<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT
OF 1934 (AMENDMENT NO. ____)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential for Use of the Commission Only
/X/ Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
CIPRICO, INC.
________________________________________________________________________________
(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/ $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:______________________________________________________________
<PAGE> 2
CIPRICO INC.
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------
The Annual Meeting of Shareholders of Ciprico Inc. will be held on
Thursday, January 25, 1996, at 3:30 p.m. (Minneapolis time), at the Sheraton
Park Place Hotel, 1500 Park Place Boulevard, Minneapolis, Minnesota, for the
following purposes:
1. To set the number of directors at six (6).
2. To elect two Class II directors for the ensuing year.
3. To approve amendments to the Company's 1992 Nonqualified Stock Option
Plan and 1994 Incentive Stock Option Plan and to approve adoption of the
Company's 1996 Restricted Stock Plan and 1996 Employee Stock Purchase
Plan.
4. To consider and act upon such other matters as may properly come before
the meeting and any adjournments thereof.
Only shareholders of record at the close of business on December 6, 1995,
are entitled to notice of and to vote at the meeting or any adjournment thereof.
Your vote is important. We ask that you complete, sign, date and return the
enclosed proxy in the envelope provided for your convenience. The prompt return
of proxies will save the Company the expense of further requests for proxies.
BY ORDER OF THE BOARD OF DIRECTORS
ROBERT H. KILL
President
PLYMOUTH, MINNESOTA
DECEMBER 15, 1995
<PAGE> 3
CIPRICO INC.
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 25, 1996
------------------
PROXY STATEMENT
------------------
INTRODUCTION
Your Proxy is solicited by the Board of Directors of Ciprico Inc. ("the
Company") for use at the Annual Meeting of Shareholders to be held on January
25, 1996, at the location and for the purposes set forth in the notice of
meeting, and at any adjournment thereof.
The cost of soliciting proxies, including the preparation, assembly and
mailing of the proxies and soliciting material, as well as the cost of
forwarding such material to beneficial owners of stock, will be borne by the
Company. Directors, officers and regular employees of the Company may, without
compensation other than their regular remuneration, solicit proxies personally
or by telephone.
Any shareholder giving a proxy may revoke it at any time prior to its use
at the meeting by giving written notice of such revocation to the Secretary of
the Company. Proxies not revoked will be voted in accordance with the choice
specified by shareholders by means of the ballot provided on the Proxy for that
purpose. Proxies which are signed but which lack any such specification will,
subject to the following, be voted in favor of the proposals set forth in the
Notice of Meeting and in favor of the number and slate of directors proposed by
the Board of Directors and listed herein. If a shareholder abstains from voting
as to any matter, then the shares held by such shareholder shall be deemed
present at the meeting for purposes of determining a quorum and for purposes of
calculating the vote with respect to such matter, but shall not be deemed to
have been voted in favor of such matter. Abstentions, therefore, as to any
proposal will have the same effect as votes against such proposal. If a broker
returns a "non-vote" proxy, indicating a lack of voting instructions by the
beneficial holder of the shares and a lack of discretionary authority on the
part of the broker to vote on a particular matter, then the shares covered by
such non-vote shall be deemed present at the meeting for purposes of determining
a quorum but shall not be deemed to be represented at the meeting for purposes
of calculating the vote required for approval of such matter.
The mailing address of the principal executive office of the Company is
2800 Campus Drive, Plymouth, Minnesota 55441. The Company expects that this
Proxy Statement, the related proxy and notice of meeting will first be mailed to
shareholders on or about December 15, 1995.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed December 6, 1995, as the
record date for determining shareholders entitled to vote at the Annual Meeting.
Persons who were not shareholders on such date will not be allowed to vote at
the Annual Meeting. At the close of business on December 6, 1995, 2,271,071
shares of the Company's Common Stock were issued and outstanding. The Common
Stock is the only outstanding class of capital stock of the Company entitled to
vote at the meeting. Each share of Common Stock is entitled to one vote on each
matter to be voted upon at the meeting. Holders of Common Stock are not entitled
to cumulative voting rights.
1
<PAGE> 4
PRINCIPAL SHAREHOLDERS
The following table provides information concerning persons known to the
Company to be the beneficial owners of more than 5% of the Company's outstanding
Common Stock as of December 6, 1995. Unless otherwise indicated, the
shareholders listed in the table have sole voting and investment powers with
respect to the shares indicated.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT OF
BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
- ------------------- ------------------ ----------
<S> <C> <C>
Perkins Capital Management, Inc. 910,600(1) 40.1%
708 E. Lake Street
Wayzata, MN 55391
</TABLE>
- ---------------
(1) Perkins Capital Management, Inc. has indicated that as of October 31, 1995,
it beneficially owns 788,050 shares, that it has no voting power as to
757,050 of such shares and that it has sole dispositive power over all of
such shares.
MANAGEMENT SHAREHOLDINGS
The following table sets forth the number of shares of Common Stock
beneficially owned as of December 6, 1995 by each executive officer of the
Company named in the Summary Compensation table, by each current director and
nominee for director of the Company and by all directors and executive officers
(including the named individuals) as a group. Unless otherwise indicated, the
shareholders listed in the table have sole voting and investment powers with
respect to the shares indicated.
<TABLE>
<CAPTION>
NAME OF DIRECTOR/NOMINEE NUMBER OF SHARES PERCENT OF
OR IDENTITY OF GROUP BENEFICIALLY OWNED CLASS (1)
- ------------------------ ------------------ ----------
<S> <C> <C>
Robert H. Kill 53,384(2) 2.3%
Ronald B. Thomas 29,847(3)(4)(5) 1.3%
Donald H. Soukup 21,000(3)(4)(5) *
William N. Wray 6,000(3)(5)(6) *
Gary L. Deaner 0(5)(7) *
Peyton Gannaway 0(5) *
All officers and directors as a group
(5 persons) 130,861(8) 5.5%
</TABLE>
- ---------------
* Less than 1%
(1) Shares not outstanding but deemed beneficially owned by virtue of the right
of a person to acquire them as of December 6, 1995, or within sixty days of
such date are treated as outstanding only when determining the percent
owned by such individual and when determining the percent owned by a group.
(2) Amount includes 40,000 shares purchasable upon exercise of options presently
exercisable or exercisable within sixty dates of December 6, 1995.
(3) Does not include 4,000 shares which will be granted to and become
exercisable by such individual on January 25, 1996 pursuant to an automatic
grant under the Company's 1992 Nonqualified Stock Option Plan.
(4) Amount includes 21,000 shares purchasable upon exercise of options presently
exercisable or exercisable within sixty days of December 6, 1995.
(5) Does not include 4,000 shares which will be granted to and become
exercisable by such individual on January 25, 1996 pursuant to an automatic
grant provision under the Company's 1992 Nonqualified Stock Option Plan, if
the proposed amendment of such provision is approved by the shareholders.
(See Proposal #3 below.)
2
<PAGE> 5
(6) Such shares are not outstanding but are purchasable upon exercise of options
presently exercisable or exercisable within sixty days of December 6, 1995.
(7) Does not include 3,000 shares which will be granted to and become
exercisable by such individual on January 25, 1996 pursuant to an automatic
grant under the Company's 1992 Nonqualified Stock Option Plan.
(8) Amount includes 98,400 shares purchasable upon exercise of options presently
exercisable or exercisable within sixty days of December 6, 1995.
ELECTION OF DIRECTORS
(PROPOSALS #1 AND #2)
GENERAL INFORMATION
The Certificate of Incorporation and Bylaws of the Company provide that the
Board of Directors shall consist of not less than three directors and not more
than six directors, that the number of directors to be elected shall be
determined by the shareholders at each annual meeting, and that the number of
directors may be increased by the Board between annual meetings. The Certificate
of Incorporation also provides for the election of three classes of directors
with terms staggered so as to require the election of only one class of
directors each year. Only directors who are members of Class II will be elected
at the Annual Meeting. Directors who are members of Classes I and III will
continue to serve for the terms for which they were previously elected.
Subsequent to the 1995 annual meeting of shareholders, the Board increased the
number of directors to five and elected Gary L. Deaner as a Class III director.
The Board now recommends that the number of directors be set at six and that two
Class II directors be elected at the Annual Meeting. The affirmative vote of the
holders of a majority of the shares represented and voting at the Annual Meeting
is required to set the number of directors at six. The Board of Directors
nominates Ronald B. Thomas for re-election as a Class II director and nominates
Peyton Gannaway as a Class II director to fill the position resulting from the
Board's expansion from five to six members. If elected, Messrs. Thomas and
Gannaway will each serve for a three year term as a Class II director and until
his successor has been duly elected and qualified.
Unless authority is withheld, the proxies solicited hereby will be voted
for the election of Ronald B. Thomas and Peyton Gannaway as directors for a term
of three years. If, prior to the meeting, it should become known that either
Class II nominee will be unable to serve as a director after the meeting by
reason of death, incapacity or other unexpected occurrence, the proxies will be
voted for such substitute nominee as is selected by the Board of Directors or,
alternatively, not voted for any nominee. The Board of Directors has no reason
to believe that either nominee will be unable to serve. The election of
directors is decided by a plurality of the votes cast. Following is information
about the nominees and all other directors of the Company whose terms continue
beyond the Annual Meeting.
Ronald B. Thomas (Class II, term ending at 1996 Annual Meeting), age 52,
has been Chairman of the Board of the Company since March 1988, and a director
since the Company's incorporation in February 1978. He has been a private
investor since March 1988. Mr. Thomas served as President and Treasurer of the
Company from February 1978 to March 1988 and was the sole proprietor of the
Company's unincorporated predecessor.
Peyton Gannaway (Class II nominee), age 56, was President, Chief Operating
Officer and a director of Anthem Electronics from 1984 until his retirement in
1994. Prior to that time, Mr. Gannaway was Vice President and Senior Vice
President of Anthem from 1975 to 1984. Mr. Gannaway is a director of Aptos
Semiconductor.
Robert H. Kill (Class III, term ending at 1997 Annual Meeting), age 48, has
been President of the Company since March 1988 and a director since September
1987. Mr. Kill was Executive Vice President of the Company from September 1987
to March 1988, Secretary from September 1987 to July 1988 and from November 1989
to October 1993, and Vice President and General Manager from August 1986 to
September
3
<PAGE> 6
1987. Mr. Kill held several marketing and sales positions at Northern Telecom,
Inc. from 1979 to 1986, his latest position being Vice President, Terminals
Distribution.
Gary L. Deaner (Class III, term ending at 1997 Annual Meeting), age 55, was
elected a director of the Company in May 1995 to fill a position created by the
Board's expansion. Mr. Deaner has been Vice President and General Manager, Lan
Connect, of Digi International, Inc., a manufacturer of compute communications
products since January 1995. From August 1991 to January 1995 Mr. Deaner served
as President of Arnet Corporation, a subsidiary of Digi International, and from
1985 to 1991 he was Vice President of Marketing for Digi International.
