<PAGE>
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
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
INTEK DIVERSIFIED CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
INTEK DIVERSIFIED CORPORATION
970 WEST 190TH STREET, SUITE 720
TORRANCE, CALIFORNIA 90502
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 5, 1995
TO THE STOCKHOLDERS OF INTEK DIVERSIFIED CORPORATION:
The annual meeting of the Stockholders of INTEK Diversified Corporation,
a Delaware corporation (the "Company"), will be held on July 5, 1995 at The
California Yacht Club, 4469 Admiralty Way, Marina Del Rey, California 90292,
beginning at 12:00 noon local time for the following purposes:
1. To elect directors to serve for a term of one year.
2. To approve the 1994 Stock Option Plan.
3. To approve the 1994 Directors' Stock Option Plan.
4. To ratify the appointment of Arthur Andersen LLP as
independent accountants for the Company for the
fiscal year ending December 31, 1995.
5. To transact such other business as may properly come
before the meeting.
These items of business are more fully described in the Proxy Statement
accompanying this Notice.
Only Stockholders of record at the close of business on June 21, 1995
are entitled to vote at the Annual Meeting.
All Stockholders are cordially invited to attend the meeting in person.
However, to insure your representation at the meeting, please sign and return
the enclosed Proxy as promptly as possible in the postage prepaid envelope
enclosed for your convenience. Any stockholder attending the meeting may vote
in person even if he or she has returned a Proxy.
By Order of the Board of Directors
STEVEN L. WASSERMAN, SECRETARY
<PAGE>
INTEK DIVERSIFIED CORPORATION
970 WEST 190TH STREET, SUITE 720
TORRANCE, CALIFORNIA 90502
----------
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of INTEK Diversified Corporation (the
"Company") to be used at the 1995 Annual Meeting of Stockholders of the Company
to be held on Wednesday, July 5, 1995, and any postponements or adjournments
thereof (the "Annual Meeting"). The Annual Meeting will be held at The
California Yacht Club, 4469 Admiralty Way, Marina del Rey, California 90202,
beginning at 12:00 noon local time. As more fully described below, the
principal business to be addressed at the Annual Meeting is the election of
directors, the approval of two stock option plans and the ratification of the
appointment of Arthur Andersen LLP as independent public accountants for the
Company's 1995 fiscal year.
The expense of soliciting proxies, including the cost of preparing,
printing and mailing the proxy materials, will be borne by the Company. In
addition to solicitation of proxies by mail, solicitation may be made personally
and by telephone, and the Company may pay persons holding shares for others
their expenses for sending proxy materials to their principals. No solicitation
will be made other than by directors, officers and employees of the Company.
Any person giving a proxy pursuant to this solicitation may revoke it at
any time before it is voted by delivering to the Secretary of the Company at its
principal office a written notice of revocation or a duly executed proxy bearing
a later date or by attending the Annual Meeting and voting in person.
Attendance at the Annual Meeting will not in and of itself revoke a proxy. All
validly executed proxies received by the Board of Directors of the Company
pursuant to this solicitation will be voted at the Annual Meeting, and the
directions contained in such proxies will be followed in each instance. If no
directions are given, the proxy will be voted FOR the election of the nominees
listed in the proxy and FOR the proposals set forth in the Notice.
This Proxy Statement and the Notice and Proxy together with the
Company's Annual Report on Form 10-K for the year ended December 31, 1994 and
the Company's quarterly report on Form 10-Q for the period ended March 31, 1995,
are being sent to stockholders beginning on or about June 23, 1995.
<PAGE>
VOTING RIGHTS
Holders of record of shares of the Company's common stock, par value
$0.01 per share (the "Common Stock"), at the close of business on June 21, 1995
are entitled to vote at the Annual Meeting. On June 21, 1995, there were
9,564,831 shares of Common Stock outstanding. Each share is entitled to one
vote.
A majority of the issued and outstanding shares of Common Stock entitled
to vote constitutes a quorum at the Annual Meeting. The affirmative vote of the
holders of a plurality of the votes of the shares present in person or
represented by proxy at the Annual Meeting is required for the election of
directors and the affirmative vote of a majority of the shares present at the
Annual Meeting is required for the approval of the two stock option plans.
Shares of Common Stock represented in person or by proxy at the Annual
Meeting (including shares which abstain or do not vote with respect to one or
more of the matters presented at the Annual Meeting) will be tabulated by the
inspectors of election appointed for the Annual Meeting and will determine
whether or not a quorum is present. Abstentions will be counted as shares that
are present and entitled to vote for purposes of determining the number of
shares that are present and entitled to vote with respect to any particular
matter, but will not be counted as votes in favor of such matter. Accordingly,
an abstention from voting on a matter by a stockholder present in person or
represented by proxy at the Annual Meeting will have the same legal effect as a
vote "against" the matter even though the stockholder or interested parties
analyzing the results of the voting may interpret such vote differently. If a
broker holding stock in "street name" 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. Accordingly, a "broker non-vote" on a matter has no
effect on the voting on such matter.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
The Company's Board of Directors currently has eight members, all of
whom have a term expiring in 1995. The Board has nominated the eight incumbent
Directors for election as directors and recommends that the stockholders vote
FOR all of the nominees.
The enclosed proxy will be voted FOR all of the nominees unless the
proxy holders are otherwise instructed. If any of the nominees are unavailable
or decline to serve as a director for any reason, the proxy holders will vote
the proxies for a substitute nominee or nominees designated by the Board of
Directors. The Board of Directors does not expect that any nominee will be
unavailable.
Certain information about the nominees is set forth below.
2
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information with respect to the
directors and executive officers of the Company as of June 21, 1995.
Director
Name Age Positions with the Company Since
- ------------------------ ----- ---------------------------- ------------
Nicholas R. Wilson 50 Chairman of the Board 1994
Vincent P. Paul 74 Vice Chairman of the Board 1984
John G. Simmonds 44 Chief Executive Officer and
Director 1994
Harry Dunstan 44 President, Chief Operating
Office and Director 1994
Peter A. Heinke 37 Chief Financial Officer,
Treasurer and Director 1994
Steven L. Wasserman 41 Secretary and Director 1994
David Neibert 39 Director 1994
Christopher Branston 49 Director 1994
Nicholas Wilson became Chairman of the Board of the Company on
September 23, 1994. Mr. Wilson is President of Roamer One Holdings, Inc., a
holding company which owns approximately 40% of the shares of the Company, and
since 1990 Chairman of the Board of Opportunities Associates, Inc., a real
estate development company. From 1990 to 1994, Mr. Wilson has been President of
Roamer Corporation of America, an engineering and consulting company for the
wireless communications industry, a predecessor to Roamer One, Inc., a
subsidiary of the Company.
Vincent Paul became the Vice-Chairman of the Company on September 23,
1994. Mr. Paul is also a member of the Company's Audit Committee and the Stock
Option Committee. Mr. Paul was the President and Chairman of the Board of
Directors of the Company from June 1992 to September 1994. Mr. Paul was
President of Corporate Properties Limited (a Canadian land development company)
from March 1971 to June 1984 when he became Chairman of the Board of Directors.
Mr. Paul served as Chairman until December 5, 1986 when he resumed the offices
of President and Chief Executive Officer. From June 1983 to the present Mr.
Paul has been Chairman of the Board of Directors of Anglo York Industries
Limited, a Canadian corporation incorporated in the province of Ontario whose
principal business is industrial and commercial real estate and land
development. Since July 1989, Mr. Paul has been the President of Anglo York
Industries, Inc. whose principal business is the holding of securities issued by
the Company. From 1986 to the present, Mr. Paul has been Vice Chairman of
Saynor Varah, Inc., a distributor of electronic parts. In March 1989, he also
became President and Chief Executive
3
<PAGE>
Officer of Saynor Varah, Inc. Mr. Paul has been Director and Vice President of
Peter Paul Corporation, Inc., a Texas land development corporation since 1980.
John G. Simmonds became Chief Executive Officer of the Company on
September 23, 1994. Mr. Simmonds has been Chairman of the Board of Directors,
President and Chief Executive Officer of Simmonds Communications Ltd., a
wireless communications engineering and design company ("SCL"), since 1990 and
Chairman of the Board of Directors and Chief Executive Officer of Kustom
Electronics Inc.,a manufacturer of equipment for wireless data transmission,
since 1991. Mr. Simmonds was Executive Vice President and a director of
Glenayre Electronics, Ltd., a wireless communications business, from 1988-1990.
He was formerly a director (1977-1990) and Vice President (1968-1990) of
A.C. Simmonds & Sons Ltd., an electronics distributor.
Harry Dunstan became President and Chief Operating Officer of the
Company on September 23, 1994. Since 1991, Mr. Dunstan has been Vice President,
Chief Operating Officer and a director of Simmonds Communications Ltd.
Mr. Dunstan was formerly Vice President of Glenayre Electronics, Ltd., a
wireless communications company (1989-1991), and is a director of Kustom
Electronics Inc. (1991-Present).
Peter Heinke became Chief Financial Officer and Treasurer of the Company
on September 23, 1994. Mr. Heinke is Chief Financial Officer of Simmonds
Communications Ltd. (1993-Present). He was formerly self-employed as a
financial consultant (1990-1992) and Treasurer/Controller of Trac Industries
Inc. (1986-1990).
Steven L. Wasserman became Secretary and a director of the Company on
September 23, 1994. Mr. Wasserman is a member of the Company's Audit Committee
and the Stock Option Committee. Mr. Wasserman is an attorney and a partner of
the law firm of Kohrman Jackson & Krantz, Cleveland, Ohio. He is a director of
Roamer One Holdings, Inc. Mr. Wasserman was a vice-president of the law
corporation of Honohan, Harwood, Chernett & Wasserman, Cleveland, Ohio, from
September 1983 until September 1, 1994.
David Neibert became a director of the Company on September 23, 1994.
Mr. Neibert is President and a director of Roamer One, Inc. Mr. Neibert is a
director and was the President (1992-1994) of Roamer One Holdings, Inc. and was
the President of Master Marine Incorporated D.N.A. Seamark Marine Electronics
(1987-1992).
Christopher Branston became a director of the Company on September 23,
1994. Mr. Branston is also a member of the Company's Stock Option Committee.
Since October, 1987, Mr. Branston has been a Solicitor in the United Kingdom
practicing on his own, and since September 1994, a consultant to the United
Kingdom law firm of Rogers & Burton.
4
<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors met two times and held meetings by telephonic
conference five times during fiscal 1994. With the exception of Peter Heinke
who missed one meeting, each director attended all of the meetings of the Board
of Directors and meetings of the committees on which he served.
The Audit Committee consists of Mr. Paul and Mr. Wasserman. The purpose
of the Audit Committee is to review the accounting and reporting principles,
policies and practices followed by the Company and the adequacy of the Company's
internal, financial and operating controls. The Audit Committee met once in
1994.
