U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Solicitation Material Pursuant to 240.14a-11(c) or 240.14a-12
DOVER INVESTMENTS CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee:
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1 Title of each class of securities to which transaction applies:
2 Aggregate number of securities to which transaction applies:
3 Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4 Proposed maximum aggregate value of transaction:
5 Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of 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 No:
3.) Filing Party:
4.) Date Filed:
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Dover Investments Corporation will
be held at 235 Montgomery Street, Conference Room #740, Seventh Floor, San
Francisco, California, on Wednesday, May 5, 1999, at 8:30 A.M., for the
following purposes:
(1) To elect four directors (one of whom will be elected by holders of the
Class A Common Stock and three of whom will be elected by holders of
the Class B Common Stock), each to hold office until the next annual
meeting and until his successor has been elected and qualified;
(2) To ratify and approve an amendment to the 1995 Stock Option Plan
increasing the authorized shares available under such plan;
(3) To ratify the appointment of Grant Thornton LLP as the Company's
independent public accountant for the year ended December 31, 1999;
and
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 22, 1999
as the record date for the determination of stockholders entitled to notice
of and to vote at this meeting or any adjournment thereof. In accordance with
Delaware law, a list of the Company's stockholders entitled to vote at the
meeting will be available for examination by any stockholder for any purpose
germane to the meeting during normal business hours at the Company's offices
at 100 Spear Street, Suite 520, San Francisco, California, for ten days prior
to the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
LAWRENCE WEISSBERG
Chairman of the Board of Directors,
President and Chief Executive Officer
San Francisco, California
April 2, 1999
IMPORTANT: To ensure your representation at the meeting please date,
sign and mail the enclosed Proxy card(s) promptly in the return envelope
which has been provided.
DOVER INVESTMENTS CORPORATION
Proxy Statement
for the
Annual Meeting of Stockholders
to be Held on May 5, 1999
The accompanying proxy is solicited on behalf of the Board of
Directors of Dover Investments Corporation (the "Company") for use at the
Annual Meeting of Stockholders (the "Annual Meeting") to be held at 8:30 a.m.
on Wednesday, May 5, 1999, at 235 Montgomery Street, Conference Room #740,
Seventh Floor, San Francisco, California, or any adjournment thereof. Any
stockholder giving a proxy has the power to revoke it at any time prior to
the exercise thereof by filing with the Secretary of the Company a written
revocation, by attending the Annual Meeting and voting in person, or by
submitting a duly executed proxy bearing a later date. The expense of
soliciting proxies will be paid by the Company. The Company will request
brokers, custodians, nominees and other holders of record to forward copies
of soliciting material to persons for whom they hold shares of Company stock
and to request authority for the execution of proxies. In such cases, the
Company will reimburse holders for their reasonable charges or expenses. The
Company's principal executive office is located at 100 Spear Street,
Suite 520, San Francisco, California 94105. This proxy statement and the
accompanying form(s) of proxy were mailed on or about April 2, 1999.
VOTING RIGHTS
The Board of Directors has fixed the close of business on March 22,
1999 as the record date for determination of stockholders entitled to notice
of and to vote at the Annual Meeting. The voting securities of the Company
outstanding at the close of business on that date were 746,798 shares of
Class A Common Stock and 315,577 shares of Class B Common Stock, each with
a $.01 par value. The Company's Restated Certificate of Incorporation
provides that, so long as the total number of shares of Class B Common Stock
outstanding on any record date for a meeting of stockholders at which
directors are to be elected equals or exceeds 12 1/2% of the total number of
outstanding shares of Common Stock of both classes on such date, the holders
of Class A Common Stock will vote as a separate class to elect 25% of
the Board of Directors (the "Class A Directors") and the holders of the Class
B Common Stock will vote as a separate class to elect the remaining 75% of
the Board of Directors (the "Class B Directors"). If 25% of the authorized
number of directors is not a whole number, then the holders of Class A Common
Stock are entitled to elect the next higher whole number of directors that is
at least 25% of the authorized number of directors. The total number of
outstanding shares of Class B Common Stock on March 22, 1999 constituted
29.70% of the total number of outstanding shares of Common Stock of both
classes. Accordingly, holders of record of Class A Common Stock will vote as
a separate class at the Annual Meeting with respect to the election of
directors and be entitled to elect one Class A Director. Holders of
record of Class B Common Stock, voting as a separate class, will be entitled
to elect the three Class B Directors. Holders of the Class A Common Stock
and of the Class B Common Stock generally will vote together as a single
class on other matters submitted to a stockholders' vote, with the Class A
Common Stock entitled to one vote per share and the Class B Common Stock
entitled to ten votes per share.
The representation in person or by proxy of not less than a majority
of the shares entitled to vote at the meeting will constitute a quorum.
Class A Directors and Class B Directors will be elected by a plurality of the
respective votes cast by holders of Class A Common Stock and Class B Common
Stock. The affirmative vote of a majority of the shares represented at the
meeting is required for the approval and adoption of Proposals 2 and 3.
Because abstentions and "non-votes" are counted as present in determining
whether the quorum requirement is satisfied, abstentions and "non-votes" will
have the effect of a vote against a proposal. A "non-vote" occurs when a
nominee holding shares for a beneficial owner votes on one proposal but does
not vote on another proposal because the nominee does not have discretionary
voting power and has not received instructions from the beneficial owner.
