SCHEDULE 14A
(RULE l4a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement | | Confidential, For Use of the
Commission Only (as permitted
By Rule 14a-6(e) (2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or- Rule 14a-12
ICC TECHNOLOGIES, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|x| No fee required
| | Fee Computed on table below per Exchange Act Rules 14a-6(i)(1) and O-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule O-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
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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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<PAGE>
ICC TECHNOLOGIES, INC.
44 W. 18th Street, 6th Floor
New York, New York 10011
February 17, 1999
Dear Fellow Stockholder:
You are cordially invited to attend the Special Meeting of Stockholders
of ICC Technologies, Inc. (the "Company"), to be held in the ballroom at the
Masonic Hall located at 71 West 23rd Street, New York NY 10010 on March 16th,
1999, at 9:30 a.m., local time.
At the Special Meeting, you will be asked to consider and approve four
matters. Three matters relate to amendments to the Company's Certificate of
Incorporation to provide for (i) a change in the name of the Company to Rare
Medium Group, Inc., (ii) an increase in the authorized Common Stock of the
Company from 50 million shares to 200 million shares, and (iii) the
classification of the Company's Board of Directors. In addition, you will be
asked to consider and approve the adoption of the Company's 1998 Long-Term
Incentive Plan.
The enclosed proxy statement contains important information concerning
the proposals to be considered at the Special Meeting. We hope you will take the
time to study it carefully. Your vote is very important, regardless of how many
shares you own. Even if you presently plan to attend the Special Meeting, please
complete, sign, date and return the enclosed proxy card promptly in the
accompanying self-addressed postage prepaid envelope. If you do join us at the
Special Meeting and wish to vote in person, you may revoke your proxy at that
time.
Sincerely,
/s/ Glenn S. Meyers
------------------------------------
Glenn S. Meyers
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
ICC TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held March 16, 1999
- --------------------------------------------------------------------------------
To the Stockholders of ICC Technologies, Inc.:
Please take notice that a Special Meeting of Stockholders of ICC
Technologies, Inc., a Delaware corporation (the "Company") will be held in the
ballroom at the Masonic Hall, located at 71 West 23rd Street, New York NY 10010,
on March 16, 1999, at 9:30 a.m., local time, for the following purposes, all as
more fully described in the attached Proxy Statement:
1. To approve a proposal to amend the Company's Certificate of
Incorporation to change the name of the Company to Rare Medium Group,
Inc.;
2. To approve a proposal to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of Common
Stock of the Company from 50,000,000 shares to 200,000,000 shares;
3. To approve a proposal to amend the Company's Certificate of
Incorporation to divide the Board of Directors into three classes; and
4. To approve a proposal to adopt the Company's 1998 Long-Term Incentive
Plan.
The Board of Directors has fixed the close of business on January 29,
1999 as the record date for the determination of stockholders entitled to vote
at the meeting. Only stockholders of record at the close of business on the
record date will be entitled to notice of, and to vote at, the meeting or any
postponement or adjournment thereof.
YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING OF STOCKHOLDERS.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, WE RESPECTFULLY URGE
YOU TO COMPLETE, SIGN, DATE, AND PROMPTLY RETURN THE ENCLOSED FORM OF PROXY. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
New York, New York By Order of the Board of Directors.
February 17, 1999
/s/ John S. Gross,
-----------------------------------
John S. Gross, Senior Vice
President, Chief Financial
Officer, Treasurer and Assistant
Secretary
- --------------------------------------------------------------------------------
Important
Please complete, sign, date and promptly mail your proxy card.
- --------------------------------------------------------------------------------
<PAGE>
ICC TECHNOLOGIES, INC.
44 W. 18th Street, 6th Floor
New York, New York 10011
-----------------------------------------------
PROXY STATEMENT
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 16, 1999
------------------------------------------------
GENERAL INFORMATION
This Proxy Statement and the accompanying proxy card are being furnished
to the stockholders ("Stockholders") of ICC Technologies, Inc., a Delaware
corporation (the "Company"), in connection with the solicitation of proxies by
the Board of Directors of the Company (the "Board of Directors") for use in
voting at the Special Meeting of Stockholders to be held in the ballroom at the
Masonic Hall, located at 71 West 23rd Street, New York NY 10010, on March 16,
1999, at 9:30 a.m., local time, and at any and all adjournments or postponements
thereof (the "Special Meeting"). This Proxy Statement and the accompanying proxy
card are first being mailed or delivered to Stockholders of the Company on or
about February 17, 1999.
At the Special Meeting, Stockholders will be asked to consider and vote
upon the following proposals:
1. To approve a proposal to amend the Company's Certificate of
Incorporation to change the name of the Company to Rare Medium
Group, Inc.;
2. To approve a proposal to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of
Common Stock of the Company from 50,000,000 shares to 200,000,000
shares;
3. To approve a proposal to amend the Company's Certificate of
Incorporation to divide the Board of Directors into three
classes; and
4. To approve a proposal to adopt the Company's 1998 Long-Term
Incentive Plan.
The Board of Directors of the Company has unanimously voted for and
approved the above proposals and recommends a vote for approval of each of the
above proposals by the Stockholders of the Company entitled to vote at the
Special Meeting.
Voting Rights and Voting Securities
The Board has fixed the close of business on January 29, 1999 as the
record date for the determination of Stockholders entitled to notice of, and to
vote at, the Special Meeting (the "Record Date"). Only Stockholders of record at
the close of business on the Record Date will be entitled to vote at the Special
<PAGE>
Meeting or any and all adjournments or postponements thereof. On the Record
Date, the Company had 30,730,170 shares of Common Stock, par value $0.01 per
share (the "Common Stock") issued and outstanding. Each holder of Common Stock
will be entitled to one vote per share, either in person or by proxy, on each
matter presented to the Stockholders of the Company at the Special Meeting.
The enclosed proxy provides that each Stockholder may specify that his
or her shares be voted "For," "Against," or "Abstain" from voting with respect
to each of the proposals. If the enclosed proxy is properly executed, duly
returned to the Company in time for the Special Meeting and not revoked, your
shares will be voted in accordance with the instructions contained thereon.
Where a signed proxy is returned, but no specific instructions are indicated,
your shares will be voted "FOR" each of the proposals. Proxies marked as
abstaining will be treated as present for purposes of determining a quorum for
the Special Meeting, but will not be counted as voting in respect of any matter
as to which abstinence is indicated.
Any Stockholder who executes and returns a proxy may revoke it in writing
at any time before it is voted at the Special Meeting by: (i) filing with the
Secretary or Assistant Secretary of the Company, at the above address, written
notice of such revocation bearing a later date than the proxy or a subsequent,
later dated and signed proxy relating to the same shares; or (ii) attending the
Special Meeting and voting in person (although attendance at the Special Meeting
will not in and of itself constitute revocation of a proxy).
The holders of a majority of the voting power of the outstanding shares
of Common Stock entitled to vote at the Special Meeting constitute a quorum at
the Special Meeting. The affirmative vote of the holders of a majority of the
votes entitled to be cast at the Special Meeting (whether or not represented in
person or by proxy at the Special Meeting ) is required to approve Proposals 1,
2 and 3. The affirmative vote of the holders of a majority of the votes
represented in person or by proxy at the Special Meeting is required to approve
Proposal 4.
The directors and executive officers of the Company holding an aggregate
of approximately 6.0% of the outstanding shares of Common Stock on the Record
Date have indicated that they intend to vote all of their shares "FOR" the
approval of Proposals 1, 2, 3 and 4.
All votes will be tabulated by a representative of the American Stock
Transfer & Trust Company, transfer agent for the Company's Common Stock, who
will serve as the inspector of elections at the meeting and who will separately
tabulate affirmative votes, negative votes, abstentions and broker non-votes.
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<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of January 15,
1999, regarding beneficial ownership of the shares of Common Stock of the
Company by (i) each person who is known to the Company to be the beneficial
owner of more than 5% of the shares of Common Stock, (ii) each of the Company's
named executive officers under the Summary Compensation Table under the heading
"Executive Compensation," (iii) each Director, and (iv) all executive officers
and directors of the Company as a group. Unless otherwise indicated, the
Stockholders listed possess sole voting and investment power with respect to the
shares indicated as owned by them.
<TABLE>
<CAPTION>
Number of Percentage
Name and Address (1) Position Shares Owned of Class
- -------------------- -------- ------------ ----------
<S> <C> <C> <C>
Glenn S. Meyers Chairman of the Board of 1,821,274(2) 5.9%
Directors, President and CEO
William A. Wilson Former President and CEO 605,000(3) 1.9%
John S. Gross Senior Vice President, Chief -- (4) 0.0%
Financial Officer, Treasurer
and Assistant Secretary
Jeffrey M. Killeen Director -- (5) 0.0%
Richard T. Liebhaber Director -- (6) 0.0%
Steve Winograd Director 45,030(5) 0.1%
Irwin L. Gross Former Chairman of the 2,841,061(7) 8.8%
Ocean Castle Investments Board, President and CEO
1811 Chestnut Street, #120
Philadelphia PA 19103
Wisconsin Investment Board 2,020,900 6.6%
121 E. Wilson Street
Madison WI 53702
Laura Huberfeld/Naomi Bodner 3,441,005 11.2%
Partnership
152 W. 57th Street
New York, NY 10019
All Executive Officers and Directors 1,866,304 6.0%
as a group (8 persons)
</TABLE>
- ------------------
(1) Addresses are included for beneficial owners of more than 5%.
Beneficial ownership has been determined pursuant to Rule 13d-3 of the
Securities Exchange Act of 1934, as amended.
[NOTES CONTINUED ON FOLLOWING PAGE]
3
<PAGE>
(2) Includes 1,454,607 shares of Common Stock and currently exercisable
options to purchase 333,667 shares. Does not include options to
purchase an additional 1,633,333 shares at $2.375 that will vest
through 4/15/03.
(3) Consists of shares of Common Stock which may be acquired pursuant to
currently exercisable options.
(4) Does not include options to purchase 150,000 shares of Common Stock at
$2.375 that will vest annually through 5/31/01, contingent on continued
employment.
(5) Does not include options to purchase 75,000 shares of Common Stock at
$1.9375 that will vest annually through 10/28/01, contingent on
continued service as a director (applies to each Killeen and Winograd).
(6) Does not include options to purchase 75,000 shares of Common Stock at
$2.8125 that will vest annually through 11/2/01, contingent on continued
service as a director.
(7) Includes 664,693 shares of Common Stock and currently exercisable
options to purchase 475,000 shares of Common Stock and warrants to
purchase 698,000 shares. Also includes 651,692 shares of Common Stock
held of record by a Trust for the benefit of the children of Mr. Irwin
Gross, with respect to which their is an independent Trustee, and
351,676 shares held by a Charitable Trust for the benefit of Mr. Irwin
Gross, with respect to which Mr. Irwin Gross exercises voting and
investment power. Does not include options to purchase 500,000 shares
which will vest ratably over a three year period ending April 2001.
4
<PAGE>
PROPOSAL 1
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO
CHANGE THE NAME OF THE COMPANY TO RARE MEDIUM GROUP, INC.
The Board of Directors has unanimously approved and recommends to the
Stockholders an amendment to the Company's Certificate of Incorporation to
change the name of the Company from ICC Technologies, Inc. to Rare Medium Group,
Inc. The Board of Directors believes that the change in name will better reflect
the present operations and business of the Company.
The Company, through its wholly-owned subsidiaries, Rare Medium, Inc.,
I/O 360, Inc. and DigitalFacades Corporation, provides Internet professional
services primarily to large and medium sized businesses. Such services focus on
the design, delivery and implementation of Internet web site applications and
strategies. Prior to April 1998, the Company had been engaged principally in the
design, development, manufacture and marketing of desiccant based climate
control systems. Through a series of transactions during 1998, the Company
restructured its operations to focus on the business of providing Internet
professional services and divested itself of its desiccant based climate control
systems operations.
On April 15, 1998, the Company acquired by merger all of the stock of
Rare Medium, Inc., a privately held New York corporation, engaged in the design,
delivery and implementation of Internet web site applications and strategies,
with its principal offices located in New York City. Total consideration for the
purchase was approximately $46.2 million, consisting of a combination of $10
million in cash, 4,269,300 shares of Common Stock of the Company, and the
balance in a secured promissory note.