The Stock Option Committee consists of Mr. Paul, Mr. Branston and
Mr. Wasserman. The purpose of the Stock Option Committee is to administer the
Company's stock option plans. The Stock Option Committee met once in 1994.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Under Section 16(a) of the Exchange Act, the Company's directors,
executive officers and any persons holding ten percent or more of the Common
Stock are required to report their ownership of Common Stock of the Company and
any changes in that ownership to the Securities and Exchange Commission (the
"SEC") and to furnish the Company with copies of such reports. Specific due
dates for these reports have been established and the Company is required to
report any failure to file on a timely basis by such persons. Based solely upon
a review of the Company's copies of reports filed with the SEC during the fiscal
year ended December 31, 1994, all persons subject to the reporting requirements
of Section 16(a) filed all required reports on a timely basis.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth as of December 31, 1994 all compensation
paid by the Company to the Company's Chief Executive Officer and the other
executive officers of the Company whose total annual salary and bonus exceeds
$100,000 (the "Named Executive Officers"). For the year ended December 31,
1994, except as referred to below, no compensation was paid or distributed by
the Company or its subsidiaries with respect to any Named Executive Officer, the
aggregate amount of which is at least the lesser of $50,000 or ten percent (10%)
of the compensation reported in the following table for such person.
5
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
SECURITIES
CAPACITY IN WHICH CASH UNDERLYING
NAME COMPENSATION RECEIVED COMPENSATION OPTIONS/SAR
- ---- --------------------- ------------ -----------
<S> <C> <C> <C>
John Simmonds(1) Chief Executive Officer
INTEK Diversified Corporation
1994 $ 0 40,000(2)
1993 $ 0
1992 $ 0
Vincent P. Paul(3) President and Chairman of the Board
prior to September 23, 1994 and Vice
Chairman, of the Board since 40,000(4)
September 23, 1994
INTEK Diversified Corporation
1994 $ 200,000
1993 $ 200,000
1992 $ 200,000
Harold H. Davis President, Olympic
Plastics Company, Inc.
1994 $ 132,611 50,000(5)
1993 $ 157,976
1992 $ 135,044
<FN>
(1) John Simmonds became the Chief Executive Officer of the Company on
September 23, 1994 upon the consummation of the Merger. Mr. Simmonds is the
Chairman of the Board. President and Chief Executive Officer of SCL. Since
October 1, 1994, the Company has paid management fees to SCL in the amount of
$10,000 a month.
(2) Mr. Simmonds was granted a stock option for 40,000 shares of Common
Stock, which shares Mr. Simmonds has the right to acquire at a price of $3.75
per share under the 1994 Stock Option Plan. These options vest on September 24,
1995, provided that the 1994 Stock Option Plan is approved by the stockholders
of the Company.
(3) For each of the years ended December 31, 1992, 1993, and 1994, the
Company paid a management fee of $200,000 to Peter Paul Corporation, Inc., an
affiliate of Anglo York Industries, Inc., a stockholder of the Company. Under a
management agreement with the Company, Peter Paul Corporation, Inc. makes
available to the Company without additional compensation the services of Vincent
Paul. Mr. Paul served as President and Chairman of the Board of the Company
until September 23, 1994.
(4) Mr. Paul was granted a stock option for 40,000 shares of Common Stock of
the Company at an option price of $3.75 per share under the 1994 Directors'
Stock Option Plan. These options vest on September 24, 1995, provided that the
1994 Directors' Stock Option Plan is approved by the stockholders of the
Company.
(5) Mr. Davis was granted a stock option for 50,000 shares of Common Stock
of the Company, which shares Mr. Davis has the right to acquire at a price of
$2.75 per share under the 1994 Stock Option Plan, as part of his severance
agreement. Mr. Davis was also Executive Vice President and Treasurer of the
Company until September 23, 1994.
</TABLE>
Under the terms of a severance agreement with Harold H. Davis,
Mr. Davis's services with the Company terminated on September 23, 1994.
Mr. Davis received a payment of $25,000 upon termination and a grant under the
Company's 1994 Stock Option Plan of options to buy 50,000 shares of Common Stock
of the Company at a purchase price of $2.75 per share. Except for the severance
agreement with Mr. Davis, the Company does not have any compensatory plan or
arrangement, including payments to be received from the Company with respect to
any
6
<PAGE>
individual named above for the latest or last preceding fiscal year, which plan
or arrangement results or will result from the resignation, retirement or any
other termination of such individual's employment with the Company and its
subsidiaries or from a change in control of the Company or a change in the
individual's responsibilities following a change in control, which amount
involved, including all periodic payments or installments, exceeds $100,000.
OPTIONS/SAR GRANTS(6) IN THE LAST FISCAL YEAR
The following table sets forth for the Named Executive Officers,
information for fiscal 1994, relating to (i) options granted; and (ii) the net
value of shares (market value less option price) or cash realized upon the
exercise of options.
<TABLE>
<CAPTION>
Potential Realizable Value At
Assumed Annual Rates of Stock
Price Appreciation for Option
Individual Grants Term(7)
- --------------------------------------------------------------------------------------- -----------------------------
Number
of Sec-
urities % of Total
Under- Options/ Exercise
lying SARS or Base
Options/ Granted to Price Expiration 5 % 10 %
Name SARS Employees ($/Sh) Date ($) ($)
Granted in Fiscal
(#) Year
- ---------------- --------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
John Simmonds 40,000(8) 8.9% $ 3.75 9/24/04 $ 244,334 $ 389,061
Vincent P. Paul 40,000(9) 8.9% $ 3.75 9/24/04 $ 244,334 $ 389,061
Harold Davis 50,000(10) 11% $ 2.75 9/24/97 $ 159,173 $ 183,013
<FN>
(6) The Company has no plans pursuant to which stock appreciation rights may be
granted.
(7) The Potential Realizable Value is the product of (a) the difference between
(i) the closing average market price per share at the grant date and the sum of
(A) 1 plus (B) the assumed rate of appreciation of the stock compounded annually
over the term of the option and (ii) the per share exercise price of the option
and (b) the number of shares of stock underlying the options at December 31,
1994. These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on a variety of factors,
including market conditions and the price performance of the stock. There can be
no assurance that the rate of appreciation presented in this table can be
achieved.
(8) These options were granted pursuant to the 1994 Plan. These options vest
on September 24, 1995, provided that the 1994 Plan is approved by the
stockholders of the Company.
(9) These options were granted pursuant to the Directors' Plan. These options
vest on September 24, 1995, provided that the Directors' Plan is approved by the
stockholders of the Company.
(10) These options were granted pursuant to the 1994 Plan.
</TABLE>
7
<PAGE>
No options under the 1988 Plan, 1994 Plan or the 1994 Directors Plan
were exercised in 1994.
1988 STOCK OPTION PLAN
The Company's 1988 Key Employee Stock Option Plan (the "1988 Plan") is
intended to qualify as an "incentive stock option plan" within the meaning of
Section 422A of the Internal Revenue Code of 1986, as amended (the "Code").
The 1988 Plan provides that 500,000 shares of Common Stock will be
reserved for issuance upon the exercise of options to be granted. The options
are to be exercisable at a price equal to the "Fair Market Value" (average of
the closing per share bid and asked price of Common Stock on the date an option
was granted) or 110% of Fair Market Value for persons who have in excess of a
ten percent voting interest in all classes of the Company's stock prior to the
date of grant. However, the dollar amount of options issued under the 1988 Plan
in any calendar year is limited to $100,000 per person in value plus any unused
limit carry-over. The 1988 Plan provides that the number of shares subject to
the 1988 Plan and the outstanding options and their exercise prices are to be
appropriately adjusted for mergers, consolidations, recapitalization, stock
dividends, stock split-ups or combination of shares.
The 1988 Plan is required to be administered by the Stock Option
Committee. The Stock Option Committee has the authority to designate
participants and to determine the terms and provisions of each option agreement,
and interpret and amend the 1988 Plan. The Board, upon recommendation of the
Stock Option Committee, may terminate, amend or modify the 1988 Plan, except
that the following action may not be taken without the approval of the Company's
stockholders: (i) an increase in the number of shares of Common Stock subject
to the 1988 Plan (except for the adjustments referred to above); or (ii)
alteration in the method of determining the exercise price of options granted
under the 1988 Plan.
The persons eligible to receive options under the 1988 Plan are all
officers or other key employees of the Company and its subsidiaries (as defined
in the 1988 Plan). There have been no material amendments to the 1988 Plan
since its inception.
8
<PAGE>
SEP-IRA PLAN
Olympic Plastics Company, Inc. ("Olympic"), a subsidiary of the Company
which had sold substantially all of its operating assets as of May 15, 1995 and
is now inactive, adopted a Simplified Employees Pension Individual Retirement
Account Plan ("SEP-IRA") in 1979. The plan is one by which Olympic may
contribute up to 15% of a salaried employee's annual remuneration to any
qualified SEP-IRA account of the employees' choice. The annual contribution, if
any, is solely at the discretion of the Board of Directors and is not based on
profits, sales or any other operational measure. No contribution was made to
the SEP-IRA for the year ended December 31, 1994.
DIRECTOR COMPENSATION
The Company did not pay fees in 1994 to its directors for their service
on the Board of Directors or for attendance at meetings of the Board or
committees. The Company recently adopted a policy to pay its directors an
annual fee of $4,000 plus $500 for each Board of Directors and Committee meeting
attended, whether in person or by telephone.
On September 23, 1994, each of the members of the Board of Directors of
the Company was granted, pursuant to either the 1994 Stock Option Plan or the
1994 Directors' Stock Option Plan, an option to acquire 40,000 shares of Common
Stock of the Company at an exercise price of $3.75 per share. Such options vest
on September 24, 1995 provided that Plans are approved by the stockholders of
the Company. Such options expire September 24, 2004. For a description of the
Plans, see Proposals 2 and 3.
BOARD INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION DECISIONS.
The Company has no compensation committee. Compensation decisions for
the executive officers (other than grants of options which are determined by the
Stock Option Committee) are made by the Board of Directors of the Company.
Messrs. Wilson, Paul, Simmonds, Dunstan, Heinke and Wasserman are non-employee
officers of the Company. Mr. Neibert is President of Roamer One, Inc., a
subsidiary of the Company. See "DIRECTORS AND OFFICERS OF THE COMPANY."
9
<PAGE>
BOARD REPORT ON EXECUTIVE COMPENSATION
The Board of Directors (the "Board") is responsible for reviewing the
Company's compensation policies and programs applicable to the Company's
executive officers, except stock option grants which are administered by the
Stock Option Committee. As disclosed in the Summary Compensation Table, the
Company paid no compensation to its Chief Executive Officer for the year ended
December 31, 1994. The Company has no compensation committee of the Board of
Directors and the Board has not adopted compensation policies, since management
services are provided by executives of SCL and ROH, the principal shareholders
of the Company. The Company has paid management fees to each of SCL and ROH at
the rate of $10,000 per month since October 1, 1994.
Stock options have been granted to all directors of the Company to
reward them for services to the Company and to provide additional incentive to
retain such directors.