A holder of Class A Common Stock or Class B Common Stock may be
entitled to cumulate votes and give one nominee a number of votes equal to
the number of directors to be elected by the Class A Common Stock or the
Class B Common Stock, as applicable, multiplied by the number of votes to
which such stockholder's shares are entitled, or distribute such stockholder's
votes on the same principle among as many nominees as the stockholder
thinks fit. A stockholder may cumulate votes for a nominee or nominees for
Class A or Class B Directors if such nominee or nominees' names have been
placed in nomination prior to the voting at the Annual Meeting and the
stockholder has given notice prior to the voting at the Annual Meeting of the
stockholder's intention to cumulate votes. If any one stockholder has
given such notice, all stockholders may cumulate their votes for nominees.<PAGE>
<TABLE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table shows as of March 22, 1999, (i) persons who are
known by the Company to be beneficial owners of more than 5% of the Company's
Class A or Class B Common Stock, and (ii) for each director and all directors
and executive officers as a group, the amount and nature of their beneficial
ownership and percentage of all outstanding Class A Common Stock and Class
B Common Stock owned by them:
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Aggregate Voting
Class A Common Percentage of Class B Common Percentage of Power
Shares Outstanding Shares Outstanding Represented by
Position with Beneficially Class A Common Beneficially Class B Common Shares Beneficially
Name and Address Company Owned Shares (1) Owned Shares Owned(2)
Lawrence Weissberg Chairman, 245,778(3) 32.91% 245,114 77.67% 69.10%
100 Spear Street President
Suite 520 and Chief
San Francisco, CA Executive
94105 Officer
Arnold Addison Director 1,200(4) * 0 * *
727 Industrial
Parkway
Hayward, CA
94544
John Gilbert Director 2,000(5) * 0 * *
400 Montgomery
Street Suite 820
San Francisco,
CA 94104
Will C. Wood Director 11,150(6) 1.49% 0 * *
1550 El Camino
Real Suite 275
Menlo Park, CA
94025
Erika Kleczek Principal 2,212(7) * 0 * *
100 Spear Street Financial
Suite 520 Officer
San Francisco, CA
94105
Robert Naify N/A 54,437 7.29% 23,330 7.39% 7.37%
172 Golden Gate
Avenue San
Francisco, CA
94102
Leeward Capital, N/A 97,000(9) 12.99% 0 * 2.49%
Leeward Invstmt.,
LLC Eric P. Von
der Porten
1139 San Carlos
Ave., San Carlos,
CA 94070
All executive 262,340(8) 35.13% 245,114 77.67% 69.53%
officers and
directors as a
group of (5)
persons
</TABLE>
* Less than one percent (1%) of the outstanding class of stock or aggregate
voting power of the Class A Common Stock and Class B Common Stock combined.
(1) Based on a total of 746,798 currently outstanding shares and the
respective number of shares issuable upon exercise of options owned by
each individual exercisable within 60 days of March 22, 1999.
(2) For matters other than the election of directors only.
(3) Includes 58,366 shares issuable upon exercise of options exercisable
within 60 days of March 22, 1999, 7,257 shares of Class A Common Stock,
of which 1,810 shares are owned by Mr. Weissberg's wife, 4,660 shares are
owned by the Weissberg Foundation and 787 shares are held by a trust for
the benefit of the grandchildren of Mr. Weissberg of which Mr. Weissberg
is trustee. Mr. Weissberg disclaims beneficial ownership of the 1,810
shares owned by his wife.
(4) Includes 1,200 shares issuable upon exercise of options exercisable
within 60 days of March 22, 1999.
(5) Includes 1,500 shares issuable upon exercise of options exercisable
within 60 days of March 22, 1999.
(6) Includes 500 shares issuable upon exercise of options exercisable
within 60 days of March 22, 1999.
(7) Includes 1,967 shares issuable upon exercise of options exercisable
within 60 days of March 22, 1999.
(8) Includes 63,533 shares issuable upon exercise of options exercisable
within 60 days of March 22, 1999.
(9) Based on information set forth in Amendment No. 1 to a Schedule 13G
of February 8, 1999, as filed with the Securities and Exchange
Commission.<PAGE>
PROPOSAL 1 -- ELECTION OF DIRECTORS
Nominees for Directors
Action is to be taken at the Annual Meeting with respect to the
election of a total of four directors, consisting of one Class A Director and
three Class B Directors, to serve until the next annual meeting of
stockholders and until their successors are elected and qualified.
Holders of the Class A Common Stock will vote as a separate class for the
election of the Class A Director and holders of the Class B Common Stock will
vote as a separate class for the election of the Class B Directors. Each
proxy with respect to the Class A Director (the proxy card printed with black
ink) may not be voted for more than one nominee and each proxy with respect
to the Class B Directors (the proxy card printed with red ink) may not be
voted for more than three nominees. It is intended that the proxies solicited
by and on behalf of management will be voted for the election of the nominees
listed in the following table. In the event any of the nominees, for any
reason, should cease to be a candidate for a position as a director, the
proxies will be voted in accordance with the best judgment of the person or
persons acting under them and may be voted for another person nominated by
management. The Company knows of no current circumstances which would render
any nominee unable to accept nomination or election. Under the terms of the
Company's By-Laws, a vacancy may be filled by the Board of Directors.
The following table indicates as to each nominee the year when
he was first elected or appointed a director, his age and class of
directorship:
Director Class of
Name Since Age Directorship
Arnold Addison 1992 69 Class A
John Gilbert 1993 59 Class B
Lawrence Weissberg 1968 78 Class B
Will C. Wood 1992 59 Class B
Mr. Weissberg may be deemed to be a control person of the
Company under the Securities Exchange Act of 1934.
Arnold Addison. Mr. Addison has been President of Addison
Financial Corporation, an auto leasing company, since October 1987. He has
also been the owner of Warm Springs Land Co., a real estate investment firm,
since January 1985.
John Gilbert. Mr. Gilbert has been a self-employed financial
consultant since 1989 and has seventeen years of experience as a general
contractor and home builder.
Lawrence Weissberg. Mr. Weissberg is presently the Chairman of
the Board of Directors, President and Chief Executive Officer of the Company.
He was the President and Chief Executive Officer of the Company and Homestead
Savings, A Federal Savings and Loan Association (hereafter referred to as the
"Association"), from 1960 to 1973 and from 1975 to 1989. In May 1989, Mr.
Weissberg stepped down as President of the Company and the Association,
although he continued to serve as Chairman of the Board of Directors and Chief
Executive Officer of the Company. In August 1991, Mr. Weissberg was re-
appointed President of the Company. Mr. Weissberg stepped down as Chief
Executive Officer of the Association in August 1989 and as Chairman of the
Board of Directors and as a director of the Association in January 1992.
Will C. Wood. Mr. Wood has been a principal of Kentwood
Associates, a financial advisory firm, since November 1993. He was an
international banking executive with Wells Fargo Bank, Crocker Bank and
Citibank from 1972 through 1989 and was managing Director of IDI Associates
from 1989 to 1993.
Committees and Meetings of the Board of Directors
In 1998, the Board of Directors of the Company held four
regular meetings. Each of the directors attended at least 75% of the meetings
of the Board of Directors held during the period for which he has been a
director.
