SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[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 section 240.14a-11(c) or section 240.14a-12
ALPNET, INC.
(Name of Registrant as Specified in its Charter)
ALPNET, INC.
Name of Person(s) Filing Proxy Statement
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
ALPNET, INC.
4444 SOUTH 700 EAST, SUITE 204
SALT LAKE CITY, UTAH 84107-3075
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 23, 1996
To the Shareholders of ALPNET, Inc.:
Notice is hereby given that the Annual Meeting of the Shareholders of
ALPNET, Inc. (the "Company"), will be held on Thursday, May 23, 1996, at 1:00
p.m., Mountain Daylight Time, Red Lion Hotel, 255 South West Temple, Salt Lake
City, Utah, for the following purposes:
1. To elect directors for the terms specified in the enclosed Proxy Statement;
2. To ratify the appointment of Ernst & Young LLP as the Company's independent
auditors for the year 1996;
3. To approve an executive stock option plan for key executives of the
Company; and
4. To transact any other business which may properly come before the meeting.
Only the shareholders of record at the close of business on March 15, 1996
are entitled to receive notice and to vote at the meeting and any adjournments
thereof. A list of shareholders as of such date will be available for
examination by any shareholder for any appropriate purpose relating to the
meeting, at the offices of the Company, for ten days prior to May 23, 1996.
The solicitation of proxies in the enclosed form is made on behalf of the
Board of Directors of the Company.
By Order of the Board of Directors
D. Kerry Stubbs
Secretary
Salt Lake City, Utah
April 1, 1996
IT IS IMPORTANT THAT ALL SHAREHOLDERS BE REPRESENTED AT THE MEETING.
Shareholders who are unable to attend in person SHOULD IMMEDIATELY MARK, SIGN,
DATE AND RETURN the accompanying form of proxy in the enclosed self-addressed
envelope. If you attend the meeting, you may, if you wish, revoke your proxy
and vote in person. The proxy may be revoked at any time prior to its exercise
in the manner described in the Proxy Statement.
ALPNET, INC.
4444 SOUTH 700 EAST, SUITE 204
SALT LAKE CITY, UTAH 84107-3075
APRIL 1, 1996
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of ALPNET, Inc. (the "COMPANY"), of proxies to be voted
at the Annual Meeting of Shareholders of the Company to be held at the Red Lion
Hotel, 255 South West Temple, Salt Lake City, Utah, on Thursday, May 23, 1996,
at 1:00 p.m., Mountain Daylight Time, and at any and all adjournments thereof.
This proxy statement and the accompanying form of proxy will be first sent or
given to shareholders on or about April 10, 1996.
Your vote is important. Accordingly, you are urged to sign and return the
enclosed proxy whether or not you plan to attend the meeting. If you do attend,
you may vote by ballot at the meeting, thereby canceling any proxy previously
given.
ANY SHAREHOLDER WHO EXECUTES A PROXY MAY REVOKE IT ANY TIME BEFORE IT IS
VOTED BY NOTIFYING THE SECRETARY OF THE COMPANY, IN WRITING, OF THE REVOCATION,
OR BY DULY EXECUTING ANOTHER PROXY BEARING A LATER DATE, OR BY ATTENDING THE
MEETING AND EXPRESSING A DESIRE TO VOTE HIS OR HER SHARES IN PERSON.
The cost of this solicitation will be borne by the Company. The Company
will use its own employees to assist in the solicitation of proxies. Although
there is no formal agreement to do so, the Company may also reimburse banks,
brokerage houses and other custodians, nominees and fiduciaries for their
reasonable expenses in forwarding proxy materials to their principals.
VOTING SECURITIES
The Company's authorized capital stock consists of 40 million shares of no
par value Common Stock and 2 million shares of Preferred Stock. As of March 15,
1996 (the "RECORD DATE"), shares which are entitled to vote at the meeting
include: (i) 16,200,541 shares of Common Stock; (ii) 459,411 shares of series B
Preferred Stock which has voting rights as if the preferred shares had been
converted to common shares at the ratio of three common shares for each
preferred share, for a total equivalent number of 1,378,233 common shares; and
(iii) 584,257 shares of series C Preferred Stock and 87,339 shares of series D
Preferred Stock which have voting rights as if the preferred shares had been
converted to common shares at the ratio of nine common shares for each preferred
share, for a total equivalent number of 5,258,313 common shares and 786,051
common shares, for series C and D, respectively. Only those shareholders of
record at the close of business on the Record Date will be entitled to vote.
Each shareholder of Common Stock will be entitled to one vote for each common
share owned by him or her. Each shareholder of series B Preferred Stock will be
entitled to three votes for each series B preferred share owned by him or her
and each shareholder of series C or series D Preferred Stock will be entitled to
nine votes for each series C or series D preferred share owned by him or her.
The affirmative vote of a majority of shares represented at the meeting will be
the act of the shareholders. Unless contrary instructions are given, all shares
represented by the persons named in the enclosed form of proxy will be voted
"FOR" each of the proposals and otherwise in the discretion of any of the
persons acting as proxies.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of March 15, 1996, the beneficial
ownership of the Company's Common Stock and Common Stock equivalents by (i) each
person known to the Company to be the beneficial owner of more than five percent
of the outstanding shares of Common Stock, and (ii) all directors and executive
officers as a group. Detailed information regarding voting securities
beneficially owned by directors and director nominees are disclosed under
Election of Directors, below. The information shown below was furnished to the
Company by the respective persons listed.
<TABLE>
<CAPTION>
Shares of
Common Stock
and Equivalents Percent of
Beneficially- Common Stock
Name and Address Owned as of and Equivalents
of Beneficial Owner March 15, 1996 (1) (2) Outstanding (1) (2)
<S> <C> <C>
H. F. Boeckmann, II 6,025,939(3) 27.9%
15505 Roscoe Boulevard
Sepulveda, CA 91343
NFT Ventures, Inc. 2,765,826(4) 15.8%
10050 North Wolfe Road
Suite SW2-240
Cupertino, CA 95014
Michael F. Eichner 1,135,837(5) 6.7%
69A Parkhall Road
West Dulwich
London SE21 8EX
United Kingdom
Ogilvy & Mather (Canada) Ltd. 1,068,076 6.6%
33 Yonge Street
Toronto, Ontario
Canada M5E 1X6
Jaap van der Meer 1,081,818(6) 6.5%
Emmaplein 2
Amsterdam
The Netherlands
All executive officers and 2,241,166(7) 12.8%
directors as a group
(5 persons)
<FN>
(1) The persons named in the table above have sole voting power with respect to all shares of Common Stock and Common Stock
equivalents beneficially owned by them, subject to joint tenancy and community property laws, where applicable, and the
information contained in the notes to this table.
The percentages indicated in the table have been computed assuming that each shareholder has exercised all of his
available options to acquire Common Stock and has converted all of his Preferred Stock to Common Stock and that no other
shareholder has made the same exercise or conversion, thus indicating the maximum percentage share of ownership possible.
The Preferred Stock has voting rights as if the Preferred Stock has been converted to Common Stock, at the ratio of three
common shares for each preferred share of series B Preferred Stock and at the ratio of nine common shares for each
preferred share of series C or D Preferred Stock. Holders of the Preferred Stock have these voting rights even if the
Preferred Stock is never converted to Common Stock.
(2) These amounts do not include shares reserved for issuance pursuant to exercise of stock options granted under the
Company's 1983 Non-Statutory Stock Option Plan or any other stock options which are not exercisable within 60 days of
March 15, 1996.
