SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant /_/
Check the appropriate box:
/_/ Preliminary Proxy Statement
/_/ Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
RCM TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee Required.
/_/ 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 No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
___________
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
<PAGE>
[RCM TECHNOLOGIES LETTERHEAD]
March 3, 2000
Dear Stockholder:
You are cordially invited to attend the RCM Technologies, Inc.
Annual Meeting of Stockholders. The meeting will be held at the
Philadelphia Marriott Hotel, 1201 Market Street, Philadelphia,
Pennsylvania, on Thursday, April 27, 2000, at 6:00 p.m., local time. We
look forward to personally greeting those stockholders able to attend.
At the meeting, you will be asked to:
o elect two directors
o consider and approve RCM's 2000 Employee Stock Incentive Plan
o ratify our Board's appointment of Grant Thornton LLP as our
independent auditors for our fiscal year ending December 31,
2000, and
o consider all other matters which come before the meeting or
any adjournment(s) of the meeting.
These matters are discussed in greater detail in the accompanying
Proxy Statement.
Our Board of Directors recommends a vote:
o FOR the election of the directors we have nominated
o FOR the approval of RCM's 2000 Employee Stock Incentive Plan,
and
o FOR the ratification of Grant Thornton LLP as our independent
auditors.
We encourage you to vote your shares regardless of the number of
shares you own or whether you plan to attend the meeting. Please sign and
date the enclosed proxy card and promptly return it in the postage-paid
envelope we have provided.
We wish to thank you for your participation and support.
Sincerely,
/s/ Leon Kopyt
-------------------------
Leon Kopyt
Chairman of the Board and
Chief Executive Officer
<PAGE>
RCM TECHNOLOGIES, INC.
2500 MCCLELLAN AVENUE
SUITE 350
PENNSAUKEN, NEW JERSEY 08109
------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 27, 2000
------------------------------
To our Stockholders:
The RCM Technologies, Inc. Annual Meeting of Stockholders of will be held
at the Philadelphia Marriott Hotel, 1201 Market Street, Philadelphia,
Pennsylvania on Thursday, April 27, 2000, at 6:00 p.m., local time.
The purposes of the meeting are to:
1. elect two Class A directors, each to serve until his term expires
and until his successor is elected and qualified
2. consider and approve the adoption of RCM's 2000 Employee Stock
Incentive Plan
3. ratify the appointment by our Board of Directors of Grant Thornton
LLP as our independent auditors for our fiscal year ending December 31,
2000, and
4. transact such other business as may properly come before the
meeting or any adjournment(s) of the meeting.
We have fixed February 28, 2000 as the record date for determining the
stockholders entitled to vote at the meeting. You are not entitled to notice of,
or to vote at, the meeting if you were not a stockholder of record at the close
of business on that date.
You are cordially invited to attend the meeting. Whether or not you expect
to attend the meeting in person, please sign, date and return the enclosed proxy
to ensure that your shares will be represented at the meeting. Please return
your proxy promptly in the enclosed envelope which requires no postage if mailed
within the United States. If you attend the meeting, you may vote your shares
personally, even though you have sent in your proxy, if you revoke your proxy at
or prior to the meeting.
By Order of the Board of Directors,
/s/ Stanton Remer
-----------------------------------
Stanton Remer
Secretary
Pennsauken, New Jersey
March 3, 2000
<PAGE>
RCM TECHNOLOGIES, INC.
2500 MCCLELLAN AVENUE
SUITE 350
PENNSAUKEN, NEW JERSEY 08109
------------------------------
PROXY STATEMENT
------------------------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 27, 2000
ABOUT THIS PROXY STATEMENT
Our Board of Directors is soliciting proxies to be used at our 2000 Annual
Meeting of Stockholders. The meeting will be held at the Philadelphia Marriott
Hotel, 1201 Market Street, Philadelphia, Pennsylvania on Thursday, April 27,
2000, at 6:00 p.m., local time. This proxy statement, the notice of annual
meeting and the form of proxy will be mailed to stockholders beginning on or
about March 3, 2000.
VOTING PROCEDURES
WHO CAN VOTE
Only RCM common stockholders at the close of business on the record date,
February 28, 2000, may vote at the annual meeting. You are entitled to cast one
vote for each share of RCM common stock you owned as of the record date. At the
close of business on the record date, there were 10,498,151 shares of RCM common
stock outstanding.
HOW YOU CAN VOTE
You can vote by:
o marking your proxy, dating and signing it, and returning it in the
postage-paid envelope we have provided, or
o attending the meeting and voting in person.
HOW YOU CAN REVOKE YOUR PROXY OR CHANGE YOUR VOTE
You can revoke your proxy at any time before it is voted at the meeting by:
o sending a written notice that you have revoked your proxy to our
Secretary, Stanton Remer, at 2500 McClellan Avenue, Suite 350,
Pennsauken, New Jersey 08109
o submitting a later-dated proxy card, or
o attending the meeting, giving our Secretary written notice of your
revocation and voting your shares.
If a bank, broker or other holder of record holds your shares in its name,
you must obtain a proxy, executed in your favor, from the holder of record to be
able to vote your shares at the meeting.
GENERAL INFORMATION ON VOTING
A quorum must exist for voting to take place at the meeting. A quorum
exists if holders of a majority of the outstanding shares of our common stock
are present at the meeting in person or are represented at the meeting by proxy.
Shares represented by a proxy marked "abstain" or "withheld" on any matter will
be considered present at the meeting for purposes of determining whether there
is a quorum, but will not be considered as votes FOR or AGAINST that matter.
Shares represented by a proxy as to which there is a "broker non-vote" (that is,
where a broker holding your shares in "street" or "nominee" name indicates to
<PAGE>
us on a proxy that you have given the broker the discretionary authority to vote
your shares on some but not all matters), will be considered present at the
meeting for purposes of determining a quorum.
The director nominees will be elected by a plurality of the votes cast for
the election of directors at the meeting. Thus, the two nominees who receive the
most votes will be elected as directors. All other matters to be voted upon at
the meeting must be approved by a majority of the votes cast on those matters.
Shares that have been properly voted and not revoked will be voted at the
meeting in accordance with the instructions on your proxy card. If you sign your
proxy card but do not mark your choices, Leon Kopyt or Stanton Remer, the
persons named on the enclosed proxy card, will vote the shares represented by
your proxy card:
o FOR the persons we nominated for election as directors
o FOR the ratification of our Board's appointment of Grant Thornton LLP as
our independent auditors for our fiscal year ending December 31, 2000,
and
o FOR the approval of RCM's 2000 Employee Stock Incentive Plan.
If any other matters, of which we presently do not know, are properly
presented at the meeting for consideration, Mr. Kopyt and Mr. Remer will have
the discretion to vote on those matters for you.
COSTS OF SOLICITATION
We will pay for preparing, assembling and mailing this proxy statement. Our
directors, officers and employees may solicit proxies through the mails, direct
communication or otherwise. None of our directors, officers or employees will
receive additional compensation for soliciting proxies. We may reimburse
brokerage firms and other custodians, nominees or fiduciaries for their
reasonable expenses for forwarding proxy and solicitation materials to
stockholders.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table lists the persons we know to be beneficial owners of at
least five percent of our common stock as of February 14, 2000.
APPROXIMATE
PERCENTAGE OF
OUTSTANDING
NUMBER COMMON
NAME AND ADDRESS OF BENEFICIAL OWNER OF SHARES STOCK
------------------------------------ --------- -------------
Leon Kopyt ......................................... 977,863 (1) 8.7%
c/o RCM Technologies, Inc.
2500 McClellan Avenue
Suite 350
Pennsauken, NJ 08109
Dimensional Fund Advisors Inc. ...................... 907,400 (2) 8.6%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Wanger Asset Management, L.P. ...................... 851,500 (3) 8.1%
227 West Monroe Street
Suite 3000
Chicago, IL 60606
Wellington Management Company, LLP .................. 701,000 (4) 6.7%
75 State Street
Boston, MA 02109
Heartland Advisors, Inc. ........................... 669,000 (5) 6.4%
789 North Water Street
Milwaukee, WI 53202
FMR Corp. .......................................... 592,200 (6) 5.6%
82 Devonshire Street
Boston, MA 02109
- ------------------
(1) Includes 750,000 shares issuable upon the exercise of options under our
stock option plans. Also includes 227,763 shares as to which Mr. Kopyt has
sole voting power in the election of directors. Mr. Kopyt disclaims
beneficial ownership of these shares.
(2) Based on a Schedule 13G, dated February 4, 2000, filed with the Securities
and Exchange Commission. The Schedule 13G states that Dimensional Fund
Advisors, Inc. has sole voting and investment power as to all of these
shares. Dimensional Fund Advisors, Inc. disclaims beneficial ownership of
these shares.
(3) Based on a Schedule 13G, dated February 11, 2000, filed with the Securities
and Exchange Commission by Wanger Asset Management, L.P., a registered
investment advisor, on behalf of itself, its general partner, Wanger Asset
Management, Ltd., and its client, Acorn Investment Trust. The Schedule 13G
states that Wanger Asset Management, L.P. and Wanger Asset Management, Ltd.
share voting and dispositive power as to all of these shares. The Schedule
13G also states that Acorn Investment Trust has shared voting and
dispositive power as to 642,000 of these shares, or 6.1% of RCM's
outstanding common stock.
(4) Based on a Schedule 13G, dated February 9, 2000, filed with the Securities
and Exchange Commission. The Schedule 13G states that Wellington Management
Company, LLP has shared voting power as to 453,000 of these shares and
shared dispositive power as to all of these shares.
(Footnotes continued on next page)
3
<PAGE>
(Footnotes continued from previous page)
(5) Based on a Schedule 13G, dated January 27, 2000, filed with the Securities
and Exchange Commission. The Schedule 13G states that Heartland Advisors,
Inc. has sole voting power as to 426,800 of these shares and sole
dispositive power as to all of these shares.
(6) Based on a Schedule 13G, dated February 14, 2000, filed with the Securities
and Exchange Commission by FMR Corp., a parent holding corporation, on
behalf of itself, Edward C. Johnson III and Abigail Johnson. The Schedule
13G states that Fidelity Management & Research Company, a wholly-owned
subsidiary of FMR Corp. and a registered investment advisor, is the
beneficial owner of all of these shares as a result of acting as investment
adviser to various registered investment companies, including Fidelity
Low-Priced Stock Fund which owns all of the shares listed in the table. FMR
Corp. and its chairman, Edward C. Johnson III, through FMR Corp.'s control
of Fidelity Management & Research Company and Fidelity Low-Priced Stock
Fund, each have sole dispositive power as to all of these shares. The
Schedule 13G also states that Fidelity Low-Priced Stock Fund's Board of
Trustees has sole voting power as to all of these shares.
SECURITIES OWNERSHIP OF MANAGEMENT
The following table lists the number of shares of our common stock
beneficially owned, as of February 14, 2000, by each director and director
nominee, each of our executive officers, certain members of our senior
management, and by the directors, nominees and our executive officers as a
group. In general, beneficial ownership includes those shares a person has the
power to vote or transfer, as well as shares owned by immediate family members
who live with that person.
APPROXIMATE
PERCENTAGE OF
OUTSTANDING
NUMBER COMMON
NAME OF SHARES STOCK
---- --------- -------------
Leon Kopyt (1).................................... 977,863 8.7%
Stanton Remer (2)(3).............................. 60,000 *
Norman S. Berson (2).............................. 60,000 *
Robert B. Kerr (4)................................ 62,000 *
Woodrow B. Moats, Jr. (4)......................... 62,000 *
Kevin D. Miller (3)(5)............................ 40,200 *
Rocco Campanelli (6).............................. 33,000 *
Brian A. Delle Donne (7).......................... 30,000 *
Peter R. Kaminsky (8)............................. 25,165 *
Howard Honig (8).................................. 10,000 *
All directors, nominees and executive officers
as a group (6 persons) (9)...................... 1,251,863 10.9%
- ------------------
* Represents less than one percent of our outstanding common stock.