The Board of Directors of the Company established a
Compensation Committee in January 1995. The Compensation Committee of the
Board of Directors consists of Arnold Addison and Will C. Wood. The
Compensation Committee reviews and sets company policies in addition to
recommending to the Board the level of compensation of the President. The
Compensation Committee held one meeting during fiscal 1998, which was
attended by Messrs. Addison and Wood.
The Board of Directors does not have an audit committee or a
nominating committee.
Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership of equity securities of the
Company with the Securities and Exchange Commission (the "SEC").
Based solely on the Company's review of the reporting forms
received by it, and written representations from certain persons that only
one Form 5 report was required to be filed by Director Will C. Wood, the
Company believes that during the period from January 1, 1998 to December 31,
1998, inclusive, all filing requirements applicable to officers directors
and greater than ten percent stockholders were satisfied.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" EACH OF THE NOMINEES.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Compensation of Executive Officers
The cash compensation of the only executive officer of the
Company whose total cash compensation exceeded $100,000 in 1998 for services
in all capacities to the Company and its partnerships during 1996, 1997
and 1998 was as follows:
SUMMARY COMPENSATION TABLE
Principal Compensation All Other
Position Year Salary($) Compensation ($)
Lawrence Weissberg 1998 191,667(2) 5,515(1)
Chairman of the 1997 150,000 5,515(1)
Board of Directors, 1996 150,000 5,515(1)
President and Chief
Executive Officer
___________________________
(1) Consists of an automobile allowance.
(2) Mr. Weissberg received a salary increase to $250,000 annually, effective
in August 1998.
<TABLE>
Option Grants in Last Fiscal Year
<CAPTION>
<S> <C> <C> <C> <C> <C>
Potential Realizable
Value at Assumed
Number of Percent of Annual Rates of
Securities Total Options Rates of Stock Price
Underlying Granted to Exercise or Appreciation
Options Employees in Base Price Expiration For Option Term(2)
Name Granted Fiscal Year ($/share) Date 5% 10%
Lawrence Weissberg 50,000(1) 91.00% $10.3125 07/28/03 $658,083 $830,511
<FN>
(1) Options granted for a term of 5 years with an exercise price of $10.3125
(the market price plus 10% on the date of grant) and become exercisable
in two annual installments commencing one year from the date of grant
(assuming continued employment).
(2) The Company's Class A Common Stock price on July 28, 2003, the end of the
5 year option term would be $13.16 or $16.61, at annual appreciation
rates of 5 percent or 10 percent, respectively. There can be no
assurance that such increase, or any increase, in the price of such stock
will be achieved. Aggregate Option Exercises in Last Fiscal Year
and F-Y-End Option Values
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Number of
Securities Underlying Value of Unexercised
Shares Unexercised Options at in the Money Options at
Acquired Value December 31, 1998 December 31, 1998(2)
Name on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
Lawrence Weissberg.... 58,300 $269,673 33,366 100,000 $197,298 $152,500
<FN>
(1) The value realized is the difference between (a) the mean of the high and
low bid prices of the Company's Class A Common Stock as reported on the
National Quotation Bureau Pink Sheets on the date of exercise and (b) the
exercise price of the option, multiplied by the number of shares
exercised.
(2) The value of unexercisable options is the average of the high and low bid
information as reported on the National Quotation Bureau Pink Sheets of
the Company's Class A Common Stock on December 31, 1998, $8.00, less the
exercise price of the option, multiplied by the number of options
outstanding.
</TABLE>
Compensation of Directors
The Company pays each nonemployee director $750 for each meeting of
the Board of Directors of the Company attended. None of the Company's
directors, other than Mr. Weissberg, are employees of the Company.
Nonemployee directors receive stock options pursuant to the Company's
Stock Option Plan for Nonemployee Directors (the "Director Plan"). Under the
Director Plan, each nonemployee director is automatically granted options to
purchase 500 shares of Class A Common Stock on each anniversary date of his
or her appointment, until the plan terminates or the director ceases to be a
director. Options granted under the Director Plan become exercisable in
installments to the extent of one-half on the date one year after the date of
grant, and the remaining one-half on the date two years after the date of
grant. The exercise price for shares subject to options granted under the
Director Plan is the fair market value of the shares at the date of the
option grant.
CERTAIN TRANSACTIONS
The Company entered into an agreement to sublease to a related
party Corporation owned by Mr. Weissberg, a portion of the Company's
executive offices. That corporation's share of the lease equals 35% of
the total rent and operating costs.
PROPOSAL 2 -- RATIFICATION AND APPROVAL OF AN AMENDMENT TO THE
1995 STOCK OPTION PLAN INCREASING THE AUTHORIZED
SHARES AVAILABLE FOR OPTION GRANTS
On January 17, 1995, the Company's Board of Directors adopted, and
the stockholders later approved, the Company's 1995 Stock Option Plan (the
"Plan"), which provides for the issuance of incentive stock options and
nonqualified stock options. The Board of Directors deems it desirable and in
the best interest of the Company to increase to 400,000 the aggregate number
of shares which may be issued under the Plan. The following paragraphs
provide a summary of the principal features of the Plan, as amended, and its
operation. The amended Plan is set forth in its entirety as Exhibit A to
this Proxy Statement. The following summary is qualified in its entirety by
reference to Exhibit A.
Purpose of the Proposal
Options for a maximum of 400,000 shares of Class A Common Stock, Class B
Common Stock or any combination thereof may be granted at not less than the
fair market value under the Plan as amended. The Plan is intended to
contribute to maintaining the Company's performance by providing certain
officers and key employees with long-term incentives in the form of options.
Administration
The Plan is administered by the Compensation Committee of the Board of
Directors (the "Committee"), which consists of not less than two directors of
the Company who are "disinterested persons" within the meaning of Rule 16b-3
promulgated under the Securities Exchange Act of 1934. The Committee has sole
discretion to select the officers and other key employees to whom options may
be granted, to determine the number and class of Common Stock to be subject
to stock options, to determine whether payment of the exercise price of any
option shall be in cash, or shares or Common Stock of any class, or partly in
cash and partly in shares, to determine whether such options shall be
exercisable in full upon vesting or exercisable in installments, and to
interpret, construe and implement the Plan. The Committee may also, within
the general limitations of the Plan, modify, extend, renew or cancel
outstanding options and, upon cancellation of previously granted higher
priced options and rights, re-grant options and rights at lower prices,
provided that no rights or obligations under existing options may be altered
or impaired without the consent of the optionee.