Donald H. Soukup (Class I, term ending at 1998 Annual Meeting), age 55,
became a director of the Company in March 1982. Mr. Soukup has been an
independent venture capitalist for more than five years. Mr. Soukup is also a
director of MinnTech, Inc. and several privately held companies.
William N. Wray (Class I, term ending at 1998 Annual Meeting), age 67, has
been a director of the Company since July 1993. Prior to his retirement in 1988,
Mr. Wray held various management positions at Honeywell, Inc., the most recent
being Executive Vice President of Honeywell Information Systems (from 1985 to
1989) and Executive Vice President of Corporate Marketing (from 1987 to 1988).
Mr. Wray is currently employed by Honeywell Consultants, Ltd., an organization
comprised of top Honeywell executives who have retired and are now involved in
civic and nonprofit organizations.
There are no arrangements or understandings between any of the directors or
any other person (other than arrangements or understandings with directors
acting as such) pursuant to which any person was selected as a director or
nominee of the Company. There are no family relationships among the Company's
directors.
COMMITTEE AND BOARD MEETINGS
The Company's Board of Directors has two standing committees, the Audit
Committee and the Compensation Committee. The Audit Committee was established in
July 1983 and its current members are Donald H. Soukup and William N. Wray. This
committee is responsible for reviewing the Company's internal audit procedures,
the quarterly and annual financial statements of the Company, and reviewing with
the Company's independent accountants the results of the annual audit. The Audit
Committee met once during fiscal 1995. The Compensation Committee was also
established late in fiscal 1983 and its current members are Donald H. Soukup,
William N. Wray and Ronald B. Thomas. The Compensation Committee recommends to
the Board of Directors from time to time the salaries and other compensation to
be paid to executive officers of the Company and administers the Company's stock
option and proposed restricted stock plans. The Compensation Committee met four
times during fiscal 1995. Members of both of such Committees meet informally
from time to time throughout the year on Committee matters.
During fiscal 1995, the Board of Directors held five meetings. Each
incumbent director attended 75% or more of the total number of meetings (held
during the period(s) for which he has been a director or served on committee(s))
of the Board and of committee(s) of which he was a member.
DIRECTORS FEES
Directors who are not employees of the Company receive $500 for each Board
meeting attended. In addition, under the Company's 1992 Nonqualified Stock
Option Plan, on the date of each of the Company's five annual meetings
commencing with the 1992 annual meeting, each person who served as a nonemployee
director during the year preceding such annual meeting has received a five-year
option to purchase 4,000 shares of the Company's Common Stock at an exercise
price equal to the average of the closing prices of the Company's Common Stock
for the ten trading days ending with the date of such annual meeting. Any person
who served as a director for less than a full year preceding the annual meeting
has been granted an option covering that number of shares determined by
multiplying 4,000 by a fraction the numerator of which is the number of months
during the preceding year during which such director served as a director and
the denominator of which is twelve. As of January 26, 1995, the date of the 1995
annual meeting, Messrs. Donald H. Soukup, Ronald B. Thomas and William N. Wray
each received an option for the
4
<PAGE> 7
purchase of 4,000 shares at an exercise price of $5.856 per share. In the
future, if the proposed amendment to the automatic grant provision of the 1992
Plan is approved by the shareholders, commencing with the 1996 annual meeting of
shareholders and at each annual meeting thereafter, each nonemployee director
who is elected or re-elected to the Board at such meeting, or whose term of
office continues after the meeting, shall receive an option for 4,000 shares.
See Proposal #3 below.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding compensation paid
during each of the Company's last three fiscal years to the Company's President
and Chief Executive Officer, the only executive officer whose salary and bonus
for fiscal 1995 exceeded $100,000.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------- ---------------------- -------
OTHER ANNUAL RESTRICTED OPTIONS/ LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION STOCK SARS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) AWARD(S) (#) ($) (4)(1)
- ------------------- ---- ------- ------ ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert H. Kill, 1995 140,000 6,000 -0- 5,002(2) 10,000 -0- 1,402
President and 1994 131,000 6,000 -0- -0- 27,430 -0- 1,340
CEO 1993 128,000 -0- -0- -0- 37,860 -0- 1,280
</TABLE>
- ---------------
(1) Amount reflects Company contributions to the Company's Savings Plan, a
401(k) plan, on Mr. Kill's behalf.
(2) Amount reflects 1,053 shares of restricted stock having an aggregate market
value of $11,583 at September 30, 1995. The shares remain forfeitable until
December 31, 1996 unless Mr. Kill's employment is terminated by the Company
without cause or there is a change of control of the Company. Dividends, if
declared by the Company, will be paid on the shares.
OPTION/SAR GRANTS DURING 1995 FISCAL YEAR
The following table sets forth information regarding stock options granted
to the named executive officer during the fiscal year ended September 30, 1995.
The Company has not granted stock appreciation rights.
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS/SARS EXERCISE OR
OPTIONS/SARS GRANTED TO EMPLOYEES BASE PRICE EXPIRATION
NAME GRANTED (#) IN FISCAL YEAR ($/SH) DATE
- -------------------------------------- ------------ -------------------- ----------- ----------
<S> <C> <C> <C> <C>
Robert H. Kill 10,000 9% 5.875 1/26/00
</TABLE>
- ---------------
(1) Such option is exercisable as to 2,500 shares per year commencing January
26, 1996.
AGGREGATED OPTION/SAR EXERCISES DURING 1995 FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
The following table provides information related to options exercised by
the named executive officer during fiscal 1995 and the number and value of
options held at fiscal year end.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
SHARES ACQUIRED VALUE AT FY-END(#) AT FY-END($)
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
- --------------- --------------- ----------- ------------------------- ----------------------------
<S> <C> <C> <C> <C> <C>
Robert H. Kill 37,430 $ 109,614 25,000/35,000 $187,188/$224,063
</TABLE>
- ---------------
(1) These amounts represent the difference between the exercise price of the
in-the-money options and the market price of the Company's Common Stock on
September 30, 1995. The closing price of the Company's Common Stock on that
day on the Nasdaq Stock Market was $11.00. Options are in-the-money if the
market value of the shares covered thereby is greater than the option
exercise price.
5
<PAGE> 8
APPROVAL OF AMENDMENTS TO 1992 NONQUALIFIED STOCK OPTION PLAN
AND 1994 INCENTIVE STOCK OPTION PLAN AND
APPROVAL OF ADOPTION OF 1996 RESTRICTED STOCK PLAN AND
1996 EMPLOYEE STOCK PURCHASE PLAN
(PROPOSAL #3)
PROPOSED RESOLUTIONS
General. The Board of Directors recommends the adoption of a five-part
resolution in order to amend two existing stock option plans and to adopt two
additional employee benefit plans. Specifically, the resolution will (1)
increase by 100,000 the number of shares reserved for issuance under the 1992
Nonqualified Stock Option Plan (the "1992 Plan"), (2) adopt an amendment to the
automatic nonemployee director option grants under the 1992 Plan, (3) increase
by 250,000 the number of shares reserved for issuance under the 1994 Incentive
Stock Option Plan (the "1994 Plan"), (4) adopt the Ciprico Inc. 1996 Restricted
Stock Plan and (5) adopt the Ciprico Inc. 1996 Employee Stock Purchase Plan.
Increase in Shares Reserved Under Plans. There were initially 150,000
shares reserved for issuance under the 1992 Plan, of which 41,651 shares have
been issued and 75,234 shares are subject to currently outstanding options.
There were initially 250,000 shares reserved for issuance under the 1994 Plan,
of which 26,656 shares have been issued and 218,347 shares are subject to
currently outstanding options. In order to provide sufficient shares for future
grants to employees, consultants, directors and others, shareholders are asked
to approve the reservation of 100,000 additional shares under the 1992 Plan and
250,000 additional shares under the 1994 Plan.
Director Automatic Option Grants. The Board of Directors has adopted,
subject to shareholder approval, an amendment to the 1992 Plan relating to
automatic option grants to nonemployee directors. Under the current provisions
of the 1992 Plan, at each annual meeting of shareholders each nonemployee
director who served on the Board during the preceding year is automatically
granted a nonqualified option to purchase 4,000 shares (or a fraction of that
number if he served for less than a full year). If approved by the shareholders,
the 1992 Plan will be amended to provide that, beginning with the 1996 Annual
Meeting, each nonemployee director who is elected or re-elected at an annual
meeting, or who will continue to serve after such meeting by virtue of
membership in a class of directors previously elected, will receive an option
for 4,000 shares. The reasons for the proposed amendment to the automatic
director option grant are to provide an incentive for continued high performance
and to fix the option exercise price at the beginning of the period of
performance rather than at the end. See "Description of 1992 Plan" below for a
more complete discussion of the director automatic grant provisions.
1996 Restricted Stock Plan and 1996 Employee Stock Purchase Plan. The Board
of Directors has adopted, subject to shareholder approval, the Ciprico Inc. 1996
Restricted Stock Plan (the "Restricted Stock Plan"), which provides for the
discretionary grant of restricted stock awards, and the Ciprico Inc. 1996
Employee Stock Purchase Plan (the "Stock Purchase Plan"), which permits
employees to purchase stock of the Company at a favorable price and possibly
with favorable tax consequences. The Board of Directors believes that the
Restricted Stock Plan and the Stock Purchase Plan will be important for
attracting, retaining and providing incentives for employees.
More detailed descriptions of the Plans to be acted upon are set forth
below, but such descriptions are qualified in their entirety by reference to the
full text of the Plans, copies of which may be obtained without charge upon
written request to the Company's Vice President of Finance.
DESCRIPTION OF 1992 PLAN
Purpose. The purpose of the 1992 Plan is to promote the success of the
Company by facilitating the employment and retention of competent personnel and
by furnishing incentive to directors, officers and employees upon whose efforts
the success of the Company will depend to a large degree.
6
<PAGE> 9
Term. Options may be granted pursuant to the 1992 Plan until the Plan is
discontinued or terminated by its Board.
Administration. The 1992 Plan is administered by the Compensation Committee
of the Board of Directors (the "Committee"). The Plan gives broad powers to the
Committee to administer and interpret the Plan, including the authority to
select the individuals to be granted options and to prescribe the particular
form and conditions of each option granted.
Eligibility. All directors, officers and key employees of the Company or of
any subsidiary are eligible to receive options pursuant to the 1992 Plan;
provided, however, directors who are not otherwise employees are not eligible to
receive options under the Plan except for the formula grant described below. As
of December 4, 1995, the Company had approximately 80 employees and directors.