(3) Includes: (i) 65,800 shares of Common Stock owned by Mr. Boeckmann's immediate family, as to which he disclaims
beneficial ownership; (ii) 617,646 shares of Common Stock issuable upon the exercise of the right to convert series B
Preferred Stock which right is exercisable within 60 days of March 15, 1996; and (iii) 4,749,219 shares of Common Stock
issuable upon the exercise of the right to convert series C Preferred Stock which right is exercisable within 60 days of
March 15, 1996.
(4) Includes: (i) 760,587 shares of Common Stock issuable upon the exercise of the right to convert series B Preferred Stock
which right is exercisable within 60 days of March 15, 1996; and (ii) 509,094 shares of Common Stock issuable upon the
exercise of the right to convert series C Preferred Stock which right is exercisable within 60 days of March 15, 1996.
(5) Includes 786,051 shares of Common Stock issuable upon the exercise of the right to convert series D Preferred Stock which
right is exercisable within 60 days of March 15, 1996.
(6) Includes 500,000 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of March 15,
1996.
(7) Includes: (i) 955,115 shares of Common Stock issued and outstanding; (ii) 786,051 shares of Common Stock issuable upon
the exercise of the right to convert series D Preferred Stock which right is exercisable within 60 days of March 15,
1996; and (iii) 500,000 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of March
15, 1996.
</FN>
</TABLE>
ELECTION OF DIRECTORS
(Proposal No. 1)
At the meeting, four directors are to be elected to hold office for one
year or until their successors shall be elected and qualified or until they
resign. Unless authority is withheld, it is the intention of the persons named
in the enclosed form of proxy to vote "FOR" the election of the persons
identified as nominees for director in the table below. If the candidacy of any
one or more of such nominees should, for any reason, be withdrawn, the proxies
will be voted "FOR" such other person or persons, if any, as may be nominated by
the Board of Directors. The Board of Directors has no reason to believe that
any nominee named herein will be unable or unwilling to serve. The election of
each director requires the affirmative vote of not less than a majority of the
issued and outstanding Common Stock and Preferred Stock represented and entitled
to vote at the meeting. Each share of Common Stock will be entitled to one vote
for each director; each share of series B Preferred Stock will be entitled to
three votes for each director; and each share of series C or series D Preferred
Stock will be entitled to nine votes for each director.
No arrangement or understanding exists between any director or executive
officer and any other person pursuant to which any director or executive officer
was nominated or is to be elected as a director or officer.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES FOR
DIRECTORS OF THE COMPANY.
INFORMATION ABOUT DIRECTORS
The following table sets forth the name and age of each nominee, the
position and office with the Company held by each nominee, the year each first
became a director, and the beneficial ownership of stock in the Company of each.
The information below the table sets forth the principal occupation, employment
and business experience of each nominee during the past five years.
<TABLE>
<CAPTION>
Shares of
Common Stock
and Equivalents Percent of
First Beneficially Owned Common Stock
Name, Address Became As of and Equivalents
and Position Age a Director March 15, 1996(1) (2) Outstanding(1) (2)
Nominees for Director
<C> <C> <C> <C> <C>
Michael F. Eichner 50 1988 1,135,837(3) 6.7%
69A Parkhall Road
West Dulwich
London SE21 8EX
United Kingdom
Director and Chairman
Thomas F. Seal 42 1989 21,511 *
4444 South 700 East
Suite #204
Salt Lake City, UT 84107
President and Chief
Executive Officer,
Director
John W. Wittwer 50 1993 2,000 *
4444 South 700 East
Suite #204
Salt Lake City, UT 84107
Executive Vice President,
Director
Jaap van der Meer 41 First Time 1,081,818(4) 6.5%
Emmaplein 2 Nominee
Amsterdam
The Netherlands
Vice President Sales and
Marketing
<FN>
* Less than 1%
(1) The persons named in the table above have sole voting power with respect to all shares of Common Stock and Common Stock
equivalents beneficially owned by them, subject to joint tenancy and community property laws, where applicable, and the
information contained in the notes to this table.
The percentages indicated in the table have been computed assuming that each director or nominee has exercised all of his
available options to acquire Common Stock and has converted all of his Preferred Stock to Common Stock and that no other
shareholder has made the same exercise or conversion, thus indicating the maximum percentage share of ownership possible.
(2) These amounts do not include shares reserved for issuance pursuant to exercise of stock options granted under the
Company's 1983 Non-Statutory Stock Option Plan or any other stock options which are not exercisable within 60 days of
March 15, 1996.
(3) Includes 786,051 shares of Common Stock issuable upon the exercise of the right to convert series D Preferred Stock which
right is exercisable within 60 days of March 15, 1996.
(4) Includes 500,000 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of March 15,
1996.
</FN>
</TABLE>
MICHAEL F. EICHNER. Mr. Eichner has served as a director of the Company since
May 1988 and is currently the Chairman of the Board of Directors. He was
serving as Executive Chairman of Interlingua Group Ltd. of London England (then
the largest translation Company in Europe) from 1985 until March 1988 when
Interlingua was acquired by ALPNET, Inc. He joined Interlingua in 1978 and
served as its Managing Director until 1985 when he assumed the position of
Executive Chairman. Mr. Eichner is Chairman of Eurosis Group P.L.C. of London,
England, a company involved in providing leased equipment and personnel to the
international conference and meetings industry.
THOMAS F. SEAL. Mr. Seal joined the Company in January 1987 as its Vice
President of Research and Development. In June 1988, Mr. Seal assumed
responsibility for the Company's Canadian operations, and he resided in Canada
from October 1988 to March 1989 where he directed the restructuring of Canadian
operations. In April 1989, Mr. Seal returned to the U.S., and was named
President and Chief Executive Officer in May 1989. Mr. Seal was elected to the
Board of Directors in June 1989. Mr. Seal presently resides in London where he
oversees the worldwide operations of the Company. Mr. Seal received his B.S.
degree in Computer Science from Brigham Young University in 1975, and since that
time has held a variety of technical and management positions in companies
related to the computer industry.
JOHN W. WITTWER. Mr. Wittwer is one of the founders of the Company. He has
been employed by the Company since 1982 serving in various positions including
Vice President of Finance and Administration, Director of Administration,
Executive Vice President, Chief Executive Officer, Treasurer and Chief Financial
and Accounting Officer. Mr. Wittwer is a Certified Public Accountant, is
currently serving as Executive Vice President and U.S. Country Manager, and has
served as a director of the Company since May 1993.
JAAP VAN DER MEER. Mr. Van der Meer joined ALPNET in September 1995 assuming
responsibilities for strategic development and worldwide sales and marketing.
Before Mr. Van der Meer joined ALPNET, he was the CEO of the INK Network, a
leading international translation/localization company. Mr. Van der Meer
founded INK in 1980 and he and his partners sold the company to R.R. Donnelley &
Sons Company in 1993. At the end of 1994, Mr. Van der Meer left Donnelley to
pursue his interests in combining telecommunications with language services and
worked on various consultancy projects in this area before joining ALPNET. Mr.
Van der Meer is of Dutch nationality and studied linguistics and literature at
the University of Amsterdam.
COMMITTEES OF THE BOARD OF DIRECTORS
AND MEETING ATTENDANCE
The Board of Directors has the responsibility of establishing broad
corporate policies and overseeing the overall performance of the Company.