Nicholas R. Wilson
John G. Simmonds
Peter Heinke
Harry Dunstan
Christopher Branston
Vincent Paul
David Neibert
Steven L. Wasserman
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Company's
Common Stock with the cumulative total return of the companies in the Nasdaq
Stock Market Index and the Nasdaq Telecommunication Stocks Index, which includes
wireless telecommunications companies traded on Nasdaq. Cumulative total return
for each of the periods shown in the Performance Graph is measured assuming an
initial investment of $100 on December 29, 1989, and the reinvestment of any
dividends.
Comparison of Cumulative Total Stockholder Return Among
INTEK Diversified Corporation, Nasdaq Stock Market
and Nasdaq Telecommunications Stocks
10
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C>
Intek NSA Stock US Telecom Stocks
1989 100 100 100
1990 18.54 84.92 67.41
1991 29.62 136.28 92.97
1992 137.03 158.58 114.19
1993 25.92 180.93 175.98
1994 170.32 176.92 145.79
</TABLE>
On September 23, 1994, the Company acquired the business of Simrom,
Inc., ("Simrom") pursuant to a business combination involving the merger of
Simrom into Romnet, Inc., a subsidiary of the Company (the "Merger").
Subsequent to the Merger, the Company redirected its business from fabricating
and selling injection and compression molded plastic products to the business of
developing and managing a Specialized Mobile Radio Network in the United States
utilizing the recently licensed 220MHz narrow band spectrum. By May 15, 1995,
the Company had sold substantially all of the operating assets of Olympic as
part of repositioning its business within the communications industry. With the
development of the Company's 220 MHZ system during the last year, Management has
selected the Nasdaq Telecommunication Stocks Index as a meaningful index against
which to measure the Company's performance on an on-going basis.
PRINCIPAL STOCKHOLDERS
On September 23, 1994, as a result of the consummation of the Merger, a
change of control in the Company occurred. The following table sets forth the
information regarding the beneficial ownership of the Company's Common Stock as
of June 21, 1995, by (i) each person known by the Company to own beneficially
more than five percent of the Company's outstanding
11
<PAGE>
Common Stock and (ii) each Director of the Company, and (iii) all Directors and
Officers as a group. Unless otherwise noted, to the Company's knowledge, the
persons named in the table have sole voting and investment power with respect to
all shares of the Company's Common Stock shown as beneficially owned by them.
<TABLE>
<CAPTION>
Percent of
Common Stock &
Amount and Nature of Stock Options
Name and Address Beneficial Ownership (9,629,831 sh.)(11)
- ---------------- -------------------- -------------------
<S> <C> <C>
Roamer One Holdings, Inc. 3,600,000(12) 37.4%
1431 West 117th Street
Cleveland, OH 44107
<FN>
- ---------------------------
(11) Includes 9,564,831 common shares of Common Stock outstanding at June 21,
1995, and options for 65,000 shares under the 1988 Plan which the holder has the
right to acquire by the exercise of vested stock options.
(12) Roamer One Holdings, Inc. ("ROH") is a Delaware corporation controlled
by Nicholas R. Wilson. 1,800,000 shares of Common Stock held by ROH are held in
escrow pursuant to an Escrow Agreement by and among the Company, American Stock
Transfer, Simmonds Communications Ltd. ("SCL"), and ROH. Release of such shares
is subject to a number of conditions. Under the Escrow Agreement, ROH has the
right to exercise any and all voting and other consensual rights pertaining to
ROH's escrowed shares.
</TABLE>
On June 16, 1995, ROH entered into an option agreement (the "SCL
Option") with SCL pursuant to which SCL paid ROH $1,800,000 for an option to
purchase up to 1,800,000 shares of Common Stock at a purchase price of $1.50 per
share. The option may be exercised, in whole or in part, for a period of five
years. ROH also entered into a pledge agreement granting to SCL a security
interest in the shares subject to the option and depositing certificates
representing the shares with R-M Trust Company as agent for SCL. Under the
pledge agreement, ROH has the right to exercise any and all voting and other
consensual rights pertaining to ROH's pledged shares.
12
<PAGE>
<TABLE>
<S> <C> <C>
Simmonds Communications Ltd 3,658,850(13) 38%
5255 Yonge Street, #1050
Willowdale, Ontario, Canada
<FN>
- ---------------------------
(13) 1,200,000 shares of Common Stock held by SCL are held in escrow pursuant
to an Escrow Agreement by and among the Company, American Stock Transfer, SCL,
and ROH. Release of such shares is subject to a number of conditions. Under
the Escrow Agreement, SCL has the right to exercise any and all voting and other
consensual rights pertaining to SCL's escrowee shares of Common Stock.
On September 30, 1994, SCL granted an option (at an option price of
$800,000) to Murray Sinclair of Toronto, Canada, to purchase 800,000 shares of
Common Stock at $1.50 per share, and granted an option (at an option price of
$200,000) to Choi & Choi HK Limited of London, England, to purchase 200,000
shares of Common Stock at $1.50 per share. Each option is exercisable,
partially or in whole, at any time (subject to applicable regulatory or tax
restrictions), for a period of five years. On May 1, 1995, Choi & Choi HK
Limited exercised the options granted to it by SCL and a portion of 600,000
additional options which have been assigned to it by Mr. Murray Sinclair to
acquire 400,000 shares of Common Stock.
On March 24 through March 30, 1995, SCL purchased 45,000 shares of
Common Stock at $4.25 per share from certain of SCL's employees, including
certain officers and directors of the Company, and purchased 8,850 shares in the
open market. In addition, SCL has agreed, under the Employee Option Agreement
dated as of April 7, 1995, to permit each employee from whom shares were
purchased to repurchase the same number of such shares at $4.25 per share until
March 31, 1997 subject to SCL's right to cancel these options upon 90 days'
written notice.
As of March 31, 1995, SCL entered into an option agreement (the "EC
Option Agreement") with Extra Clearing B.V., a corporation incorporated under
the laws of the Netherlands ("EC"), pursuant to which EC paid SCL $890,000 for
options to purchase up to 890,000 shares of Common Stock for $1.50 per share.
436,000 of the options may be exercised, partially or in whole, at any time, for
a period of five years, subject to any applicable regulatory or tax
restrictions. 454,000 of the options are subject to an additional requirement
that they cannot be exercised for ninety (90) days from the date of the EC
Option Agreement.
In connection with the EC Option Agreement, SCL and EC also entered into
a pledge agreement (the "Pledge Agreement") pursuant to which SCL pledged
890,000 shares of Common Stock to EC in support of its obligations under the EC
Option Agreement.
On April 24, 1995, EC exercised a portion of the options and acquired
35,000 shares. On May 17, 1995, EC exercised a portion of the options and
acquired 200,000 shares. On June 1, 1995, EC exercised a portion of the options
and acquired 107,000 shares.
As of May 25, 1995, SCL entered into an option agreement (the "Bradley
Option Agreement") with Bradley Ltd. of Hamilton, Bermuda, pursuant to which
Bradley paid SCL $100,000 for options, exercisable through September 30, 1999,
to purchase up to 100,000 shares of the Company's Common Stock for $1.50 per
share, subject to any applicable regulatory or tax restrictions.
On June 16, 1995, SCL entered into an option agreement with ROH pursuant
to which SCL paid ROH $1,800,000 for an option to purchase up to 1,800,000
shares of Common Stock at a purchase price of $1.50 per share. The option may
be exercised, in whole or in part, for a period of five years.
</TABLE>
13
<PAGE>
<TABLE>
<S> <C> <C>
Anglo York Industries, Inc. 1,102,049(14) 11.4%
1050 McNicoll Avenue, Unit 13
Scarborough, Ontario
M1W 2L8 Canada
Vincent P. Paul 305,012(14) 3.2%
1050, McNicoll Avenue, Unit 13
Scarborough, Ontario
M1W 2L8 Canada
Nicholas R. Wilson 3,600,000(15) 37.4%
13700 Tahiti Way, Suite 154
Marina del Rey, CA 90291
Harry Dunstan 5,000(16) (17)
RR #2
Caledon East, Ontario
Canada
John Simmonds 17,500(18) (19)
44 Old Yonge Street
North York, Ontario, Canada
M2P 1P7
<FN>
- ---------------------------
(14) Anglo York Industries, Inc. ("Anglo York") is a wholly-owned subsidiary
of Anglo York Industries, Limited, an Ontario corporation ("Anglo Limited").
The outstanding voting securities of Anglo Limited are beneficially owned in
equal amounts by three children of Vincent P. Paul who have obtained majority
and by one child who is a minor and whose interest is held in Trust. Mr. Paul
and his spouse, the Trustee of such Trust, also may be deemed to beneficially
own the shares of the Company's Common Stock beneficially owned by their minor
child. Both Mr. and Mrs. Paul disclaim beneficial ownership of the shares of
the Company's Common Stock beneficially owned by any of their adult children.
Anglo York has pledged 1,000,049 shares of the Company's Common Stock to the
Royal Bank of Canada and 102,000 shares in the aggregate to Swiss Bank
Corporation (Canada) to secure certain indebtedness of Anglo York. Accordingly,
the Royal Bank of Canada and the Swiss Bank Corporation (Canada) may be deemed
to be the respective beneficial owners of such shares. In addition, if Anglo
York defaults in the repayment of such indebtedness, a change in control of the
Company may result.
(15) Mr. Wilson controls ROH which beneficially owns 3,600,000 shares of the
Company's Common Stock.
(16) On March 24, 1995, Mr. Dunstan sold 5,000 shares of Common Stock to SCL
at $4.25 per share and SCL granted to Mr. Dunstan an option to purchase the same
number of shares at $4.25 per share until March 31, 1997, subject to SCL's right
to cancel such option upon 90 days' written notice.
(17) Less than 0.1%.
(18) On March 24, 1995, Mr. Simmonds sold 16,150 shares of Common Stock to
SCL at $4.25 per share and SCL granted Mr. Simmonds an option to purchase the
same number of shares at $4.25 per share until March 31, 1997, subject to SCL's
right to cancel such option upon 90 days' written notice.
(19) Less than 0.1%.
</TABLE>
14
<PAGE>
<TABLE>
<S> <C> <C>
Peter Heinke 10,000(20) (21)
RR #1 Clarksburg
Ontario, Canada NOH 1JO
Steven L. Wasserman 0 --
2800 Belgrave Road
Pepper Pike, Ohio 44124
David Neibert 455 (22)
23275 Lenora Drive
Woodland Hills, CA 91367
Christopher Branston 0 --
14 Willow Avenue
Barnes, London
SW13OLT England
All officers and directors
as a group (8 persons) 3,937,967 40.8%
- ---------------------------
(20) On March 24, 1995, Mr. Heinke sold 10,000 shares of Common Stock to SCL
at $4.25 per share and SCL granted Mr. Heinke an option to purchase the same
number of shares at $4.25 per share until March 31, 1997, subject to SCL's right
to cancel such option upon 90 days' written notice.