(1) Includes 750,000 shares issuable upon the exercise of options under our
stock option plans and 227,763 shares as to which Mr. Kopyt has sole voting
power in the election of directors. Mr. Kopyt disclaims beneficial ownership
of these shares.
(2) Consists of 60,000 shares issuable upon the exercise of options under our
stock option plans.
(3) Excludes 30,000 shares, issuable upon the exercise of options under our
stock option plans, none of which were exercisable within 60 days after the
record date.
(4) Includes 60,000 shares issuable upon the exercise of options under our stock
option plans.
(5) Includes 39,000 shares issuable upon the exercise of options under our stock
option plans.
(6) Includes 32,000 shares issuable upon the exercise of options under our stock
option plans.
(Footnotes continued on next page)
4
<PAGE>
(Footnotes continued from previous page)
(7) Includes 30,000 shares issuable upon the exercise of options under our stock
option plans. Excludes 20,000 shares, issuable upon the exercise of options
under our stock option plans, none of which were exercisable within 60 days
after the record date.
(8) Includes 10,000 shares issuable upon the exercise of options under our stock
option plans.
(9) Includes 1,020,000 shares issuable upon the exercise of options under our
stock option plans.
VOTING ARRANGEMENTS
On February 5, 1996, we issued and sold 276,625 shares of our common stock
to Limeport Investments, LLC in a private placement transaction. In conjunction
with this transaction, Limeport granted Mr. Kopyt an irrevocable proxy entitling
him to vote those shares solely in connection with the election of our
directors. We believe that, as of February 14, 2000, Limeport beneficially owned
38,312 shares of our common stock.
The former stockholders of Cataract, Inc. executed a voting trust agreement
granting RCM the right to vote the shares of RCM's common stock the former
Cataract stockholders received as part of the consideration given to them upon
RCM's acquisition of Cataract. In 1998, the former Cataract stockholders
executed irrevocable proxies in favor of Mr. Kopyt, giving him the power of
attorney to vote the shares.
In general, the proxies expire with respect to any shares of our common
stock the former Cataract stockholders sell to third parties in public or
private open market transactions. Further, the number of shares subject to the
powers of attorney granted to Mr. Kopyt will be reduced on August 30, 2000 and
on August 30, 2001. After August 30, 2002, none of the shares will be subject to
powers of attorney.
If Mr. Kopyt ceases to serve as our Chairman, Chief Executive Officer and
President, all proxies will expire immediately.
Based on documentation provided to us by the former Cataract stockholders,
we believe that as of February 14, 2000, the former Cataract stockholders have
sold 122,860 shares of our common stock in open market transactions.
Consequently, as of such date, we believe that Mr. Kopyt is the attorney-in-fact
with respect to 189,451 shares of our common stock owned by former Cataract
stockholders.
PROPOSAL 1
----------------
ELECTION OF DIRECTORS
Our Board of Directors is divided into three classes. Our directors
increased the size of our Board from five members to six, expanding Class A from
one director to two directors, effective as of the date of the annual meeting.
As of the date of the annual meeting, each of the three classes will have two
directors. Directors are elected to staggered three-year terms and will serve
until their successors have been elected and qualified.
The term of our Class A director, Norman S. Berson, expires at this year's
annual meeting. The Class B directors, Robert B. Kerr and Woodrow B. Moats, Jr.,
will serve until the annual meeting in 2001. The Class C directors, Leon Kopyt
and Stanton Remer, will serve until the annual meeting in 2002.
Two Class A directors will be elected at this year's annual meeting to
serve for three-year terms expiring at our annual meeting in 2003. Our Board has
nominated Mr. Berson to serve as a Class A director. Mr. Berson is currently
serving as a director and has consented to serve for a new term. Our Board has
nominated Mr. Delle Donne to serve as the other Class A director, and fill the
vacancy created by the increase in the size of our Board. Mr. Delle Donne has
consented to serve a term on our Board of Directors. The persons named as proxy
holders on the enclosed proxy card, Mr. Kopyt and Mr. Remer, intend to vote FOR
the election of Mr. Berson and Mr. Delle Donne unless you mark a contrary
instruction on your proxy card. Unless you indicate otherwise on your proxy
card, if either Mr. Berson or Mr. Delle Donne is unable to serve as a director
at the time of this year's annual meeting, Mr. Kopyt or Mr. Remer will vote FOR
the election of another person that the Board may nominate in his place.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF NORMAN S.
BERSON AND BRIAN A. DELLE DONNE AS CLASS A DIRECTORS.
5
<PAGE>
NOMINEES FOR ELECTION AS DIRECTOR
CLASS A DIRECTOR NOMINEES
NORMAN S. BERSON, Director Since 1987, Age 73
Mr. Berson has been a shareholder in the law firm of Fineman & Bach, P.C.
of Philadelphia, Pennsylvania since 1981. Previously, Mr. Berson was a member of
the House of Representatives of the Commonwealth of Pennsylvania for 16 years.
BRIAN A. DELLE DONNE, Age 43
Mr. Delle Donne has been our Chief Operating Officer since June 1999 and
served as our Executive Vice President of Operations from April 1998 to June
1999. Mr. Delle Donne served as President of Knight Facilities Management, a
global planning, engineering and management consulting firm from 1997 to 1998
where he was responsible for strategic outsourcing services. From 1989 to 1995,
Mr. Delle Donne served as Senior Vice President of Ogden Projects, Inc. and as
President and Chief Operating Officer of its subsidiary, Ogden Environmental
Services. Mr. Delle Donne currently serves on the Board of Directors of UMS
Group, Inc., a privately held international management consulting firm providing
services to power utilities around the world.
CURRENT BOARD MEMBERS
CLASS C DIRECTORS
LEON KOPYT, Director Since 1991, Age 54
Mr. Kopyt has been our President, Chief Executive Officer and Chairman of
the Board since 1992. Previously, Mr. Kopyt served as our Chief Financial
Officer and Treasurer from 1992 to 1994, and as our Chief Operating Officer from
May 1990 to January 1992. From 1977 to 1990, Mr. Kopyt served as President and
Chief Executive Officer of a subsidiary of a European-based company that
specialized in the design and manufacture of defense products.
STANTON REMER, Director Since 1992, Age 50
Mr. Remer has been our Chief Financial Officer and Treasurer since May
1994. In 1993, he served as a director of auditing of a Philadelphia regional
accounting firm. Before working at the accounting firm, Mr. Remer served as
Chief Financial Officer of Sterling Supply Corporation from 1991 to 1992. Mr.
Remer is a Certified Public Accountant.
CLASS B DIRECTORS
ROBERT B. KERR, Director Since 1994, Age 57
Mr. Kerr is a founding partner of Everingham & Kerr, Inc., a merger &
acquisition consulting firm located in Haddon Heights, New Jersey, which has
served small and medium-sized manufacturing, distribution and service businesses
since 1987.
WOODROW B. MOATS, JR., Director Since 1994, Age 67
Mr. Moats is President of W.B. Moats & Associates, a marketing and
communications firm located in Berwyn, Pennsylvania, which specializes in
business-to-business marketing. Mr. Moats served as Senior Vice
President-Corporate Marketing and Public Relations of National Railway
Utilization Corporation from 1975 to 1980.
6
<PAGE>
OUR EXECUTIVE OFFICERS
The following table lists our executive officers as of February 14, 2000
and certain members of our senior management. Our Board elects our executive
officers annually for terms of one year and may remove any of our executive
officers with or without cause.
NAME AGE POSITION
---- --- --------
EXECUTIVE OFFICERS
Leon Kopyt........................... 54 Chairman, Chief Executive Officer,
President and Director
Stanton Remer........................ 50 Chief Financial Officer, Treasurer,
Secretary and Director
Brian A. Delle Donne................. 43 Chief Operating Officer
SENIOR MANAGEMENT
Rocco Campanelli..................... 49 Executive Vice President
Kevin D. Miller...................... 33 Senior Vice President
Howard Honig......................... 47 Senior Vice President
Peter R. Kaminsky.................... 60 Senior Vice President
Michael O'Keefe...................... 50 Senior Vice President
The business experience of Messrs. Kopyt, Remer and Delle Donne is
summarized in "Proposal 1 - Election of Directors."
Rocco Campanelli has served as an Executive Vice President of RCM since
June 1999. From September 1995 until June 1999, Mr. Campanelli served as a
Senior Vice President of RCM and our General Manager of Professional
Engineering. Previously, Mr. Campanelli was a Senior Vice President of
Operations and Marketing for Cataract, Inc., a business we acquired in August
1995. From the time he joined Cataract in 1988 until August 1995, Mr. Campanelli
held the position of Northeast Regional Manager and Vice President of
Operations.
Kevin D. Miller has served as a Senior Vice President of RCM since January
1998. Previously, Mr. Miller was a consultant to RCM from July 1997 through
December 1997. From 1996 until July 1997, Mr. Miller served as an Associate in
the corporate finance department of Legg Mason Wood Walker, Incorporated. From
1995 to 1996, Mr. Miller was a business consultant for the Wharton Small
Business Development Center. Mr. Miller previously served as a member of both
the audit and corporate finance groups at Ernst & Young, LLP. Mr. Miller is a
Certified Public Accountant.
Howard Honig has served as a Senior Vice President of RCM since July 1998.
Mr. Honig served as Vice President of Sales and Operations of an international
technical consulting and staffing firm from 1997 to 1998. Mr. Honig also served
as National Operations Director, Vice President of Organizational Development,
and Regional Vice President of Source Services Corp., now a division of Romac
International, from 1980 through 1997. Mr. Honig is a Certified Public
Accountant.
Peter R. Kaminsky has served as a Senior Vice President of RCM since May
1996. Previously, Mr. Kaminsky founded The Consortium of Maryland, Inc., a
business we acquired in 1996. Mr. Kaminsky previously served as Assistant to the
President of a subsidiary of the Equitable Life Assurance Society from 1965 to
1974, where his responsibilities included management recruitment, acquisitions,
marketing literature development and public relations.
Michael O'Keefe has served as our Senior Vice President of Information
Technology since October 1999. Mr. O'Keefe served as our Vice President of
Information Technology from October 1997 until October 1999. Prior to joining
us, Mr. O'Keefe founded Camelot Contractors Limited, which we acquired in August
1997.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF EXECUTIVE COMPENSATION
The following table lists cash and other compensation paid to, or accrued
by us for, our chief executive officer and each of the persons who, based upon
total annual salary and bonus, was one of our other five most highly compensated
executives for our fiscal year ended October 31, 1999. The information is
presented for each individual for our fiscal years ended October 31, 1997, 1998
and 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------- ------------------------------
AWARDS
SECURITIES
UNDERLYING
FISCAL OTHER ANNUAL OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) SARS COMPENSATION(2)
--------------------------- ------ -------- -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Leon Kopyt .......................... 1999 $350,000 $260,965 0 60,000 $13,318
President and CEO 1998 342,309 358,760 0 190,000 12,068
1997 300,000 100,000 0 500,000 10,019
Stanton Remer ....................... 1999 $125,000 $114,202 0 30,000 $ 4,173
CFO, Treasurer and Secretary 1998 124,236 71,752 0 10,000 2,788
1997 120,000 0 0 50,000 2,650
Brian A. Delle Donne (3) ............ 1999 $186,538 $100,000 0 20,000 $ 5,750
Chief Operating Officer 1998 93,272 50,000 0 30,000 4,500
Peter R. Kaminsky ................... 1999 $203,016 $ 76,696 0 0 $ 5,750
Senior Vice President 1998 200,000 62,287 0 10,000 4,500
1997 200,000 28,844 0 15,000 4,500
Rocco Campanelli .................... 1999 $101,135 $132,438 0 0 $ 5,750
Executive Vice President 1998 100,618 100,216 0 20,000 4,500
1997 96,323 35,859 0 12,000 4,500
Kevin D. Miller (4) ................. 1999 $120,000 $ 30,000 0 30,000 $ 1,250
Senior Vice President 1998 60,584 10,000 0 39,000 0
1997 20,000 0 0 0 0
</TABLE>
- ------------------
(1) During fiscal 1997, 1998 and 1999, certain of the officers named in this
table received personal benefits not reflected in the amounts of their
respective annual salaries or bonuses. The dollar amount of these benefits
did not, for any individual in any fiscal year, exceed the lesser of $50,000
or 10% of the total annual salary and bonus reported for that individual in
any year.
