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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
QMS
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] 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 Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[LOGO OF QMS APPEARS HERE]
To the Stockholders of QMS, Inc.:
You are cordially invited to attend the annual meeting of stockholders to
be held at the Four Seasons Georgetown Hotel, 2800 Pennsylvania Avenue
Northwest, Washington, D.C. 20007, on Wednesday, April 12, 2000, at 2:00 p.m.
local time.
The principal business of the meeting will be (i) to elect one class of
directors to serve a three-year term beginning April 12, 2000; (ii) to present
for stockholder approval an amendment to the Company's Certificate of
Incorporation to change the name of the Company; (iii) to present for
stockholder approval an amendment to the Company's 1997 Stock Incentive Plan
to increase the number of shares authorized under this plan; and (iv) to
present for stockholder approval an amendment to the Company's Stock Option
Plan for Directors to increase the number of options that shall be granted
annually to eligible directors and to increase the number of shares authorized
under this plan. During the meeting, we will also review the results of the
past year.
Whether or not you plan to attend the annual meeting, please complete,
sign, date, and return to the Company the enclosed proxy card in the enclosed,
postage-prepaid envelope at your earliest convenience so that your shares will
be represented at the meeting. If you choose to attend the meeting, you may,
of course, revoke your proxy and personally cast your votes.
Sincerely yours,
/s/ Edward E. Lucente
----------------------------------
Edward E. Lucente
Chairman of the Board, President,
and Chief Executive Officer
Mobile, Alabama
March 14, 2000
<PAGE>
QMS, INC.
One Magnum Pass
Mobile, Alabama 36618
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 12, 2000
The annual meeting of stockholders of QMS, Inc. will be held on Wednesday,
April 12, 2000, at 2:00 p.m. local time, at the Four Seasons Georgetown Hotel,
2800 Pennsylvania Avenue Northwest, Washington, D.C. 20007.
The meeting is called for the following purposes:
1. To elect three persons to serve as Class II directors for a three-year
term beginning in 2000;
2. To present for stockholder approval an amendment to the Company's
Certificate of Incorporation to change the name of the Company;
3. To present for stockholder approval a proposal to approve a recent
amendment to the Company's 1997 Stock Incentive Plan;
4. To present for stockholder approval a proposal to approve a recent
amendment to the Company's Stock Option Plan for Directors; and
5. To consider and act upon such other business as may properly come before
the meeting or any adjournment(s).
The Board of Directors has fixed February 15, 2000, as the record date for
the determination of stockholders entitled to notice of and to vote at the
meeting.
PLEASE COMPLETE, SIGN, DATE, AND RETURN THE ENCLOSED PROXY SO THAT YOUR SHARES
WILL BE REPRESENTED AT THE MEETING. IF YOU CHOOSE TO ATTEND THE MEETING, YOU
MAY, OF COURSE, REVOKE YOUR PROXY AND PERSONALLY CAST YOUR VOTES.
By Order of the Board of Directors,
/s/ Albert A. Butler
--------------------------------
Albert A. Butler
Secretary
Mobile, Alabama
March 14, 2000
<PAGE>
QMS, INC.
One Magnum Pass
Mobile, Alabama 36618
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of QMS, Inc. (the "Company") of proxies to be voted at
the annual meeting of stockholders of the Company to be held Wednesday, April
12, 2000, and at any and all adjournments thereof (the "Meeting"). Any proxy
given pursuant to such solicitation and received in time for the Meeting will
be voted with respect to all shares represented by it and will be voted in
accordance with the directions, if any, given in such proxy. If directions are
not given, the proxy will be voted (i) FOR the election of the persons named
herein to serve as Class II directors, (ii) FOR approval of an amendment to
the Company's Certificate of Incorporation to change the name of the Company,
(iii) FOR approval of an amendment to the Company's 1997 Stock Incentive Plan,
and (iv) FOR approval of an amendment to the Company's Stock Option Plan for
Directors. All expenses incurred in this solicitation will be borne by the
Company.
Stockholders who execute proxies may revoke them at any time before they
are voted by filing with the Secretary of the Company either an instrument
revoking the proxy or a duly executed proxy bearing a later date. Proxies also
may be revoked by any stockholder present at the Meeting who expresses a
desire to vote his or her shares in person. A majority of the stockholders
entitled to vote must be present in person, or represented by proxy, to
constitute a quorum and to act upon the proposed business. Failure of a quorum
to be represented at the Meeting will necessitate adjournment and will subject
the Company to additional expense.
The Company's Board of Directors changed the Company's fiscal year to a
year ending on the Friday closest to December 31, effective at the end of a
transitional period ended January 1, 1999. The terms "fiscal 1997," "fiscal
1998" and "fiscal 1999" as used herein refer to the Company's fiscal years
ended October 3, 1997, October 2, 1998, and December 31, 1999, respectively.
The term "transitional period" refers to the quarter ended January 1, 1999.
On October 8, 1999, the Company's Board of Directors approved changing the
Company's fiscal year again to a year ending on the Friday closest to March
31, effective at the end of a three-month transitional period ending March 31,
2000.
SHARES ENTITLED TO VOTE
The Notice of the Meeting, this Proxy Statement, and the form of proxy are
first being mailed to stockholders on or about March 14, 2000. At the close of
business on February 15, 2000, the record date for determining the
stockholders entitled to notice of and to vote at the Meeting, there were
13,258,421 shares of common stock, $0.01 par value ("Common Stock"), of the
Company outstanding and entitled to vote at the Meeting. Each share is
entitled to one vote.
The election of directors requires the affirmative vote of a plurality of
shares of Common Stock voting in person or by proxy at the Meeting; the
approval of the proposal regarding the amendment to the Company's Certificate
of Incorporation requires the affirmative vote of a majority of the shares of
outstanding Common Stock entitled to vote on the amendment; and the approval
of the proposals regarding the amendments to the 1997 Stock Incentive Plan and
the Stock Option Plan for Directors requires the affirmative vote of the
majority of the Common Shares represented at the Meeting, assuming a quorum is
present. Therefore, abstentions and votes withheld from director nominees will
not be included in vote totals and will not be considered in determining the
outcome of the election of directors. Abstentions and broker non-votes will
have the same effect
1
<PAGE>
as votes against the proposals regarding the amendment to the Company's
Certificate of Incorporation, the 1997 Stock Incentive Plan, and the Stock
Option Plan for Directors.
YOUR BOARD OF DIRECTORS URGES YOU TO SIGN, DATE,
AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE
PROPOSAL 1--ELECTION OF DIRECTORS
Directors and Director Nominees
The Company's Certificate of Incorporation provides for three classes of
directors serving staggered terms of office. Upon the expiration of the term
of office for a class of directors, the nominees for that class will be
elected for a term of three years to serve until the election and
qualification of their successors. At the Meeting, three nominees for the
Class II positions will be considered. The Class III and Class I directors
have two years and one year, respectively, remaining in their terms of office.
The Company's Certificate of Incorporation and Bylaws provide that the
Company shall have at least five and no more than fifteen directors, the exact
number to be determined by resolution of the Board of Directors from time to
time. The Board has, by resolution, set the number of directors at eleven. The
Bylaws further permit the Board of Directors, between annual meetings of
stockholders, to fill any vacancy occurring in the Board, whether created by
the death, resignation, retirement, or removal from office of a director or by
an increase in the number of directors.
It is the intention of the persons named as proxies to vote the proxies for
the election as Class II directors of the Company of the persons named below,
each of whom is currently a director, unless the stockholders direct otherwise
in their proxies. In the event any of the nominees named below refuses or is
unable to serve as a director (which is not now anticipated), the persons
named as proxies reserve full discretion to vote for such other person or
persons as may be nominated. The election of the nominees to the Board of
Directors requires the presence, by proxy or in person, of the holders of a
majority of all shares of the Company's Common Stock entitled to notice of and
to vote at the Meeting and the affirmative vote of the holders of a plurality
of the shares voted at the Meeting.
Set forth below is certain information furnished to the Company by each of
the Company's directors, including each of the nominees.
YOUR BOARD OF DIRECTORS RECOMMENDS
THAT STOCKHOLDERS VOTE FOR THE ELECTION
OF THE NOMINEES FOR DIRECTOR
Nominees for Director
Class II Directors--Term Expiring 2000
Edward E. Lucente (age 60) has been a director, President, and Chief
Executive Officer of the Company since January 1998 and Chairman of the Board
since October 1998. He has also been a director of SAGA Systems (a software
company) since 1997 and Information Resources, Inc. (a marketing research
firm) since 1991. Previously, Mr. Lucente was President of Lucente Associates,
Inc. (a management consulting firm) from June 1994 to December 1997, Senior
Vice President of Digital Equipment Corporation (an implementer and supporter
of networked business solutions) from April 1993 to June 1994 and Senior Vice
President, World Wide
2
<PAGE>
Sales and Marketing, for Northern Telecom (a provider of network solutions)
from January 1991 to April 1993. Prior to that, he was with International
Business Machines (a computer hardware and software company) for thirty years,
retiring in 1991 as President and Chairman of IBM World Trade Asia Pacific
Corporation in Tokyo, Japan.
Albert A. Butler (age 57) has been a director, Senior Vice President,
Operations, and Chief Financial Officer of the Company since August 1999.
Prior to that time, Mr. Butler served as Vice President, Operations, of the
Company from April 1992 to August 1999, and Vice President, Corporate
Materials and Logistics from January 1991 to April 1992. Previously, he was
with the General Electric Co. in a number of management positions in various
GE operating businesses, and at the corporate headquarters where he managed
the production management consulting organization.
F. Rigdon Currie (age 69) has been a director of the Company since October
1996. He was a general partner of Pacific Venture Partners from 1983 to 1994,
and has been a special limited partner of MK Global Ventures since 1988. He is
also a director of DISC, Inc. (a manufacturer of robotic digital storage
libraries), Synbiotics Corporation (an internet commerce service company and
manufacturer of veterinarian test kits and instruments) and four private
companies. He is Chairman of the Board of Opportunity Capital Corporation (a
minority venture capital firm).
Directors Continuing in Office
Class I Directors--Current Term Expiring 2001
Hiroshi Fujii (age 56) has been a director of the Company since July 1999.
Mr. Fujii has been a director of Minolta Co., Ltd. since 1995 and President
and CEO of Minolta Corporation (which is a wholly owned subsidiary of Minolta
Co., Ltd.) since 1993. He is currently a director of Minolta Corporation,
Mohawk Marketing, Inc., Astro-Tec Manufacturing, Inc., Minolta Advance
Technology, Inc., Minolta Systems Laboratory Inc., and Minolta Investments
Company. Prior to his election as President of Minolta Corporation, Mr. Fujii
served in the capacity of Executive Vice President and Treasurer of that
company and held a number of other executive positions with both Minolta
Corporation and Minolta Co., Ltd.
Allen A. Hans (age 48) has been a director of the Company since July 1999.
Mr. Hans has been Vice President, General Counsel and Secretary of Minolta
Corporation and Secretary of Minolta Business Systems, Inc., Mohawk Marketing
Corporation, Minolta Information Systems, Inc., Astro-Tec Manufacturing, Inc.,
Minolta Advance Technology, Inc. and Minolta Systems Laboratory, Inc. since
June 1994. In addition, since June 1999, he has also been Vice President and
Secretary of Minolta Investments Company. Mr. Hans joined Minolta Corporation
in 1987 as General Counsel and was promoted to Vice President in 1993.
Ryusho Kutani (age 60) has been a director of the Company since July 1999.
Mr. Kutani has been a director of Minolta Co., Ltd. since 1995 and President
of Minolta Europe GmbH (formerly known as Minolta GmbH), a wholly owned
subsidiary of Minolta Co., Ltd. since 1993. In addition, he is currently a
director of Minolta (UK) Ltd., Minolta Austria Ges.mbH, Minolta Lorraine S.A.,
Minolta Europe Finance B.V. and Minolta Spain S.A. Mr. Kutani previously
served in the capacity of Executive Vice President of Minolta Europe GmbH and
held a number of managing director and director's positions with Minolta's
European subsidiaries.
Class III Directors--Current Term Expiring 2002
Michael C. Dow (age 52) has been a director of the Company since 1977 and
was an executive officer from 1977 until January 1989. He served the Company
in a consulting capacity from February 1989 to January 1992. From 1977 to
January 1989, he served the Company in various capacities, including Senior
Vice President, Marketing and Service; Senior Vice President, Marketing;
Senior Vice President, Sales and Customer Technical Service; Senior Vice
President, Sales and Customer Support; and Senior Vice President, Sales and
Services. Since October 1989, he has served as Mayor of the City of Mobile,
Alabama.
3
<PAGE>
Yoshisuke Takekida (age 55) has been a director of the Company since July
1999. Mr. Takekida has been a director of Minolta Systems Laboratory Inc.
since July 1997 and a Director of Imaging Information Products General
Headquarters and Systems Development Center of Minolta Co., Ltd. since July
1999. Previously, he was Senior General Manager of Imaging Information
Products Development Headquarters and Systems Development Center of Minolta
Co., Ltd. from July 1995 to June 1999. He joined Minolta Co., Ltd. in January
1995, and previously was General Manager of the Peripheral Printing Controller
Business Unit of NEC Corporation.
Shoei Yamana (age 45) has been a director of the Company since July 1999
and Vice President, Strategic & Business Development since August 1999. Mr.
Yamana was the General Manager of the Corporate Strategy Division of Minolta
Co., Ltd. from July 1996 to August 1999. Mr. Yamana joined Minolta Co., Ltd.
in 1977 and has served in various capacities, including Manager of the
Corporate Strategy Division from April 1995 to June 1996, Manager of the Asia
Division from July 1994 to March 1995, Manager of the China Division from
April 1994 to June 1994 and Manager of the Camera Sales Department from April
1990 to March 1994.
William R. Bowles (age 60) has been a director of the Company since
December 1999. Mr. Bowles served as President of IBM Greater China from 1995
until his retirement in 1999. Previously, Mr. Bowles held several senior
executive level positions at IBM, including Corporate General Manager of OEM,
President of the product divisions producing printers and consumer systems,
and Vice President of Operations for Asia Pacific, South America and Canada.
Robert J. Materna (age 60) has been a director of the Company since
December 1999. Mr. Materna has been the Secretary/Treasurer of the Rahway
Valley Sewerage Authority (a servicer of wastewater for eleven New Jersey
municipalities) since February 1997. He served as Acting Controller of
Investor International (U.S.), Inc. (an investor in equity securities and a
subsidiary of Investor AB, a publicly listed company on the Stockholm Stock
Exchange) in an independent contractor capacity from September 1993 to
February 1999. Mr. Materna was a partner at KPMG Peat Marwick from 1973 to to
1991.
Meetings and Committees of the Board of Directors
During fiscal 1999, the Board of Directors met twelve times. All incumbent
members of the Board attended at least 75% of the total number of Board
meetings and meetings of committees of which they were members.