On August 14, 1998, the Company acquired by merger all of the stock of
I/O 360, Inc., a privately held New York corporation, and DigitalFacades
Corporation, a privately held California corporation, each engaged in the
design, delivery and implementation of Internet web site applications and
strategies. In consideration of the purchase of I/O 360, the Company issued
786,559 shares of Common Stock of the Company valued at $3.0 million. In
consideration for the purchase of DigitalFacades, the Company issued 719,144
shares of Common Stock of the Company valued at $3.0 million.
On October 14, 1998, the Company, through its wholly-owned subsidiary,
ICC Desiccant Technologies, Inc., completed the sale of a majority of its
partnership interests in the desiccant based climate control systems operating
limited partnership, Fresh Air Solutions, L.P., a Pennsylvania limited
partnership, and retained a passive investment, minority limited partnership
interest in Fresh Air Solutions, L.P.
If the name change is approved, current Company stock certificates will
remain valid and no exchange of certificates will be required, unless and until
the securities are sold or transferred.
Under Delaware law, the amendment would become effective upon Stockholder
approval and filing of the amendment to the Certificate of Incorporation with
the Secretary of State of Delaware. The Amendment to the Certificate of
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<PAGE>
Incorporation will be filed as soon as reasonably practicable after the adoption
and approval of Proposal 1 by the Company's Stockholders. If Proposal 1 is
adopted, Article FIRST of the Company's Certificate of Incorporation will be
amended to read as follows:
"FIRST: The name of the corporation is Rare Medium Group, Inc."
The affirmative vote of a majority of the outstanding shares of Common
Stock entitled to vote at the meeting is required to approve Proposal 1. As a
result, abstentions and broker non-votes are effectively equivalent to votes
against Proposal 1.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF PROPOSAL 1.
PROPOSAL 2
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
FROM 50,000,000 TO 200,000,000 SHARES.
The Board of Directors has unanimously approved and recommends to the
Stockholders an amendment to the Company's Certificate of Incorporation to
increase the number of authorized shares of Common Stock from 50,000,000 to
200,000,000. The Company's Certificate of Incorporation currently authorizes
50,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock. The
Company's Certificate of Incorporation was last amended in June, 1990 to
increase the number of shares of Common Stock authorized from 25,000,000 shares
to 50,000,000 shares.
As of January 15, 1999 there were 30,730,170 shares of Common Stock
issued and outstanding and a total of approximately 9.4 million additional
shares were reserved for issuance under the Company's Non-Qualified Stock Option
Plan, the Amended and Restated Equity Plan for Directors, the 1998 Long-Term
Incentive Plan (which is subject to Stockholder approval under Proposal 4
below), and upon the exercise of various warrants and rights that have been
issued by the Company. The Board of Directors believes that it is in the best
interests of the Company and its Stockholders that additional shares of Common
Stock should be available for capital formation in order to pursue additional
potential sources of equity capital from time to time and to take advantage of
business opportunities as they arise. Although the Company is presently pursuing
additional potential sources of equity capital, no arrangements have been made
to secure such capital for which the proposed increase in authorized shares of
Common Stock would be required. The Board of Directors also believes that the
availability for the issuance of a sufficient number of shares of its Common
Stock will provide the Company with greater flexibility to take advantage of
favorable business opportunities and meet business needs as they arise,
including the acquisition of other businesses in the future. Although the
Company is presently pursuing business opportunities and acquisition candidates,
there are no present plans or arrangements to effect any such opportunities or
acquisitions for which the proposed increase in authorized shares of Common
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<PAGE>
Stock would be required. In addition, such increase in authorized shares of
Common Stock will provide for the availability of shares to be reserved for
issuance pursuant to awards to be made under the Company's 1998 Long-Term
Incentive Stock Option Plan which is discussed under Proposal 4 of this Proxy
Statement, if approved. The issuance of additional shares of Common Stock for
capital formation purposes or otherwise will result in the dilution of the
ownership interests of the current Stockholders of the Company.
Under Delaware law, the amendment would become effective upon Stockholder
approval and filing of the amendment to the Certificate of Incorporation with
the Secretary of State of Delaware. The Amendment to the Certificate of
Incorporation will be filed as soon as reasonably practicable after the adoption
and approval of Proposal 2 by the Company's Stockholders. If Proposal 2 is
adopted, Article FOURTH will be amended to read as follows:
"FOURTH: The aggregate number of shares which the corporation shall have
authority to issue shall be:
"Two Hundred Million (200,000,000) shares of Common Stock, each of
which shall have a par value of One Cent ($0.01), and Ten Million
(10,000,000) shares of Preferred Stock, each of which have a par value of
One Cent ($0.01). The Board of Directors, in its sole discretion, shall
have full and complete authority, by resolutions, from time to time, to
establish one or more series or classes and to issue shares of Preferred
Stock, and to fix, determine and vary the voting rights, designations,
preferences, restrictions, qualifications, privileges, limitations,
options, conversion rights and other special rights of each series or class
of Preferred Stock, including, but not limited to, dividend rates and
manner of payment, preferential amounts payable upon voluntary or
involuntary liquidation, voting rights, conversion rights, redemption
prices, terms and conditions and sinking fund and stock purchase prices,
terms and conditions."
The affirmative vote of a majority of outstanding shares of Common Stock
entitled to vote at the meeting is required to approve Proposal 2. As a result,
abstentions and broker non-votes are effectively equivalent to votes against
Proposal 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF PROPOSAL 2.
PROPOSAL 3
AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO PROVIDE FOR A CLASSIFIED BOARD OF DIRECTORS.
The Board of Directors of the Company has unanimously approved and
recommends to the Stockholders an amendment to the Company's Certificate of
Incorporation to provide that the Board of Directors be divided into three
classes: Class 1, Class 2 and Class 3, with the directors in each class to hold
office for staggered terms of three years each. Under Delaware law, the
amendment would become effective upon Stockholder approval and filing of the
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<PAGE>
amendment to the Certificate of Incorporation with the Secretary of State of
Delaware. The amendment to the Certificate of Incorporation will be filed as
soon as reasonably practicable after the adoption and approval of Proposal 3 by
the Company's Stockholders. If Proposal 3 is adopted, a new Article NINTH will
be added to the Certificate which will read as follows:
"NINTH: The Board of Directors shall be divided into three classes,
each composed of as nearly equal a number of directors as the then total
number of directors constituting the entire Board of Directors permits with
the term of office of one class expiring each year. At the 1999 Annual
Meeting of Stockholders, directors of the first class shall be elected to
hold office for a term expiring at the next succeeding Annual Meeting of
Stockholders, directors of the second class shall be elected to hold office
for a term expiring at the second succeeding Annual Meeting of
Stockholders, and directors of the third class shall be elected to hold
office for a term expiring at the third succeeding Annual Meeting of
Stockholders. Subject to the foregoing, at each Annual Meeting of
Stockholders the successors to the class of directors whose term shall then
expire shall be elected to hold office for a term expiring at the third
succeeding Annual Meeting of Stockholders. Directors shall serve for their
respective terms except in the event of their earlier death, resignation or
removal, and until their successors are duly elected and shall qualify.
Newly created directorships, resulting from any increase in the authorized
number of directors or any vacancies in the Board of Directors resulting
from death, resignation, retirement, removal from office, disqualification
or other cause, may be filled by a majority vote of the directors then in
office, through less than a quorum, and directors so chosen shall hold
office for a term expiring at the Annual Meeting of Stockholders at which
the term of office of the class to which they have been elected expires. No
decrease in the number of directors constituting the Board of Directors
shall shorten the term of any incumbent director."
If Proposal 3 is adopted, all directors will be elected to their
classified terms at the 1999 Annual Meeting of Stockholders. Initially, the term
of the Class 1 directors would expire at the 2000 Annual Meeting of
Stockholders, and the terms of Class 2 and Class 3 directors would expire at the
2001 and 2002 Annual Meetings of Stockholders, respectively. Successors to the
directors in each class would be elected for three-year terms. The proposed
amendment would thus have the effect of causing only one class of directors per
year to be elected, with the directors in the other two classes remaining in
office until the elections held in later years.
Under Delaware law, a director of a corporation with a classified board
of directors may be removed by the stockholders only for cause unless the
certificate of incorporation provides otherwise. The Certificate does not
provide otherwise, and the contrary provision in the By-laws of the Company will
be ineffective as a matter of law and will be suspended if Proposal 3 is passed.
Therefore, if Proposal 3 is approved, the holders of a majority of the
outstanding voting shares would be able to remove a director during their
elected terms only for "cause." In this context, "cause" is not defined by
statute. If a vacancy occurs during the term of any director, under Delaware law
the majority of the Board of Directors may fill the vacancy, and the director so
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<PAGE>
appointed will hold office until the next election of the class to which he or
she was appointed. If Proposal 3 is passed, the Board of Directors will amend
the By-laws to conform to these changes.
Proposal 3 was approved by the Board based on its observation of a trend
towards third parties accumulating substantial stock positions in public
companies as a prelude to proposing a takeover, a restructuring or sale of all
or part of the company, or other similar extraordinary corporate action. Such
actions are often undertaken by the third party without advance notice to, or
consultation with, management of the company involved. In many cases, the
purchaser also seeks representation on the company's board of directors in order
to increase the likelihood that the extraordinary corporate action proposed will
be implemented by the company. If the company resists the efforts of the
purchaser to obtain representation on the board, the purchaser may commence a
proxy contest to have its nominees elected in place of some or all of the
existing directors. The Board of Directors believes that an imminent threat of
removal in such situations would severely curtail its ability to negotiate
effectively. Under such pressure, the directors could be deprived of the time
and information necessary to evaluate the takeover proposal, to study
alternative proposals and to help ensure that the best price is obtained in any
transaction which could ultimately occur. Moreover, the Board of Directors
believes that the longer time required to displace a classified board could help
to ensure the future continuity and stability of the Company's management and
policies, since a majority of the Board of Directors at any given time will
ordinarily have had prior experience as directors of the Company.
In considering this Proposal, Stockholders should be aware that Proposal
3, if approved, could have the effect of preventing even a majority Stockholder
from electing any directors or taking any other action until the next annual
meeting. Thus, Proposal 3 will, if approved, make any change in the composition
of the Board of Directors more difficult. For example, holders of a majority of
the Company's voting stock might not be able to elect a majority of the
Company's directors until two or more annual meetings have been held. As a
result, some persons who might otherwise seek to take over the Company may
decide not even to attempt such step because of the potential that the Company
might have a Board of Directors not under their control for some period of time.
In addition, changes in management not related to a takeover will become more
difficult.
Takeovers or changes in management of the Company which are proposed and
effected without prior negotiations with the Company's management are not
necessarily detrimental to the Company and its Stockholders. Indeed, their
decreased likelihood might discourage certain potential Stockholders from
acquiring the Company's stock, thus potentially reducing trading activity to the
possible disadvantage of some or, under certain conditions, all of the Company's
Stockholders. However, the Board of Directors believes that the benefits of
seeking to protect its ability to negotiate with the proponent of an unfriendly
or unsolicited proposal to take over or restructure the Company outweigh the
disadvantages of discouraging such proposals. Proposal 3 is not being submitted
as a result of, and the Board of Directors is unaware of, any specific effort by
any persons to obtain control of the Company or to accumulate large amounts of
its stock.
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<PAGE>
The affirmative vote of a majority of outstanding shares of Common Stock
entitled to vote at the meeting is required to approve Proposal 3. As a result,
abstentions and broker non-votes are effectively equivalent to votes against
Proposal 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF PROPOSAL 3.
PROPOSAL 4
ADOPTION OF THE COMPANY'S 1998 LONG-TERM INCENTIVE PLAN
The Board of Directors of the Company has unanimously approved and
recommends the adoption of the 1998 Long-Term Incentive Plan (the "1998
Incentive Plan" or the "Plan") to the Stockholders of the Company. The Nasdaq
National Market rules require the approval of the 1998 Incentive Plan by the
Stockholders. Accordingly, the 1998 Incentive Plan will become effective only if
Stockholder approval is obtained.
