THIS DOCUMENT IS A COPY OF THE PRELIMINARY PROXY STATEMENT (SCHEDULE 14A) WITH
EXHIBITS AND IS PURSUANT TO SECTION 14(a) OF THE SECURITIES ACT OF 1934.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[x] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box: [x] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only
(as Permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule
14a-11(c) or Rule 14a-12
LASER CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing: (Check the appropriate bocx)
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and O-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 of other underlying value of transaction computed
persuant to Exchange Act Rule O-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 O-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:___________________
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
OF
LASER CORPORATION
-----------------------------------------
GENERAL
This Proxy Statement is furnished in connection with the solicitation
of Proxies by the Board of Directors of Laser Corporation (the "Company") for
the 1998 Annual Meeting of Shareholders of the Company to be held on May 28,
1998, at 10:00 a.m. MDT, at the Company's headquarters, 1832 South 3850 West,
Salt Lake City, Utah. Shareholders will consider and vote upon the proposals
described herein and referred to in the Notice of Annual Meeting accompanying
this Proxy Statement.
The close of business on April 9, 1998, has been fixed as the record
date for the determination of the Shareholders entitled to notice of, and to
vote at, the Annual Meeting. On such date there were outstanding and entitled
to vote 854,549 shares of common stock. Each share of common stock is entitled
to one vote on each matter to be considered at the meeting. For a description
of the principal holders of such stock, see "Security Ownership of Certain
Beneficial Owners and Management" below.
Shares represented by Proxies will be voted in accordance with the
specifications made thereon by the Shareholders. Any Proxy not specifying the
contrary will be voted in favor of Management's nominees for directors of the
Company.
The Proxies being solicited by the Board of Directors may be revoked
by any Shareholder giving the Proxy at any time prior to the Annual Meeting by
giving notice of such revocation to the Company, in writing, at the address of
the Company provided below. The Proxy may also be revoked by any Shareholder
giving such Proxy who appears in person at the Annual Meeting and advises the
Chairman of the Meeting of his intent to revoke the Proxy.
The principal executive offices of the Company are located at 1832
South 3850 West, Salt Lake City, Utah 84104. This Proxy Statement and the
enclosed Proxy are being furnished to Shareholders on or about April 17, 1998.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
- - -----------------------------------------------
The following table sets forth information as of March 31, 1998, as
to each person who owns of record, or is known by the Company to own
beneficially, more than five percent (5%) of any class of voting securities of
the Company.
Amount and
Nature of Percent
Title Name & Address Beneficial of
of Class of Beneficial Owner Ownership(1) Class(2)
- - -------- ------------------------- ------------ --------
[C] [C]
Common Dr. William H. McMahan(3) 192,619 20.0
3959 West 1820 South
Salt Lake City, UT 84104
Common Paula F. Julander(4) 83,750 8.7
1467 Penrose Drive
Salt Lake City, UT 84103
Common Carl M. Fireman(5) 52,500 5.4
2967 Roundtree Drive
Troy, MI 48083
(1) Except as otherwise indicated, all shares are directly owned with voting
and investment power held by the person named.
(2) Unless otherwise noted, based upon 962,674 shares (including shares
subject to options that are exercisable within sixty days) outstanding
as of March 31, 1998.
(3) Based upon information included on a Form 4 filed by Dr. McMahan, former
Chairman and President of the Company, with the Securities and Exchange
Commission ("SEC") on January 15, 1990. The Company has not received any
amendments to this Form 4. Includes 22,080 shares held by Linda R.
McMahan, Dr. McMahan's spouse.
(4) Based upon information provided by Ms. Julander on a SEC Form 144 dated
December 11, 1997.
(5) Based upon information included in a Schedule 13D filed with the SEC on
August 27, 1997.
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Security Ownership of Management
- - --------------------------------
The following table sets forth certain information as of March 31,
1998, regarding the ownership of each class of equity securities of the Company
by each director or nominee for director of the Company and by all executive
officers and directors as a group.
Amount and
Nature of Percent
Title Name & Address Beneficial of
of Class of Beneficial Owner Ownership(1) Class
- - -------- -------------------- ------------ -------
[C] [C]
Common B. Joyce Wickham 27,375 2.8
Common Rod O. Julander 110,750(2) 11.5
Common Mark L. Ballard 24,024 2.5
Common Elizabeth A. Whitsett 0 *
Common All Executive Officers 162,149 16.8
and Directors as a
Group. (4 persons)
(1) Except as otherwise indicated, all shares listed include shares subject to
options that officers and directors have the right to exercise within
sixty days and are directly owned with voting and investment power held
by the person named.
(2) Includes 83,750 shares owned by Paula F. Julander, his wife, as to which
Dr. Julander disclaims beneficial ownership.
Ms. Wickham and Whitsett and Messrs. Julander and Ballard are
required to annually report the acquisition of options granted pursuant to
stock option plans of the Company on a Form 5. These reports were filed for
1997 and evidence the grant of options to the individuals named.
Changes in Control
- - ------------------
The Company is unaware of any arrangement which may at a subsequent
date result in any change of control of the Company.
PROPOSAL 1 - ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide that the board of
directors shall be elected each year at the annual meeting of the Shareholders
of the Company. At the 1998 Annual Meeting, the Board of Directors will
nominate B. Joyce Wickham, Rod O. Julander, Mark L. Ballard and Elizabeth A.
Whitsett for election as directors of the Company. Upon election, the directors
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will serve until the next Annual Meeting of the Shareholders or until their
successors have been elected and qualified. The Board of Directors believes
that all of the nominees will be available and able to serve as directors.
In the absence of instructions to the contrary, the persons named in
the Proxy will vote the Proxies "FOR" the election of the nominees listed below,
unless otherwise specified in the Proxy. The Board of Directors has no reason
to believe that any nominee will be unable to serve, but if any nominee should
become unable to serve, the Proxies will be voted for such other person as the
Board of Directors shall recommend.
Certain information concerning the nominees to the Board of Directors
is set forth below:
Has Served
Name of Company as Director
Nominee Age Position Held Since
- - ------- --- ------------- -----------
[C] [C]
B. Joyce 46 Director, Chairman, 1989
Wickham President, Chief
Executive Officer
and Treasurer
Rod O. 64 Director and Secretary 1989
Julander
Mark L. 50 Director, Vice President 1994*
Ballard and Assistant Secretary
Elizabeth A. 51 Director 1998
Whitsett
* Mr. Ballard served as a Director of the Company from June 1983 to October
1987.
Board and Committee Meetings
- - ----------------------------
There were seven meetings of the Board of Directors during the last
fiscal year. Each of the directors attended at least seventy-five (75%) of the
meetings held. For a description of directors' fees, see "Executive
Compensation - Compensation of Directors." The Board of Directors has
designated Audit, Stock Option, and Executive and Compensation committees. At
the present time, Rod O. Julander and Elizabeth A. Whitsett are the members of
the Audit and Executive and Compensation committees. Dr. Julander and Elizabeth
A. Whitsett are members of the Stock Option committee, employee plan. B. Joyce
Wickham and Mark L. Ballard are members of the Stock Option committee, director
plan.
The functions performed by the Audit Committee include (i) meeting
with the Company's independent auditors to discuss the scope of the auditors'
annual review of the Company's financial statements, procedures recommended by
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the auditors, and the results of the auditors' annual review, and (ii) reporting
and making recommendations to the Board of Directors. The Audit Committee held
two meetings in 1997.
The functions performed by the Executive and Compensation Committee
are to periodically review the compensation paid to officers of the Company and
to make recommendations to the Board of Directors concerning such compensation.
The Executive and Compensation Committee held two meetings in 1997.
The functions performed by the Stock Option Committee, employee plan,
include (i) administering the Company's employee stock option plans, and (ii)
determining eligible officers and employees to whom any stock options should be
granted pursuant to the stock option plans, the number thereof, and the terms of
any such grants. This Stock Option Committee held two meetings in 1997.
The functions performed by the Stock Option Committee, director plan,
include (i) administering the Company's director stock option plans, and (ii)
determining eligible directors to whom any stock options should be granted
pursuant to the stock option plans, the number thereof, and the terms of any
such grants. This Stock Option Committee held two meetings in 1997.