Eligibility
Officers and key employees selected by the Committee are eligible to
receive options under the Plan. "Officers and key employees" means officers
and assistant officers, both elective and appointive, presidents and general
managers of divisions and subsidiaries and such other key employees as may be
determined by the Committee in its sole discretion. The actual number of
individuals who will receive options under the Plan cannot be determined
because selection for participation in the Plan is in the sole discretion of
the Committee. Only two of the Company's executive officers have been granted
options under the Plan. Except as described below, the Plan does not provide
for any maximum or minimum amount of options which may be received by any one
employee.
Mr. Weissberg was granted options to purchase 50,000 shares of Class A
Common Stock on July 28, 1998.
Terms of Options
Options granted under the Plan will provide for the purchase of shares
of the Company's Class A Common Stock, Class B Common Stock, or any
combination thereof, at not less than the fair market value of the stock on
the date the option is granted. In the case of an incentive stock option
held by an optionee who, on the date of grant of such option, owns more than
10% of the total combined voting power of all classes of stock of the Company,
the exercise price will be not less than 110% of the fair market value of the
stock. The Plan also provides that the aggregate fair market value of the
stock (determined at the time the incentive stock option is granted) with
respect to which incentive stock options are exercisable for the first time
by any employee during any calendar year may not exceed $100,000.
On February 1, 1999, the market value of the Class A Common Stock was
$8.25 per share and the market value of the Class B Common Stock was $9.25
per share, based on the average of the high and low bid information as
reported on the National Quotation Bureau Pink Sheets.
The Plan provides for appropriate adjustments in the provisions of
outstanding options and rights and the number of shares available for future
awards in the event of any changes in the Company's outstanding Common Stock
of any class by reason of certain stock dividends, stock splits or similar
events.
Exercise of Options
Options granted under the Plan will be exercisable during a period fixed
by the Committee,provided that no nonqualified stock option will be
exercisable before the expiration of six months fromthe date of grant and no
incentive stock option, except as described below, will be exercisable before
the expiration of one year from the date of grant and, with limited
exceptions, no option will be exercisable after the expiration of ten years
from the date of grant. The Plan provides that no option will be exercisable
after the expiration of five years from the date of grant of such option in
the case of an incentive stock option held by an optionee who, on the date of
grant of such option, owns more than 10% of the total combined voting power
of all classes of stock of the Company.
The Plan provides that an option is exercisable generally only while the
optionee is an employee of the Company or one of its subsidiaries, or within
30 days following cessation of employment for reasons other than death or
disability. Under certain circumstances, an option may be exercised within
three months of a cessation of employment. Furthermore, if a cessation of
employment occurs after a Change in Control (as defined below) and certain
other conditions are satisfied, such option will terminate upon the earlier
of 180 days after the date of a cessation of employment or the expiration
date of such option. If an optionee ceases to be employed as a result of
disability, retirement or death, the exercise period also will be extended.
The option exercise price is payable upon exercise of the option in cash
or, in the discretion of the Committee, in shares of the Class A Common Stock,
the Class B Common Stock, in a combination of cash and such shares or in the
form of other consideration (including, without limitation, promissory notes)
approved by the Committee.
During an optionee's lifetime an option is exercisable only by the
optionee. Options are transferable only by will or the laws of descent and
distribution.
Change in Control, Reorganization, Consolidation or Merger
If the Company is the continuing or surviving corporation in any
reorganization, consolidation or merger, each outstanding option will pertain
to and apply to the securities, if any, to which a holder of the same number
of shares of Class A Common Stock and/or Class B Common Stock that are
subject to that option would have been entitled.
A "Change in Control" of the Company (as defined below) will cause each
outstanding option to terminate, unless any agreement relating to a Change in
Control otherwise provides or unless such Change in Control is an event
described in clauses (a)(2) or (a)(3) of the following paragraph; provided,
however, that each optionee holding an outstanding option in the event of a
Change in Control will have the right immediately prior to such a Change in
Control, regardless of whether such option will terminate, to exercise his or
her option in whole or in part without regard to any limitations on
exercisability and thereafter such option will be considered fully vested.
A "Change in Control" will be deemed to have occurred under the Plan
when (a) there shall be consummated (1) any reorganization, consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation, or (2) any reorganization, consolidation or merger of the
company in which the Company is the continuing or surviving corporation and
pursuant to which shares of the Company's Class A Common Stock and Class B
Common Stock would be converted into cash, securities or other property, or
(3) any sale, lease exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the assets
of the Company; (b) the stockholders of the Company approve a plan or
proposal for the liquidation or dissolution of the Company; or (c) the Board
of Directors of the Company or the Committee shall have determined that
such a "Change in Control" otherwise has occurred.
These "Change in Control" provisions may have certain anti-takeover
effects. If a Change in Control occurs and options issued under the Plan
become immediately exercisable and fully vested, such accelerated vesting
could have the effect of increasing the consideration a potential acquirer
would have to pay to acquire the Company since more shares and vested options
would be outstanding.
Amendment and Termination
The Board of Directors of the Company may suspend or discontinue the
Plan or revise or amend it in any respect whatsoever, except that no such
amendment may alter or impair any rights or obligations under any option
previously granted under the Plan without the consent of the optionee.
Furthermore without further stockholder approval, no such amendment may
increase the number of shares subject to the Plan (except in the case of
stock splits or similar changes in capitalization), change the designation of
the class of employees eligible to receive options under the Plan, provide
for the grant of stock options having a purchase price less than the fair
market value on the date of grant, extend the term during which stock options
granted under the Plan may be exercised, extend the date pursuant to which
options under the Plan may be granted, or otherwise amend the Plan in a way
that would require stockholder approval pursuant to Rule 16b-3 under the
Securities Exchange Act of 1934.
Option awards may be made under the Plan until January 16, 2005, the date
of termination of the Plan.