Directors' Formula Grant. The 1992 Plan currently provides that on the date
of each of the Company's five annual meetings commencing with the 1992 annual
meeting, an option for the purchase of 4,000 shares of the Company's Common
Stock will be granted to each individual who served as a nonemployee director of
the Company during the year preceding such annual meeting. Any person who served
as a director for less than a full year preceding the annual meeting will be
granted an option covering that number of shares determined by multiplying 4,000
by a fraction the numerator of which is the number of months during the
preceding year during which such director served as a director and the
denominator of which is 12. The exercise price of such options are equal to the
average of the closing prices of the Company's Common Stock for the ten trading
days ending with the date of the annual meeting at which the option is granted,
and the options are exercisable immediately upon grant and for a period of five
years thereafter. At the 1996 Annual Meeting, Messrs. Soukup, Thomas and Wray
will each receive an option to purchase 4,000 shares and Mr. Deaner will receive
an option to purchase 3,000 shares pursuant to such provision.
If the shareholders approve the resolutions contemplated by Proposal #3, at
each annual meeting of shareholders, commencing with the 1996 Annual Meeting,
each nonemployee director who is elected or re-elected to the Company's Board of
Directors at such meeting, or whose term of office continues after such meeting,
will receive a stock option to purchase 4,000 shares at an exercise price equal
to the average of the closing prices of the Company's Common Stock for the ten
trading days ending with the date of the annual meeting at which the option is
granted. Each such option will be for a term of seven years and will become
exercisable on the date of the annual meeting of shareholders following the date
of the meeting on which the option was granted if the director has continued to
serve on the Board throughout such period. If approved by the shareholders,
Messrs. Deaner, Gannaway, Soukup, Thomas and Wray will each receive an option to
purchase 4,000 shares at the 1996 Annual Meeting which will be in addition to
any option received by such directors at the 1996 Annual Meeting for prior
service under the current provisions of the 1992 Plan.
Options. When an option is granted under the Plan the Committee at its
discretion specifies the option price and the number of shares of Common Stock
which may be purchased upon exercise of the option. Unless otherwise determined
by the Committee, the option price may not be less than 100% of the fair market
value of the Company's Common Stock on the date of grant. The market value of
the Company's Common Stock on December 4, 1995 was $14.625. The term during
which the option may be exercised and whether the option will be exercisable
immediately, in stages or otherwise are set by the Committee, but the option
term may not exceed ten years from the date of grant. Each option granted under
the 1992 Plan is nontransferable during the lifetime of the optionee. Each
outstanding option under the 1992 Plan may terminate earlier than its stated
expiration date in the event of the optionee's termination of employment or
directorship.
Amendment. The Board of Directors may from time to time suspend or
discontinue the 1992 Plan or revise or amend it any respect; provided, that no
such revision or amendment may impair the terms and conditions of any
outstanding option to the material detriment of the optionee without the consent
of the optionee except as authorized in the event of merger, consolidation or
liquidation of the Company and provided, further, that the provisions relating
to the formula grant to nonemployee directors may not be amended more than once
every six months except to comport with certain changes in the laws.
7
<PAGE> 10
Federal Income Tax Consequences of the Plan. Generally, an optionee will
not realize any taxable income on the date an option is granted pursuant to the
1992 Plan. Upon exercise of the option, however, the optionee must recognize, in
the year of exercise, ordinary income equal to the difference between the option
price and the fair market value of the Company's Common Stock on the date of
exercise. Upon the sale of the shares, any resulting gain or loss will be
treated as capital gain or loss. The Company will receive an income tax
deduction in its fiscal year in which options are exercised, equal to the amount
of ordinary income recognized by those optionees exercising options, and must
withhold income and other employment-related taxes on such ordinary income.
Plan Benefits. The table below shows the total number of stock options that
have been received by the following individuals and groups under the 1992 Plan:
<TABLE>
<CAPTION>
TOTAL NUMBER OF
NAME AND POSITION/GROUP OPTIONS RECEIVED(1)
----------------------- -------------------
<S> <C>
Robert H. Kill, President and Chief Executive Officer -0-
Current Executive Officer Group (2 persons) 1,650
Current Non-executive Officer Director Group (5 persons) 73,000(2)
Current Non-executive Officer Employee Group (35 persons) 55,235
</TABLE>
- ---------------
(1) This table reflects the total stock options granted without taking into
account exercises or cancellations. Because future grants of stock options
are subject to the discretion of the Compensation Committee, the future
benefits that may be received by these individuals or groups under the 1992
Plan cannot be determined at this time, except for the automatic grants of
4,000 share options to outside directors as described under "Directors'
Formula Grant" above.
(2) Includes 4,000 share options which will be granted to Messrs. Soukup, Thomas
and Wray and a 3,000 share option which will be granted to Mr. Deaner on the
date of the 1996 Annual Meeting pursuant to the existing provisions of the
1992 Plan, and includes additional 4,000 share options which will be granted
to Messrs. Deaner, Gannaway, Soukup, Thomas and Wray subject to approval of
such grants by the shareholders at the Annual Meeting. See "Director
Automatic Option Grants" and "Directors' Formula Grant" above.
DESCRIPTION OF 1994 PLAN
Purpose. The purpose of the 1994 Plan is to promote the success of the
Company by affording key employees the opportunity to obtain a proprietary
interest in the growth and performance by the Company.
Term. The term of the 1994 Plan expires on October 21, 2003, ten years from
the date the Plan was adopted by the Board; provided, however, the Board may
terminate the Plan earlier in the event of a sale by the Company of
substantially all of its assets or in the event of a merger, exchange or
liquidation of the Company.
Administration. The 1994 Plan is administered by the Compensation Committee
of the Board of Directors (the "Committee"). The Plan gives broad powers to the
Committee to administer and interpret the Plan, including the authority to
select the individuals to be granted options and to prescribe the particular
form and conditions of each option granted.
Eligibility. All officers and key employees of the Company or of any
subsidiary are eligible to receive options pursuant to the 1994 Plan.
Options. Options granted under the 1994 Plan are intended to be "incentive
stock options" within the meaning of Section 422 of the Internal Revenue Code
(the "Code"). Under current tax law, no incentive stock option may be granted
with a per share exercise price less than the fair market value of a share of
the underlying Common Stock on the date the incentive stock option is granted.
The option exercise price generally may be paid in cash, by certified check or
by delivering shares of Common Stock of the Company, valued at fair market value
as of the date of exercise, unless the Board or Committee restricts the forms of
payment available to the optionee. When an option is granted under the Plan, the
Committee at its discretion
8
<PAGE> 11
specifies the option price (which may not be less than fair market value) and
the number of shares of Common Stock which may be purchased upon exercise of the
option. The term during which the option may be exercised and whether the option
will be exercisable immediately, in stages or otherwise are set by the
Committee, but the option term may not exceed ten years from the date of grant.
Each option granted under the 1994 Plan is nontransferable during the lifetime
of the optionee. Each outstanding option under the 1994 Plan may terminate
earlier than its stated expiration date in the event of the optionee's
termination of employment.
Amendment. The Board of Directors or the Committee may terminate or amend
the 1994 Plan at any time, except that the terms of option agreements then
outstanding may not be adversely affected without the consent of the individual.
Neither the Board nor the Committee may amend the Plan, unless permitted by the
Code, if the amendment would materially increase the total number of shares of
Common Stock available for issuance under the Plan, materially modify the
requirements as to eligibility for participation in the Plan or decrease the
price at which options may be granted. Furthermore, the Plan may not be amended,
without the approval of the Company's shareholders, in any manner which would
cause the options to fail to meet the requirements of incentive stock options as
defined under the Code.
Federal Income Tax Consequences of the Plan. Incentive stock options
granted under the Plan are intended to qualify for favorable tax treatment under
Code Section 422. Under Section 422, an optionee recognizes no taxable income
when the option is granted. Further, the optionee generally will not recognize
any taxable income when the option is exercised if he or she has at all times
from the date of the option's grant until three months before the date of
exercise been an employee of the Company. The Company ordinarily is not entitled
to any income tax deduction upon the grant or exercise of an incentive stock
option. Certain other favorable tax consequences may be available to the
optionee if he or she does not dispose of the shares acquired upon the exercise
of an incentive stock option for a period of two years from the granting of the
option and one year from the receipt of the shares.
Plan Benefits. The table below shows the total number of stock options that
have been received by the following individuals and groups under the 1994 Plan:
<TABLE>
<CAPTION>
TOTAL NUMBER OF
NAME AND POSITION/GROUP OPTIONS RECEIVED(1)
------------------------------------------------------------- -------------------
<S> <C>
Robert H. Kill, President and Chief Executive Officer 20,000
Current Executive Officer Group (2 persons) 24,000
Current Non-executive Officer Director Group (5 persons) -0-
Current Non-executive Officer Employee Group (62 persons) 218,503
</TABLE>
- ---------------
(1) This table reflects the total stock options granted without taking into
account exercises or cancellations. Because future grants of stock options
are subject to the discretion of the Compensation Committee, the future
benefits that may be received by these individuals or groups under the 1994
Plan cannot be determined at this time.
RESTRICTED STOCK PLAN
General. In November 1995 the Board of Directors adopted, subject to
shareholder approval, the Ciprico Inc. 1996 Restricted Stock Plan (the
"Restricted Stock Plan") and reserved 50,000 shares of the Company's Common
Stock for issuance pursuant to the Plan.
Purpose. The purpose of the Restricted Stock Plan is to promote the success
of the Company by facilitating the employment and retention of competent
personnel and by furnishing incentive to officers and employees upon whose
efforts the success of the Company and its subsidiaries will depend to a large
degree.
Term. Restricted stock awards may be granted pursuant to the Restricted
Stock Plan until the Plan is discontinued or terminated by the Board.
9
<PAGE> 12
Administration. The Restricted Stock Plan is administered by the
Compensation Committee of the Board of Directors (the "Committee"). The Plan
gives broad powers to the Committee to administer and interpret the Plan,
including the authority to select the individuals to be granted restricted stock
awards, to determine the number of shares of Common Stock of the Company subject
to each award, and to prescribe the particular form and conditions of each award
granted.
Eligibility. All officers and key employees of the Company or of any
subsidiary are eligible to receive awards pursuant to the Restricted Stock Plan.
Awards. When a restricted stock award is granted under the Restricted Stock
Plan, the recipient receives shares of the Company's Common Stock which are
subject to restrictions and the possibility of forfeiture for a period of time
set by the Committee. During such restricted period the recipient may not
assign, sell, transfer, pledge, hypothecate or otherwise dispose of the shares.
Upon issuance of certificates representing such restricted stock, the recipient
is entitled to vote such shares and to receive dividends thereon. Under the
terms of the Plan, all risks of forfeiture on outstanding restricted stock will
lapse upon a "change of control" (as defined in the Plan) of the Company. Each
award granted under the Restricted Stock Plan is nontransferable during the
lifetime of the participant.
Amendment. The Board of Directors may amend or discontinue the Restricted
Stock Plan at any time, except that no amendment or termination of the Plan
shall adversely affect rights of a recipient holding restricted stock.