The Company's Incentive Stock Option Plan expired in July 1995. With
respect to its two other existing plans, the Company's Non-Qualified Stock
Option Plan and the Amended and Restated Equity Plan for Directors, there are
463,598 aggregate shares of Common Stock available for the grant of stock
options under these plans. The Board of Directors has evaluated its existing
plans and the incentives which it believes are important to assure that certain
directors, officers, employees and consultants to the Company will devote the
time and energy necessary to improve the Company's performance over the long
term. As a result of such evaluation, the Board of Directors has determined that
the Company's ability to recruit, attract, retain and reward directors,
executive officers, key employees and consultants would be enhanced by the
adoption of a compensation plan which provides for greater flexibility in terms
of both the nature of the awards and the persons eligible to receive such
awards. The 1998 Incentive Plan will provide for the granting of awards
("Awards") to directors (whether or not employees), executive officers, key
employees and consultants and other service providers in the form of stock
options, stock appreciation rights ("SARs"), restricted stock awards
("Restricted Stock Awards"), deferred stock awards ("Deferred Stock Awards"),
bonus stock awards, dividend equivalents ("Dividend Equivalents"), and other
types of stock based awards. The variety of awards authorized by the Plan is
intended to give the Company flexibility to adapt the Company's compensation
practices as the business environment in which it operates changes. The Board of
Directors believes that the 1998 Incentive Plan will provide a method whereby
certain directors, executive officers, key employees and consultants and other
service providers can share in the long-term growth of the Company and thereby
promote a closer identity of interests between such persons and the Company's
Stockholders.
The Board of Directors believes it is in the best interests of the
Company and its Stockholders that the 1998 Incentive Plan be adopted in order to
attract and retain the services of experienced and knowledgeable directors,
executive officers, key employees and consultants and other service providers
for the benefit of the Company and its Stockholders and to provide additional
incentives for such directors, executive officers, key employees and consultants
10
<PAGE>
and other service providers to continue to work for the best interests of the
Company and its Stockholders and achievement of the Company's strategic goals.
The summary of the 1998 Incentive Plan set forth below is qualified by
reference to the full text thereof which is attached hereto as Appendix I.
Amount of Stock Reserved for Issuance Under the 1998 Incentive Plan
Subject to certain adjustment provisions described below, the maximum
aggregate number of shares of Common Stock that may be delivered for all
purposes under the proposed 1998 Incentive Plan is 8,000,000 shares. If an Award
valued by reference to Common Stock may only be settled in cash, the number of
shares to which such Award relates shall not be deemed to be Common Stock
subject to such Award. In the event of a change in the outstanding shares of
Common Stock by reason of a stock dividend, stock split, recapitalization,
merger, consolidation, reorganization or other change in corporate structure,
or other similar corporate transaction or event which affects the shares such
that an adjustment is appropriate in order to prevent dilution or enlargement
of the rights of participants under the 1998 Incentive Plan, the Compensation
Committee shall have the authority to adjust, in a manner it deems equitable,
the number, type and/or kind of shares awarded, or to be awarded, under the
1998 Incentive Plan.
Administration
The 1998 Incentive Plan will be administered by the Compensation
Committee of the Board of Directors ("Compensation Committee" or "Committee")
except as noted below. The Compensation Committee will determine, among other
things, the recipients of Awards under the 1998 Incentive Plan, the times at
which the Awards will be made and the terms of each Award. The Board of
Directors may perform the functions of the Committee for purposes of granting
Awards to non-employee directors, and the Board may perform any function of the
Committee under the Plan for any other purpose, including without limitation,
for the purpose of ensuring that transactions under the Plan by participants who
are then subject to Section 16 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), in respect of the Company are exempt under Rule
16b-3 thereunder.
Amendment of 1998 Incentive Plan
The 1998 Incentive Plan may be amended at any time and from time to time
by the Board of Directors. The Board of Directors may not, however, amend the
1998 Incentive Plan without the approval of the Stockholders if such approval is
required by any federal or state law or regulation or by the rules of any stock
exchange or automated quotation system on which the shares may then be listed or
quoted.
Eligibility
Executive officers and key employees of the Company and its subsidiaries,
directors of the Company, and persons who provide consulting or other services
to the Company deemed by the Committee to be of substantial value to the
Company, are eligible to be granted Awards under the Plan. As of December 31,
1998 there were three non-employee directors, five executive officers, and
11
<PAGE>
approximately 110 employees and other persons who provide consulting or other
services to the Company who were eligible to participate in the Plan subject to
the discretion of the Committee or the Board of Directors.
Effective Date and Termination
If approved by the Company's Stockholders, the 1998 Incentive Plan will
be deemed effective as of May 6, 1998 and shall continue in effect until
terminated by the Board of Directors.
Grant of Awards
Individual Awards under the 1998 Incentive Plan may take the form of one
or more of the following:
Nature of Options. Both "incentive stock options," as defined in Section
422 of the Internal Revenue Code of 1986, as amended (the "Code") (referred to
herein as "ISOs") and non-incentive stock options (referred to herein as
"Non-Qualified Options") may be granted under the Plan. ISOs may be awarded only
to employees of the Company or its subsidiaries.
Stock Appreciation Rights. A SAR may be awarded to confer upon the
participant to whom it is granted a right to receive, upon exercise thereof, the
excess of (A) the fair market value of one (1) share of Common Stock on the date
of exercise (or, if the Committee shall so determine in the case of any such
right other than or related to an ISO, the fair market value of one (1) share at
any time during a specified period before the date of exercise), over (B) the
grant price of the SAR as determined by the Committee as the date of grant of
the SAR, which generally shall be not less than the fair market value of one (1)
share of Common Stock on the date of grant.
Restricted Stock Awards. A Restricted Stock Award entitles the recipient
to acquire shares of Common Stock ("Restricted Stock") for no cash consideration
or for such other consideration as determined by the Committee, subject to such
restrictions on transferability and other restrictions, if any, as the Committee
may impose, which restrictions may lapse separately or in combination at such
dates, under such circumstances, in such installments, or otherwise, as the
Committee may determine. Except to the extent restricted under the terms of the
Plan and any award agreement relating to the Restricted Stock, a participant
granted Restricted Stock shall have all of the rights of a Stockholder,
including, without limitation, the right to vote Restricted Stock or the right
to receive dividends thereon.
Deferred Stock Awards. A Deferred Stock Award entitles the recipient to
receive shares of Common Stock ("Deferred Stock") upon expiration of the
deferral period specified for an Award of Deferred Stock by the Committee (or,
if permitted by the Committee, as elected by the participant). In addition,
Deferred Stock shall be subject to such restrictions as the Committee may
impose, if any, which restrictions may lapse at the expiration of the deferral
period or at earlier specified times, separately or in combination, in
installments or otherwise, as the Committee may determine.
Bonus Stock and Awards in Lieu of Cash Obligations. The Committee is
authorized to grant Common Stock as a bonus, or to grant Common Stock or other
Awards in lieu of Company obligations to pay cash under other plans or
compensatory arrangements.
12
<PAGE>
Dividend Equivalents. The Committee is authorized to grant dividend
equivalents entitling a participant to receive cash, common stock, other Awards
or other property equal in value to dividends paid with respect to a specified
number of shares of Common Stock ("Dividend Equivalents"). Dividend Equivalents
may be awarded on a free-standing basis or in connection with another Award. The
Committee may provide that Dividend Equivalents shall be paid or distributed
when accrued or shall be deemed to have been reinvested in additional Common
Stock, Awards or other investment vehicles, and subject to such restrictions on
transferability and risks of forfeiture as the Committee may specify.
Other Stock-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant such other Awards that may be
denominated or payable in, valued in whole or in part or by reference to, or
otherwise based on, or related to, Common Stock and factors that may influence
the value of Common Stock as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, convertible or exchangeable
debt securities, other rights convertible or exchangeable into Common Stock,
purchase rights for Common Stock, Awards with value and payment contingent upon
performance of the Company or any other factors designated by the Committee, and
Awards valued by reference to the book value of Common Stock or the value of
securities of, or the performance of, specified subsidiaries (collectively,
"Other Stock-Based Awards").
The Committee generally is empowered to select the individuals who will
receive Awards and the terms and conditions of those Awards, including exercise
price for options (which generally shall not be less than the fair market value
per share of the Common Stock on the date of grant) and other exercisable
Awards, vesting and forfeiture conditions (if any), performance conditions, the
extent to which Awards may be transferable and periods during which Awards will
remain outstanding. Awards may be settled in cash, shares of Common Stock, other
awards or other property, as determined by the Committee.
The number of shares of Common Stock deliverable upon exercise of an ISO
in any one year period cannot exceed $100,000 based upon the fair market value
of the Common Stock at the date of grant of the ISO Award. The 1998 Incentive
Plan also provides that no participant may be granted in any calendar year (i)
options or SARs exercisable for more than 400,000 shares of Common Stock; or
(ii) other Awards that may be settled by delivery of more than 200,000 shares of
Common Stock, and limits payments under cash-settled Awards in any calendar year
to an amount equal to the fair market value of the 200,000 shares of Common
Stock on the date of grant or the date of settlement of the Award, whichever is
greater.
Rule 16b-3 Compliance
Unless a participant can otherwise dispose of equity securities,
including derivative securities, acquired under the Plan without incurring
liability under Section 16(b) of the Exchange Act, equity securities acquired
under the Plan must be held for a period of six (6) months following the date of
such acquisition, provided that this condition shall be satisfied with respect
to a derivative security if at least six (6) months elapse from the date of
acquisition of the derivative security to the date of disposition of the
derivative security (other than upon exercise or conversion) or its underlying
equity security. With respect to a participant who is then subject to Section
16(b) of the Exchange Act in respect of the Company, the Committee shall
implement transactions under the Plan and administer the Plan in a manner that
shall ensure that each transaction by such participant is exempt from liability
under Rule 16b-3, except that such a participant may be permitted to engage in a
non-exempt transaction under the Plan if written notice has been given to the
participant regarding the non-exempt nature of such transaction.
13
<PAGE>
Acceleration upon a Change of Control
Unless otherwise provided by the Committee in an Award agreement, all
conditions and restrictions relating to an Award, including limitations on
exercisability, risks of forfeiture, deferral periods and conditions and
restrictions requiring the continued performance of services or the achievement
of performance objectives with respect to the exercisability or settlement of
such Award, shall immediately lapse upon a "change in control" of the Company as
such term is defined under the Plan.
Options Granted Automatically to Non-Employee Directors
Under the Plan, each new non-employee director shall be automatically
granted an option to purchase shares of Common Stock as of the effective date of
the non-employee director's initial election to the Board of Directors and
thereafter at the close of business on the date of final adjournment of each
Annual Meeting of Stockholders of the Company. The number of shares of Common
Stock subject to each initial option shall be 25,000 shares and the number of
shares subject to each annual option shall be 25,000 shares or, if so determined
by the Board of Directors, such other number of shares specified in the most
recent resolution of the Board of Directors adopted on or prior to the date of
the Annual Meeting of Stockholders that coincides with or most recently precedes
the date of grant of the option. The exercise price per share of Common Stock
purchasable upon exercise of a non-employee director's initial or annual option
shall be equal to 100% of the fair market value of a share of Common Stock on
the date of grant of the option. A non-employee director's initial or annual
option shall expire at the earlier of (A) ten (10) years after the date of grant
or (B) one (1) year after the date the participant ceases to serve as a director
of the Company for any reason. Each non-employee director's initial or annual
option may be exercised, prior to expiration, commencing one (1) year after the
date of grant, or at such earlier date as may be specified by the Board of
Directors. Each of the Company's current non-employee directors will become
eligible to receive an annual option as described above on the date of the 2001
Annual Meeting of Stockholders following the date of their initial election to
the Board.
14
<PAGE>
Certain Federal Income Tax Consequences of the 1998 Incentive Plan
The following description of certain Federal income tax consequences of
the 1998 Incentive Plan is based upon current statutes, regulations and
interpretations and does not include State or local income tax consequences
applicable to a person who receives a stock option or other Award under the 1998
Incentive Plan.
Neither the option holder nor the Company incurs any Federal income tax
consequences as a result of the grant of an option under the 1998 Incentive
Plan.
Upon exercise of a Non-Qualified Option, the difference between the
exercise price and the fair market value of the shares on the Income Recognition
Date (defined below) will be taxable as ordinary income to the option holder as
of such Income Recognition Date. The Income Recognition Date for shares received
upon exercise of a Non-Qualified Option under the 1998 Incentive Plan is the
date of exercise (except in the case of persons subject to Section 16b of the
Exchange Act, in which case the Income Recognition Date will generally be the
later of the date of exercise or the date six (6) months after the date of
grant, unless the option holder elects to recognize income as of the exercise
date).
At the time of a subsequent sale of any shares of Common Stock obtained
upon the exercise of a Non-Qualified Option under the 1998 Incentive Plan, any
gain or loss generally will be a capital gain or loss to the option holder. Such
capital gain or loss would be long-term gain or loss if the sale occurs more
than one (1) year after the Income Recognition Date and would be short-term
capital gain or loss if the sale occurs one (1) year or less after the Income
Recognition Date.