Certain Federal Income Tax Considerations
The current general federal income tax consequences of options granted
under the Plan are summarized below. Persons in differing circumstances may
have different tax consequences and the tax laws may change in the future.
A recipient of a stock option will not have taxable income upon grant of
the option. For options other than incentive stock options, the optionee
will recognize ordinary income upon exercise in an amount equal to the excess
of the fair market value of the shares over the exercise price 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 exercise of an incentive stock option will not
result in any taxable income to the optionee, except for purposes of the
alternative minimum tax. Gain or loss recognized by the optionee on a later
sale or other disposition will either be long-term capital gain or loss or
ordinary income depending upon whether the optionee holds the shares
transferred upon the exercise for a specified period. Any ordinary income
recognized will be in the amount, if any, by which the lesser of
the fair market value of such shares on the date of exercise or the amount
realized from the sale exceeds the option price.
The Company will be entitled to a tax deduction in connection with an
option under the Plan only in an amount equal to the ordinary income realized
by the participant at the time the participant recognizes such income. In
addition, section 162(m) of the Internal Revenue Code of 1986, as amended,
limits the federal income tax deductibility of compensation paid to the
Company's Chief Executive Officer and to each of the other four most highly
compensated executive officers. The Company generally may deduct compensation
paid to such an officer (including compensation from options) only
if the compensation does not exceed $1 million during any fiscal year or
meets certain other requirements. At present, the Company believes that it
will not be affected by section 162(m) because no Company executive currently
receives compensation in excess of $1 million.
Options to be Granted to Certain Individuals and Groups
Because options are granted under the Plan in the sole discretion of the
Committee, future option grants are not determinable. Options were granted
under the Plan from January 1, 1998 through December 31, 1998, to the
following persons and groups:
Number of Shares Average Per-Share
Name and Position Subject to Options Exercise Price (1)
Lawrence Weissberg
Chairman of the Board of Directors,
President and Chief Executive Officer 50,000 $10.3125
All current Executive Officers
as a Group 55,000 $10.2273
All current Non-Executive
Directors as a Group(2) N/A N/A
All current Non-Executive
Officers as a Group 0 0
(1) Options were granted at an exercise price of 110 % and 100%, respectively,
of the market price of the underlying shares of the Company's Class A
Common Stock on the date of grant, become exercisable over 2 and 3 years
at the rate of approximately 50% and 33.333%, respectively, each year
and expire no later than 5 and 10 years from the date of grant,
respectively. On February 1, 1999, shares of the Company's Class A
Common Stock had a market value of $8.25 per share based on the average
ofthe high and low bid information as reported on the National Quotation
Bureau Pink Sheets.
(2) Non-employees are not eligible to receive options under the Plan.
Required Vote
A vote FOR Proposal 2 by the holders of a majority of the
outstanding shares of the Company's Class A Common Stock and Class B Common
Stock, present at the Annual Meeting in person or by proxy and voting
together as a single class with holders of the Class A Common Stock
casting one vote per share and holders of the Class B Common Stock casting
ten votes per share, is required to approve and adopt the proposal. Votes
with respect to this proposal will be cast as specified in the proxy. If no
specification is made, votes represented by proxy will be cast FOR the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
PROPOSAL 2.
PROPOSAL 3 -- RATIFICATION OF ACCOUNTANTS
The Company has engaged Grant Thornton LLP as the Company's
independent public accountant to audit its financial statements for the year
ended December 31, 1999.
Representatives of Grant Thornton LLP are expected to be
present at the Annual Meeting, will have an opportunity to make a statement
if they desire to do so, and will be available to respond to appropriate
stockholder questions.
Required Vote
A vote FOR Proposal 3 by the holders of a majority of the
outstanding shares of the Company's Class A Common Stock and Class B Common
Stock, present at the Annual Meeting in person or by proxy and voting
together as a single class with holders of the Class A Common Stock
casting one vote per share and holders of the Class B Common Stock casting
ten votes per share, is required to approve and adopt the proposal. Votes
with respect to this proposal will be cast as specified in the proxy.
If no specification is made, votes represented by proxy will be cast FOR the
proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
PROPOSAL 3.
OTHER MATTERS
As of the date of this Proxy Statement, management knows of no
business other than that specified in the Notice of Annual Meeting of
Stockholders to be transacted at the Annual Meeting, but if other matters are
properly raised before the Annual Meeting it is the intention of the persons
named in the enclosed proxy, in the absence of instructions to the contrary,
to vote in regard thereto in accordance with their judgment; discretionary
authority to do so is included in the proxy.
STOCKHOLDER PROPOSALS
Any proposals of stockholders intended to be presented at the
2000 Annual Meeting must be received by the Company by December 8, 1999 in
order to be considered for inclusion in the Company's proxy materials
relating to that meeting.
The accompanying proxy grants the persons named therein discretionary
authority to vote on any matter raised at the Annual Meeting. If a
stockholder intends to submit a proposal at the 2000 Annual Meeting, which
proposal is not intended to be included in the Company's proxy statement and
form of proxy relating to such meeting, the stockholder should give the
Company appropriate notice no later than February 17, 2000. If the Company
fails to receive notice of the proposal by such date, the Company will not be
required to provide any information about the nature of the proposal in its
proxy material and the proposal will not be submitted to the stockholders for
approval at the 2000 Annual Meeting as the Company will not have received
proper notice as required by the rules of the Securities and Exchange
Commission.
Lawrence Weissberg
Chairman of the Board of Directors,
President and Chief Executive Officer
San Francisco, California
April 2, 1999
APPENDIX B
PROXY
DOVER INVESTMENTS CORPORATION
PROXY FOR HOLDERS OF CLASS A COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Lawrence Weissberg and Will C. Wood
and each of them as proxies with full power of substitution and hereby
authorizes them to represent and to vote as designated below all the shares
of Class A Common Stock of Dover Investments Corporation (the "Company") held
of record by the undersigned on March 22, 1999, at the Annual Meeting of
Stockholders to be held at 235 Montgomery Street, Conference Room #740,
Seventh Floor, San Francisco, California, on May 5, 1999 at 8:30A.M.,
local time, or any adjournment thereof.
Comments/Address Change: Please mark comment/address box on reverse side.
Please mark, sign, date and return this Proxy card promptly using the
enclosed envelope.