Federal Income Tax Consequences of the Plan. Generally, current federal tax
law does not require a recipient of a restricted stock award to recognize
taxable income in the year in which the restricted stock award is granted.
Instead, in the year in which the transfer restriction lapses, the recipient
will recognize ordinary income equal to the fair market value of the shares at
that time. The Company will also receive an income tax deduction, equal to the
amount of ordinary income recognized by the recipient, in the fiscal year in
which the restrictions lapse, and must withhold income and other
employment-related taxes on the such ordinary income. The recipient may, subject
to the discretion of the Committee, elect to have all or a portion of such tax
withholding obligations satisfied by delivering previously-acquired stock of the
Company, including shares received pursuant to a restricted stock award on which
the risks of forfeiture have lapsed, of sufficient value to meet the withholding
requirements.
Alternatively, the recipient can file an election under Section 83(b) of the
Internal Revenue Code. If such an election is filed, the recipient will
recognize ordinary income equal to the fair market value of the restricted
shares on the date of the restricted stock award. The Company will receive an
income tax deduction, equal to the amount of such ordinary income, in the fiscal
year in which the restricted stock award is granted, and must also comply with
the tax withholding obligations at that time.
Plan Benefits. No restricted stock awards have been granted under the
Restricted Stock Plan and, accordingly, no shares of Common Stock have been
issued under the Plan. As a result, the number of shares (out of the 50,000
reserved for the Plan) which may be acquired and the benefits that any
particular group of potential participants will received under the Plan are not
determinable at this time.
EMPLOYEE STOCK PURCHASE PLAN
General. In November 1995 the Board of Directors adopted, subject to
shareholder approval, the Ciprico Inc. 1996 Employee Stock Purchase Plan (the
"Stock Purchase Plan") and reserved 100,000 shares of the Company's Common Stock
for issuance pursuant to the Plan.
Purpose. The purpose of the Stock Purchase Plan is to encourage stock
ownership by the Company's employees and in so doing to provide an incentive for
the Company's employees to remain in the Company's employ, to improve
operations, to increase profits and to contribute more significantly to the
Company's success.
Term. The term of the Stock Purchase Plan expires on December 31, 2005;
provided, that the Board of Directors may extend the term of the Plan for such
period as the Board deems advisable.
10
<PAGE> 13
Administration. The Stock Purchase Plan is administered by the Compensation
Committee of the Board of Directors (the "Committee"). The Plan gives broad
powers to the Committee to administer and interpret the Plan, including the
authority to limit the number of shares that may be optioned under the Stock
Purchase Plan during a phase.
Eligibility. All regular U.S. full-time or part-time employees (including
officers) of the Company or any subsidiary are eligible to participate in any of
the twenty six-month phases of the Stock Purchase Plan. However, any employee
who would own (as determined under the Internal Revenue Code), immediately after
the grant of an option, stock possessing 5% or more of the total combined voting
power or value of all classes of stock of the Company will not be granted an
option under the Stock Purchase Plan.
Options. Phases of the Stock Purchase Plan will commence in January and
July of each calendar year or such other months as the Committee may determine,
with the first phase beginning February 1, 1996. Before the commencement date of
the phase, each participating employee must have elected to have from 1% to 10%
of his or her compensation withheld over the pay periods in such phase. The
percentage designated may be increased or decreased during a phase or
discontinued entirely. Participants also have the right to withdraw all
accumulated payroll deductions before the end of a phase. Based on the amount of
salary deductions accumulated at the end of the phase, shares will be purchased
from the account of each participant at the termination date of such phase (six
months after the commencement date). In no event, however, may a participant
receive a grant of shares which would cause the employee to own 5% or more of
the Common Stock of the Company, nor may the total number of shares subject to a
participant's options during a phase exceed 500. The purchase price to be paid
by the employees will be the lower of the amount determined under Paragraphs A
and B below:
A. 85% of the closing price of the Company's Common Stock on the
commencement date of the phase; or
B. 85% of the closing price of the Company's Common Stock on the
termination date of the phase.
As required by tax law, in any calendar year no employee may receive
options under the Stock Purchase Plan for shares which have a fair market value
in excess of $25,000 determined at the time such option is granted. Any funds
not used to purchase shares will be carried over to the next phase unless the
employee requests a withdrawal of such funds. No interest is paid by the Company
on funds withheld and such funds are used by the Company for general operating
purposes. If an employee terminates employment for any reason or dies before the
end of a phase, all of the employee's accumulated payroll deductions will be
paid to the employee or to his or her estate, as the case may be.
Amendment. The Board of Directors may, from time to time, revise or amend
the Stock Purchase Plan as the Board may deem proper and in the best interest of
the Company or as may be necessary to comply with Section 423 of the Internal
Revenue Code; provided, that no such revision or amendment may, without approval
of the Company's shareholders, (i) increase the total number of shares for which
options may be granted under the Stock Purchase Plan except as provided in the
case of stock splits, consolidations, stock dividends or similar events, (ii)
modify requirements as to eligibility for participation in the Plan or (iii)
materially increase the benefits accruing to participants under the Plan.
Federal Income Tax Consequences of the Plan. Options granted under the
Stock Purchase Plan are intended to qualify for favorable tax treatment to the
employees under Sections 421 and 423 of the Internal Revenue Code. Employee
contributions are made on an after-tax basis. The Company understands that under
existing federal income tax provisions, if shares are purchased pursuant to the
Stock Purchase Plan and are not disposed of by the participant within the
two-year period after the date the option was granted nor within the one-year
period after the date of transfer of the shares to the participant, and if the
participant was an employee of the Company at all times from the date of grant
of the option until the date of exercise of the option, then the participant
will not realize any taxable income until the participant sells the shares and
the Company will not be entitled to a deduction in connection with either the
grant or exercise of the option.
11
<PAGE> 14
Plan Benefits. Because participation in the Stock Purchase Plan is
voluntary, the future benefits that may be received by participating individuals
or groups under the Stock Purchase Plan cannot be determined at this time.
VOTE REQUIRED
The Board of Directors recommends that the shareholders adopt the
resolution to approve the increase in the number of shares reserved under the
1992 and 1994 Plans, the amendment to the 1992 Plan, and the Restricted Stock
and Employee Stock Purchase Plans. Approval of such resolution requires the
affirmative vote of the greater of (i) a majority of the shares represented at
the meeting with authority to vote on such matter or (ii) a majority of the
voting power of the minimum number of shares that would constitute a quorum for
the transaction of business at the meeting.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
KPMG Peat Marwick LLP acted as the Company's independent auditors for
fiscal 1995. The Company has not selected its independent auditors for the
current fiscal year ending September 30, 1996, pending the Audit Committee's
completion of its review of the Company's fiscal 1995 audit. Representatives of
KPMG Peat Marwick LLP are expected to be present at the meeting, will be given
an opportunity to make a statement regarding financial and accounting matters of
the Company if they so desire, and will be available at the meeting to respond
to appropriate questions from the Company's shareholders.
OTHER BUSINESS
Management knows of no other matters to be presented at the meeting. If any
other matter properly comes before the meeting, the appointees named in the
proxies will vote the proxies in accordance with their best judgment.
SHAREHOLDER PROPOSALS
Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the 1997 annual meeting of shareholders must be
received by the Company by August 17, 1996, to be includable in the Company's
proxy statement and related proxy for the 1997 annual meeting.
ANNUAL REPORT TO SHAREHOLDERS
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended September 30, 1995, accompanies this notice of meeting and Proxy
Statement. No part of the Annual Report is incorporated herein and no part
thereof is to be considered proxy soliciting material.
12
<PAGE> 15
FORM 10-KSB
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED, UPON WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1995, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL
STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES THERETO. THE COMPANY WILL
FURNISH TO ANY SUCH PERSON ANY EXHIBIT DESCRIBED IN THE LIST ACCOMPANYING THE
FORM 10-KSB, UPON THE PAYMENT, IN ADVANCE, OF REASONABLE FEES RELATED TO THE
COMPANY'S FURNISHING SUCH EXHIBIT(S). REQUESTS FOR COPIES OF SUCH REPORT AND/OR
EXHIBITS(S) SHOULD BE DIRECTED TO MR. CORY J. MILLER, VICE PRESIDENT OF FINANCE,
AT THE COMPANY'S PRINCIPAL ADDRESS.
BY ORDER OF THE BOARD OF DIRECTORS
ROBERT H. KILL
President
Dated: December 15, 1995
Plymouth, Minnesota
13
<PAGE> 16
AMENDMENT NO. 2
TO
CIPRICO, INC. 1992 NONQUALIFIED STOCK OPTION PLAN
This Amendment No. 2 to the Ciprico, Inc. 1992 Nonqualified Stock Option
Plan (the "1992 Option Plan") was adopted by the Board of Directors of the
Company on November 15, 1995 and approved by the shareholders of the Company on
January 25, 1996.
1. Section 6 shall be amended to provide that Two Hundred Fifty Thousand
(250,000) shares of Common Stock shall be reserved and available for options
under the 1992 Option Plan.
2. Section 10 shall be amended in its entirety to read as follows:
"SECTION 10
NONQUALIFIED STOCK OPTIONS
FOR OUTSIDE DIRECTORS
(a) Automatic Grants. No person shall have any discretion to select
the nonemployee directors that shall be eligible for nonqualified stock
options or to determine the number of shares of Common Stock to be subject
to such options, the option price per share, the term and exercisability
for such options or the date of grant. No action by the Board of Directors
or the Committee shall be required for the grant of nonqualified stock
options pursuant to this Section 10, it being the intention of the Company
that such stock option grants will occur automatically.
(b) Annual Grants to Nonemployee Directors.
(1) At the annual shareholders' meeting occurring in 1996, each
individual who served as a nonemployee director of the Company during
the year preceding such annual meeting shall receive a nonqualified
stock option for 4,000 shares. Any individual who served as a
nonemployee director for less than a full year preceding the annual
meeting shall receive a nonqualified stock option for the number of
shares determined by multiplying 4,000 by a fraction, the numerator of
which is the number of months during the preceding year that such
individual served as a nonemployee director and the denominator of which
is 12.
(2) Beginning with the annual shareholders' meeting occurring in
1996 and on the date of each annual shareholders' meeting thereafter,
each nonemployee director who is elected or reelected to the Company's
Board of Directors at such meeting or who will continue to serve as a
director during the ensuing year by virtue of membership in a class of
directors previously elected shall receive a nonqualified stock option
for 4,000 shares. The option granted pursuant to this Section 10(b)(2)
to a nonemployee director upon his reelection to the Board of Directors
at the 1996 annual shareholders' meeting shall be in addition to any
option which such nonemployee director receives for prior service under
Section 10(b)(1) above.
