SCHEDULE 14A
(RULE 14A-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
BERENS INDUSTRIES, INC.
-----------------------
(Name of Registrant as Specified in Its Charter)
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
0-11.
(1) Title of each class of securities to which transaction applies:
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(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 0-11 (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:
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<PAGE>
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
<PAGE>
BERENS INDUSTRIES, INC.
701 N. POST OAK, SUITE 350
HOUSTON, TEXAS 77024
PHONE (713)682-7400 FACSIMILE (713)682-7402
May 5, 2000
Dear Stockholder:
You are cordially invited to attend our 2000 Annual Meeting of Stockholders
of Berens Industries, Inc. to be held on Wednesday, June 7, at 701 N. Post Oak,
Suite 350 at 10:00 a.m. Houston, Texas 77024. We look forward to this
opportunity to update you on developments at Berens Industries, Inc.
We hope you will attend the meeting in person. Whether you expect to be
present and regardless of the number of shares you own, please mark, sign and
mail the enclosed proxy in the envelope provided. Matters on which action will
be taken at the meeting are explained in detail in the notice and proxy
statement following this letter.
Sincerely,
/S/ Marc I. Berens
-------------------
Marc I. Berens
Chief Executive Officer
<PAGE>
BERENS INDUSTRIES, INC.
701 N. POST OAK, SUITE 350
HOUSTON, TEXAS 77024
____________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 7, 2000
To the Stockholders of Berens Industries, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of Berens
Industries, Inc., will be held at 701 N. Post Oak, Suite 350, Houston, Texas
77024, at 10:00 a.m. on Wednesday, June 7, 2000 for the following purposes:
1. Elect Three Directors. The Board has nominated for re-election Marc
I. Berens, Yolana Berens, and William Ranshaw as directors until the
next annual meeting.
2. Ratify and Approve the Board's Appointment of Ham, Langston &
Brezina, L.L.P. as the Company's Independent Auditors for fiscal
year 2000. Ham, Langston & Brezina, L.L.P. served in this capacity
for fiscal year 1999.
3. Adoption of 2000 Stock Option Plan. The Board seeks approval of the
2000 Stock Option Plan.
4. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on April 19, 2000 will
be entitled to notice of and to vote at the meeting.
Stockholders unable to attend the Annual Meeting in person are requested to
read the enclosed Proxy Statement and then complete and deposit the proxy
together with the power of attorney or other authority, if any, under which it
was signed, or a notarized certified copy, with the Company at N. Post Oak,
Suite 350, Houston, Texas 77024, at least 48 hours (excluding Saturdays and
Sundays) before the time of the Annual Meeting or with the chairman of the
Annual Meeting prior to the commencement of the Annual Meeting.
Unregistered stockholders who received the proxy through an intermediary
must deliver the proxy in accordance with the instructions given by such
intermediary.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Marc I. Berens
---------------------------------------
Marc I. Berens, Chief Executive Officer
May 5, 2000
THE PROXY STATEMENT WHICH ACCOMPANIES THIS NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS CONTAINS MATERIAL INFORMATION CONCERNING THE MATTERS TO BE
CONSIDERED AT THE MEETING, AND SHOULD BE READ IN CONJUNCTION WITH THIS NOTICE.
<PAGE>
BERENS INDUSTRIES, INC.
701 N. POST OAK, SUITE 350
HOUSTON, TEXAS 77024
(PRINCIPAL EXECUTIVE OFFICE)
____________
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
___________
INTRODUCTION
This Proxy Statement is being furnished to stockholders in connection with
the solicitation of proxies by and on behalf of the Board of Directors of Berens
Industries, Inc. for use at the 2000 Annual Meeting of Stockholders ("Meeting")
to be held at 701 N. Post Oak, Suite 350, Houston, Texas 77024, at 10:00 a.m. on
Wednesday, June 7, 2000, for the purpose of considering and voting upon the
matters set forth in the accompanying Notice of Annual Meeting of Stockholders.
This Proxy Statement and the accompanying form of proxy are first being mailed
to stockholders on or about May 5, 2000.
The close of business on April 19, 2000, has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
Meeting. As of the record date, there were 19,644,860 shares of the Company's
common stock, par value $.001 per share ("Common Stock"), issued and
outstanding. Each share of common stock entitles the holder thereof to one vote
upon any proposal submitted for a vote at the Meeting. The presence, in person
or by proxy, of a majority of the outstanding shares of Common Stock on the
record date is necessary to constitute a quorum at the Meeting. Abstentions and
broker non-votes will be counted towards a quorum. Abstentions will have the
same effect as a vote against a proposal.
Brokers who hold shares in street name for customers are required to vote
those shares in accordance with instructions received from the beneficial
owners. Broker non-votes will have no effect on any of the proposals.
All shares represented by properly executed proxies, unless such proxies
previously have been revoked, will be voted at the Meeting in accordance with
the directions on the proxies.
If no direction is indicated, the shares will be voted:
1. FOR election of all the nominated directors;
2. FOR ratification of Ham, Langston & Brezina, L.L.P. as the Company's
auditors;
3. FOR ratification of the Company's 2000 Stock Option Plan; and
4. TO transact such other business as may properly come before the
meeting.
The enclosed proxy, even though executed and returned, may be revoked at
any time prior to the voting of the proxy by any one of the following methods:
(a) execution and submission of a revised proxy,
(b) written notice to the Secretary of the Company, or
(c) voting in person at the Meeting.
<PAGE>
ANNUAL REPORT
A copy of the Company's 1999 Annual Report on Form 10-KSB is being mailed
with this Proxy Statement. The Annual Report does not form any part of the
material for solicitation of proxies.
The Company will provide, without charge, a copy of any exhibits to the
Company's Form 10-KSB, upon written request to Marc I. Berens, at N. Post Oak,
Suite 350, Houston, Texas 77024.
PROPOSAL 1
ELECTION OF DIRECTORS
Pursuant to the Company's By-Laws, the members of the Board of Directors
serve for one-year terms. The number of directors constituting the whole Board
is currently three and the selected nominees are listed below. Each of the
nominees is currently a director of the Company. Unless authority to vote for
any nominee is withheld in the proxy, the persons named in the accompanying
proxy intend to vote FOR the election of the three nominees for director listed
below.