The Board of Directors recommends that stockholders vote "FOR the nominees"
and "FOR" Proposals 2 and 3.
1. ELECTION OF CLASS A DIRECTORS: FOR WITHHELD FOR ALL
Arnold Addison
(INSTRUCTION: To withhold authority
to vote for any individual nominee(s),
write that nominee's name on the
space provided below)
2. RATIFICATION AND APPROVAL OF AN FOR AGAINST ABSTAIN
AMENDMENT TO THE 1995 STOCK OPTION
PLAN INCREASING THE AUTHORIZED
SHARES AVAILABLE UNDER THE PLAN.
3. RATIFICATION OF THE APPOINTMENT FOR AGAINST ABSTAIN
OF GRANT THORNTON, LLP AS THE
COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANT FOR THE YEAR ENDED
DECEMBER 31, 1999.
I PLAN TO ATTEND THE MEETING
COMMENTS/ADDRESS CHANGE
Please mark this box, if you have written comments/address change on
the reverse side.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted FOR the election of directors nominated by the Board of Directors,
FOR the ratification and approval of an amendment to the 1995 stock option
plan, FOR the ratification of Grant Thornton LLP as the Company's independent
public accountant and, in the discretion of the proxies, upon any other
matters that may properly come before the meeting.
Signature(s) Date:
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please sign full title as such.
If a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
PROXY
DOVER INVESTMENTS CORPORATION
PROXY FOR HOLDERS OF CLASS B COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Lawrence Weissberg and Will C. Wood
and each of them as proxies with full power of substitution and hereby
authorizes them to represent and to vote as designated below all the shares
of Class B Common Stock of Dover Investments Corporation (the "Company") held
of record by the undersigned on March 22, 1999, at the Annual Meeting of
Stockholders to be held at 235 Montgomery Street, Conference Room #740,
Seventh Floor, San Francisco, California, on May 5, 1999 at 8:30A.M., local
time, or any adjournment thereof.
Comments/Address Change: Please mark comment/address box on reverse side.
Please mark, sign, date and return this Proxy card promptly using the enclosed
envelope.
The Board of Directors recommends that stockholders vote "FOR the nominees"
and "FOR" Proposals 2 and 3.
1. ELECTION OF CLASS A DIRECTORS: FOR WITHHELD FOR ALL
Lawrence Weissberg, Will C. Wood and
John Gilbert
(INSTRUCTION: To withhold authority
to vote for any individual nominee(s),
write that nominee's name on the
space provided below)
2. RATIFICATION AND APPROVAL OF AN FOR AGAINST ABSTAIN
AMENDMENT TO THE 1995 STOCK OPTION
PLAN INCREASING THE AUTHORIZED
SHARES AVAILABLE UNDER THE PLAN.
3. RATIFICATION OF THE APPOINTMENT FOR AGAINST ABSTAIN
OF GRANT THORNTON, LLP AS THE
COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANT FOR THE YEAR ENDED
DECEMBER 31, 1999.
I PLAN TO ATTEND THE MEETING
COMMENTS/ADDRESS CHANGE
Please mark this box, if you have written comments/address change on
the reverse side.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted FOR the election of directors nominated by the Board of Directors, FOR
the ratification and approval of an amendment to the 1995 stock option
plan, FOR the ratification of Grant Thornton LLP as the Company's independent
public accountant and, in the discretion of the proxies, upon any other
matters that may properly come before the meeting.
Signature(s) Date:
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please sign full title as such.
If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership
name by authorized person.
EXHIBIT A
DOVER INVESTMENTS CORPORATION
1995 STOCK OPTION PLAN
(Amended and Restated, Effective January 26, 1999)
ARTICLE I
GENERAL
1. PURPOSE.
This 1995 Stock Option Plan (the "Plan") is intended to contribute
to maintaining the Company's performance by providing certain officers and
key employees of the Company with long-term incentives in the form of options
to purchase shares of the Company's Class A Common Stock, $.01 par value per
share (the "Class A Common Stock"), Class B Common Stock, $.01 par value per
share (the "Class B Common Stock"), or any combination thereof.
2. ADMINISTRATION.
The plan shall be administered by the Compensation Committee of the
Board of Directors of the Company, a standing committee (the "Committee").
The Committee shall from time to time at its discretion make determinations
with respect to the officers and key employees of the Company to whom options
shall be granted and the amount of such options. The Committee shall
consist of not less than two (2) members of the Board of Directors. Each
member of the Committee shall be a "disinterested person" within the meaning
of Rule 16b-3 promulgated under the Securities Exchange Act of 1934,
as amended.
The interpretation and construction by the Committee of any
provisions of the Plan or of any option granted under it shall be final. No
member of the Committee shall be liable for any action or determination made
in good faith with respect to the Plan or any option granted under it.
3. ELIGIBILITY.
Subject to Section 2 of this Article I, the persons who shall be
eligible to receive options under the Plan shall be such officers and key
employees (including directors who are also salaried employees of the Company)
of the Company as the Committee shall select. The terms "officers and key
employees" as used herein shall mean officers and assistant officers, both
elective and appointive, presidents and general managers of divisions and
subsidiaries and such other key employees as may be determined by the
Committee in its sole discretion.
Except where the context otherwise requires, the term "Company," as
used herein, shall include (i) Dover Investments Corporation and (ii) any of
its "subsidiary corporations" which meet the definition of subsidiary
corporation contained in Section 425(f) of the Internal Revenue
Code of 1986, as amended, as now in effect or as hereafter amended (the
"Code"), and the terms "officers and key employees of the Company," and words
of similar import, shall include officers and key employees of each such
subsidiary corporation, as well as officers and key employees of
Dover Investments Corporation.
4. SHARES OF STOCK SUBJECT TO THE PLAN.
The shares that may be issued under the Plan shall be authorized
and unissued or reacquired shares of the Company's Class A Common Stock and
Class B Common Stock. The aggregate number of shares which may be issued
under the Plan shall not exceed 400,000 shares of Class A Common Stock,
400,000 shares of Class B Common Stock or an aggregate of 400,000
shares of any combination of shares of Class A Common Stock and Class B
Common Stock, unless an adjustment is required in accordance with
Section 3(I) of Article II hereof.