(2) This amount represents (i) premiums we paid for life and disability
insurance on certain of the officers named in this table as follows: Leon
Kopyt: 1999-$7,568, 1998-$7,568 and 1997-$5,519; and Stanton Remer:
1999-$2,923, 1998-$2,788 and 1997-$2,650, (ii) premiums we paid for medical
insurance for Leon Kopyt, Brian A. Delle Donne, Peter R. Kaminsky and Rocco
Campanelli in the amount of $4,500 each, and (iii) matching contributions we
made during our fiscal year ended October 31, 1999 in the amount of $1,250
for each of the officers named in this table in accordance with RCM's
retirement savings plan adopted pursuant to Section 401(k) of the Internal
Revenue Code of 1986, as amended. We did not make any matching contributions
in fiscal 1998 or 1997.
(3) Mr. Delle Donne became an employee of RCM in March 1998.
(4) Mr. Miller was a consultant to RCM from July 1997 through December 1997. He
became an employee of RCM in January 1998.
8
<PAGE>
OPTIONS GRANTED TO OUR EXECUTIVES IN FISCAL 1999
The following table lists information on the options to purchase our common
stock we granted to our executive officers and certain members of our senior
management during our fiscal year ended October 31, 1999. We did not grant any
other options, during our fiscal year ended October 31, 1999, to any of our
executive officers or members of our senior management listed in the summary
compensation table of this proxy statement. We have never granted any stock
appreciation rights.
OPTION/SAR GRANTS IN FISCAL 1999
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------------------ ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SARS APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM(1)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% 10%
---- ------------ ------------ ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Leon Kopyt................................ 60,000 (2) 13.7% $10.19 10/06/2009 $384,506 $974,414
Stanton Remer............................. 30,000 (3) 6.9% 11.50 06/17/2009 216,969 549,841
Brian A. Delle Donne...................... 20,000 (3) 4.6% 11.50 06/17/2009 144,646 366,561
Peter R. Kaminsky......................... 10,000 (3) 2.3% 15.06 11/01/2008 94,730 240,065
Rocco Campanelli.......................... 20,000 (3) 4.6% 15.06 11/01/2008 189,461 480,131
Kevin D. Miller........................... 30,000 (3) 6.9% 11.50 06/17/2009 216,969 547,841
</TABLE>
- ------------------
(1) Potential realizable value is reported net of option exercise price but
before taxes associated with exercise. These amounts represent assumed rates
of appreciation only. Actual gains, if any, on the options are dependent
upon the future performance of our common stock, and the amounts reflected
in the table will not necessarily be achieved.
(2) These options are exercisable six months from the date of the grant.
(3) These options are exercisable one year from the date of the grant.
9
<PAGE>
OPTION EXERCISES IN FISCAL 1999 AND FISCAL YEAR-END OPTION VALUES
The following table lists the number of options exercised during our fiscal
year ended October 31, 1999, and the number and value of options held by our
executive officers and certain members of our senior management at the end of
our fiscal year ended October 31, 1999. No other options were exercised, during
our fiscal year ended October 31, 1999, by any of our executive officers or
members of our senior management listed in the summary compensation table of
this proxy statement. RCM does not have any outstanding stock appreciation
rights. The values listed relate solely to outstanding stock options.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
SHARES AT FISCAL YEAR-END AT FISCAL YEAR-END(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Leon Kopyt ............... 0 $ 0 690,000 60,000 $2,250,300 $82,380
Stanton Remer ............ 0 0 60,000 30,000 86,280 1,890
Brian A. Delle Donne ..... 0 0 30,000 20,000 0 1,260
Peter R. Kaminsky ........ 15,000 159,450 10,000 0 0 0
Rocco Campanelli ......... 0 0 32,000 0 17,280 0
Kevin D. Miller .......... 0 0 39,000 30,000 0 1,890
</TABLE>
- ------------------
(1) These values represent the difference between the closing price of our
common stock on the Nasdaq National Market on October 31, 1999 and the
exercise price of each option, multiplied by the number of shares underlying
each option.
COMPENSATION OF DIRECTORS
Our employee directors do not receive any compensation for serving on our
Board or its committees, other than the compensation they receive for serving as
employees of RCM.
The following table summarizes the compensation of our non-employee
directors:
TYPE OF COMPENSATION CASH
-------------------- ----
Fee for each Board meeting attended ........................ $750
Fee for each Committee meeting attended .................... 300
Fee for each special assignment performed .................. 300
Directors are also eligible to receive options to purchase our common stock
and stock appreciation rights under our stock option plans.
EMPLOYMENT AGREEMENTS
We have an employment agreement with Leon Kopyt which pays him an annual
base salary of $350,000. The employment agreement also provides Mr. Kopyt with
vacation time and other customary benefits. The agreement provides that Mr.
Kopyt's annual bonus will be based on our EBITDA, defined as earnings before
interest, taxes, depreciation and amortization.
Mr. Kopyt's employment agreement is for a term of three years. The term of
the Agreement automatically extends each year for an additional one-year period.
The Agreement is terminable upon Mr. Kopyt's death or disability, or the
termination of Mr. Kopyt for cause.
10
<PAGE>
CHANGE IN CONTROL AND TERMINATION OF EMPLOYMENT ARRANGEMENTS FOR MR. KOPYT
Mr. Kopyt has an agreement with us which provides him with benefits upon a
change in control of RCM. The remaining term of Mr. Kopyt's employment is
extended for five years upon a change in control. If, during the term of Mr.
Kopyt's employment following a change in control, RCM terminates Mr. Kopyt's
employment other than for cause, or Mr. Kopyt terminates his own employment for
good reason, the provisions below will apply. The agreement includes as "good
reason," among other things, a material change in Mr. Kopyt's salary, title or
reporting responsibilities, or a change in RCM's office location which requires
Mr. Kopyt to relocate.
o RCM must pay Mr. Kopyt a lump sum equal to the total amount of his salary
and bonus for the remainder of the five-year term.
o The exercise price of the 500,000 options granted to Mr. Kopyt under our
1996 Executive Stock Plan will be reduced to 50% of the average market
price of our common stock for the 60 days prior to the date of
termination if that price is less than the original $7.125 per share
exercise price of the options.
o RCM must pay to Mr. Kopyt an amount equal to the sum of all penalties he
is assessed (including excise taxes imposed on certain parachute
payments) and taxes he incurs as a result of the benefits he will receive
under the agreement.
11
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
The graph below is presented in accordance with SEC requirements. You
should not draw any conclusions from the data in the graph, because past results
do not necessarily predict future stock price performance. The graph does not
represent our forecast of future stock price performance.
The graph below compares, over the five-year period ended October 31, 1999,
our total stockholder return to the cumulative total return of two indexes: the
University of Chicago Graduate School of Business CRSP Total Return Index for
the Nasdaq Stock Market, referred to in the graph as the Nasdaq Composite, and a
peer group of staffing companies that we selected in good faith. In developing
the index, each company we selected is weighted based on its market
capitalization measured on October 31, 1999.
The corporations making up the peer group are:
Alternative Resources Corp. Data Processing Corp.
Interim Services Inc. Kelly Services Inc.
Registry, Inc. Butler International, Inc.
Headway Corporate Resources Inc. Judge Group, Inc.
Olsten Corp. SCB Computer Technology, Inc.
The graph assumes that $100 was invested on October 31, 1994 in each of our
common stock, the Nasdaq Composite and the peer group index, and that all
dividends were reinvested.
[GRAPHIC]
In the printed version of the document, a line graph appears which depicts
the following plot points:
TOTAL RETURN ANALYSIS 1994 1995 1996 1997 1998 1999
- --------------------- ------ ------ ------ ------ ------ ------
RCM Technologies, Inc. .... $100.0 $104.3 $293.3 $441.9 $459.0 $352.4
Nasdaq Composite .......... 100.0 134.6 158.9 209.2 234.1 390.8
Peer Group ................ 100.0 106.8 113.4 126.4 82.8 68.2
12
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
We believe that, during our fiscal year ended October 31, 1999, our
executive officers and directors made all required filings under Section 16(a)
of the Securities Exchange Act on a timely basis. Our belief is based solely on:
o our review of copies of forms filed pursuant to Section 16(a) and
submitted to us during and with respect to our fiscal year ended October
31, 1999, and
o representations from our executive officers and directors that no Forms 5
were required for those persons.
BOARD MEETINGS AND COMMITTEES
Our Board of Directors has an executive committee, an audit committee and a
compensation committee. The committees report their actions to the full Board at
the Board's next regular meeting. The following table shows on which of our
Board's committees each of our directors served, and the number of meetings held
by each of our Board's committees, during our fiscal year ended October 31,
1999.
COMMITTEE
------------------------------------------
BOARD MEMBER EXECUTIVE AUDIT COMPENSATION
- ------------ --------- ----- ------------
Leon Kopyt ....................... (check mark)
Stanton Remer .................... (check mark)
Robert B. Kerr ................... (check mark) (check mark)
Woodrow B. Moats, Jr. ............ (check mark)
Norman S. Berson ................. (check mark)
MEETINGS HELD IN FISCAL 1999* .... 3 3 3
- ------------------
* Our Board of Directors held four meetings in our fiscal year ended October 31,
1999. Each of our directors attended all of those meetings and all meetings of
the committees on which he served. Our Board took other actions during our
fiscal year ended October 31, 1999 by consent resolution.
GENERAL DUTIES OF EACH COMMITTEE
The general duties of each committee are as follows:
EXECUTIVE COMMITTEE
o acts on behalf of our Board between meetings of the Board
AUDIT COMMITTEE
o reviews our financial and accounting practices, controls and results,
reviews the scope and services of our auditors and recommends independent
auditors to us
COMPENSATION COMMITTEE
o determines the compensation of our officers and employees
o administers our stock option plans
Our Board of Directors does not have a nominating committee. Our directors
recommend nominees for the election of directors, executive officers and
committee members.
13
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
This report summarizes the functions and philosophical principles of the
compensation committee, the compensation components of RCM's executives and
other factors the compensation committee considers in determining the
compensation of RCM's executives.
FUNCTIONS OF THE COMMITTEE
The compensation committee's primary functions include:
o reviewing, approving and determining the salaries, bonuses and other
benefits of RCM's directors, executive officers and senior management
o recommending to RCM's Board amendments to existing stock option plans and
the adoption of new stock option plans
o negotiating, reviewing, approving and determining the adoption of, or
amendments to, any compensatory plans, arrangements or agreements between
RCM and its executives, and
o establishing and reviewing management perquisites.
COMPENSATION PHILOSOPHY
The compensation committee determines executive compensation and
administers RCM's stock option plans with the following goals in mind:
o provide a competitive level of total compensation necessary to attract,
motivate and retain talented executives
o align the interests of RCM's executives with those of RCM by increasing
their interest in RCM through the grant of stock options, stock
appreciation rights and restricted stock awards, and
o emphasize variable, performance-based compensation which rewards
executives for achieving both short-term and long-term goals.
COMPONENTS OF COMPENSATION
The compensation committee generally structures RCM executives'
compensation through a combination of the following:
o BASE SALARY: As a general rule, the compensation committee establishes
base salaries for RCM's executives based upon the individual's
performance and contribution to RCM. The Committee takes into account
base salaries of executives in comparable positions in companies similar
to RCM. Some of RCM's executives are parties to employment agreements.
The salaries of those executives are based on their agreements.
o ANNUAL INCENTIVES: The compensation committee provides annual incentive
awards to RCM's executives to reward their contributions to RCM. Mr.