All nominees have indicated a willingness to serve as directors, but if any
of them should decline or be unable to act as a director, the persons named in
the proxy will vote for the election of such nominee or nominees as may be
recommended by the Board of Directors. Under Nevada Corporation Law, each of
the nominees must receive a plurality of the votes of shares of Common Stock
present in person or by proxy at the meeting to be elected as a director. A
plurality means receiving the largest number of votes, regardless of whether
that is a majority. Abstentions will be counted as shares present at the
meeting. The Company anticipates that the holders of a majority of the
outstanding common stock will be present in person or by proxy at the Meeting.
The following biographical information is furnished with respect to each of
the nominees. The information includes the individual's present position with
the Company, period served as a director, and other business experience during
the past five years.
DIRECTORS NOMINATED FOR ELECTION
Marc I. Berens has served as the Company's chief executive officer and has
served as a director since the Company commenced its current operations in June
1999. From 1991 until 1998, Mr. Berens served as chief executive officer of
Mercosur Industries, Inc.
Yolana Berens has served as a director since the Company commenced its
current operations in June 1999. From 1989 until 1998, Ms. Berens served as
director of Mercosur Industries, Inc.
William Ranshaw has served as the Company's chief financial officer
and has served as a director since the Company commenced its current operations
in June 1999. Since November 1998, Mr. Ranshaw has served as the president of
McGuffy Industries, Inc. From January 1997 until March 1998, Mr. Ranshaw served
as vice president and chief financial officer of Superior Wellhead, Inc. From
August 1995 until August 1997, Mr. Ranshaw served as treasurer of Citadel
Computer Systems, Inc.
During the fiscal year ended December 31, 1999, the Company's Board of
Directors held one meeting. No incumbent director attended fewer than 75%
of the meetings. The Company has no audit, compensation, or nominating
committees.
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own beneficially
more than ten percent of the common stock of the Company, to file reports of
ownership and changes of ownership with the Securities and Exchange Commission.
Based solely on the reports received by the Company and on written
representations from certain reporting persons, the Company believes that the
directors, executive officers, and greater than ten percent beneficial owners
have complied with all applicable filing requirements, except for a Form 5 for
Ms. Berens and Mr. Ranshaw that was not timely filed in February 2000 reporting
three transactions, which was filed in May 2000, and a Form 3 for Mr. Ranshaw
that was not timely filed in September 1999, which was filed in May 2000.
The Board of Directors has nominated the above-referenced directors for
election by the stockholders and recommends a vote for such election. The
election of the directors requires a plurality of the votes of the shares of
common stock present in person or represented by proxy at the Meeting.
PROPOSAL 2
RATIFICATION AND APPROVAL OF HAM, LANGSTON, & BREZINA, L.L.P. AS THE COMPANY'S
INDEPENDENT AUDITORS
The Board of Directors has approved the engagement of Ham, Langston, &
Brezina, L.L.P. as independent auditors for the Company. The Board of Directors
wishes to obtain from the stockholders a ratification of the Board's action in
appointing Ham, Langston, & Brezina, L.L.P. as independent auditors of the
Company.
In the event the appointment of Ham, Langston, & Brezina, L.L.P. as
independent auditors is not ratified by the stockholders, the adverse vote will
be considered as a direction to the Board of Directors to select other auditors
for the following year.
Representatives of Ham, Langston, & Brezina, L.L.P. are expected to be
present at the meeting. Representatives of Ham, Langston, & Brezina, L.L.P.
will be given the opportunity to make a statement if they desire to do so. Such
representatives are also expected to be available to respond to questions.
The Board of Directors has recommended the ratification of Ham, Langston, &
Brezina, L.L.P. as independent auditors. Such ratification requires the
affirmative vote of the majority of outstanding shares of common stock present
at the Meeting or represented by proxy.
PROPOSAL 3
ADOPTION OF THE 2000 STOCK OPTION PLAN
The 2000 Stock Option Plan was adopted by the Board of Directors in April
2000, subject to shareholder approval. The Plan will allow stock option grants,
performance stock awards, restricted stock awards, and stock appreciation rights
("SAR") as determined by the Company's compensation committee. The Board has
reserved 2,000,000 shares of common stock for issuance pursuant to the Plan.
The purpose of the Plan is to foster and promote the financial success of the
Company and increase stockholder value by enabling eligible key employees and
others to participate in the long-term growth and financial success of the
company. A summary of the Plan is set forth below, and the full text of the
Plan is attached hereto as Exhibit "A."
ELIGIBILITY. The Plan is open to key employees (including officers and
directors) and consultants of the company and its affiliates ("Eligible
Persons").
TRANSFERABILITY. The grants are not transferable.
<PAGE>
CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The Plan will not effect the right
of the company to authorize adjustments, recapitalizations, reorganizations or
other changes in the company's capital structure. In the event of an
adjustment, recapitalization or reorganization the award shall be adjusted
accordingly. In the event of a merger, consolidation, or liquidation, the
Eligible Person will be eligible to receive a like number of shares of stock in
the new entity he would have been entitled to if immediately prior to the merger
he had exercised his option. The Board may waive any limitations imposed under
the Plan so that all options are immediately exercisable. All outstanding
options may be cancelled by the Board upon written notice to the Eligible Person
and by granting a period in which the options may be exercised.
OPTIONS AND SARS. The company may grant incentive or nonqualified stock
options.
OPTION PRICE. Incentive options shall be not less than the greater of (i) 100%
of fair market value on the date of grant, or (ii) the aggregate par value of
the shares of stock on the date of grant. The compensation committee, at its
option, may provide for a price greater than 100% of fair market value. The
price for 10% or more stockholders shall be not less than 110% of fair market
value.
DURATION. No Option or SAR may be exercisable after the period of 10 years. In
the case of 10% or more stockholder no incentive option may be exercisable after
the expiration of five years.
AMOUNT EXERCISABLE INCENTIVE OPTIONS. No option may be exercisable within six
months from its date of grant unless a shorter time is designated by the Board.
In the event an Eligible Person exercises incentive options during the calendar
year whose aggregate fair market value exceeds $100,000, the exercise of options
over $100,000 will be considered non qualified stock options.
EXERCISE OF OPTIONS. Options may be exercised by written notice to the
compensation committee with:
- - Cash, certified check, bank draft, or postal or express money order
payable to the order of the Company for an amount equal to the option price
of the shares;
- - Stock at its fair market value on the date of exercise;
- - An election to make a cashless exercise through a registered broker-dealer
(if approved in advance by the compensation committee).
- - Any other form of payment which is acceptable to the compensation
committee, including with limitation, payment in the form of a promissory
note, and specifying the address to which the certificates for the shares
are to be mailed.