Regular meetings of the Board of Directors are held once each quarter, and
special meetings are scheduled when required. There were four regular meetings
and one special meeting of the Board of Directors during 1995. All directors
attended all of the regular meetings and all of the current directors attended
the special meeting.
The Company has a standing Audit and Budget Committee of the Board of
Directors which is currently comprised of Messrs. Eichner and Seal. The
principal audit-related functions of the Audit and Budget Committee are to
consider and recommend the selection of independent public accountants to audit
the Company's financial statements, to review the Company's internal accounting
policies and controls, to review with the independent public accountants the
scope and content of their audit and their recommendations and comments with
respect to internal controls and accounting systems, and to reinforce the
independence of the independent public accountants. The principal budget-
related function of the Committee is to review and recommend for approval the
annual budget of the Company. During 1995, the Audit and Budget Committee held
one meeting.
The Company also has a standing Compensation Committee, currently comprised
of Messrs. Eichner and Seal. The functions of the Compensation Committee
include reviewing and making recommendations concerning the compensation of
executive officers, the granting of stock options to employees, and the
compensation policies of the Company. The Compensation Committee held two
meetings in 1995.
COMPENSATION OF DIRECTORS
Members of the Board of Directors are paid a quarterly fee of $200 for
services as a director. In addition, each director is paid $200 for attendance
at each meeting of the Board of Directors and $75 for attendance at each meeting
of any committees thereof. During 1995, $10,600 of directors' fees were paid,
$3,150 of which related to amounts earned in 1994.
In addition to the above remuneration, Mr. Eichner was paid a total of
$24,996 for independent consulting services provided to the Company during 1995.
CERTAIN SIGNIFICANT EMPLOYEES
In addition to the directors who also serve as officers, the Company has
certain significant employees who are engaged in management positions in its
international translation operations and other areas, as follows:
FRANCISCO CIVIT, 36. Country Manager of ALPNET Spain. Born in Barcelona,
Mr. Civit is a Telecommunications Engineer and completed his studies at the
Engineer of Telecommunications Superior Technical School of Barcelona in 1988.
He worked as a Product Manager for Square D Company Spain for several years.
Later, he was General Manager of a lighting manufacturing company before joining
ALPNET in December of 1991. Mr. Civit is fluent in Spanish and English.
RAYMOND J. KING, 39. Country Manager of ALPNET U.K. - South. Mr. King
obtained his Bachelor of Arts degree in German in 1979, with additional studies
in French and English. He has been with the U.K. operation for 13 years and
presently manages ALPNET U.K.'s international project management team as well as
its in-house electronic publishing group. Mr. King speaks English and German.
GERALDINE LIM, 42. Director of ALPNET Asia. Ms. Lim was born in Singapore
and attended both Chinese and English schools developing her language skills.
Her professional career started in the travel industry in the Far East. In the
Singapore Foreign Service, she headed the Consular and Administrative
Departments of the Singapore Commission in Hong Kong. Thereafter, she was a
freelance journalist. She is currently responsible for ALPNET's Far East
operations in Singapore, Hong Kong, Korea, China and Japan. Ms. Lim is fluent
in Chinese and English.
DAVID J. MARSHALL, 34. Country Manager of ALPNET U.K. - Regions and
Finance Director of ALPNET U.K. Mr. Marshall graduated with a degree in French
and German from the University of Durham in 1984. He qualified as a Chartered
Accountant with Arthur Andersen & Co. before joining ALPNET in 1988. Mr.
Marshall has operational responsibility over several of the U.K. offices and
also coordinates accounting and finance matters in the U.K. Mr. Marshall is
fluent in English, French and German.
DENIS MARTIN, 35. Country Manager of ALPNET France. Born in French
Canada, Mr. Martin graduated with a degree in French-English Translation from
the Concordia University in 1986. After two years in freelance translation, he
joined ALPNET Canada as Medical Translation Manager. He held positions in
marketing and production in Canada before moving to France where he took over
the management of ALPNET France. Mr. Martin is fluent in French and English.
DR. FRANCOIS MASSION, 41. Country Manager of ALPNET Germany. Dr. Massion
graduated as a translator from the University of Mayence. He obtained his
Doctorate at Erlangen University. He worked in Germany for 11 years for a large
Munich bank, for Erlangen University, and for a large manufacturing company
before joining ALPNET in 1989. Dr. Massion is fluent in French, German and
English.
D. KERRY STUBBS, 41. Chief Financial Officer, Treasurer, and Secretary.
Mr. Stubbs joined the Company in November 1993 as Vice President Finance. He
has been Chief Financial Officer and Treasurer since June 1994 and Secretary
since February 1995. His responsibilities include coordinating the
international accounting, finance and taxation functions of the Company as well
as managing and directing these functions in the U.S. A Certified Public
Accountant, he practiced with Ernst & Young for 13 years prior to joining the
Company.
DANIEL D. VINCENT, 41. Country Manager of ALPNET Canada. Mr. Vincent is a
Certified Management Accountant (Canada) and holds an M.B.A. degree from
Concordia University and a Bachelor of Business Administration with Honors from
Bishops University. Mr. Vincent has been managing ALPNET Canada since 1988.
Previously, Mr. Vincent spent three years as Vice President of Finance and
Administration at Comp-U-Card Canada, a large telemarketing service, and six
years as Corporate Controller/Treasurer for a subsidiary of RCA. Mr. Vincent is
fluent in French and English.
EXECUTIVE COMPENSATION
The information set forth below regarding Executive Compensation has been
prepared in compliance with SEC Regulation S-B. Regulation S-B simplifies
ongoing disclosure and filing requirements for qualifying small businesses in an
effort to reduce the compliance burdens placed on them by the Federal securities
laws. Accordingly, the Company is exempt from some of the expanded executive
compensation reporting requirements.
The following Summary Compensation Table sets forth the cash compensation
and certain other components of the compensation of Thomas F. Seal, the
President and Chief Executive Officer of the Company, and the other most highly
compensated executive officers (named executives) of the Company, whose total
annual salary and bonus exceeded $100,000 in 1995.
<TABLE>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards
Payouts
Other
Annual Restricted Securities All other
Compen- Stock Underlying LTIP Compen-
Name and Salary Bonus(1) sation(2) Award(s) Options Payouts sation(3)
Principal Position Year ($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thomas F. Seal 1995 124,000 17,000 10,800 0 750,000 0 25,943
President and Chief Executive
Officer 1994 120,000 0 1,600 0 0 0 0
1993 113,420 8,750 1,600 0 50,000 0 0
John W. Wittwer 1995 120,500 7,000 1,800 0 250,000 0 0
Executive Vice President 1994 118,000 0 1,600 0 0 0 0
1993 111,300 8,750 800 0 50,000 0 0
<FN>
(1) The amounts shown represent what was earned in the respective years. Certain of these amounts were paid in
subsequent years.
(2) Represents directors' fees earned for the respective years, and, for Mr. Seal, $9,000 of cost of living payments
due to increased foreign living expenses in 1995.
(3) Represents payments made to or for the benefit of the named executive for foreign housing and utilities
($19,647) and certain other specific foreign-location items ($6,296). The Company's Board of Directors has also
agreed to reimburse Mr. Seal for any foreign income tax costs which are incurred in excess of what would have
been paid by him absent the foreign assignment. No such amounts have yet been paid or determined for any of the
years presented.