Executive Officers and Directors
- - --------------------------------
The executive officers, directors, and significant employees of the
Company are listed on the following table:
Name Position Age
---- -------- ---
[C]
B. Joyce Wickham Chairman, Director, 46
President, Chief
Executive Officer
and Treasurer
Mark L. Ballard Director, Vice President 50
and Assistant Secretary
Rod O. Julander Director and Secretary 64
Elizabeth A. Whitsett Director 51
The term of each executive officer is one year. Officers are elected
each year at the Annual Meeting of the Board of Directors.
Certain information regarding the business experience of these
executive officers, directors and significant employees is set forth below.
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B. Joyce Wickham. Ms. Wickham was elected Chairman of the Board,
-----------------
President and Chief Executive Officer, and Treasurer of the Company in 1989.
She has served in those capacities since that time, except for the period from
June 1989 until December 1990 when she served solely as Chairman of the Board
and Treasurer. Ms. Wickham has been employed by the Company and its
subsidiaries or associated companies since 1981, with the exception of one
year during 1988-1989 at which time she was employed with McMahan Enterprises
and Kaye Corporation in General Management and as Director of Personnel and
Operations. Ms. Wickham has held various executive positions for the Company
including Manager of American Laser GmbH, Munich, Germany, Manager of the
Company's Taipei, Taiwan material procurement operations, Manager of Optical
Computer, Inc. and President of Southfork Electronics, Inc. Ms. Wickham holds
a Bachelor of Science Degree in Psychology from Brigham Young University.
Mark L. Ballard. Mr. Ballard currently is employed by the Company as
---------------
Vice President of Laser Corporation and President of American Laser. He was
elected to these positions in May 1991 and June 1994, respectively. Prior to
May 1991, Mr. Ballard held various executive, officer and director positions for
the Company and its subsidiaries. He has been employed by the Company since
1975, with the exception of one year during 1983-1984 at which time he was
President and a director of HGM. Mr. Ballard holds a Bachelor of Arts degree in
Accounting from Utah State University.
Rod O. Julander. Dr. Julander was elected to the Board of Directors
---------------
and as Secretary of the Company in 1989. Dr. Julander has been a Professor of
Public Administration at Weber State University, Ogden, Utah, since 1960 and is
Chairman of the Political Science Department. In 1984 he was a consultant for
University of Utah Center for Public Administration, and a lobbyist for the Utah
Chapter of the National Association of Social Workers and the Utah Society of
Radiologic Technologists. In 1967 he was Personnel Consultant at Hill Air Force
Base, Utah and from 1965 to 1966 was Executive Director of the Utah Committee on
Children and Youth. Dr. Julander received his Bachelor of Science and Master of
Science in Philosophy and his Ph.D. in Political Science from the University of
Utah.
Elizabeth A. Whitsett. Ms. Whitsett was elected to the Board of
---------------------
Directors February 20, 1998. Ms. Whitsett has been a practicing attorney
since 1978. Currently she is employed by Huntsman Corporation, Salt Lake City,
Utah in the position of Associate General Counsel. Huntsman Corporation
and its affiliated companies manufacture and market a variety of specialty and
industrial chemicals and polymers worldwide. Prior to 1993 Ms. Whitsett was a
partner in the law firm of Van Cott, Bagley, Cornwall & McCarthy in Salt Lake
City, Utah. Ms. Whitsett received her Juris Doctorate from the University of
Southern California in 1978, a MAT from Yale University in 1969 and a Bachelor
of Arts degree in 1967 from Stanford University.
Dr. Julander and Ms. Whitsett are employed full time in activities
which do not involve the Company. Ms. Wickham is employed full time by the
Company as its President, Chief Executive Officer and Treasurer. Mr. Ballard is
employed full time by the Company as its Vice President and Assistant Secretary.
If any outside director is requested to perform services for the Company beyond
normal service as a director, such director will be compensated for the
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performance of such services at rates to be agreed upon by such director and the
Company.
There are no family relationships between any directors or executive
officers of the Company.
EXECUTIVE COMPENSATION
The following table sets forth the aggregate cash remuneration paid
by the Company for services rendered in all capacities during the last fiscal
year by its Chief Executive Officer and by its most highly compensated executive
officers whose cash remuneration from the Company and its subsidiaries exceeded
$100,000. No executive officer received cash remuneration in excess of $100,000
in 1997.
Summary Compensation Table
(a) Name and Principal Position
---------------------------
B. Joyce Wickham
President, Chief Executive Officer, and Director
Long Term Compensation
Annual Compensation Awards Payouts
--------------------------- ------------------------------
(b) (c) (d) (e) (f) (g) (h) (i)
Other Securities
Annual Restricted Underlying All Other
Year Compensation Stock Options/ LTIP Compensation
Ended Salary Bonus (1) Award(s) SARs Payouts (2)
Dec. 31 ($) ($) ($) ($) (#) ($) ($)
- - --------------------------------------------------------------------------------
[C] [C] [C] [C] [C] [C] [C] [C]
1997 $72,100 $7,983 $416 - 5,000 - $4,160
1996 $72,100 $7,983 $659 - 5,000 - $5,547
1995 $68,571 $7,210 $278 - 5,000 - $2,773
(1) Amounts include Company payments for additional health insurance coverage.
(2) Payments in lieu of vacation earned.
Other Compensation
- - ------------------
Ms. Wickham's Employment Agreement provides to Ms. Wickham, as
additional compensation, a payment equal to fifty percent (50%) of the price
actually paid by her to purchase stock of the Company during any calendar year
of her employment, up to a maximum of ten percent (10%) of her annual
compensation for such year. Ms. Wickham has not purchased any shares pursuant
to this provision.
The Company does not have a key-man life insurance policy on the life
of any executive officer or director. The Company provides health and life
insurance to its employees. The Company had no other retirement, pension or
similar programs in 1997. In 1990, the Company established a 401(k) retirement
program for employees. The Company did not make a contribution to the Plan in
1997.
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Stock Option Plans
- - ------------------
The Company has two stock option plans for key employees: an
incentive stock option plan pursuant to which incentive stock options to
purchase a maximum of 62,500 shares of common stock may be issued and a
non-statutory stock option plan pursuant to which non-qualified stock options to
purchase 62,500 shares may be issued. Amounts shown have been adjusted to take
into account the five for four stock dividend. The Stock Option Committee of
the Board of Directors administers both plans and has discretion to determine
the terms of options granted under each plan. Such terms include the exercise
price of each option, the number of shares subject to each option, and the
exercisability of such options. Options under the incentive plan must be
granted at the fair market value on the date of grant except that the option
price must be one hundred ten percent (110%) of such fair market value if the
optionee owns more than ten percent (10%) of the outstanding common stock. The
aggregate fair market value of the shares issuable on exercise of options
granted to any employee in a calendar year may not exceed $20,000 plus certain
carry over allowances. Options under the non-statutory plan must be granted at
a price equal to at least the fair market value of the shares on the date of
grant. The maximum term of options granted under either plan is five years.
Each of the plans provides that if the optionee's employment by the Company is
terminated for any reason the option shall thereupon expire and any and all
right to purchase shares pursuant thereto shall terminate ninety days after the
optionee's employment terminates. Under the incentive stock option plan in
1997, options to purchase an aggregate of 5,000 shares of common stock at an
exercise price of $1.30 per share were granted and remain exercisable to two
officers. In addition during 1997, non-statutory stock options were granted and
remain exercisable to four non-officers to purchase an aggregate of 5,625
shares of common stock at an exercise price of $1.30 and an aggregate of 10,625
shares of common stock at an exercise price of $3.728 per share were granted to
two officers and four non-officers. 4,375 shares of common stock granted under
the incentive stock plan in 1992 were exercised during 1997 at a price of $1.536
per share. The incentive plan, as amended on May 21, 1993 and July 15, 1994,
and the non-statutory plan, as amended on May 21, 1993, expire on June 30, 1998.
The following table sets forth information respecting all individual
grants of options and stock appreciation rights ("SARs") made during the last
completed fiscal year to any of the executives named in the Summary Compensation
Table above.