SARS. SARs may, at the discretion of the compensation committee, be included in
each option granted under the Plan to permit the Eligible Person to surrender
that option, or a portion of the part which is then exercisable, and receive in
exchange an amount equal to the excess of the fair market value, in cash, or
partly in cash and partly in shares of stock, as the compensation committee
determines. SARs may be exercised only when the fair market value of the stock
covered by the option surrendered exceeds the exercise price of the stock. In
the event of the surrender of an option, or a portion of it, to exercise the
SARs, the shares represented by the option or that part of it which is
surrendered, shall not be available for reissuance under the Plan. Each SAR
issued in tandem with an option (a) will expire no later than the expiration of
the underlying option, (b) may be for no more than 100% of the difference
between the exercise price of the underlying option and the fair market value of
a share of stock at the time the SAR is exercised, (c) is transferable only when
the underlying option is transferable, and under the same conditions, and (d)
may be exercised only when the underlying option is eligible to be exercised.
TERMINATION OF OPTIONS OR SARS. Unless expressly provided in the option or SAR
agreement, options or SARs shall terminate one day less than three months after
an employees severance of employee with the company other than death, disability
or retirement.
DEATH. Unless the option or SAR expires sooner, the option or SAR will expire
one year after the death of the Eligible Person.
DISABILITY. Unless the option or SAR expires sooner, the option or SAR will
expire one day less than one year after the disability of the Eligible Person.
<PAGE>
RETIREMENT. Unless it is expressly provided otherwise in the option agreement,
before the expiration of an incentive option, the employee shall be retired in
good standing from the employ of the company under the then established rules of
the company, the incentive option shall terminate on the earlier of the options
expiration date or one day less than one year after his retirement; provided,
if an incentive option is not exercised within specified time limits prescribed
by the Internal Revenue Code, it will become a nonqualified option by operation
of law. Unless it is expressly provided otherwise in the option agreement, if
before the expiration of a nonqualified option, the employee shall be retired in
good standing from the employ of the company under the then established rules of
the company, the nonqualified option shall terminate on the earlier of the
nonqualified option's expiration date or one day less than one year after his
retirement. In the event of retirement, the employee shall have the right prior
to the termination of the nonqualified option to the extent to which he was
entitled to exercise it immediately prior to his retirement, unless it is
expressly provided otherwise in the option agreement. Upon retirement, a SAR
shall continue to be exercisable for the remainder of the term of the SAR
agreement.
RELOAD OPTIONS. The Board or compensation committee shall have the authority
(but not an obligation) to include as part of any option agreement a provision
entitling the Eligible Person to further option (a "Reload Option") in the event
the Eligible Person exercises the option in accordance with the Plan and the
terms and conditions of the option agreement. Any such Reload Option (a) shall
be for a number of shares equal to the number of shares surrendered as part or
all of the exercise price of such option, (b) shall have an expiration date
which gave rise to such Reload Option, and (c) shall have an exercise price
which is equal to one hundred percent (100%) of the fair exercise of the
original option. Notwithstanding the foregoing, a Reload Option which is an
incentive option and which is granted to a 10% Stockholder, shall have an
exercise price which is equal to one hundred ten percent (110%) of the fair
market value of the stock subject to the Reload Option on the date of exercise
of the original option and shall have a term which is no longer than five (5)
years.
RESTRICTED STOCK AWARDS. The compensation committee may issue shares of stock
to an Eligible Person subject to the terms of a restricted stock agreement. The
restricted stock may be issued for no payment by the Eligible Person or for a
payment below the fair market value on the date of grant. Restricted stock
shall be subject to restrictions as to sale, transfer, alienation, pledge or
other encumbrance and generally will be subject to vesting over a period of time
specified in the restricted stock agreement. The compensation committee shall
determine the period of vesting, the number of shares, the price, if any, of
stock included in a restricted stock award, and the other terms and provisions
which are included in the restricted stock agreement.
AWARD OF PERFORMANCE STOCK The compensation committee may award shares of
stock, without any payment for such shares, to designated Eligible Persons if
specified performance goals established by the Compensation Committee are
Satisfied. The terms and provisions herein relating to these performance based
awards are intended to satisfy Section 162(m) of the Code and regulations issued
thereunder. The designation of an employee eligible for a specific performance
stock award shall be made by the compensation committee in writing prior to the
beginning of the period for which the performance is measured (or within such
period as permitted by IRS regulations).
AMENDMENT OR TERMINATION OF THE PLAN. The Board may amend, terminate or suspend
the Plan at any time, in its sole and absolute discretion; provided, however,
that to the extent required to qualify the Plan under Rule 16b-3 promulgated
under Section 16 of the Exchange Act, no amendment that would (a) materially
increase the number of shares of stock that may be issued under the Plan, (b)
materially modify the requirements as to eligibility for the participation in
the Plan, or (c) otherwise materially increase the benefits accruing to
participants under the Plan, shall be made without the approval of the company's
Stockholders; provided further, however, that to the extent required to maintain
the status of any incentive option under the Code, no amendment that would (a)
change the aggregate number of shares of stock which may be used under incentive
options, or (c) decreases the option price for incentive options below the fair
market value of the stock at the time it is granted, shall be made without the
approval of the Stockholders. Subject to the preceding sentence, the Board
shall have the power to make any changes in the Plan and in the regulations and
administrative provisions under it or in any outstanding incentive option as in
the opinion of counsel for the company may be necessary or appropriate from time
to time to enable any incentive option granted under this Plan to continue to
qualify as an incentive stock option or such other stock option as may be
defined under the Code so as to receive preferential federal income tax
treatment.
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES. Under present federal income tax laws, awards
under the Plan will have the following consequences:
- - The grant of an award will not, by itself, result in the recognition of
taxable income to the participant nor entitle the Company to a deduction at
the time of such grant.
- - The exercise of a stock option which is an incentive option within the
meaning of Section 422 of the Code will generally not, by itself, result in
the recognition of taxable income to the participant nor entitle the
Company to a deduction at the time of such exercise. However, a participant
must generally include in alternative minimum taxable income the amount by
which the fair market value on the date of exercise exceeds the exercise
price. The basis of the stock for alternative minimum tax purposes is
adjusted to reflect the gain realized so that the participant will receive
a corresponding deduction for alternative minimum tax purposes in the year
the stock is sold. No alternative minimum tax consequences result for the
Company.