The Company will be entitled to a deduction for Federal income tax
purposes at the same time and in the same amount that the holder of a
Non-Qualified Option recognizes ordinary income, to the extent that such income
is considered reasonable compensation under the Code, and provided that the
Company properly withholds taxes in respect of the exercise. The Company will
not, however, be entitled to a deduction with respect to any payment that
constitutes an "excess parachute payment" pursuant to Section 280G of the Code
and does not qualify as reasonable compensation pursuant to that Section. Such
payments will also subject a participant in the Plan to a non-deductible 20%
excise tax.
An option holder will not recognize any income, and the Company will not
be entitled to a deduction, upon the exercise of an ISO during the option
holder's employment with the Company or within three (3) months after
termination of employment (or longer in the event of termination by reason of
death or disability); however, in certain circumstances, upon the exercise of an
ISO, the option holder may be subject to the alternative minimum tax.
Assuming that the option holder does not dispose of the shares received
within the "incentive stock option holding period," which is both two (2) years
after the date that the ISO was granted and one (1) year after the exercise of
an ISO, any gain recognized by the option holder on the sale or exchange of the
shares will be treated as long-term capital gain and any loss sustained will be
15
<PAGE>
a long-term capital loss. If the shares acquired upon exercise of an ISO are
disposed of before the end of the incentive stock option holding period, the
disposition may cause the option holder to recognize ordinary income.
A participant who is granted a Restricted Stock Award will not recognize
taxable income at the time of the Award (except in cases where an Award of
Common Stock is made without the imposition of transfer or forfeiture
restrictions, in which case the recipient will recognize ordinary income and the
Company will be entitled to a corresponding deduction as described below). At
the time any transfer or forfeiture restrictions applicable to the Restricted
Stock Award lapse, the recipient will recognize ordinary income and the Company
will be entitled to a corresponding deduction equal to the excess of the fair
market value of such stock at such time over the amount paid therefor (if any),
provided that the Company properly withholds taxes at that time. Any dividends
paid to the recipient on the Restricted Stock at or prior to such time will be
ordinary compensation income to the recipient and deductible as such by the
Company.
A participant who is granted a Deferred Stock Award will not recognize
ordinary income at the time of the Award. At the time that all of the conditions
to the receipt of the Common Stock subject to the Award are satisfied, the
recipient will recognize ordinary income and the Company will be entitled to a
corresponding deduction equal to the excess of the fair market value of such
stock at such time over the amount paid therefor (if any), provided the Company
properly withholds taxes at that time.
There are no Federal income tax consequences either to the participant or
the Company upon the granting of SARs. The amount of any cash (or the fair
market value of any Common Stock) received by the holder upon the exercise of
SARs under the 1998 Incentive Plan will be subject to ordinary income tax in the
year of receipt and the Company will be entitled to a deduction for such amount,
provided that the Company properly withholds taxes in respect of the exercise.
Effective January 1, 1994, Section 162(m) of the Code limits deductions
for compensation paid to or accrued for any officer named in the Compensation
Table presented in the Company's Annual Meeting proxy statement, to $1,000,000
per annum. However, if certain criteria are met, then certain types of
compensation are not subject to the specified limit on deductibility. These
criteria are:
o the compensation must be paid solely on account of the attainment of
one or more preestablishe objective performance goals;
o the performance goals must be established by a compensation committee
("Committee") comprised solely of two or more outside directors;
o the material terms of the performance goal must be disclosed to, and
later approved by, shareholders of the corporation; and
o the Committee must certify in writing before payment that the
performance goals and any other material terms were in fact met.
16
<PAGE>
Based on the above criteria, Awards to the Company's five most highly
compensated executive officers will be subject to the Section 162(m) limitation.
Grants Under the 1998 Incentive Plan
The following table sets forth information with respect to the number of
options granted under the 1998 Incentive Plan to the named executive officers
and certain groups named below during the fiscal year ended December 31, 1998,
subject to securing the approval of the 1998 Incentive Plan by the Company's
Stockholders(1).
1998 Long-Term Incentive Plan
Name and Position Number of Options(1)
- ----------------- --------------------
Glenn S. Meyers ......................................... --
William A. Wilson ....................................... --
John S. Gross ........................................... 150,000(2)
Irwin L. Gross........................................... --
Executive Officer Group ................................. 299,500(3)
Non-Executive Officer Employee Group .................... 1,793,019(4)
Non-Executive Director Group ............................ --
- -----------------
(1) The identified options have been granted pursuant to the 1998 Long-Term
Incentive Plan which was adopted by the Board of Directors of the
Company on May 6, 1998, subject to approval by the Stockholders of the
Company. In the event the Plan is not approved by the Stockholders
within twelve months of its adoption by the Board of Directors, the
identified options shall be deemed to be options having been granted by
the Board of Directors not under any plan of the Company, and the
Company shall, in its sole discretion, use its reasonable efforts to
file and cause to be effective a Registration Statement on Form S-3, if
available, under the Securities Act of 1933, covering the shares
subject to these options.
(2) These options were granted on September 18, 1998 at an exercise price
of $2.375, the per share fair market value of the Company's Common
Stock at that time. The options have a term of five (5) years. Options
are exercisable cumulatively in three equal installments, with the
first installment becoming exercisable on the one-year anniversary of
the date of employment.
(3) All Executive Officer Group options were granted on September 18, 1998
at an exercise price of $2.375. On that date, the per share fair market
value of the Company's Common Stock was $2.375. Each option has a term
of five (5) years, and such options are exercisable cumulatively in
three equal installments, with the first installment becoming
exercisable on the one-year anniversary of each grantee's date of
employment.
(4) These options were granted to certain employees of the Company on
September 18, 1998 at an exercise price of $2.375, the fair market
value at such time. Such options vest at various rates. Certain of
these options were granted to replace options to purchase stock in Rare
Medium, Inc. and DigitalFacades Corporation, respectively, held by
employees prior to the Company's acquisition of those companies.
17
<PAGE>
Vote Required
Adoption of the 1998 Incentive Plan requires the affirmative vote of the
holders of a majority of the votes represented in person or by proxy and cast at
the Special Meeting. For this purpose, abstentions will have the effect of votes
against the proposal. However, broker non-votes, like shares not represented at
the meeting, will neither be counted in favor of or against the proposal, nor
increase or decrease the number of votes required for approval, and this will
have no effect on the outcome of the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF PROPOSAL 4.
18
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth, for the three fiscal
years ended December 31, 1998, the compensation for services in all capacities
earned by the Company's Chief Executive Officer and each other named executive
officer whose total annual salary, bonus and other annual compensation exceeded
$100,000 in 1998.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
- -----------------------------------------------------------------------------------------------------------------------------------
Awards Payouts
------ -------
Name and Principal Other Annual Restricted Securities LTIP All other
Position Salary Bonus Compensation Stock Underlying Payouts Compensation
Year ($) ($) ($) Award(s) Options/SARs ($) ($)
($) (#)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Glenn S. Meyers, 1998 $178,082(1) - $20,000(6) - 2,000,000(8) - -
President and CEO
William A. Wilson, 1998 $107,692(2) - - - - - $ 2,154(10)
former President and CEO 1997 165,972(3) - - - 300,000(9) - 1,028(10)
1996 70,833(3) - - - 100,000(9) - -
John S. Gross, CFO 1998 $113,750(4) - $3,875(7) - 150,000(8) - -
Irwin L. Gross, former 1998 $91,400(5) - $3,600(6) - 500,000 - $118,001(11)
President and CEO 1997 305,000(5) - 7,200(6) - - - 45,353(12)
1996 305,000(5) - - - - - 3,100(12)
</TABLE>
(1) Includes Mr. Meyers' annual salary of $250,000 from April 15, 1998.
(2) Includes Mr. Wilson's salary through October 13, 1998, the date of
disposition of the Fresh Air Solutions, L.P. operations.
(3) Includes Mr. Wilson's compensation for consulting services provided to
Engelhard/ICC of $100,000 in 1997, and $20,833 in 1996. Mr. Wilson's
consulting services were covered under a consulting agreement which was
terminated December 31, 1997.
(4) Includes Mr. John Gross' annual salary of $175,000 from 5/13/1998.
(5) Includes Mr. Irwin Gross' annual salary of $155,000 received from
Engelhard./ICC in his capacity as Chief Executive Officer covered under
an employment agreement, which was terminated February 27, 1998, in
connection with the restructuring of Engelhard/ICC.
(6) Represents automobile allowance.
(7) Represents expense allowance.
(8) Stock options granted under the 1998 Incentive Stock Option Plan.
(9) Stock options granted under the Non-Qualified Stock Option Plan.
(10) Represents an ICC Technologies, Inc. 401(k) Profit Sharing Plan
employer match.
(11) Represents a severance payment of $116,857 pursuant to a letter
agreement dated July 1, 1998 entered into in connection with Mr. Irwin
Gross' resignation as Chairman of the Board of Directors of the
Company, and an ICC Technologies, Inc. 401(k) Profit Sharing Plan
employer match of $1,144.
(12) Represents loan forgiveness which includes principal and accrued
interest in 1997 and an Engelhard/ICC 401(k) Profit Sharing Plan
employer mated of $3,100 in 1997 and 1996.
19
<PAGE>
The following table sets forth information concerning grants of stock
options to purchase Common Stock during the fiscal year ended December 31, 1998,
to the named executive officers.
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realized Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option
Term
-------------------------------------------------------------------------------------------------------
Percent of
Number of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price
Granted (#)(1) Fiscal Year ($/Sh) Expiration Date 5% ($) 10% ($)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Glenn S. Meyers 2,000,000(2) 39.8% $2.375 4/15/08 $8,281,157 $15,999,940
William A. Wilson - - - - - -
John S. Gross 150,000(3) 3.0% $2.375 9/18/03 $98,425 $ 217,494
Irwin L. Gross 500,000(4) 10.0% $2.375 4/15/01 $328,084 $ 724,981
</TABLE>
(1) The number of shares of Common Stock covered by the options are subject
to anti-dilution adjustments in the event of any stock dividend, stock
split or combination of shares, recapitalization or other change in the
Company's capital stock. The vesting of the options is subject to
acceleration in the event of a change in control of the Company, which
means the consummation of any merger or consolidation involving the
Company, any sale of substantially all of the Company's assets or other
transaction or related transactions as a result of which a single
person or several persons acting in concert own a majority of the
shares of Common Stock (except for certain transactions that do not
involve a change in the holders of a majority of the outstanding shares
of Common Stock and the ownership of a majority of the outstanding
shares of Common Stock by a single person).
(2) Pursuant to the acquisition of Rare Medium, Inc. by the Company, and as
an inducement for him to enter into the agreement for his employment,
the President and CEO was granted incentive and nonincentive stock
options to acquire an aggregate of 2,000,000 shares of Common Stock at
an exercise price equal to $2.375 per share, the fair value at the time
of agreement, which options will become exercisable ratably on a
monthly basis over a period of 60 months from the date of grant and
expire ten years from the date of grant.
(3) These options were granted on September 18, 1998 at an exercise price
of $2.375, the per share fair market value of the Company's Common
Stock at that time. The options have a term of five (5) years. Options
are exercisable cumulatively in three equal installments, with the
first installment becoming exercisable on the one-year anniversary of
the date of employment.
(4) Such options were granted at the time of the acquisition of Rare
Medium, Inc. at an exercise price equal to the fair market value of the
common stock at the time, which become exercisable ratably on an annual
basis over a three year period with the first installment becoming
exercisable on the one-year anniversary of the date of grant.
20
<PAGE>
The following table sets forth information concerning the exercise of
options to purchase the Shares by the named executive officers during the fiscal
year ended December 31, 1998, as well as the number and potential value of
unexercised options (both options which are presently exercisable and options
which are not presently exercisable) as of December 31, 1998.
Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
Number of Value Number of Securities Value of Unexercised
Securities Realized ($) Underlying Unexercised In-the-Money Options/SARs
Underlying Options/SARs at Fiscal at Fiscal Year End ($)
Options/SARs Year End (#) Exercisable/
Name Exercised (#) Exercisable/Unexercisable Unexercisable
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Glenn S. Meyers - - 333,667 / 1,633,000 583,917 / 2,858,333
William A. Wilson - - 575,000 / 0 834,987 / 0
John S. Gross - - 0 / 150,000 0 / 262,500
Irwin L. Gross - - 1,173,000 / 500,000 1,267,844 / 875,000
</TABLE>
Executive Employment Contracts and Severance Agreements
In connection with the transactions consummated pursuant to the
acquisition of Rare Medium, Inc., the Company entered into an Employment
Agreement effective April 15, 1998, with Glenn S. Meyers ("Meyers' Employment
Agreement"). Pursuant to the Meyers' Employment Agreement, Mr. Meyers has been
engaged as the President and Chief Executive Officer of the Company and Rare
Medium, Inc. to serve for a term of 5 years. Mr. Meyers receives an annual base
salary of $250,000, with a minimum annual increase during the term of not less
than 4% per annum. In addition to base compensation, Mr. Meyers is entitled to
receive for each calendar year during the term, incentive compensation equal to
2% of revenues derived from activities of Rare Medium, Inc. for such calendar
year in excess of the revenues of Rare Medium, Inc. for the preceding year. The
Meyers' Employment Agreement provides Mr. Meyers with a right to terminate his
employment agreement upon a breach of such agreement or upon the occurrence of
certain events constituting a "change in control" of the Company as defined
therein, upon which Mr. Meyers would be entitled to receive all salary and
incentive compensation for the remaining term, the cash value of all benefits
which would have been received by him for the remaining term and the cash value
of all unexercised stock options (whether or not vested) or the cashless
exercise value thereof. The Meyers' Employment Agreement also contains a
covenant not to compete with the Company or any of its affiliates for the term
of the agreement, plus one additional year. Concurrently with the execution of
the Meyers' Employment Agreement, the Company granted to Mr. Meyers options to
acquire an aggregate of 2,000,000 shares of Common Stock at exercise prices
equal to $2.375 per share, which options become exercisable ratably on a monthly
basis over a period of 60 months from the date of grant and expire ten years
from the date of grant.
In connection with his resignation as the Chairman of the Board of
Directors of the Company, Mr. Irwin Gross entered into a letter agreement dated
July 1, 1998 with the Company, pursuant to which Mr. Gross received a severance
payment of $145,000, which when netted against off setting amounts resulted in
a net payment of $116,857.
21
<PAGE>
Compensation of Directors
Each non-employee director receives a per meeting fee of $1,000 for each
Board of Directors meeting and $500 for each committee meeting attended, along
with expenses incurred in connection with each meeting attended. See "Stock
Option Plans" below.
Stock Option Plans
The Company's Incentive Stock Option Plan ("ISOP") which authorized
1,750,000 aggregate shares of Common Stock for the granting of stock options
expired July 18, 1995, and there are no outstanding options to purchase Common
Stock of the Company which were granted under such Plan.
The Company has a Nonqualified Stock Option Plan ("NQSOP") for directors,
officers and key employees of the Company. The number of options to be granted
thereunder and the exercise prices for such options are determined by the Stock
Option Committee of the Board of Directors in accordance with the terms of the
plan. Under the NQSOP, option prices as determined by the Stock Option Committee
may be greater or less than the fair market value of the Common Stock as of the
date of the grant, and the options are generally exercisable for a period of ten
years and vest ratably over a three to five year period subsequent to the grant
date. The NQSOP authorized 5,100,000 aggregate shares of Common Stock for the
granting of stock options, of which 355,598 shares were available for granting
stock options as of December 31, 1998.
During 1994, the Company adopted an Equity Plan for Directors (the
"Equity Plan for Directors") pursuant to which non-employee directors received
automatic option grants whose vesting was dependent on the market price of the
Common Stock. Under the Equity Plan for Directors each non-employee director was
entitled to receive an option to purchase 50,000 shares of Common Stock on the
date such person first became a director and thereafter was entitled to the
automatic grant of an option to purchase an additional 50,000 shares of Common
Stock on each fifth anniversary of the initial grant, in each case vesting in
five equal annual installments commencing on the first anniversary of the date
of grant, with a term of ten years and providing for accelerated vesting in the
event of death or a "change in control" of the Company as defined therein. The
exercise price for the options granted under the Equity Plan for Directors was
the fair market value of the Common Stock on the date of each grant.
On October 26, 1998, the Board of Directors of the Company amended and
restated the Equity Plan for Directors to change the Plan from a formula-based
stock option plan as described above to a discretionary plan (the "Amended and
Restated Equity Plan for Directors"), thereby providing more flexibility in
determining incentive based stock option awards for non-employee directors of
the Company.
Upon becoming directors of the Company in 1998, each of Steven Winograd
and Jeffrey M. Killeen was granted an option for 75,000 shares of Common Stock
on October 28, 1998 under the Amended and Restated Equity Plan for Directors,
exercisable at $1.9375 per share, the fair market value of the Common Stock on
the date of grant, and Richard T. Liebhaber was granted an option for 75,000
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shares on November 2, 1998 under the Amended and Restated Equity Plan for
Directors, exercisable at $2.8125 per share, the fair market value of the Common
Stock on the date of grant, all of which vest ratably over three years. The
Equity Plan for Directors, amended and restated as described above, authorized
500,000 aggregate shares of Common Stock for the granting of such options under
the Plan, of which 108,000 were available for granting stock options as of
December 31, 1998. It is anticipated that if the Stockholders approve the 1998
Incentive Plan under Proposal 4, future grants of stock options to directors
will principally be made under the 1998 Incentive Plan.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee and the Stock Option Committee
for the Company during 1998 were Charles T. Condy, Andrew L. Shapiro and Mark S.
Hauser, each of which was a non-employee director. Following their respective
resignations from the Board of Directors in 1998, such directors were succeeded
by Richard T. Liebhaber and Jeffrey M. Killeen, also non-employee directors, as
committee members.
SOLICITATION OF PROXIES
The cost of this solicitation of proxies will be borne by the Company.
Directors, officers and regular employees of the Company may solicit proxies in
person, by telephone, by mail or by other means of communication, but such
persons will not be specially compensated for such services. In addition, the
Company has engaged the firm of Morrow & Company, to assist in the solicitation
of proxies, to which it will pay a fee of approximately $6,000 and has agreed to
reimburse it for its reasonable expenses. The Company will reimburse American
Stock Transfer & Trust Company for forwarding proxy materials to beneficial
owners and serving as inspectors of election. The total estimated cost for this
solicitation of proxies is approximately $25,000.
- --------------------------------------------------------------------------------
IMPORTANT - MAIL YOUR SIGNED PROXY CARD
Please complete, sign, date and mail your Proxy Card.
- --------------------------------------------------------------------------------
By Order of the Board of Directors.
February 17, 1999 /s/ John S. Gross
----------------------------------
New York, New York John S. Gross, Senior Vice President,
Chief Financial Officer, Treasurer and
Assistant Secretary
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APPENDIX I
ICC TECHNOLOGIES, INC.
1998 LONG-TERM INCENTIVE PLAN
1. Purpose. The purpose of this 1998 Long-Term Incentive Plan (the
"Plan") of ICC Technologies, Inc., a Delaware corporation (the "Company"), is to
advance the interests of the Company and its stockholders by providing a means
to attract, retain, motivate and reward executive officers, key employees,
directors and consultants of and service providers to the Company and its
subsidiaries (including consultants and others providing services of substantial
value) and to enable such persons to acquire or increase their proprietary
interest in the Company, thereby promoting a closer identity of interests
between such persons and the Company's stockholders.
2. Definitions. The terms "Award" or "Awards" under the Plan means
Options, SARs (including Limited SARs), Restricted Stock, Deferred Stock, Stock
granted as a bonus or in lieu of other compensation or right, Dividend
Equivalents and Other Stock Based Awards as set forth in Section 6 hereof
together with any other right or interest granted to a Participant under the
Plan. For purposes of the Plan, the following additional terms shall be defined
as set forth below:
(a) "Award Agreement" means any written agreement, contract, notice or
other instrument or document evidencing an Award.
(b) "Beneficial Owner" and related terms shall have the meaning
ascribed thereto under Section 13(d) of the Exchange Act, including Rule 13d-3,
and any successor thereto.
(c) "Beneficiary" shall mean the person, persons, trust or trusts
which have been designated by the Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the benefits
specified under the Plan upon such Participant's death or, if there is no
designated Beneficiary or surviving designated Beneficiary, then the person,
persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.
(d) "Board" means the Board of Directors of the Company.
(e) A "Change in Control" shall be deemed to have occurred if: (i)
there is a merger or consolidation of the Company into or with any other
corporation when the Company is not the surviving entity of such merger or
consolidation, (ii) there is an acquisition, directly or indirectly by any
entity or "group" (as defined in Section 13(d) of the Securities and Exchange
Act of 1934, as amended), of stock or options, or any combination thereof, (a)
constituting a majority of the then outstanding common stock of the Company or
(b) possessing a majority of the then outstanding voting power of the Company,
(iii) there is any similar purchase or other acquisition of a majority of the
total equity interest of the Company, (iv) there is an acquisition of all, or
<PAGE>
substantially all of, the assets of the Company, or (v) upon the formation of a
joint venture or partnership with the Company for the purpose of effecting a
transfer of control of, or a material interest in, the Company (such merger,
consolidation, sale or other transaction being hereinafter referred to as a
"Transaction"). There shall be excluded from the foregoing any Transaction as a
result of which (a) the holders of Common Stock prior to the Transaction retain
or acquire securities constituting a majority of the outstanding voting common
stock of the acquiring or surviving corporation or other entity and (b) no
single person owns more than half of the outstanding voting common stock of the
acquiring or surviving corporation or other entity. For purposes of this
definition, voting common stock of the acquiring or surviving corporation or
other entity that is issuable upon conversion of convertible securities or upon
exercise of warrants or options shall be considered outstanding, and all
securities that vote in the election of directors (other than solely as the
result of a default in the making of any dividend or other payment) shall be
deemed to constitute that number of shares of voting common stock which is
equivalent to the number of such votes that may be cast by the holders of such
securities.
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time. References to any provision of the Code shall be deemed to include
regulations thereunder and successor regulations thereto.
(g) "Committee" means the Compensation Committee of the Board, or such
other Board committee as may be designated by the Board to administer the Plan;
provided, however, that the Committee shall consist solely of two or more
directors. In appointing members of the Committee, the Board will consider
whether each member shall qualify as a "Non-Employee Director" within the
meaning of Rule 16b-3(b)(3) of the Exchange Act and as an "outside director"
within the meaning of Treasury Regulation ss.1.162-27(e)(3) under Code Section
162(m), but such members are not required to so qualify at the time of
appointment or during their term of service on the Committee.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time. References to any provision of the Exchange Act shall
be deemed to include rules thereunder and successor provisions and rules
thereto.
(i) "Fair Market Value" means, with respect to Awards or other
property, the fair market value of such Stock, Award or other property
determined by such methods or procedures as shall be established from time to
time by the Committee; provided, however, that the "Fair Market Value" of Stock
shall be based upon the last sales price or, if unavailable, the average of the
closing bid and asked prices per share of the Stock on such date (or, if there
was no trading or quotation in the Stock on such date, on the next preceding
date on which there was trading or quotation) as reported in The Wall Street
Journal (or other reporting service approved by the Committee).
(j) "ISO" means any Option intended to be and designated as an
incentive stock option within the meaning of Section 422 of the Code.
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(k) "Non-Employee Director" means a director of the Company who is
not, at the time an Option is to be granted under Section 8(a) or (b), an
employee of the Company or any subsidiary of the Company.
(l) "Non-Employee Director Initial Option" or "Annual Option" means an
Option to purchase the number of shares specified in or under Section 8(a) or
(b), subject to adjustment as provided in Section 4(c), granted to a
Non-Employee Director.
(m) "Participant" means a person who, at a time when eligible under
Section 5 hereof, has been granted an Award under the Plan.
(n) "Rule 16b-3" means Rule 16b-3, as from time to time in effect and
applicable to the Plan and participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.
(o) "Stock" means the Common Stock, $.01 par value, of the Company and
such other securities as may be substituted or resubstituted for Stock pursuant
to Section 4.