5. AMENDMENT OF THE PLAN.
The Board of Directors of the Company may, insofar as permitted by
law, from time to time, suspend or discontinue the Plan or revise or amend it
in any respect whatsoever, except that no such amendment shall alter or
impair any rights or obligations under any option theretofore
granted under the Plan without the consent of the Person to whom such option
was granted. Furthermore, without further stockholder approval, no such
amendment shall increase the number of shares subject to the Plan (except as
authorized by Section 3(I) of Article II hereof), change the designation in
Section 3 of Article I of the class of employees eligible to receive options
under the Plan, provide for the grant of stock options having a purchase
price less than the fair market value on the date of grant, extend the term
during which stock options granted under the Plan may be exercised, extend
the date pursuant to which options under the Plan may be granted, or otherwise
amend the Plan in a way that would require stockholder approval promulgated
under Rule 16b-3 under the Securities Exchange Act of 1934, as amended.
6. TERM OF PLAN.
Awards may be made under the Plan until January 16, 2005, the date
of termination of the Plan. Notwithstanding the foregoing, all options
granted under the Plan shall remain in effect until such options have been
satisfied by the issuance of shares or terminated in accordance with
their terms and the terms of the Plan.
7. RESTRICTIONS.
All options granted under the Plan shall be subject to the
requirement that, if at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of
the shares subject to stock options granted under the Plan upon any
securities exchange or under any state or federal law, or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such option or the issue
or purchase of shares thereunder, such option may not be exercised in whole
or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.
8. NONASSIGNABILITY.
No stock option shall be assignable or transferable by the grantee
except by will or by the laws of descent and distribution. During the life
of the grantee, any stock options which have been granted to the grantee
shall be exercisable only by the grantee.
9. WITHHOLDING TAXES.
Whenever under the Plan shares of Class A Common Stock, Class B
Common Stock or any combination thereof are to be issued, the Company shall
have the right to require the grantee to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for such shares.
10. CERTAIN INFORMATION.
The Company shall provide to each optionee, during the period that
such optionee has one or more outstanding options, copies of all annual
reports and other information which are provided to all stockholders of the
Company. The Company shall not be required to provide such information to
key employees whose duties in connection with the Company assure their access to
equivalent information.
ARTICLE II
STOCK OPTIONS
1. AWARD OF STOCK OPTIONS.
Awards of stock options may be made under the Plan. It is intended
that certain options granted pursuant to the Plan shall constitute incentive
stock options within the meaning of Section 422 of the Code ("incentive stock
options"), and that certain options granted pursuant to the Plan shall not
constitute incentive stock options ("nonqualified stock options"). The
aggregate fair market value (determined at the time the option is granted) of
the stock with respect to which incentive stock options are exercisable for
the first time by such individual during any calendar year (under all
incentive stock option plans of the individual's employer corporation and its
parent and subsidiary corporations) shall not exceed $100,000. The date on
which an option is granted shall be the date of the Committee's authorization
of such grant or such later date as may be determined by the Committee at the
time such grant is authorized.
2. EFFECT OF TERMINATION OF OPTIONS.
In the event that any outstanding option under the Plan terminates
before it would otherwise have expired under its terms or expires by its
terms without being fully exercised, the shares of Class A Common Stock,
Class B Common Stock or any combination thereof subject to such option not
issued pursuant to the exercise of such option shall again become available
in the pool of shares provided under the Plan.
3. TERMS AND CONDITIONS OF OPTIONS.
Stock options granted pursuant to the Plan shall be evidenced by
agreements in such form as the Committee shall from time to time determine,
which agreements shall comply with the following terms and conditions:
(A) Optionee's Agreement
Each optionee shall agree to remain in the employ of and to
render to the Company his or her services for a period of one (1) year from
the date of the option, but such agreement shall not impose upon the Company
any obligation to retain the optionee in its employ for any period.
(B) Number of Shares
Each option agreement shall state the class and number of
shares to which the option pertains.
(C) Option Price
Each option agreement shall state the option price per share,
which shall be not less than 100% of the fair market value of the Class A
Common Stock or Class B Common Stock, as the case may be, on the date that
the option is granted. Notwithstanding the foregoing, the option price per
share of an incentive stock option granted to a person who, on the date of
such grant and in accordance with Section 425(d) of the Code, owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company shall be not less than 110% of the fair market value of
a shares of the Class A Common Stock or Class B Common Stock, as the case may
be, on the date that the option is granted. Fair market value as used herein
shall be the mean of the closing sales prices of the Class A Common Stock or
Class B Common Stock, as the case may be, on the Composite Tape for New York
Stock Exchange Listed Stocks on the date that such option is granted or, if
the option date is not a trading date, the trading date next following the
option date. If the Class A Common Stock or the Class B Common Stock is not
listed on the New York Stock Exchange, fair market value shall be the highest
closing sales price on the principal United States securities exchange
registered under the Securities Exchange Act of 1934, as amended, on which
such stock is listed, or, if such stock is not listed on any such
securities exchange, the highest closing sales price or bid quotation with
respect to a share of such stock on the date such option is granted on the
National Association of Securities Dealers, Inc. Automated Quotations System
or any successor system or, if no such quotations are available, the fair
market value on the date in question of a share of such stock as determined
in good faith by the Board of Directors.
(D) Medium and Time of Payment
The option price shall be payable upon the exercise of an
option in the legal tender of the United States or, in the discretion of the
Committee, in shares of the Class A Common Stock, Class B Common Stock, in a
combination of such legal tender and such shares or in the form of such other
consideration (including, without limitation, promissory notes). Upon
receipt of payment, the Company shall deliver to the optionee (or person
entitled to exercise the option) a certificate or certificates for the shares
of Class A Common Stock or Class B Common Stock, as the case may be, to which
the option pertains.
(E) Terms and Exercise of Option
Each option shall state the time or times when it becomes
exercisable, which shall be determined by the Committee; provided, however,
that, except as otherwise provided herein, no option shall become exercisable
until six months has elapsed from the date of grant and no incentive stock
option shall become exercisable until one (1) year has elapsed from the date
of grant. The Committee may specify such option exercise schedule, if any,
for each option as it, in its discretion, deems appropriate. To the extent
that an option has become exercisable, it may be exercised in whole or in
such lesser amount as authorized by the option agreement. If exercised in
part, the unexercised portion of an option shall continue to be held by the
optionee and may thereafter be exercised as herein provided.