(21) Less than 0.1%.
(22) Less than 0.1%.
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For the year ended December 31, 1994, the Company paid a management fee
of $200,000 to Peter Paul Corporation, Inc., an affiliate of Anglo York
Industries, Inc., a shareholder of the Company. Peter Paul Corporation, Inc.,
makes the services of Mr. Vincent Paul, Vice Chairman of the Board of Directors,
available to the Company without additional compensation. On September 23,
1994, the Company entered into a new agreement with Peter Paul Corporation for
$200,000 a year in exchange for the services of Mr. Vincent Paul. The agreement
expires on December 31, 1999.
In November, 1994, the Company borrowed $2,500,000 evidenced by a short-
term promissory note from Quest Capital Corporation ("Quest"). The loan is
secured by a first mortgage on the real property owned by Olympic and a guaranty
by SCL. SCL is a stockholder of the Company which is the beneficial owner of
approximately 38% of the Company's Common Stock. In consideration for SCL's
guaranty, the Company has pledged to SCL the issued and outstanding stock of
Olympic and has granted a lien on the real property owned by Olympic which is
subordinate to the lien granted to Quest.
Roamer One, Inc. borrowed $150,000 from SCL evidenced by a short-term,
non-interest bearing note in October, 1994 and repaid the obligation in
November, 1994.
15
<PAGE>
The Company and SCL have an arrangement whereby Roamer One, Inc.
purchases equipment and installation services from SCL. During 1994, Roamer
One, Inc. purchased $2,195,203 of radio equipment and installation services from
SCL, paying $982,903 and leaving a balance of $1,212,300 as of December 31,
1994, payable upon demand.
On September 23, 1994, the Company and SCL, ROH, Anglo York Industries,
Inc. and Harold Davis (collectively referred to as the "Holders") entered into a
Registration Rights Agreement to provide the Holders with certain demand and
"piggy-back" registration rights with respect to the Company's Common Stock
owned by the Holders. ROH is a stockholder of the Company holding approximately
37.4% of the Company's Common Stock. Anglo York Industries, Inc. is a
stockholder of the Company holding approximately 11.4% of the Company's Common
Stock. Mr. Davis was an executive vice president and treasurer of the Company
until September 23, 1994.
Kohrman Jackson & Krantz, a Cleveland, Ohio, law firm of which Steven L.
Wasserman is a partner, performs legal services for the Company and its
subsidiaries.
On March 7, 1995, the Company entered into a letter of intent with SCL
to purchase all of SCL's wireless communications business including Midland
International Corporation, Midland International, Ltd., and SCL Systems and
Infrastructure, a division of SCL, in exchange for 15 million shares of the
Company's Common Stock. A definitive agreement has not been executed and the
proposed transaction is subject to a number of contingencies. If the
transaction is consummated on the terms and conditions contemplated by the
letter of intent, SCL will hold more than 75% of the outstanding shares of the
Company and will have voting control. No assurance can be made that such
proposed transaction will be consummated on such terms and conditions.
The Company believes that the terms of the transactions and the
agreements described above are on terms at least as favorable as those which it
could otherwise have obtained from unrelated parties. On-going and future
transactions with related parties will be (1) on terms at least as favorable as
those which the Company would be able to obtain from unrelated parties; (2) for
bona fide business purposes; and (3) approved by a majority of the disinterested
and non-employee directors.
PROPOSAL NO. 2--APPROVAL OF 1994 STOCK OPTION PLAN
The following description of certain features of the 1994 Stock Option
Plan (the "1994 Plan") is qualified in its entirety by reference to the 1994
Plan, which is attached as Exhibit A.
GENERAL
The 1994 Plan provides for the granting of stock options for up to an
aggregate of 600,000 shares of the Company's Common Stock. The 1994 Plan
includes provisions authorizing the Stock Option Committee of not less than two
members of the Board of Directors, which administers the 1994 Plan, to adjust
the number of shares of Common Stock covered by the 1994
16
<PAGE>
Plan and outstanding stock options granted thereunder, and the purchase price
per share of Common Stock payable upon the exercise of an outstanding stock
option granted thereunder, in the event of a stock dividend, stock split,
recapitalization, reorganization, merger or other event that causes a change in
the capital structure of the Company. The shares of Common Stock covered by the
1994 Plan may be shares of original issue or shares held in treasury or a
combination thereof.
PURPOSE AND ADOPTION
The purpose of the 1994 Plan is to enable the Company and its
subsidiaries to attract and retain officers and other key employees and
consultants and provide them with appropriate incentives and rewards for
superior performance. The 1994 Plan is intended to advance the interests and
long-term success of the Company by encouraging stock ownership among those who
participate in the 1994 Plan and thereby increasing the personal involvement of
the participants with the fortunes of the Company. The 1994 Plan was adopted by
the Board of Directors effective July 1994.
AWARDS
The 1994 Plan provides for the granting of "incentive stock options"
within the meaning of Section 422 of the Code, and "nonqualified stock options,"
which are not intended to qualify under any provision of the Code. Each grant
shall specify the number of shares of Common Stock to which it pertains;
provided, however, that no optionee shall be granted stock options for more than
60,000 shares in any fiscal year of the Company.
EXERCISE PRICE AND PAYMENT
Stock options are rights to purchase shares of Common Stock at a price
per share that is determined by the Stock Option Committee on the date that the
stock options are granted. The purchase price per share of Common Stock that is
payable upon the exercise of nonqualified stock options granted under the 1994
Plan may be equal to or greater than the fair market value of a share of Common
Stock on the date of grant, provided, however, that the purchase price per share
of Common Stock payable upon the exercise of incentive stock options must be at
least equal to the fair market value thereof on the date of grant.
The 1994 Plan permits payment of the purchase price in cash or by check
or the transfer to the Company of nonforfeitable, unrestricted shares of Common
Stock that are already owned by the optionee and have a fair market value on the
date of exercise equal to the aggregate purchase price. The 1994 Plan also
permits the Stock Option Committee to authorize deferred payment of the purchase
price from the proceeds of sale through a broker on the date of exercise of some
or all of the shares of Common Stock to which the exercise relates.
17
<PAGE>
VESTING AND TERMINATION
The 1994 Plan authorizes the Stock Option Committee to establish vesting
provisions with respect to each grant of stock options, regarding the period(s)
of continuous employment, or continuous engagement of the consulting services,
of the optionee with the Company or any of its subsidiaries that is necessary
before a stock option (or installments thereof) will become exercisable.
Furthermore, any grant may provide for the earlier exercise of the stock option
in the event of a change in control of the Company or other similar transaction
or event. Each grant shall be evidenced by an agreement, executed on behalf of
the Company and accepted by the optionee, which shall contain such terms and
provisions as the Board of Directors may determine consistent with the 1994
Plan.
The 1994 Plan authorizes the Stock Option Committee to establish
provisions consistent therewith in respect of each grant of stock options
thereunder regarding the termination thereof. No stock option may be exercised
more than ten years after the date of grant.
CANCELLATION
The 1994 Plan provides that the Stock Option Committee may cancel any
stock option granted thereunder with the consent of the affected optionee. In
the event of any such cancellation, the Committee may grant a new stock option,
which may or may not cover the same number of shares of Common Stock as was
covered by the cancelled stock option, in such manner, at such exercise price
and subject to such terms and conditions as would have been applicable under the
1994 Plan had the cancelled stock option not been granted.
TRANSFERABILITY
Stock options granted under the 1994 Plan may not be transferred except
by will or the laws of descent and distribution and may not be exercised during
an optionee's lifetime except by the optionee or, in the event of the optionee's
legal incapacity, by his or her guardian or legal representative acting in a
fiduciary capacity on behalf of the optionee under state law and court
supervision.
ELIGIBILITY
Incentive stock options and nonqualified stock options may be granted
under the 1994 Plan to those officers, including officers who are also directors
of the Company, other key employees or consultants of the Company and its
subsidiaries who are selected by the Stock Option Committee. The 1994 Plan
provides that the Stock Option Committee may provide special terms for grants to
foreign participants to accommodate differences in local law, tax policy or
custom.
18
<PAGE>
AMENDMENT
No further awards shall be granted under the 1994 Plan after the passage
of 10 years from the date on which the 1994 Plan is first approved by the
stockholders of the Company. However, any amendment that increases the
aggregate number of shares of Common Stock covered by the 1994 Plan, or
otherwise would cause this Plan to cease to satisfy any applicable condition of
Rule 16b-3 under the Securities Exchange Act of 1934 (the "Exchange Act") (or
any successor rule to the same effect), is subject to approval by the
stockholders of the Company. The 1994 Plan is intended to comply with and be
subject to Rule 16b-3 as in effect prior to May 1, 1991, once it has been
submitted to the stockholders. The Committee may at any time elect that the 1994
Plan shall be subject to Rule 16b-3 as in effect on and after May 1, 1991.
TAX CONSEQUENCES TO OPTIONEES
The following is a brief summary of certain of the federal income tax
consequences of certain transactions under the 1994 Plan based on federal income
tax laws in effect as of the date of this Proxy Statement. The following is not
intended to be complete and does not describe any state or local tax
consequences.
NONQUALIFIED STOCK OPTIONS
GENERALLY. An optionee generally will not recognize income upon the
grant of a nonqualified stock option. If an optionee receives unrestricted
shares of Common Stock upon the exercise of a nonqualified stock option, he or
she will normally recognize ordinary income at the time of exercise equal to the
excess of the fair market value, at the time of exercise, of the shares received
pursuant to the exercise over the exercise price. Ordinary income from a non-
qualified stock option will constitute compensation for which withholding may be
required under federal and state law.
SPECIAL RULES APPLICABLE TO OPTIONEES SUBJECT TO SECTION 16(B) OF THE
EXCHANGE ACT. The tax consequences to optionees who are subject to Section
16(b) of the Exchange Act ("Insiders") and receive shares of Common Stock
pursuant to the 1994 Plan may sometimes differ from the tax consequences
described above because of the interaction between Section 16(b) of the Exchange
Act and Section 83 of the Code. Section 83 of the Code applies to the transfer
of property, including stock, to an employee as compensation for services and
provides for deferral of taxation so long as the employee's rights in the
property are subject to a substantial risk of forfeiture and are not
transferable. In the case of an Insider, the deferral provided by Section 83 of
the Code generally will apply until the earlier of (i) the date the Insider is
no longer subject to suit under Section 16(b) of the Exchange Act or (ii) six
months from the date of acquisition of the Common Stock (the "Section 16(b)
Deferral").
In the usual case, the effect of the Section 16(b) Deferral will be to
postpone valuation and taxation until the end of the deferral period. In
addition, the Insider's holding period for capital gains purposes will generally
be deferred until the end of the deferral period. If desired, the effect
19
<PAGE>
of the Section 16(b) Deferral generally can be avoided if the Insider makes an
election under Section 83(b) of the Code within 30 days after the shares of
Common Stock are transferred to the Insider to have the shares taxed to the
Insider as ordinary income at their fair market value on the date of transfer
less any amount paid by the Insider.