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Option/SAR Grants in Last Fiscal Year
Individual Grants
- - --------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Number of % of Total
Securities Options/SARs
Underlying Granted Exercise or Ex-
Options/SARs During Base Price piration
Name Granted (#) Fiscal Year(1) ($/share) Date
- - --------------------------------------------------------------------------------
[C] [C] [C] [C]
B. Joyce Wickham 2,500 19 % $1.30 Jun. 2002
2,500 19 % $3.728 Dec. 2002
(1) The percentages are based on the total of options to purchase 13,125 shares
granted in June of 1997 and the total of options to purchase 13,125 shares
in December of 1997.
Stock Bonus Plan
- - ----------------
In January 1985, the Board of Directors adopted a Stock Bonus Plan
(the "Stock Bonus Plan") to provide stock bonuses to qualified employees of
the Company. 62,500 shares of the Company's common stock have been reserved for
issuance under the Stock Bonus Plan.
The Board of Directors has discretion to determine qualified
employees to whom stock bonuses should be awarded, the number of shares to be
granted to each qualified employee and any restrictions to be placed upon the
shares. No more than 1,000 shares may be granted to any one employee during
any fiscal year. Employees are not required to pay cash or other consideration
for shares awarded under the Stock Bonus Plan. As of March 31, 1998, the
Company had granted 1,058 shares of common stock under the stock bonus plan, all
of which were issued prior to 1987.
Director Options
- - ----------------
On October 16, 1987, the Board of Directors adopted a resolution,
ratified by the Shareholders of the Company, granting all non-employee directors
five-year options to purchase 10,000 shares of common stock, at the end of each
six months of service as a director, at the last reported sale price on the date
of grant. Such options will not be granted under the incentive or non-statutory
stock option plans. On March 22, 1990, the Board of Directors adopted a
resolution terminating the director option program. As of December 31, 1991,
options to purchase an aggregate of 10,000 shares of common stock at exercise
prices ranging from $5.60 to $6.90 per share, had been granted to former
directors and now have expired. On May 29, 1992 the Board of Directors
reinstated this option plan whereby each outside director would be granted a
five-year option to purchase 2,000 shares of common stock at the end of each six
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months of service as a director beginning on June 1, 1992. The plan provides
that if a director shall cease to be a director of the Corporation for any
reason the option may be exercised by the former director at any time within
one year after such cessation. A formalized Stock Option Plan and Stock Option
Agreement was adopted on September 10, 1992, effective May 29, 1992. On June 1,
1993 the plan was amended to change the method of calculating the exercise price
to that of the employee's Incentive Stock Option Plan. All amounts shown have
been adjusted to take into account the five for four stock dividend. Of the
options granted to directors during 1992, an aggregate of 2,500 shares of common
stock at an exercise price of $1.752 per share have expired and an aggregate of
2,500 shares of common stock at an exercise price of $1.536 per share were
exercised. Options granted in 1993 to purchase an aggregate of 2,500 shares of
common stock at the exercise price of $2.424 per share and an aggregate of
2,500 shares of common stock at an exercise price of $1.20 per share remain
exercisable. During 1994, options to purchase an aggregate of 2,500 shares of
common stock at an exercise price of $1.144 per share and an aggregate of 2,500
shares of common stock at an exercise price of $4.104 per share were granted.
Options were granted in 1995 to purchase an aggregate of 2,500 shares of common
stock at the exercise price of $2.90 per share and an aggregate of 2,500 shares
of common stock at an exercise price of $1.90 per share. In 1996, options to
purchase an aggregate of 2,500 shares of common stock at an exercise price of
$2.40 per share and an aggregate of 2,500 shares of common stock at an exercise
price of $2.00 per share were granted. Options were granted in 1997 to purchase
a aggregate of 2,500 shares of common stock at the exercise price of $1.30 per
share and an aggregate of 2,500 shares of common stock at the exercise price of
$3.728 per share.
Termination of Employment Arrangement
- - -------------------------------------
Pursuant to the terms of the Employment Agreements between B. Joyce
Wickham and the Company and Mark L. Ballard and the Company, in the event of
termination by the Company of their employment, Ms. Wickham shall be entitled to
twelve months of severance benefits at the time of termination and Mr. Ballard
shall be entitled to eleven months of severance benefits at the time of
termination, unless such termination shall be for cause, lack of performance,
resignation or by reason of death.
Compensation of Directors
- - -------------------------
Board members who are also employees of the Company do not receive
any directors' fees. Non-employee Board members receive $10,000 per year in
directors' fees. Directors are reimbursed for their expenses of attending
meetings outside the area in which they live.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's administrative offices and primary assembly facilities
for its laser products are located in an approximately 46,000 square foot
building in Salt Lake City, Utah, which is owned by Dr. McMahan, former Chairman
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and President of the Company, who owns approximately twenty percent (20%) of the
stock of the Company. The Company leases the building from Dr. McMahan pursuant
to a lease agreement which terminates on April 30, 1999. In January 1992, the
lease was amended eliminating the annual cost of living index rent escalation
provision, providing for a new annual base rent of $236,725, which was paid in
1996 and 1997.
PROPOSAL 2 - RATIFICATION AND APPROVAL OF THE LASER CORPORATION
1998 STOCK INCENTIVE PLAN
Background
- - ----------
As of June 30, 1998, the two stock option plans for employees will
terminate by their terms. As a result, the Board of Directors, believing that
the ability to grant stock option to key employees is necessary to attract and
retain key employees, authorized the adoption of the Laser Corporation Stock
Incentive Plan (the "1998 Plan") to make an additional 150,000 shares of Company
Common Stock available for distribution to the Company's key officers and
employees.
Consequently, the shareholders will be asked at the Annual Meeting to
vote on a proposal to ratify and approve the adoption of the 1998 Plan. The
1998 Plan was approved by the Board of Directors on March 30, 1998, subject to
stockholder approval.
The Board of Directors believes that substantial benefits accrue to
the Company from the granting of stock awards under the 1998 Plan to its key
officers and employees. Such awards encourage such persons to acquire a
proprietary interest in the Company through stock ownership and thereby afford
them a greater incentive to enhance the value of the Company Common Stock
through their own efforts in improving the Company's business. The granting
of awards under the 1998 Plan also assists in obtaining and attracting competent
personnel who will contribute to the Company's success by their ability,
ingenuity and industry and to provide incentive to the participating personnel
which will inure to the benefit of all stockholders of the Company. For these
reasons, the Board adopted the 1998 Plan. Accordingly, the Board of Directors
and management believe that ratification and approval of the 1998 Plan is in the
best interests of the Company and recommend that shareholders vote in favor of
the proposal.
The following is a summary of the material features of the 1998 Plan
and is qualified in its entirety by reference to it. A copy of the 1998 Plan is
attached hereto as Exhibit A.
General
- - -------
The 1998 Plan provides for the issuance of stock options, performance
stock units, restricted stock units or any combination thereof (each an
"Award"). Stock options may be granted to Eligible Employees (as such term is
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defined within the 1998 Plan). Eligible Employees may be granted "incentive
stock options" within the meaning of Section 422A of the Code and non-qualified
(for federal income tax purposes) stock options.
Performance stock units and restricted stock units may be granted to
Eligible Employees and represent the right to receive one share of Company
Common Stock. In the case of performance stock units, Company Common Stock
would be received upon the attainment of certain Company performance objectives.
Such performance objectives would be set by the Committee. In the case of
restricted stock units, Company Common Stock would be received upon completion
of a restriction period, the duration of which would be determined by the
Committee.
In all cases, Awards are subject to the terms and provisions of the
1998 Plan described below. The maximum number of shares of Company Common Stock
reserved and available for issuance under the 1998 Plan is 150,000 shares, which
constitutes approximately 14.9% of the outstanding shares of company Common
Stock (as of March 1, 1998).
Duration and Administration of the 1998 Plan
- - --------------------------------------------
The 1998 Plan will terminate on January 1, 2008, unless otherwise
terminated by resolution of the Board of Directors. Initially, the 1998 Plan
will be administered by the Company's Stock Option Committee (the "Committee").