</FN>
</TABLE>
OPTION GRANTS IN 1995
The following table sets forth certain information concerning options to
purchase restricted Common Stock granted during 1995 to the executives named in
the Summary Compensation Table.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
% of
Number Total
of Securities Options
Underlying Granted
Options to Employees Exercise Expiration
Name Granted(#)(1) in 1995 Price ($/Sh)(2) Date
<S> <C> <C> <C>
Thomas F. Seal 250,000 $.50 September 1, 2000
250,000 20.8% $.75 September 1, 2000
250,000 $1.10 September 1, 2000
John W. Wittwer 83,334 $.50 September 1, 2000
83,334 6.9% $.75 September 1, 2000
83,332 $1.10 September 1, 2000
<FN>
(1) All options granted and reported in this table have been granted with the terms described in the section "Compensation
Pursuant to Plans" under the heading "1995 Grant of Stock Options for Purchase of Restricted Stock," below.
(2) Exercise price was in excess of the fair market value on the date of grant of $.34375, determined by calculating the average
of high and low prices of Common Stock as reported by the Nasdaq Stock Market.
</FN>
</TABLE>
AGGREGATED OPTION EXERCISES IN 1995
AND DECEMBER 31, 1995 OPTION VALUES
The following table sets forth certain information concerning
the exercise in 1995 of options to purchase Common Stock by the Executives named
in the Summary Compensation Table and the unexercised options to purchase Common
Stock held by such individuals at December 31, 1995.
<TABLE>
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired Value 12/31/95 (#) 12/31/95 (2) ($)
on Exercise Realized(1)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C> <C> <C>
Thomas F. Seal 0 0 0 / 750,000 0 / 762,500
John W. Wittwer 0 0 0 / 250,000 0 / 254,167
<FN>
(1) The value realized equals the aggregate amount of the excess of the fair market value on the date of exercise (the average of
high and low prices of Common Stock as reported by the Nasdaq Stock Market for the exercise date) over the relevant exercise
price.
(2) The value is calculated based on the aggregate amount of the excess of the average of the high and low prices of Common Stock
as reported by the Nasdaq Stock Market for December 31, 1995 ($1.80) over the relevant exercise price(s). Options are "in-
the-money" if the fair market value of the underlying securities exceeds the exercise price of the option.
</FN>
</TABLE>
COMPENSATION PURSUANT TO PLANS
INCENTIVE STOCK OPTION PLAN
As of December 31, 1995, 136,577 shares were reserved for issuance under
the 1981 Incentive Stock Option Plan (the "1981 PLAN"). As of December 31,
1995, an aggregate of 47,677 shares of Common Stock had been issued upon
exercise of options granted under the 1981 Plan, and no options were
outstanding. No options were granted during 1995. The Company is no longer
granting new options under the 1981 Plan, primarily because of changes in the
U.S. individual income tax laws.
1983 NON-STATUTORY STOCK OPTION PLAN
The Company originally reserved 800,000 shares of Common Stock for issuance
under its 1983 Non-Statutory Stock Option Plan, as amended (the "1983 PLAN").
The 1983 Plan is administered by the Board of Directors (with recommendations
from the Compensation Committee), which selects the optionees and determines:
(i) the number of shares subject to each option; (ii) when the option becomes
exercisable; (iii) the exercise price; and (iv) the duration of the option,
which cannot exceed ten years from the date of the grant. The options granted
pursuant to the Company's 1983 Plan are reserved for issuance to key employees,
executive officers, directors and independent contractors of the Company and its
subsidiaries. Generally, the options expire if employment is terminated and are
non-transferable except by Will or the laws of descent and distribution as to
accrued or vested portions. In 1988, the initial term of the 1983 Plan expired.
The Board of Directors has extended the term of the 1983 Plan to 1998.
The Board of Directors may also grant stock appreciation rights ("SAR's")
in connection with specific options granted under the 1983 Plan. Each SAR
entitles the holder to either cash (in an amount equal to the excess of the fair
market value of a share of the Company's Common Stock over the option price of
the related option) or Common Stock (with the number of shares issued being
determined by dividing the SAR's cash value by the fair market value of a share
on the SAR exercise date). SAR's may be granted at the same time options under
the 1983 Plan are granted and to holders of previously granted options. No
SAR's have been granted under the 1983 Plan.
In August 1989, the shareholders of the Company approved a reallocation of
263,423 of the shares originally reserved under the Company's 1981 Incentive
Stock Option Plan as additional shares reserved for issuance under the 1983
Plan. Accordingly, the number of shares reserved for issuance under the 1983
Plan at December 31, 1995 was 1,063,423.
At December 31, 1995, 160,831 shares of Common Stock had been issued upon
exercise of options granted under the 1983 Plan, and options to purchase an
aggregate of 321,100 shares of the Company's Common Stock (net of exercises and
cancellations) were outstanding under the 1983 Plan. Based on 1,063,423 shares
reserved for issuance at December 31, 1995 and 481,931 shares issued or issuable
upon exercise of options granted under the 1983 Plan, options for an additional
581,492 shares could be granted in the future, under terms of the Plan.
However, in conjunction with the grant of stock options to certain executives of
the Company in August 1995, which are not part of the 1983 Plan or the 1981 Plan
(see below), the Board of Directors limited to 500,000 the number of shares that
could be issued under the terms of the two existing Plans of the Company, from
that date forward. This limitation effectively reduces the number of shares
which can be issued for stock options granted under the 1983 Plan from 581,492
shares to 123,700 shares at December 31, 1995.
1995 GRANT OF STOCK OPTIONS FOR PURCHASE OF RESTRICTED STOCK
In August 1995, the Board of Directors approved the grant of stock
options to nine members of management, including a new vice president of the
Company. In total, options to purchase 2,950,000 shares of restricted Common
Stock were granted, with the following terms and conditions. As currently
granted, 983,333 optioned shares vest on September 1, 1996 and are exercisable
at $.50 per share; 983,333 optioned shares vest on September 1, 1997 and are
exercisable at $.75 per share; and 983,334 optioned shares vest on September 1,
1998 and are exercisable at $1.10 per share. Options to purchase 750,000 shares
of Common Stock were granted to Thomas F. Seal (with vesting dates of September
1, 1996, 1997 and 1998) and 250,000 shares of Common Stock were granted to John
W. Wittwer (with vesting dates of September 1, 1996, 1997 and 1998).
All unexercised options expire on September 1, 2000 or when the employee
terminates employment with the Company, if sooner. All existing options (for
the purchase of approximately 450,000 shares of unrestricted Common Stock)
previously granted to members of management participating in the new grants,
were voluntarily forfeited. Thomas F. Seal forfeited options to purchase 93,489
shares of Common Stock and John W. Wittwer forfeited options to purchase 102,000
shares of Common Stock.