During fiscal 1999, the Audit Committee met three times. The Audit
Committee recommends to the Board of Directors the firm to be appointed as the
Company's independent public accountants and monitors the performance of such
firm. In addition, the Committee reviews and approves the scope of the annual
audit and evaluates internal accounting practice and policy. The current
members of the Audit Committee are Messrs. Currie (Chairman), Bowles, and
Materna.
During fiscal 1999, the Compensation Committee met two times. The
Compensation Committee is responsible for recommending and reviewing the
compensation, including fringe benefits, of the executive officers and
directors of the Company and for administering the Company's stock option
plans. The current members of the Compensation Committee are Messrs. Fujii
(Chairman), Dow, Hans, Kutani, and Takekida.
The Company has no nominating committee.
Director Compensation
No remuneration is paid to executive officers of the Company for services
rendered in their capacities as directors. The Company pays fees only to
Messrs. Bowles, Currie, Dow, Hans and Materna of $2,000 per month, plus $750
for each day, or part thereof, spent in meetings of the Board of Directors or
committees thereof and $375 for each scheduled teleconference of the Board of
Directors. Messrs. Bowles, Currie, Dow, Hans and Materna are paid an
additional $1,000 a year for each committee on which they serve (prorated for
committee membership less than twelve months).
4
<PAGE>
Non-employee directors may elect, on an annual basis, to receive stock
options pursuant to the QMS, Inc. Stock Option Plan for Directors in lieu of
the monthly fee. Each year, each non-employee director receives a non-
qualified stock option to purchase 5,000 shares (to be increased to 10,000
shares with shareholder approval of Proposal 4 herein) of Common Stock as of
the date of the annual meeting of the Company's stockholders. The exercise
price is equal to the Fair Market Value (as defined in the Directors' Plan) of
Common Stock as of the date of grant.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers, and persons who own more than 10% of the
Company's Common Stock to file reports of ownership and changes in ownership
of such securities with the Securities and Exchange Commission (the "SEC") and
the New York Stock Exchange, Inc. Such persons are also required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file. Based solely on a review of the copies of such forms furnished to the
Company or written representations that no other reports were required, the
Company believes that during fiscal 1999 all of the Company's directors and
executive officers and greater than 10% beneficial owners complied with all
Section 16(a) filing requirements, except that Messrs. Dow, Materna and Robert
R. Schulz (a former executive officer) each filed one late report and Messrs.
Lucius E. Burch, III (a former director) and Currie each filed two late
reports.
EXECUTIVE OFFICERS
The executive officers of the Company serve at the discretion of the Board
of Directors and as of February 15, 2000, included Edward E. Lucente, Albert
A. Butler, Shoei Yamana, Marino J. Niccolai, Thomas L. McGoogan, Jan B.
Sundelin, and James T. Garner.
Dr. Niccolai (age 56) has been Senior Vice President, Engineering since
August 1999. Prior to that, he was Vice President, Engineering, of the Company
from June 1998. Dr. Niccolai acted as a consultant to the Company from 1991 to
June 1998. He was with the University of South Alabama as Professor of
Computer Science from 1982 to June 1998.
Mr. McGoogan (age 46) has been Vice President, Human Resources, of the
Company since May 1998. Prior to that time, Mr. McGoogan served as Executive
Director of Human Resources from July 1996 to May 1998; Director of Personnel
from July 1990 to July 1996; and Employment Manager from July 1985 to July
1990.
Mr. Sundelin (age 39) has been Senior Vice President, Worldwide Sales and
Marketing, since October 1999, and has been President and CEO of QMS Europe
B.V. since October 1995. Prior to that, he served as Area Director with
responsibility for various countries and regions, including Nordic Countries,
France, Eastern Europe and the Middle East, from February 1989 to October
1995.
Mr. Garner (age 39) has been Corporate Controller of the Company since
December 1999. Prior to that time, Mr. Garner was with Acordis Cellulosic
Fibers, Inc. (formerly Courtaulds Fibers Inc.), a subsidiary of Akzo Nobel
from 1987 to 1999. While with Acordis, he served in various financial
capacities, including Financial Controller, Corporate Secretary/Treasurer,
Assistant Controller, and Finance Manager.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information as of February 15, 2000,
regarding the amount of Common Stock beneficially owned by each of the
executive officers whose names appear in the "Summary Compensation Table"
included herein ("named executive officers"), each director and director
nominee of the Company, all directors and officers of the Company as a group,
and each person known to the Company to own beneficially more than five
percent of the outstanding shares of Common Stock. All shares shown reflect
sole voting and investment power except as otherwise noted.
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<PAGE>
According to rules adopted by the SEC, a person is a "beneficial owner" of
securities if that person has or shares the power to vote them or to direct
their investment or has the right to acquire beneficial ownership of such
securities within 60 days through the exercise of an option, warrant or right
of conversion of a security, or otherwise. As of the date of this Proxy
Statement, the Company only has shares of Common Stock outstanding.
<TABLE>
<CAPTION>
Number of Shares and Nature of
Beneficial Ownership at
February 15, 2000
------------------------------------
Voting or
Investment Power Options
---------------- Exercisable Percent of
Name or Group Sole(/1/) Shared Within 60 Days Class(/2/)
- ------------- --------- ------ -------------- ----------
<S> <C> <C> <C> <C>
Minolta Investments Co.(/3/).. 7,570,000 0 0 57.1%
Edward E. Lucente............. 130,617 10,000(/4/) 208,000 2.6%
Albert A. Butler.............. 0 6,803(/5/) 29,000 *
Shoei Yamana.................. 0 0 0 0
Marino J. Niccolai............ 6,164 0 5,000 *
C. Richard Bowles............. 2,083 0 16,100 *
Thomas L. McGoogan............ 5,062 0 5,945 *
F. Rigdon Currie.............. 8,363 0 11,250 *
Michael C. Dow................ 0 53,112(/5/) 47,432 *
Hiroshi Fujii................. 0 0 0 0
Allen A. Hans................. 0 0 0 0
Ryusho Kutani................. 0 0 0 0
Yoshisuke Takekida............ 0 0 0 0
William R. Bowles............. 0 1,470(/5/) 0 *
Robert J. Materna............. 0 0 0 0
James A. Wallace(/6/)......... 0 0 0 0
All current directors and
executive officers as a group
(17 persons)................. 152,289 71,385 322,727 4.0%
</TABLE>
- --------
* Indicates beneficial ownership of less than 1.0%.
(/1/) Includes shares held in the Company's 401(k) plan as follows: Mr.
Butler, 4,138; Mr. Niccolai, 2,050; Mr. Richard Bowles, 907; Mr.
McGoogan, 2,920; and all directors and executive officers as a group,
10,015. It also includes shares held in the Company's Employee Stock
Purchase Plan as follows: Mr. Lucente, 7,231 and all current directors
and executive officers as a group, 7,231.
(/2/) For each person named and the group identified in the table, "Percent of
Class" has been calculated assuming the exercise of all options
exercisable by that person or group within 60 days after February 15,
2000.
(/3/) Minolta Investment Co.'s address is c/o Minolta Corporation, 101
Williams Drive, Ramsey, New Jersey, 07446.
(/4/) All such shares are held by Mr. Lucente's spouse and he disclaims
beneficial ownership.
(/5/) Voting and investment power is shared with spouse with respect to the
indicated shares.
(/6/) Mr. Wallace resigned his position as an executive officer of the Company
as of August 6, 1999.
EXECUTIVE COMPENSATION TABLES
The following tables present certain information concerning compensation
paid to the named executive officers. The notes to these tables provide more
specific information regarding compensation. The executive officer
compensation policies of the Board of Directors are discussed in more detail
in the Compensation Committee Report.
6
<PAGE>
TABLE I
SUMMARY COMPENSATION TABLE
This table presents the total compensation earned during or with respect to
fiscal 1999, the three-month transitional period ended January 1, 1999 ("TP"),
fiscal 1998, and fiscal 1997 by the Company's Chief Executive Officer and its
four most highly compensated executive officers, other than the Chief
Executive Officer, during fiscal 1999. The table also includes one additional
individual who was one of the Company's most highly compensated executive
officers during fiscal 1999, but whose employment by the Company ceased prior
to December 31, 1999. The Company has no stock appreciation rights ("SARs")
outstanding and has issued no shares of restricted stock to any of its
officers or employees.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation ($) Awards
---------------------------- ------------
Other Annual Securities All Other
Name and Principal Fiscal Salary Bonus Compensation Underlying Compensation
Position Year ($) ($) ($)(/1/) Options (*) ($)(/3/)
- ------------------ ------ ------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Edward E. Lucente....... 1999 373,075 0 84,313 0 2,017,501
President and CEO TP 83,019 113,500 31,525 270,000 0
1998 263,270 325,002 0 500,000(/2/) 0
1997 0 0 0 0 0
Albert A. Butler........ 1999 223,046 50,000 0 10,000 5,000
CFO, Sr. Vice President, TP 44,262 14,865 0 0 0
Operations 1998 197,065 63,335 0 10,000 4,000
1997 187,976 15,500 0 5,000 0
Marino J. Niccolai...... 1999 245,000 50,000 0 10,000 2,724
Sr. Vice President, TP 55,385 16,665 0 0 0
Engineering 1998 78,461 53,950 0 50,000 0
1997 0 0 0 0 0
C. Richard Bowles....... 1999 155,750 30,458 0 0 5,000
Vice President, TP 35,077 16,005 0 0 0
Marketing 1998 160,010 54,835 0 10,000 4,000
1997 137,296 33,400 0 2,500 0
Thomas L. McGoogan...... 1999 119,135 30,000 0 0 1,387
Vice President, HR TP 23,077 16,665 0 0 0
1998 101,750 25,921 0 22,300 0
1997 91,474 5,000 0 1,750 0
James A. Wallace........ 1999 255,420 0 29,005 0 191,603
Former CFO TP 59,942 25,000 20,919 0 0
1998 44,932 25,000 0 200,000 0
1997 0 0 0 0 0
</TABLE>
- --------
* Number of shares.
(1) Amounts reported in "Other Annual Compensation" include for Mr. Lucente
$21,838 in reimbursed relocation expense, $20,147 in medical reimbursement
and LTD premiums paid on his behalf, and $42,328 in country club dues and
expenses; and for Mr. Wallace $12,916 in reimbursed relocation expense and
$16,089 in medical reimbursement and LTD premiums paid on his behalf.
(2) Shares reported in the "Underlying Options" for Mr. Lucente include
200,000 options granted in FY98 at an option price of $2.4375 but
subsequently forfeited and replaced with 270,000 options granted in the
transitional period at an option price of $3.75.
(3) Amounts reported in "All Other Compensation" include for Mr. Lucente
$1,800,000 additional compensation to be funded through a Rabbi Trust (see
the "Executive Agreements" section), a $212,501 gain reported as
compensation upon his exercise of non-qualified stock options and $5,000
contributed on his behalf to the Company's 401(k) Plan; and for Mr.
Wallace a $188,213 gain reported as compensation upon his exercise of non-
qualified stock options and $3,390 contributed on his behalf to the
Company's 401(k) Plan. All other amounts shown represent contributions on
the executive officers' behalf to the Company's 401(k) Plan.
7
<PAGE>
TABLE II
FISCAL 1999 AND TRANSITIONAL PERIOD STOCK OPTION GRANTS
The following table presents information regarding options to purchase
shares of Common Stock that were issued by the Company to its named executive
officers in fiscal 1999 and the three-month period ended January 1, 1999, that
may be exercised to purchase shares of Common Stock. The Company granted no
SARs during fiscal 1999 or the three-month period ended January 1, 1999.
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------
% of Total
Number of Options
Securities Granted to Exercise Grant
Underlying Employees of Base Date
Options in Fiscal Price Expiration Value
Name Granted(/1/) Year ($/Share) Date ($)(/2/)
- ---- ------------ ---------- --------- ---------- --------
<S> <C> <C> <C> <C> <C>
Edward E. Lucente......... 270,000 93.6% $3.7500 11/09/08 $562,248
Albert A. Butler.......... 10,000 3.8% $3.0625 02/18/09 $ 17,622
Marino J. Niccolai........ 10,000 3.8% $3.0625 02/18/09 $ 17,622
C. Richard Bowles......... 0 0% n/a n/a n/a
Thomas L. McGoogan........ 0 0% n/a n/a n/a
James A. Wallace.......... 0 0% n/a n/a n/a
</TABLE>
- --------
(1) On November 9, 1998, during the transitional period, Mr. Lucente was
granted an option to purchase 270,000 shares. On February 18, 1999,
Messrs. Butler and Niccolai were each granted options to purchase 10,000
shares. These options become exercisable in 20% increments annually
beginning on the date of grant for Messrs. Lucente and Butler, and in
25% increments annually beginning on the first anniversary of the date
of grant for Mr. Niccolai. All options are subject to accelerated
vesting in whole or in part, at the discretion of the committee
administering the plan, upon a "change of control" as defined in the
Company's 1997 Stock Incentive Plan.
(2) This column represents the present value of the options on the date of
grant using the Black-Scholes option pricing model adapted for the
Company's Common Stock, utilizing the following assumptions: five-year
stock price volatility of 0.6535% for Mr. Lucente's option and 0.6904%
for the options of Messrs. Butler and Niccolai; no dividend yield;
expected term to exercise of 3.97 years for Mr. Lucente's option and
3.79 years for the options of Messrs. Butler and Niccolai; interest
rates equal to the U.S. Treasury Note rates in effect at the date of the
grant (approximately 7%) for the expected terms of the options, and no
adjustment for non-transferability or forfeiture. The actual value, if
any, an executive may realize will depend on the excess of the stock
price over the exercise price on the date the option is exercised, so
there is no assurance that the value to be realized by an executive will
be at or near the value estimated by the Black-Scholes model.
8
<PAGE>
TABLE III
AGGREGATED OPTION EXERCISES IN FISCAL 1999 AND TRANSITION PERIOD
FISCAL YEAR-END OPTION VALUES
The following table presents information regarding options exercised for
shares of the Company's Common Stock during fiscal 1999 and the three-month
period ended January 1, 1999, and the value of unexercised options held at
December 31, 1999. The Company has no outstanding SARs.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Value Options at 12/31/99 Options at 12/31/99 ($)(/1/)
Acquired on Realized ------------------------- ---------------------------------
Name Exercise ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Edward E. Lucente....... 100,001 $310,420 108,000 361,999 $ 0 $ 58,333
Albert A. Butler........ 6,000 15,625 24,800 15,200 0 0
Marino J. Niccolai...... 10,000 11,250 2,500 47,500 0 0
C. Richard Bowles....... 4,000 10,750 14,600 6,000 0 0
Thomas L. McGoogan...... 7,520 17,948 5,745 11,235 0 0
James A. Wallace(/2/)... 120,200 188,213 0 0 0 0
</TABLE>
- --------
(/1/) Based on the closing price on the New York Stock Exchange--Composite
Transactions of the Company's Common Stock on that date ($2.8125).
(/2/) Mr. Wallace's options were forfeited on August 6, 1999, when he ceased
to be an executive officer of the Company.