Notwithstanding any other provision of the Plan, no option granted under the
Plan shall be exercisable after the expiration of ten (10) years from the
date of its grant, subject, in the Committee's discretion, to Section 3(H) of
this Article II. In addition, no incentive stock option granted under the
Plan to a person who, at the time such option is granted and in accordance
with Section 425(d) of the Code, owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company shall be
exercisable after the expiration of five (5) years from the date of its grant.
During the lifetime of the optionee, the option shall be exercisable only by
the optionee and shall not be assignable or transferable by the optionee, and
no other person shall acquire any rights therein.
(F) Termination of Employment Except Disability or Death
In the event that an optionee shall cease to be employed by
the Company for any reason other than the optionee's death or disability, the
optionee's option shall terminate 30 days after the date of cessation of
employment; provided, however, that if such cessation of employment is with
the consent of the Board of Directors of the Company, expressed in the form
of a resolution, or is pursuant to the optionee's retirement under the
provisions of any pension, profit sharing or other retirement plan of the
Company then in effect, such option may be exercised within three (3) months
after the date that he ceases to be an employee of the Company, but only
to the extent such option was exercisable or would have been exercisable
but for the existence of earlier-granted incentive stock options on the date
of such cessation of employment; and, provided, further, that if such
cessation of employment occurs after a Change in Control (as defined in
Section 3(l)(i) of Article II hereof) and the provisions of Section 3(l)(i)
are applicable to such option, such option shall terminate upon the earlier
of 180 days after the date of such cessation of employment or the expiration
date of such option.
(G) Disability of Optionee
If an optionee shall cease to be employed by the Company by
reason of the optionee becoming permanently and totally disabled within the
meaning of Section 22(e)(3) of the Code and shall not have fully exercised
the optionee's option, such option may be exercised to the extent it was
exercisable immediately prior to the optionee's disability at any
time within one (1) year after cessation of employment due to such disability.
(H) Death of Optionee and Transfer of Option
If an optionee should die while in the employ of the Company,
or within a period of three (3) months after a termination of the optionee's
employment with the Company during which the optionee is still permitted to
exercise an option in accordance with Subsection 3(F) of this Article II and
shall not have fully exercised the optionee's option, such option may be
exercised to the extent it was exercisable immediately prior to the optionee's
death at any time within one (1) year after the optionee's death. Such
option may be exercised to the extent it was exercisable immediately prior to
the optionee's death by the executors or administrators of the optionee's
estate or by any person or persons who shall have acquired the option
directly from the optionee by the optionee's will or the applicable law of
descent and distribution.
(I) Recapitalizations and Reorganizations
The number of shares of Class A Common Stock and Class B
Common Stock covered by the Plan, and each outstanding option hereunder and
the price per share thereof, shall be proportionately adjusted for any
increase or decrease in the number of issued and outstanding shares of
Class A Common Stock and Class B Common Stock resulting from a subdivision
or consolidation of shares or the payment of a stock dividend in excess of 2%
or any other increase or decrease in the number of issued and outstanding
shares of Class A Common Stock and Class B Common Stock effected without
receipt of consideration by the Company.
If the Company shall be the continuing or surviving
corporation in any reorganization, consolidation or merger, each outstanding
option shall pertain to and apply to the securities, if any, to which a
holder of the same number of shares of Class A Common Stock and/or Class B
Common Stock that are subject to that option would have been entitled.
A "Change in Control" of the Company (as defined below) shall
cause each outstanding option to terminate, unless any agreement relating to
a Change in Control shall otherwise provide or unless such Change in Control
is an event described in clauses (a)(2) or (a)(3) of the following paragraph;
provided, however, that each optionee holding an outstanding option in the
event of a Change in Control shall have the right immediately prior
to such a Change in Control, regardless of whether such option will terminate,
to exercise his or her option in whole or in part without regard to any
limitations on exercisability and thereafter such option shall be considered
fully vested.
For the purposes hereof, a "Change in Control" shall be
deemed to have occurred when (a) there shall be consummated (1) any
reorganization, consolidation or merger of the Company in which the Company
is not the continuing or surviving corporation, or (2) any reorganization,
consolidation or merger of the Company in which the Company is the continuing
or surviving corporation and pursuant to which shares of the Company's Class
A Common Stock and Class B Common Stock would be converted into cash,
securities or other property, or (3) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, or (b) the stockholders of
the Company approve a plan or proposal for the liquidation or dissolution of
the Company, or (c) the Board of Directors of the Company or the Committee
shall have been determined that such a "Change in Control" otherwise has
occurred.
To the extent that the foregoing adjustments in this Section 3(I)
relate to stock or securities of the Company, such adjustments shall be made
by the Committee, whose determination in that respect shall be final, binding
and conclusive.
The grant of an option pursuant to the Plan shall not affect
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations of changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell,
or transfer all or any part of its business or assets.
(J) Rights as a Stockholder
An optionee or a transferee of an option shall have no rights
as a stockholder with respect to any shares covered by his or her option until
the date of the receipt of payment by the Company and the issuance of a stock
certificate to him or her for such shares pursuant to Section 3(D) of this
Article II. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
or other rights for which the record date is prior to such date, except as
provided in Section 3(I) of this Article II.
(K) Modification, Extension and Renewal of Options
Subject to the terms and conditions and within the limitations
of the Plan, the Committee may modify, extend, renew or cancel outstanding
options granted under the Plan. Notwithstanding the foregoing, however, no
modification of an option shall, without the consent of the optionee, alter
or impair any right or obligations under any option theretofore granted under
the Plan.
(L) Other Provisions
The option agreements authorized under the Plan shall contain
such other provisions, including, without limitation, restrictions upon the
exercise of the option or restrictions required by any applicable securities
laws, as the Committee, in its discretion, shall deem advisable.
4. APPLICATION OF FUNDS.
The proceeds received by the Company from the sale of Class A Common
Stock, Class B Common Stock or any combination thereof pursuant to options
will be used for general corporate purposes.
5. NO OBLIGATION TO EXERCISE OPTION.
The granting of an option shall impose no obligation upon the
optionee to exercise such option.