The Committee is composed solely of two or more Directors who are non-employee
Directors. The current members of the Committee are Rod O. Julander and
Elizabeth A. Whitsett (see, "The Board of Directors and Committees of the
Board"). Subject to the terms and conditions of the 1998 Plan, the Committee
has full and final authority in its absolute discretion to, without limitation:
(i) determine the terms and conditions of Awards; (ii) construe and interpret
the 1998 Plan and any agreement or instrument entered into thereunder; (iii)
adopt, amend, or rescind rules and regulations that may be advisable in the
administration of the 1998 Plan; (iv) establish, amend or waive the rules and
regulations and the instruments evidencing Awards granted under the 1998 Plan;
and (v) make all other determinations deemed necessary or advisable for the
administration of the 1998 Plan. Any decision made or action taken by the
Committee in connection with the administration, interpretation and
implementation of the 1998 Plan and of its rules and regulations will be, to
the extent permitted by law, conclusive and binding upon all Eligible Employees
and upon any person claiming under or through any of them. Neither the
Committee nor any of its members is liable for any action taken by the Committee
pursuant to the 1998 Plan. No member of the Committee is liable for the act of
any other member.
Securities Subject to the 1998 Plan
- - -----------------------------------
No more that 150,000 shares of Company Common Stock may be issued
pursuant to the 1998 Plan in the aggregate, subject to equitable adjustment by
the Committee in the event of stock splits, stock dividends, combinations,
exchanges of shares or similar capital adjustments. If any Award expires
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without having been fully exercised, the shares with respect to which such Award
has not been exercised will be available for further Awards.
Grant and Method of Exercise of Awards
- - --------------------------------------
Subject to certain conditions, the duration of each Award granted
under the 1998 Plan will be determined by the Committee, provided that no Award
shall be granted after the tenth anniversary of the establishment of the 1998
Plan and no such Award shall be exercisable or vest, as applicable, later than
the tenth anniversary of the date the Award was granted.
Each stock option granted under the 1998 Plan will have an exercise
price of no less than the fair market value at the date of grant which will be
determined by averaging the highest and lowest sales prices for the Company
Common Stock on The Nasdaq Stock Market on the date of the grant. A stock
option granted under the 1998 Plan will become exercisable in equal increments
of one-third (1/3) of the shares of Company Common Stock which are covered by
the stock option. The first third is immediately exercisable on the date of the
grant with the remaining two-thirds (2/3) to become exercisable on the first
anniversary date of the grant.
Shares of the Company Common Stock shall be deliverable upon the
vesting of performance stock unit Award or restricted stock units Award for no
consideration other than services rendered or, in the Committee's sole
discretion, the minimum amount of consideration other than services, required
to be received by the Company in order to assure compliance with applicable
state law, which amount shall not, in any case, exceed ten percent (10%) of the
fair market value of such shares of Company Common Stock on that date of
issuance.
Awards may be exercised by the giving of written notice to the
Company of the exercise of the Award accompanied by full payment of the exercise
price (if applicable) in cash or, in the Committee's discretion, its equivalent.
The Committee also may allow cashless exercise as permitted under the Federal
Reserve Board's Regulation T.
Exercise of Stock Options upon Termination of Employment
- - --------------------------------------------------------
Termination due to Death or Disability
If an Eligible Employee's employment with the Company and all
subsidiaries ceases because of death or disability, the option may be exercised
by the Eligible Employee (or, in the event of death, such person's estate or
personal representative) until the earlier of either: (i) the first anniversary
of such termination of employment, or (ii) the expiration of the option, but
only to the extent the option was exercisable at the date of such termination
of employment.
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Termination Without Cause or Due to Constructive Termination
If an Eligible Employee's employment with the Company and all
subsidiaries is terminated by the Company without "cause" or in the event of
"Constructive Termination" (including a "Change in Control") (as all such terms
are defined within the 1998 Plan) the option may be exercised by the Eligible
Employee (or, in the event of death, such person's estate or personal
representative) until the expiration of the option, buy only to extent the
option was exercisable at the date of such termination of employment. The
option agreements with respect to the awards granted under the 1998 Plan to
date provided for the immediate and full vesting of the option if the optionee's
employment is terminated without "cause" or in the event of the optionee's
"Constructive Termination."
Termination for any other Reason
If an Eligible Employee's employment with the Company and all
subsidiaries ceases for any reason other than death, disability, without cause
or Constructive Termination, the option may be exercised by the Eligible
Employee (or, in the event of death, such person's estate or personal
representative) until the earlier of either: (i) the 90th day following such
termination of employment, or (ii) the expiration of the option, but only to the
extent the option was exercisable at the date of such termination of employment.
Subject to certain limitations set forth in the 1998 Plan, the
Committee may waive any restrictions or conditions set forth in an option
agreement concerning an Eligible Employee's right to exercise any stock option
and/or the time and method of exercise.
Cancellation of Restricted Stock Unit
- - -------------------------------------
Awards or Performance Stock Unit Awards
- - ---------------------------------------
If an Eligible Employee's employment with the Company and all
subsidiaries terminates for any reason, the unvested portion of any restricted
stock units Award or performance stock units Award will be canceled and the
Eligible Employee shall not be entitled to receive any consideration in respect
of such cancellation; provided, however, that the Committee, subject to certain
limitations set forth in the 1998 Plan, may waive any restrictions or conditions
relating to the vesting of restricted stock units Awards and performance stock
units Awards.
Income Tax Treatment
- - --------------------
The Company has been advised that under current law certain of the
income tax consequences under the laws of the United States to Eligible
Employees and the Company of Awards granted under the 1998 Plan generally should
be as set forth in the following summary. This summary only addresses income
tax consequences for Eligible Employees and the Company.
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An Eligible Employee who is granted an incentive stock option which
qualifies under Section 422 of the Code will not recognize income at the time of
grant or exercise of such Award. No federal income tax deduction will be
allowable to the Company upon the grant or exercise of such Award. Upon the
exercise of an incentive stock option, however, special alternative minimum tax
rules apply for the Eligible Employee. When the Eligible Employee sells such
shares more than one (1) year after the date of exercise of Award and more than
two (2) years after the date of grant of the incentive stock option, the
employee will normally recognize a long term capital gain or loss equal to the
difference, if any, between the sales price of such shares and the option
exercise price. If the Eligible Employee does not hold such shares for the
period, when the employee sells such shares, the employee will recognize
ordinary compensation income and possible capital gain or loss in such amounts
as are prescribed by the code and the regulations thereunder. Subject to
applicable provisions of the Code and regulation, the Company generally will be
entitled to a federal income tax deduction in the amount of such ordinary
compensation income.
An Eligible Employee to whom a non-qualified option (an option which
is not an incentive stock option) is granted will not recognize income at the
time of grant of such option. When the Eligible Employee exercises such
non-qualified option, such person will recognize ordinary compensation income
equal to the difference, if any, between the option exercise price and the fair
market value, as the date of the option exercise, of the shares such person
receives. The tax basis of such shares to such person will be equal to the fair
market value, as of the date of the option exercise, of the shares such person
receives (or the exercise price, if greater) and the holding period for such
shares will commence on the day on which such person recognized taxable income
in respect to such shares. Subject to applicable provisions of the Code and
regulations, the Company generally will be entitled to a federal income tax
deduction in respect of non-qualified options in the amount of such ordinary
compensation income recognized by the Eligible Employee.
An Eligible Employee to whom a restricted stock units Award or a
performance stock units Award is granted will not recognize income at the time
of grant to such Award. When such Eligible Employee receives shares of Company
Common Stock, the Eligible Employee will recognize ordinary compensation income
equal to the fair market value of any shares received. Subject to applicable
provisions of the Code and regulations thereunder, the Company generally will be
entitled to a federal income tax deduction in respect of the Award of Company
Common Stock in an amount equal to the ordinary Compensation income recognized
by the Eligible Employee.
The discussion set forth above does not purport to be a complete
analysis of all potential tax consequences relevant to recipients of Awards of
the Company or to describe tax consequences based on particular circumstances.
It is based on the United States federal income tax law and interpretational
authorities as of the date of this Proxy Statement, which are subject to change
at any time. This discussion does not address state or local income tax
consequences or income tax consequences for taxpayers who are not subject to
taxation in the United States.
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Vote Required
- - -------------
The action of the Board of Directors in adopting the 1998 Plan
requires the ratification and approval by an affirmative vote of the holders
of a majority of shares of Company Common Stock present in person or represented
by proxy at the Annual Meeting.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS A VOTE
FOR THE RATIFICATION AND APPROVAL OF THE LASER CORPORATION STOCK INCENTIVE PLAN.