Kopyt's bonus is based solely on RCM's EBITDA. Mr. Remer's bonus is
determined based on a combination of EBITDA and certain other factors at
the discretion of the chief executive officer. The bonuses of all other
executives are determined based on RCM's operating income and certain
other factors at the discretion of the chief executive officer, based on
the guidelines established by the compensation committee.
o LONG-TERM INCENTIVE COMPENSATION: The compensation committee
periodically grants stock options and other RCM securities to RCM
executives. The compensation committee intends the grants to be a
significant portion of the total executive compensation. The grants are
designed to align the interests of each RCM executive with those of the
stockholders, and provide each executive with a significant incentive to
manage RCM from the perspective of an owner with an equity stake in the
business. Grants typically permit executives to acquire RCM's common
stock at a fixed price per share (generally, the market price on the
grant date) over a specified period of time (usually up to ten
14
<PAGE>
years). The grants provide a return to the executive only if the market
price of the shares appreciates over the option term.
The compensation committee bases the size of each executive's option grant
upon the executive's:
o position with RCM
o potential for future responsibility over the option term
o performance in recent periods, and
o current holdings of RCM stock and options.
The compensation committee believes that RCM's financial performance is a
better indicator of executive achievement than its stock price. The compensation
committee examines a number of financial indicators in assessing RCM's
performance, including:
o net sales
o operating income
o net income, and
o earnings per share.
The compensation committee does not base compensation decisions upon any
precise formula or accord any one factor greater weight than the other factors.
During RCM's fiscal year ended October 31, 1999, RCM achieved records in
each of the four financial performance indicators discussed above. During RCM's
fiscal year ended October 31, 1999, the compensation committee approved grants
of options to purchase, in the aggregate, 437,500 shares of RCM's common stock.
COMPENSATION OF LEON KOPYT, RCM'S CHIEF EXECUTIVE OFFICER
Leon Kopyt, RCM's Chief Executive Officer, participates in the same
programs as RCM's other executives, and receives compensation based on: the same
factors as RCM's other executives, his employment agreement and a termination
benefits agreement. Mr. Kopyt's overall compensation reflects his degree of
policy and decision-making authority and his level of responsibility with
respect to RCM's strategic direction and financial and operational results. Mr.
Kopyt's compensation was determined based on a study of the compensation of
chief executive officers of other companies in the information technology
industry which have financial and corporate characteristics similar to those of
RCM. Mr. Kopyt's compensation components for RCM's fiscal year ended October 31,
1999 were as follows:
o BASE SALARY: Mr. Kopyt received a base salary of $350,000.
o ANNUAL INCENTIVE: Pursuant to Mr. Kopyt's incentive compensation
arrangement, Mr. Kopyt received a $260,965 bonus for the fiscal year
ended October 31, 1999.
o LONG-TERM INCENTIVE: Mr. Kopyt received options to purchase 60,000
shares of RCM's common stock. The options become exercisable in March
2000. The compensation committee awarded Mr. Kopyt these options based
on:
o RCM's financial performance during its fiscal year ended October 31,
1999
o RCM's stockholder return for its fiscal year ended October 31, 1999
o the value of awards granted to chief executive officers of other
companies in the information technology industry which have
financial and corporate characteristics similar to those of RCM, and
o the number of stock options granted by the compensation committee in
prior years.
15
<PAGE>
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code limits the amount of executive
compensation RCM may deduct for federal income tax purposes. In general, Section
162(m) only allows a publicly held corporation to deduct up to one million
dollars per year of compensation paid to certain executives. The executives
whose compensation is subject to limitation under Section 162(m) are those
executives who, as of the close of a corporation's taxable year, are either the
chief executive officer (or an individual acting in such capacity), or an
executive whose compensation is required to be reported to shareholders under
the Securities Exchange Act of 1934 by reason of that executive being among the
four highest compensated officers of a corporation for the taxable year (other
than the chief executive officer). Performance-based compensation is not,
however, subject to this deduction limitation if it meets certain requirements.
One of the requirements is that performance-based compensation be payable only
on the attainment of performance goals that have been approved by a
corporation's stockholders. Compensation attributable to the exercise of options
that are granted with an exercise price at or above the fair market value of the
stock subject to the option under a stockholder-approved stock option plan
meeting certain requirements is also qualified as performance-based
compensation. The compensation committee has generally attempted to structure
the compensation it pays to RCM's executives subject to Section 162(m) so that
compensation that would exceed the one million dollar limitation otherwise
imposed under Section 162(m) will qualify for the exemption noted above for
performance-based compensation.
Respectfully submitted by the members of the compensation committee of the
Board of Directors:
Woodrow B. Moats, Jr.
Robert B. Kerr
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our compensation committee consists of Robert B. Kerr and Woodrow B. Moats,
Jr. Neither Mr. Kerr nor Mr. Moats is or has been an officer or employee of RCM
or any of its subsidiaries.
16
<PAGE>
PROPOSAL 2
------------------
APPROVAL OF THE RCM TECHNOLOGIES, INC.
2000 EMPLOYEE STOCK INCENTIVE PLAN
You are being asked to consider and approve the adoption of the RCM
Technologies, Inc. 2000 Employee Stock Incentive Plan. Our Board of Directors
adopted the plan on January 6, 2000, subject to approval by our stockholders at
the annual meeting.
REASONS FOR ADOPTING THE PLAN
Our Board believes that talented, dedicated employees, advisors and
consultants play a key role in RCM's sustained growth and financial success. In
order to improve our ability to attract, retain and motivate superior
individuals, including non-employee directors, our Board has adopted an employee
stock incentive plan. Our Board adopted the plan subject to the approval of our
stockholders. Under the plan, our Board may, in its discretion, grant any of the
following:
o Options to purchase shares of RCM common stock. Options granted under the
plan may be either non-qualified stock options, options intended to
qualify as "incentive stock options" under Section 422 of the Internal
Revenue Code of 1986, as amended, or a combination of both.
o Stock appreciation rights, or SARs. SARs are the right to receive, in
exchange for surrender of an option, cash equal to the fair market value
of the shares that are subject to the option, less the exercise price to
acquire those shares.
o Awards of RCM common stock, either with or without a purchase price. Our
Board may subject awards of our common stock to conditions under which
the grantee must deliver the shares covered by the awards to RCM. For
example, an award can specify that the grantee must convey the shares
covered by the award to RCM if the grantee's employment with RCM
terminates before a specified time.
Our Board believes that grants of options and stock appreciation rights and
awards of RCM common stock will strongly link the interests of recipient
employees, advisors and consultants to those of our stockholders. Grants and
awards will also provide recipients with additional incentives to devote
themselves to RCM's future success.
The following is a summary of the plan's principal features. We have
attached a copy of the plan as Exhibit A to this Proxy Statement.
SUMMARY OF THE PLAN
COMMON STOCK AVAILABLE UNDER THE 2000 EMPLOYEE STOCK INCENTIVE PLAN
We have reserved 1.5 million shares of our common stock for issuance under
the 2000 Employee Stock Incentive Plan. If there is a change in our
capitalization that affects our outstanding common stock, our Board or the
committee administering the plan may adjust this number in order to preserve the
benefits we intend to provide under the plan.
MARKET VALUE OF THE COMMON STOCK
The closing sale price of RCM's common stock on the Nasdaq Stock Market's
National Market System on February 14, 2000 was $15.50 per share.
17
<PAGE>
ADMINISTRATION
Our Board or one or more committees that our Board designates will
administer the plan. In order for grants of options under the plan to be exempt
from the limitations on deductibility under Section 162(m) of the Internal
Revenue Code, the plan must be administered, at least as to optionees whose
compensation is subject to those limitations on deductibility, by a committee
composed exclusively of two or more outside directors. Outside directors are
members of our Board who meet certain tests under the tax laws for independence
from RCM management.
ELIGIBILITY
Our Board or the committee may make grants or awards to our employees,
directors, consultants or advisors. Consultants and advisors are eligible for
grants or awards only if they provide us with services that are unrelated to the
offer or sale of securities. Grants and awards will be within the discretion of
our Board or the committee. Therefore, it is impossible to predict to whom the
awards or grants will be made or the amount of the grants or awards. As of the
date of the annual meeting, there will be approximately 3,500 employees, six
directors and 500 consultants or advisors eligible to receive grants or awards
under the plan.
STOCK OPTIONS AND THEIR TERMS
Under the plan, the committee may award either non-qualified stock options
or options intended to qualify as "incentive stock options," or ISOs, under
Section 422 of the Internal Revenue Code. All awards will be non-qualified stock
options unless our Board or the committee designates the grant as an ISO. If a
court or governmental body determines that an award designated as an ISO does
not qualify as an incentive stock option under the Internal Revenue Code, then,
under the plan, the option will be treated as a non-qualified stock option.
An option which is designated as an ISO may not become exercisable for the
first time during any one calendar year for shares of RCM common stock having an
aggregate fair market value in excess of $100,000. For this purpose, the
aggregate fair market value of RCM common stock will be determined as of the
date of the grant. In making this determination, the shares subject to the
incentive stock option are aggregated with all other shares subject to other
incentive stock options granted under this or any other RCM plan that also first
become exercisable in the same year. An option which is designated as an ISO
will, to the extent it exceeds these limitations, be treated as a non-qualified
stock option.
The committee determines the terms of option awards, including their
amount, exercise price and term. The committee will set forth the terms of each
option award in an award agreement that it will give to the grantee at the time
of the grant.
LIMITATION ON INDIVIDUAL OPTION GRANTS
The committee administering the plan may not, in any calendar year, grant
to any person options or stock appreciation rights representing more than
300,000 shares of RCM's common stock. If there is a change in our capitalization
that affects our outstanding common stock, our Board or the committee may adjust
this number in order to preserve the benefits we intend to provide under the
plan.
TERM
The committee establishes an expiration date for each option it grants. In
no event will an option be exercisable after its expiration date.
o For non-qualified stock options, the committee may establish any
expiration date it chooses.
o For ISOs, the term generally may not exceed ten years. However, if the
grant is to an individual who, on the date of the grant, owns more than
ten percent of our outstanding stock, then the term may not exceed five
years.
18
<PAGE>
In certain circumstances, an option may terminate before its expiration
date.
o If the optionee's employment or service with RCM terminates for any
reason other than disability, death or a termination by RCM on a finding
of, without limitation, fraud, embezzlement, commission of a felony or
proven dishonesty in the course of employment, or disclosure of trade
secrets or confidential information of RCM, each option generally will
terminate no later than three months after the termination date. However,
the award agreement may provide otherwise. In addition, after the
termination of a grantee's employment, the grantee may only exercise
options which were exercisable immediately before the termination.
o If an optionee's employment or service with RCM terminates as a result of
the optionee's disability or death, each option generally will terminate
no later than one year after termination of employment. However, the
award agreement may provide otherwise. After the termination of a
grantee's employment, the grantee may only exercise options which were
exercisable immediately before the termination.
o If RCM terminates an employee on a finding of, without limitation, fraud,
embezzlement, commission of a felony or proven dishonesty in the course
of employment, or disclosure of trade secrets or confidential information
of RCM, each option will terminate immediately, or otherwise at the
discretion of the committee, without regard to the exercisability of the
option prior to termination. The terminated optionee will also forfeit
any shares which were not yet delivered and will receive a refund of the
purchase price he or she paid.
o The committee may accelerate expiration dates of options if RCM
liquidates or dissolves, and may extend an option's early termination
date to a date that is no later than its original expiration date.
EXERCISE PRICE
The committee has the absolute discretion to determine the exercise price
of non-qualified stock options. In the case of incentive stock options, the
exercise price generally may not be less than the fair market value of a share
of our common stock on the date of the grant. However, if the grantee owns more
than ten percent of our outstanding stock, then the per share exercise price of
an incentive stock option must be at least ten percent more than the fair market
value of a share of our common stock on the date of the grant. Generally,
grantees may pay the exercise price of an option in cash or by certified or
cashier's check payable to the order of RCM. Our Board or the committee may
allow a recipient to pay in other modes, including by surrendering RCM common
stock that he or she holds.