(c) Exercise Price. The exercise price per share for each nonqualified
stock options granted pursuant to this Section 10 shall be equal to the
average of the fair market values of the Company's Common Stock for the ten
(10) trading days ending with the date of the annual meeting, unless the
annual meeting date is not a trading day, in which case the ten-trading day
period will end on the last trading day immediately preceding such annual
meeting.
(d) Term and Exercisability. Each nonqualified stock option granted
pursuant Section 10(b)(1) shall expire five (5) years from the date of
grant and shall be fully exercisable at all times. Each nonqualified stock
option granted pursuant to Section 10(b)(2) shall become exercisable on the
date of the annual shareholders' meeting following the date of the meeting
on which the option was granted if the Optionee has served as a director
throughout such period, and shall expire seven (7) years from the date
A-1
<PAGE> 17
of grant. Each nonqualified stock option granted pursuant to this Section
10 shall be subject to such additional terms and conditions not
inconsistent with this Plan as the Option Agreement issued to the Optionee
by the Company may contain."
3. Except as otherwise amended or modified herein, all other provisions of
the Plan shall remain in full force and effect.
CIPRICO, INC.
Date: January 25, 1996 By:
--------------------------------------
Its:
--------------------------------------
A-2
<PAGE> 18
CIPRICO, INC.
1996 RESTRICTED STOCK PLAN
SECTION 1.
DEFINITIONS
As used herein, the following terms shall have the meanings indicated
below:
(a) "Affiliates" shall mean a Parent or Subsidiary of the Company.
(b) "Committee" shall mean a Committee of two or more directors who
shall be appointed by and serve at the pleasure of the Board. Each of the
members of the Committee shall be a "disinterested" person within the
meaning of Rule 16b-3, or any successor provision, as then in effect, of
the General Rules and Regulations under the Securities Exchange Act of 1934
as amended. As of the effective date of the Plan, a "disinterested" person
under Rule 16b-3 generally means a person who, among other things, has not
been, at any time within one year prior to his or her appointment to the
Committee (or, if shorter, during the period beginning with the initial
registration of the Company's equity securities under Section 12 of the
Securities Exchange Act of 1934, as amended, and ending with the director's
appointment to the Committee) and who will not be, while serving on such
Committee, granted or awarded options under the Plan, or under any other
plan of the Company or any of its Affiliates entitling participants to
acquire stock, stock options, stock appreciation rights or similar rights
that have an exercise or conversion privilege or a value derived from
equity securities issued by the Company or its Affiliate, except to the
extent permitted by Rule 16b-3, or any successor provision.
(c) The "Company" shall mean CIPRICO, INC., a Delaware corporation.
(d) The "Internal Revenue Code" is the Internal Revenue Code of 1986,
as amended from time to time.
(e) "Parent" shall mean any corporation which owns, directly or
indirectly in an unbroken chain, fifty percent (50%) or more of the total
voting power of the Company's outstanding stock.
(f) The "Participant" is the employee or officer of the Company or any
Subsidiary to whom a restricted stock award has been granted.
(g) The "Plan" means the Ciprico, Inc. 1996 Restricted Stock Plan, as
amended hereafter from time to time, including the form of restricted stock
agreements as they may be modified by the Board from time to time.
(h) "Stock" shall mean Common Stock of the Company (subject to
adjustment as described in Section 11) reserved for restricted stock awards
pursuant to this Plan.
(i) A "Subsidiary" shall mean any corporation of which fifty percent
(50%) or more of the total voting power of outstanding stock is owned,
directly or indirectly in an unbroken chain, by the Company.
SECTION 2.
PURPOSE
The purpose of the Plan is to promote the success of the Company and its
Subsidiaries by facilitating the employment and retention of competent personnel
and by furnishing incentive to officers and employees upon whose efforts the
success of the Company and its Subsidiaries will depend to a large degree.
It is the intention of the Company to carry out the Plan through the
granting of restricted stock awards. Adoption of this Plan shall be and is
expressly subject to the condition of approval by the shareholders of the
Company after the adoption of the Plan by the Board of Directors. In no event
shall the risks of forfeiture on any restricted stock awards lapse prior to the
date this Plan is approved by the shareholders of the Company. If shareholder
approval of this Plan is not obtained, any restricted stock awards previously
granted shall be revoked.
B-1
<PAGE> 19
SECTION 3.
EFFECTIVE DATE OF PLAN
The Plan shall be effective upon its adoption by the Board of Directors of
the Company, subject to approval by the shareholders of the Company as required
in Section 2.
SECTION 4.
ADMINISTRATION
The Plan shall be administered by the Board of Directors of the Company
(hereinafter referred to as the "Board") or by a Committee which may be
appointed by the Board from time to time. The Board or the Committee, as the
case may be, shall have all of the powers vested in it under the provisions of
the Plan, including but not limited to, the exclusive authority (where
applicable and within the limitations described herein) to determine, in its
sole discretion, the individuals to whom, and the time or times at which,
restricted stock awards shall be granted, the number of shares of Stock subject
to each award, the price (if any) to be paid for such shares of Stock, the risks
of forfeiture that will apply to such shares of Stock and the manner in which
such risks of forfeiture will lapse, and all other terms and conditions of each
award.
The Board, or the Committee, shall have full power and authority to
administer and interpret the Plan, to make and amend rules, regulations and
guidelines for administering the Plan, to prescribe the form and conditions of
the written restricted stock agreements (which may vary from Participant to
Participant) evidencing each award and to make all other determinations
necessary or advisable for the administration of the Plan. The Board's, or the
Committee's, interpretation of the Plan, and all actions taken and
determinations made by the Board or the Committee pursuant to the power vested
in it hereunder, shall be conclusive and binding on all parties concerned. No
member of the Board or the Committee shall be liable for any action taken or
determination made in good faith in connection with the administration of the
Plan.
In the event the Board appoints a Committee as provided hereunder, any
action of the Committee with respect to the administration of the Plan shall be
taken pursuant to a majority vote of the Committee members or pursuant to the
written resolution of all Committee members.
SECTION 5.
PARTICIPANTS
The Board or the Committee, as the case may be, shall from time to time, at
its discretion and without approval of the shareholders, designate those
officers and employees of the Company or of any Subsidiary to whom restricted
stock awards shall be granted under this Plan. The Board or the Committee may
grant additional restricted stock awards under this Plan to some or all
Participants then holding awards or may grant restricted stock awards solely or
partially to new Participants. In designating Participants, the Board or the
Committee shall also determine the number of shares to be awarded to each such
Participant, subject to the provisions of Section 8. The Board may from time to
time designate individuals as being ineligible to participate in the Plan.
SECTION 6.
STOCK
Fifty Thousand (50,000) shares of authorized but unissued shares of Stock
shall be reserved and available for restricted stock awards under the Plan;
provided, however, that the total number of shares of Stock reserved for
restricted stock awards under this Plan shall be subject to adjustment as
provided in Section 11 of the Plan. In the event that all or any part of a
restricted stock award under the Plan is forfeited for any reason, the shares of
Stock allocable to the portion of such award for which the risks of forfeiture
have
B-2
<PAGE> 20
not lapsed shall continue to be reserved for restricted stock awards under the
Plan and may be subject to new restricted stock awards hereunder.
SECTION 7.
DURATION OF PLAN
Restricted stock awards may be granted pursuant to the Plan from time to
time after the effective date of the Plan and until the Plan is discontinued or
terminated by the Board.
SECTION 8.
TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS
Each restricted stock award granted pursuant to the Plan shall be evidenced
by a written restricted stock agreement. The restricted stock agreement shall be
in such form as may be approved from time to time by the Board or the Committee
and may vary from Participant to Participant; provided, however, that each
Participant and each restricted stock agreement shall comply with and be subject
to the following terms and conditions:
(a) Number of Shares. The restricted stock agreement shall state the
total number of shares covered by the restricted stock award.
(b) Issuance of Restricted Shares. The Company shall cause to be
issued a stock certificate representing such shares of Stock in the
Participant's name, and shall deliver such certificate to the Participant;
provided, however, that the Company shall place a legend on such
certificate describing the risks of forfeiture and other transfer
restrictions set forth in the Participant's restricted stock agreement and
providing for the cancellation and return of such certificate if the shares
of Stock subject to the restricted stock award are forfeited. Until such
risks of forfeiture have lapsed or the shares subject to such restricted
stock award have been forfeited, the Participant shall be entitled to vote
the shares represented by such stock certificates and shall receive all
dividends attributable to such shares, but the Participant shall not have
any other rights as a shareholder with respect to such shares.
(c) Withholding Taxes. In order to provide the Company with the
opportunity to claim the benefit of any income tax deduction which may be
available to it as from the grant of restricted stock awards to a
Participant under this Plan and to permit the Company to comply with all
applicable federal or state income tax laws or regulations, the Company may
take such action as it deems appropriate to insure that, if necessary, all
applicable federal or state payroll, income or other taxes are withheld
from any future wages or other amounts payable by the Company to the
Participant. If the Company is unable to withhold such federal and state
taxes, for whatever reason, the Participant hereby agrees to pay to the
Company an amount equal to the amount the Company would otherwise be
required to withhold under federal or state law prior to the transfer of
any certificates for the shares of Stock subject to such restricted stock
awards.
The Participant may, subject to the discretion of the Board or the
Committee, as the case may be, and such other administrative rules it may
deem advisable, elect to have all or a portion of such tax withholding
obligations satisfied by delivering previously-acquired shares of Stock,
including shares received pursuant to a restricted stock award on which the
risks of forfeiture have lapsed, such shares having a fair market value, as
of the date the amount of tax to be withheld is determined under applicable
tax law, equal to such obligations. Such election shall comply with such
rules as may be adopted by the Board or the Committee to assure compliance
with Rule 16b-3, or any successor provision, as then in effect, of the
General Rules and Regulations under the Securities Exchange Act of 1934, if
applicable.
(d) For purposes of Section 8(c), the "fair market value" of the Stock
shall mean the last sale price of such stock as reported by Nasdaq on the
date the amount of tax to be withheld is determined or, if no
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<PAGE> 21
sale of such stock shall have occurred on that date, on the next preceding
day on which there was a sale of such stock.
(e) Other Provisions. The restricted stock agreement authorized under
this Section 8 shall contain such other provisions as the Board or the
Committee, as the case may be, shall deem advisable.
SECTION 9
TRANSFER OF AWARD
No restricted stock award shall be transferable, in whole or in part, by
the Participant, other than by will or by the laws of descent and distribution,
prior to the date the risks of forfeiture described in the restricted stock
agreement have lapsed. If the Participant shall attempt any transfer of any
restricted stock award granted under the Plan prior to such date, such transfer
shall be void and the restricted stock award shall terminate.
SECTION 10.