PROFIT SHARING 401(K) PLAN
In January 1986, the Company adopted a contributory profit sharing plan
("PLAN") which is designed to meet the requirements for qualification under
Section 401(k) of the Internal Revenue Code. The adoption of the Plan was
approved by the Board of Directors in November 1985. Under the provisions of
the Plan, a covered employee may elect a salary reduction and have an amount
equal to the reduction of salary contributed to the Plan for his or her benefit,
which contribution is excluded from the covered employee's taxable income. The
Company has the discretion to make additional contributions to the Plan for the
benefit of the employees, except that no discretionary contributions may be made
for any officer of the Company. The total of the Company's deductible annual
contribution may not exceed the lesser of 15% of the employee's annual
compensation or $30,000, reduced by such employee's elective deferral of
compensation, which may not exceed $9,240 per annum. Company contributions to
the Plan were $3,900 in 1995 and $1,700 in 1994.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of December 31, 1993, the Company's long-term debt to affiliates
consisted of the following:
<TABLE>
<CAPTION>
Thousands of dollars
<S> <C>
Secured note payable to H.F. Boeckmann, II, due in quarterly
installments commencing March 31, 1994 through June 30, 1996,
interest at prime plus 1.5% payable monthly $1,632
Secured note payable (300,000 Swiss francs) to Michael F. Eichner,
due in quarterly installments commencing March 31, 1994 through
June 30, 1996, interest at 9% payable monthly 243
Unsecured note payable to NFT Ventures, Inc., due in quarterly
installments commencing March 31, 1994 through September 30, 1995,
interest at prime plus 3% payable quarterly 175
$2,050
</TABLE>
In June 1994, the Company completed a capital restructuring with all
three of the shareholders holding the debt described above. The agreements
with these shareholders provided for the following:
(1) Conversion of the debt owed to H.F. Boeckmann, II and NFT Ventures,
Inc. into a new series of Convertible Preferred Stock of the
Company;
(2) Deferral of the due dates for repayment of the 300,000 Swiss franc
($243,000) note payable to Michael F. Eichner to 1996 and beyond;
and
(3) Elimination of all of the outstanding warrants held by these
shareholders to purchase up to 8,390,000 additional shares of
the Company's Common Stock.
The conversion of $1,807,000 of debt ($1,734,000, net of related costs)
to preferred shares resulted in the issuance of 584,257 shares of Series C
Preferred Stock. H.F. Boeckmann, II, received 527,691 shares and NFT Ventures,
Inc. received 56,566 shares. This Preferred Stock is convertible at the option
of the shareholders into common shares at a rate of nine common shares for each
preferred share, has voting rights as if the preferred shares were already
converted, and features a 10% non-cumulative dividend subject to the discretion
of the Board of Directors.
In conjunction with the capital restructuring, the Company entered into a
"financial monitoring agreement" with H.F. Boeckmann, II which requires the
Company, among other things, to obtain prior approval for major financing
transactions, significant asset purchases or sale of a major portion of the
Company's assets.
In August 1995, the Company converted the $243,000 debt owed to Michael
F. Eichner ($242,000, net of related costs) to a new series of Convertible
Preferred Stock of the Company. Mr. Eichner received 87,339 shares of series D
Preferred Stock, which is convertible at the option of the shareholder into
common shares at a rate of nine common shares for each preferred share, has
voting rights as if the preferred shares were already converted, and features a
10% non-cumulative dividend subject to the discretion of the Board of Directors.
The Company paid interest of approximately $40,700 to Mr. Boeckmann in
1994; approximately $14,300 and $19,900 to Mr. Eichner in 1995 and 1994,
respectively; and approximately $3,900 to NFT Ventures, Inc. in 1994.
In 1995, the Board of Directors granted options for the purchase of
2,950,000 shares of restricted Common Stock to nine members of management, all
as described in the section, "Compensation Pursuant to Plans" under the heading
"1995 Grant of Stock Options for Purchase of Restricted Stock."
In 1995, the Company issued 581,818 shares of restricted Common Stock to
Jaap van der Meer for net proceeds of approximately $194,000. In conjunction
with this transaction, the Company granted Mr. Van der Meer an option to acquire
500,000 shares of restricted Common Stock. The option was exercisable at date
of grant and expires on September 1, 2000, unless Mr. Van der Meer terminates
employment with the Company sooner. The price per share of $.34375 for both of
these transactions was based upon the average of high and low prices of Common
Stock as reported by the Nasdaq Stock Market on the day the Board of Directors
approved the transactions.
As of December 31, 1995, the Company has a $67,200 unsecured promissory
note receivable, bearing interest at prime plus 3%, from J.W. Wittwer, Executive
Vice President and Director. The note balance was $76,100 at December 31, 1994.
LITIGATION INVOLVING EXECUTIVE OFFICERS AND DIRECTORS
No executive officer or director of the Company has been during the past
five years, nor is presently, involved in any litigation material to such
executive officer's or director's ability to serve as such or as to his
integrity.
RATIFICATION OF SELECTION OF AUDITORS
(Proposal No. 2)
Subject to ratification by the shareholders, the Board of Directors, upon
the recommendation of the Audit Committee, has selected the accounting firm of
Ernst & Young LLP to serve as auditors of the financial records of the Company
and its subsidiaries for the fiscal year ending December 31, 1996. The
accounting firm of Ernst & Young LLP, and its predecessors, has been the
independent auditor of the Company since 1983.
One or more representatives of Ernst & Young LLP are expected to be present
at the annual meeting and will have an opportunity to make a statement and
respond to appropriate questions.
THE SELECTION OF ERNST & YOUNG LLP WILL BE SUBMITTED FOR RATIFICATION BY
THE SHAREHOLDERS AT THE ANNUAL MEETING. THE BOARD OF DIRECTORS RECOMMENDS A
VOTE "FOR" RATIFICATION OF THE SELECTION.
PROPOSAL TO APPROVE THE ALPNET
EXECUTIVE STOCK OPTION PLAN
(Proposal No. 3)
The Board of Directors has approved and proposes the adoption of the ALPNET
Executive Stock Option Plan (the "PLAN"), the approval of 2,950,000 shares to be
set aside for and be issuable under the Plan, and the approval of the term of
the Plan to September 1, 2000.
The primary purpose of the Plan is to afford an incentive to key executive
employees of the Company and to enable the Company to retain such key employees,
thereby promoting the interests of the Company and all its stockholders.
The Plan is intended to encompass certain existing stock options for the
purchase of restricted Common Stock previously granted in August 1995, all of
which are and will be "non-qualified" options within the meaning of the
applicable sections of the Internal Revenue Code, as amended. (See "Federal
Income Tax Consequences.") The significant features of the Plan, as it is
proposed, are as follows:
1. The Plan will be administered by the Board of Directors. The Board
shall interpret the Plan and prescribe such rules, regulations and
procedures in connection with the operation of the Plan as it shall
deem to be necessary.
2. The Plan provides for no additional grants of options unless some of
the previously granted options, as discussed hereafter, are forfeited
or terminated prior to September 1, 2000. Rather, the Plan
encompasses certain options already granted to the key executives in
August 1995 and changes no terms of those options except for (i) an
extension of the vesting dates from September 1, 1996, 1997 and 1998
to June 1, 1998, 1999 and 2000, and (ii) for registration of the stock
set aside for issuance with the SEC.
3. The options as modified will vest and become exercisable in three
equal installments on June 1, 1998 at an exercise price of $.50 per
share; June 1, 1999 at an exercise price of $.75 per share; and June
1, 2000 at an exercise price of $1.10 per share. All options will
terminate, if not sooner exercised, on September 1, 2000. The Plan
and the options will contain appropriate antidilution provisions for
adjustment of the number of shares subject to options and the option
price in the event of stock splits, stock dividends and certain other
events described in the Plan. The fair market value of the Company's
Common Stock as of August 17, 1995, the grant date, was $.34375 per
share, determined by calculating the average of high and low prices as
reported by the Nasdaq Stock Market. The fair market value of the
Company's Common Stock as of March 15, 1996 was $1.53125 per share,
determined by calculating the average of high and low prices as
reported by the Nasdaq Stock Market.
