise provided in the Award
Agreement. If any such dividends or distributions are paid in Shares, the Shares
shall be subject to the same restrictions on transferability and forfeitability
as the Shares of Restricted Stock with respect to which they were paid.
In the event that any dividend or distribution constitutes a "derivative
security" or an "equity security" pursuant to the rules promulgated under
Section 16 of the Exchange Act, such dividend or distribution shall be subject
to a vesting period equal to the longer of: (i) the remaining vesting period of
the Shares of Restricted Stock with respect to which the dividend or
distribution is paid; or (ii) six months. The Committee shall establish
procedures for the application of this provision.
8.9 Return of Restricted Stock to Company. Subject to the applicable
Award Agreement and Section 8.6, upon the earlier of (a) the Participant's
termination of employment, or (b) the date set forth in the Award Agreement, the
Restricted Stock for which restrictions have not lapsed shall revert to the
Company and, subject to Section 4.2, again shall become available for grant
under the Plan.
SECTION 9
PERFORMANCE UNITS AND PERFORMANCE SHARES
9.1 Grant of Performance Units/Shares. Subject to the terms of the Plan,
Performance Units and Performance Shares may be granted to eligible Employees
and Consultants at any time and from time to time, as shall be determined by the
Committee, in its sole discretion. The Committee shall have complete discretion
in determining the number of Performance Units and Performance Shares granted to
each Participant.
9.2 Value of Performance Units/Shares. Each Performance Unit shall have
an initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal
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to the Fair Market Value of a Share on the date of grant. The Committee shall
set performance goals in its discretion which, depending on the extent to which
they are met, will determine the number and/or value of Performance Units/Shares
that will be paid out to the Participants. The time period during which the
performance goals must be met shall be called a "Performance Period."
Performance Periods of Awards granted to Insiders shall, in all cases, exceed
six (6) months in length.
9.3 Earning of Performance Units/Shares. After the applicable Performance
Period has ended, the holder of Performance Units/Shares shall be entitled to
receive a payout of the number of Performance Units/Shares earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding performance goals have been achieved.
Notwithstanding the preceding sentence, after the grant of a Performance
Unit/Share, the Committee, in its sole discretion, may waive the achievement of
any performance goals for such Performance Unit/Share.
9.4 Form and Timing of Payment of Performance Units/Shares. Payment of
earned Performance Units/Shares shall be made in a single lump sum, within
forty-five (45) calendar days following the close of the applicable Performance
Period. The Committee, in its sole discretion, may pay earned Performance
Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market
Value equal to the value of the earned Performance Units/Shares at the close of
the applicable Performance Period) or in a combination thereof.
Prior to the beginning of each Performance Period, Participants may, in the
discretion of the Committee, elect to defer the receipt of any Performance
Unit/Share payout upon such terms as the Committee shall determine.
9.5 Cancellation of Performance Units/Shares. Subject to the applicable
Award Agreement, upon the earlier of (a) the Participant's termination of
employment, or (b) the date set forth in the Award Agreement, all remaining
Performance Units/Shares shall be forfeited by the Participant to the Company,
and subject to Section 4.2, the Shares subject thereto shall again be available
for grant under the Plan.
9.6 Nontransferability. Performance Units/Shares may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further a Participant's
rights under the Plan shall be exercisable during the Participant's lifetime
only by the Participant or the Participant's legal representative.
SECTION 10
BENEFICIARY DESIGNATION
As provided in this Section 10, each Participant under the Plan may name a
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of the Participant's death
before he or she receives any or all of such benefit and/or who may exercise any
vested Award under the Plan following the Participant's death. Each such
designation shall revoke all prior designations by the same Participant and must
be in a form and manner acceptable to the Committee. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall be paid
to the Participant's estate and, subject to the terms of the Plan, any
unexercised vested Award may be exercised by the administrator or executor of
the Participant's estate.
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SECTION 11
DEFERRALS
The Committee, in its sole discretion, may permit a Participant to defer
such Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise of an
Option or SAR, the lapse or waiver of restrictions with respect to Restricted
Stock, or the satisfaction of any requirements or goals with respect to
Performance Units/Shares. Any such deferral elections shall be subject to such
rules and procedures as shall be determined by the Committee from time to time.
SECTION 12
RIGHTS OF EMPLOYEES
12.1 No Effect on Employment or Service. Nothing in the Plan shall
interfere with or limit in any way the right of the Company to terminate any
Participant's employment or service at any time, with or without cause. For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Subsidiaries (or between Subsidiaries) shall not be
deemed a termination of employment.
12.2 Participation. No Employee or Consultant shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.
SECTION 13
AMENDMENT, SUSPENSION, OR TERMINATION
13.1 Amendment, Suspension, or Termination. The Board, in its sole
discretion, may alter, amend or terminate the Plan, or any part thereof, at any
time and for any reason; provided, however, that without further stockholder
approval, no such alteration or amendment shall (a) materially increase the
benefits accruing to participants under the Plan, (b) materially increase the
number of securities which may be issued under the Plan, or (c) materially
modify the requirements as to eligibility for participation in the Plan;
provided, further, that stockholder approval is not required if such approval is
not required in order to assure the Plan's continued qualification under Rule
16b-3 promulgated under the 1934 Act. Neither the amendment, suspension, nor
termination of the Plan shall, without the consent of the Participant, alter or
impair any rights or obligations under any Award theretofore granted. No Award
may be granted during any period of suspension nor after termination of the
Plan.