- - If the shares acquired upon exercise of an incentive option are not held
for at least one year after transfer of such shares to the participant or
two years after the grant of the incentive option, whichever is later
(disqualifying disposition), the participant will recognize ordinary income
upon the disposition of the shares in an amount equal to excess of fair
market value on the date of exercise over the exercise price. However, the
amount reportable as compensation is limited to the actual gain realized on
the sale in cases where the sales prices is less than the fair market value
of the stock on the date of exercise. In addition, where a loss is realized
on the sale, no income is reported as compensation. Where the sales price
is in excess of the exercise price, the participant will also recognize
capital gain or loss in an amount equal to the difference between the sales
price and the basis in the stock increased by any income reported as
compensation. In cases where the exercise price is in excess of the sales
price, the participant will recognize capital loss in an amount equal to
the difference between the sales price and the exercise price. Capital
gains or losses will be characterized as short-term if the shares were not
held for more than one year after the exercise date of the incentive option
and as long-term if the shares were held for more than one year after the
exercise date of the incentive option.
- - Where a disqualifying disposition occurs and the participant recognizes
income, the Company will generally be entitled to a corresponding
deduction. The Company will not be entitled to a corresponding deduction
for any capital gain or loss recognized by the participant.
- - If the shares acquired upon exercise of an incentive option are held by the
participant for one year after the incentive option is exercised and two
years after the incentive option was granted, the participant will
recognize a capital gain or loss upon disposition of the shares in an
amount equal to the difference between the sale price and the exercise
price; such capital gain or loss will be characterized as short-term if the
shares were not held for more than one year after the exercise of the
incentive option and long-term if the shares were held for more than one
year after the exercise of the incentive option. The Company will not be
entitled to a corresponding deduction for such capital gain or loss.
- - The exercise of a non-qualified stock option will result in the recognition
of ordinary income by the participant on the date of exercise in an amount
equal to the difference between the exercise price and the fair market
value on the date of exercise of the option shares acquired pursuant to the
stock option.
- - The Company will be allowed a deduction at the time, and in the amount of
any ordinary income recognized by the participant upon the exercise of a
non-qualified stock option, provided the Company meets its federal
withholding tax obligations.
<PAGE>
- - Upon sale of the shares acquired upon exercise of a non-qualified stock
option, any appreciation or depreciation in the value of such shares from
the time of exercise will result in the recognition of a capital gain or
loss by the participant. Such capital gain or loss will be short-term if
the shares were not held by the participant for more than one year after
the exercise of the non-qualified stock option and long-term if the
participant held the shares for more than one year following exercise of
the non-qualified stock option.
AWARDS UNDER THE STOCK OPTION PLAN. At the present time, the Company has
not determined if any options under the 2000 Stock Option Plan will be issued to
the chief executive officer, any executives, any directors, or any employees.
To date, no options have been issued under the Plan.
The Board of Directors has recommended the adoption of the 2000 Stock Option
Plan. Such ratification requires the affirmative vote of the majority of
outstanding shares of common stock present at the Meeting or represented by
proxy.
<PAGE>
EXECUTIVE OFFICERS
The Company's directors and executive officers are:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------ --- ------------------------------------
<S> <C> <C>
Marc I. Berens 42 Director and Chief Executive Officer
- ------------------ --- ------------------------------------
Yolana Berens 75 Director
- ------------------ --- ------------------------------------
William Ranshaw 58 Director and Chief Financial Officer
- ------------------ --- ------------------------------------
Kevin P. Willcutts 36 Vice-President of Marketing
- ------------------ --- ------------------------------------
</TABLE>
Please refer to page 2 of this proxy statement for biographies on Messrs.
Berens and Ranshaw and Ms. Berens.
Kevin P. Willcutts has served as the Company's vice-president of marketing
since August 1999. From February 1998 until August 2000, Mr. Willcutts served
as vice-president of marketing of Smilex, Inc. From March 1995 until February
1998, Mr. Willcutts served as director of marketing of Plan 21.
Marc I. Berens is the son of Yolana Berens. There are no other family
relationships among the officers or directors. Pursuant to the Company's
by-laws, each director is elected annually by the Company's stockholders at the
Company's annual meeting. The Company's officers serve at the discretion of the
Board of Directors.
EXECUTIVE COMPENSATION
The following tables contain compensation data for the chief executive
officer of the Company for the fiscal year ended December 31, 1999. No
executive officer or director received in excess of $100,000 in compensation
during the fiscal year ended December 31, 1999.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual
------
Compensation Long Term Compensation
------------ ------------------------------------
Awards
Securities
Name and Restricted Underlying All Other
Principal Positions Year Salary ($) stock award(s) ($) Options/SARs (#) Compensation ($)
- ------------------- ---- ---------- ------------------ ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Marc I. Berens, 1999 $37,500 -- -- --
Chief Executive Officer
</TABLE>
EMPLOYMENT AGREEMENTS
In June 1999, Marc I. Berens entered into a three-year employment
agreement with Berensgallery.com, Inc., a wholly-owned subsidiary of the
Company. The employment agreement provides for a monthly salary of $7,500 for
the first year, $10,000 for the second year, and $12,500 for the third year,
plus an annual bonus equal to 5% of the pretax operating profit of the Company.
The employment agreement may be terminated by either party during the term of
the agreement.
In August 1999, Kevin P. Willcutts entered into a six-month employment
agreement with the Company that was renewed for an additional six months in
February 2000. The employment agreement provides for a monthly salary of
$5,000. The employment agreement also provided for the issuance of options to
purchase 50,000 shares of common stock at a price of $1.00 per share expiring in
August 2001.
<PAGE>
The Company does not have any employment agreements with any other of
its officers or directors. The Company maintains life insurances for Mr. Berens
and Ms. Berens in the amounts of $500,000 and $250,000, respectively.
STOCK OPTIONS
As of December 31, 1999, the Company had outstanding options to purchase an
aggregate of 709,250 shares of Common Stock at exercise prices ranging from $.01
to $1.00 per share. Of these options, options to purchase 500,000, 10,000, and
20,000 shares of Common Stock were issued to Ms. Berens, Mr. Willcutts, and Mr.