4. Upon adoption, the total number of shares of the Company's no-par
value Common Stock available for issuance upon the exercise of options
will be 2,950,000, issuable as follows:
<TABLE>
<CAPTION>
Name and Position Number of Shares
<S> <C>
Thomas F. Seal 750,000
President and CEO and
Nominee for Director
Jaap van der Meer 750,000
Vice President Sales and Marketing and
Nominee for Director
John W. Wittwer 250,000
Executive Vice President and
Nominee for Director
D. Kerry Stubbs 150,000
Chief Financial Officer, Treasurer and
Secretary
Current executive officers as a group 1,900,000
Raymond J. King 250,000
Country Manager of ALPNET U.K. - South
David J. Marshall 250,000
Country Manager of ALPNET U.K. - Regions
Dr. Francois Massion 250,000
Country Manager of ALPNET Germany
Geraldine Lim 150,000
Director of ALPNET Asia
Daniel D. Vincent 150,000
Country Manager of ALPNET Canada
All non-executive management as a group 1,050,000
Total 2,950,000
</TABLE>
Management currently contemplates registering the stock set aside for
issuance under the Plan with the Securities and Exchange Commission
("SEC").
5. The Plan initially would cover only the options granted to the nine
key executive employees of the Company listed above, although
additional options can be granted to other key employees if any of the
above options are forfeited for any reason.
6. The options are not transferable except to the optionee's estate in
the event of death. In the event of termination of employment of an
optionee, all options shall lapse immediately. In the event of death,
any outstanding options shall be exercisable for a period of six
months after death.
7. Payment of the exercise price can be made in full or part with the
stock of the Company valued at fair market value as of the date of
exercise of the option.
8. The vesting of options will accelerate under certain situations
involving a change in control of the Company.
9. The Board of Directors may at any time terminate, annul, modify or
suspend the Plan, subject to the following conditions: No termination
or modification shall terminate any outstanding options granted under
the Plan; no change can be made without stockholder approval if the
change increases the maximum number of shares which may be exercised
under the Plan or alters the option price so that it is less than the
fair market value of Common Stock on the grant date for any new option
grants, extends the option period longer than September 1, 2000 or
materially modifies the requirements as to eligibility for
participation in the Plan; or causes the options granted under the
Plan not to qualify for the exemption provided by Rule 16b-3 of the
Securities Exchange Act of 1934.
U.S. Income Tax Consequences
Based on management's understanding of existing U.S. income tax laws, the
principal consequence of the grant and exercise of non-qualifying stock options
is summarized as follows. The grant of non-qualifying options does not
ordinarily have any income tax consequences to the optionee. Upon exercise of
the option, the optionee will realize ordinary income for income tax purposes
equal to the difference between the fair market value of the shares received at
the date of exercise less the option price. If the optionee holds the shares
for a period of at least one year after the date of exercise, any additional
gain or loss will be treated as a long-term capital gain or loss for federal
income tax purposes. The Company will ordinarily be entitled to a tax deduction
equal to the income recognized only by the U.S. optionees at the date of
exercise. Optionees who are not U.S. citizens will need to consult their local
tax advisors to determine how the grant and exercise will be treated.
Approval of the Plan by the shareholders is being sought in order to comply
with the Rules of the National Association of Securities Dealers, Inc.,
regarding issuance of securities, and Rule 16b-3 promulgated under the
Securities and Exchange Act of 1934, as amended, regarding stock option plans.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ADOPTION OF
THE PROPOSED ALPNET EXECUTIVE STOCK OPTION PLAN.
VOTE NECESSARY FOR APPROVAL
A majority of the outstanding shares of Common Stock and Common Stock
equivalents of the Company represented at the annual meeting shall constitute a
quorum of the shareholders. Each matter to be voted upon at the annual meeting
for which this proxy statement is provided will be approved and adopted if at
least a majority of all outstanding shares of Common Stock and Common Stock
equivalents of the Company voted at the meeting are cast in favor of such
approval and adoption.
SHAREHOLDER PROPOSALS
Any shareholder proposals intended to be presented at the 1997 Annual
Meeting of Shareholders must be received by the Company by December 6, 1996 to
be considered by the Company for inclusion in the Company's proxy statement and
form of proxy relating to that meeting.
OTHER MATTERS
Neither the Company nor any of the persons named as proxies know of matters
other than those stated above to be presented and voted on at the annual
meeting. However, if any other matters should properly come before the meeting,
it is the intention of the persons named in the proxy to vote the proxy in
accordance with their judgment on such matters.
ANNUAL REPORT
The Annual Report to Shareholders of the Company for the fiscal year ended
December 31, 1995 includes the Company's Annual Report on Form 10-K and has been
mailed with this proxy statement to shareholders of record as of March 15, 1996,
but it is not deemed a part of the proxy soliciting materials.
FINANCIAL STATEMENTS
Financial statements for the Company and its subsidiaries are included in
the Annual Report to Shareholders for the Year 1995.
UPON WRITTEN REQUEST BY ANY SHAREHOLDER TO D. KERRY STUBBS, VICE PRESIDENT
FINANCE, ALPNET, INC., 4444 SOUTH 700 EAST, SUITE 204, SALT LAKE CITY, UTAH,
84107-3075, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, WILL BE PROVIDED WITHOUT CHARGE. EXHIBITS
TO THE FORM 10-K WILL BE FURNISHED ONLY UPON SPECIFIC REQUEST AND UPON PAYMENT
OF A FEE REPRESENTING THE EXPENSES OF FURNISHING ANY SUCH EXHIBITS.
By Order of the Board of Directors
D. Kerry Stubbs
Secretary
Salt Lake City, Utah
April 1, 1996
PROXY FOR 1996 ANNUAL MEETING
OF SHAREHOLDERS OF
ALPNET, INC.
4444 SOUTH 700 EAST, SUITE 204
SALT LAKE CITY, UTAH 84107-3075
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Thomas F. Seal and John W. Wittwer, and each of
them, as proxies of the undersigned, with full power of substitution and
revocation to each of them, for and in the name of the undersigned to vote all
shares of Common Stock of ALPNET, Inc. (the "COMPANY"), which the undersigned
would be entitled to vote if personally present at the Company's Annual Meeting
of Shareholders to be held on May 23, 1996, and at any adjournment or
adjournments thereof, with all the powers the undersigned would possess if
personally present, with authority to vote (i) as specified by the undersigned
below, and (ii) in the discretion of any proxy upon such other business as may
properly come before the meeting. THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" 1, 2 AND 3.
<TABLE>
<S><C>
1. ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) To vote for all nominees listed below
[INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE
NOMINEE'S NAME IN THE LIST BELOW.]
Michael F. Eichner, Thomas F. Seal, and John W. Wittwer
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS
OF THE COMPANY.
FOR AGAINST ABSTAIN
3. APPROVAL OF EXECUTIVE STOCK OPTION PLAN.
FOR AGAINST ABSTAIN
This proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder. IF NO DIRECTION
IS MADE, THE PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3 AND OTHERWISE IN THE DISCRETION OF ANY OF THE PROXIES.
Please sign exactly as your name appears on the label
to the left. When shares are held by joint tenants,
both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full
title as such. If a corporation, please sign full
corporate name by President or other authorized
officer. If a partnership, please sign in partnership
name by authorized person.
Stockholder Signature
DATED this day of 1996.