9
<PAGE>
Stock Performance Graph
The following graph compares the Company's five-year cumulative total return
to the S&P 500 and the S&P Computer Systems Composite Index over the five-year
period beginning on October 1, 1994, and ending December 31, 1999. The total
stockholder return assumes $100 invested at the beginning of the period in the
Company's Common Stock, the S&P 500, and the S&P Computer Systems Composite
Index. It also assumes reinvestment of all dividends. Past financial
performance should not be considered to be a reliable indicator of future
performance, and investors should not use historical trends to anticipate
results or trends in future periods.
QMS, INC.
COMPARISON OF CUMULATIE TOTAL RETURN (10/1/94-12/31/99)
vs.
S&P 500 AND S&P COMPUTER SYSTEMS COMPOSITE INDICES
[LINE GRAPH]
Transitional
1994 1995 1996 1997 1998 Period 1999
------- ------- ------- ------- ------- ------------ -------
S&P 500 $100.00 $129.64 $155.92 $218.90 $238.64 $292.23 $371.64
S&P COMPUTER
SYSTEMS $100.00 $143.67 $173.94 $321.22 $384.61 $111.38 $154.41
QMS, INC. $100.00 $ 47.37 $ 61.84 $ 30.26 $ 39.47 $ 33.55 $ 30.92
10
<PAGE>
EXECUTIVE AGREEMENTS
The Company has an Executive Services Agreement (the "Agreement") with Mr.
Lucente. Mr. Lucente's Agreement expires March 31, 2003, with an option to
renew through March 31, 2004. It provides that Mr. Lucente will be paid the
following compensation: (i) a base salary of $350,000 per year, subject to
annual review by the Compensation Committee; (ii) eligibility for annual
incentive bonus compensation in the amount of $550,000 per year, which may be
paid quarterly based upon the specific accomplishments and the Company's
overall performance; (iii) options to purchase up to 500,000 shares of the
Company's Common Stock; (iv) a monthly automobile allowance of $1,250; (v)
reimbursement of all expenses incurred in connection with membership in two
country clubs; and (vi) financial and estate planning services, tax return
preparation services and tax counseling services. In addition to the above,
Mr. Lucente is entitled to additional compensation of $1,800,000 plus gains
and earnings on this amount, which is being set aside in a Rabbi Trust created
for Mr. Lucente's benefit. The $1,800,000 is being deposited in the Rabbi
Trust in monthly payments of $50,000 over a 36-month period.
Mr. Lucente's Agreement gives the Board of Directors express authority to
terminate it if Mr. Lucente willfully fails to perform his material
obligations thereunder after notice or for criminal acts against the Company.
It also gives the Company the right to terminate Mr. Lucente's employment due
to any physical or mental infirmity which continues for three (3) consecutive
months, or for six (6) months during any consecutive twelve (12) month period,
on ninety (90) days written notice, during which ninety (90) day period Mr.
Lucente would continue to receive his full compensation. Mr. Lucente's
Agreement also contains restrictions on solicitation of Company employees and
competition with the Company for two years after termination of employment and
on use of confidential information.
The Company entered into an Executive Agreement with Mr. Lucente which
provides Mr. Lucente with certain benefits upon a "change of control" of the
Company, as defined in the Executive Agreement. The Executive Agreement has no
specified term. It provides that if Mr. Lucente is terminated within eighteen
(18) months after the date of a change of control of the Company, he has the
right to receive the following: (i) immediate vesting of all options; and (ii)
a single cash payment equal to 200% of Mr. Lucente's base salary plus the
amount which, if paid to Mr. Lucente in thirty-six (36) consecutive equal
monthly installments, would have a present value equal to the amount by which
299% of Mr. Lucente's "base amount" (as defined by Section 280G of the
Internal Revenue Code) exceeds the aggregate present value of all other
parachute payments (as defined by Section 280G) received by Mr. Lucente.
"Present value" is determined in accordance with Section 280G. The amount to
be paid under the Executive Agreement would be paid to a trust for the benefit
of Mr. Lucente, and all expenses arising therefrom or from implementation
enforcement of the agreement would be paid by the Company. The Executive
Agreement also provides that the Company will increase the amounts paid
thereunder to account for any excise tax due on such amounts. Mr. Lucente
asserted that the change of control clause was activated with Minolta's
acquisition of over 51% of the Company's outstanding shares of Common Stock.
In lieu of pursuing the enforcement of this clause and to settle this matter,
Mr. Lucente and the Company agreed to additional compensation under the Rabbi
Trust as stated above.
Mr. Wallace's Executive Services Agreement with the Company specified that
in the event of a change of control in the Company and his subsequent
resignation from the Company he would continue to receive his salary for a
period of 12 months after the date of his resignation, and enjoy immediate
vesting of all unvested stock options which had been granted to him. Mr.
Wallace's outstanding stock options became fully vested on June 21, 1999, and
his resignation was effective August 6, 1999. The Company intends to continue
his salary through August 6, 2000, and 79,800 outstanding unexercised vested
stock options were cancelled, pursuant to an agreement between Mr. Wallace and
the Company, on August 6, 1999.
11
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS OF QMS, INC.
The Compensation Committee of the Board of Directors is currently composed
of five non-employee directors, Messrs. Fujii (Chairman), Dow, Hans, Kutani,
and Takekida. The Committee is responsible for setting overall policies that
govern the Company's compensation programs, administering certain of the
Company's equity compensation plans, and establishing the cash compensation of
executive officers.
The Company's executive compensation programs are designed to attract,
reward, and retain key executives who will continue to lead the Company in
achieving its objectives in a highly competitive and fast-changing industry.
The cash compensation for each of the Company's executives consists of a
base salary and an annual incentive program. Long-term incentives consist of
stock options granted under the QMS, Inc. 1997 Stock Incentive Plan.
Cash Compensation--Base Salaries
Base salary targets are established by reviewing published survey data and
compensation information contained in proxy statements regarding similar
positions held by executives of other high technology/electronics firms of
approximately the same size as the Company. The Compensation Committee then
chooses to pay the executive at, above, or below his base salary target
according to a subjective determination by the Compensation Committee based
upon the following two factors:
1. The executive's job performance in the Company's last fiscal year; and
2. The executive's perceived potential to contribute to the Company's
performance in the upcoming fiscal year.
Final decisions regarding the establishment of base salary targets and
levels of base salaries are made independently by the Compensation Committee.
The Committee does, however, solicit input from the Company's Chief Executive
Officer on the level of performance of executives reporting to him. Base
salary adjustments may be made within a fiscal year based on the executive's
performance and contribution to the Company's results of operations during
that period.
The results of such actions with respect to the named executive officers
are reflected in the Summary Compensation Table set forth above.
Cash Compensation--Annual Incentive Programs
The Compensation Committee believes that an annual cash compensation
program tied to the Company's performance provides appropriate short-term
incentives to the Company's key executive officers. Accordingly, all executive
officers of the Company participate in an annual cash incentive program that
requires the Company to achieve a certain earnings level before any payments
may be made. The earnings levels are established by the Compensation Committee
upon recommendation by the Chief Financial Officer of the Company each year
and are generally set at levels providing for an increase in earnings over the
prior year before any incentive compensation is earned. As quarterly targeted
objectives are achieved, each executive is eligible to receive a quarterly
bonus payment of $15,000 for Vice Presidents and $25,000 for Senior Vice
Presidents, contingent upon accomplishment of specific performance goals. Due
to the challenges of the convergence as a result of the Company's alliance
with Minolta, the participation of every executive was critical for the last
six months of fiscal 1999. Therefore, while these executives received no bonus
payments for the first six months of fiscal 1999, the full annual bonus
amounts were paid over the last six months as retention incentive, with the
exception of Mr. Lucente.
12
<PAGE>
Stock Option Programs
The Compensation Committee believes that management ownership of a
significant equity interest in the Company is a major incentive in building
stockholder value and aligning the long-term interests of management and
stockholders. To that end, the Compensation Committee has historically granted
stock options at option prices not less than the fair market value of the
Common Stock on the grant date. Any gain from the exercise of the stock
options will occur only when the price of the Company's Common Stock increases
above the option grant price. This situation, in turn, means that stockholder
value is being enhanced. In fiscal 1999, the Compensation Committee granted
stock options to the named executive officers as outlined in "Table II--Fiscal
1999 and Transitional Period Stock Option Grants" set forth above.
Compensation--Chief Executive Officer
The Compensation Committee considers the information set forth above
concerning compensation paid to executives by other companies in setting the
compensation of Mr. Lucente as the Chief Executive Officer of the Company. The
Committee's objective in setting Mr. Lucente's compensation has been that his
salary be within a range of salaries paid to chief executive officers of
companies in the high technology/electronics industry of approximately the
same size as the Company. In addition, the Committee approves the performance
objectives set forth in an annual incentive plan described above, which is
designed to permit Mr. Lucente (as well as the other officer-participants in
the annual incentive plan) to earn additional compensation if certain earnings
levels are achieved. See the discussions under "Cash Compensation--Annual
Incentive Programs" above. The Committee also granted stock options to Mr.
Lucente in the transitional period based on the philosophy described under
"Stock Option Programs" above. See "Table II--Fiscal 1999 and Transitional
Period Stock Option Grants" for the terms of such options.
Limitations on the Deductibility of Compensation
Pursuant to the 1993 Omnibus Budget Reconciliation Act, a portion of annual
compensation payable after 1993 to any of the Company's five highest paid
executive officers would not be deductible by the Company for federal income
tax purposes to the extent such officer's overall compensation exceeds
$1,000,000. Qualifying performance-based incentive compensation, however,
would be both deductible and excluded for purposes of calculating the
$1,000,000 base. It has been determined that no portion of anticipated
compensation payable to any executive officer in fiscal 1999 would be non-
deductible. Although the Compensation Committee does not presently intend to
award compensation in excess of the $1,000,000 cap, it will continue to
address this issue when formulating compensation arrangements for executive
officers.
Submitted By the Compensation Committee/1/
of the Board of Directors
Hiroshi Fujii Ryusho Kutani Yoshisuke Takekida
The foregoing Report of the Compensation Committee shall not be deemed to
constitute soliciting material and shall not be deemed to be incorporated by
reference as a result of any general incorporation by reference of this Proxy
Statement or any part hereof in the Company's Annual Report to Stockholders on
form 10-K.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1999, Minolta (defined below, see "Proposal 2--Amendment of
the Certificate of Incorporation") acquired 57% of the outstanding Common
Stock of the Company. Five of the Company's eleven directors, namely Messrs.
Fujii, Hans, Kutani, Takekida, and Yamana, are affiliates or employees of
Minolta or
- --------
/1/ Messrs. Fujii, Kutani, and Takekida were appointed to serve on the
Compensation Committee on August 8, 1999. Messrs. Dow and Hans were
appointed to serve on the Compensation Committee on January 26, 2000, and
therefore did not participate in the deliberations of the Committee during
fiscal 1999.
13
<PAGE>
an affiliate of Minolta. Since October 1993, the Company has purchased printer
engines and related products from Minolta, and during fiscal 1999, the Company
purchased $5.7 million of such products from Minolta. The Company currently
has contractual relationships with Minolta that provide for the Company to
continue to purchase printer engines and related products from Minolta in the
future. The Company can effectively terminate these agreements by ceasing to
place purchase orders for the subject products; however, the Company's
arrangement with Minolta regarding the purchase of products requires the
Company to submit six month rolling forecasts which can obligate the Company
to place purchase orders for products in accordance with the forecast for two
to three months following the date of the last forecast.
Furthermore, the Company borrowed approximately $32.8 million from Minolta
in fiscal 1999. The Company received a $12.8 million loan from Minolta on June
7, 1999, a $15 million loan on November 10, 1999, and a $5 million loan on
December 22, 1999. These loans are payable over four years and have a stated
interest rate of LIBOR plus 2.5% payable monthly in arrears.
Messrs. Fujii, Kutani, and Takekida all serve on the Company's Compensation
Committee and are all affiliates of Minolta.
PROPOSAL 2--AMENDMENT OF THE
CERTIFICATE OF INCORPORATION
The Board of Directors has adopted a resolution to amend the Company's
Restated Certificate of Incorporation, as amended to date, to change the
Company's name from "QMS, Inc." to "Minolta - QMS, Inc." The Board has
declared this name change advisable and recommends that stockholders vote
"FOR" the proposed amendment.
The Board has adopted this resolution pursuant to the Stock Purchase
Agreement dated as of June 7, 1999, among the Company, Minolta Investments
Company and Minolta Co., Ltd. (collectively "Minolta"), in which the Company
agreed that, assuming Minolta's tender offer was successful, which it was, the
Company would change its name in a manner acceptable to Minolta to a name that
included the word "Minolta."
The approval of this amendment requires the affirmative vote of the holders
of a majority of the outstanding shares of Common Stock.
YOUR BOARD OF DIRECTORS RECOMMENDS
THAT STOCKHOLDERS VOTE FOR THE AMENDMENT TO
THE COMPANY'S CERTIFICATE OF INCORPORATION
PROPOSAL 3--AMENDMENT OF THE
QMS, INC. 1997 STOCK INCENTIVE PLAN
Introduction
On October 8, 1999, the Board of Directors approved an amendment to the
QMS, Inc. 1997 Stock Incentive Plan (the "Incentive Plan"). The amendment
provides for an increase in the shares available under the Incentive Plan from
1,500,000 shares to 4,500,000 shares. The Plan and this amendment were adopted
because the Board of Directors believes the Company must continue to have the
capacity to grant stock incentives to its key employees and directors.
The Incentive Plan provides the Company with increased flexibility to grant
equity-based compensation to key employees and directors of the Company or any
affiliate of the Company for the purpose of providing incentive to stimulate
their efforts toward the success of the Company and to operate and manage the
business in
14
<PAGE>
a manner that will provide for the long-term growth and profitability of the
Company. Additionally, the Incentive Plan permits the Company to encourage
stock ownership by employees and directors by providing the employees and
directors with a means to acquire a proprietary interest in the Company, and
the Incentive Plan provides the Company with a means to attract and retain key
personnel. The Board of Directors has approved and seeks stockholder approval
of the amendment to the Incentive Plan. The Board of Directors has reserved
4,500,000 shares of Common Stock, subject to stockholder approval of this
amendment, for issuance pursuant to awards that may be made under the
Incentive Plan, subject to adjustment as provided therein. The Incentive Plan
is not subject to the Employee Retirement Income Security Act of 1974, nor is
it qualified under Section 401(a) of the Internal Revenue Code.
Reasons for Amendment
At December 31, 1999, there were 174,990 shares available to grant under
this plan. These shares available are insufficient to meet the Company's
needs. The Board of Directors has approved this amendment in order to enable
the Company to continue to further the purposes for which the Incentive Plan
was originally adopted.
Terms of the Incentive Plan
The following description of the Incentive Plan is qualified in its
entirety by reference to the applicable provisions of the plan document.
Administration. The Incentive Plan is administered by a Committee (the
"Committee") appointed by the Board of Directors consisting of at least 2
members of the Board of Directors all of whom may be required to satisfy
"disinterested" standards under tax and securities law. The Committee has the
power to determine which eligible persons receive awards and the specific
terms of each award, subject to the general parameters set forth in the
Incentive Plan.