PROPOSAL 3 - RATIFICATION OF APPOINTMENT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
The Board of Directors of the Company has selected Tanner + Co. as
the independent public accountants of the Company for the fiscal year ending
December 31, 1998. Tanner + Co. has served as the Company's independent public
accountants since November 4, 1994.
During the two most recent years the Company has not consulted with
Tanner + Co. on items which (i) were or should have been subject to SAS 50 or
(ii) concerned the subject matter of a disagreement or reportable event with
the former auditor, (as described in Regulation S-K Item 304(a)(2)).
Representatives of Tanner + Co. are expected to attend the Annual
Meeting of Shareholders and will be available to respond to appropriate
questions and will be afforded the opportunity to make a statement if they
desire to do so.
In the absence of instructions to the contrary, the persons named in
the Proxy will vote the Proxies FOR approval of the selection of Tanner + Co. as
independent public accountants for the Company.
SHAREHOLDER PROPOSALS
If a Shareholder wishes to present a proposal at the 1999 Annual
Meeting of Shareholders, the proposal must be received by Laser Corporation,
1832 South 3850 West, Salt Lake City, Utah 84104 prior to December 15, 1998.
The Board of Directors will review any proposal which is received by that date
and determine whether it is a proper proposal to present at the 1999 Annual
Meeting.
VOTE REQUIRED
A majority of the 854,549 issued and outstanding shares of common
stock of the Company shall constitute a quorum at the Annual Meeting. Under
the Utah Revised Business Corporation Act, the affirmative vote of at least a
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majority of the shares represented at the meeting is required for all proposals
to come before the meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company does not intend to present and has not been informed that any other
person intends to present, a matter for action at the 1998 Annual Meeting other
than as set forth herein and in the Notice of Annual Meeting. If any other
matter properly comes before the meeting, it is intended that the holders of
Proxies will act in accordance with their best judgment. The Board of Directors
may read the minutes of the 1997 Annual Meeting of Shareholders and make
reports, but Shareholders will not be requested to approve or disapprove such
minutes or reports.
In addition to the solicitation of proxies by mail, certain of the
officers and employees of the Company, without extra compensation, may solicit
proxies personally or by telephone. The Company will also request brokerage
houses, nominees, custodians and fiduciaries to forward soliciting materials
to the beneficial owners of common stock held of record and will reimburse such
persons for forwarding such material. The cost of this solicitation of proxies
will be borne by the Company.
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB (INCLUDING
FINANCIAL STATEMENTS AND FINANCIAL STATEMENTS SCHEDULES) FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "10-KSB") MAY BE OBTAINED WITHOUT CHARGE
BY WRITING TO THE COMPANY, ATTENTION: ROD O. JULANDER, SECRETARY, 1832
SOUTH 3850 WEST, SALT LAKE CITY, UTAH 84104. COPIES OF THE COMPANY'S 1997
ANNUAL REPORT TO SHAREHOLDERS, INCLUDING THE 10-KSB, ARE BEING MAILED WITH
THIS PROXY STATEMENT. ADDITIONAL COPIES MAY BE OBTAINED BY WRITING TO LASER
CORPORATION, ATTENTION: ROD O. JULANDER, SECRETARY, 1832 SOUTH 3850 WEST,
SALT LAKE CITY, UTAH 84104.
The enclosed Proxy is furnished for you to specify your choices with
respect to the matters referred to in the accompanying Notice and described in
this Proxy Statement. If you wish to vote in accordance with the Board's
recommendations, merely sign, date and return the Proxy in the enclosed
envelope, which requires no postage if mailed in the United States. A prompt
return of your Proxy will be appreciated.
By Order of the Board of Directors
Rod O. Julander, Secretary
Salt Lake City, Utah
April 17, 1998
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EXHIBIT A
LASER CORPORATION
STOCK INCENTIVE PLAN
TO BE EFFECTIVE JANUARY 1, 1998
SECTION 1. GENERAL PURPOSE OF PLAN; DEFINITIONS.
The name of this Plan is the Laser Corporation Stock Incentive Plan
(the "Plan"). The purpose of this Plan is to enable the Corporation (as
hereinafter defined) and its Subsidiaries (as hereinafter defined) to obtain and
retain competent personnel who will contribute to the Corporation's success by
their ability, ingenuity and industry and to provide incentives to the
participating officers and key employees which are related to increases in
stockholder value and will therefore inure to the benefit of all stockholders of
the Corporation.
For purposes of this Plan, the following terms shall be defined as set
forth below:
(a) "Award" means any grant under this Plan in the form of Stock Options,
Performance Stock Units, Restricted Stock Units or any combination of the
foregoing.
(b) "Board" means the Board of Directors of the Corporation.
(c) "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor thereto.
(d) "Committee" means the Stock Option Committee or any other committee the
Board may subsequently appoint to administer this Plan. The Committee shall be
composed entirely of directors who meet the qualifications referred to in
Section 2 of this Plan.
(e) "Corporation" means Laser Corporation, a corporation incorporated under
the laws of the State of Utah (or any successor corporation).
(f) "Disability" means an event of illness or other incapacity of Optionee
resulting in Optionee's failure or inability to discharge Optionee's duties as
an employee of the Corporation, any Subsidiary or any Related Entity for ninety
(90) or more days during any period of 120 consecutive days.
(g) "Eligible Employee" means an employee of the Corporation, any
Subsidiary or any Related Entity as described in Section 4 of this Plan.
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(h) "Fair Market Value" means, as of any given date, with respect to any
Awards granted hereunder, the mean of the high and low trading price of the
Stock on such date as reported on The Nasdaq Stock Market or if the Stock is not
then traded on The Nasdaq Stock Market, on such other national securities
exchange on which the Stock is admitted to trade or, if none, on the National
Association of Securities Dealers Automated Quotation System if the Stock is
admitted for quotation thereon; provided, however, that if any such system,
exchange or quotation system is closed on any day on which Fair Market Value
is to be determined, Fair Market Value shall be determined as of the first day
immediately proceeding such day on which such system, exchange or quotation
system was open for trading; provided, further, that in all other circumstances,
"Fair Market Value" means the value determined by the Committee after obtaining
an appraisal by one or more independent appraisers meeting the requirements of
regulations issued under Section 170(a)(1) of the Code.
(i) "Incentive Stock Option" means any Stock Option intended to qualify as
an "incentive stock option" within the meaning of Section 422 of the Code.
(j) "Non-Employee Director" shall have the meaning set forth in Rule 16b-3
("Rule 16b-3"), as promulgated by the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended from time to time (the "Exchange
Act"), or any successor definition adopted by the Securities and Exchange
Commission.
(k) "Nonqualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(l) "Optionee" means a Participant granted a Stock Option pursuant to
Section 5 of this Plan which remains outstanding.
(m) "Participant" means any Eligible Employee selected by the Committee,
pursuant to the Committee's authority in Section 2 of this Plan, to receive
Awards.
(n) "Performance Stock Unit" means the right to receive one share of Stock
as set forth in an Award granted pursuant to Section 7 of this Plan.
(o) "Related Entity" means any corporation, joint venture or other entity,
domestic or foreign, other than a Subsidiary, in which the Corporation owns,
directly or indirectly, a substantial equity interest.
(p) "Restricted Stock Unit" means the right to receive one share of Stock
as set forth in an Award granted pursuant to Section 7 of this Plan.
(q) "Retirement" means (i) retirement from active employment under a
retirement plan of the Corporation, any Subsidiary or Related Entity or under
an employment contract with any of them or (ii) termination of employment at or
after age 55 under circumstances which the Committee, in its sole discretion,
deems equivalent to retirement.
(r) "Stock" means the common stock, par value $0.05 per share, of the
Corporation.
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(s) "Stock Option" means any option to purchase shares of Stock granted
pursuant to Section 5 of this Plan.
(t) "Subsidiary" means any corporation in an unbroken chain of corporations
beginning with the Corporation, if each of the corporations (other than the last
corporation in the unbroken chain) owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.
SECTION 2. ADMINISTRATION.
This Plan shall be administered by the Committee, composed solely of
two or more directors who are Non-Employee Directors, who shall be appointed by
the Board and who shall serve at the pleasure of the Board. In the event that a
Committee has not been appointed or in the Board's sole discretion, this Plan
shall be administered by the Board which shall have all of the power and
authority of the Committee set forth below. The Committee shall have the power
and authority in its sole discretion to grant Awards pursuant to the terms and
provisions of this Plan.