HOW A GRANTEE MAY EXERCISE AN OPTION
In order to exercise an option, the grantee must:
o give written notice of exercise to RCM, including the number of shares
the grantee will be purchasing
o pay the option price in full for the shares being purchased, and
o satisfy any other conditions that the award agreement requires.
If, at the time of exercise, the shares are not covered by a current
registration statement, the grantee may also be required to state in the notice
of exercise that the shares being acquired are for investment and not for
distribution or resale.
TRANSFERABILITY
Options are generally not transferable. Upon a grantee's death, options are
transferrable by will or by the laws of descent and distribution. A recipient
may transfer non-qualified stock options to:
o immediate family members
o trusts for the benefit of immediate family members, or
o partnerships whose only partners are immediate family members so long as
the family member does not pay any money or other form of consideration
in exchange for the options.
19
<PAGE>
Grantees may also transfer non-qualified stock options pursuant to a
"domestic relations order" as defined in either the Internal Revenue Code or
Title I of the Employee Retirement Income Security Act.
STOCK APPRECIATION RIGHTS
Under the plan, our Board or the committee may choose to grant stock
appreciation rights in conjunction with any option that it grants under the
plan.
o Each SAR must relate to a specific option that the committee grants under
the plan.
o The committee must grant each SAR at the same time as it grants the
option to which the SAR relates.
o The committee may not grant any individual more SARs than the number of
shares he or she is entitled to purchase pursuant to the related option.
COMMON STOCK AWARDS
The committee may award shares of common stock. The stock awards may or may
not be restricted. Restricted stock awards are awards of common stock that are
subject to restrictions during a specified period. For example, the committee
may condition a restricted stock award on a participant's continued service with
RCM or on RCM's achieving specified financial goals.
Restricted stock awards generally have the following characteristics:
o The grantee will forfeit the shares if the specified conditions are not
met.
o The grantee cannot transfer restricted shares during the restriction
period.
o The committee may specify that RCM will hold the restricted shares during
the restriction period.
o Notwithstanding these restrictions, the grantee is entitled to vote
restricted shares and receive any dividends during the restriction
period.
The committee may also award common stock without restrictions. The
committee determines what, if anything, the grantee must pay in order to receive
the award of common stock.
ADJUSTMENTS FOR CAPITAL CHANGES
If RCM's corporate structure or capitalization changes, and the change
affects our common stock, our Board or the committee will adjust:
o the aggregate number of shares reserved for issuance under the plan, and
o the number of shares subject to outstanding options, stock appreciation
rights and stock awards, together with option and SAR exercise prices.
The committee will make these adjustments in order to preserve the benefits
the plan is intended to provide.
CHANGE IN CONTROL
Upon a change in control of RCM, the following things will happen:
o Unless the committee elects otherwise, any outstanding options held by a
grantee whom the committee believes will not be employed by RCM following
the change of control will become automatically exercisable in full.
o The committee may take whatever actions it deems necessary or desirable
including, among other things, accelerating the expiration date of any
option or the exercisability of the option.
20
<PAGE>
AMENDMENTS TO THE PLAN
Either our Board or the committee may, in its discretion, amend the plan.
However, our Board must obtain stockholder approval in order to:
o increase the number of shares of common stock issuable under the plan
o increase the number of options that our Board may grant to any one
recipient in any given year, or
o change the class of persons eligible to receive incentive stock options.
If an amendment will adversely affect an option or award, our Board or the
committee must obtain the consent of the affected grantee before so amending the
plan.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The plan is not subject to the provisions of Section 401(a) of the Internal
Revenue Code.
INCENTIVE STOCK OPTIONS
A participant generally does not realize taxable income upon the grant or
exercise of an ISO under the plan.
If a participant does not dispose of shares received upon exercise of an
ISO for at least
o two years from the date of grant, and
o one year from the date of exercise,
then upon sale of the shares:
o any amount realized in excess of the exercise price is taxed as long-term
capital gain, and
o any loss sustained will be a long-term capital loss.
If the participant has held the common stock for more than 12 months,
capital gains are subject to a maximum federal income tax rate of 20%.
Otherwise, capital gains are subject to the same tax rates as are applicable to
other income.
The exercise of an ISO gives rise to an adjustment in computing alternative
minimum taxable income that may result in alternative minimum tax liability for
the participant. Specifically, in computing alternative minimum taxable income
for the year in which the participant exercises the ISO, he or she must include
the amount by which the fair market value of a share at the time of exercise
exceeds the option exercise price. Currently, the maximum alternative minimum
tax rate is 28%. If an optionee pays alternative minimum tax with respect to the
exercise of an incentive stock option, he or she may be able to use the amount
of tax paid as a credit against regular tax liability in subsequent years. The
optionee's basis in the shares for purposes of the alternative minimum tax will
also be adjusted when income from a disposition of the shares is included in
alternative minimum taxable income.
If the participant disposes of common stock acquired by exercise of an ISO
before the end of the one and two-year holding periods described above, he or
she has made a disqualifying disposition. If a participant makes a disqualifying
disposition, he or she realizes ordinary income in the year of the disposition
generally to the extent that the lesser of the fair market value of the common
stock on the date the option was exercised or the fair market value at the time
of the disqualifying disposition exceeds the exercise price. Any amount realized
upon a disqualifying disposition in excess of the fair market value of the
common stock on the date of exercise generally will be treated as either
short-term or long-term capital gain, depending upon how long the participant
holds the common stock. If a participant uses common stock that he or she
acquires upon exercise of an ISO to pay the exercise price of another option
prior to the end of the holding period for the common stock, the disposition
will be a disqualifying disposition.
RCM cannot take a deduction for federal income tax purposes at the time of
the grant or exercise of an incentive stock option. At the time of a
disqualifying disposition by a participant, RCM generally will be entitled to a
deduction for federal income tax purposes equal to the amount taxable to the
participant as ordinary income in connection with the disqualifying disposition.
RCM is only entitled to the deduction, however, to the extent the amount the
participant must pay in tax constitutes reasonable compensation.
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NON-QUALIFIED STOCK OPTIONS
The grant of a non-qualified stock option under the plan will not generally
be subject to federal income tax. Upon exercise, however, the participant
generally will recognize ordinary income in an amount equal to the difference
between the exercise price and the fair market value of the shares on the date
of exercise. Gain or loss on the subsequent sale of common stock received on
exercise of a non-qualified stock option generally will be either short-term or
long-term capital gain or loss, depending upon how long the participant holds
the common stock.
Upon exercise of a non-qualified stock option, RCM will be entitled to a
compensation deduction for federal income tax purposes in the year and in the
same amount as the participant recognizes and includes in his or her ordinary
income, and not subject to other limitations on deductibility. RCM is
responsible for withholding of federal income and wage taxes on this amount. In
general, under Section 162(m) of the Internal Revenue Code, RCM may not take a
deduction for remuneration we pay during any taxable year to the chief executive
officer or any of the four next most highly compensated executive officers in
excess of $1,000,000. Section 162(m) is known as the "million dollar cap." For
this purpose, remuneration excludes certain performance-based compensation. We
believe that the plan meets all general requirements applicable to it under the
performance-based compensation rules in order for specific option grants to be
treated as giving rise to performance-based compensation. We anticipate that the
Board or the committee will administer the plan so that all non-qualified stock
options will in fact qualify as performance-based and any income recognized on
their exercise will be exempt from the million dollar cap.
AWARDS
Awards granted under the Plan, may or may not be subject to restrictions
during a vesting period established with respect to the Award. If an Award is
fully vested as of the date it is granted, the excess of the value of the shares
transferred pursuant to the Award over the amount, if any, that the recipient is
required to pay for the shares is treated as ordinary compensation income to the
recipient, and will be a deductible compensation expense to RCM, subject to
limitations on deductibility generally applicable to compensation payments. If
the Award is subject to restrictions during a vesting period that are properly
treated as constituting a "substantial risk of forfeiture" for federal income
tax purposes, the recipient of an Award will generally include in his or her
taxable income for federal income tax purposes the value of the shares over the
amount, if any, paid for the shares, as of the dates the shares become vested.
This income will be treated as ordinary compensation income in determining his
or her tax liability for the relevant year (as explained below).
In general, if property is transferred to an individual in connection with
arrangements related to compensation for services provided by that individual,
the excess of the fair market value of the property transferred over the
purchase price paid for the property, if any, is treated as taxable compensation
income (that is taxed as additional ordinary income). In the case of an Award
granted for no purchase price, the full value of the shares transferred will be
treated as compensation income of the grantee. This income must be recognized,
absent an election under Section 83(b) of the Code, as explained below, at the
time the shares cease to be subject to a "substantial risk of forfeiture."
If shares transferred pursuant to an Award are subject to forfeiture on,
for example, termination of employment of the recipient prior to the date the
shares "vest," that forfeiture may normally be treated as constituting a
substantial risk of forfeiture for these purposes. The recipient of such an
Award would normally recognize the value of the shares granted as they become
vested, taking into account the value not as of the date the Award was granted,
but as of the vesting date of the shares. On a sale of the shares, the Award
recipient would calculate his or her capital gain or loss by reference to the
value of the shares on the vesting date, and would determine the character of
the gain or loss as long or short term by measuring the holding period starting
as of the vesting date.
The recipient of an Award that is subject to vesting may make an election
under Section 83(b) of the Code. The election will cause the recipient to
recognize an amount of ordinary income equal to the fair market value of the
shares transferred as of the date the Award is granted (rather than as of the
vesting date), and on a subsequent sale of those shares, the holding period
would also be calculated by reference to the
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grant date rather than the vesting date. If the shares are subsequently
forfeited, the employee will not be able to claim a loss under applicable tax
rules (which only permit recognition of a loss if there has been a purchase
price paid for the shares, and only to the extent of such purchase price).
To make an election under Section 83(b) of the Code, a recipient of an
Award that is subject to vesting must file the election no later than 30 days
after the date of the Award. This is done by filing a written statement with the
IRS office where the employee files his or her returns, and a copy with RCM. A
copy of the filing must also be included in the participant's tax return for the
year of the purchase. The 83(b) election statement must contain the following
information: the name, address and taxpayer identification number of the
taxpayer, a description of the shares received, the date of the Award and the
taxable year for which the election is made, the nature of the restrictions on
the shares, the fair market value of the shares as of the Award date, the
purchase price paid for the shares, if any, and a statement indicating that
copies of the election have been furnished to other persons as required. The
statement must be signed by the participant and must indicate that it is made
under Section 83(b) of the Code. A copy of the 83(b) election must be filed
along with the Award recipient's federal income tax return for the year in which
the Award was granted.
ACCOUNTING CONSEQUENCES
The current accounting treatment of options selected by RCM provides that
no amount is accrued as compensation and thus charged against earnings unless
the options were granted: (i) with an exercise price that is below the market
price of our common stock subject to the option, or (ii) to consultants,
advisors or other non-employees of RCM. In the former circumstance, the excess
of such market price over the exercise price is fixed at the date of grant and
is amortized, through a charge against earnings, over the period to which the
compensation represented by the options is deemed attributable. This is
typically the vesting period of the options. In the latter circumstance, the
fair value of the option is amortized, through a charge against earnings, over
the period to which the compensation represented by the option is deemed
attributable.
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
The Plan is not subject to any provisions of the Employee Retirement Income
Security Act of 1974.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF RCM'S 2000
EMPLOYEE STOCK INCENTIVE PLAN.
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PROPOSAL 3
------------------
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
Our Board of Directors has appointed Grant Thornton LLP as our independent
auditors for our fiscal year ending December 31, 2000. Our Board expects one or
more representatives of Grant Thornton LLP to be present at the annual meeting.
The representatives will have the opportunity to make a statement if they desire
to do so, and will respond to appropriate stockholder questions.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF GRANT
THORNTON'S APPOINTMENT AS OUR INDEPENDENT AUDITORS FOR OUR FISCAL YEAR ENDING
OCTOBER 31, 2000.