The Incentive Plan permits the Committee to make awards of both incentive
stock options as defined in Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), and nonqualified stock options. The Company intends
that all incentive stock options to be granted under the Incentive Plan will
comply with Section 422 ("Incentive Stock Options") of the Code. The Incentive
Plan gives the Committee wide latitude in determining the specific terms of
any particular award; however, there are certain specific limits described in
the Incentive Plan attributable to federal tax laws.
The number of shares of Common Stock as to which an option is granted and
to whom any option is granted are determined by the Committee in its sole
discretion, subject to the provisions of the Incentive Plan. Options issuable
may be made exercisable or settled at such prices and may be made terminable
under such terms as are established by the Committee, to the extent not
otherwise inconsistent with the terms of the Incentive Plan.
The maximum number of shares of Common Stock with respect to which options
may be granted during any fiscal year of the Company as to any eligible
recipient shall not exceed 100,000, to the extent required by Section 162(m)
of the Internal Revenue Code for the grant to qualify as qualified
performance-based compensation.
The Incentive Plan generally provides that all rights granted pursuant to
stock incentives shall not be transferable or assignable, except by the laws
of descent and distribution.
Eligibility. All employees and directors of the Company are eligible to
participate in the Incentive Plan; provided, however, that an Incentive Stock
Option can only be granted to an employee of the Company. As of February 15,
2000, 706 individuals were eligible to participate in the Incentive Plan.
Options. Each option granted pursuant to the Incentive Plan must be
authorized by the Committee and evidenced by an agreement (the "Agreement")
containing the terms and the conditions of the option. At the
15
<PAGE>
time the option is granted, the Committee shall determine whether the option
is an incentive stock option or a nonqualified stock option. The Committee may
permit an option exercise price to be paid in cash, by the delivery of
previously owned shares of Common Stock, through a cashless exercise executed
through a broker, by having a number of shares of Common Stock otherwise
issuable at the time of exercise withheld, or in whole or in part in
installments with Company financing for any unpaid portion. The Incentive Plan
permits the grant of both Incentive Stock Options and Nonqualified Stock
Options. An Incentive Stock Option may only be granted within ten (10) years
from the earlier of the date the Incentive Plan is adopted by the Board of
Directors or approved by the Company's stockholders.
The terms of particular options may provide that they terminate, among
other reasons, upon the holder's termination of employment or other status
with respect to the Company and any affiliate, upon a specified date, upon the
holder's death or disability, or upon the occurrence of a change in control of
the Company. Options may also include exercise, conversion or settlement
rights to a holder's estate or personal representative in the event of the
holder's death or disability. At the Committee's discretion, options that are
held by an employee who suffers a termination of employment may be cancelled,
accelerated, paid, or continued, subject to the terms of the applicable
Agreement and to the provisions of the Incentive Plan.
Recapitalizations and Reorganizations. The number of shares of Common Stock
reserved for issuance in connection with the grant or settlement of options or
to which an option is subject, as the case may be, and the exercise price of
each option are subject to adjustment in the event of any recapitalization of
the Company or similar event, effected without the receipt of consideration.
In the event of certain corporate reorganizations, options may be
substituted, cancelled, accelerated, cashed-out, or otherwise adjusted by the
Committee, provided such adjustment is not inconsistent with the express terms
of the Incentive Plan or the applicable Agreement.
Amendment or Termination. Although the Incentive Plan may be amended by the
Board of Directors without stockholder approval, the Board of Directors also
may condition any such amendment upon stockholder approval if stockholder
approval is deemed necessary or appropriate pursuant to tax, securities, or
other laws.
Federal Income Tax Matters
The following discussion outlines generally the federal income tax
consequences of participation in the Incentive Plan. Individual circumstances
may vary and each participant should rely on his or her own tax counsel for
advice regarding federal income tax treatment under the Incentive Plan.
Nonqualified Options. A participant will not recognize income upon the
grant of an option or at any time prior to the exercise of the option or a
portion thereof. At the time the participant exercises a nonqualified option
or portion thereof, he or she will recognize compensation taxable as ordinary
income in an amount equal to the excess of the fair market value of the Common
Stock on the date the option is exercised over the price paid for the Common
Stock, and the Company will then be entitled to a corresponding deduction.
Depending upon the period of time shares of Common Stock are held after
exercise, the sale or other taxable disposition of shares acquired through the
exercise of a nonqualified option generally will result in a short- or long-
term capital gain or loss equal to the difference between the amount realized
on such disposition and the fair market value of such shares when the
nonqualified option was exercised.
Special rules apply to a participant who exercises a nonqualified option by
paying the exercise price, in whole or in part, by the transfer of shares of
Common Stock to the Company.
Incentive Stock Options. A participant who exercises an Incentive Stock
Option will not be taxed at the time he or she exercises the option or a
portion thereof. Instead, he or she will be taxed at the time he or she sells
the Common Stock purchased pursuant to the option. The participant will be
taxed on the difference
16
<PAGE>
between the price he or she paid for the stock and the amount for which he or
she sells the stock. If the participant does not sell the stock prior to two
years from the date of grant of the option and one year from the date the
stock is transferred to him or her, the participant will be entitled to
capital gain or loss treatment based upon the difference between the amount
realized on the disposition and the aggregate exercise price and the Company
will not get a corresponding deduction. If the participant sells the stock at
a gain prior to that time, the difference between the amount the participant
paid for the stock and the lesser of the fair market value on the date of
exercise or the amount for which the stock is sold, will be taxed as ordinary
income, and the Company will be entitled to a corresponding deduction. If the
stock is sold for an amount in excess of the fair market value on the date of
exercise, the excess amount is taxed as capital gain. If the participant sells
the stock for less than the amount he or she paid for the stock prior to the
one or two year periods indicated, no amount will be taxed as ordinary income
and the loss will be treated as a capital loss.
Exercise of an Incentive Stock Option may subject a participant to, or
increase a participant's liability for, the alternative minimum tax.
Options granted under the Incentive Plan during fiscal 1999 included 80,000
to all executive officers as a group, 180,400 to all employees other than
executive officers, and in the amounts shown for the executive officers named
in the Summary Compensation Table.
Stockholder Approval
The Board of Directors seeks stockholder approval of the amendment to the
Incentive Plan because that portion which authorizes the grant of incentive
stock options must be approved by stockholders under federal tax law. In
addition, the receipt of stockholder approval will enable the Company to
maximize deductions otherwise available in connection with the exercise of
nonqualified stock options.
Vote Required
The affirmative vote of the holders of at least a majority of the shares of
Common Stock represented and entitled to vote at the Meeting is required to
approve the Amendment to the 1997 Stock Incentive Plan.
YOUR BOARD OF DIRECTORS RECOMMENDS
THAT STOCKHOLDERS VOTE FOR THE AMENDMENT TO
THE QMS, INC. 1997 STOCK INCENTIVE PLAN
PROPOSAL 4--AMENDMENT OF
QMS, INC. STOCK OPTION PLAN FOR DIRECTORS
Introduction
On October 8, 1999, the Board of Directors approved an amendment (the
"Amendment") of the QMS, Inc. Stock Option Plan for Directors (the "Directors'
Plan"), subject to stockholder approval. The Amendment increases the number of
options awarded to each director annually from 5,000 to 10,000 and increases
the aggregate number of shares of the Company's Common Stock that may be
issued pursuant to the Directors' Plan from 500,000 to 700,000.
The purpose of the Directors' Plan is to advance the interests of the
Company by encouraging and enabling the acquisition of Common Stock by the
Company's non-employee directors, upon whose judgment and ability the Company
relies to attain its long-term growth and development, to promote a close
identity of interests among the Company, such directors, and the stockholders
of the Company, and to provide a means to attract and retain well-qualified
directors.
17
<PAGE>
The Directors' Plan includes an opportunity for non-employee directors to
receive stock options at a below-market exercise price (50% of the Fair Market
Value, as defined in the Directors' Plan, of a share of Common Stock on the
date of grant) as an alternative to the payment of the annual directors'
retainers in cash. The Directors' Plan does not apply to meeting fees or fees
for committee service. In addition, the Directors' Plan provides the
opportunity for the Company to eliminate the cash cost of directors' annual
retainer fees to the extent the directors elect to receive options in lieu of
cash. Further, when any option is exercised, the Company generally will be
able to deduct for federal income tax purposes any difference between the
option price and the market price of Common Stock (see "Federal Income Tax
Matters"). If the Amendment is not approved by the Company's stockholders,
there will be insufficient shares, at the current market price of the Common
Stock, to permit grants of options as provided in the Directors' Plan. The
Board of Directors believes that it is in the best interests of the Company to
continue the Directors' Plan. Accordingly, the Board of Directors has approved
the Amendment increasing the number of shares available under the Directors'
Plan and recommends a vote in favor of the Amendment to the Directors' Plan.
The terms of the Directors' Plan provide for the grant of nonqualified
stock options. The Directors' Plan is not subject to the Employee Retirement
Income Security Act of 1974, nor is it qualified under Code Section 401(a).
The Directors' Plan will terminate on January 24, 2004 unless terminated by
the Board of Directors at an earlier date.
Reasons for Amendment
At December 31, 1999, there were 222,536 shares available to grant under
this plan. These shares available are insufficient to meet the Company's
needs. The Board of Directors has approved this Amendment in order to enable
the Company to continue to further the purposes for which the Directors' Plan
was originally adopted.
Terms of the Directors' Plan
The following description of the Directors' Plan is qualified in its
entirety by reference to the applicable provisions of the Directors' Plan as
so amended and agreements related to the Directors' Plan.
Administration. The Directors' Plan is administered by a committee (the
"Committee") of employee directors appointed by the Board of Directors.
Subject to the express provisions of the Directors' Plan, the Committee has
full and final authority to interpret the Directors' Plan, adopt, amend, and
rescind rules and regulations relating to the Directors' Plan, and make all
other determinations and take all other actions necessary and advisable for
the administration of the Directors' Plan. The Committee's decisions and
determinations on all matters relating to the Directors' Plan are in its sole
discretion and are conclusive.
Eligibility. All non-employee directors are eligible to participate in the
Directors' Plan.
Stock Subject to Directors' Plan. By the adoption of the Amendment, the
Company has authorized and reserved for issuance upon the exercise of options
pursuant to the Directors' Plan 700,000 shares of Common Stock, subject to
adjustment as provided in the Directors' Plan. On February 15, 2000, the
closing sales price per share of the Common Stock was $3.75.
Option Awards. By adoption of the Amendment, the Directors' Plan provides
for annual grants to each non-employee director of an option to purchase
10,000 shares of Common Stock, provided the director is first appointed to
serve, or continues to serve, as a non-employee director as of the date of the
annual meeting of the Company's stockholders. The exercise price shall be
equal to the Fair Market Value (as defined in the Directors' Plan) of Common
Stock as of the date of grant.
Options Purchased with Retainer Compensation. The Directors' Plan also
provides for the grant of options, as of the date of the annual meeting of the
Board of Directors which is held in conjunction with the
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Company's annual meeting of stockholders, to any director who, no later than
the date of such annual meeting of the Board of Directors (and subject to such
other rules as the Committee may adopt from time to time), has filed with the
Company an irrevocable election to receive a stock option in lieu of all or a
specified portion of the Annual Director Compensation (as defined in the
Directors' Plan) expected to be earned by the director for the twelve-month
period described in the Directors' Plan and defined as the "Plan Year." The
director is not entitled to receive in cash any portion of the Annual Director
Compensation for which an election has been made to receive an option.
The number of shares of Common Stock subject to each option purchased by
any director for a Plan Year is determined by a formula which provides that
each director shall receive an option to purchase the nearest number of whole
shares of Common Stock (with cash payment for fractional shares) equal to the
portion of Annual Director Compensation allocated to the purchase of the
option divided by the difference between the Fair Market Value (as defined in
the Directors' Plan) on the date the option is granted and the option exercise
price, which will be 50% of the market value of the stock on the date the
option is granted. "Annual Director Compensation" is defined generally as the
amount of fees (or portion thereof subject to the director's election) which
the director shall be entitled to receive during a Plan Year for serving as a
director or as a member of any committee of the Board of Directors pursuant to
the policy in effect for each Plan Year, including retainers paid periodically
and fees paid for attendance at or participation in meetings of the Board of
Directors or any committee thereof.
The operation of the option formula can be illustrated as follows: If the
Fair Market Value of a share of the Company's Common Stock on a given date is
$4.00, each director who elected to receive a stock option in lieu of Annual
Director Compensation of $24,000 for a particular Plan Year would be granted
an option to purchase 12,000 shares of Common Stock at $2.00 per share (the
amount of the Annual Director Compensation of $24,000 divided by $2.00).
Transfer of Options. Directors may not transfer any options issued under
the Directors' Plan other than by will or the laws of intestate succession.
Any option issued to a director and outstanding on the date of his or her
death may be exercised by the administrator of the director's estate, the
executor under his or her will, or the person or persons to whom the option
will have been validly transferred by such executor or administrator pursuant
to the will or laws of intestate succession, but not beyond the first to occur
of (i) the first anniversary of the director's death or (ii) the specified
expiration date of the option; provided, however, that an option that is not
exercised prior to the anniversary of the director's death and which remains
exercisable on the first anniversary will be deemed exercised on the first
anniversary of the date of death to the extent the then Fair Market Value of
the shares subject to the option exceeds the option exercise price and payment
of such exercise price will be effected by withholding a number of shares of
Common Stock otherwise issuable pursuant to the option, the Fair Market Value
of which on such anniversary is equal to the exercise price. If the Fair
Market Value of the Common Stock on the first anniversary of the director's
death equals or is less than the option exercise price, then the option will
be deemed to have expired unexercised.
Exercise of Options. The optionee may pay for shares purchased pursuant to
exercise of any option (i) in cash, (ii) by delivering to the Company a number
of shares of Common Stock the director has beneficially owned at least six
months before the date of exercise and having an aggregate Fair Market Value
of at least the product of the exercise price multiplied by the number of
shares the director intends to purchase upon exercise of the option on the
date of delivery, or (iii) in a cashless exercise through a broker. No option
granted under the Directors' Plan may be exercised before the twelve-month
anniversary of the date upon which it was granted; however, any option issued
under the Directors' Plan will become immediately exercisable upon the
director's retirement due to attainment of at least age 65, death, or
disability, provided that the Committee has the discretion to delay the
exercise of any option immediately exercisable due to retirement or disability
prior to the six-month anniversary of the date of the stock issuance, unless
the Committee is satisfied that an earlier exercise will not trigger recovery
of short-swing profits under Section 16 of the Securities Exchange Act of
1934. No option granted under the Directors' Plan will be exercisable after
the expiration of 20 years from the date upon which it is granted.