In particular, the Committee shall have the full authority, not
inconsistent with this Plan:
(a) to select Participants;
(b) to determine whether and to what extent Awards are to be granted to
Participants hereunder;
(c) to determine the number of shares of Stock to be covered by each such
Award granted hereunder, but in no case shall such number be in the aggregate
greater than that allowed under this Plan;
(d) to approve or ratify transactions by Participants involving
acquisitions from the Corporation or dispositions to the Corporation of equity
securities of the Corporation made pursuant to the terms of this Plan;
(e) to determine the terms and conditions of any Award granted hereunder
(including, without limitation, (i) the restrictive periods applicable to
Restricted Stock Unit Awards and (ii) the performance objectives and periods
applicable to Performance Stock Unit Awards);
(f) to waive compliance by a Participant with any obligation to be
performed by such Participant under any Award and to waive any term or condition
of any such Award (provided, however, that no such waiver shall detrimentally
affect the rights of the Participant without such Participant's consent); and
(g) to determine the terms and conditions which shall govern all written
agreements evidencing the Awards.
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The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing this Plan as it shall,
from time to time deem advisable; to interpret the provisions of this Plan and
the terms and conditions of any Award issued, expired, terminated, canceled or
surrendered under this Plan (and any agreements relating thereto); and to
otherwise supervise the administration of this Plan.
All decisions made by the Committee pursuant to the provisions of this
Plan and as to the terms and conditions of any Award (and any agreements
relating thereto) shall be final and binding on all persons, including the
Corporation and the Optionees.
SECTION 3. NUMBER OF SHARES OF STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for issuance
under this Plan shall be one hundred fifty thousand (150,000). Such shares of
Stock may consist, in whole or in part, of authorized and unissued shares of
Stock, treasury shares or issued shares of Stock reacquired by the Corporation
at any time, as the Board may determine.
To the extent that (a) a Stock Option expires or is otherwise
terminated, canceled or surrendered without being exercised (including, without
limitation, in connection with the grant of a replacement option) or (b) any
Restricted Stock Unit Award or Performance Stock Unit Award granted hereunder
expires or is otherwise terminated or is canceled, the shares of Stock
underlying such Stock Option or subject to such Restricted Stock Unit Award or
Performance Stock Unit Award shall again be available for issuance in connection
with future Awards under this Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, spin-off, or other change in corporate
structure or capitalization affecting the Stock, the Committee shall make an
equitable adjustment or substitution in the number and class of shares reserved
for issuance under this Plan, the number and class of shares covered by
outstanding Awards and the option price per share of Stock Options to reflect
the effect of such change in corporate structure or capitalization on the Stock;
provided, however, that any fractional shares resulting from such adjustment
shall be eliminated; provided further, however, that if by reason of any such
change in corporate structure or capitalization a Participant holding a
Restricted Stock Unit Award or Performance Stock Unit Award shall be entitled,
subject to the terms and conditions of such Award, to additional or different
shares of any security, the issuance of such additional or different shares
shall thereupon be subject to all of the terms and conditions (including
restrictions and performance criteria) which were applicable to such Award prior
to such change in corporate structure or capitalization; and, provided, further,
however, that unless the Committee in its sole discretion determines otherwise,
any issuance by the Corporation of shares of stock of any class or securities
convertible into shares of stock of any class shall not affect, and no such
adjustment or substitution by reason thereof shall be made with respect to, the
number or class of shares reserved for issuance under this Plan, the number or
class of shares covered by outstanding Awards or any option price or applicable
price.
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SECTION 4. ELIGIBILITY.
Officers and other key employees of the Corporation, its Subsidiaries
and its Related Entities who are responsible for or contribute to the
management, growth or profitability of the business of the Corporation, its
Subsidiaries or its Related Entities shall be eligible to be granted Awards;
provided however, with respect to an employee of a Related Entity, that such
person was an employee of the Corporation, a Subsidiary or, if originally an
employee of the Corporation or a Subsidiary, of another Related Entity
immediately prior to becoming employed by such Related Entity and accepted
employment with such Related Entity at the request of the Corporation or a
Subsidiary. The Participants under this Plan shall be selected, from time to
time, by the Committee, in its sole discretion, from among those Eligible
Employees.
SECTION 5. STOCK OPTIONS.
(a) GRANT AND EXERCISE. Stock Options may be granted either alone or in
addition to other Awards granted under this Plan. Any Stock Option granted
under this Plan shall be in such form as the Committee may, from time to time,
approve, and the terms and conditions of Stock Option Awards need not be the
same with respect to each Optionee. Each Optionee shall enter into a Stock
Option agreement ("Stock Option Agreement") with the Corporation, in such form
as the Corporation shall determine, which agreement shall set forth, among other
things, the option price of the option, the term of the option and conditions
regarding exercisability of the option granted thereunder.
(i) NATURE OF OPTIONS. The Committee shall have the authority to
grant any Participant either Incentive Stock Options, Nonqualified Stock Options
or both types of Stock Options, except that the Committee shall not grant any
Incentive Stock Options to an employee of a Related Entity. Any Stock Option
which does not qualify as an Incentive Stock Option, or the terms of which at
the time of its grant provide that it shall not be treated as an Incentive Stock
Option, shall constitute a Nonqualified Stock Option.
(ii) EXERCISABILITY. Subject to such terms and conditions as
shall be determined by the Committee in its sole discretion at or after the
time of grant, Stock Options shall be exercisable from time to time to the
extent of 33% of the number of shares of Stock covered by the Stock Option
immediately upon the date of grant of the Stock Option, and to the extent of
100% of the number of shares of Stock covered by the Stock Option on and after
the first anniversary and before the expiration of the stated term of the Stock
Option (or to such lesser extent as the Committee in its sole discretion shall
determine at the time of grant or to such greater extent as the Committee in its
sole discretion shall determine at or after the time of grant).
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(iii) METHOD OF EXERCISE. Stock Options may be exercised by
giving written notice of exercise delivered in person or by mail as required
by the terms of any Stock Option Agreement at the Corporation's principal
executive office, specifying the number of shares of Stock with respect to
which the Stock Option is being exercised, accompanied by payment in full of the
option price in cash or its equivalent as determined by the Committee in its
sole discretion. If requested by the Committee, the Optionee shall deliver to
the Corporation the Stock Option Agreement evidencing the Stock Option being
exercised for notation thereon of such exercise and return thereafter of such
agreement to the Optionee. As determined by the Committee in its sole
discretion at or after the time of grant, payment of the option price in full or
in part may also be made in the form of shares of unrestricted Stock already
owned by the Optionee (based on the Fair Market Value of the Stock on the date
the Stock Option is exercised); provided however, that in the case of an
Incentive Stock Option, the right to make payment of the option price in the
form of already owned shares of Stock may be authorized only at the time of
grant. The Committee also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or by any other means which the Committee determines to be consistent with this
Plan's purpose and applicable law. An Optionee shall generally have the rights
to dividends or other rights of a stockholder with respect to shares of Stock
subject to the Stock Option when the Optionee has given written notice of
exercise, has paid in full for such shares of Stock, and, if requested, has made
representations described in Section 9(a) of this Plan.
(b) TERMS AND CONDITIONS. Stock Options granted under this Plan shall
be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem desirable.
(i) OPTION PRICE. The option price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at the time of grant,
but shall be not less than 100% of the Fair Market Value of the Stock on the
date of the grant; provided, however, that if any Participant owns or is deemed
to own (by reason of the attribution rules of Section 424(d) of the Code) more
than 10% of the combined voting power of all classes of stock of the Corporation
or any Subsidiary when an Incentive Stock Option is granted to such Participant,
the option price of such Incentive Stock Option (to the extent required by the
Code at the time of grant) shall be not less than 110% of the Fair Market Value
of the Stock on the date such Incentive Stock Option is granted.
(ii) OPTION TERM. The term of each Stock Option shall be fixed by
the Committee at the time of grant, but no Stock Option shall be exercisable
more than ten years after the date such Stock Option is granted; provided,
however, that if any Participant owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Corporation or any Subsidiary when
an Incentive Stock Option is granted to such Participant, such Stock Option (to
the extent required by the Code at time of grant) shall not be exercisable more
than five years from the date such Incentive Stock Option is granted.