PLEASE VOTE, SIGN, DATE, AND RETURN THIS Stockholder Signature
PROXY USING THE ENCLOSED ENVELOPE. (Joint Signature if Applicable)
</TABLE>
ALPNET, INC.
1996 EXECUTIVE STOCK OPTION PLAN
SECTION 1
PURPOSE OF THE PLAN
The purpose of the ALPNET Executive Stock Option Plan (the "PLAN") is to
advance the interests of ALPNET, INC., a Utah corporation and its subsidiaries
(the "COMPANY"), by stimulating the efforts of key employees on behalf of the
Company, heightening the desire of key employees to continue employment with the
Company, assisting the Company in competing effectively with other enterprises
for the services of key employees by encouraging such key employees (the "KEY
EMPLOYEES") to acquire a stock ownership interest in the Company, thereby
promoting the interests of the Company and all its stockholders. Accordingly,
the Company, during the term of the Plan, will grant options to the Key
Employees to purchase shares of the Company's common stock, subject to the
conditions hereinafter provided.
SECTION 2
ADMINISTRATION OF THE PLAN
2.1. The Plan shall be administered by the Company's Board of Directors
(the "BOARD"). The Board shall keep records of action taken at its meetings.
2.2. The Board shall interpret the Plan and prescribe such rules,
regulations and procedures in connection with the operation of the Plan as it
shall deem to be necessary and advisable for the administration of the Plan
consistent with the purposes and terms of the Plan. All questions of
interpretation and application of the Plan, or as to options granted under the
Plan, shall be subject to the determination of the Board, which shall be final
and binding.
2.3. For purposes of Rule 16b-3 promulgated under the Securities Exchange
Act of 1934 (the "ACT"), the Plan's administration complies with the provisions
of Rule 16b-3(c)(2)(ii) of the Act.
SECTION 3
ELIGIBILITY OF GRANTEES
3.1. Options shall be granted only to Key Employees of the Company as
determined by the Board.
3.2. Nothing in the Plan, in any option granted under the Plan, or in any
option agreement shall confer any right to any person to continue as an employee
of the Company or interfere in any way with the rights of the stockholders of
the Company or the Company's Board to hire and fire employees.
SECTION 4
STOCK AVAILABLE UNDER THE PLAN
4.1. The stock to be issued upon exercise of options granted under the Plan
shall be the Company's common stock, without par value ("COMMON STOCK"), that
shall be made available either from authorized but unissued Common Stock or from
Common Stock reacquired by the Company, including shares purchased in the open
market. The aggregate number of shares of Common Stock that may be issued under
options granted pursuant to the Plan shall not exceed Two Million Nine Hundred
Fifty Thousand (2,950,000) shares. The limitations established by the preceding
sentence shall be subject to adjustment as provided in Section 11 of the Plan.
4.2. If any option granted under the Plan is cancelled by mutual consent or
terminates or expires for any reason without having been exercised in full, the
shares of Common Stock allocable to the unexercised portion of such option may
again be made subject to options under the Plan.
4.3. The Common Stock which will be issued upon exercise of an option
granted hereunder is being registered with the Securities and Exchange
Commission, and listed or qualified on such securities exchange or automated
stock quotation system as is necessary to allow such common stock to be freely
traded.
SECTION 5
TYPE OF OPTION
Only "nonstatutory stock options" shall be granted under the terms of the
Plan. For purposes of the Plan, the term "nonstatutory stock options" shall
mean an option which does not qualify under Section 422 or 423 of the Internal
Revenue Code of 1986, as amended.
SECTION 6
GRANT OF OPTION
6.1. The Key Employees received the grant of Options being administered
under the Plan on 17 August 1995 in such amounts as set forth on the schedule
attached hereto. This Plan amends the terms of the Options granted on 17 August
1995 as herein set forth. The amendments to the Options granted on 17 August
1995 are not deemed to be material for purposes of Rule 16b-3(b)(2).
6.2. Each option granted shall vest and become exercisable in three equal
installments on 1 June 1998, 1 June 1999 and 1 June 2000.
6.3. Subject to Section 9, each option shall be exercisable until 1
September 2000 and not thereafter. An option, to the extent exercisable at any
time, may be exercised in whole or in part, but in not less than One Thousand
(1,000) share increments.
6.4. All options have been confirmed by an agreement, or an amendment
thereto, which has been executed on behalf of the Company by the Chairman of the
Board and by the grantee.
SECTION 7
OPTION PRICE
7.1. The option price per share shall be $0.50 per share for those options
vesting on 1 June 1998, $0.75 per share for those options vesting on 1 June
1999, and $1.10 per share for those options vesting on 1 June 2000 (the "CURRENT
OPTION PRICE").
7.2. With respect to options granted pursuant to the Plan in the future,
the option price per share shall be no less than One Hundred percent (100%) of
the "fair market value" of one share of Common Stock on the date the option is
granted (the "OPTION PRICE").
7.3. As used in this Plan, the term "FAIR MARKET VALUE" shall be deemed to
be the average bid and ask closing prices of the Company's Common Stock as
reported on the National Association of Securities Dealers Automated Quotations
System (or the principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which the Common Stock is listed at the time)
("NASDAQ") on the date the option is granted. If there are not NASDAQ closing
price quotations for the date as of which fair market value is to be determined,
then the fair market value shall be determined by reference to the NASDAQ
closing price quotations for the next preceding day on which closing price
quotations are reported by NASDAQ.
7.4. The Option Price shall be subject to adjustment only as provided in
Section 11 of the Plan.
SECTION 8
EXERCISE OF OPTIONS
8.1. A grantee electing to exercise an option shall give written notice to
the Company of such election and of the number of shares he or she has elected
to purchase, in such form as the Board shall have prescribed or approved, and
shall at the time of exercise tender the full Option Price of the shares he or
she has elected to purchase.
8.2. The Option Price shall be paid in full upon exercise and shall be
payable in cash in United States dollars (including check, bank draft or money
order); provided, however, that in lieu of cash, the person exercising the
option may pay the Option Price in whole or in part by delivering to the Company
shares of the Common Stock owned by him and having a fair market value on the
date of exercise equal to the cash Option Price applicable to his or her option,
except that (i) any portion of the Option Price representing a fraction of a
share shall in any event be paid in cash and (ii) no shares of the Common Stock
which have been held for less than six (6) months may be delivered in payment of
the Option Price of an option. Delivery of shares may also be accomplished
through the effective transfer to the Company of shares held by a broker or
other agent.
8.3. Notwithstanding the provisions of Section 8.2 above, the exercise of
the option shall not be deemed to occur and no shares of Common Stock will be
issued by the Company upon exercise of the option until the Company has received
payment of the Option Price in full.
8.4. A grantee shall have no rights as a stockholder with respect to any
shares covered by his or her option(s) until the date a stock certificate is
issued evidencing ownership of the shares. No adjustments shall be made for
dividends (ordinary or extraordinary), whether in cash, securities or other
property, or distributions or other rights, for which the record date is prior
to the date such stock certificate is issued, except as provided in Section 11
hereof.
8.5. Payment of the option price with shares of Common Stock shall not
increase the number of shares of Common Stock which may be issued under the Plan
as provided in Section 4 above.
8.6. Notwithstanding any provision of the Plan or any provision or
limitation in any option to the contrary, if a grantee's employment is
involuntarily terminated (with or without cause) within two (2) years after a
"change in control of the Company" (as defined below), then all outstanding
options held by such grantee shall immediately be vested and become exercisable.