STOCKHOLDER PROPOSALS
Stockholders may submit proposals to be considered for inclusion in the
proxy materials for our annual meetings. For your proposal to be included in the
proxy materials for our 2001 annual meeting:
o you must submit your proposal in writing to Stanton Remer, Secretary, RCM
Technologies, Inc., 2500 McClellan Avenue, Suite 350, Pennsauken, New
Jersey 08109
o Mr. Remer must receive your proposal no later than January 3, 2001, and
o your proposal must comply with the rules and regulations of the SEC.
You may wish to present a proposal at our 2001 annual meeting but not have
the proposal included in our proxy materials relating to that meeting. You must
notify our Secretary of such proposal. If we do not receive notice of your
proposal by March 19, 2001, the proposal will be deemed "untimely" for the
purposes of Rule 14a-4(c) of the Securities Exchange Act of 1934. If the
proposal is deemed "untimely," the persons named as proxies in next year's proxy
materials will be entitled to vote in their discretion with respect to the
proposal.
By Order of the Board of Directors,
/s/ Leon Kopyt
-----------------------------------
Leon Kopyt
Chairman of the Board and
Chief Executive Officer
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EXHIBIT A
RCM TECHNOLOGIES, INC.
2000 EMPLOYEE STOCK INCENTIVE PLAN
AS ADOPTED BY THE BOARD OF DIRECTORS
(EFFECTIVE JANUARY 6, 2000)
1. Purpose. RCM Technologies, Inc., (the "Company"), hereby adopts the RCM
Technologies, Inc. 2000 Employee Stock Incentive Plan (the "Plan"). The Plan is
intended to recognize the contributions made to the Company by employees
(including employees who are members of the Board of Directors) of the Company
or any Affiliate, to provide such persons with additional incentive to devote
themselves to the future success of the Company or an Affiliate, and to improve
the ability of the Company or an Affiliate to attract, retain, and motivate
individuals upon whom the Company's sustained growth and financial success
depend. Through the Plan, the Company will provide such persons with an
opportunity to acquire or increase their proprietary interest in the Company,
and to align their interest with the interests of the Company's stockholders,
through the receipt of rights to acquire the Company's Common Stock, $.05 par
value per share (the "Common Stock"), and through the transfer or issuance of
Common Stock or other Awards. In addition, the Plan is intended as an additional
incentive to directors of the Company who are not employees of the Company or an
Affiliate to serve on the Board and to devote themselves to the future success
of the Company by providing them with an opportunity to acquire or increase
their proprietary interest in the Company through the receipt of rights to
acquire Common Stock. Furthermore, the Plan may be used to encourage consultants
and advisors of the Company to further the success of the Company.
2. Definitions. Unless the context clearly indicates otherwise, the
following terms shall have the following meanings:
a. "Affiliate" means a corporation which is a parent corporation or a
subsidiary corporation with respect to the Company within the meaning of
Section 424(e) or (f) of the Code, or any successor provision.
b. "Award" shall mean a transfer of Common Stock made pursuant to the
terms of the Plan or the grant to a person of performance units, "phantom"
units, SARs or other rights containing such terms, benefits or restrictions
as the Committee shall specify in the Award Agreement.
c. "Award Agreement" shall mean the agreement between the Company and
a Grantee with respect to an Award made pursuant to the Plan.
d. "Board" means the Board of Directors of the Company.
e. "Change of Control" shall have the meaning set forth in Paragraph 9
of the Plan.
f. "Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute, and the rules and regulations issued pursuant to that
statute or any successor statute.
g. "Committee" shall have the meaning set forth in Paragraph 3 of the
Plan.
h. "Common Stock" shall have the meaning set forth in Paragraph 1 of
the Plan.
i. "Company" means RCM Technologies, Inc., a Nevada corporation.
j. "Disability" means a condition treated as a "disability" for
purposes of Section 22(e)(3) of the Code.
k. "Employee" means an employee of the Company or an Affiliate.
l. "Fair Market Value" shall have the meaning set forth in Section 8b
of the Plan.
m. "Grantee" shall mean a person to whom an Award has been granted
pursuant to the Plan.
n. "ISO" means an Option granted under the Plan which is intended to
qualify as an "incentive stock option" within the meaning of Section 422(b)
of the Code.
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o. "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute, and the rules and regulations issued
pursuant to that statute or any successor statute.
p. "Non-Employee Director" shall mean a member of the Board who is a
"non-employee director" as that term is defined in paragraph (b)(3) of Rule
16b-3 and an "outside director" as that term is defined in Treasury
Regulations Section 1.162-27 promulgated under the Code.
q. "Non-qualified Stock Option" means an Option granted under the Plan
which is not intended to qualify, or otherwise does not qualify, as an ISO.
r. "Option" means either an ISO or a Non-qualified Stock Option
granted under the Plan.
s. "Option Document" means the document described in Paragraph 8 of
the Plan, which sets forth the terms and conditions of each grant of
Options.
t. "Option Price" means the price at which Shares may be purchased
upon exercise of an Option, as calculated pursuant to Section 8b of the
Plan.
u. "Optionee" means a person to whom an Option has been granted under
the Plan, which Option has not been exercised and has not expired or
terminated.
v. "Plan" shall have the meaning set forth in Paragraph 1 hereof.
w. "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act,
or any successor rule.
x. "SAR" shall have the meaning set forth in Section 11 of the Plan.
y. "Section 16 Officers" means any person who is an "officer" within
the meaning of Rule 16a-1(f) promulgated under the Exchange Act or any
successor rule, and who is subject to the reporting requirements under
Section 16 of the Exchange Act with respect to Company's Common Stock.
z. "Securities Act" means the Securities Act of 1933, as amended, or
any successor statute, and the rules and regulations issued pursuant to
that statute or any successor statute.
aa. "Shares" means the shares of Common Stock of the Company which are
the subject of Options or granted as Awards under the Plan.
3. Administration of the Plan. The Board may administer the Plan and/or it
may, in its discretion, designate a committee or committees composed of two or
more of its directors to operate and administer the Plan with respect to all or
a designated portion of the participants. To the extent that the committee is
empowered to grant options to Section 16 Officers or persons whose compensation
might have limits on deductibility under Section 162(m) of the Code, each member
of a committee designated by the Board shall be a Non-Employee Director. Any
such committee designated by the Board, and the Board itself in its
administrative capacity with respect to the Plan, is referred to as the
"Committee."
a. Meetings. The Committee shall hold meetings at such times and
places as it may determine, and shall keep minutes of its meetings. The
Committee may take action only upon the agreement of a majority of the
whole Committee. Any action which the Committee shall take through a
written instrument signed by all of its members shall be effective as
though it had been taken at a meeting duly called and held.
b. Exculpation. No member of the Committee shall be personally liable
for monetary damages for any action taken or any failure to take any action
in connection with the administration of the Plan or the granting of
Options or Awards under the Plan, unless (i) the member has breached or
failed to perform the duties of such member's office under Chapter 78 of
Title 7 of the Nevada Revised Statutes Annotated, and (ii) the breach or
failure to so perform constitutes self-dealing, wilful misconduct or
recklessness; provided, however, that the provisions of this Subsection b
shall not apply to the responsibility or liability of a member of the
Committee pursuant to any criminal statute, or to the liability of a member
for the payment of taxes pursuant to local, Nevada or federal law.
c. Indemnification. Service on the Committee shall constitute service
as a member of the Board. Each member of the Committee shall be entitled,
without further act on the member's part, to indemnity
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from the Company and limitation of liability to the fullest extent provided
by applicable law and by the Company's Articles of Incorporation and/or
Bylaws in connection with or arising out of any action, suit or proceeding
with respect to the administration of the Plan or the granting of Options
or Awards hereunder in which the member may be involved by reason of the
member being or having been a member of the Committee, whether or not the
member continues to be a member of the Committee at the time of the action,
suit or proceeding.
d. Interpretation. The Committee shall have the power and authority
to (i) interpret the Plan, (ii) adopt, amend and revoke rules and
regulations for its administration that are not inconsistent with the
express terms of the Plan, and (iii) waive requirements relating to
formalities or other matters that do not either modify the substance of the
rights intended to be granted by Options and Awards or constitute a
material amendment for any purpose under the Code. Any such actions by the
Committee shall be final, binding and conclusive on all parties in
interest.
4. Grants of Options under the Plan. Grants of Options under the Plan may
be in the form of a Non-qualified Stock Option, an ISO or a combination thereof,
at the discretion of the Committee.
5. Eligibility. All Employees, members of the Board and consultants and
advisors to the Company shall be eligible to receive Options and Awards
hereunder. Consultants and advisors shall be eligible only if they render bona
fide services to the Company unrelated to the offer or sale of securities. The
Committee, in its sole discretion, shall determine whether an individual
qualifies as an Employee.
6. Shares Subject to Plan. The aggregate maximum number of Shares for
which Awards or Options may be granted pursuant to the Plan is 1,500,000. The
number of Shares which may be issued under the Plan shall be subject to
adjustment in accordance with Paragraph 10 of the Plan. The Shares shall be
issued from authorized and unissued Common Stock or Common Stock held in or
hereafter acquired for the treasury of the Company. If an Option terminates or
expires without having been fully exercised for any reason or if Shares subject
to an Award have been conveyed back to the Company pursuant to the terms of an
Award Agreement, the Shares for which the Option was not exercised or the Shares
that were conveyed back to the Company shall again be available for issuance
pursuant to the terms of one or more Options, or one or more Awards, granted
pursuant to the Plan.
7. Term of the Plan. The Plan is effective as of January 6, 2000, the date
on which it was adopted by the Board, subject to the approval of the Plan within
one year after such date by the stockholders of the Company in the manner
required by state law. If the Plan is not so approved by the stockholders of the
Company, all Options granted under the Plan shall be null and void. No ISO may
be granted under the Plan after January 6, 2010.
8. Option Documents and Terms. Each Option granted under the Plan shall be
a Non-qualified Stock Option unless the Option shall be specifically designated
at the time of grant to be an ISO. If any Option designated an ISO is determined
for any reason not to qualify as an incentive stock option within the meaning of
Section 422 of the Code, such Option shall be treated as a Non-qualified Stock
Option for all purposes under the provisions of the Plan. Options granted
pursuant to the Plan shall be evidenced by the Option Documents in such form as
the Committee shall approve from time to time, which Option Documents shall
comply with and be subject to the following terms and conditions and such other
terms and conditions as the Committee shall require from time to time which are
not inconsistent with the terms of the Plan.
a. Number of Option Shares. Each Option Document shall state the
number of Shares to which it pertains. An Optionee may receive more than
one Option, which may include Options which are intended to be ISOs and
Options which are not intended to be ISOs, but only on the terms and
subject to the conditions and restrictions of the Plan. Notwithstanding
anything herein to the contrary, no Optionee shall be granted Options
during one fiscal year of the Company for more than 300,000 Shares (such
number to be subject to adjustment in accordance with Paragraph 10 of the
Plan).
b. Option Price. Each Option Document shall state the Option Price,
which, for a Non-qualified Stock Option, need not be the Fair Market Value
of the Shares on the date the Option is granted and, for an ISO, shall be
at least 100% of the Fair Market Value of the Shares on the date the Option
is granted as determined by the Committee in accordance with this Section
8b; provided, however, that if an ISO is granted to an Optionee who then
owns, directly or by attribution under Section 424(d) of the
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Code, Shares possessing more than ten percent of the total combined voting
power of all classes of stock of the Company or an Affiliate, then, to the
extent required by Section 424(d) of the Code, the Option Price shall be at
least 110% of the Fair Market Value of the Shares on the date the Option is
granted. If the Common Stock is traded in a public market, then the Fair
Market Value per share shall be: (i) if the Common Stock is listed on a
national securities exchange or traded on Nasdaq, the last reported sale
price thereof on the relevant date, (ii) if the Common Stock is not so
listed or traded, the mean between the last reported "bid" and "asked"
prices thereof, as reported on a national securities exchange or Nasdaq, or
(iii) if not so reported, as reported by the National Daily Quotation
Bureau, Inc. or as reported in a customary financial reporting service, as
applicable and as the Committee determines.