3. Administration.
(a) Authority of the Committee. Except as otherwise provided below,
the Plan shall be administered by the Committee. The Committee shall have full
and final authority to take the following actions, in each case subject to and
consistent with the provisions of the Plan:
(i) to select persons to whom Awards may be granted;
(ii) to determine the type or types of Awards to be granted to
each such person;
(iii) to determine the number of Awards to be granted, the number
of shares of Stock to which an Award shall relate, the terms and conditions of
any Award granted under the Plan (including, but not limited to, any exercise
price, grant price or purchase price, any restriction or condition, a schedule
for lapse of restrictions or conditions relating to transferability or
forfeiture, exercisability or settlement of an Award, and waivers or
accelerations thereof, performance conditions relating to a Award (including
waivers and modifications thereof), based in each case on such considerations as
the Committee shall determine), and all other matters to be determined in
connection with an Award;
(iv) to determine whether, to what extent and under what
circumstances an Award may be settled, or the exercise price of an Award may be
paid, in cash, Stock, other Awards or other property, or an Award may be
cancelled, forfeited or surrendered;
(v) to determine whether, to what extent and under what
circumstances cash, Stock, other Awards or other property payable with respect
to an Award shall
3
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be deferred either automatically, at the election of the Committee or at the
election of the Participant;
(vi) to prescribe the form of each Award Agreement, which need not
be identical for each Participant;
(vii) to adopt, amend, suspend, waive and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;
(viii) to correct any defect or supply any omission or reconcile
any inconsistency in the Plan and to construe and interpret the Plan and any
Award, rules and regulations, Award Agreement or other instrument hereunder; and
(ix) to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem necessary or
advisable for the administration of the Plan.
Other provisions of the Plan notwithstanding, the Board shall perform the
functions of the Committee for purposes of granting Awards (subject to the
Section 8, which provides for certain automatic grants) to Non-Employee
Directors, and the Board may perform any function of the Committee under the
Plan for any other purpose, including without limitation, for the purpose of
ensuring that transactions under the Plan by Participants who are then subject
to Section 16 of the Exchange Act in respect of the Company are exempt under
Rule 16b-3. In any case in which the Board is performing a function of the
Committee under the Plan, each reference to the Committee herein shall be deemed
to refer to the Board, except where the usage or context otherwise requires.
(b) Manner of Exercise of Committee Authority. Any action of the
Committee with respect to the Plan shall be final, conclusive and binding on all
persons, including the Company, subsidiaries of the Company, Participants, any
person claiming any rights under the Plan from or through any Participant and
stockholders, except to the extent the Committee may subsequently modify, or
take further action not consistent with its prior action. If not specified in
the Plan, the date by which the Committee must or may make all determinations
shall be determined by the Committee, and any such determination may thereafter
by modified by the Committee (subject to Section 9(e)). The express grant of any
specific power to the Committee, and the taking of any action by the Committee,
shall not be construed as limiting any power or authority of the Committee. The
Committee may delegate to officers or managers of the Company or a subsidiary of
the Company, the authority, subject to such terms as the Committee shall
determine, to perform such functions as the Committee may determine, to the
extent permitted under applicable law.
(c) Limitation of Liability. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him by any
4
<PAGE>
officer or other employee of the Company or any subsidiary, the Company's
independent certified public accountants or any executive, compensation
consultant, legal counsel or other professional retained by the Company to
assist in the administration of the Plan. No member of the Committee, or any
officer or employee of the Company acting on behalf of the Committee, shall be
personally liable for any action, determination or interpretation taken or made
in good faith with respect to the Plan, and all members of the Committee and any
officer or employee of the Company acting on its behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company with respect
to any such action, determination or interpretation.
4. Stock Subject to Plan.
(a) Amount of Stock Reserved. Subject to adjustment as provided in
Section 4(c) below, the maximum aggregate number of shares of Stock that may be
delivered for all purposes under the Plan shall be eight million (8,000,000)
shares. Shares of Stock subject to any Award, including, without limitation, an
ISO, Restricted Stock or Deferred Stock Award, shall not be deemed delivered if
such Awards are forfeited, expire or otherwise terminate without delivery of
shares to the Participant and the number of shares of Stock as to which such
Award was not exercised will be available for future Awards. If an Award valued
by reference to Stock may only be settled in cash, the number of shares to which
such Award relates shall not be deemed to be Stock subject to such Award for
purposes of this Section 4(a). Any shares of Stock delivered pursuant to an
Award may consist, in whole or in part, of authorized and unissued shares,
treasury shares or shares acquired in the market for Participant's Account.
(b) Annual Per Participant Limitations. With respect to ISO Awards,
the value of shares of Stock that may be delivered upon the exercise of an ISO
in any one year period cannot exceed $100,000 based on the fair market value of
the Stock at the date of the ISO grant. During any calendar year, no Participant
may be granted Options and SARs exercisable for more than 400,000 shares of
Stock and Awards other than Options and SARs that may be settled by delivery of
more than 200,000 shares of Stock, subject to adjustment as provided in Section
4(c). In addition, with respect to Awards that may be settled in cash (in whole
or in part), no Participant may be paid during any calendar year cash amounts
relating to such Awards that exceed the greater of the Fair Market Value of the
200,000 shares of Stock (i) at the date of grant or (ii) at the date of
settlement of Award. This provision sets forth separate limitations, so that
Awards that may be settled solely by delivery of Stock shall not operate to
reduce the amount of cash-only Awards, and vice-versa; nevertheless, Awards that
may be settled in Stock or cash must not exceed any applicable limitation.
(c) Adjustments. In the event that the Committee shall determine that
any recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase or exchange of Stock or other
securities, Stock dividend or other special, large and non-recurring dividend or
distribution (whether in the form of cash, securities or other property),
liquidation, dissolution or other similar corporate transaction or event,
affects the Stock such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of
5
<PAGE>
Participants under the Plan, then the Committee shall, in such manner as it may
deem equitable, adjust any or all of (i) the number and kind of shares of Stock
reserved and available for Awards under Section 4(a), including shares reserved
for ISOs and Restricted and Deferred Stock, (ii) the number and kind of shares
of Stock specified in the annual per participant limitations provisions under
Section 4(b), (iii) the number and kind of shares of Stock to be subject to
Non-Employee Director Initial and Annual Options thereafter granted, (iv) the
number and kind of shares of outstanding Restricted Stock or other outstanding
Award in connection with which shares have been issued, (v) the number and kind
of shares that may be issued in respect of other outstanding Awards, and (vi)
the exercise price, grant price or purchase price relating to any Award (or, if
deemed appropriate, the Committee may make provision for a cash payment with
respect to any outstanding Award). In addition, the Committee is authorized to
make adjustments in the terms and conditions of, and the criteria included in,
Awards in recognition of unusual or nonrecurring events (including, without
limitation, events described in the preceding sentence) affecting the Company or
any subsidiary or the financial statement of the Company or any subsidiary, or
in response to changes in applicable laws, regulations, or accounting
principles. The foregoing notwithstanding, no adjustments shall be authorized
under this Section 4(c) with respect to ISOs or SARs in tandem therewith to the
extent that such authority would cause the Plan to fail to comply with Section
422(b)(1) of the Code.
5. Eligibility. Executive officers and key employees of the Company and
its subsidiaries, including any director or officer who is also such an
executive officer or key employee, directors of the Company, and persons who
provide consulting or other services to the Company deemed by the Committee to
be of substantial value to the Company, are eligible to be granted Awards under
the Plan. In addition, a person who has been offered employment by the Company
or its subsidiaries or agreed to become a director of the Company is eligible to
be granted an Award under the Plan; provided, however, that such Award shall be
cancelled if such person fails to commence such employment service as a
director, and no payment of value may be made in connection with such Award
until such person has commenced such employment or service.
6. Specific Terms of Awards.
(a) General. Awards may be granted on the terms and conditions set
forth in this Section 6. In addition, the Committee may impose on any Award or
the exercise thereof such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of termination of employment or
service of the Participant. The Committee shall retain full power and discretion
to accelerate, waive or modify, at any time, any term or condition of an Award
that is not mandatory under the Plan. Except as expressly provided by the
Committee (including for purposes of complying with requirements of the Delaware
General Corporation Law relating to lawful consideration for issuance of
shares), no consideration other than services shall be required for the grant
(but not the exercise) of any Award.
6
<PAGE>
(b) Options. The Committee is authorized to grant Options (including
"reload" options automatically granted to offset specified exercises of Options)
("Options") on the following terms and conditions:
(i) Exercise Price. The exercise price per share of Stock
purchasable under an Option shall be determined by the Committee; provided,
however, that, except as otherwise provided for herein, such exercise price
shall be not less than the Fair Market Value of a share on the date of grant of
such Option.
(ii) Date and Method of Exercise. The Committee shall determine
the date or dates at which an Option may be exercised in whole or in part, the
methods by which such exercise price may be paid or deemed to be paid, the form
of such payment, including, without limitation, cash, Stock, other Award or
awards granted under other Company plans or other property (including notes or
other contractual obligations of Participants to make payment on a deferred
basis, such as through "cashless exercise arrangements," to the extent permitted
by applicable law), and the methods by which Stock shall be delivered or deemed
to be delivered to Participants.
(iii) ISOs. The terms of any ISO granted under the Plan shall
comply in all respects with the provisions of Section 422 of the Code including,
but not limited to, the requirement that no ISO shall be granted more than 10
years after the effective date of the Plan. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to ISOs shall be interpreted,
amended, or altered, nor shall any discretion or authority granted under the
Plan be exercised, so as to disqualify either Plan or any ISO under Section 422
of the Code, unless requested by the affected Participant.
(c) Stock Appreciation Rights. The Committee is authorized to grant
stock appreciation right ("SARs") on the following terms and conditions:
(i) Right to Payment. A SAR shall confer upon the Participant to
whom it is granted a right to receive, upon exercise thereof, the excess of (A)
the Fair Market Value of one (1) share of Stock on the date of exercise (or, if
the Committee shall so determine in the case of any such right other than or
related to an ISO, the Fair Market Value of one (1) share at any time during a
specified period before after the date of exercise), over (B) the grant price of
the SAR as determined by the Committee as the date of grant of the SAR, which,
except as otherwise provided for herein, shall be not less than the Fair Market
Value of one (1) share of Stock on the date of grant.
(ii) Other Terms. The Committee shall determine the date, or
dates, at which an SAR may be exercised in whole or in part, the method of
exercise, method of settlement, form of consideration payable in settlement,
method by which Stock will be delivered or deemed to be delivered to
Participants, whether an SAR shall be in tandem with any other Award, and any
other terms and conditions of any SAR. Limited SARs that may only be exercised
upon the occurrence of a Change in Control may be granted on such terms, not
inconsistent with this Section
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6(c), as the Committee may determine. Limited SARs may be either freestanding or
issued in tandem with other Awards.
(d) Restricted Stock. The Committee is authorized to grant restricted
stock ("Restricted Stock") on the following terms and conditions:
(i) Grant and Restrictions. Restricted Stock shall be subject to
such restrictions on transferability and other restrictions, if any, as the
Committee may impose, which restrictions may lapse separately or in combination
at such dates, under such circumstances, in such installments, or otherwise, as
the Committee may determine. Except to the extent restricted under the terms of
the Plan and any Award Agreement relating to the Restricted Stock, a Participant
granted Restricted Stock shall have all of the rights of a stockholder
including, without limitation, the right to vote Restricted Stock or the right
to receive dividends thereon.
(ii) Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment or service (as determined under criteria
established by the Committee) during the applicable restriction period,
Restricted Stock that is at that time subject to restrictions shall be forfeited
and reacquired by the Company; provided, however, that the Committee may
provide, by rule or regulation or in any Award Agreement, or may determine in
any individual case, that restrictions or forfeiture conditions relating to
Restricted Stock shall be waived in whole or in part in the event of termination
resulting from specified causes.
(iii) Certificates for Stock. Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Stock are registered in the name of the
Participant, such certificates may bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Restricted Stock. The
Company may retain physical possession of the Restricted Stock certificate, in
which case the Participant shall be required to have delivered a stock power to
the Company, endorsed in blank, relating to the Restricted Stock.
(iv) Dividends. Dividends paid on Restricted Stock shall be either
paid at the dividend payment date in cash or in shares of unrestricted Stock
having a Fair Market Value equal to the amount of such dividends, or the payment
of such dividends shall be deferred and/or the amount or value thereto
automatically reinvested in additional Restricted Stock, other Awards, or other
investment vehicles, as the Committee shall determine or permit. Stock
distributed in connection with property distributed as a dividend shall be
subject to restrictions and a risk of forfeiture to the same extent as the
Restricted Stock with respect to which such Stock or other property has been
distributed, unless otherwise determined by the Committee.
(e) Deferred Stock. The Committee is authorized to grant deferred
stock ("Deferred Stock") subject to the following terms and conditions:
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(i) Award and Restrictions. Delivery of Stock shall occur upon
expiration of the deferral period specified for an Award of Deferred Stock by
the Committee (or, if permitted by the Committee, as elected by the
Participant). In addition, Deferred Stock shall be subject to such restrictions
as the Committee may impose, if any, which restrictions may lapse at the
expiration of the deferral period or at earlier specified times, separately or
in combination, in installments or otherwise, as the Committee may determine.