TAX CONSEQUENCES TO THE COMPANY. To the extent that an optionee
recognizes ordinary income, the Company or subsidiary for which the optionee
performs services will be entitled to a corresponding deduction provided that,
among other things, the deduction meets the test of reasonableness, is an
ordinary and necessary business expense and is not an "excess parachute payment"
within the meaning of Section 280G of the Code and is not disallowed by the $1
million limitation on certain executive compensation. The deduction is allowed
in the tax year in which the optionee is required to include the amount in
income.
INCENTIVE STOCK OPTIONS
GENERALLY. An optionee will not recognize income upon the grant of an
incentive stock option. In addition, an optionee will not recognize income upon
the exercise of an incentive stock option if he or she satisfies certain
employment and holding period requirements. To satisfy the employment
requirement, an optionee generally must exercise the option not later than three
months after he or she ceases to be an employee of the Company or its parent or
subsidiary (one year if he or she ceases to be an employee due to disability).
To satisfy the holding period requirement, an optionee must hold the optioned
Common Stock for more than two years from the grant of the option and more than
one year after the Common Stock is transferred to him or her. If these
requirements are satisfied, upon the sale of the Common Stock, the optionee will
be taxed at long-term capital gains rates on any gain, measured by the
difference between his or her basis in the Common Stock and the net proceeds of
the sale.
DISQUALIFYING DISPOSITION. If shares of Common Stock acquired upon the
timely exercise of an incentive stock option are sold, exchanged or otherwise
disposed of without satisfying the holding period requirement (a "Disqualifying
Disposition"), the optionee will usually recognize ordinary income at the time
of disposition equal to the amount of the excess of the fair market value of the
shares on the date of the exercise of the incentive stock option over the
exercise price of the shares. Any gain in excess of that amount will be either
long-term or short-term capital gain depending on the holding period. However,
upon a Disqualifying Disposition that constitutes a sale or exchange with
respect to which any loss (if sustained) would be recognized, the amount
includable in the ordinary income will be limited to any excess of the net
amount realized on the sale or exchange over the optionee's basis in the shares.
In general, such a disposition is a transaction with an unrelated third party
that is not subject to the wash-sale provisions of the Code.
ALTERNATIVE MINIMUM TAX. An optionee generally must include in
alternative minimum taxable income the amount by which the amount paid for the
option is exceeded by the option's fair market value at the time the rights to
the stock are freely transferable or not subject to a substantial risk of
forfeiture.
20
<PAGE>
TAX CONSEQUENCES TO THE COMPANY. The granting of the incentive stock
option, or the exercise thereof, will generally not result in a business
deduction for the Company. However, to the extent that an optionee recognizes
ordinary income as the result of a Disqualifying Disposition, the Company will
be entitled to a corresponding deduction provided that, among other things, the
deduction meets the test of reasonableness, is an ordinary and necessary
business expense and is not an "excess parachute payment" within the meaning of
Section 280G of the Code and is not disallowed by the $1 million limitation on
certain executive compensation.
VOTE REQUIRED FOR APPROVAL
Approval of the 1994 Plan requires the affirmative vote of the holders
of a majority of the shares present in person or by proxy at the Annual Meeting.
The Board of Directors recommends that the shareholders vote FOR the
approval of the 1994 Plan.
PROPOSAL NO. 3--APPROVAL OF 1994 DIRECTORS' STOCK OPTION PLAN
The following description of certain features of the 1994 Directors'
Option Plan is qualified in its entirety by reference to the Directors' Plan,
which is attached as Exhibit B.
GENERAL
Under the terms of the 1994 Directors' Stock Option Plan (the
"Directors' Plan"), each member of the Stock Option Committee received an option
to purchase 40,000 shares of Common Stock on September 24, 1994. In addition,
each director who is not a director on September 23, 1994 will receive, on the
date of his or her initial election as a director, an option to purchase 20,000
shares of Common Stock. Options are exercisable on the first anniversary of the
date of grant, provided the optionee remains a director on such anniversary. No
person may receive an option pursuant to the Directors' Plan more than once.
PURPOSE AND ADOPTION
The purpose of the Directors' Plan is to advance the interests of the
Company by providing additional incentive to attract and retain qualified and
competent directors upon whose efforts and judgment the success of the Company
is largely dependent, by encouraging such persons to own stock of the Company.
On September 23, 1994, the Board of Directors of the Company adopted, subject to
stockholder approval, the Directors' Plan. A total of 300,000 shares of the
Company's Common Stock are reserved for issuance under the Directors' Plan.
21
<PAGE>
AWARDS
Stock options under the Directors' Plan will be "non-qualified" for
purposes of the Code. The options have a term of ten years from the date of
grant, subject to earlier termination if the option holder dies or ceases to be
a director of the Company for any reason other than death. If the option holder
dies, the options are exercisable, to the extent vested, within one year of
death but in no event after the expiration of the term of the option. If an
option holder ceases to be a director for any reason other than death, the
options are exercisable, to the extent vested, for a period of three months
after the optionee ceases to be a director, but in no event after expiration of
the term of the option. All stock options will be evidenced by written
agreements.
EXERCISE PRICE AND PAYMENT
Stock options are rights to purchase shares of Common Stock at a price
per share that is determined by the Stock Option Committee on the date that the
stock options are granted. The purchase price per share of Common Stock that is
payable upon the exercise of stock options granted under the Directors' Plan
must be equal to the fair market value of a share of Common Stock on the date of
grant.
The Directors' Plan permits payment of the purchase price in cash or by
check or, the transfer to the Company of nonforfeitable, unrestricted shares of
Common Stock that are already owned by the optionee and have a fair market value
on the date of exercise equal to the aggregate purchase price.
Options become immediately exercisable in the event that the
stockholders of the Company approve a merger or similar transaction in which the
Company is not the surviving corporation or the sale of substantially all of the
assets of the Company or there is a change in control of the Company.
VESTING AND TERMINATION
The Directors' Plan provides that options may be exercised any time
after the first anniversary of the date of grant, provided the optionee remains
a director on such anniversary date. Each grant shall be evidenced by an
agreement, executed on behalf of the Company and accepted by the optionee, which
shall contain such terms and provisions that are not inconsistent with the
Directors' Plan.
No stock option may be exercised after the earliest to occur of: (1)
one year after the death of the optionee; (2) three months after the date on
which the optionee ceases to be a director for any reason other than death; or
(3) ten years after the date of grant.
22
<PAGE>
TRANSFERABILITY
Stock options granted under the Directors' Plan may not be transferred
except by will or the laws of descent and distribution and may not be exercised
during an optionee's lifetime except by the optionee or, in the event of the
optionee's legal incapacity, by his or her guardian or legal representative
acting in a fiduciary capacity on behalf of the optionee under state law and
court supervision.
ELIGIBILITY
Options may be granted under the Directors' Plan only to directors of
the Company.
ADJUSTMENT OF SHARES
The Directors' Plan provides for adjustments in the 300,000 shares
reserved and available for the Directors' Plan, and in the outstanding awards
granted pursuant to the Directors' Plan if there is an increase or decrease in
the number of issued and outstanding shares of Common Stock through the
declaration of a stock dividend or any recapitalization resulting in a stock
split, combination or exchange of shares.
AMENDMENT
Either the Board of Directors or the Option Committee may amend the
Directors' Plan at any time, in which case options previously granted under the
Directors' Plan will remain in effect in accordance with their terms and
conditions. However, without approval by the stockholders of the Company, the
Plan may not be amended to materially increase the benefits accruing to
participants under the Directors' Plan, materially increase the number of
securities which may be issued under the Directors' Plan or materially modify
the requirements as to eligibility for participation in the Directors' Plan.
The Directors' Plan will terminate on September 23, 2004.
FEDERAL INCOME TAX CONSEQUENCES
For the Federal income tax consequences resulting when a director
receives a stock option under the Directors' Plan, see Tax Consequences to
Optionees-Nonqualified Stock Options set forth above.
VOTE REQUIRED FOR APPROVAL
Approval of the Directors' Plan requires the affirmative vote of the
holders of a majority of the shares present in person or represented by proxy at
the Annual Meeting.
The Board of Directors recommends that the shareholders vote FOR the
approval of the Directors' Plan.
23
<PAGE>
STOCK OPTION BENEFITS
It is not possible to determine the amount of options that may be
awarded to various individuals in the future under the 1994 Plan and the
Directors' Plan. However, subject to approval of the Plans by the shareholders
at the Annual Meeting, options have been granted to certain executives officers
named in the Summary Compensation Table, all non-employee directors and certain
other employees. The table below reflects options granted since September 23,
1994.
<TABLE>
<CAPTION>
NEW PLAN BENEFITS
Directors' Plan
1994 Plan ---------------
---------
Name and Position Dollar Value(1) Shares Dollar Value Shares
- ----------------- --------------- ------ ------------ ------
<S> <C> <C> <C> <C>
John G. Simmonds
Chief Executive Officer $252,500 40,000
Vincent Paul
Vice Chairman of the Board $252,500 40,000
Harold H. Davis
Former President of
Olympic Plastics, Inc. $365,625 50,000
Executive Group $1,123,125 170,000
Non-Executive Director Group $252,500 40,000 $505,000 80,000
Non-Executive Officer
Employee Group $252,500 40,000
<FN>
- ---------------------------
(1) The dollar values are based on the spread between the market price of
the Company's Common Stock on June 20, 1995 and the option exercise prices
payable by the optionees.
</TABLE>
PROPOSAL NO. 4--APPROVAL OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has selected Arthur Andersen LLP as
independent accountants to examine the books, records and accounts of the
Company and its subsidiaries for the fiscal year ending December 31, 1995.
Although the By-laws of the Company do not require the selection of independent
accountants to be submitted to stockholders for approval, this selection is
being presented to stockholders for ratification or rejection at the Annual
Meeting. The Board of Directors recommends that the stockholders vote FOR the
ratification of such selection. Arthur Andersen LLP was the independent
accountant of the Company for the fiscal year ended December 31, 1993 and
December 31, 1994, and is considered by the Board of Directors to be well
qualified. A representative of Arthur Andersen LLP is expected to be present
24
<PAGE>
at the Annual Meeting, and will have an opportunity to make a statement if he so
desires and will be available to respond to appropriate questions.
For ratification, this proposal will require the affirmative vote of the
holders of a majority of the shares of Common Stock represented at the meeting
in person or by proxy. If the resolution is rejected, or if Arthur Andersen &
Co. declines to act or becomes incapable of action, or if its employment is
discontinued, the Board of Directors will appoint other public accountants whose
continued employment after the following Annual Meeting of Stockholders will be
subject to ratification by stockholders.