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Termination of Directorship. Except as otherwise provided in the Directors'
Plan, the rights of a director in an option issued under the Directors' Plan
will not terminate upon such director's termination as a director for any
reason. That portion of an option granted under the Directors' Plan which is
attributable to any portion of the Annual Director Compensation which is not
earned due to termination as a director or as a member of a committee of the
Board of Directors (for any reason) or because of lack of attendance or
participation in any meeting of the Board of Directors or any committee
thereof will automatically abate and be cancelled.
Amendment, Modification, and Termination. The Board of Directors may
terminate and in any respect amend or modify the Directors' Plan provided,
however, that no such action by the Board of Directors without approval of the
stockholders may (i) increase the total number of shares of Common Stock
available under the Directors' Plan in the aggregate (except as otherwise
provided in the Directors' Plan), (ii) extend the period during which any
option may be exercised, (iii) extend the term of the Directors' Plan, (iv)
change the option price, or (v) alter the class of persons eligible to receive
options.
Restrictions on Delivery of Shares; Legends. Each option will be subject to
the condition that if at any time the Committee, in its discretion, determines
that the listing, registration, or qualification of the shares covered by such
option upon any securities exchange or under any state or federal law is
necessary or desirable as a condition of or in connection with the granting of
such option or the purchase or delivery of shares thereunder, the delivery of
any or all shares pursuant to such option may be withheld unless and until
such listing, registration or qualification will have been effected or until
receipt of appropriate representations and an opinion of counsel that such
disposition is exempt from such requirement under the Securities Act of 1933
and any applicable state securities laws.
Benefits. Each of Messrs. Dow and Currie and former directors Messrs.
Burch, James L. Busby, Charles D. Daley, Jack Edwards, and S. Felton Mitchell,
Jr. received options to purchase 5,000 shares under the Directors' Plan during
fiscal 1999. No options were granted in lieu of directors' fees during fiscal
1999. Non-employee directors eligible to receive options under the Directors'
Plan who have not yet received options under this plan are Messrs. Fujii,
Hans, Kutani, Takekida, Bowles and Materna.
Federal Income Tax Matters
Directors are not required to recognize income upon the issuance of options
under the Directors' Plan, nor at any time before the exercise of the option
or a portion thereof. When an optionee exercises an option or portion thereof,
the optionee generally will be required to recognize compensation taxable as
ordinary income in an amount equal to the excess of the fair market value of
the Common Stock on the exercise date over the exercise price of the option,
and the Company is then entitled to a corresponding deduction.
Vote Required
The affirmative vote of the holders of at least a majority of the shares of
Common Stock represented and entitled to vote at the Meeting is required to
approve the Amendment to the Directors' Plan.
YOUR BOARD OF DIRECTORS RECOMMENDS
THAT STOCKHOLDERS VOTE FOR THE AMENDMENT TO
THE STOCK OPTION PLAN FOR DIRECTORS
AUDITORS
The firm of Deloitte & Touche LLP has served as the Company's independent
certified public accountants since 1980. The appointment of auditors is a
matter for determination by the Audit Committee of the Board of Directors and
is not being submitted to the stockholders for approval or ratification. A
representative of the firm is expected to attend the Meeting, to respond to
questions from stockholders, and to make a statement if he so desires.
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CERTAIN TRANSACTIONS AND MATTERS
Change in Control
A change in control of the Company occurred during the last fiscal year.
Minolta Investments Company and its parent company, Minolta Co., Ltd., a
Japanese corporation (collectively "Minolta"), acquired an aggregate of
7,570,000 shares of the Common Stock of the Company. Initially on June 7,
1999, in a private placement of stock, Minolta purchased from the Company
2,130,000 shares of Common Stock, which then constituted approximately 16.6%
of the outstanding Common Stock of the Company after giving effect to such
purchase, for $5.75 per share, or approximately $12 million. Thereafter,
Minolta made a tender offer to the Company's stockholders on June 14, 1999,
pursuant to which Minolta purchased an additional 5,440,000 shares of the
Company's Common Stock for $6.25 per share or $34 million. Consequently,
Minolta now owns 7,570,000 shares, or 57%, of the Company's Common Stock. As
the owner of a majority of the Company's Common Stock, Minolta effectively has
control of the Company.
Minolta spent a total of approximately $46 million to acquire the Common
Stock it now holds in QMS. It obtained the funds required to consummate this
acquisition through the use of internally generated funds and the issuance in
a private placement of a fixed rate bond due in 2002 in the aggregate amount
of Five Billion Japanese Yen (approximately $41.8 million based on the
exchange rate of $1.00 to 119.45 Japanese Yen on June 9, 1999). The interest
rate on this bond is 1.75%.
Pursuant to the Stock Purchase Agreement dated June 7, 1999, between
Minolta and the Company, certain directors of the Company resigned, and
Minolta was given the right to designate a majority of the Company's Board of
Directors. Former directors Messrs. Burch, Busby, Daley, Edwards, and Mitchell
resigned following the Minolta tender offer. The Company also agreed to change
its name to a name acceptable to Minolta that include the word "Minolta."
Transactions with Minolta
The Company engaged in business transactions with and borrowed money from
Minolta in 1999. For a description of these relationships see "Compensation
Committee Interlocks and Insider Participation" above.
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
All of the non-employee directors of the Company, namely Messrs. Currie,
Dow, Fujii, Hans, Kutani, Takekida, Bowles, and Materna, stand to benefit
directly from Proposal 4 regarding the amendment of the QMS Stock Option Plan
for Directors. The proposed amendment to this Plan increases the number of
shares reserved for this Plan, thereby allowing participating directors, if
they choose, to receive more of their compensation as directors in the form of
stock options. Because of the limited number of options reserved for the Plan,
directors have been unable during the last several years to elect to receive
director compensation in the form of stock options. In addition, this proposed
amendment calls for the number of options automatically granted to each
director in each year to be increased from 5,000 to 10,000.
All of the executive officers of the Company stand to benefit from Proposal
3 to increase the number of authorized shares reserved for the QMS, Inc. 1997
Stock Incentive Plan. By increasing the number of shares reserved for this
Plan, the Company is able to provide a greater number of options as
compensation to all of its executive officers.
STOCKHOLDER PROPOSALS FOR ANNUAL MEETING
Under applicable SEC Regulations, any stockholder of the Company wishing to
submit a proposal for action at the Company's Annual Meeting of Stockholders
to be held in 2001 and desiring the proposal to be
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<PAGE>
considered for inclusion in the Company's proxy material relating thereto must
provide a written copy of the proposal to the management of the Company at its
principal executive office not later than November 13, 2000, and must
otherwise comply with the rules of the SEC relating to stockholder proposals.
The named proxies for the 2001 Annual Meeting will have discretionary voting
authority with respect to any stockholder proposal not received in writing by
the Company by January 27, 2001, and they will exercise their authority in
accordance with the recommendations of the Board of Directors.
If, as a result of the expected change in the Company's fiscal year, the
date of the 2001 Annual Meeting is more than thirty (30) days after the month
and date of the 2000 Annual Meeting, submission of stockholder proposals will
be required within a reasonable time prior to the time the Company mails its
proxy materials, and the named proxies will have discretionary voting
authority as to stockholder proposals not submitted a reasonable time prior to
the time the Company mails its proxy materials.
ANNUAL REPORT
The Company's 1999 Annual Report to Stockholders is being mailed to the
Company's stockholders with this Proxy Statement. The Annual Report is not
part of the proxy solicitation material.
GENERAL
Management does not know of any other matters to be presented at the
Meeting for action by stockholders. However, if any other matter requiring a
vote of the stockholders is properly presented at the Meeting or any
adjournment thereof, it is intended that votes will be cast pursuant to the
proxies with respect to such matters in accordance with the best judgment of
the persons acting under the proxies.
The Company will pay the cost of soliciting proxies in the accompanying
form. In addition to solicitation by use of the mail, certain officers and
regular employees of the Company may solicit the return of proxies by
telephone, telegram, or personal interview. The Company has engaged Corporate
Investor Communications, Inc. to distribute and solicit proxies for the
Meeting at an estimated cost of $4,500 plus reasonable expenses. The Company
has requested that brokerage houses, custodians, nominees and fiduciaries
forward soliciting materials to their principals and beneficial owners of
Common Stock of the Company, and the Company will reimburse them for their
reasonable out-of-pocket expenses.
A list of stockholders entitled to be present and vote at the Meeting will
be available at the offices of the Company, One Magnum Pass, Mobile, Alabama,
for inspection by the stockholders during regular business hours from March
27, 2000, to the date of the Meeting. The list also will be available during
the Meeting for inspection by stockholders who are present.
Whether or not you plan to be present in person, you are requested to
complete, sign, date, and return the enclosed proxy promptly. An envelope has
been provided for that purpose. No postage is required if mailed in the United
States.
/s/ Albert A. Butler
----------------------------
Albert A. Butler
Secretary
March 14, 2000
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QMS, INC.
STOCK OPTION PLAN FOR DIRECTORS
1. Purpose. The purpose of this Stock Option Plan for Directors ("Plan") of
QMS, Inc. (the "Company"), a Delaware corporation, is to encourage stock
ownership by non-employee directors ("Directors" or a "Director") by providing
them a means to acquire a proprietary interest in the Company, thereby advancing
the interests of the Company by encouraging and enabling the acquisition of its
stock by Directors whose judgment and ability are relied upon by the Company for
the attainment of its long-term growth and development. Accordingly, the Plan is
intended to promote a close identity of interests among the Company, the
Directors and its stockholders, as well as to provide a means to attract and
retain well-qualified Directors.
2. Effective Date and Term of Plan. The Plan shall become effective only upon
such date as it may be approved by the stockholders of the Company and shall
remain in effect for ten years from the date on which it is so approved or until
termination by the Board of Directors of the Company (the "Board"), whichever
occurs first.
3. Stock Subject to the Plan. There are authorized for issuance or delivery
upon the exercise of options to be granted from time to time under the Plan an
aggregate of 125,000 shares of the Company's common stock, $.01 par value
("Common Stock"), subject to adjustment as provided hereinafter in Section 6.
Such shares may be, as a whole or in part, authorized but unissued shares,
whether now or hereafter authorized, or issued shares which have been reacquired
by the Company. If any option issued under this Plan shall expire, terminate or
be cancelled for any reason without having been exercised in full, the shares of
Common Stock which have not been purchased thereunder shall again become
available for the purposes of this Plan.
4. Plan Administration:
(a) The Plan shall be administered by a committee of employee directors of the
Company appointed by the Board (the "Committee"), which committee shall consist
of at least two members who shall serve at the pleasure of the Board of
Directors.
(b) The Committee shall have full and final authority to interpret the Plan,
adopt, amend and rescind rules and regulations relating to the Plan, and make
all other determinations and take all other actions necessary and advisable for
the administration of the Plan.
(c) Decisions and determinations of the Committee on all matters relating to
the Plan shall be in its sole discretion and shall be conclusive. No member of
the Committee shall be liable for any action taken or decision made in good
faith relating to this Plan or any grant hereunder.
(d) An administrator of the Plan (the "Administrator") may from time to time be
appointed by the Committee. If appointed, the Administrator shall be responsible
for the general administration of the Plan under the policy guidance of the
Committee. The Administrator shall be in the employ of the Company, and shall be
compensated for services and expenses by the Company according to its normal
employment policies without special or additional compensation, other than
reimbursement of expenses, if any, for his or her services as the Administrator.
<PAGE>
5. Terms and Conditions of Option Awards. Each option granted under the Plan
shall be evidenced by a written award document in such form, not inconsistent
with this Plan, as the Committee shall approve from time to time, which document
shall comply with and be subject to the following terms and conditions:
(a) Types of Option Awards.
(i) Formula Awards. Each Director shall be granted as of the date of
each annual meeting of the stockholders of the Company occurring after January
1, 1994 an option to purchase 5,000 shares of Common Stock; provided the
Director is first appointed to serve, or continues to serve, as a Director as of
the date of that annual meeting. The exercise price for each share of Common
Stock subject to an option granted pursuant to this Section 5(a)(i) shall equal
the Fair Market Value of a share of Common Stock as of the date of the option
grant.
(ii) Retainer Awards. Options shall be granted as of the date of each
annual meeting of the Board that is held in conjunction with each annual meeting
of stockholders of the Company, to each Director who, no later than the date of
such annual meeting of the Board (and subject to such other rules as the
Committee may adopt from time to time), has filed with the Company an
irrevocable election to receive an option to purchase shares of Common Stock in
lieu of all or a specified percentage of the Annual Director Compensation (as
defined in Subsection 5(b) below) expected to be earned by such Director for the
upcoming twelve-month period beginning on the first day of the third fiscal
quarter of the Company and ending on the last day of the second fiscal quarter
of the Company ("Plan Year"). A separate election may be made for each Plan
Year; provided, however, that no amendment or revocation may be made during a
Plan Year with respect to such Plan Year and that no amendment or modification
shall be given as of any date that the implementation of such amendment or
revocation would cause any option purchased pursuant to the direction contained
in a prior election to be treated as not exempt from Section 16(b) of the
Securities Exchange Act of 1934. A Director shall not be entitled to receive in
cash any portion of the Annual Director Compensation for which an election has
been made to receive an option.
(b) Formula for Retainer Awards. The number of shares of Common Stock subject
to each option granted to any Director for a Plan Year pursuant to Section
5(a)(ii) above shall be equal to the nearest number of whole shares of Common
Stock, with cash payment for fractional shares, determined in accordance with
the following formula:
Annual Director Compensation
- ----------------------------------------------- = Number of Shares
Fair Market Value minus Option Exercise Price
For purposes of the Plan, the following terms shall have the meanings ascribed
to them in this Section 5(b):
(i) "Annual Director Compensation" shall mean the amount of fees
which a Director will be entitled to receive during a Plan Year for serving as a
Director or as a member of any committee of the Board pursuant to the policy in
effect for such Plan Year, including retainers paid periodically and fees paid
for attendance at or participation in meetings of the Board or any committee
thereof; provided, however, that if a Director elects to receive an option in
lieu of only a portion of Annual Director Compensation, the Annual Director
Compensation for purposes of the foregoing formula shall equal the portion of
the Annual Director Compensation so elected. To the extent that a portion of
Annual Director Compensation includes fees for attending or participating in
meetings of the Board or any committee
<PAGE>
thereof, for purposes of the election to be made pursuant to Subsection 5(a)(ii)
above, the Committee shall advise each Director, in advance of the next Plan
Year, of the number of such meetings anticipated to be held during such Plan
Year and the election may take the fees related thereto into account. To the
extent fewer or greater such meetings are actually held during the Plan Year, an
appropriate adjustment shall be made in the number of shares of Common Stock
subject to any option awarded. Annual Director Compensation shall not include
expenses reimbursed by the Company for attendance at or participation in
meetings of the Board or any committee thereof or fees for any other services to
be provided to the Company.
(ii) "Option Exercise Price" refers to the per share purchase price
for Common Stock subject to each option granted under the Plan and that per
share purchase price shall be fifty percent (50%) of the Fair Market Value of
the Common Stock on the date the option is granted.