(ii) Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment or service (as determined under criteria
established by the Committee) during the applicable deferral period or portion
thereof to which forfeiture conditions apply (as provided in the Award Agreement
evidencing the Deferred Stock), all Deferred Stock that is at that time subject
to such forfeiture conditions shall be forfeited; provided, however, that the
Committee may provide, by rule or regulation or in any Award Agreement, or may
determine in any individual case, that restrictions or forfeiture conditions
relating to Deferred Stock shall be waived in whole or in part in the event of
termination resulting from specified causes.
(f) Bonus Stock and Awards in Lieu of Cash Obligations. The Committee
is authorized to grant Stock as a bonus, or to grant Stock or other Awards in
lieu of Company obligations to pay cash under other plans or compensatory
arrangements.
(g) Dividend Equivalents. The Committee is authorized to grant
dividend equivalents entitling the Participant to receive cash, Stock, other
Awards or other property equal in value to dividends paid with respect to a
specified number of shares of Stock ("Dividend Equivalents"). Dividend
Equivalents may be awarded on a free-standing basis or in connection with
another Award. The Committee may provide that Dividend Equivalents shall be paid
or distributed when accrued or shall be deemed to have been reinvested in
additional Stock, Awards or other investment vehicles, and subject to such
restrictions on transferability and risks of forfeiture as the Committee may
specify.
(h) Other Stock-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant such other Awards that may be
denominated or payable in, valued in whole or in part or by reference to, or
otherwise based on, or related to, Stock and factors that may influence the
value of Stock as deemed by the Committee to be consistent with the purposes of
the Plan, including, without limitation convertible or exchangeable debt
securities, other rights convertible or exchangeable into Stock, purchase rights
for Stock, Awards with value and payment contingent upon performance of the
Company or any other factors designated by the Committee, and Awards valued by
reference to the book value of Stock or the value of securities of, or the
performance of, specified subsidiaries (collectively, "Other Stock-Based
Awards"). The Committee shall determine the terms and conditions of such Awards.
Stock issued pursuant to an Award in the nature of a purchase right granted
under this Section 6(h) shall be purchased for such consideration paid for at
such times, by such methods, and in such forms, including, without limitation,
cash, Stock, other Awards or other property, as the Committee shall determine.
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Cash awards, as an element of or supplement to any other Award under the Plan,
may be granted pursuant to this Section 6(h).
7. Certain Provisions Applicable to Awards.
(a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards
granted under the Plan may, at the discretion of the Committee, be granted
either alone or in addition to, in tandem with or in substitution for any other
Award granted under the Plan or any award granted under any other plan of the
Company, any subsidiary or any business entity to be acquired by the Company or
a subsidiary, or an other right of a Participant to receive payment from the
Company or any subsidiary. Awards granted in addition to or in tandem with other
Awards may be granted either as of the same time as or different time from the
grant of such other Awards or awards.
(b) Term of Awards. The term of each Award shall be for such period as
may be determined by the Committee; provided, however, that in no event shall
the term of any ISO or an SAR granted in tandem therewith exceed a period of ten
years from the date of its grant (or such shorter period as may be applicable
under Section 422 of the Code).
(c) Form of Payment Under Awards. Subject to the terms of the Plan and
any applicable Award Agreement, payments to be made by the Company or a
subsidiary upon the grant, exercise or settlement of an Award may be made in
such forms as the Committee shall determine, including, without limitation,
cash, Stock, other Awards or other property, and may be made in a single payment
or transfer, in installments or on a deferred basis. Such payments may include,
without limitation, provisions for the payment or crediting of reasonable
interest on installment or deferred payments or the grant or crediting of
Dividend Equivalents in respect of installment or deferred payments denominated
in Stock.
(d) Rule 16b-3 Compliance.
(i) Six-Month Holding Period. Unless a Participant could otherwise
dispose of equity securities, including derivative securities, acquired under
the Plan without incurring liability under Section 16(b) of the Exchange Act,
equity securities acquired under the Plan must be held for a period of six (6)
months following the date of such acquisition, provided that this condition
shall be satisfied with respect to a derivative security if at least six (6)
months elapse from the date of acquisition of the derivative security to the
date of disposition of the derivative security (other than upon exercise or
conversion) or its underlying equity security.
(ii) Other Compliance Provisions. With respect to a Participant
who is then subject to Section 16(b) of the Exchange Act in respect of the
Company, the Committee shall implement transactions under the Plan and
administer the Plan in a manner that shall ensure that each transaction by such
Participant is exempt from liability under Rule 16b-3, except that such a
Participant may be permitted to engage in a non-exempt transaction under the
Plan if written
10
<PAGE>
notice has been given to the Participant regarding the non-exempt nature of such
transaction. The Committee may authorize the Company to repurchase any Award or
shares of Stock resulting from any Award in order to prevent any Participant who
is subject to Section 16 of the Exchange Act from incurring liability under
Section 16(b). Unless otherwise specified by the Participant, equity securities,
including derivative securities acquired under the Plan, which are disposed of
by a Participant shall be deemed to be disposed of in the order acquired by the
Participant.
(e) Loan Provisions. With the consent of the Committee, and subject at
all times to, and only to the extent, if any, permitted under and in accordance
with, laws and regulations and other binding obligations or provisions
applicable to the Company, the Company may make, guarantee or arrange for a loan
or loans to a Participant with respect to the exercise of any Option or other
payment in connection with any Award including the payment by a Participant of
any or all federal, state or local income or other taxes due in connection with
any Award. Subject to such limitations, the Committee shall have full authority
to decide whether to make a loan or loans hereunder and to determine the amount,
terms and provisions of any such loan or loans, including the interest rate to
be charged in respect of any such loan or loans, whether the loan or loans are
to be with or without recourse against the borrower, the terms on which the loan
is to be repaid and conditions, if any, under which the loan or loans may be
forgiven.
(f) Performance-Based Awards. The Committee may, in its discretion,
designate any Award the exercisability or settlement of which is subject to the
achievement of performance conditions as a performance-based Award subject to
this Section 7(f). The performance objectives for an Award subject to this
Section 7(f) shall consist of one or more business criteria and a targeted level
or levels of performance with respect to such criteria, as specified by the
Committee. Such levels of performance may be expressed in absolute or relative
levels. Achievement of performance objectives with respect to such Awards shall
be measured over a period of not less than one (1) year nor more than five (5)
years, as the Committee may specify. Performance objectives may differ for such
Awards to different Participants. The Committee shall specify the weighting to
be given to each performance objective for purposes of determining the final
amount payable with respect to any such Award. The Committee may, in its
discretion, reduce the amount of a payout otherwise to be made in connection
with an Award subject to this Section 7(f), and the Committee may consider other
performance criteria in exercising such discretion. All determinations by the
Committee as to the achievement of performance objectives shall be in writing.
(g) Acceleration upon a Change of Control. Notwithstanding anything
contained herein to the contrary, unless otherwise provided by the Committee in
an Award Agreement, all conditions and restrictions relating to an Award,
including limitations on exercisability, risks of forfeiture, deferral periods
and conditions and restrictions requiring the continued performance of services
or the achievement performance objectives with respect to the exercisability or
settlement of such Award, shall immediately lapse upon a Change in Control.
11
<PAGE>
8. Options Granted Automatically to Non-Employee Directors.
(a) Initial Option Grants. A Non-Employee Director Initial Option
shall be automatically granted as of the effective date of the Non-Employee
Director's initial election to the Board if he or she qualifies as a
Non-Employee Director at that date.
(b) Annual Option Grants. A Non-Employee Director Annual Option shall
be automatically granted at the close of business on the date of final
adjournment of each annual meeting of stockholders of the Company, to each
member of the Board of Directors who then qualifies as a Non-Employee Director.
The foregoing notwithstanding, any person who has been automatically granted a
Non-Employee Director Initial Option under Section 8(a) shall not be
automatically granted a Non-Employee Director Annual Option at the first annual
meeting of stockholders following such grant of the Initial Option if such
annual meeting takes place within three (3) months after the effective date of
such grant of the Initial Option.
(c) Number of Shares Subject to Automatic Option Grants In the case of
any Initial or Annual Option, the number of shares of Stock to be subject to
each Initial Option shall be 30,000 and each Annual Option shall be 30,000 or,
if so determined by the Board, such other number of shares specified in the most
recent resolution of the Board adopted on or prior to the date of the annual
meeting of stockholders that coincides with or most recently precedes the date
of grant of the Option.
(d) Other Non-Employee Director Initial and Annual Option Terms. Other
terms of Initial and Annual Options shall be as follows:
(i) The exercise price per share of Stock purchasable upon
exercise of a Non-Employee Director Initial or Annual Option shall be equal to
100% of the Fair Market Value of a share of Stock on the date of grant of the
Option.
(ii) A Non-Employee Director Initial or Annual Option shall expire
at the earlier of (A) ten 10 years after the date of grant or (B) one (1) year
after the date the Participant ceases to serve as a director of the Company for
any reason.
(iii) Each Non-Employee Director Initial or Annual Option may be
exercised, prior to expiration, commencing one (1) year after the date of grant,
or at such earlier date as may be specified the Board of Directors; provided,
however, that an Option may be exercised following a Participant's termination
of service as a director for reasons other than death or disability, but only if
the director served for, at least, eleven (11) months after the date of grant or
the Option was otherwise exercisable at the date of termination of service.
(e) Method of Exercise. A Participant may exercise a Non-Employee
Director Initial or Annual Option, in whole or in part, at such date as it is
exercisable and prior to its expiration, by giving written notice of exercise to
the Secretary of the Company, specifying the Option to be exercised and the
number of shares to be purchased, and paying in full the exercise
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<PAGE>
price in cash (including by check) or by surrender of shares already owned by
the Participant (except for shares acquired from the Company by exercise of
option less than six (6) months before the date of surrender) having a Fair
Market Value at the time of exercise equal to the exercise price, or by a
combination of cash and shares.
(f) Availability of Shares. If an automatic grant of Options
authorized under Section 8(a) or (b) cannot be made in full due to the
limitation set forth in Section 4(a), such grant shall be made (together with
other automatic grants to occur at the same time) to the greatest extent then
permitted under Section 4(a).
9. General Provisions.
(a) Compliance With Laws and Obligations. The Company shall not be
obligated to issue or deliver Stock in connection with any Award or take any
other action under the Plan in a transaction subject to the registration
requirements of the Securities Act of 1933, as amended, or any other federal or
state securities law, any requirement under any listing agreement between the
Company and any national securities exchange or automated quotation system or
any other law, regulation or contractual obligation of the Company until the
Company is satisfied that the Company is in full compliance with such laws,
regulations and other obligations of the Company. Certificates representing
shares of Stock issued under the Plan shall be subject to such stop-transfer
orders and other restrictions as may be applicable under such laws, regulations
and other obligations of the Company, including any requirement that a legend or
legends be placed thereon.
(b) Limitations on Transferability. Awards and other rights under the
Plan shall not be transferable by a Participant, except by will or the laws of
descent and distribution or to a beneficiary in the event of the Participant's
death, shall not be pledged, mortgaged, hypothecated or otherwise encumbered, or
otherwise subject to the claims of creditors, and, in the case of ISOs and SARs
in tandem therewith, shall be exercisable during the lifetime of a Participant
only by such Participant or his guardian or legal representative; provided,
however, that such Awards and other rights (other than ISOs and SARs in tandem
therewith) may be transferred to one or more transferees during the lifetime of
the Participant to the extent and on such terms as then may be permitted by the
Committee.
(i) Procedures. The Company acting as the "Administrator" of the
Plan within the meaning of Section 3(16) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), shall make all determinations as to
the right of any claimant to an uninsured benefit under this Plan in accordance
with the procedure set forth below.
(ii) Claims. All claims for benefits under this Plan shall be made
in writing and shall be signed by the applicant. Claims shall be submitted to a
representative designated by the Company and hereinafter referred to as the
"Plan Sponsor's Representative."
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(A) Each claim hereunder shall be acted on and approved or
disapproved by the Company within ninety (90) days following the receipt by the
Plan Sponsor's Representative of the information necessary to process the claim.
(B) In the event the Company denies a claim for benefits, in
whole or in part, the Company shall notify the applicant in writing of the
denial of the claim and notify such applicant of his/her right to a review of
the decision by the Named Appeals Fiduciary. Such notice shall also set forth,
in a manner calculated to be understood by the applicant, the specific reason
for such denial, the specific Plan provisions on which the denial is based, a
description of any additional material or information necessary to perfect the
claim, with an explanation of why such materials or information is necessary,
and an explanation of the Plan's claim review procedure as set forth in this
paragraph.