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Pursuant to Rule 14a-8 promulgated by the Securities and Exchange
Commission, a stockholder intending to present a proposal to be included in the
Company's proxy statement for the Company's 1996 Annual Meeting of Stockholders
must deliver a proposal, in accordance with the requirements of the Company's
Bylaws, to the Company's principal executive office located at 970 West 190th
Street, Suite 720, Torrance, California 90502, sent to the attention of David
Neibert, no later than February 23, 1996. There were no proposals submitted by
the stockholders for the 1995 Annual Meeting.
OTHER MATTERS
The Board of Directors of the Company is not aware of any other matters to
be submitted to the Annual Meeting. If any other matters properly come before
the Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote the shares they represent as the Board of Directors may recommend.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON ENTITLED TO VOTE AT
THE ANNUAL MEETING ON WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1994, INCLUDING THE
FINANCIAL STATEMENT SCHEDULES WHICH ARE A PART THEREOF. WRITTEN REQUEST SHOULD
BE DIRECTED TO DAVID NEIBERT, INTEK DIVERSIFIED CORPORATION, 970 WEST 190TH
STREET, SUITE 720, TORRANCE, CALIFORNIA 90502.
You are urged to sign and return your proxy promptly to make certain your
shares will be voted at the Annual Meeting. For your convenience, a return
envelope is enclosed requiring no additional postage if mailed in the United
States.
By Order of the Board of Directors,
June 23, 1995 STEVEN L. WASSERMAN, SECRETARY
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EXHIBIT A
INTEK DIVERSIFIED CORPORATION
1994 STOCK OPTION PLAN
<PAGE>
INTEK DIVERSIFIED CORPORATION
1994 STOCK OPTION PLAN
TABLE OF CONTENTS
PAGE
----
1. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Shares Available under the Plan . . . . . . . . . . . . . . 2
4. Option Rights . . . . . . . . . . . . . . . . . . . . . . . 2
5. Transferability . . . . . . . . . . . . . . . . . . . . . . 4
6. Adjustments . . . . . . . . . . . . . . . . . . . . . . . . 4
7. Fractional Shares . . . . . . . . . . . . . . . . . . . . . 5
8. Withholding Taxes . . . . . . . . . . . . . . . . . . . . . 5
9. Participation by Employees or Consultants
of a Less-Than-80-Percent Subsidiary. . . . . . . . . . . . 6
10. Certain Terminations of Employment or Other
Services, Hardship and Approved Leaves of Absence . . . . . 6
11. Foreign Participants. . . . . . . . . . . . . . . . . . . . 6
12. Administration of the Plan. . . . . . . . . . . . . . . . . 7
13. Amendments and Other Matters. . . . . . . . . . . . . . . . 7
14. Termination of the Plan . . . . . . . . . . . . . . . . . . 8
<PAGE>
INTEK DIVERSIFIED CORPORATION
1994 STOCK OPTION PLAN
1. PURPOSE. The purpose of this Plan is to attract and retain key
employees of, and officers and consultants providing valuable services to, Intek
Diversified Corporation, a Delaware corporation (the "Corporation"), and its
Subsidiaries and to provide such persons with incentives and rewards for
superior performance.
2. DEFINITIONS. As used in this Plan,
"BOARD" means the Board of Directors of the Corporation.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COMMITTEE" means the committee described in Section 12(a) of this
Plan.
"COMMON STOCK" means (i) shares of the common stock, par value $.01
per share, of the Corporation and (ii) any security into which shares of Common
Stock may be converted by reason of any transaction or event of the type
referred to in Section 6 of this Plan.
"DATE OF GRANT" means the date specified by the Board on which a grant
of Option Rights shall become effective, which shall not be earlier than the
date as of which the Board takes action with respect thereto.
"INCENTIVE STOCK OPTION" means an Option Right that is intended to
qualify as an "incentive stock option" under Section 422 of the Code or any
successor provision.
"LESS-THAN-80-PERCENT SUBSIDIARY" means a Subsidiary with respect to
which the Corporation directly or indirectly owns or controls less than 80
percent of the total combined voting or other decision-making power.
"MARKET VALUE PER SHARE" means the fair market value of the shares of
Common Stock as determined by the Board from time to time.
"NONQUALIFIED OPTION" means an Option Right that is not intended to
qualify as a Tax-Qualified Option.
"OPTIONEE" means the person so designated in an agreement evidencing
an outstanding Option Right.
"OPTION PRICE" means the purchase price payable upon the exercise of
an Option Right.
<PAGE>
"OPTION RIGHT" means the right to purchase shares of Common Stock from
the Corporation upon the exercise of a Nonqualified Option or a Tax-Qualified
Option granted pursuant to Section 4 of this Plan.
"PARTICIPANT" means a person who is selected by the Board to receive
benefits under this Plan and (i) is at that time a key employee (including,
without limitation, a key employee who is also a member of the Board), officer
or consultant of the Corporation or any Subsidiary or (ii) has agreed to
commence serving in any such capacity.
"RULE 16b-3" means Rule 16b-3 under the Securities Exchange Act of
1934 or any successor rule to the same effect.
"SUBSIDIARY" means a corporation, partnership, joint venture,
unincorporated association or other entity in which the Corporation has a direct
or indirect ownership or other equity interest; PROVIDED, HOWEVER, for purposes
of determining whether any person may be a Participant for purposes of any grant
of Incentive Stock Options, "Subsidiary" means any corporation in which the
Corporation owns or controls directly or indirectly more than 50 percent of the
total combined voting power represented by all classes of stock issued by such
corporation at the time of the grant.
"TAX-QUALIFIED OPTION" means an Option Right that is intended to
qualify under particular provisions of the Code, including without limitation an
Incentive Stock Option.
3. SHARES AVAILABLE UNDER THE PLAN. Subject to adjustment as
provided in Section 6 of this Plan, the number of shares of Common Stock issued
or transferred and covered by outstanding Option Rights granted under this Plan
shall not in the aggregate exceed 600,000 shares of Common Stock, which may be
shares of Common Stock of original issuance or shares of Common Stock held in
treasury or a combination thereof. For the purposes of this Section 3, shares of
Common Stock covered by any Option Rights granted under this Plan shall be
deemed to have been issued or transferred, and shall cease to be available for
future issuance or transfer in respect of any other Option Rights granted
hereunder, at the earlier of the time when they are actually issued or
transferred or the time when dividend equivalents are paid thereon.
4. OPTION RIGHTS. The Committee may from time to time authorize
grants to Participants of options to purchase shares of Common Stock upon such
terms and conditions as the Committee may determine in accordance with the
following provisions:
2
<PAGE>
(a) Each grant shall specify the number of shares of Common Stock to
which it pertains; PROVIDED, HOWEVER, that no Participant shall be granted
Option Rights for more than 60,000 shares of Common Stock in any one fiscal
year of the Corporation, subject to adjustment as provided in Section 6 of
this Plan.
(b) Each grant shall specify an Option Price per Common Share, which
shall be equal to or greater than the Market Value per Share on the Date of
Grant.
(c) Each grant shall specify the form of consideration to be paid in
satisfaction of the Option Price and the manner of payment of such
consideration, which may include (i) cash in the form of currency or check
or other cash equivalent acceptable to the Corporation, (ii)
nonforfeitable, unrestricted shares of Common Stock, which are already
owned by the Optionee and have a value at the time of exercise that is
equal to the Option Price, (iii) any other legal consideration that the
Committee may deem appropriate (including, without limitation, any form of
consideration authorized under Section 4(d) below) on such basis as the
Committee may determine in accordance with this Plan and (iv) any
combination of the foregoing.
(d) On or after the Date of Grant of any Nonqualified Option, the
Committee may determine that payment of the Option Price may also be made
in whole or in part in the form of shares of Common Stock that are subject
to risk of forfeiture or restrictions on transfer. Unless otherwise
determined by the Committee on or after the Date of Grant, whenever any
Option Price is paid in whole or in part by means of the form of
consideration specified in this Section 4(d), the shares of Common Stock
received by the Optionee upon the exercise of the Nonqualified Option shall
be subject to the same risk of forfeiture or restrictions on transfer as
those that applied to the consideration surrendered by the Optionee;
PROVIDED, HOWEVER, that any such risk of forfeiture or restrictions on
transfer shall apply only to the same number of shares of Common Stock
received by the Optionee as applied to the forfeitable or restricted shares
of Common Stock surrendered by the Optionee.
(e) Any grant may provide for deferred payment of the Option Price
from the proceeds of sale through a broker of some or all of the shares of
Common Stock to which the exercise relates.
(f) Successive grants may be made to the same Participant regardless
of whether any Option Rights previously granted to the Participant remain
unexercised.
3
<PAGE>
(g) Each grant shall specify the period or periods of continuous
service as a key employee, officer or consultant by the Optionee to the
Corporation or any Subsidiary that are necessary before the Option Rights
or installments thereof shall become exercisable, and any grant may provide
for the earlier exercise of the Option Rights in the event of a change in
control of the Corporation or other similar transaction or event.
(h) Option Rights granted pursuant to this Section 4 may be
Nonqualified Options or Tax-Qualified Options or combinations thereof.
(i) Any grant of a Nonqualified Option may provide for the payment to
the Optionee of dividend equivalents thereon in cash or shares of Common
Stock on a current, deferred or contingent basis or may provide that any
dividend equivalents shall be credited against the Option Price.
(j) No Option Right granted pursuant to this Section 4 may be
exercised more than 10 years from the Date of Grant.
(k) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and delivered
to and accepted by the Optionee and shall contain such terms and provisions
as the Board may determine consistent with this Plan.
5. TRANSFERABILITY. (a) No Option Right or other "derivative
security" (as that term is used in Rule 16b-3) granted under this Plan may be
transferred by a Participant except by will or the laws of descent and
distribution. Option Rights may not be exercised during a Participant's lifetime
except by the Participant or, in the event of the Participant's legal
incapacity, by his guardian or legal representative acting in a fiduciary
capacity on behalf of the Participant under state law and court supervision.
(b) Any grant of Option Rights made under this Plan may provide that
all or any part of the shares of Common Stock that are to be issued or
transferred by the Corporation upon the exercise thereof shall be subject to
further restrictions upon transfer.
6. ADJUSTMENTS. The Committee may make or provide for such
adjustments in the number of shares of Common Stock covered by outstanding
Option Rights, the Option Prices per Common Share applicable thereto, and the
kind of shares (including shares of another issuer) covered thereby, as the
Committee may in good faith determine to be equitably required in order to
prevent dilution or expansion of the rights of Participants that otherwise would
result from (i) any stock
4
<PAGE>
dividend, stock split, combination of shares, recapitalization or other change
in the capital structure of the Corporation or (ii) any merger, consolidation,
spin-off, spin-out, split-off, split-up, reorganization, partial or complete
liquidation or other distribution of assets, issuance of warrants or other
rights to purchase securities or (iii) any other corporate transaction or event
having an effect similar to any of the foregoing. In the event of any such
transaction or event, the Committee may provide in substitution for any or all
outstanding Option Rights under this Plan such alternative consideration as it
may in good faith determine to be equitable under the circumstances and may
require in connection therewith the surrender of all Option Rights so replaced.