(iii) "Fair Market Value" means, with regard to a date, the closing
price at which a share of Common Stock shall have been sold on the last trading
date prior to that date as reported by the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") (or, if applicable, as reported by
a national securities exchange selected by the Committee on which the shares of
Common Stock are then actively traded) and published in "The Wall Street
Journal."
(c) Exercise of Option Awards. All options, whether granted pursuant to Section
5(a)(i) or 5(a)(ii), may be exercised only by written notice to the Company.
Payment for all shares of Common Stock purchased pursuant to exercise of an
option shall be made (a) in cash; (b) by delivery to the Company of a number of
shares of Common Stock which have been beneficially owned by the Director for at
least six (6) months prior to the date of exercise having an aggregate Fair
Market Value of not less than the product of the exercise price multiplied by
the number of shares the Director intends to purchase upon exercise of the
option on the date of delivery; or (c) in a cashless exercise through a broker.
Payment shall be made at the time that the option or any part thereof is
exercised, and no shares shall be issued or delivered upon exercise of an option
until full payment has been made by the Director. No option granted under the
Plan may be exercised before the twelve-month anniversary of the date upon which
it was granted; provided, however, that any option granted under the Plan shall
become immediately exercisable upon the retirement of the Director due to
attainment of at least age 65, death or disability. No option granted under the
Plan shall be exercisable after the expiration of twenty years from the date
upon which it is granted. Each option shall be subject to earlier termination
before its date of expiration as hereinafter provided in Subsections 5(d) and
5(e).
(d) Termination of Directorship. Except as provided in this Section 5(d) and
Section 5(e) below, the rights of a Director in an option granted under the Plan
shall not terminate upon such Director's termination as a Director for any
reason. That portion of an option granted pursuant to Section 5(a)(ii) which is
attributable to any portion of the Annual Director Compensation which is not
earned due to termination as a Director or as a member of a committee of the
Board (for any reason) or because of lack of attendance or participation in any
meeting of the Board or any committee thereof shall automatically abate and be
cancelled.
(e) Death of Director. Any option granted to a Director and outstanding on the
date of his or her death may be exercised by the administrator of such
Director's estate, the executor under his or her will, or the person or persons
to whom the option shall have been validly transferred by such executor or
administrator pursuant to the will or laws of intestate succession, but not
beyond the first to occur of (i) the first anniversary of the Director's death,
or (ii) the specified expiration date of the option; provided, however, that an
option that is not exercised prior to the first anniversary of the Director's
death and
<PAGE>
which remains exercisable on the first anniversary shall be deemed exercised on
the first anniversary of the date of death to the extent the then aggregate Fair
Market Value of the shares subject to the option exceeds the aggregate exercise
price and payment of such aggregate exercise price shall be effected by
withholding a number of shares of Common Stock otherwise issuable pursuant to
the option the Fair Market Value of which on such anniversary is equal to the
aggregate exercise price. If the Fair Market Value of the Common Stock on the
first anniversary of the Director's death equals or is less than the aggregate
exercise price, then the option shall be deemed to have expired unexercised.
6. Changes in Capitalization. If the outstanding shares of Common Stock are
increased, decreased or exchanged for a different number or kind of shares or
other securities, or if additional shares of other property (other than ordinary
cash dividends) are distributed with respect to such shares of Common Stock or
other securities, through merger, consolidation, sale of all or substantially
all of the assets of the Company, reorganization, recapitalization,
reclassification, dividend, stock split, reverse stock split, spin-off, split-
off or other distribution with respect to such shares of common stock, or other
securities, an appropriate and proportionate adjustment shall be made in (i) the
maximum number and kind of shares reserved for issuance under the Plan, (ii) the
number and kind of shares or other securities subject to then outstanding
options under the Plan, and (iii) the price for each share subject to any then
outstanding options under the Plan. No fractional shares will be issued under
the Plan on account of any such adjustments. Any adjustment pursuant to this
Section 6 shall provide for the elimination without payment therefor of any
fractional shares.
7. Limitation of Rights:
(a) No Right to Continue as a Director. Neither the Plan, nor the granting of
an option, nor any other action taken pursuant to the Plan, shall constitute
evidence of any agreement or understanding, express or implied, that the Company
will retain a Director as a director for any period of time, or at any
particular rate of compensation.
(b) No Stockholders' Rights for options. The holder of an option granted under
the Plan shall have no rights as a stockholder with respect to the shares
covered by his or her options until the date of the issuance to such holder of a
stock certificate therefor, and no adjustment will be made for dividends or
other rights for which the record date is prior to the date such certificate is
issued.
(c) No Right to Participate as an Employee Director. A Director's right to
participate in the Plan shall automatically terminate if and when a Director
becomes an employee of the Company. That portion of an option granted under the
Plan witch is attributable to any Unearned Annual Director Compensation shall
automatically abate and be cancelled. "Unearned Annual Director Compensation"
shall mean any portion of Annual Director Compensation which relates to
attendance or participation in any meeting of the Board or any committee thereof
occurring after the date the Director's employment by the Company commences, or
which consists of a retainer earned after such date.
8. Transferability:
(a) Options are not transferable other than by will or the laws of intestate
succession. No transfer by will or by the laws of intestate succession shall be
effective to bind the Company unless the Committee shall have been furnished
with a copy of the deceased participant's will or such other evidence as the
Committee may deem necessary to establish the validity of the transfer.
(b) Only a Director, or in the event of disability, his or her guardian, or in
the event of death, his or her legal representative or beneficiary, may exercise
options and receive deliveries of shares.
<PAGE>
9. Amendment, Modification and Termination. The Board at any time may
terminate and in any respect amend or modify the Plan; provided, however, that
no such action by the Board, without approval of the Company's stockholders, may
(i) increase the total number of shares of Common Stock available under the Plan
in the aggregate (except as otherwise provided in Section 6 above), (ii) extend
the period during which any option may be exercised, (iii) extend the term of
the Plan, (iv) change any option exercise price or (v) alter the class of
persons eligible to receive options. No amendment, modification or termination
of the Plan shall in any manner adversely affect the rights of any Director with
respect to an option previously granted.
10. Notice. Any written notice to the Company required by any of the provisions
of the Plan shall be addressed to the Corporate Secretary of the Company and
shall become effective when it is received.
11. Restrictions on Delivery and Sale of Shares; Legends. Each option is
subject to the condition that if at any time the Committee, in its discretion,
shall determine that the listing, registration or qualification of the shares
covered by such option upon any securities exchange or under any state or
federal law is necessary or desirable as a condition of or in connection with
the granting of such option or the purchase or delivery of shares thereunder,
the delivery of any or all shares pursuant to such option may be withheld unless
and until such listing, registration or qualification shall have been effected.
If a registration statement is not in effect under the Securities Act of 1933 or
any applicable state securities laws with respect to the shares of Common Stock
purchasable or otherwise deliverable under options then outstanding, the
Committee may require, as a condition of exercise of any option or as a
condition to any other delivery of Common Stock pursuant to an option, that the
Director represent, in writing, that the shares received pursuant to the option
are being acquired for investment and not with a view to distribution and agree
that the shares will not be disposed of except pursuant to an effective
registration statement, unless the Company shall have received an opinion of
counsel that such disposition is exempt from such requirement under the
Securities Act of 1933 and any applicable state securities laws. The Company may
include on certificates representing shares issued pursuant to an option such
legends referred to the foregoing representations or restrictions or any other
applicable restrictions on resale as the Company, in its discretion, shall deem
appropriate.
12. Restrictions on Plan Amendments. Notwithstanding the provisions of Section
9 above, the Plan shall not be amended more than once every six (6) months,
other than to comport with changes in the Internal Revenue Code or the rules
thereunder.
QMS, Inc.
By: /s/ James L. Busby
Title: President
ATTEST:
/s/ G. William Speer
Title: Secretary
[CORPORATE SEAL]
<PAGE>
FIRST AMENDMENT TO THE
QMS, INC. STOCK OPTION PLAN
FOR DIRECTORS
THIS FIRST AMENDMENT is made as of the 23rd day of October, 1996, by
QMS, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company maintains the QMS, Inc. Stock Option Plan for
Directors under an indenture dated November 18, 1993 (the "Plan");
WHEREAS, the Company desires to amend the Plan to reflect an increase
in the number of shares authorized for issuance thereunder and for other
reasons; and
WHEREAS, the Company now desires to amend the Plan, to make the
changes herein embodied;
NOW, THEREFORE, the Company does hereby amend the Plan as follows:
1. By deleting, immediately, the first sentence of Section 3 in s
entirety and by substituting therefor the following:
"There are authorized for issuance or delivery upon the exercise of
options to be granted from time to time under the Plan an aggregate of
250,000 shares of the Company's common stock, $.01 par value ("Common
Stock"), subject to adjustment as provided hereinafter in Section 6."
2. By deleting, effective November 1, 1996, the fourth sentence of
Section 5 in its entirety and by substituting therefor the following:
"No option granted under the Plan may be exercised before the twelve-
month anniversary of the date upon which it was granted; however, any
option granted under the Plan shall become immediately exercisable
upon the retirement of the Director due to the attainment of at least
age 65, death or disability; provided that the Committee has the
discretion to deny the exercise of any option that becomes immediately
exercisable due to retirement or disability prior to the six-month
anniversary of the date of the stock issuance, unless the Committee is
satisfied that an earlier exercise will not trigger recovery of short-
swing profits under Section 16 of the Securities Exchange Act of
1934."
<PAGE>
3. Notwithstanding the foregoing, the adoption of this First
Amendment is subject to the approval of the stockholders of the Company and in
the event that the stockholders of the Company fail to approve such action
within twelve months of the adoption of this First Amendment, the adoption of
this First Amendment and any options granted subject to stockholder approval of
the First Amendment shall be null and void.
Except as specifically provided herein, the Plan shall remain in full
force and effect as prior to this First Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be executed as of the day and year first above written.
QMS, Inc.
By: ___________________________________
Title:_________________________________
ATTEST:
_________________________________
Title:___________________________
[CORPORATE SEAL]
SECOND AMENDMENT TO THE
QMS, INC. STOCK OPTION PLAN
FOR DIRECTORS
THIS SECOND AMENDMENT is made as of the 17th day of November, 1997, by
QMS, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company maintains the QMS, Inc. Stock Option Plan for
Directors under an indenture dated November 18, 1993 (the "Plan");
WHEREAS, the Company desires to amend the Plan to reflect an increase
in the number of shares authorized for issuance thereunder and for other
reasons; and
NOW, THEREFORE, the Company does hereby amend the Plan as follows :
<PAGE>
1. By deleting, immediately, the first sentence of Section 3 in its
entirety and by substituting therefor the following:
There are authorized for issuance or delivery upon the exercise of
options to be granted from time to time under the Plan an aggregate of
500,000 shares of the Company's common stock, $.01 par value ("Common
Stock"), subject to adjustment as provided hereinafter in Section 6.
2. By deleting, immediately, Clause (i) of Section 5(b) in its
entirety and by substituting therefor the following:
(i) "Annual Director Compensation" shall mean the amount of the annual
retainer fee which a Director will be entitled to receive during a
Plan Year, excluding fees paid for service on a committee or for
attendance at or participation in meetings of the board or any
committee thereof; provided, however, that if a director elects to
receive an option in lieu of only a portion of Annual Director
Compensation, the Annual Director Compensation for purposes of the
foregoing formula shall equal the portion of the Annual Director
Compensation so elected.
3. Notwithstanding the foregoing, the adoption of this Second
Amendment is subject to the approval of the stockholders of the Company and in
the event that the stockholders of the Company fail to approve such action
within twelve months of the adoption of this Second Amendment, the adoption of
this Second Amendment and any options granted subject to stockholder approval of
the Second Amendment shall be null and void.
Except as specifically provided herein, the Plan shall remain in full
force and effect as prior to this Second Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed as of the day and year first above written.
QMS, INC.
By: ___________________________________
Title: ________________________________
[CORPORATE SEAL]
Attest:
__________________________________
Title: ___________________________
<PAGE>
QMS, INC.
1997 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1 DEFINITIONS 1
1.1 Definitions 1
SECTION 2 THE STOCK INCENTIVE PLAN 4
2.1 Purpose of the Plan 4
2.2 Stock Subject to the Plan 4
2.3 Administration of the Plan 4
2.4 Eligibility and Limits 5
SECTION 3 GENERAL TERMS OF OPTIONS 6
3.1 General Terms and Conditions 6
3.2 Other Terms and Conditions of Options 6
(a) Option Price 7
(b) Option Term 7
(c) Payment 7
(d) Conditions to the Exercise of an Option 8
(e) Termination of Incentive Stock Option 8
(f) Special Provisions for Certain Substitute Options 8
3.3 Treatment of Awards Upon Termination of Service 8
SECTION 4 GENERAL PROVISIONS 8
4.1 Withholding 8
4.2 Changes in Capitalization; Merger; Liquidation 9
4.3 Cash Awards 10
4.4 Compliance with Code 10
4.5 Right to Terminate Service 10
4.6 Restrictions on Delivery and Sale of Shares; Legends 10
4.7 Non-alienation of Benefits 10
4.8 Termination and Amendment of the Plan 10
4.9 Stockholder Approval 11
4.10 Indemnification of Committee 11
4.11 Choice of Law 11
4.12 Effective Date of Plan 11
</TABLE>
<PAGE>
QMS, INC.
1997 STOCK INCENTIVE PLAN
SECTION 1 DEFINITIONS
1.1 Definitions. Whenever used herein, the masculine pronoun shall be
-----------
deemed to include the feminine, and the singular to include the plural, unless
the context clearly indicates otherwise, and the following capitalized words and
phrases are used herein with the meaning thereafter ascribed:
(a) "Affiliate" means a person that directly or indirectly,
---------
through one or more intermediaries, controls, or is controlled by, or is under
common control with, a specified person.
(b) "Associate" means (1) any corporation, partnership or other
---------
organization of which a specified person is an officer or partner, or is,
directly or indirectly, the beneficial owner of ten percent (10%) or more of any
class of equity securities thereof, (2) any trust or other estate in which the
specified person has a substantial beneficial interest or as to which specified
person serves as trustee or in a similar fiduciary capacity, (3) any relative or
spouse of such specified person, or any relative of such spouse, who has the
same home as such person or who is a director or officer of such person and (4)
any person who is a trustee, officer or partner of such specified person or of
any corporation, partnership or other entity which in an Affiliate of such
specified person.
(c) "Beneficial Owner" shall be defined by reference to Rule
----------------
13d-3 under the Exchange Act as such Rule was in effect on the date hereof;
provided, however, that any individual, corporation, partnership, Group,
association or other person or entity which, directly or indirectly, owns or has
the right to acquire any of the Company's outstanding securities entitled to
vote generally in the election of directors at any time in the future, whether
such right is contingent, absolute, direct or indirect, pursuant to any
agreement, arrangement or understanding or upon exercise of conversion rights,
warrants or options, or otherwise, shall be deemed the Beneficial Owner of such
securities.
(d) "Board of Directors" means the board of directors of the
------------------
Company.