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(iii) TRANSFERABILITY OF OPTIONS. Except as otherwise determined
by the Committee, no Stock Options shall be transferable by the Optionee
otherwise than by will or by the laws of descent and distribution and all Stock
Options shall be exercisable, during the Optionee's lifetime, only by the
Optionee, or in the case of Optionee's legal incompetency, only by Optionee's
guardian or legal representative.
(iv) OPTION EXERCISE AFTER TERMINATION BY REASON OF DEATH OR
DISABILITY. If an Optionee's employment with the Corporation, any Subsidiary
or any Related Entity terminates by reason of death or Disability, and Stock
Option held by such Optionee may thereafter be exercised for a period of one
year (or such shorter period as the Committee in its sole discretion shall
specify at or after the time of grant) from the date of such termination or
until the expiration of the stated term if such Stock Option, whichever period
is shorter, to the extent to which the Optionee would on the date of termination
have been entitled to exercise the Stock Option (or to such greater or lesser
extent as the Committee in its sole discretion shall determine at or after the
time of grant). In the event of a termination of employment by reason of death
or Disability, if an Incentive Stock Option is exercised after the expiration of
the exercise period that applies for purposes of Section 422 of the Code, such
Stock Option will thereafter be treated as a Nonqualified Stock Option.
(v) OPTION EXERCISE AFTER TERMINATION WITHOUT CAUSE OR
CONSTRUCTIVE TERMINATION. If an Optionee's employment with the Corporation,
any Subsidiary, or any Related Entity is terminated, by the Corporation or such
Subsidiary or such Related Entity, without "Cause" (as such term is defined
within the Stock Option Agreement) or in the event of "Constructive Termination"
(as such term is defined within the Stock Option Agreement) of the Optionee's
employment with the Corporation or such Subsidiary or such Related Entity is so
terminated the Committee, in its sole discretion, may permit the Optionee to
exercise any Stock Option held by such Optionee, to the extent not theretofore
exercised, in whole or in part with respect to all remaining shares covered by
the Stock Option at any time prior to the expiration of the Stock Option (or
such shorter period as the Committee in its sole discretion shall specify at or
after the time of grant), to the extent to which the Optionee would on the date
of termination have been entitled to exercise the Stock Option (or to such
greater or lesser extent as the Committee in it sole discretion shall determine
at or after the time of grant). An Optionee's acceptance of employment, at the
request of the Corporation or a Subsidiary, with a Related Entity (or acceptance
of employment, at the request of the Corporation or a Subsidiary, with any other
Related Entity), shall not be deemed a termination of employment hereunder and
any Stock Option held by Optionee may be exercised thereafter to the extent
that the Optionee would on the date of exercise have been entitled to exercise
such Stock Option if such Optionee had continued to be employed by the
Corporation or such Subsidiary (or such initial Related Entity), provided that
the Optionee has been in continuous employ with the Related Entity to which such
Optionee has moved from the date of acceptance of employment therewith until the
date of exercise. In the event of termination of employment by the Corporation,
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any Subsidiary or any Related Entity without Cause or in the event of
Constructive Termination of the Optionee's employment or the acceptance of
employment with a Related Entity, if an Incentive Stock Option is exercised
after the expiration of the exercise period that applies for purposes of Section
422 of the Code, such Stock Option will thereafter be treated as a Nonqualified
Stock Option.
(vi) OPTION EXERCISE AFTER TERMINATION OR RESIGNATION. If an
Optionee's employment with the Corporation, any Subsidiary, or any Related
Entity terminates for any reason not set forth in Sections 5(iv) or (v) above,
the Committee, in its sole discretion, may permit the Optionee to exercise any
Stock Option held by such Optionee to the extent such Option was exercisable
on the date of such termination (or to such greater or lesser extent as the
Committee in its sole discretion shall determine at or after the time of grant)
for a period of ninety (90) days from the date of such termination (or such
shorter period as the Committee in its sole discretion shall specify at or after
the time of grant).
(vii) OTHER TERMINATION. Except as otherwise provided in this
Section 5 of this Plan, or as determined by the Committee in its sole
discretion, if an Optionee's employment with the Corporation, any Subsidiary or
any Related Entity terminates, all Stock Options held by the Optionee will
terminate.
(viii) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent
required for incentive stock option treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the date of Incentive Stock Option
is granted) of the shares of Stock with respect to which Incentive Stock Options
granted under this Plan and all other option plans of the Corporation or any
Subsidiary become exercisable for the first time by an Optionee during any
calendar year shall not exceed $100,000; provided, however, that if the
aggregate Fair Market Value (so determined) of the shares of Stock covered by
such options exceeds $100,000 during any year in which they become exercisable,
such options with a Fair Market Value in excess of $100,000 will be Nonqualified
Stock Options.
SECTION 6. RESTRICTED STOCK UNITS AND PERFORMANCE STOCK UNITS.
(a) GRANT. Awards of Restricted Stock Units or Performance Stock Units
may be granted either alone or in addition to other Awards granted under this
Plan. Each Restricted Stock Unit or Performance Stock Unit represents the right
to receive, subject to the terms and provisions of this Plan and any agreements
evidencing such Awards, one share of Stock. If the Committee in its sole
discretion so determines at the time of grant, a Participant to whom a
Restricted Stock Unit Award or Performance Stock Unit Award has been granted may
be credited with an amount equivalent to all cash dividends ("Dividend
Equivalents") that would have been paid to the holder of such Restricted Stock
Unit Award or Performance Stock Unit Award if one share of Stock for every
Restricted Stock Unit or Performance Stock Unit awarded had been issued to the
holder on the date of grant of such Restricted Stock Unit Award or Performance
Stock Unit Award. The Committee shall determine the terms and conditions of each
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Restricted Stock Unit Award and Performance Stock Unit, including without
limitation, the number of Restricted Stock Units or Performance Stock Units to
be covered by such Awards, the restricted period applicable to Restricted
Stock Unit Awards and the performance objectives applicable to Performance Stock
Unit Awards. The Committee in its sole discretion may prescribe terms and
conditions applicable to the vesting of such Restricted Stock Unit Awards or
Performance Stock Unit Awards in addition to those provided in this Plan. The
Committee shall establish such rules and guidelines governing the crediting of
Dividend Equivalents, including the timing, form of payment and payment
contingencies of Dividend Equivalents, as it may deem desirable. The Committee
in its sole discretion may at any time accelerate the time at which the
restrictions on all or any part of a Restricted Stock Unit Award lapse or deem
the performance objectives with respect to all or any part of a Performance
Stock Unit Award to have been attained. Restricted Stock Units Awards and
Performance Stock Unit Awards shall not be transferable otherwise than by will
or by the laws of descent and distribution. Shares of Stock shall be deliverable
upon the vesting of Restricted Stock Unit Awards and Performance Stock Unit
Awards for no consideration other than services rendered or, in the Committee's
sole discretion, the minimum amount of consideration other than services (such
as the par value of Stock) required to be received by the Corporation in order
to assure compliance with applicable state law, which amount shall not exceed
10% of the Fair Market Value of such shares of Stock on the date of issuance.
Each such Award shall be evidenced by a Restricted Stock Unit agreement
("Restricted Stock Unit Award Agreement") or Performance Stock Unit Award
agreement ("Performance Stock Unit Award Agreement").
(b) TERMS AND CONDITIONS. Unless otherwise determined by the Committee
in its sole discretion:
(i) a breach of any term or condition provided in this Plan, the
Restricted Stock Unit Award Agreement or the Performance Stock Unit Award
Agreement or established by the Committee with respect to such Restricted Stock
Unit Award or Performance Stock Unit Award will cause a cancellation of the
unvested portion of such Restricted Stock Unit Award or Performance Stock Unit
Award (including any Dividend Equivalents credited in respect thereof) and the
Participant shall not be entitled to receive any consideration in respect of
such cancellation; and
(ii) termination of such holder's employment with the
Corporation, any Subsidiary or any Related Entity prior to the lapsing of the
applicable restriction period or attainment of applicable performance objectives
will cause a cancellation of the unvested portion of such Restricted Stock Unit
Award or Performance Stock Unit Award (including any Dividend Equivalents
credited in respect thereof) and the Participant shall not be entitled to
receive any consideration in respect of such cancellation.