c. Exercise. No Option shall be deemed to have been exercised prior
to the receipt by the Company of written notice of such exercise and,
unless arrangements satisfactory to the Company have been made for payment
through a broker in accordance with procedures permitted by rules or
regulations of the Federal Reserve Board, receipt of payment in full of the
Option Price for the Shares to be purchased. Each such notice shall specify
the number of Shares to be purchased and, unless the Shares are covered by
a then current registration statement or a Notification under Regulation A
under the Securities Act, shall contain the Optionee's acknowledgment, in
form and substance satisfactory to the Company, that (i) such Shares are
being purchased for investment and not for distribution or resale (other
than a distribution or resale which, in the opinion of counsel satisfactory
to the Company, may be made without violating the registration provisions
of the Securities Act), (ii) the Optionee has been advised and understands
that (A) the Shares have not been registered under the Securities Act and
are "restricted securities" within the meaning of Rule 144 under the
Securities Act and are subject to restrictions on transfer, and (B) the
Company is under no obligation to register the Shares under the Securities
Act or to take any action which would make available to the Optionee any
exemption from such registration, (iii) such Shares may not be transferred
without compliance with all applicable federal and state securities laws,
and (iv) an appropriate legend referring to the foregoing restrictions on
transfer and any other restrictions imposed under the Option Documents may
be endorsed on the certificates representing such Shares. Notwithstanding
the foregoing, if the Company determines that issuance of Shares should be
delayed pending registration under federal or state securities laws, the
receipt of an opinion of counsel satisfactory to the Company that an
appropriate exemption from such registration is available, the listing or
inclusion of the Shares on any securities exchange or an automated
quotation system, or the consent or approval of any governmental regulatory
body whose consent or approval is necessary in connection with the issuance
of such Shares, the Company may defer exercise of any Option granted
hereunder until any of the events described in this sentence has occurred.
d. Medium of Payment. Subject to the terms of the applicable Option
Document, an Optionee shall pay for Shares (i) in cash, (ii) by certified
or cashier's check payable to the order of the Company, or (iii) by such
other mode of payment as the Committee may approve, including payment
through a broker in accordance with procedures permitted by rules or
regulations of the Federal Reserve Board. The Optionee may also exercise
the Option in any manner contemplated by Paragraph 11. Furthermore, the
Committee may provide in an Option Document that payment may be made in
whole or in part in shares of the Company's Common Stock held by the
Optionee. If payment is made in whole or in part in shares of the Company's
Common Stock, then the Optionee shall deliver to the Company certificates
registered in the name of such Optionee representing the shares owned by
such Optionee, free of all liens, claims and encumbrances of every kind and
having an aggregate Fair Market Value on the date of delivery that is at
least as great as the Option Price of the Shares (or relevant portion
thereof) with respect to which such Option is to be exercised by the
payment in shares of Common Stock, endorsed in blank or accompanied by
stock powers duly endorsed in blank by the Optionee. In the event that
certificates for shares of the Company's Common Stock delivered to the
Company represent a number of shares in excess of the number of shares
required to make payment for the Option Price of the Shares (or relevant
portion thereof) with respect to which such Option is to be exercised by
payment in shares of Common Stock, the stock certificate or certificates
issued to the Optionee shall represent (i) the Shares in respect of which
payment is made, and (ii) such excess number of shares. Notwithstanding the
foregoing, the Committee may impose from time to time such limitations and
prohibitions on the use of shares of the Common Stock to exercise an Option
as it deems appropriate.
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e. Termination of Options.
i. No Option shall be exercisable after the first to occur of the
following:
(1) Expiration of the Option term specified in the Option
Document, which expiration, in the case of an ISO, shall not occur
after (1) ten years from the date of grant, or (2) five years from
the date of grant if the Optionee on the date of grant owns, directly
or by attribution under Section 424(d) of the Code, shares possessing
more than ten percent of the total combined voting power of all
classes of stock of the Company or of an Affiliate;
(2) Except to the extent otherwise provided in an Optionee's
Option Document, a finding by the Committee, after full consideration
of the facts presented on behalf of both the Company and the
Optionee, that the Optionee has been engaged in disloyalty to the
Company or an Affiliate, including, without limitation, fraud,
embezzlement, theft, commission of a felony or proven dishonesty in
the course of his employment or service, or has disclosed trade
secrets or confidential information of the Company or an Affiliate.
In such event, in addition to immediate termination of the Option,
the Optionee shall automatically forfeit all Shares for which the
Company has not yet delivered the share certificates upon refund by
the Company of the Option Price. Notwithstanding anything herein to
the contrary, the Company may withhold delivery of share certificates
pending the resolution of any inquiry that could lead to a finding
resulting in a forfeiture;
(3) The date, if any, set by the Committee as an accelerated
expiration date in the event of the liquidation or dissolution of the
Company;
(4) The occurrence of such other event or events as may be set
forth in the Plan or the Option Document as causing an accelerated
expiration of the Option;
(5) Except as otherwise set forth in the Option Document and
subject to the foregoing provisions of this Section 8e, three months
after the Optionee's employment or service with the Company or its
Affiliates terminates for any reason other than Disability or death,
or one year after such termination due to Optionee's Disability or
death. With respect to this Subsection i(5) of Section 8e, the only
Options that may be exercised during such three-month or one-year
period, as the case may be, are Options which were exercisable on the
last date of Optionee's employment or service and not Options which,
if the Optionee were still employed or rendering service during such
three-month or one-year period, would become exercisable, unless the
Option Document specifically provides to the contrary or the
Committee otherwise approves. The terms of an executive severance
agreement or other agreement between the Company and an Optionee,
approved by the Committee or the Board, whether entered into prior or
subsequent to the grant of an Option, which provide for Option
exercise dates later than those set forth in this Subsection i of
Section 8e, shall be deemed to be Option terms approved by the
Committee and consented to by the Optionee.
ii. Notwithstanding the foregoing, the Committee may extend the
period during which all or any portion of an Option may be exercised to
a date no later than the Option term specified in the Option Document
pursuant to Subsection i(1) of this Section 8e; provided that any change
pursuant to this Subsection ii of Section 8e which would cause an ISO to
become a Non-qualified Stock Option may be made only with the consent of
the Optionee.
iii. Notwithstanding anything to the contrary contained in the Plan
or an Option Document, an ISO shall be treated as a Non-qualified Stock
Option to the extent such ISO is exercised at any time after the
expiration of the time period permitted under the Code for the exercise
of an ISO.
f. Transfers. Except as otherwise provided in this Section 8f, no
Option granted under the Plan may be transferred, except by will or by the
laws of descent and distribution. During the lifetime of the person to whom
an Option is granted, such Option may be exercised only by the Optionee.
Notwithstanding the foregoing, an Option, other than an ISO, shall be
transferrable pursuant to a "domestic relations order" as defined in the
Code or Title I of the Employee Retirement Income Security Act, or the
rules thereunder, and also shall be transferrable, without payment of
consideration,
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to (i) immediate family members of the holder (i.e., spouse or former
spouse, parents, issue, including adopted and "step" issue, or siblings),
(ii) trusts for the benefit of immediate family members, (iii) partnerships
whose only partners are such family members, and (iv) to any transferee
permitted by a rule adopted by the Committee or approved by the Committee
in an individual case. Any transferee will be subject to all of the
conditions set forth in the Option prior to its transfer.
g. Limitation on ISO Grants. To the extent that the aggregate fair
market value of the shares of Common Stock (determined at the time the ISO
is granted) with respect to which ISOs under all incentive stock option
plans of the Company or its Affiliates are exercisable for the first time
by the Optionee during any calendar year exceeds $100,000, such ISOs shall,
to the extent of such excess, be treated as Non-qualified Stock Options.
This Section 8g shall be interpreted consistent with the requirements of
Section 422(d) of the Code (or any successor thereto) and shall be
automatically deemed to be modified to comply with such Code provision, as
it may be amended from time to time. This Section 8g shall be of no further
force or effect if the limits set forth in such section of the Code are
repealed.
h. Other Provisions. Subject to the provisions of the Plan, the
Option Documents shall contain such other provisions, including, without
limitation, provisions authorizing the Committee to accelerate the
exercisability of all or any portion of an Option granted pursuant to the
Plan, additional restrictions upon the exercise of the Option or additional
limitations upon the term of the Option, as the Committee deems advisable.
i. Amendment. Subject to the provisions of the Plan, the Committee
shall have the right to amend any Option Document or Award Agreement issued
to an Optionee or Award holder, subject to the Optionee's or Award holder's
consent, if such amendment is not favorable to the Optionee or Award holder
or if such amendment has the effect of changing an ISO to a Non-qualified
Stock Option; provided, however, that the consent of the Optionee or Award
holder shall not be required for any amendment made pursuant to Subsection
e.i.(3) of this Section 8 or pursuant to Paragraph 9 of the Plan, as
applicable.
9. Change of Control. In the event of a Change of Control, the Committee
may take whatever actions it deems necessary or desirable with respect to any of
the Options outstanding or Shares subject to an Award which are not yet fully
vested or paid for, all of which need not be treated identically, including,
without limitation, accelerating (a) the expiration or termination date in the
respective Option Documents to a date no earlier than thirty (30) days after
notice of such acceleration is given to the Optionees, or (b) the exercisability
of the Option. Notwithstanding the foregoing, in the event of a Change of
Control, Options granted pursuant to the Plan will become automatically
exercisable in full but only with respect to those Optionees who, in the good
faith determination of the Board, are likely to have their relationship with the
Company or any Affiliate or successor of the Company terminated (including
constructive termination through a significant decrease in authority,
responsibility or overall total compensation) as a result of such Change of
Control.
A "Change of Control" shall be deemed to have occurred upon the
earliest to occur of any of the following events, each of which shall be
determined independently of the others:
a. any Person (as defined below) becomes a "beneficial owner," as such
term is used in Rule 13d-3 promulgated under the Exchange Act, of 20% or
more of the Company's stock entitled to vote in the election of directors.
For purposes of this Plan, the term "Person" is used as such term is used
in Sections 13(d) and 14(d) of the Exchange Act; provided, however that,
unless the Committee determines to the contrary, the term shall not include
(i) the Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, (ii) such
individual as the Company's Board of Directors may determine, his or her
issue and/or his or her heirs, executors, administrators and successors
(but excluding a successor as a result of a sale for value), (iii) such
corporation, partnership, limited liability company, trust or other entity
or association as the Company's Board of Directors may determine, or (iv)
the Continuing Directors (as defined below), individually or to the extent
that they act or agree to act in concert.
A-6
<PAGE>
b. individuals who are Continuing Directors cease to constitute a
majority of the members of the Board ("Continuing Directors" for this
purpose being the members of the Board on the date of adoption of this
Plan, provided that any person becoming a member of the Board subsequent to
such date whose election or nomination for election was supported by
two-thirds of the directors who then comprised the Continuing Directors
shall be considered to be a Continuing Director);
c. stockholders of the Company adopt a plan of complete or substantial
liquidation or an agreement providing for the distribution of all or
substantially all of the Company's assets;
d. the Company is party to a merger, consolidation, other form of
business combination or a sale of all or substantially all of its assets,
unless the business of the Company is continued following any such
transaction by a resulting entity (which may be, but need not be, the
Company) and the stockholders of the Company immediately prior to such
transaction (the "Prior Stockholders") hold, directly or indirectly, at
least two-thirds of the voting power of the resulting entity (there being
excluded from the voting power held by the Prior Stockholders, but not from
the total voting power of the resulting entity, any voting power received
by Affiliates of a party to the transaction (other than the Company) in
their capacities as stockholders of the Company); provided, however, that a
merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person acquires more than ten
percent of the combined voting power of the Company's then outstanding
securities shall not constitute a Change in Control;
e. there is a Change of Control of the Company of a nature that would
be required to be reported in response to item 1(a) of Current Report on
Form 8-K or item 6(e) of Schedule 14A of Regulation 14A or any similar
item, schedule or form under the Exchange Act, as in effect at the time of
the change, whether or not the Company is then subject to such reporting
requirement;
f. the Company is a subject of a "Rule 13e-3 transaction" as that term
is defined in Exchange Act Rule 13e-3; or
g. there has occurred a "change of control," as such term (or any term
of like import) is defined in any of the following documents which is in
effect with respect to the Company at the time in question: any note,
evidence of indebtedness or agreement to lend funds to the Company, any
option, incentive or employee benefit plan of the Company or any
employment, severance, termination or similar agreement with any person who
is then an employee of the Company.