CHANGE OF CONTROL
Notwithstanding anything in this Plan or any restricted stock agreement to
the contrary, all risks of forfeiture applicable to a Participant's restricted
stock awards shall immediately lapse upon a "change of control." For purposes of
this Section 10, a "change of control" shall mean any of the following events:
(a) Any exchange, reorganization, reclassification, extraordinary
dividend, divestiture (including a spin-off), merger, consolidation or
similar transaction (collectively referred to as the "transaction") to
which the Company is a party, whether or not such transaction is approved
by the Company's Board of Directors, if the individuals and entities who
were shareholders of the Company immediately prior to the effective date of
such transaction have, immediately following the effective date of such
transaction, beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of less than fifty percent (50%) of the
total combined voting power (with respect to the election of directors) of
all classes of securities issued by the surviving corporation;
(b) A change in the direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of
securities of the Company representing, in the aggregate, a majority of the
total combined voting power of all classes of the Company's then issued and
outstanding securities by any person or entity or by a group of associated
persons or entities acting in concert;
(c) The sale of substantially all of the properties and assets of the
Company to any person or entity which is not a wholly-owned subsidiary of
the Company;
(d) The approval of any plan or proposal for the liquidation of the
Company by its shareholders; or
(e) A change in the composition of the Board of Directors at any time
during any consecutive twenty-four (24) month period such that the
"Continuing Directors" cease for any reason to constitute at least a
seventy percent (70%) majority of the Board. For purpose of this event,
"Continuing Directors" means those members of the Board who either (1) were
directors at the beginning of such consecutive twenty-four (24) month
period; or (2) were elected by, or on the nomination or recommendation of,
at least a two-thirds (2/3) majority of the then existing Board of
Directors.
SECTION 11.
RECAPITALIZATION, SALE, MERGER, EXCHANGE OR LIQUIDATION
In the event of an increase or decrease in the number of shares of Stock
resulting from a subdivision or consolidation of shares or the payment of a
stock dividend or any other increase or decrease in the number of shares of
Stock effected without receipt of consideration by the Company, the number of
shares of Stock
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reserved under Section 6 hereof and the number of shares of Stock covered by
each outstanding restricted stock award shall be adjusted by the Board to
reflect such change. Additional shares which may be credited pursuant to such
adjustment shall be subject to the same risks of forfeiture and other
restrictions as are applicable to the shares with respect to which the
adjustment relates.
Unless otherwise provided in the restricted stock agreement, in the event
of the sale by the Company of substantially all of its assets and the consequent
discontinuance of its business, or in the event of a merger, consolidation,
exchange, reorganization, reclassification, extraordinary dividend, divestiture
(including a spin-off) or liquidation of the Company (collectively referred to
as a "transaction"), the Board may, in connection with the Board's adoption of
the plan for such transaction, provide for one or more of the following: (i)
that all risks of forfeiture on any outstanding restricted stock awards shall
immediately lapse; (ii) that this Plan shall completely terminate and any
outstanding restricted stock awards for which the risks of forfeiture have not
lapsed prior to a date specified by the Board shall be cancelled; and (iii) that
this Plan shall continue with respect to the any restricted stock awards which
were outstanding as of the date of adoption by the Board of such plan for such
transaction and provide to Participants holding such awards the right to receive
an equivalent number of shares of stock of the corporation succeeding the
Company by reason of such transaction. The grant of a restricted stock award
pursuant to the Plan shall not limit in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure or to merge, exchange or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business or assets.
SECTION 12.
INVESTMENT PURPOSE
No shares of Stock issued pursuant to the Plan shall be transferred or
otherwise disposed of by a Participant unless and until there has been
compliance, in the opinion of Company's counsel, with all applicable legal
requirements, including without limitation, those relating to securities laws
and stock exchange listing requirements. As a condition to the issuance of Stock
to a Participant, the Board or the Committee may require the Participant to (a)
represent that the shares of Stock are being acquired for investment and not
resale and to make such other representations as the Board, or the Committee, as
the case may be, shall deem necessary or appropriate to qualify the issuance of
the shares as exempt from the Securities Act of 1933 and any other applicable
securities laws, and (b) represent that the Participant shall not dispose of the
shares of Stock in violation of the Securities Act of 1933 or any other
applicable securities laws. The Company reserves the right to place a legend on
any stock certificate issued pursuant to the Plan to assure compliance with this
Section 12.
SECTION 13.
AMENDMENT OF THE PLAN
The Board may from time to time, insofar as permitted by law, suspend or
discontinue the Plan or revise or amend it in any respect; provided, however,
that no such revision or amendment, except as is authorized in Section 11, shall
impair the terms and conditions of any restricted stock award which is
outstanding on the date of such revision or amendment to the material detriment
of the Participant without the consent of the Participant. Notwithstanding the
foregoing, no such revision or amendment shall (i) materially increase the
number of shares subject to the Plan except as provided in Section 11 hereof,
(ii) change the designation of the class of employees eligible to receive
restricted stock awards, or (iii) materially increase the benefits accruing to
Participants under the Plan, unless such revision or amendment is approved by
the shareholders of the Company.
SECTION 14.
NO OBLIGATION TO CONTINUE EMPLOYMENT
The granting of a restricted stock award hereunder shall not impose upon
the Company or any Subsidiary any obligation to retain the Participant in its
employ for any period.
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CIPRICO, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I -- ESTABLISHMENT OF PLAN
1.01 ADOPTION BY BOARD OF DIRECTORS. By action of the Board of Directors of
Ciprico, Inc. (the "Corporation") on October 23, 1995, subject to approval by
its shareholders, the Corporation has adopted an employee stock purchase plan
pursuant to which eligible employees of the Corporation and certain of its
Subsidiaries may be offered the opportunity to purchase shares of Stock of the
Corporation. The terms and conditions of this Plan are set forth in this plan
document, as amended from time to time as provided herein. The Corporation
intends that the Plan shall qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code of 1986, as amended from time to time,
(the "Code") and shall be construed in a manner consistent with the requirements
of Code Section 423 and the regulations thereunder.
1.02 SHAREHOLDER APPROVAL AND TERM. This Plan shall become effective
January 1, 1996, and shall terminate December 31, 2005; provided, however, that
the Plan shall be subject to approval by the shareholders of the Corporation
within twelve (12) months after the Plan is adopted by the Board or, if earlier,
at the next annual meeting of the shareholders, in the manner provided under
Code Section 423 and the regulations thereunder; and provided, further that the
Board of Directors may extend the term of the Plan for such period as the Board,
in its sole discretion, deems advisable. In the event that the shareholders fail
to approve the Plan at such annual shareholders' meeting, this Plan shall not
become effective and shall have no force or effect.
ARTICLE II -- PURPOSE
2.01 PURPOSE. The primary purpose of the Plan is to provide an opportunity
for Eligible Employees of the Corporation to become shareholders of the
Corporation, thereby providing them with an incentive to remain in the
Corporation's employ, to improve operations, to increase profits and to
contribute more significantly to the Corporation's success.
ARTICLE III -- DEFINITIONS
3.01 "ADMINISTRATOR" means the Compensation Committee appointed by the
Board of Directors. The Compensation Committee may, in its sole discretion,
authorize the officers of the Corporation to carry out the day-to-day operation
of the Plan. In its sole discretion, the Board may take such actions as may be
taken by the Administrator, in addition to those powers expressly reserved to
the Board under this Plan.
3.02 "BOARD OF DIRECTORS" or "BOARD" means the Board of Directors of
Ciprico, Inc.
3.03 "COMPENSATION" means the Participant's base compensation, excluding
overtime and all bonuses.
3.04 "CORPORATION" means Ciprico, Inc., a Delaware corporation.
3.05 "ELIGIBLE EMPLOYEE" means any employee who, as determined on or
immediately prior to an Enrollment Period, is a United States full-time or
part-time employee of the Corporation or one of its Subsidiaries.
3.06 "ENROLLMENT PERIOD" means the period determined by the Administrator
for purposes of accepting elections to participate during a Phase from Eligible
Employees.
3.07 "FISCAL YEAR" means the fiscal year of the Corporation, which is the
twelve-month period beginning October 1 and ending September 30 each year.
3.08 "PARTICIPANT" means an Eligible Employee who has been granted an
option and is participating during a Phase through payroll deductions, but shall
exclude those employees subject to the limitations described in Section 9.03
below.
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3.09 "PHASE" means the period beginning on the date that the option was
granted, otherwise referred to as the commencement date of the Phase, and ending
on the date that the option was exercised, otherwise referred to as the
termination date of the Phase.
3.10 "PLAN" means the Ciprico, Inc. 1996 Employee Stock Purchase Plan.
3.11 "STOCK" means the voting common stock of the Corporation.
3.12 "SUBSIDIARY" means any corporation defined as a subsidiary of the
Corporation in Code Section 424(f) as of the effective date of the Plan, and
such other corporations that qualify as subsidiaries of the Corporation under
Code Section 424(f) as the Board approves to participate in this Plan from time
to time.
ARTICLE IV -- ADMINISTRATION
4.01 ADMINISTRATION. Except for those matters expressly reserved to the
Board pursuant to any provisions of the Plan, the Administrator shall have full
responsibility for administration of the Plan, which responsibility shall
include, but shall not be limited to, the following:
(a) The Administrator shall, subject to the provisions of the Plan,
establish, adopt and revise such rules and procedures for administering the
Plan, and shall make all other determinations as it may deem necessary or
advisable for the administration of the Plan;
(b) The Administrator shall, subject to the provisions of the Plan,
determine all terms and conditions that shall apply to the grant and
exercise of options under this Plan, including, but not limited to, the
number of shares of Stock that may be granted, the date of grant, the
exercise price and the manner of exercise of an option. The Administrator
may, in its discretion, consider the recommendations of the management of
the Corporation when determining such terms and conditions;
(c) The Administrator shall have the exclusive authority to interpret
the provisions of the Plan, and each such interpretation or determination
shall be conclusive and binding for all purposes and on all persons,
including, but not limited to, the Corporation and its Subsidiaries, the
shareholders of the Corporation and its Subsidiaries, the Administrator,
the directors, officers and employees of the Corporation and its
Subsidiaries, and the Participants and the respective
successors-in-interest of all of the foregoing; and
(d) The Administrator shall keep minutes of its meetings or other
written records of its decisions regarding the Plan and shall, upon
requests, provide copies to the Board.
ARTICLE V -- PHASES OF THE PLAN
5.01 PHASES. The Plan shall be carried out in one or more Phases of six (6)
months each. Unless otherwise determined by the Administrator, in its
discretion, Phases shall commence on January 1 and July 1 of each fiscal year
during the term of the Plan; provided, however, that the first phase shall
commence on February 1, 1996, and shall end on June 30, 1996. No two Phases
shall run concurrently.