Ranshaw at an exercise price of $.01 per share. Mr. Willcutts was also issued
an option to purchase 50,000 shares of Common Stock at an exercise price of
$1.00 per share. No options were issued to Mr. Berens.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 19, 2000 the number and
percentage of outstanding shares of Company Common Stock owned by:
- - each person known to the Company to beneficially own more than 5% of its
outstanding Common Stock;
- - each director;
- - each named executive officer; and
- - all executive officers and directors as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK BENEFICIALLY OWNED PERCENTAGE OF OWNERSHIP
- ----------------------------------------------------------- ------------------------------- ------------------------
<S> <C> <C>
Marc I. Berens 250,000 1.3%
Yolana Berens 7,400,000 37.7%
William Ranshaw 140,000 less than 1%
All executive officers and directors as a
group (4 persons)
8,050,000 40.8%
</TABLE>
Of the shares held by Ms. Berens, 7,000,000 is held by a trust that is
controlled by Ms. Berens. The business address of each person listed is the
same as the address of the Company's principal executive office, except for
Mr. Ranshaw whose business address is 18635 Telge Road, Cypress, Texas 77077.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June 1999, the Company completed as reverse merger with
Berensgallery.com, Inc. in which it issued 2,893,250 shares of Company Common
Stock to the shareholders of Berensgallery.com, Inc. Of these shares, an
aggregate of 2,623,000 shares of Company Common Stock were issued to Ms. Berens,
Messrs. Berens and Ranshaw, and a family member of the Berens'. In December
1999, the Company acquired Artmovement.com, Inc. for 12,960,000 shares of
Company Common Stock. Of these shares, an aggregate of 5,340,000 shares of
Company Common Stock were issued to Ms. Berens, Messrs. Berens, Ranshaw, and
Willcutts, and a family member of the Berens'. In February 2000, Mr. Berens was
issued 250,000 shares of Company Common Stock in exchange for his guarantee of
Company credit line.
VOTING PROCEDURES
The Company has one class of voting shares outstanding, namely Common
Stock, of which there were 19,644,860 outstanding at the close of business on
April 19, 2000 (the "Record Date"). Each shareholder present or represented at
the Meeting will be entitled to one vote per share. Shareholder action requires
the affirmative vote by the holders of a majority of the Common Stock voting at
the Meeting.
<PAGE>
COST OF SOLICITATION
The Company will bear the cost of the solicitation of proxies from its
stockholders. In addition to the use of mail, proxies may be solicited by
directors, officers, and regular employees of the Company in person or by
telephone or other means of communication. The directors, officers, and
employees of the Company will not be compensated additionally for the
solicitation, but may be reimbursed for out-of-pocket expenses in connection
with this solicitation.
OTHER MATTERS
The Board of Directors and management of the Company know of no other
matters to be brought before the Meeting. If a shareholder proposal that was
excluded from this Proxy Statement in accordance with Rule 14a-8 of the Exchange
Act is properly brought before the Meeting, it is intended that the proxy
holders will use their discretionary authority to vote the proxies against such
proposal. If any other matters should arise at the Meeting, shares represented
by proxies will be voted at the discretion of the proxy holders.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Under Rule 14a-8 of the Exchange Act, proposals that shareholders intend to
have included in the Company's proxy statement and form of proxy for the 2001
Annual Meeting of Stockholders must be received by the Company no later than
January 5, 2001. However, if the date of the 2001 Annual Meeting of
Shareholders changes by more than 30 days from the date of the 2000 Annual
Meeting of Shareholders, the deadline is a reasonable time before the Company
begins to print and mail its proxy materials, which deadline will be set forth
in a quarterly report on Form 10-QSB or will otherwise be communicated to
shareholders. Shareholder proposals must also be otherwise eligible for
inclusion.
Moreover, with respect to any proposal by a shareholder not seeking to have
the proposal included in the proxy statement but seeking to have the proposal
considered at the 2001 Annual Meeting of Stockholders, such stockholder must
provide written notice of such proposal to the Secretary of the Company at the
principal executive offices of the Company by March 21, 2001. With respect to a
proposal not to be included in the proxy statement, in the event notice is not
timely given to the Company, the persons who are appointed as proxies may
exercise their discretionary voting authority with respect to such proposals, if
the proposal is considered at the 2001 Annual Meeting of Stockholders, even if
the stockholders have not been advised of the proposal. In addition,
stockholders must comply in all respects with the rules and regulations of the
Securities and Exchange Commission then in effect and the procedural
requirements of the Company's Bylaws.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Marc I. Berens
---------------------------------------
Marc I. Berens, Chief Executive Officer
May 5, 2000
<PAGE>
BERENS INDUSTRIES, INC.
ANNUAL MEETING OF STOCKHOLDERS
June 7, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SPORTAN UNITED
INDUSTRIES, INC. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH THE CHOICES SPECIFIED BELOW.
The undersigned stockholder of BERENS INDUSTRIES, INC. (the "Company")
hereby appoints Debra Tritt, the true and lawful attorney, agent and proxy of
the undersigned with full power of substitution for and in the name of the
undersigned, to vote all the shares of Common Stock or Common Stock Equivalents
of the Company which the undersigned may be entitled to vote at the Annual
Meeting of Stockholders of the Company to be held at the Company's principal
executive offices at 701 N. Post Oak, Suite 350, Houston, Texas 77024, on
Wednesday, June 7, 2000 at 10:00 a.m., and any and all adjournments thereof,
with all of the powers which the undersigned would possess if personally
present, for the following purposes:
FOR AGAINST ABSTAIN
--- ------- -------
1. To elect Marc I. Berens as director. [ ] [ ] [ ]
2. To elect Yolana Berens as director. [ ] [ ] [ ]
3. To elect William Ranshaw as director. [ ] [ ] [ ]
4. To ratify the appointment of Ham, Langston, [ ] [ ] [ ]
& Brezina, LLP as the Company's independent
public accountants.
5. To ratify the 2000 Employee Stock Option Plan [ ] [ ] [ ]
The proxies are authorized to vote as they determine in their discretion upon
such other matters as may properly come before the meeting.
THIS PROXY WILL BE VOTED FOR THE CHOICE SPECIFIED. IF NO CHOICE IS SPECIFIED
FOR EACH ITEM, THIS PROXY WILL BE VOTED FOR THAT ITEM.
The undersigned hereby acknowledges receipt of the Notice of Meeting and Proxy
Statement.
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
DATED:
------------------------------ -----------------------------
[Signature]
-----------------------------
[Signature if jointly held]
-----------------------------
[Printed Name]
Please sign exactly as name appears on stock certificate(s). Joint owners
should each sign. Trustees and others acting in a representative capacity
should indicate the capacity in which they sign.
<PAGE>
APPENDIX A
SPORTAN UNITED INDUSTRIES, INC.