10. Adjustments on Changes in Capitalization.
a. In the event that the outstanding shares of Common Stock are
changed by reason of a reorganization, merger, consolidation,
recapitalization, reclassification, stock split, combination or exchange of
shares and the like (not including the issuance of Common Stock on the
conversion of other securities of the Company which are convertible into
Common Stock) or dividends payable in Shares, an equitable adjustment may
be made by the Committee as it deems appropriate to the aggregate number of
shares of Common Stock available under the Plan and to the number of Shares
and price per Share subject to outstanding Options. Unless the Committee
makes other provisions for the equitable settlement of outstanding Options,
if the Company shall be reorganized, consolidated, or merged with another
corporation, or if all or substantially all of the assets of the Company
shall be sold or exchanged, an Optionee shall at the time of issuance of
the stock under such corporate event be entitled to receive, upon the
exercise of his or her Option, the same number and kind of shares of stock
or the same amount of property, cash or securities as the Optionee would
have been entitled to receive upon the occurrence of any such corporate
event as if the Optionee had been, immediately prior to such event, the
holder of the number of Shares covered by his or her Option.
b. Any adjustment under this Section 10 to the number of Shares
subject to Options shall apply proportionately to only the unexercised
portion of any Option granted hereunder. If a fraction of a Share would
result from any such adjustment, the fraction shall be eliminated, unless
the Committee otherwise determines.
c. The Committee shall have authority to determine the adjustments to
be made under this Paragraph 10, and any such determination by the
Committee shall be final, binding and conclusive.
A-7
<PAGE>
11. Stock Appreciation Rights (SARs).
a. In General. Subject to the terms and conditions of the Plan, the
Committee may, in its sole and absolute discretion, grant to an Optionee
the right (which right shall be referred to as an "SAR") to surrender an
Option to the Company, in whole or in part, and to receive in exchange
therefor payment by the Company of an amount equal to the excess of the
Fair Market Value of the Shares subject to such Option, or portion thereof,
so surrendered (determined in the manner described in Section 8b as of the
date the SARs are exercised) over the exercise price to acquire such
Shares. Except as may otherwise be provided in an Option Document, such
payment may be made, as determined by the Committee in accordance with
Section 11c below and set forth in the Option Agreement, either in Shares,
or in cash, or in any combination thereof.
b. Grant. Each SAR shall relate to a specific Option granted under
the Plan and shall be granted to the Optionee concurrently with the grant
of such Option by inclusion of appropriate provisions in the Option
Agreement pertaining thereto. The number of SARs granted to an Optionee
shall not exceed the number of Shares which such Optionee is entitled to
purchase pursuant to the related Option. The number of SARs held by an
Optionee shall be reduced by (i) the number of SARs exercised under the
provisions of the Option Agreement pertaining to the related Option, and
(ii) the number of Shares purchased pursuant to the exercise of the related
Option.
c. Payment. The Committee shall have sole discretion to determine
whether payment in respect of SARs exercised by any Optionee shall be made
in shares of Common Stock, or in cash, or in a combination thereof. If
payment is made in Common Stock, the number of shares which shall be issued
pursuant to the exercise of SARs shall be determined by dividing (i) the
total number of SARs being exercised, multiplied by the amount by which the
Fair Market Value (as determined under Section 8b) of a share of Common
Stock on the exercise date exceeds the exercise price for Shares covered by
the related Option, by (ii) the Fair Market Value of a share of Common
Stock on the exercise date of the SARs. No fractional share of Common Stock
shall be issued on exercise of an SAR; cash may be paid by the Company to
the person exercising an SAR in lieu of any such fractional share, if the
Committee so determines. If payment on exercise of an SAR is to be made in
cash, the person exercising the SAR shall receive, in respect of each SAR
to which such exercise relates, an amount of money equal to the difference
between the Fair Market Value of a share of Common Stock on the exercise
date and the then-applicable exercise price for Shares covered by the
related Option.
d. Limitations. SARs shall be exercisable at such times and under
such terms and conditions as the Committee, in its sole and absolute
discretion, shall determine; provided, however, that an SAR may be
exercised only at such times and by such individuals as the related Option
may be exercised under the Plan and the Option Agreement.
12. Terms and Conditions of Awards. Awards granted pursuant to the Plan
shall be evidenced by written Award Agreements in such form as the Committee
shall from time to time approve, which Award Agreements shall comply with and be
subject to the following terms and conditions and such other terms and
conditions as the Committee shall from time to time require, which are not
inconsistent with the terms of the Plan.
a. Number of Shares. Each Award Agreement shall state the number of
Shares or other units or rights to which it pertains.
b. Purchase Price. Each Award Agreement shall specify the purchase
price, if any, which applies to the Award. If the Board specifies a
purchase price, the Grantee shall be required to make payment on or before
the payment date specified in the Award Agreement. A Grantee shall make
payment (i) in cash, (ii) by certified or cashier's check payable to the
order of the Company, or (iii) by such other mode of payment as the
Committee may approve.
c. Grant. In the case of an Award which provides for a grant of
Shares without any payment by the Grantee, the grant shall take place on
the date specified in the Award Agreement. In the case of an Award which
provides for a payment, the grant shall take place on the date the initial
payment is delivered to the Company, unless the Committee or the Award
Agreement otherwise specifies. Stock certificates evidencing Shares granted
pursuant to an Award shall be issued in the sole name of the
A-8
<PAGE>
Grantee. Notwithstanding the foregoing, as a precondition to a grant, the
Company may require an acknowledgment by the Grantee as required with
respect to Options under Section 8c.
d. Conditions. The Committee may specify in an Award Agreement any
conditions under which the Grantee of that Award shall be required to
convey to the Company the Shares covered by the Award. Upon the occurrence
of any such specified condition, the Grantee shall forthwith surrender and
deliver to the Company the certificates evidencing such Shares as well as
completely executed instruments of conveyance. The Committee, in its
discretion, may provide that certificates for Shares transferred pursuant
to an Award be held in escrow by the Company or its designee until such
time as each and every condition has lapsed and that the Grantee be
required, as a condition of the Award, to deliver to such escrow agent or
the Company officer stock transfer powers covering the Shares subject to
the Award, duly endorsed by the Grantee. Unless otherwise provided in the
Award Agreement or determined by the Committee, dividends and other
distributions made on Shares held in escrow shall be deposited in escrow,
to be distributed to the party becoming entitled to the Shares on which the
distribution was made. Stock certificates evidencing Shares subject to
conditions shall bear a legend to the effect that the Shares evidenced
thereby are subject to repurchase by, or conveyance to, the Company in
accordance with the terms applicable to such Shares under an Award made
pursuant to the Plan, and that the Shares may not be sold or otherwise
transferred.
e. Lapse of Conditions. Upon termination or lapse of all forfeiture
conditions, the Company shall cause certificates without the legend
referring to the Company's repurchase or acquisition right (but with any
other legends that may be appropriate) evidencing the Shares covered by the
Award to be issued to the Grantee upon the Grantee's surrender to the
Company of the legended certificates held by the Grantee.
f. Rights as a Stockholder. Upon payment of the purchase price, if
any, for Shares covered by an Award and compliance with the acknowledgment
requirement of Section 12c, the Grantee shall have all of the rights of a
stockholder with respect to the Shares covered thereby, including the right
to vote the Shares and (subject to the provisions of Section 12d) receive
all dividends and other distributions paid or made with respect thereto,
except to the extent otherwise provided by the Committee or in the Award
Agreement.
13. Amendment of the Plan. Either of the Board or the Committee may amend
the Plan from time to time in such manner as it may deem advisable.
Nevertheless, the Board may not change the class of persons eligible to receive
an ISO or increase the maximum number of Shares as to which Options may be
granted under the Plan, or to any individual under the Plan in any year, without
obtaining approval, within twelve months before or after such action, by the
stockholders in the manner required by state law. No amendment to the Plan shall
adversely affect any outstanding Option or Award, however, without the consent
of the Optionee or Grantee, as the case may be.
14. No Commitment to Retain. The grant of an Option or Award pursuant to
the Plan shall not be construed to imply or to constitute evidence of any
agreement, express or implied, on the part of the Company or any Affiliate to
retain the Optionee or Grantee as an employee, director, consultant or advisor
of the Company or any Affiliate, or in any other capacity.
15. Withholding of Taxes. In connection with any event relating to an
Option or Award, the Company shall have the right to (a) require the recipient
to remit or otherwise make available to the Company an amount sufficient to
satisfy any federal, state and/or local withholding tax requirements prior to
the delivery or transfer of any certificates for such Shares, or (b) take
whatever other action it deems necessary to protect its interests with respect
to tax liabilities, including, without limitation, withholding any Shares, funds
or other property otherwise due to the Optionee or Grantee. The Company's
obligations under the Plan shall be conditioned on the Optionee's or Grantee's
compliance, to the Company's satisfaction, with any withholding requirement.
A-9
<PAGE>
April 27, 2000
RCM TECHNOLOGIES, INC.
2500 McCLELLAN AVENUE
SUITE 350
PENNSAUKEN, NEW JERSEY 08109
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY
The undersigned, a stockholder of RCM Technologies, Inc., a Nevada corporation
(the "Company"), hereby appoints Leon Kopyt and Stanton Remer, and each of them,
as the true and lawful attorneys and proxies of the undersigned, with full power
of substitution, for and in the name of the undersigned, to vote and otherwise
act on behalf of the undersigned at the Annual Meeting of Stockholders of the
Company to be held at the Philadelphia Marriott Hotel, 1201 Market Street,
Philadelphia, Pennsylvania on Thursday, April 27, 2000, at 6:00 p.m., local
time, and at any adjournment or adjournments thereof, with respect to all shares
of the Company's Common Stock which the undersigned would be entitled to vote,
with all powers the undersigned would possess if personally present, on the
following matters:
Please mark your
/X/ votes as in this example.
<TABLE>
<S> <C> <C> <C> <C> <C>
FOR both nominees
listed at right (except
as marked to the
contrary below) WITHHELD
1. The election of / / / / Nominees: Norman S. Berson
two Class A Brian A. Delle Donne
directors, each to serve until the expiration of his
term and until his successor is elected and qualified
or until his earlier resignation or removal.
</TABLE>
INSTRUCTION. To withhold authority to vote for any
individual nominee, write that nominee's name on the
line below.
- ----------------------------------------------------
<PAGE>
FOR AGAINST ABSTAIN
2. Approval of adoption of the Company's / / / / / /
2000 Employee Stock Incentive Plan.
3. Ratification of the appointment by the / / / / / /
Board of Directors of Grant Thornton LLP
as independent auditors for the Company
for the fiscal year ending December 31, 2000.
4. In their discretion, the named proxies are authorized to vote upon such
other matters as may properly come before the meeting or any
adjournment(s) thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED
STOCKHOLDER. IF THE STOCKHOLDER GIVES NO DIRECTION, THE PROXY WILL BE VOTED
"FOR" ALL NOMINEES FOR DIRECTOR, "FOR" PROPOSAL #2, "FOR" PROPOSAL #3 AND IN THE
PROXIES' DISCRETION ON ANY OTHER MATTERS TO COME BEFORE THE MEETING.
Signature(s) Dated:
------------------------------------------ -------------------
PLEASE DATE THIS PROXY AND SIGN ABOVE exactly as your name appears on this
Proxy. If more than one person owns the shares, each owner should sign. If you
are signing this proxy as an attorney, administrator, executor, guardian or
trustee, please include your title. If you are signing this proxy on behalf of a
corporation, please include your title.