(C) If no action is taken by the Company on an applicant's
claim within ninety (90) days after receipt by the Plan Sponsor's
Representative, such application shall be deemed to be denied for purposes of
the following appeals procedure.
(iii) Review of Decision. Any applicant whose claim for benefits
is denied in whole or in part (such applicant being hereinafter referred to as
the "Claimant") may appeal from such denial to the Named Appeals Fiduciary for a
review of the decision. Such appeal must be made within sixty (60) days after
the Claimant has received written notice of the denial as provided above in
Paragraph ii. An appeal must be submitted in writing within such period and
must:
(A) Request a review by the Named Appeals Fiduciary of the
claim for benefits under this Plan;
(B) Set forth all of the grounds upon which the Claimant's
request for review is based and any facts in support thereof; and
(C) Set forth any issues or comments which the Claimant
deems pertinent to the appeal.
Upon receipt of a notice of denial, the Plan Sponsor's
Representative shall establish a hearing date on which the Claimant may make an
oral presentation in support of his/her appeal. All oral appeals shall be heard
by the Named Appeals Fiduciary. The Claimant may elect to forego the oral
presentation. In such event, the Named Appeals Fiduciary shall determine the
appeal on the basis of the written evidence as presented by the parties.
The Named Appeals Fiduciary shall act upon each appeal within
sixty (60) days after receipt thereof unless special circumstances require an
extension of the time for processing the Claimant's request, any such written
notice of the extension shall be forwarded to the Claimant prior to the
commencement of the extension. In no event shall such extension exceed a
14
<PAGE>
period of one hundred twenty (120) days after the request for review is received
by the Named Appeals Fiduciary.
The Named Appeals Fiduciary shall make a full and fair review of
each appeal and any written materials submitted by the Claimant and/or the
Company in connection therewith. The Named Appeals Fiduciary may require the
Claimant and/or the Company to submit such additional facts, documents or other
evidence as the Named Appeals Fiduciary in its discretion deems necessary or
advisable in making its review. The Claimant shall be given the opportunity to
review pertinent documents or materials upon submission of a written request to
the Named Appeals Fiduciary, provided the Named Appeals Fiduciary finds the
requested documents or materials are pertinent to the appeal.
On the basis of its review, the Named Appeals Fiduciary shall make
an independent determination of the Claimant's eligibility for benefits under
this Plan. The decision of the Named Appeals Fiduciary on any claim for benefits
shall be final and conclusive upon all parties thereto.
In the event the Named Appeals Fiduciary denies an appeal, in
whole or in part, the Named Appeals Fiduciary shall give written notice of the
decision to the Claimant, which notice shall set forth, in a manner calculated
to be understood by the Claimant, the specific reasons for such denial and which
shall make specific reference to the pertinent Plan provisions on which the
Named Appeals Fiduciary's decision was based.
(iv) Named Appeals Fiduciary. The "Named Appeals Fiduciary" shall
be the person or persons named as such by the Company. Named Appeals Fiduciaries
may at any time be removed by the Company. All such removals may be with or
without cause and shall be effective on the date stated in the notice of
removal. The Named Appeals Fiduciary shall be the "Appropriate Named Fiduciary"
within the meaning of Section 503 of ERISA, and, unless appointed to other
fiduciary responsibilities, shall have no authority, responsibility, or
liability with respect to any matter other than the proper discharge of the
functions of the Named Appeals Fiduciary as set forth herein.
(v) Compliance with Regulations. It is intended that the claims
procedure of this Plan be administered in accordance with the claims procedure
regulations of U.S. Department of Labor Regulation ss.2560.503-1.
(c) No Right to Continued Employment or Service. Neither the Plan nor
any action taken hereunder shall be construed as giving any employee, director
or other person the right to be retained in the employ or service of the Company
or any of its subsidiaries, nor shall it interfere in any way with the right of
the Company or any of its subsidiaries to terminate any employee's employment or
other person's service at any time or with the right of the Board or
stockholders to remove any director.
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(d) Taxes. The Company and any subsidiary is authorized to withhold
from any Award granted or to be settled, any delivery of Stock in connection
with an Award, any other payment relating to an Award or any payroll or other
payment to a Participant, amounts of withholding and other taxes due or
potentially payable in connection with any transaction involving an Award, and
to take such other action as the Committee may deem advisable to enable the
Company and Participants to satisfy obligations for the payment of withholding
taxes and other tax obligations relating to any Award. This authority shall
include authority to withhold or receive Stock or other property and to make
cash payments in respect thereof, in satisfaction of a Participant's tax
obligations.
(e) Changes to the Plan and Awards. The Board may amend, alter,
suspend, discontinue or terminate the Plan or the Committee's authority to grant
Awards under the Plan without the consent of stockholders or Participants,
except that any such action shall be subject to the approval of the Company's
stockholders at or before the next annual meeting of stockholders for which the
record date is after such Board action if such stockholder approval is required
by any federal or state law or regulation or the rules of any stock exchange or
automated quotation system on which the Stock may then be listed or quoted, and
the Board may otherwise, in its discretion, determine to submit such other
changes to the Plan to stockholders for approval; provided, however, that,
without the consent of an affected Participant, no such action may materially
impair the rights of such Participant under any Award theretofore granted to him
or her. The Committee may waive any conditions or rights under, or amend, alter,
suspend, discontinue, or terminate any Award theretofore granted and any Award
Agreement relating thereto; provided, however, that without the consent of an
affected Participant, no such action may materially impair the rights of such
Participant under such Award.
(f) No Rights to Awards; No Stockholder Rights. No Participant or
employee shall have any claim to be granted any Award under the Plan (except for
a director who has become entitled to Options under Section 8), and there is no
obligation for uniformity of treatment of Participants and employees. No Award
shall confer on any Participant any of the rights of a stockholder of the
Company unless and until Stock is duly issued or transferred and delivered to
the Participant in accordance with the terms of the Award or in the case of an
Option, the Option is duly exercised.
(g) Unfunded Status of Awards; Creation of Trusts. The Plan is
intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant
pursuant to an Award, nothing contained in the Plan or any Award shall give any
such Participant any rights that are greater than those of a general creditor of
the Company; provided, however, that the Committee may authorize the creation of
trusts or make other arrangements to meet the Company's obligations under the
Plan to deliver cash, Stock, other Awards or other property pursuant to any
Award, which trusts or other arrangements shall be consistent with the
"unfunded" status of the Plan, unless the Committee otherwise determines with
the consent of each affected Participant.
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<PAGE>
(h) Nonexclusivity of the Plan. Neither the adoption of the Plan by
the Board nor any submission of the Plan or amendments thereto to the
stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Board to adopt such other compensatory
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under the Plan, and such arrangements
may be either applicable generally or only in specific cases.
(i) No Fractional Shares. No fractional shares of Stock shall be
issued or delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, other Awards or other property shall be issued or paid
in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.
(j) Governing Law. The validity, construction and effect of the Plan,
any rules and regulations relating to the Plan and any Award Agreement shall be
determined in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts of laws, and applicable federal law.
(k) Effective Date; Plan Termination. The Plan became effective as of
May 6, 1998, the date of its adoption by the Board, subject to stockholder
approval, and shall continue in effect until terminated by the Board.
(l) Pooling-of-Interest Accounting. Notwithstanding anything to the
contrary stated in this Plan, any provisions of this Plan that would result in
the inability to use the pooling-of-interest method of accounting shall be
deemed to be rescinded or canceled.
(m) None of the payments, benefits or rights of any Participant or
Beneficiary shall be subject to any claim of any creditor to the fullest extent
permitted by law. No Participant or Beneficiary shall have the right to
alienate, anticipate, commute, encumber or assign any of the benefits or
payments which he/she may expect to receive, contingently or otherwise, under
this Plan, except the right to designate a Beneficiary or Beneficiaries as
hereinabove provided.
(n) Severability of Provisions. If any provision of this Plan shall be
held invalid or unenforceable, such invalidity or unenforeability shall not
affect any other provisions hereof, and this Plan shall be construed and
enforced as if such provisions had not been included.
(o) Heirs, Assigns and Personal Representatives. This Plan shall be
binding upon the heirs, executors, administrators, successors and assigns of the
parties, including each Participant and Beneficiary, present and future.
(p) Headings and Captions. The headings and captions herein are
provided for reference and convenience only, shall not be considered part of the
Plan, and shall not be employed in the construction of the Plan.
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<PAGE>
(q) Gender and Number. Except where otherwise clearly indicated by
context, the masculine and the neuter shall include the feminine and the neuter,
the singular shall include the plural, and vice-versa.
(r) Payment to Minors, Etc. Any benefit payable to or for the benefit
of a minor, an incompetent person or other person incapable of receipting
therefor shall be deemed paid when paid to such person's guardian or to the
party providing or reasonably appearing to provide for the care of such person,
and such payment shall fully discharge the Company and all other parties with
respect thereto.
(s) Binding Effect. The Plan shall be binding upon the Company. In the
event of a merger or other event of reorganization or consolidation involving
the Company, whereby the shareholders of the Company on the date of the
execution of this Plan own more than fifty percent (50%) of the voting power
with respect to the voting stock of the surviving entity, this Plan shall
continue in full force and effect and become an obligation of the surviving
entity.
18
<PAGE>
ICC TECHNOLOGIES, INC.
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS ON MARCH 16, 1999
Solicited on behalf of the Board of Directors
The undersigned hereby appoints Glenn S. Meyers, Chairman of the Board of
ICC Technologies, Inc. (the "Company") and John S. Gross, Chief Financial
Officer of the Company, or either of them individually and each of them with the
full power of substitution, as attorney and proxy of the undersigned for and in
the name, place and stead of the undersigned, to appear at the Special Meeting
of Stockholders of the Company to be held on the 16th day of March 1999, in the
ballroom at the Masonic Hall, located at 71 West 23rd Street, New York, NY
10010, and at any postponement or adjournment thereof (the "meeting"), and to
vote all of the shares of Common Stock, which the undersigned is entitled to
vote, with all the powers and authority the undersigned would possess if
personally present. The Board of Directors recommends a vote for approval of
each of the proposals to be voted on at the meeting.
The Board of Directors has fixed the close of business on January 29, 1999,
as the record date for the determination of Stockholders entitled to vote at the
meeting. Only Stockholders of record at the close of business on the record date
will be entitled to notice of, and to vote at, the meeting or any postponement
or adjournment thereof.
(To be Signed on Reverse Side)
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Special Meeting of Stockholders
ICC TECHNOLOGIES, INC.
March 16, 1999
Please Detach and Mail in the Envelope Provided
Please mark your
A /X/ votes as in this
example.
<TABLE>
<CAPTION>
THE UNDERSIGNED HEREBY DIRECTS THAT THIS PROXY BE VOTED AS FOLLOWS:
FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C>
THIS PROXY WILL WHEN PROPERLY 1. To approve a proposal to amend the
EXECUTED, BE VOTED AS DIRECTED. Company's Certificate of Incorporation to
IF NO DIRECTIONS TO THE CONTRARY change the name of the Company to Rare / / / / / /
ARE INDICATED IN THE BOXES Medium Group, Inc.
PROVIDED, THE PERSONS NAMED HEREIN
INTEND TO VOTE FOR THE APPROVAL OF 2. To approve a proposal to amend the
EACH OF THE PROPOSALS TO BE VOTED Company's Certificate of Incorporation to / / / / / /
ON AT THE MEETING. increase the number of authorized shares of
Common Stock of the Company from
THE SAID ATTORNEY AND PROXY PRESENTED 50,000,000 shares to 200,000,000 shares.
AT SAID MEETING MAY EXERCISE ALL THE
POWERS HEREUNDER. THE UNDERSIGNED 3. To approve a proposal to amend the
HEREBY ACKNOWLEDGES RECEIPT OF THE Company's Certificate of Incorporation to / / / / / /
ACCOMPANYING PROXY STATEMENT. divide the Board of Directors into three
classes.
4. To approve a proposal to adopt the
Company's 1998 Long-Term Incentive Plan. / / / / / /
Stockholder's Signature: ________________________________________ Dated: _________, 1999
Signature: ______________________________________________________ Dated: _________, 1999
Note: It is necessary that you date this Proxy and sign your name (or names) exactly as it appears on the label indicating
any official position or representive capacity.
</TABLE>