1999 STOCK OPTION PLAN
ADOPTION AND PURPOSE
Sportan United Industries, Inc., a Texas corporation (the "Company"),
adopted its 1999 Incentive Stock Option Plan for Employees ("Plan")
effective March 1, 1999. The purpose of the Plan is to foster and promote
the financial success of the Company and materially increase stockholder
value by enabling eligible key employees and others to participate in the
long-term growth and financial success of the Company. The Plan is intended
to provide "incentive stock options" within the meaning of that term under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
as well as non-qualified stock options. Any proceeds of cash or property
received by the Company for the sale of Sportan United Industries, Inc.
common stock, $.001 par value (the "Common Stock") pursuant to Options
granted under this Plan will be used for general corporate purposes.
ADMINISTRATION
The Plan shall be administered by a committee (the "Compensation
Committee") appointed by the Board of Directors of the Company (the
"Board") and composed of at least two Board members. The Compensation
Committee shall meet the plan administration requirements described
under Rule 16b-3(c) promulgated under the Securities Exchange Act of
1934, as amended ("Exchange Act"), or any similar rule which may
subsequently be in effect. Any vacancy on the Compensation Committee
shall be filled by the Board.
2.1 Subject to the express provisions of the Plan, the Compensation
Committee shall have the sole and complete authority to determine key
employees and others to whom awards hereunder shall be granted, ()
make awards in such form and amounts as it shall determine, impose
such limitations and conditions upon such awards as it shall deem
appropriate, interpret the Plan, prescribe, amend and rescind rules
and regulations relating to it, determine the terms and provisions of
the respective participants' agreements (which need not be identical),
and make such other determinations as it deems necessary or advisable
for the administration of the Plan. The decisions of the Compensation
Committee on matters within their jurisdiction under the Plan shall be
conclusive and binding on the Company and all other persons. No
members of the Board or the Compensation Committee shall be liable for
any action taken or determination made in good faith.
All expenses associated with the Plan shall be paid by the Company or
its Subsidiaries.
2. DEFINITIONS
"Cause" when used in connection with the termination of a
Participant's employment with the Company, shall mean the termination
of the Participant's employment by the Company by reason of (i) the
conviction of the Participant of a crime involving moral turpitude by
a court of competent jurisdiction as to which no further appeal can be
taken; (ii) the proven commission by the Participant of an act of
fraud upon the Company; (iii) the willful and proven misappropriation
of any funds or property of the Company by the Participant; (iv) the
willful, continued and unreasonable failure by the Participant to
perform duties assigned to him and agreed to by him; (v) the knowing
engagement by the Participant in any direct, material conflict of
interest with the Company without compliance with the Company's
conflict of interest policy, if any, then in effect; (vi) the knowing
engagement by the Participant, without the written approval of the
Board of Directors of the Company, in any activity which competes with
the business of the Company or which would result in a material injury
to the Company; or (vii) the knowing engagement in any activity which
would constitute a material violation of the provisions of the
Company's insider trading policy or business ethics policy, if any,
then in effect.
2.3 "Change in Control" shall mean the occurrence of any of the following
events:
<PAGE>
any Person becomes, after the effective date of this Plan, the "beneficial
owner" (as defined in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of securities of the Company representing 30% or
more of the combined voting power of the Company's then outstanding
securities, unless the Board (as constituted immediately prior to such
Change in Control) determines in its sole absolute discretion that no
Change in Control has occurred;
(1) Individuals who constitute the Board on the effective date of the
Plan cease, for any reason, to constitute at least a majority of
the Board of Directors; provided, however, that any person
becoming a director subsequent to the effective date of the Plan
who was nominated for election by at least 66_% of the Board as
constituted on the effective date of the Plan (other than the
nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest
relating to the election of the Board of Directors, as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) shall be, for purposes of this Plan, considered a
member of the Board as constituted on the effective date of the
Plan; or
the Board of Directors determines in its sole and absolute discretion that
there has been a Change in Control of the Company.
2.3 "Consultant" shall mean any person who is engaged by the Company or
any parent or Subsidiary of the Company to render consulting services
and is compensated for such consulting services.
"Continuous Service" shall mean the absence of any interruption or
termination of employment with or service to the Company or any parent
or Subsidiary of the Company that now exists or hereinafter is
organized or acquires the Company for a period of 12 months.
Continuous Service shall not be considered interrupted in the case of
sick leave, military leave or any other leave of absence approved by
the Company provided that such interruption shall not be longer than
90 consecutive days.
2.4 "Eligible Employee" shall mean an Employee that has provided
continuous service to the Company or to any parent or Subsidiary of
the Company that now exists or hereafter is organized or acquires the
Company.
"Employee" shall mean any person employed on an hourly or salaried
basis by the Company or any parent or Subsidiary of the Company that
now exists or hereafter is organized or acquires the Company.
2.5 The "Fair Market Value" of a share of Common Stock on any date shall
be (i) the closing sales price on the immediately preceding business
day of a share of Common Stock as reported on the principal securities
exchange on which shares of Common Stock are then listed or admitted
to trading or (ii) if not so reported, the average of the closing bid
and asked prices for a share of Common Stock on the immediately
preceding business day as quoted on the National Association of
Securities Dealers Automated Quotation System ("Nasdaq") or (iii) if
not quoted on Nasdaq, the average of the closing bid and asked prices
for a share of Common Stock as quoted by the National Quotation
Bureau's "Pink Sheets" or the National Association of Securities
Dealers' OTC Bulletin Board System. If the price of a share of Common
Stock shall not be so reported, the Fair Market Value of a share of
Common Stock shall be determined by the Compensation Committee in its
absolute discretion. In no event shall the Fair Market Value of any
share of Common Stock be less than its par value.
"Incentive Stock Option" shall mean an Option which is an "incentive
stock option" within the meaning of Section 422 of the Code and which
is identified as an Incentive Stock Option in the agreement by which
it is evidenced.
2.6 "Non-Qualified Stock Option" shall mean an Option which is not an
Incentive Stock Option and which is identified as a Non-Qualified
Stock Option in the agreement by which it is evidenced.
"Option" shall mean an Option to purchase shares of Common Stock of
the Company granted pursuant to this Plan. Each Option shall be
identified either as an Incentive Stock Option or a Non-Qualified
Stock Option in the agreement by which it is evidenced.
<PAGE>
2.7 "Subsidiary" shall mean a corporation (other than the Company) in
which the Company directly or indirectly controls 50% or more of the
combined voting power of all stock of that corporation.