5.02 LIMITATIONS. The Administrator may, in its discretion, limit the
number of shares available for option grants during any Phase as it deems
appropriate. Without limiting the foregoing, in the event all of the shares of
Stock reserved for the grant of options under Section 12.01 is issued pursuant
to the terms hereof prior to the commencement of one or more Phases or the
number of shares of Stock remaining is so small, in the opinion of the
Administrator, as to render administration of any succeeding Phase
impracticable, such Phase or Phases may be cancelled or the number of shares of
Stock limited as provided herein. In addition, if, based on the payroll
deductions authorized by Participants at the beginning of a Phase, the
Administrator determines that the number of shares of Stock which would be
purchased at the end of a Phase exceeds the number of shares of Stock remaining
reserved under Section 12.01 hereof for issuance under the Plan, or if the
number of shares of Stock for which options are to be granted exceeds the number
of shares designated for option grants by the Administrator for such Phase, then
the Administrator shall make a pro rata allocation of the shares of Stock
remaining available in as nearly uniform and equitable a manner as the
Administrator shall
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consider practicable as of the commencement date of the Phase or, if the
Administrator so elects, as of the termination date of the Phase. In the event
such allocation is made as of the commencement date of a Phase, the payroll
deductions which otherwise would have been made on behalf of Participants shall
be reduced accordingly.
ARTICLE VI -- ELIGIBILITY
6.01 ELIGIBILITY. Each employee who is an Eligible Employee on or
immediately prior to the commencement of a Phase shall be eligible to
participate in such Phase.
ARTICLE VII -- PARTICIPATION
7.01 PARTICIPATION. Participation in the Plan is voluntary. An Eligible
Employee who desires to participate in any Phase of the Plan must complete the
plan enrollment form provided by the Administrator and deliver such form to the
Administrator or its designated representative during the Enrollment Period
established by the Administrator prior to the commencement date of the Phase.
7.02 SUBSEQUENT PHASES. An Eligible Employee who elects to participate in a
Phase of a fiscal year shall be deemed to have elected to participate in each
subsequent Phase during that fiscal year and all subsequent fiscal years unless
such Participant elects to discontinue payroll deductions during a Phase or
exercises his or her right to withdraw amounts previously withheld, as provided
under Article 10 hereof. In such event, such Participant must complete a new
plan enrollment form and file such form with the Administrator during the
Enrollment Period prior to the next Phase with respect to which the Eligible
Employee wishes to participate.
ARTICLE VIII -- PAYMENT: PAYROLL DEDUCTIONS
8.01 ENROLLMENT. Each Eligible Employee electing to participate shall
indicate such election on the plan enrollment form and designate therein a
percentage of such Participant's Compensation to be paid during the Phase. Such
percentage shall be at least one percent (1%) but not more than ten percent
(10%) of such Participant's Compensation to be paid during such Phase, or such
other maximum percentage as the Administrator may establish from time to time;
provided, however, that the payroll deduction authorized by the Participant must
equal or exceed $10 or such other minimum amount as established by the
Administrator from time to time. In order to be effective, such plan enrollment
form must be properly completed and received by the Administrator by the due
date indicated on such form, or by such other date established by the
Administrator.
8.02 PAYROLL DEDUCTIONS. Payroll deductions for a Participant shall
commence on the first paycheck issued for the payroll period which begins on or
immediately after the commencement date of the Phase and shall terminate on the
last paycheck issued for the payroll period which begins on or immediately prior
to the termination date of that Phase, unless the Participant elects to
discontinue payroll deductions or exercises his or her right to withdraw all
accumulated payroll deductions previously withheld during the Phase as provided
in Article 10 hereof. The authorized payroll deductions shall be made over the
pay periods of such Phase by deducting from the Participant's Compensation for
each such pay period that percentage specified by the Participant in the plan
enrollment form.
Unless the Participant elected to discontinue payroll deductions or
exercised his or her right to withdraw all accumulated payroll deductions
previously withheld during the preceding Phase (in which event the Participant
must complete a change of election form or a new plan enrollment form, as the
case may be, to continue participation for any subsequent Phase), the
Corporation shall continue to withhold from such Participant's Compensation the
same designated percentage specified by the Participant in the most recent plan
enrollment form previously completed by the Participant for all subsequent
Phases; provided, however, that the Participant may, if he or she so chooses,
increase, decrease or discontinue payroll deductions for any or all such
subsequent Phases by properly completing a new enrollment form during the
Enrollment Period for
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such subsequent Phase and delivering such form to the Administrator by the due
date for receipt of such forms for that Phase.
8.03 INCREASES OR DECREASES DURING A PHASE. In addition to the right to
discontinue or withdraw payroll deductions during a Phase as provided in Article
10 and the right to increase or decrease or discontinue payroll deductions for
subsequent Phases as provided in Section 8.02, a Participant may increase or
decrease the percentage of Compensation designated to be deducted during a Phase
by completing a change of election form and filing such form with the
Administrator on or before the date that is fifteen (15) days prior to the date
of the last paycheck during that Phase, or on or before such other date
established by the Administrator; provided, however, that the Participant may
exercise the right to increase or decrease his or her payroll deductions only
once during each Phase.
8.04 CHANGE IN COMPENSATION DURING A PHASE. In the event that the
Participant's Compensation is discontinued or reduced during a Phase for any
reason so that the amount actually withheld on behalf of the Participant as of
the termination date of the Phase is less than the amount anticipated to be
withheld as determined on the commencement date of the Phase, then the extent to
which the Participant may exercise his or her option shall be based on the
amounts actually withheld on his or her behalf. In the event of a change in the
pay period of any Participant, such as from biweekly to monthly, an appropriate
adjustment shall be made to the deduction in each new pay period so as to insure
the deduction of the proper amount authorized by the Participant.
ARTICLE IX -- OPTIONS
9.01 GRANT OF OPTION. Subject to Article 10, a Participant who has elected
to participate in the manner described in Article VIII and who is employed by
the Corporation or a Subsidiary as of the commencement date of a Phase shall be
granted an option as of such date to purchase that number of whole shares of
Stock determined by dividing the total amount to be credited to the
Participant's account by the option price per share set forth in Section 9.02(a)
below; provided, however, that in no event shall the number of shares subject to
the Participant's option exceed 500 shares of Stock or such other number of
shares as the Board or the Administrator may establish. The option price per
share for such Stock shall be determined under Section 9.02 hereof, and the
number of shares exercisable shall be determined under Section 9.03 hereof.
9.02 OPTION PRICE. Subject to the limitations hereinbelow, the option price
for such Stock shall be the lower of the amounts determined under paragraphs (a)
and (b) below:
(a) Eighty-five percent (85%) of the closing price for a share of the
Corporation's Stock as reported on the NASDAQ National Market or on an
established securities exchange as of the commencement date of the Phase;
or
(b) Eighty-five percent (85%) of the closing price for a share of the
Corporation's Stock as reported on the NASDAQ National Market or on an
established securities exchange as of the termination date of the Phase.
In the event that the commencement or termination date of a Phase is a
Saturday, Sunday or holiday, the amounts determined under the foregoing
subsections shall be determined using the price as of the last preceding trading
day.
If the Corporation's Stock is not so reported in the NASDAQ National Market
or upon an established securities exchange, the option price shall equal the
lesser of (i) eighty-five percent (85%) of the average of the closing "bid" and
"asked" prices quoted on the NASDAQ SmallCap Market as of the commencement date
of the Phase, or if there are no such quoted "bid" and "asked" prices on such
date, on the next preceding date for which there are quotes, and (ii)
eighty-five percent (85%) of the average of the closing "bid" and "asked" prices
quoted on the NASDAQ SmallCap Market as of the termination date of the phase, or
if there are no such quoted "bid" and "asked" prices on such date, on the next
preceding date for which there are such quotes.
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If the Corporation's Stock is not listed on an established securities
exchange, the NASDAQ National Market or the NASDAQ SmallCap Market, then the
option price shall equal the lesser of (i) eighty-five percent (85%) of the fair
market value of a share of the Corporation's Stock as of the commencement date
of the Phase, and (ii) eighty-five percent (85%) of the fair market value of
such stock as of the termination date of the Phase. Such "fair market value"
shall be determined by the Board.
9.03 LIMITATIONS. No employee shall be granted an option hereunder:
(a) Which permits his or her rights to purchase Stock under all
employee stock purchase plans of the Corporation or its Subsidiaries to
accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) of
fair market value of such Stock (determined at the time such option is
granted) for each calendar year in which such option is outstanding at any
time;
(b) If such employee would own and/or hold, immediately after the
grant of the option, Stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the
Corporation or of any Subsidiary. For purposes of determining stock
ownership under this paragraph, the rules of Section 424(d) of the Code
shall apply.
(c) Which, if exercised, would cause the limits established by the
Administrator under Section 5.02 to be exceeded.
9.04 EXERCISE OF OPTION. Subject to a Participant's right to withdraw in
the manner provided in Section 10.01, a Participant's option for the purchase of
shares of Stock will be exercised automatically on the termination date of that
Phase. However, in no event shall a Participant be allowed to exercise an option
for more shares of Stock than can be purchased with the payroll deductions
accumulated by the Participant in his or her bookkeeping account during such
Phase, whether or not the accumulated payroll deductions are less than the full
percentage amount that such Participant anticipated he or she would contribute
at the beginning of such Phase.
9.05 DELIVERY OF SHARES. As promptly as practicable after the termination
of any Phase, the Corporation's transfer agent or other authorized
representative shall deliver to each Participant herein certificates for that
number of whole shares of Stock purchased upon the exercise of the Participant's
option. The Corporation may, in its sole discretion, arrange with the
Corporation's transfer agent or other authorized representative to establish, at
the direction of the Participant, individual securities accounts to which will
be credited that number of whole shares of Stock that are purchased with the
Participant's accumulated payroll deductions pursuant to Section 9.04 above,
such securities account to be subject to such terms and conditions as may be
imposed by the transfer agent or authorized representative. Any accumulated
payroll deductions remaining after the exercise of the Participant's option
pursuant to Section 9.04 above shall remain credited to the Participant's
bookkeeping account and applied to the purchase of shares of Stock in the next
succeeding Phase, unless the Participant requests a withdrawal of such amount
pursuant to Section 10.01.
ARTICLE X -- WITHDRAWAL OR
DISCONTINUATION OF PAYROLL WITHHOLDINGS
10.01 WITHDRAWAL. A Participant may request a withdrawal of all accumulated
payroll deductions then credited to the Participant's bookkeeping account by
completing a change of election form and filing such form with the
Administrator. The Participant's request shall be effective as of the beginning
of the next payroll period immediately following the date that the Administrator
receives the Participant's properly completed change of election form. As soon
as administratively feasible after the end of that Phase, all payroll deductions
credited to a bookkeeping account for the Participant will be paid to such
Participant and no further payroll deductions will be made during that Phase or
any future Phase unless the Participant completes a new plan enrollment form as
provided in Section 8.02 above. If the Participant requests a withdrawal, the
option granted to the Participant under that Phase of the Plan shall immediately
lapse and shall not be exercisable. Partial withdrawals of payroll deductions
are not permitted.