(e) "Cause" has the same meaning as provided in the employment
-----
agreement between the Participant and the Company or, if applicable, any
affiliate of the Company on the date of Termination of Service, or if no such
definition or employment agreement exists, "Cause" means conduct amounting to
(1) fraud or dishonesty against the Company or its affiliates, (2) Participant's
willful misconduct, repeated refusal to follow the reasonable directions of the
board of directors of the Company or its affiliates, or knowing violation of law
in the course of performance of the duties of Participant's service with the
Company or its affiliates, (3) repeated absences from work without a reasonable
excuse, (4) repeated intoxication with alcohol or drugs while on the Company or
affiliates' premises during regular business hours, (5) a conviction or plea of
guilty or nolo contendere to a felony or a crime involving dishonesty, or (6) a
breach or violation of the terms of any agreement to which Participant and the
Company or its affiliates are party.
(f) "Change in Control" means any one of the following events
-----------------
(1) when any individual, corporation, partnership, Group, association or other
person or entity, together with his, its or their Affiliates and/or Associates
(other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company), is or becomes the Beneficial Owner of securities
of the Company representing twenty percent (20%) or more of the combined voting
power of the Company's then outstanding securities entitled to vote generally in
the election of directors or (2) when the Continuing Directors shall at any time
fail to constitute a majority of the members of the Board of Directors.
<PAGE>
(g) "Code" means the Internal Revenue Code of 1986, as amended.
----
(h) "Committee" means the committee appointed by the Board of
---------
Directors to administer the Plan pursuant to Plan Section 2.3.
(i) "Company" means QMS, Inc., a Delaware corporation.
-------
(j) "Continuing Director" means a director who either was a
-------------------
member of the Board of Directors on the date hereof, or who became a member of
the Board of Directors subsequent to such date and whose election, or nomination
for election by the Company's stockholders, was Duly Approved by the Continuing
Directors at the time of such nomination or election, either by a specific vote
or by approval of the proxy statement issued by the Company on behalf of the
Board of Directors in which such person was named as nominee for director,
without due objection to such nomination.
(k) "Disability" has the same meaning as provided in the long-
----------
term disability plan or policy maintained or, if applicable, most recently
maintained, by the Company or, if applicable, any affiliate of the Company for
the Participant. If no long-term disability plan or policy was ever maintained
on behalf of the Participant or, if the determination of Disability relates to
an Incentive Stock Option, Disability shall mean that condition described in
Code Section 22(e)(3), as amended from time to time. In the event of a dispute,
the determination of Disability shall be made by the Board of Directors and
shall be supported by advice of a physician competent in the area to which such
Disability relates.
(l) "Disposition" means any conveyance, sale, transfer,
-----------
assignment, pledge or hypothecation, whether outright or as security, inter
vivos or testamentary, with or without consideration, voluntary or involuntary.
(m) "Duly Approved by the Continuing Directors" means an action
-----------------------------------------
approved by the vote of at least a majority of the Continuing Directors then on
the Board of Directors, except, if the votes of such Continuing Directors in
favor of such action would be insufficient to constitute an act of the Board of
Directors if a vote by all of its members were to have been taken, then such
term shall mean an action approved by the unanimous vote of the Continuing
Directors then on the Board of Directors so long as there are at least three (3)
Continuing Directors on the Board of Directors at the time of such unanimous
vote.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(o) "Fair Market Value" refers to the determination of value of
-----------------
a share of Stock. If the Stock is actively traded on any national securities
exchange or any Nasdaq quotation or market system, Fair Market Value shall mean
the closing price at which sales of Stock shall have been sold on the most
recent trading date immediately prior to the date of determination, as reported
by any such exchange or system selected by the Committee on which the shares of
Stock are then traded. If the shares of Stock are not actively traded on any
such exchange or system, Fair Market Value shall mean the arithmetic mean of the
bid and asked prices for the shares of Stock on the most recent trading date
within a reasonable period prior to the determination date as reported by such
exchange or system. If there are no bid and asked prices within a reasonable
period or if the shares of Stock are not traded on any exchange or system as of
the determination date, Fair Market Value shall mean the fair market value of a
share of Stock as determined by the Committee taking into account such facts and
circumstances deemed to be material by the Committee to the value of the Stock
in the hands of the Participant; provided that,
<PAGE>
for purposes of granting awards other than Incentive Stock Options, Fair Market
Value of a share of Stock may be determined by the Committee by reference to the
average market value determined over a period certain or as of specified dates,
to a tender offer price for the shares of Stock (if settlement of an award is
triggered by such an event) or to any other reasonable measure of fair market
value and provided further that, for purposes of granting Incentive Stock
Options, Fair Market Value of a share of Stock shall be determined in accordance
with the valuation principles described in the regulations promulgated under
Code Section 422.
(p) "Group" means persons who act in concert as described in
-----
Section 13(d)(3) 0f the Exchange Act.
(q) "Incentive Stock Option" means an incentive stock option, as
----------------------
defined in Code Section 422, described in Plan Section 3.2.
(r) "Non-Qualified Stock Option" means a stock option, other
--------------------------
than an option qualifying as an Incentive Stock Option, described in Plan
Section 3.2.
(s) "Option" means a Non-Qualified Stock Option or an Incentive
------
Stock Option.
(t) "Over 10% Owner" means an individual who at the time an
--------------
Incentive Stock Option is granted owns Stock possessing more than 10% of the
total combined voting power of the Company or one of its Parents or
Subsidiaries, determined by applying the attribution rules of Code Section
424(d).
(u) "Parent" means any corporation (other than the Company) in
------
an unbroken chain of corporations ending with the Company if, with respect to
Incentive Stock Options, at the time of granting of the Option, each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.
(v) "Participant" means an individual who receives an Option
-----------
hereunder.
(w) "Plan" means the QMS, Inc. 1997 Stock Incentive Plan.
----
(x) "Stock" means the Company's common stock, $0.01 par value
-----
per share.
(y) "Stock Incentive Agreement" means an agreement between the
-------------------------
Company and a Participant or other documentation evidencing an award of an
Option.
(z) "Subsidiary" means any corporation (other than the Company)
----------
in an unbroken chain of corporations beginning with the Company if, with respect
to Incentive Stock Options, at the time of the granting of the Option, each of
the corporations other than the last corporation in the unbroken chain owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in the chain.
(aa) "Termination of Service" means the termination of the
----------------------
service relationship, whether employment or otherwise, between a Participant and
the Company and its affiliates, regardless of the fact that severance or similar
payments are made to the Participant for any reason, including, but not by way
of limitation, a termination by resignation, discharge, death, Disability or
retirement. The
<PAGE>
Committee shall, in its absolute discretion, determine the effect of all matters
and questions relating to Termination of Service, including, but not by way of
limitation, the question of whether a leave of absence constitutes a Termination
of Service, or whether a Termination of Service is for Cause.
SECTION 2 THE STOCK INCENTIVE PLAN
2.1 Purpose of the Plan. The Plan is intended to (a) provide
-------------------
incentive to employees and directors of the Company and its affiliates to
stimulate their efforts toward the continued success of the Company and to
operate and manage the business in a manner that will provide for the long-term
growth and profitability of the Company; (b) encourage stock ownership by
employees and directors by providing them with a means to acquire a proprietary
interest in the Company by acquiring shares of Stock; and (c) provide a means of
obtaining and rewarding key personnel.
2.2 Stock Subject to the Plan. Subject to adjustment in accordance
-------------------------
with Section 4.2, 500,000 shares of Stock, $0.01 par value, (the "Maximum Plan
Shares") are hereby reserved exclusively for issuance pursuant to Options. At no
time shall the Company have outstanding Options and shares of Stock issued in
respect of Options in excess of the Maximum Plan Shares. The shares of Stock
attributable to the nonvested, unpaid, unexercised, unconverted or otherwise
unsettled portion of any Option that is forfeited or cancelled or expires or
terminates for any reason without becoming vested, paid, exercised, converted or
otherwise settled in full shall again be available for purposes of the Plan.
2.3 Administration of the Plan. The Plan shall be administered by the
--------------------------
Committee. The Committee shall have full authority in its discretion to
determine the officers, employees, directors and consultants of the Company or
its affiliates to whom Options shall be granted and the terms and provisions of
Options, subject to the Plan. Subject to the provisions of the Plan, the
Committee shall have full and conclusive authority to interpret the Plan; to
prescribe, amend and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of the respective Option Agreements and to
make all other determinations necessary or advisable for the proper
administration of the Plan. The Committee's determinations under the Plan need
not be uniform and may be made by it selectively among persons who receive, or
are eligible to receive, awards under the Plan (whether or not such persons are
similarly situated). The Committee's decisions shall be final and binding on all
Participants.
As to any matter involving a Participant who is not a "reporting
person" for purposes of Section 16 of the Exchange Act, the Committee may
delegate to any member of the Board of Directors or officer of the Company the
administrative authority to (a) interpret the provisions of the Participant's
Stock Incentive Agreement and (b) determine the treatment of Options upon a
Termination of Service, as contemplated by Plan Section 3.3.
The Committee shall consist of at least two members of the Board of
Directors and, during those periods that the Company is subject to the
provisions of Section 16 of the Exchange Act, the Board of Directors shall
consider the advisability of whether each such appointee shall qualify as a
"non-employee director," as that term is defined in Rule 16b-3 as then in effect
under the Exchange Act, and, during those periods that the Company has issued
equity securities required to be registered under Section 12 of the Exchange
Act, the Board of Directors shall consider the advisability of whether each such
appointee shall separately qualify as an "outside director," within the meaning
of Code Section 162(m) and the regulations promulgated thereunder. Each member
of the Committee shall serve at the pleasure of the Board of Directors, and the
Board of Directors may from time to time remove members from or add members to
the Committee. Vacancies on the Committee shall be filled by the Board of
Directors. The Committee shall select one of its members as Chairman and shall
hold meetings at the times and in the
<PAGE>
places as it may deem advisable. Acts approved by a majority of the Committee in
a meeting at which a quorum is present, or acts reduced to or approved in
writing by a majority of the members of the Committee, shall be the valid acts
of the Committee.
2.4 Eligibility and Limits. Options may be granted only to employees
----------------------
and directors of the Company or an affiliate; provided, however, that an
Incentive Stock Option may only be granted to an employee of the Company or any
Parent or Subsidiary. In the case of Incentive Stock Options, the aggregate Fair
Market Value (determined as of the date an Incentive Stock Option is granted) of
stock with respect to which stock options intended to meet the requirements of
Code Section 422 become exercisable for the first time by an individual during
any calendar year under all plans of the Company and its Parents and
Subsidiaries shall not exceed $100,000; provided further, that if the limitation
is exceeded, the Incentive Stock Option(s) which cause the limitation to be
exceeded shall be treated as Non-Qualified Stock Option(s); except as the terms
of the Stock Incentive Agreement may expressly provide otherwise. To the extent
required under Code Section 162(m) and regulations thereunder for compensation
to be treated as qualified performance-based compensation, the maximum number of
shares of Stock with respect to which Options may be granted during any single
fiscal year of the Company to any Participant who is a covered employee,
within the meaning of Code Section 162(m) and the regulations promulgated
thereunder (a "Covered Employee"), shall not exceed 100,000.
SECTION 3 GENERAL TERMS OF OPTIONS
3.1 General Terms and Conditions.
----------------------------
(a) The number of shares of Stock as to which an Option shall be
granted shall be determined by the Committee in its sole discretion, subject to
the provisions of Section 2.2 as to the total number of shares available for
grants under the Plan. If a Stock Incentive Agreement so provides, a Participant
may be granted a new Option to purchase a number of shares of Stock equal to the
number of previously owned shares of Stock tendered in payment of the Exercise
Price (as defined below) for each share of Stock purchased pursuant to the terms
of the Stock Incentive Agreement.
(b) Each Option shall be evidenced by a Stock Incentive
Agreement in such form and containing such terms, conditions and restrictions as
the Committee may determine is appropriate. Each Stock Incentive Agreement shall
be subject to the terms of the Plan and any provision in a Stock Incentive
Agreement that is inconsistent with the Plan shall be null and void.
(c) The date an Option is granted shall be the date on which the
Committee has approved the terms and conditions of the Stock Incentive Agreement
and has determined the recipient of the Option and the number of shares covered
by the Option and has taken all such other action necessary to complete the
grant of the Option.
(d) The Committee may provide in any Stock Incentive Agreement
that, in the event of a Change in Control, the Option shall or may be cashed out
on the basis of any price (the "Change in Control Price") not greater than the
highest price paid for a share of Stock in any transaction reported by any
market or system selected by the Committee on which the shares of Stock are then
actively traded during a specified period immediately preceding or including the
date of the Change in Control or offered for a share of Stock in any tender
offer occurring during a specified period immediately preceding or including the
date the tender offer commences; provided that, in no case shall any such
specified period exceed one (1) year. For purposes of this Subsection, the cash-
out of an Option shall be on the basis of the excess, if any, of the Change in
Control Price (but not more than the Fair Market Value
<PAGE>
of the Stock on the date of the cash-out in the case of Incentive Stock Options)
over the Exercise Price with or without regard to whether the Option may
otherwise be exercisable only in part.
(e) Options shall not be transferable or assignable except by will or
by the laws of descent and distribution and shall be exercisable, during the
Participant's lifetime, only by the Participant; in the event of the Disability
of the Participant, by the legal representative of the Participant; or in the
event of the death of the participant, by the personal representative of the
Participant's estate or if no personal representative has been appointed, by the
successor in interest determined under the Participant's will.
3.2 Other Terms and Conditions of Options. Each Option granted under the
-------------------------------------
Plan shall be evidenced by a Stock Incentive Agreement. At the time any Option
is granted, the Committee shall determine whether the Option is to be an
Incentive Stock Option or a Non-Qualified Stock Option, and the Option shall be
clearly identified as to its status as an Incentive Stock Option or a Non-
Qualified Stock Option. At the time any Incentive Stock Option is exercised, the
Company shall be entitled to place a legend on the certificates representing the
shares of Stock purchased pursuant to the Option to clearly identify them as
shares of Stock purchased upon exercise of an Incentive Stock Option. An
Incentive Stock Option may only be granted within ten (10) years from the
earlier of the date the Plan is adopted by the Board of Directors or approved by
the Company's stockholders.
(a) Option Price. Subject to adjustment in accordance with Section
------------
4.2 and the other provisions of this Section 3.2, the exercise price (the
"Exercise Price") per share of Stock purchasable under any Option shall be as
set forth in the applicable Stock Incentive Agreement. With respect to each
grant of an Incentive Stock Option to a Participant who is not an Over 10% Owner
or to each grant of any Option to a Participant who is then a Covered Employee,
the Exercise Price per share shall not be less than the Fair Market Value on the
date the Option is granted. With respect to each grant of an Incentive Stock
Option to a Participant who is an Over 10% Owner, the Exercise Price shall not
be less than 110% of the Fair Market Value on the date the Option is granted.
(b) Option Term. The term of an Option shall be as specified in the
-----------
applicable Stock Incentive Agreement; provided, however that any Incentive Stock
Option granted to a Participant who is not an Over 10% Owner shall not be
exercisable after the expiration of ten (10) years after the date the Option is
granted and any Incentive Stock Option granted to an Over 10% Owner shall not be
exercisable after the expiration of five (5) years after the date the Option is
granted.