ELIGIBILITY
The Compensation Committee may grant Options to purchase Common Stock under
this Plan to Eligible Employees of the Company or its Subsidiaries, as well
as to non-employee directors and Consultants. Employees of the Company, as
well as non-employee directors and Consultants who are granted Options
pursuant to this Plan shall be referred to as "Participants." The
Compensation Committee shall determine, within the provisions of the Plan,
those persons to whom, and the times at which, Options shall be granted. In
making such determinations, the Compensation Committee may take into
account the nature of the services rendered by such person, his or her
present and potential contributions to the Company's success, and such
other factors as the Compensation Committee in its discretion shall deem
relevant. Grants may be made to the same individual on more than one
occasion.
GRANTING OF OPTIONS
Powers of the Compensation Committee. The Compensation Committee shall
------------------------------------
determine, in accordance with the provisions of the Plan, the duration
of each Option, the exercise price of each Option, the time or times
within which (during the term of the Option) all or portions of each
Option may be exercised, and whether cash, Common Stock, or other
property may be accepted in full or partial payment upon exercise of
an Option.
4.1 Number of Options. As soon as practicable after the date an individual
-----------------
is determined to be eligible under Section 4 hereof, the Compensation
Committee may, in its discretion, grant to such person a number of
Options determined by the Compensation Committee.
COMMON STOCK
Each Option granted under the Plan shall be convertible into one share of
Common Stock, unless adjusted in accordance with the provisions of Section
8 hereof. Options may be granted for a number of shares not to exceed, in
the aggregate, 1,000,000 shares of Common Stock, subject to adjustment
pursuant to Section 8 hereof. For purposes of calculating the maximum
number of shares of Common Stock that may be issued under the Plan, (i) all
the shares issued (including the shares, if any, withheld for tax
withholding requirements) shall be counted when cash is used as full
payment for shares issued upon the exercise of an Option, and (ii) shares
tendered by a Participant as payment for shares issued upon exercise of an
Option shall be available for issuance under the Plan. Upon the exercise of
an Option, the Company may deliver either authorized but unissued shares,
treasury shares, or any combination thereof. In the event that any Option
granted under the Plan expires unexercised, or is surrendered by a
Participant for cancellation, or is terminated or ceases to be exercisable
for any other reason without having been fully exercised, the Common Stock
subject to such Option shall again become available for new Options to be
granted under the Plan to any eligible person (including the holder of such
former Option) at an exercise price determined in accordance with Section
7.2 hereof, which price may then be greater or less than the exercise price
of such former Option. No fractional shares of Common Stock shall be
issued, and the Compensation Committee shall determine the manner in which
fractional share value shall be treated.
REQUIRED TERMS AND CONDITIONS OF OPTIONS
Award of Options. The Compensation Committee may, from time to time
----------------
and subject to the provisions of the Plan and such other terms and
conditions as the Compensation Committee may prescribe, grant to any
Participant in the Plan one or more Incentive Stock Options or
Non-Qualified Stock Options to purchase for cash or shares the number
of shares of Common Stock allotted by the Compensation Committee.
However, subject to the provisions of Sections 7.4 and 7.5, Incentive
Stock Options may be granted only to Eligible Employees. The date an
Option is granted shall mean the date selected by the Compensation
Committee as of which the Compensation Committee allots a specific
number of shares to a Participant pursuant to the Plan.
<PAGE>
6.1 Exercise Price. The exercise price of any Non-Qualified Stock Option
--------------
granted under the Plan shall be such price as the Compensation
Committee shall determine on the date on which such Non-Qualified
Stock Option is granted; provided, that such price may not be less
than 85% of the Fair Market Value of a share of Common Stock on the
date the Option is granted. Except as provided in Section 7.4 hereof,
the exercise price of any Incentive Stock Option granted under the
Plan shall be not less than 100% of the Fair Market Value of a share
of Common Stock on the date on which such Incentive Stock Option is
granted.
Term and Exercise. Each Option shall be exercisable on such date or
-----------------
dates, during such period and for such number of shares of Common
Stock as shall be determined by the Compensation Committee on the day
on which such Option is granted and set forth in the agreement
evidencing the Option; provided, however, that (A) no Option shall be
exercisable after the expiration of 10 years from the date such Option
was granted, and (B) no Incentive Stock Option granted to a 10%
shareholder as set forth in Section 7.4 hereof shall be exercisable
after the expiration of five years from the date such Incentive Stock
Option was granted, and, provided, further, that each Option shall be
subject to earlier termination, expiration or cancellation as provided
in the Plan. Each Option shall be exercisable in whole or in part with
respect to whole shares of Common Stock. The partial exercise of an
Option shall not cause the expiration, termination or cancellation of
the remaining portion thereof. On the partial exercise of an Option,
the agreement evidencing such Option shall be returned to the
Participant exercising such Option together with the delivery of the
certificates described in Section 7.7 hereof.
6.2 Ten Percent Shareholder. Notwithstanding anything to the contrary in
-----------------------
this Plan, Incentive Stock Options may not be granted to any owner of
10% or more of the total combined voting power of the Company and its
Subsidiaries unless (i) the exercise price is at least 110% of the
Fair Market Value of a share of Common Stock on the date the Option is
granted, and (ii) the Option by its terms is not exercisable after the
expiration of five years from the date such Incentive Stock Option is
granted.
Maximum Amount of Option Grant. To the extent that the aggregate Fair
------------------------------
Market Value (determined on the date the Option is granted) of Common
Stock subject to Incentive Stock Options exercisable for the first
time by a Participant during any calendar year exceeds $100,000, such
Options shall be treated as Non-Qualified Stock Options.
6.3 Method of Exercise. An Option shall be exercised by delivering notice
------------------
to the Company's principal office, to the attention of its Secretary,
no fewer than five business days in advance of the effective date of
the proposed exercise. Such notice shall be accompanied by the
agreement evidencing the Option, shall specify the number of shares of
Common Stock with respect to which the Option is being exercised and
the effective date of the proposed exercise, and shall be signed by
the Participant. The Participant may withdraw such notice at any time
prior to the close of business on the business day immediately
preceding the effective date of the proposed exercise, in which case
such agreement shall be returned to the Participant. Payment for
shares of Common Stock purchased upon the exercise of an Option shall
be made on the effective date of such exercise either (i) in cash, by
certified check, bank cashier's check or wire transfer or (ii) subject
to the approval of the Compensation Committee, in shares of Common
Stock owned by the Participant and valued at their Fair Market Value
on the effective date of such exercise, or partly in shares of Common
Stock with the balance in cash, by certified check, bank cashier's
check or wire transfer. Any payment in shares of Common Stock shall be
effected by the delivery of such shares to the Secretary of the
Company, duly endorsed in blank or accompanied by stock powers duly
executed in blank, together with any other documents and evidences as
the Secretary of the Company shall require from time to time.