SECTION 14
WITHHOLDING
14.1 Tax Withholding. Prior to the delivery of any Shares or cash
pursuant to the Plan, the Company shall have the power and the right to deduct
or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any Awards.
14.2 Shares Withholding. The Committee may, in its absolute discretion,
permit a Participant to satisfy such tax withholding obligation, in whole or in
part, by electing to have the Company withhold Shares having a value equal to
the amount required to be withheld or by delivering to the Company already-owned
shares to satisfy the withholding requirement. The amount of the withholding
requirement shall be deemed to include any amount which the Committee agrees may
be withheld at the time the election is made, not to exceed the amount
determined by using the maximum federal, state or local marginal income tax
rates applicable to the Participant with respect to the Award on the date that
the amount of tax to be withheld is to be determined (the "Tax Date"). The value
of the Shares to be withheld or delivered will be based on their Fair Market
Value on the Tax Date. Such elections will be subject to the following
restrictions: (1) the
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election must be made on or before the Tax Date; (2) the election will be
irrevocable; and (3) the election will be subject to the disapproval of the
Committee. Each election by an Optionee or Grantee whose transactions in shares
of Common Stock are subject to Section 16(b) of the Exchange Act will be subject
to the following additional restrictions: (1) the election may not be made
within six months of the grant of the Award (except that this limitation will
not apply in the event the death or disability of the Participant occurs prior
to the expiration of the six-month period), and (2) the election must be made
either at least six months before the Tax Date or within a Window Period.
SECTION 15
INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, motion,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan or
any Award Agreement and against and from any and all amounts paid by him or her
in settlement thereof, with the Company's approval, or paid by him or her in
settlement thereof, with the Company's approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against him
or her, provided he or she shall give the Company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company's Articles of Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.
SECTION 16
SUCCESSORS
All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
SECTION 17
LEGAL CONSTRUCTION
17.1 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
17.2 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
17.3 Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
Notwithstanding any other provision set forth in the Plan, if required by
the then-current Section 16 of the Exchange Act, any "derivative security" or
"equity security" offered pursuant to the Plan to any Insider may not be sold or
transferred for at least six (6) months after the date of grant of such Award.
The terms "equity security" and "derivative security" shall have the meanings
ascribed to them in the then-current rules promulgated under Section 16 of the
Exchange Act.
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17.4 Securities Law Compliance. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan, Award Agreement or action by the Committee fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
17.5 Governing Law. The Plan and all Award Agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of
California.
17.6 Captions. Captions are provided herein for convenience only, and are
not to serve as a basis for interpretation or construction of the Plan.
EXECUTION
IN WITNESS WHEREOF, The Harper Group, Inc., by its duly authorized officer,
has executed the Plan on the date indicated below.
The Harper Group, Inc.
By
Name:
Title:
Dated: February 28, 1994
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[LOGO]
THE HARPER GROUP, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS MAY 10, 1994
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints PETER GIBERT and ROBERT H. KENNIS, or
any of them, each with power of substitution, as proxies of the undersigned, to
attend the Annual Meeting of Stockholders of THE HARPER GROUP, INC. to be held
at the office of the Company at 260 Townsend Street, San Francisco, California,
on May 10, 1994, at 10:30 A.M., and any adjournment thereof, and to vote the
number of shares the undersigned would be entitled to vote if personally
present on the following:
THIS PROXY IS CONTINUED, AND TO BE SIGNED, ON THE REVERSE SIDE
STOCKHOLDERS ARE URGED TO MARK, DATE, SIGN AND RETURN THIS PROXY
PROMPTLY IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE
IF MAILED IN THE UNITED STATES.
<PAGE> 30
________________
COMMON
/X/ Please mark your votes as this
This proxy will be voted as directed. In the absence of contrary
directions, this proxy will be voted FOR the election of the directors listed
below and FOR item 2.
Item 1--ELECTION OF TWO CLASS III DIRECTORS FOR A THREE YEAR TERM.
Nominees: Ray C. Robinson, Jr. and John M. Kaiser
FOR all nominees / / WITHHOLD AUTHORITY / /
listed at left to vote for all
(except) as marked nominees listed.
to the contrary below).
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below.)
______________________________________________________________________________
Item 2--TO APPROVE THE 1994 OMNIBUS EQUITY INCENTIVE PLAN.
FOR / / AGAINST / / ABSTAIN / /
Item 3--IN THEIR DISCRETION UPON ANY AND ALL SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Dated:_____________________1994.
________________________________
Signature
________________________________
Signature
The signature should correspond exactly with the name appearing on the
certificate evidencing your Common Stock. If more than one name appears, all
should sign. Joint owners should each sign personally.