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Notwithstanding the foregoing, in order to be effective for a particular
Phase, the Participant's request for withdrawal must be properly completed and
received by the Administrator on or before the date that is fifteen (15) days
before the date of the last paycheck during the Phase, or on or before such
other date established by the Administrator. Requests for withdrawal that are
received after that due date shall not be effective and no withdrawal shall be
made, unless otherwise determined by the Administrator.
10.02 DISCONTINUATION. A Participant may also request that the
Administrator discontinue any further payroll deductions that would otherwise be
made during the remainder of the Phase by completing a change of election form
and filing such form with the Administrator on or before the date that is
fifteen (15) days before the date of the last paycheck during the phase, or on
or before such other date established by the Administrator. The Participant's
request shall be effective as of the beginning of the next payroll period
immediately following the date that the Administrator receives the Participant's
properly completed change of election form. Upon the effective date of the
Participant's request, the Corporation will discontinue making payroll
deductions for such Participant for that Phase, and all future Phases, unless
the Participant completes another change of election form as provided above.
ARTICLE XI -- TERMINATION OF EMPLOYMENT
11.01 If a Participant's employment terminates with the Corporation for any
reason, voluntarily or involuntarily, including by reason of retirement or
death, the payroll deductions credited to such Participant's bookkeeping account
for such Phase, if any, will be returned to the Participant (or, in the case of
death, to the Participant's estate) and any options granted to such Participant
under the Plan shall immediately lapse and shall not be exercisable. The return
of such payroll deductions shall be made to the Participant (or to the
Participant's estate) as soon as administratively practicable. In the event that
such termination occurs near the end of a Phase and the Corporation is unable to
discontinue payroll deductions for such Participant for his or her final
paycheck(s), such deductions shall still be made but shall be returned to the
Participant (or his or her estate) as provided herein. In no event shall the
accumulated payroll deductions be used to purchase any shares of Stock.
If the option lapses as a result of the Participant's death, any
accumulated payroll deductions credited to the Participant's bookkeeping account
will be paid to the Participant's estate. In the event a Participant dies after
exercise of the Participant's option but prior to delivery of the Stock to be
transferred pursuant to the exercise of the option under Section 9.04 above, any
such Stock and/or accumulated payroll deductions remaining after such exercise
shall be paid by the Corporation to the Participant's estate.
The Corporation will not be responsible for or be required to give effect
to the disposition of any cash or Stock or the exercise of any option in
accordance with any will or other testamentary disposition made by such
Participant or in accordance with the provisions of any law concerning
intestacy, or otherwise. No person shall, prior to the death of a Participant,
acquire any interest in any Stock, in any option or in the cash credited to the
Participant's bookkeeping account during any Phase of the Plan.
11.02 In the event that any Subsidiary ceases to be a Subsidiary of the
Corporation, the employees of such Subsidiary shall be considered to have
terminated their employment for purposes of Section 11.01 hereof as of the date
the Subsidiary ceased to be a Subsidiary of the Corporation.
ARTICLE XII -- STOCK RESERVED FOR OPTIONS
12.01 One Hundred Thousand (100,000) shares of Stock, which may be
authorized but unissued shares of the Corporation (or the number and kind of
securities to which said 100,000 shares may be adjusted in accordance with
Section 14.01 hereof) are reserved for issuance upon the exercise of options to
be granted under the Plan. Shares subject to the unexercised portion of any
lapsed or expired option may again be subject to option under the Plan.
12.02 The Participant (or a joint tenant named pursuant to Section 9.05
above) shall have no rights as a shareholder with respect to any shares of Stock
subject to the Participant's option until the date of the
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issuance of a stock certificate evidencing such shares as provided in Section
9.05. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property), distributions or other rights
for which the record date is prior to the date such stock certificate is
actually issued, except as otherwise provided in Section 14.01 hereof.
ARTICLE XIII -- ACCOUNTING AND USE OF FUNDS
13.01 Payroll deductions for Participants shall be credited to bookkeeping
accounts, established by the Corporation for each such Participant under the
Plan. A Participant may not make any cash payments into such account. Such
account shall be solely for bookkeeping purposes and shall not require the
Corporation to establish any separate fund or trust hereunder. All funds from
payroll deductions received or held by the Corporation under the Plan may be
used, without limitation, for any corporate purpose by the Corporation, which
shall not be obligated to segregate such funds from its other funds.
ARTICLE XIV -- ADJUSTMENT PROVISION
14.01 Subject to any required action by the shareholders of the
Corporation, in the event of an increase or decrease in the number of
outstanding shares of Stock or in the event the Stock is changed into or
exchanged for a different number or kind of shares of stock or other securities
of the Corporation or another corporation by reason of a reorganization, merger,
consolidation, divestiture (including a spin-off), liquidation,
recapitalization, reclassification, stock dividend, stock split, combination of
shares, rights offering or any other change in the corporate structure or shares
of the Corporation, the Board (or, if the Corporation is not the surviving
corporation in any such transaction, the board of directors of the surviving
corporation), in its sole discretion, shall adjust the number and kind of
securities subject to and reserved under the Plan and, to prevent the dilution
or enlargement of rights of those Eligible Employees to whom options have been
granted, shall adjust the number and kind of securities subject to such
outstanding options and, where applicable, the exercise price per share for such
securities.
In the event of sale by the Corporation of substantially all of its assets
and the consequent discontinuance of its business, or in the event of a merger,
exchange, consolidation, reorganization, divestiture (including a spin-off),
liquidation, reclassification or extraordinary dividend (collectively referred
to as a "transaction"), after which the Corporation is not the surviving
corporation, the Board may, in its sole discretion, at the time of adoption of
the plan for such transaction, may provide for one or more of the following:
(a) The acceleration of the exercisability of outstanding options
granted at the commencement of the Phase then in effect, to the extent of
the accumulated payroll deductions made as of the date of such acceleration
pursuant to Article 8 hereof;
(b) The complete termination of this Plan and a refund of amounts
credited to the Participants' bookkeeping accounts hereunder; or
(c) The continuance of the Plan only with respect to completion of the
then current Phase and the exercise of options thereunder. In the event of
such continuance, Participants shall have the right to exercise their
options as to an equivalent number of shares of stock of the corporation
succeeding the Corporation by reason of such transaction.
In the event of a transaction where the Corporation survives, then the Plan
shall continue in effect, unless the Board takes one or more of the actions set
forth above. The grant of an option pursuant to the Plan shall not limit in any
way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes in its capital or business
structure or to merge, exchange or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.
C-7
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ARTICLE XV -- NONTRANSFERABILITY OF OPTIONS
15.01 Options granted under any Phase of the Plan shall not be transferable
and shall be exercisable only by the Participant during the Participant's
lifetime.
15.02 Neither payroll deductions granted to a Participant's account, nor
any rights with regard to the exercise of an option or to receive Stock under
any Phase of the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way by the Participant. Any such attempted assignment,
transfer, pledge or other disposition shall be null and void and without effect,
except that the Corporation may, at its option, treat such act as an election to
withdraw in accordance with Section 10.01.
ARTICLE XVI -- AMENDMENT AND TERMINATION
16.01 The Plan may be terminated at any time by the Board of Directors,
provided that, except as permitted in Section 14.01 hereof, no such termination
shall take effect with respect to any options then outstanding. The Board may,
from time to time, amend the Plan as it may deem proper and in the best
interests of the Corporation or as may be necessary to comply with Code Section
423 or other applicable laws or regulations; provided, however, no such
amendment shall, without the consent of a Participant, materially adversely
affect or impair the right of a Participant with respect to any outstanding
option; and provided, further, that no such amendment shall, unless the
shareholders of the Corporation have approved the same, directly or indirectly:
(a) Increase the total number of shares for which options may be
granted under the Plan (except as provided in Section 14.01 herein);
(b) Modify the group of Subsidiaries whose employees may be eligible
to participate in the Plan or materially modify any other requirements as
to eligibility for participation in the Plan; or
(c) Materially increase the benefits accruing to Participants under
the Plan.
ARTICLE XVII -- NOTICES
17.01 All notices, forms, elections or other communications in connection
with the Plan or any Phase thereof shall be in such form as specified by the
Corporation or the Administrator from time to time, and shall be deemed to have
been duly given when received by the Participant or his or her personal
representative or by the Corporation or its designated representative, as the
case may be.
C-8
<PAGE> 31
CIPRICO INC.
PROXY FOR ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD
JANUARY 25, 1996
The undersigned hereby appoints ROBERT H. KILL and CORY J. MILLER,
and each of them, with full power of substitution, as Proxies to
represent and vote, as designated below, all shares of Common Stock of
Ciprico Inc. registered in the name of the undersigned at the Annual
Meeting of Shareholders of the Company to be held the Sheraton Park
Place Hotel, 1500 Park Place Boulevard, Minneapolis, Minnesota, at 3:30
p.m. (Minneapolis time) on January 25, 1996, and at any adjournment
thereof, and the undersigned hereby revokes all proxies previously given
with respect to the meeting.
The Board of Directors recommends that you vote FOR each proposal
below.
<TABLE>
<S> <C>
1. Set the number of directors at six (6):
/ / FOR / / AGAINST / / ABSTAIN
2. Elect two Class II directors: [Nominees: Ronald B. Thomas and
Peyton Gannaway]
/ / FOR all nominees listed above (except those whose names
have been written in below)
/ / WITHHOLD AUTHORITY to vote for all nominees listed above
To withhold authority to vote for any individual nominee write
that nominee's name on the line below
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</TABLE>
<PAGE> 32
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<TABLE>
<S> <C>
3. Approve amendments to the Company's 1992 Nonqualified Stock Option Plan and 1994
Incentive Stock Option Plan and approve adoption of the Company's 1996
Restricted Stock Plan and 1996 Employee Stock Purchase Plan.
/ / FOR / / AGAINST / / ABSTAIN
4. OTHER MATTERS. In their discretion, the Proxies are ...
/ / AUTHORIZED / / NOT AUTHORIZED
to vote upon such other business as may properly come before the Meeting.
</TABLE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS
DIRECTED OR, IF NO DIRECTION IS GIVEN FOR A PARTICULAR
PROPOSAL, WILL BE VOTED FOR SUCH PROPOSAL, AND WILL BE
DEEMED TO GRANT AUTHORITY UNDER PROPOSAL NUMBER 4. THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
DATE: , 199
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PLEASE DATE AND SIGN ABOVE
EXACTLY AS NAME APPEARS AT
THE LEFT, INDICATING,
WHERE APPROPRIATE,
OFFICIAL POSITION OR
REPRESENTATIVE CAPACITY.
FOR STOCK HELD IN JOINT
TENANCY, EACH JOINT OWNER
SHOULD SIGN.
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