Moreover, the Committee may on or after the Date of Grant provide in the
agreement evidencing any grant of Option Rights under this Plan that the
Optionee may elect to receive an equivalent award in respect of securities of
the surviving entity of any merger, consolidation or other transaction or event
having a similar effect, or the Committee may provide that the Optionee will
automatically be entitled to receive such an equivalent award. The Committee may
also make or provide for such adjustments in the number of shares of Common
Stock specified in Section 3, and the number of shares of Common Stock specified
in Section 4(a), of this Plan as the Committee may in good faith determine to be
appropriate in order to reflect any transaction or event described in this
Section 6.
7. FRACTIONAL SHARES. The Corporation shall not be required to
issue any fractional shares of Common Stock pursuant to this Plan. The Committee
may provide for the elimination of fractions or for the settlement thereof in
cash.
8. WITHHOLDING TAXES. To the extent that the Corporation is
required to withhold federal, state, local or foreign taxes in connection with
any payment made or benefit realized by a Participant or other person under this
Plan, and the amounts available to the Corporation for the withholding are
insufficient, it shall be a condition to the receipt of any such payment or the
realization of any such benefit that the Participant or such other person make
arrangements satisfactory to the Corporation for payment of the balance of any
taxes required to be withheld. At the discretion of the Committee, any such
arrangements may include relinquishment of a portion of any such payment or
benefit. The Corporation and any Participant or such other person may also make
similar arrangements with respect to the payment of any taxes with respect to
which withholding is not required.
5
<PAGE>
9. PARTICIPATION BY EMPLOYEES OR CONSULTANTS OF A
LESS-THAN-80-PERCENT SUBSIDIARY. As a condition to the effectiveness of any
grant of Option Rights to be made hereunder to a Participant who is an employee
or consultant of a Less-Than-80-Percent Subsidiary, regardless of whether the
Participant is also employed or engaged as a consultant by the Corporation or
another Subsidiary, the Committee may require the Less-Than-80-Percent
Subsidiary to agree to transfer to the Participant (as, if and when provided for
under this Plan and any applicable agreement entered into between the
Participant and the Less-Than-80-Percent Subsidiary pursuant to this Plan) the
shares of Common Stock that would otherwise be delivered by the Corporation upon
receipt by the Less-Than-80-Percent Subsidiary of any consideration then
otherwise payable by the Participant to the Corporation. Any such grant of
Option Rights may be evidenced by an agreement between the Participant and the
Less-Than-80-Percent Subsidiary, in lieu of the Corporation, on terms consistent
with this Plan and approved by the Committee and the Less-Than-80-Percent
Subsidiary. All shares of Common Stock so delivered by or to a
Less-Than-80-Percent Subsidiary will be treated as if they had been delivered by
or to the Corporation for purposes of Section 3 of this Plan, and all references
to the Corporation in this Plan shall be deemed to refer to the
Less-Than-80-Percent Subsidiary except with respect to the definitions of the
Board and the Committee and in other cases where the context otherwise requires.
10. CERTAIN TERMINATIONS OF EMPLOYMENT OR OTHER SERVICES, HARDSHIP
AND APPROVED LEAVES OF ABSENCE. Notwithstanding any other provision of this
Plan to the contrary, in the event of termination of employment or service as an
officer or consultant by reason of death, disability, normal retirement, early
retirement with the consent of the Corporation, termination of employment or
service as an officer or consultant to enter public service with the consent of
the Corporation or leave of absence approved by the Corporation, or in the event
of hardship or other special circumstances, of a Participant who holds an Option
Right that is not immediately and fully exercisable or any shares of Common
Stock that are subject to any transfer restriction pursuant to Section 5(b) of
this Plan, the Committee may take any action that it deems to be equitable under
the circumstances or in the best interests of the Corporation, including without
limitation waiving or modifying any limitation or requirement with respect to
any grant of Option Rights under this Plan.
11. FOREIGN PARTICIPANTS. In order to facilitate the making of any
grant of Option Rights under this Plan, the Committee may provide for such
special terms for grants of Option Rights to Participants who are foreign
nationals, or who are employed or engaged as consultants by the Corporation or
any Subsidiary outside of the United States of America, as the
6
<PAGE>
Committee may consider necessary or appropriate to accommodate differences in
local law, tax policy or custom. Moreover, the Committee may approve such
supplements to, or amendments, restatements or alternative versions of, this
Plan as it may consider necessary or appropriate for such purposes without
thereby affecting the terms of this Plan as in effect for any other purpose;
PROVIDED, HOWEVER, that no such supplements, amendments, restatements or
alternative versions shall include any provisions that are inconsistent with the
terms of this Plan, as then in effect, unless this Plan could have been amended
to eliminate the inconsistency without further approval by the stockholders of
the Corporation.
12. ADMINISTRATION OF THE PLAN. (a) This Plan shall be administered
by a committee of not less than two members of the Board, each of whom shall be
a "disinterested person" within the meaning of Rule 16b-3. A majority of the
members of the Committee shall constitute a quorum, and the acts of the members
of the Committee who are present at any meeting thereof at which a quorum is
present, or acts unanimously approved in writing by the members of the
Committee, shall be the acts of the Committee.
(b) The interpretation and construction by the Committee of any
provision of this Plan or any agreement, notification or document evidencing a
grant of Option Rights, and any determination by the Committee pursuant to any
provision of this Plan or any such agreement, notification or document, shall be
final and conclusive. No member of the Committee shall be liable for any such
action taken or determination made in good faith.
13. AMENDMENTS AND OTHER MATTERS. (a) This Plan may be amended from
time to time by the Committee; PROVIDED, HOWEVER, that except as expressly
authorized by this Plan, no such amendment shall increase the number of shares
of Common Stock specified in Section 3 of this Plan, increase the number of
shares of Common Stock specified in Section 4(a) of this Plan, or otherwise
cause this Plan to cease to satisfy any applicable condition of Rule 16b-3,
without the further approval of the stockholders of the Corporation.
(b) With the concurrence of the affected Optionee, the Committee may
cancel any agreement evidencing Option Rights granted under this Plan. In the
event of any such cancellation, the Committee may authorize the granting of new
Option Rights hereunder, which may or may not cover the same number of shares of
Common Stock as had been covered by the cancelled Option Rights, at such Option
Price, in such manner and subject to such other terms, conditions and discretion
as would have been permitted under this Plan had the cancelled Option Rights not
been granted.
7
<PAGE>
(c) This Plan shall not confer upon any Participant any right with
respect to continuance of employment or other service with the Corporation or
any Subsidiary and shall not interfere in any way with any right that the
Corporation or any Subsidiary would otherwise have to terminate any
Participant's employment or other service at any time.
(d) (i) To the extent that any provision of this Plan would prevent
any Option Right that was intended to qualify as a Tax-Qualified Option
from so qualifying, any such provision shall be null and void with respect
to any such Option Right; PROVIDED, HOWEVER, that any such provision shall
remain in effect with respect to other Option Rights, and there shall be no
further effect on any provision of this Plan.
(ii) Any award that may be made pursuant to an amendment to this
Plan that shall have been adopted without the approval of the stockholders
of the Corporation shall be null and void if it is subsequently determined
that such approval was required in order for this Plan to continue to
satisfy the applicable conditions of Rule 16b-3.
14. TERMINATION OF THE PLAN. No further awards shall be granted under
this Plan after the passage of 10 years from the date on which this Plan is
first approved by the stockholders of the Corporation.
8
<PAGE>
EXHIBIT B
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INTEK DIVERSIFIED CORPORATION
1994 DIRECTORS' STOCK OPTION PLAN
(September 23, 1994)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. PURPOSE. The purpose of this Plan is to advance the interests of
INTEK DIVERSIFIED CORPORATION, a Delaware corporation (the "Company"), by
providing additional incentive to attract and retain qualified and competent
Directors upon whose efforts and judgment the success of the Company is largely
dependent, by encouraging such persons to own stock in the Company.
2. DEFINITIONS. As used herein, the following terms shall have the
meanings indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Committee" shall mean the stock option committee described
in Section 11 hereof.
(d) "Common Stock" shall mean the Company's Common Stock, par
value $0.01 per share.
(e) "Director" shall mean a member of the Board.
(f) "Disinterested Person" shall mean a Director who is not,
during the one year prior to his or her service as an administrator of this Plan
or any other stock option plan of the Company, or during such service, granted
or awarded equity securities pursuant to this Plan or any other plan of the
Company or any of its affiliates, except that:
(i) participation in a formula plan meeting the
conditions in paragraph (c)(2)(ii) of Rule 16b-3 promulgated under the
Securities Exchange Act shall not disqualify a Director from being a
Disinterested Person;
(ii) participation in an ongoing securities acquisition
plan meeting the conditions in paragraph (d)(2)(i) of Rule 16b-3 promulgated
under the Securities Exchange Act shall not disqualify a Director from being a
Disinterested Person; and
(iii) an election to receive an annual retainer fee in
either cash or an equivalent amount of securities, or partly in cash and partly
in securities, shall not disqualify a Director from being a Disinterested
Person.
(g) "Effective Date" shall mean September 23, 1994.
(h) "Fair Market Value" of a Share on any date of reference shall
be the "Closing Price" (as defined below) of the Common Stock on the business
day immediately preceding such
<PAGE>
date. For the purpose of determining Fair Market Value, the "Closing Price" of
the Common Stock on any business day shall be (i) if the Common Stock is listed
or admitted for trading on any United States national securities exchange, or if
actual transactions are otherwise reported on a consolidated transaction
reporting system, the last reported sale price of Common Stock on such exchange
or reporting system, as reported in any newspaper of general circulation, (ii)
if the Common Stock is quoted on the National Association of Securities Dealers
Automated Quotations ("NASDAQ") System, or any similar system of automated
dissemination of quotations of securities prices in common use, the mean between
the closing high bid and low asked quotations for such day of Common Stock on
such system, or (iii) if neither clause (i) or (ii) is applicable, the mean
between the high bid and low asked quotations for the Common Stock as reported
by the National Quotation Bureau, Incorporated if at least two securities
dealers have inserted both bid and asked quotations for Common Stock on at least
five of the ten preceding days.
(i) "Non-Statutory Stock Option" shall mean an Option which is
not an incentive stock option as defined in Section 422 of the Code.
(j) "Option" (when capitalized) shall mean any option granted
under this Plan.
(k) "Optionee" shall mean a person to whom an Option is granted
under this Plan or any person who succeeds to the rights of such person under
this Plan by reason of the death of such person.
(l) "Plan" shall mean this Directors' Stock Option Plan for the
Company.
(m) "Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(n) "Share(s)" shall mean a share or shares of the Common Stock.
3. SHARES AND OPTIONS. Options may be granted under this Plan from
time to time to purchase an aggregate of up to 300,000 Shares from Shares held
in the Company's treasury or from authorized and unissued Shares. If any Option
granted under the Plan shall terminate, expire, or be canceled or surrendered as
to any Shares, new Options may thereafter be granted covering such Shares. Each
Option granted hereunder shall be a Non-Statutory Stock Option and shall clearly
state that it is a Non-Statutory Stock Option.