(c) COMPLETION OF RESTRICTION PERIOD AND ATTAINMENT OF PERFORMANCE
OBJECTIVES. To the extent that restrictions with respect to any Restricted
Stock Unit Award lapse or performance objectives with respect to any Performance
Stock Unit Award are attained and provided that other applicable terms and
conditions have been satisfied:
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(i) such of the Restricted Stock Units or Performance Stock Units
as to which restrictions have lapsed or performance objectives have been
attained shall become vested and the Committee shall cause to be issued and
delivered to the Participant a stock certificate representing a number of shares
of Stock equal to such number of Restricted Stock Units or Performance Stock
Units, and, subject to Section 11(a) hereof, free of all restrictions; and
(ii) any Dividend Equivalents credited in respect of such
Restricted Stock Units or Performance Stock Units shall become vested to the
extent that such Restricted Stock Units or Performance Stock Units shall have
become vested and the Committee shall cause such Dividend Equivalents to be
delivered to the Participant.
Any such Restricted Stock Unit Award or Performance Stock Unit Award
(including any Dividend Equivalents credited in respect thereof) that shall
not have become vested at the end of the applicable restricted period or the
period given for the attainment of performance objectives shall expire,
terminate and be cancelled and the Participant shall not thereafter have any
rights with respect to the Restricted Stock Units or Performance Stock Units
(or any Dividend Equivalents credited in respect thereto) covered thereby.
SECTION 7. AMENDMENT AND TERMINATION.
The Board may amend, alter, or discontinue this Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the rights of a
Participant under any Award theretofore granted without such Participant's
consent, or which, without the approval of the stockholders of the Corporation
(where such approval is necessary to satisfy then applicable requirements of
Rule 16b-3 under the Exchange Act, any Federal tax law relating to Incentive
Stock Options or applicable state law), would:
(a) except as provided in Section 3 of this Plan, increase the total
number of shares of Stock which may be issued under this Plan;
(b) except as provided in Section 3 of this Plan, decrease the option
price of any Stock Option to less than 100% of the Fair Market Value on the
date of the grant of the Option;
(c) change the class of employees eligible to participate in this
Plan; or
(d) extend (i) the period during which Stock Options may be granted or
(ii) the maximum period of any Award under Sections 5(b)(ii) or 6(b)(i) of this
Plan.
Except as restricted herein with respect to Incentive Stock Options,
the Committee may amend or alter the terms and conditions of any Award
theretofore granted, and of any agreement evidencing such Award, prospectively
or retroactively, but no such amendment or alteration shall impair the rights of
any Optionee under such Award or agreement without such Optionee's consent.
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SECTION 8. UNFUNDED STATUS OF PLAN.
This Plan is intended to constitute an "unfunded" plan. With respect to
any payments not yet made and due to a Participant by the Corporation, nothing
contained herein shall give any such Participant any rights that are greater
than those of a general unsecured creditor of the Corporation.
SECTION 9. GENERAL PROVISIONS.
(a) The Committee may require each Optionee purchasing shares of Stock
pursuant to a Stock Option to represent to and agree with the Corporation in
writing that such Optionee is acquiring the shares of Stock without a view to
distribution thereof. All certificates for shares of Stock delivered under this
Plan and, to the extent applicable, all evidences of ownership with respect to
Dividend Equivalents delivered under this Plan, shall be subject to such
stock-transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Stock is then listed or
quotation system on which the Stock is admitted for trading and any applicable
Federal or state securities law, and the Committee may cause a legend or legends
to be put on any such certificates to make appropriate reference to such
restrictions.
(b) Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan shall not confer upon any employee of the Corporation, any Subsidiary or
any Related Entity any right to continued employment with the Corporation, any
Subsidiary or any Related Entity as the case may be, nor shall it interfere in
any way with the right of the Corporation, any Subsidiary or any Related Entity
to terminate the employment of any of its employees at any time.
(c) Each Participant shall be deemed to have been granted an Award on
the date the Committee took action to grant such Award under this Plan or such
later date as the Committee in its sole discretion shall determine at the time
such grant is authorized.
(d) Unless the Committee otherwise determines, each Participant shall,
no later than the date as of which the value of an Award first becomes
includable in the gross income of the Participant for federal income tax
purposes, pay to the Corporation, or make arrangements satisfactory to the
Committee regarding payment of, any federal, state or local taxes of any kind
required by law to be withheld with respect to the Award. The obligations of
the Corporation under this Plan shall be conditional on such payment or
arrangements and the Corporation (and, where applicable, its Subsidiaries and
its Related Entities) shall, to the extent permitted by law, have the right to
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deduct any such taxes from any payment of any kind otherwise due to the
Participant. A Participant may elect to have such tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the Corporation to withhold
from shares of Stock to be issued upon the exercise of a Stock Option or upon
the vesting of any Restricted Stock Unit Award or the Performance Stock Unit
Award a number of shares of Stock with an aggregate Fair Market Value that would
satisfy the withholding amount due, or (ii) transferring to the Corporation
shares of Stock owned by the Participant with an aggregate Fair Market Value
that would satisfy the withholding amount due. With respect to any Participant
who is an executive officer, the election to satisfy the tax withholding
obligations relating to the exercise of a Stock Option or to the vesting of a
Restricted Stock Unit Award or Performance Stock Unit Award in the manner
permitted by this subsection (d) shall be made during the "window period" as
described within the Corporation Insider Trading Policy unless otherwise
determined in the sole discretion of the Committee of the Board.
(e) No member of the Board or the Committee, nor any officer or
employee of the Corporation acting on behalf of the Board or the Committee,
shall be personally liable for any action, failure to act, determination or
interpretation taken or made in good faith with respect to this Plan, and all
members of the Board or the Committee and each and any officer or employee of
the Corporation acting on their behalf shall, to the extent permitted by law,
be fully indemnified and protected by the Corporation in respect of any such
action, failure to act, determination or interpretation.
(f) This Plan is intended to satisfy the conditions of Rule 16b-3 under
the Exchange Act, and all interpretations of this Plan shall, to the extent
permitted by law, regulations and rulings, be made in a manner consistent with
and so as to satisfy the conditions of Rule 16b-3 under the Exchange Act. The
term "executive officer" as used in this Plan means any director or officer
who is subject to the provisions of Section 16(b) of the Exchange Act. Any
provisions of this Plan or the application of any provision of this Plan
inconsistent with Rule 16b-3 under the Exchange Act shall be inoperative and
shall not affect the validity of this Plan.
(g) In interpreting and applying the provisions of this Plan, any Stock
Option granted as an Incentive Stock Option pursuant to this Plan shall, to the
extent permitted by law, regulations and rulings be construed as, and any
ambiguity shall be resolved in favor of preserving its status as, an "incentive
stock option" within the meaning of Section 422 of the Code. Once an Incentive
Stock Option has been granted, no action by the Committee that would cause such
Stock Option to lose its status under the Code as an "incentive stock option"
shall be effective as to such Incentive Stock Option unless taken at the request
of or with the consent of the Participant. Notwithstanding any provision to the
contrary in this Plan or in any Incentive Stock Option granted pursuant to this
Plan, if any change in law or any regulation or ruling of the Internal Revenue
Service shall have the effect of disqualifying any Stock Option granted under
this Plan which is intended to be an "incentive stock option" within the meaning
of Section 422 of the Code, the Stock Option granted shall nevertheless continue
to be outstanding as and shall be deemed to be a Nonqualified Stock Option under
this Plan.
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(h) Notwithstanding any other provision herein to the contrary, the
maximum number of shares with respect to which Awards may be granted to the
same Participant under this Plan may not exceed, in the aggregate, 20,000
shares, except to the extent of adjustments authorized by Section 3 of this
Plan.
SECTION 10. EFFECTIVE DATE OF PLAN.
This Plan shall be effective January 1, 1998, subject to the approval
by the affirmative vote of the holders of a majority of the shares of Stock of
the Corporation present in person or by proxy at the meeting of stockholders on
that date.
SECTION 11. TERM OF PLAN.
No Award shall be granted under this Plan on or after the tenth
anniversary of the effective date of this Plan; provided, however, that Awards
granted prior to such tenth anniversary may extend beyond that date.
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