As used herein, a "CHANGE IN CONTROL OF THE COMPANY" shall be deemed to have
occurred if (i) any person (as such term is used in Section 13(d) and 14(d) of
the Act) is or becomes the beneficial owner (as such term is used in Rule 13d-3
under the Act) of securities of the Company representing 35% or more of the
combined voting power of the Company, or (ii) the stockholders of the Company
approve (A) a plan of merger or consolidation of the Company (unless,
immediately following consummation of such merger or consolidation, the persons
who held the Company's voting securities immediately prior to consummation
thereof will hold at least a majority of the total voting power of the surviving
or new corporation), or (B) a sale or disposition of all or substantially all
assets of the Company, or (C) a plan of liquidation or dissolution of the
Company.
SECTION 9
RESTRICTIONS ON TRANSFERABILITY OF OPTIONS
9.1. No option shall be transferable by the grantee otherwise than by Will,
or if the Grantee dies intestate, by the laws of descent and distribution of the
state of domicile of the grantee at the time of death. All options shall be
exercisable during the lifetime of the grantee only by the grantee. These
restrictions on transferability shall not apply to the extent such restrictions
are not at the time required for the Plan to continue to meet the requirements
of Rule 16b-3 of the Act, or any successor Rule.
9.2. If a grantee ceases to be an employee, officer, director or
independent contractor of the Company for any reason, any outstanding options
held by the grantee shall be exercisable according to the following provisions:
9.2.1. If a grantee ceases to be an employee, officer, director or
independent contractor of the Company for any reason other than death, any
outstanding options held by such grantee shall terminate as of the date on which
the grantee ceases to be an employee, officer, director or independent
contractor;
9.2.2. If a grantee dies, any outstanding options held by the
grantee, which are exercisable by the grantee immediately prior to his or her
death shall be exercisable by the person entitled to do so under the Will of the
grantee, or, if the grantee shall fail to make testamentary disposition of the
options or shall die intestate, by the legal representative of the grantee's
estate, at any time prior to the expiration date of such options or within six
(6) months after the date of the grantee's death, whichever period is shorter.
SECTION 10
AMENDMENT OR TERMINATION OF THE PLAN
The Board may at any time terminate, annul, modify or suspend the Plan,
subject to the following conditions:
10.1. No termination of the Plan shall terminate any outstanding options
granted under the Plan.
10.2. The Board cannot amend the Plan more often than once per six-month
period except for amendments to comply with changes in federal tax and ERISA
laws and the rules thereunder.
10.3. No amendment of the Plan shall be made without stockholder approval
if stockholder approval of the amendment is at the time required for options
under the Plan to qualify for the exemption from Section 16(b) of the Act
provided by Rule 16b-3, or any successor Rule, or by the rules of any stock
exchange or automated quotation system on which the Common Stock may then be
listed.
10.4. The Board cannot amend, modify, suspend, or terminate the Plan in
such a way that affects any options previously granted under the Plan without
the consent of the grantee.
10.5. Without the approval of the stockholders of the Company, no
amendment or modification shall be made by the Board that:
10.5.1. Increases the maximum number of shares as to which options
may be granted under the Plan;
10.5.2. Alters the method by which the option price is determined
pursuant to Section 7;
10.5.3. Extends any option for a period longer than 1 September 2000;
10.5.4. Materially modifies the requirements as to eligibility for
participation in the Plan;
10.5.5. Provides for the administration of the Plan which is not in
compliance with the provisions of Rule 16b-3(c)(2);
10.5.6. Causes the options granted under the Plan not to qualify for
the exemption provided by Rule 16b-3, or any successor Rule; or
10.5.7. Alters this Section 10 so as to defeat its purpose.
10.6. Notwithstanding anything contained in the preceding paragraph or any
other provision of the Plan or any option agreement, the Board shall have the
power to amend the Plan in any manner deemed necessary or advisable for the
options granted under the Plan to qualify for the exemption provided by Rule
16b-3 (or any successor rule relating to exemption from Section 16(b) of the
Act), and any such amendment shall, to the extent deemed necessary or advisable
by the Board, be applicable to any outstanding options theretofore granted under
the Plan notwithstanding any contrary provisions contained in any option
agreement. In the event of any such amendment to the Plan, the holder of any
option outstanding under the Plan shall, upon request of the Board and as a
condition to the exercisability of such option, execute a conforming amendment
in the form prescribed by the Board to their option agreement within such
reasonable time as the Board shall specify in such request.
SECTION 11
CHANGES IN CAPITALIZATION
11.1. In the event that the shares of stock of the Company, as presently
constituted, shall be changed into or exchanged for a different number or kind
of shares of stock or other securities of the Company or of another corporation
(whether by reason of merger, consolidation, recapitalization, reclassification,
split-up, combination of shares or otherwise) or if the number of such shares of
stock shall be increased through the payment of a stock dividend, then, subject
to the provisions of Section 11.3 below, there shall be substituted for or added
to each share of stock of the Company which was theretofore appropriated, or
which thereafter may become subject to an option under the Plan, the number and
kind of shares of stock or other securities into which each outstanding share of
the stock of the Company shall be so changed or for which each such share shall
be exchanged or to which each such share shall be entitled, as the case may be.
Outstanding options shall also be appropriately amended as to price and other
terms, as may be necessary to reflect the foregoing events.
11.2. Subject to the provisions of Section 8.6, a dissolution or
liquidation of the Company, or a merger or consolidation in which the Company is
not the surviving corporation, shall cause each outstanding option to terminate,
except to the extent that another corporation may and does in the transaction
assume and continue the option or substitute its own options.
11.3. Fractional shares resulting from any adjustment in options pursuant
to this Section 11 may be dealt with as the Board shall determine.
11.4. To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Notice of
any adjustment shall be given by the Company to each holder of an option which
shall have been so adjusted.
11.5. The grant of an option pursuant to the Plan shall not affect in any
way the right or power of the Company to make adjustments, reclassifications,
reorganization or changes of its capital or business structure, to merge, to
consolidate, to dissolve, to liquidate or to sell or transfer all or any part of
its business or assets.
SECTION 12
EFFECTIVE DATE AND DURATION OF PLAN
The Plan shall become effective upon approval by the affirmative vote of
the holders of a majority of the Common Stock present in person or by proxy and
entitled to vote at a duly called and convened meeting of the Company's
stockholders. If such approval is obtained at the Annual Meeting of
Stockholders in 1996, the Plan shall be effective on the date of such meeting,
and shall terminate on 1 September 2000.
THE ALPNET 1996 EXECUTIVE STOCK OPTION PLAN WAS APPROVED AND ADOPTED BY THE
SHAREHOLDERS ON 23 MAY 1996.
EXHIBIT TO
ALPNET EXECUTIVE STOCK OPTION PLAN
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF SHARES
<S> <C>
Thomas F. Seal 750,000
President and CEO
Jaap van der Meer 750,000
Vice President Sales and Marketing
John W. Wittwer 250,000
Executive Vice President
D. Kerry Stubbs 150,000
Chief Financial Officer, Treasurer and
Secretary
Raymond J. King 250,000
Country Manager of ALPNET U.K. - South
David J. Marshall 250,000
Country Manager of ALPNET U.K. - Regions
Dr. Francois Massion 250,000
Country Manager of ALPNET - Germany
Geraldine Lim 150,000
Director of ALPNET Asia
Daniel D. Vincent 150,000
Country Manager of ALPNET Canada
</TABLE>