4. CONDITIONS FOR GRANT OF OPTIONS. Each Option shall be evidenced by
a written agreement with such terms as are not inconsistent with this Plan. Any
person who files with the Committee, in a form satisfactory to the Committee, a
written waiver of eligibility to receive any Option under this Plan shall not be
eligible to receive any Option under this Plan for the duration of such waiver.
5. OPTION GRANTS. On the Effective Date Christopher Branston, Vincent
P. Paul and Steven L. Wasserman will each receive an Option to purchase 40,000
shares of Common Stock, which Option will become exercisable in full on the
first anniversary of the Option's grant. Each Director who is not a director on
the Effective Date will receive, on the date of his or her initial election as a
Director, an Option to purchase 20,000 shares of Common Stock, which Option will
2
<PAGE>
become exercisable in full on the first anniversary of the Option's grant;
provided he or she remains a Director on such anniversary. No person shall
receive an Option pursuant to this Section 5 more than once. The per share
exercise price of all Options granted pursuant to this Section 5 will be equal
to the Fair Market Value of the Shares underlying such Option on the date such
Option is granted.
6. EXERCISE OF OPTIONS. An Option shall be deemed exercised when (i)
the Company has received written notice of such exercise in accordance with the
terms of the Option, (ii) full payment of the aggregate option price of the
Shares as to which the Option is exercised has been made, and (iii) arrangements
that are satisfactory to the Committee in its sole discretion have been made for
the Optionee's payment to the Company of an amount that is sufficient to satisfy
all applicable Federal or state tax withholding requirements relating to
exercise of the Option. The option price of any Shares purchased shall be paid
in cash, by certified or official bank check, by money order, with Shares or by
a combination of the above; provided, however, that the Committee in its sole
discretion may accept a personal check in full or partial payment of any Shares.
If the exercise price is paid in whole or in part with Shares, the value of the
Shares surrendered shall be their Fair Market Value on the date the Option is
exercised. No Optionee shall be deemed to be a holder of any Shares subject to
an Option unless and until a stock certificate or certificates for such Shares
are issued to such person(s) under the terms of this Plan. 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 the date such stock certificate is issued, except as expressly provided
in Section 9 hereof.
7. EXERCISABILITY OF OPTIONS. Each outstanding Option shall become
immediately fully exercisable if:
(a) there occurs any transaction (which shall include a series of
transactions occurring within 60 days or occurring pursuant to a plan), that has
the result that stockholders of the Company immediately before such transaction
cease to own at least 51% of the voting stock of the Company or of any entity
that results from the participation of the Company in a reorganization,
consolidation, merger, liquidation or any other form of corporate transaction;
(b) the stockholders of the Company approve a plan of merger,
consolidation, reorganization, liquidation or dissolution in which the Company
does not survive (unless the approved merger, consolidation, reorganization,
liquidation or dissolution is subsequently abandoned); or
(c) the stockholders of the Company approve a plan for the sale,
lease, exchange, transfer, assignment or other disposition of all or
substantially all the property and assets of the Company (unless such plan is
subsequently abandoned).
8. TERMINATION OF OPTION PERIOD. The unexercised portion of any Option
shall automatically and without notice terminate and become null and void on the
earliest to occur of: (i) one year after the death of Optionee; (ii) six months
after the date on which the Optionee ceases to be a Director for any reason
other than death; or (iii) after the expiration of 10 years from the date of
grant of the Option.
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<PAGE>
9. ADJUSTMENT OF SHARES.
(a) If at any time while the Plan is in effect or unexercised
Options are outstanding, there shall be any increase or decrease in the number
of issued and outstanding Shares through the declaration of a stock dividend or
through any recapitalization resulting in a stock split-up, combination or
exchange of Shares, then and in such event:
(i) appropriate adjustment shall be made in the maximum
number of Shares available for grant under the Plan, so that the same percentage
of the Company's issued and outstanding Shares shall continue to be subject to
being so optioned; and
(ii) appropriate adjustment shall be made in the number of
Shares and the exercise price per Share thereof then subject to any outstanding
Option, so that the same percentage of the Company's issued and outstanding
Shares shall remain subject to purchase at the same aggregate exercise price.
(b) Subject to the specific terms of any Option, the Committee
shall make appropriate adjustment in the terms of Options outstanding under this
Plan, with respect to the option price or the number of Shares subject to the
Options, or both, when such adjustments become appropriate by reason of a
corporate transaction described in Subsections 7(b) or (c) hereof.
(c) Except as otherwise expressly provided herein, the issuance
by the Company of shares of its capital stock of any class, or securities
convertible into shares of capital stock of any class, either in connection with
direct sale or upon the exercise of rights or warrants to subscribe therefor, or
upon conversion of shares or obligations of the Company convertible into such
shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to the number of or exercise price of Shares
then subject to outstanding Options granted under the Plan.
(d) Without limiting the generality of the foregoing, the
existence of outstanding Options granted under the Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate (i)
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business; (ii) any merger or
consolidation of the Company; (iii) any issue by the Company of debt securities,
or preferred or preference stock that would rank above the Shares subject to
outstanding Options; (iv) the dissolution or liquidation of the Company; (v) any
sale, lease, exchange, transfer, assignment or other disposition of all or any
part of the assets or business of the Company; or (vi) any other corporate act
or proceeding, whether of a similar character or otherwise.
10. TRANSFERABILITY OF OPTIONS. No Option shall be transferable by the
Optionee other than by will or the laws of descent and distribution and each
Option shall be exercisable during the Optionee's lifetime only by the Optionee.
11. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Committee, which shall
consist of not less than two Directors, each of whom shall be Disinterested
Persons, provided that the Committee
4
<PAGE>
shall not have any discretion with respect to the grant of Options to pursuant
to this Plan. The Committee shall have all of the powers of the Board with
respect to the Plan. The Board may change the membership of the Committee at
any time and fill any vacancy occurring in the membership of the Committee by
appointment.
(b) The Committee, from time to time, may adopt rules and
regulations for carrying out the purposes of the Plan. The Committee's
determinations and its interpretation and construction of any provision of the
Plan shall be final and conclusive.
(c) Any and all decisions or determinations of the Committee
shall be made either (i) by a majority vote of the members of the Committee at a
meeting or (ii) without a meeting by the unanimous written consent of the
members of the Committee.
12. INTERPRETATION.
(a) This Plan shall be governed by the internal substantive laws
of the State of Delaware.
(b) Headings contained in this Plan are for convenience only and
shall in no manner be construed as part of this Plan.
(c) Any reference to the masculine, feminine, or neuter gender
shall be a reference to such other gender as is appropriate.
13. AMENDMENT AND DISCONTINUATION OF THE PLAN. Either the Board or the
Committee may from time to time amend the Plan or any Option; provided, however,
that, except to the extent provided in Section 9, no such amendment may, without
approval by the stockholders of the Company, (i) materially increase the
benefits accruing to participants under the Plan, (ii) materially increase the
number of securities which may be issued under the Plan, or (iii) materially
modify the requirements as to eligibility for participation in the Plan; and
provided further, that, no amendment or suspension of the Plan or any Option
issued hereunder shall substantially impair any Option previously granted to any
Optionee without the consent of such Optionee. Notwithstanding anything herein
to the contrary, to the extent required by Rule 16b-3 promulgated under the
Securities Exchange Act, the provisions of this Plan which govern the number of
Options to be awarded, the exercise price per share under each Option, when and
under what circumstances Options will be granted and the period within which
each Option may be exercised, shall not be amended more than once every six
months (even with stockholder approval), other than to conform to changes to the
Code, or the rules promulgated thereunder, or with rules promulgated by the
Securities and Exchange Commission.
14. EFFECTIVE DATE AND TERMINATION DATE. Subject to approval of the
Plan by the holders of a majority of the shares of Common Stock present at a
duly called stockholders' meeting at which a quorum is present, the Plan shall
be effective upon the Effective Date and shall terminate on the tenth
anniversary of the Effective Date. If the Plan is not approved by the holders
of a majority of the outstanding shares of Common Stock, the Plan shall be null
and void.
5
<PAGE>
PROXY PROXY
INTEK DIVERSIFIED CORPORATION
ANNUAL MEETING OF STOCKHOLDERS, JULY 5, 1995
THE CALIFORNIA YACHT CLUB, 4469 ADMIRALTY WAY, MARINA DEL REY, CALIFORNIA 90292
12:00 NOON LOCAL TIME
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Nicholas R. Wilson and David Neibert, and
each of them, the proxy or proxies of the undersigned, with full powers of
substitution to each, to attend the Annual Meeting of the Stockholders of INTEK
Diversified Corporation, to be held on July 5, 1995, at The California Yacht
Club, 4469 Admiralty Way, Marina Del Rey, California 90292, beginning at 12:00
Noon local time, and any adjournments thereof, and to vote all shares of stock
that the undersigned would be entitled to vote if personally present in the
manner indicated below and on the reverse side, and on any other matters
properly brought before the Meeting or any adjournments thereof, all as set
forth in the June 23, 1995 proxy statement.
PLEASE MARK YOUR CHOICE LIKE THIS /X/ IN BLUE OR BLACK INK.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR "FOR ALL NOMINEES",
FOR PROPOSAL 2, FOR PROPOSAL 3 AND FOR PROPOSAL 4.
1. Election of the following nominees as directors: Nicholas R. Wilson, Vincent
P. Paul, John G. Simmonds, Harry Dunstan, Peter A. Heinke, Steven L.
Wasserman, David Neibert, Christopher Branston:
/ / FOR / / WITHHOLD
(AUTHORITY TO VOTE FOR ANY NOMINEE MAY BE WITHHELD BY LINING THROUGH OR
OTHERWISE STRIKING OUT THE NAME OF SUCH NOMINEE.)
2. Approval of the 1994 Stock Option Plan:
/ / FOR / / AGAINST / / ABSTAIN
3. Approval of the 1994 Directors' Stock Option Plan:
/ / FOR / / AGAINST / / ABSTAIN
4. Ratification of appointment of independent accountants:
/ / FOR / / AGAINST / / ABSTAIN
THIS PROXY IS CONTINUED ON THE REVERSE SIDE. PLEASE DATE, SIGN AND RETURN
PROMPTLY.
<PAGE>
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING,
PROXY STATEMENT AND ANNUAL REPORT OF INTEK DIVERSIFIED CORPORATION.
(Signature should be exactly as
name or names appear on this proxy.
If stock is held jointly each
holder should sign. If signature is
by attorney, executor,
administrator, trustee or guardian,
please give full title.)
Dated: ______________________, 1995
___________________________________
Signature
___________________________________
Signature if held jointly
I plan to attend the meeting: Yes
/ / No / /
This proxy will be voted FOR the
nominees and the above matters
unless otherwise indicated, and in
the discretion of the proxies on
all other matters properly brought
before the meeting.