(c) Payment. Payment for all shares of Stock purchased pursuant to
-------
exercise of an Option shall be made in any form or manner authorized by the
Committee in the Stock Incentive Agreement or by amendment thereto, including,
but not limited to, cash or, if the Stock Incentive Agreement provides, (1) by
delivery to the Company of a number of shares of Stock which have been owned by
the holder for at least six (6) months prior to the date of exercise having an
aggregate Fair Market Value of not less than the product of the Exercise Price
multiplied by the number of shares the Participant intends to purchase upon
exercise of the Option on the date of delivery; (2) in a cashless exercise
through a broker; (3) by having a number of shares of Stock withheld, the Fair
Market Value of which as of the date of exercise is sufficient to satisfy the
Exercise Price; or (4) in whole or in part in installments, in which case the
Stock Incentive Agreement may require no down payment but shall provide for at
least annual installments in cash, together with accrued interest on the unpaid
principal balance at a rate at least equal to the minimum rate required at the
date of exercise of the Option in order not to be a below-market loan under Code
Section 7872 and the minimum rate required at the date of exercise of the Option
under Regulations prescribed by the Secretary of the Treasury under Section
<PAGE>
483(c)(1)(B) of the Code, and shall require that the unpaid balance of the
aggregate Exercise Price shall be evidenced by a promissory note, secured by a
pledge of shares of stock acquired pursuant to the exercise of the Option.
Payment shall be made at the time that the Option or any part thereof is
exercised, and no shares shall be issued or delivered upon exercise of an option
until full payment has been made by the Participant. The holder of an Option, as
such, shall have none of the rights of a stockholder.
(d) Conditions to the Exercise of an Option. Each Option granted
---------------------------------------
under the Plan shall be exercisable by whom, at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee shall
specify in the Stock Incentive Agreement; provided, however, that subsequent to
the grant of an Option, the Committee, at any time before complete termination
of such Option, may accelerate the time or times at which such Option may be
exercised in whole or in part, including, without limitation, upon a Change in
Control and may permit the Participant or any other designated person to
exercise the Option, or any portion thereof, for all or part of the remaining
Option term notwithstanding any provision of the Stock Incentive Agreement to
the contrary.
(e) Termination of Incentive Stock Option. With respect to an
-------------------------------------
Incentive Stock Option, in the event of the Termination of Service of a
Participant, the Option or portion thereof held by the Participant which is
unexercised shall expire, terminate, and become unexercisable no later than the
expiration of three (3) months after the date of Termination of Service;
provided, however, that in the case of a holder whose Termination of Service is
due to death or Disability, one (1) year shall be substituted for such three (3)
month period. For purposes of this Subsection (e), Termination of Service of the
Participant shall not be deemed to have occurred if the Participant is employed
by another corporation (or a parent or subsidiary corporation of such other
corporation) which has assumed the Incentive Stock Option of the Participant in
a transaction to which Code Section 424(a) is applicable.
(f) Special Provisions for Certain Substitute Options.
-------------------------------------------------
Notwithstanding anything to the contrary in this Section 3.2, any Option issued
in substitution for an option previously issued by another entity, which
substitution occurs in connection with a transaction to which Code Section
424(a) is applicable, may provide for an exercise price computed in accordance
with such Code Section and the regulations thereunder and may contain such other
terms and conditions as the Committee may prescribe to cause such substitute
Option to contain as nearly as possible the same terms and conditions (including
the applicable vesting and termination provisions) as those contained in the
previously issued option being replaced thereby.
3.3 Treatment of Awards Upon Termination of Service. Except as otherwise
-----------------------------------------------
provided by Plan Section 3.2(e), any award under this Plan to a Participant who
suffers a Termination of Service may be cancelled, accelerated, paid or
continued, as provided in the Stock Incentive Agreement or, in the absence of
such provision, as the Committee may determine. The portion of any award
exercisable in the event of continuation or the amount of any payment due under
a continued award may be adjusted by the Committee to reflect the Participant's
period of service from the date of grant through the date of the Participant's
Termination of Service or such other factors as the Committee determines are
relevant to its decision to continue the award.
SECTION 4 GENERAL PROVISIONS
4.1 Withholding. The Company shall deduct from all cash distributions
-----------
under the Plan any taxes required to be withheld by federal, state or local
government. Whenever the Company proposes or is required to issue or transfer
shares of Stock under the Plan, the Company shall have the right to require the
recipient to remit to the Company an amount sufficient to satisfy any federal,
state and local
<PAGE>
withholding tax requirements prior to the delivery of any certificate or
certificates for such shares. A Participant may pay the withholding tax in cash,
or, if the applicable Stock Incentive Agreement provides, a Participant may
elect to have the number of shares of Stock he is to receive reduced by the
smallest number of whole shares of Stock which, when multiplied by the Fair
Market Value of the shares of Stock determined as of the Tax Date (defined
below), is sufficient to satisfy federal, state and local, if any, withholding
taxes arising from exercise or payment of an Option (a "Withholding Election").
A Participant may make a Withholding Election only if both of the following
conditions are met:
(a) The Withholding Election must be made on or prior to the date on
which the amount of tax required to be withheld is determined (the "Tax Date")
by executing and delivering to the Company a properly completed notice of
Withholding Election as prescribed by the Committee; and
(b) Any Withholding Election made will be irrevocable; however, the
Committee may in its sole discretion disapprove and give no effect to the
Withholding Election.
4.2 Changes in Capitalization; Merger; Liquidation.
----------------------------------------------
(a) The number of shares of Stock reserved for the grant of Options;
the number of shares of Stock reserved for issuance upon the exercise or
payment, as applicable, of each outstanding Option; and the Exercise Price of
each outstanding Option shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock resulting from a subdivision or
combination of shares or the payment of an ordinary stock dividend in shares of
Stock to holders of outstanding shares of Stock or any other increase or
decrease in the number of shares of Stock outstanding effected without receipt
of consideration by the Company.
(b) In the event of any merger, consolidation, extraordinary dividend
(including a spin-off), reorganization or other change in the corporate
structure of the Company or its Stock or tender offer for shares of Stock, the
Committee, in its sole discretion, may make such adjustments with respect to
awards and take such other action as it deems necessary or appropriate to
reflect or in anticipation of such merger, consolidation, extraordinary
dividend, reorganization, other change in corporate structure or tender offer,
including, without limitation, the substitution of new awards, the termination
or adjustment of outstanding awards, the acceleration of awards or the removal
of restrictions on outstanding awards, all as may be provided in the applicable
Stock Incentive Agreement or, if not expressly addressed therein, as the
Committee subsequently may determine in the event of any such merger,
consolidation, extraordinary dividend (including a spin-off), reorganization or
other change in the corporate structure of the Company or its Stock or tender
offer for shares of Stock. Any adjustment pursuant to this Section 4.2 may
provide, in the Committee's discretion, for the elimination without payment
therefor of any fractional shares that might otherwise become subject to any
Options.
(c) The existence of the Plan and the Options granted pursuant to the
Plan shall not affect in any way the right or power of the Company to make or
authorize any adjustment, reclassification, reorganization or other change in
its capital or business structure, any merger or consolidation of the Company,
any issue of debt or equity securities having preferences or priorities as to
the Stock or the rights thereof, the dissolution or liquidation of the Company,
any sale or transfer of all or any part of its business or assets, or any other
corporate act or proceeding.
4.3 Cash Awards. The Committee may, at any time and in its discretion,
------------
grant to any holder of an Option the right to receive, at such times and in such
amounts as determined by the Committee in its discretion, a cash amount which is
intended to reimburse such person for all or a portion of the
<PAGE>
federal, state and local income taxes imposed upon such person as a consequence
of the receipt of the Option or the exercise of rights thereunder.
4.4 Compliance with Code. All Incentive Stock Options to be granted
--------------------
hereunder are intended to comply with Code Section 422, and all provisions of
the Plan and all Incentive Stock Options granted hereunder shall be construed in
such manner as to effectuate that intent.
4.5 Right to Terminate Service. Nothing in the Plan or in any Stock
--------------------------
Incentive Agreement shall confer upon any Participant the right to continue as
an employee, officer or director of the Company or any of its affiliates or
affect the right of the Company or any of its affiliates to terminate the
Participant's service at any time.
4.6 Restrictions on Delivery and Sale of Shares; Legends. Each Option is
----------------------------------------------------
subject to the condition that if at any time the Committee, in its discretion,
shall determine that the listing, registration or qualification of the shares
covered by such Option upon any securities exchange or under any state or
federal law is necessary or desirable as a condition of or in connection with
the granting of such Option or the purchase or delivery of shares thereunder,
the delivery of any or all shares pursuant to such Option may be withheld unless
and until such listing, registration or qualification shall have been effected.
If a registration statement is not in effect under the Securities Act of 1933 or
any applicable state securities laws with respect to the shares of Stock
purchasable or otherwise deliverable under Options then outstanding, the
Committee may require, as a condition of exercise of any Option or as a
condition to any other delivery of Stock pursuant to an Option, that the
Participant or other recipient of an Option represent, in writing, that the
shares received pursuant to the Option are being acquired for investment and not
with a view to distribution and agree that the shares will not be disposed of
except pursuant to an effective registration statement, unless the Company shall
have received an opinion of counsel that such disposition is exempt from such
requirement under the Securities Act of 1933 and any applicable state securities
laws. The Company may include on certificates representing shares delivered
pursuant to an Option such legends referring to the foregoing representations or
restrictions or any other applicable restrictions on resale as the Company, in
its discretion, shall deem appropriate.
4.7 Non-alienation of Benefits. Other than as specifically provided with
--------------------------
regard to the death of a Participant, no benefit under the Plan shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge; and any attempt to do so shall be void. No such benefit
shall, prior to receipt by the Participant, be in any manner liable for or
subject to the debts, contracts, liabilities, engagements or torts of the
Participant.
4.8 Termination and Amendment of the Plan. The Board of Directors at any
-------------------------------------
time may amend or terminate the Plan without stockholder approval; provided,
however, that the Board of Directors may condition any amendment on the approval
of stockholders of the Company if such approval is necessary or advisable with
respect to tax, securities or other applicable laws. No such termination or
amendment without the consent of the holder of an Option shall adversely affect
the rights of the Participant under such Option.
4.9 Stockholder Approval. The Plan shall be submitted to the stockholders
--------------------
of the Company for their approval within twelve (12) months before or after its
adoption by the Board of Directors. If such approval is not obtained, any Option
granted under the Plan shall be void.
4.10 Indemnification of Committee. In addition to such other rights of
----------------------------
indemnification that they may have as directors of the Company or as members of
the Committee, the members of the
<PAGE>
Committee shall be indemnified by the Company against the reasonable expenses,
including attorneys' fees actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any option
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such Committee member is liable
for negligence in the performance of his duties; provided that within 60 days
after institution of any such action, suit or proceeding a Committee member
shall in writing offer the Company the opportunity, at its own expense, to
handle and defend the same.
4.11 Choice of Law. The laws of the State of Delaware shall govern the
-------------
Plan, to the extent not preempted by federal law.
4.12 Effective Date of Plan. The Plan shall become effective upon the
----------------------
date the Plan is approved by the Board of Directors.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed this
23rd day of October, 1996.
QMS, Inc.
By:_____________________
Title:__________________
ATTEST:
_________________________
Title:___________________
[CORPORATE SEAL]
Appendix A
FIRST AMENDMENT TO QMS, Inc. 1997
STOCK INCENTIVE PLAN
THIS FIRST AMENDMENT is made as of the 15th day of October, 1997, by QMS,
Inc., a Delaware corporation (the "Company").
<PAGE>
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company maintains the QMS, Inc. 1997 Stock Incentive Plan
under an indenture dated October 23, 1996 (the "Plan"); and
WHEREAS, the Company desires to amend the Plan to reflect an increase in
the number of shares authorized for issuance thereunder;
NOW, THEREFORE, the Company does hereby amend the Plan as follows:
1. By deleting the first sentence of Section 2.2 in its entirety and by
substituting therefor the following:
Subject to adjustment in accordance with Section 4.2, 1,500,000 shares of
Stock, $0.01 par value (the "Maximum Plan Shares"), are hereby reserved
exclusively for issuance pursuant to Options.
2. Notwithstanding the foregoing, the adoption of this First Amendment is
subject to the approval of the stockholders of the Company and in the event that
the stockholders of the Company fail to approve such action within twelve months
of the adoption of this First Amendment, the adoption of this First Amendment
and any options granted subject to stockholder approval of the First Amendment
shall be null and void.
Except as specifically provided herein, the Plan shall remain in full force
and effect as prior to this First Amendment.
IN WITNESS WHEREOF, the Company has caused this First Amendment to be
executed as of the day and year first above written.
QMS, INC.
By:___________________
Title:________________
[CORPORATE SEAL]
Attest:
______________________
Title:________________
<PAGE>
QMS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON APRIL 12, 2000
The undersigned hereby appoints Albert A. Butler and Gregory R. Jones, or
either of them, proxies, with power of substitution, to vote the shares of
common stock of QMS, Inc. which the undersigned is entitled to vote at the
annual meeting of stockholders on April 12, 2000, and any adjournment thereof,
as set forth on the reverse side of this card. If directions are not given, the
proxy will be voted (i) FOR the election of the persons named herein to serve as
Class II directors, (ii) FOR approval of an amendment to the Company's
Certificate of Incorporation to change the name of the Company, (iii) FOR
approval of an amendment to the Company's 1997 Stock Incentive Plan, and
(iv) FOR approval of an amendment to the Company's Stock Option Plan for
Directors.
Please mark, sign, date and return this proxy promptly, using the enclosed
envelope. No postage required if mailed in the United States of America.
(Continued and to be signed and dated on the other side.)
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<TABLE>
<S> <C> <C> <C>
Please mark
your votes as
indicated in
this example [X]
1. Election of Directors: NOMINEES: Edward E. Lucente, 2. Approval of an amendment to the
Albert A. Butler and F. Rigdon Currie Company's Certificate of
FOR all nominees WITHHOLD Incorporation
listed to the right AUTHORITY (Instructions: To withhold authority to
(except as marked to vote for all nominees vote for any particular nominee, draw a
to the contrary) listed to the right line through the name above.) FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ]
3. Approval of an amendment to the 4. Approval of an amendment to the 5. With discretionary power in the
Company's 1997 Stock Incentive Company's Stock Option Plan for transaction of such other
Plan. Directors. business as may properly come
before the meeting.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ] [ ]
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|
|
|
Signature Signature Date
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NOTE: Please sign exactly as name appears hereon. If shares are registered in more than one name, the signatures of all persons are
required. A corporation should sign in its full corporate name by a duly authorized officer, stating his or her title. Trustees,
guardians, executors and administrators should sign in their official capacity, giving their full titles as such. If a partnership,
please sign in the partnership name by an authorized person.
</TABLE>