Delivery of Stock Certificates. Certificates for shares of Common
--------------------------------
Stock purchased on the exercise of an Option shall be issued in the
name of the Participant and delivered to the Participant as soon as
practicable following the effective date on which the Option is
exercised; provided, however, that such delivery shall be effected for
all purposes when the stock transfer agent of the Company shall have
deposited such certificates in the United States mail, addressed to
the Participant.
<PAGE>
6. ADJUSTMENTS
The aggregate number or type of shares of Common Stock with respect to
which Options may be granted hereunder, the number or type of shares
of Common Stock subject to each outstanding Option, and the exercise
price per share for each such Option may all be appropriately
adjusted, as the Compensation Committee may determine, for any
increase or decrease in the number of shares of issued Common Stock
resulting from a subdivision or consolidation of shares whether
through reorganization, recapitalization, consolidation, payment of a
share dividend, or other similar increase or decrease.
6.5 Subject to any required action by the stockholders, if the Company
shall be a party to a transaction involving a sale of substantially
all its assets, a merger, or a consolidation, any Option granted
hereunder shall pertain to and apply to the securities to which a
holder of Common Stock would be entitled to receive as a result of
such transaction; provided, however, that all unexercised Options
under the Plan may be cancelled by the Company as of the effective
date of any such transaction by giving notice to the holders of such
Options of its intention to do so, and by permitting the exercise of
such Options during the 30-day period immediately after the date such
notice is given.
In the case of dissolution of the Company, every Option outstanding
hereunder shall terminate; provided, however, that each Option holder
shall have 30 days' prior written notice of such event, during which
time he shall have a right to exercise his partly or wholly
unexercised Options.
6.6 On the basis of information known to the Company, the Compensation
Committee shall make all determinations under this Section 8,
including whether a transaction involves a sale of substantially all
the Company's assets; and all such determinations shall be conclusive
and binding on the Company and all other persons.
Upon the occurrence of a Change in Control, the Compensation Committee
(as constituted immediately prior to the Change in Control) shall
determine, in its absolute discretion, whether each Option granted
under the Plan and outstanding at such time shall become fully and
immediately exercisable and shall remain exercisable until its
expiration, termination or cancellation pursuant to the terms of the
Plan or whether each such Option shall continue to vest according to
its terms.
6. OPTION AGREEMENTS
Each award of Options shall be evidenced by a written agreement, executed
by the Participant and the Company, which shall contain such restrictions,
terms and conditions as the Compensation Committee may require in
accordance with the provisions of this Plan. Option agreements need not be
identical. The certificates evidencing the shares of Common Stock acquired
upon exercise of an Option may bear a legend referring to the terms and
conditions contained in the respective Option agreement and the Plan, and
the Company may place a stop transfer order with its transfer agent against
the transfer of such shares. If requested to do so by the Compensation
Committee at the time of exercise of an Option, each Participant shall
execute a certificate indicating that he is purchasing the Common Stock
under such Option for investment and not with any present intention to sell
the same.
LEGAL AND OTHER REQUIREMENTS
The Company shall be under no obligation to effect the registration
pursuant to the Securities Act of 1933, as amended, of any shares of
Common Stock to be issued hereunder or to effect similar compliance
under any state laws. Notwithstanding anything herein to the contrary,
the Company shall not be obligated to cause to be issued or delivered
any certificates evidencing shares of Common Stock pursuant to the
Plan unless and until the Company is advised by its counsel that the
issuance and delivery of such certificates is in compliance with all
applicable laws, regulations of governmental authority and the
requirements of any securities exchange on which shares of Common
Stock are traded. The Compensation Committee may require, as a
condition of the issuance and delivery of certificates evidencing
shares of Common Stock pursuant to the terms hereof, that the
recipient of such shares make such covenants, agreements and
representations, and that such certificates bear such legends, as the
Compensation Committee, in its sole discretion, deems necessary or
desirable. The exercise of any Option granted hereunder shall only be
effective at such time as counsel to the Company shall have determined
that the issuance and
<PAGE>
delivery of shares of Common Stock pursuant to such exercise is in
compliance with all applicable laws, regulations of governmental
authorities and the requirements of any securities exchange on which
shares of Common Stock are traded. The Company may, in its sole
discretion, defer the effectiveness of any exercise of an Option
granted hereunder in order to allow the issuance of shares of Common
Stock pursuant thereto to be made pursuant to registration or an
exemption from registration or other methods for compliance available
under federal or state securities laws. The Company shall inform the
Participant in writing of its decision to defer the effectiveness of
the exercise of an Option granted hereunder. During the period that
the effectiveness of the exercise of an Option has been deferred, the
Participant may, by written notice, withdraw such exercise and obtain
the refund of any amount paid with respect thereto.
7.1 With respect to persons subject to Section 16 of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), transactions under
this Plan are intended to comply with all applicable conditions of
Rule 16b-3 or its successors under the Exchange Act. To the extent any
provisions of the Plan or action by the Compensation Committee fails
to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Compensation Committee.
Moreover, in the event the Plan does not include a provision required
by Rule 16b-3 to be stated therein, such provision (other than one
relating to eligibility requirements, or the price and amount of
Options) shall be deemed automatically to be incorporated by reference
into the Plan insofar as Participants subject to Section 16 are
concerned. The Compensation Committee may at any time impose any
limitations upon the exercise, delivery and payment of any Option
which, in the Compensation Committee's discretion, are necessary in
order to comply with Section 16(b) and the rules and regulations
thereunder.
A Participant shall have no rights as a stockholder with respect to
any shares covered by an Option, or exercised by him, until the date
of delivery of a stock certificate to him for such shares. No
adjustment, other than pursuant to Section 8 hereof, shall be made for
dividends or other rights for which the record date is prior to the
date such stock certificate is delivered.
7. NON-TRANSFERABILITY
During the lifetime of a Participant, any Option granted to him shall be
exercisable only by him or by his guardian or legal representative. No
Option shall be assignable or transferable, except by will, by the laws of
descent and distribution, or pursuant to certain domestic relations orders.
The granting of an Option shall impose no obligation upon the holder
thereof to exercise such Option or right.
NO CONTRACT OF EMPLOYMENT
The adoption of this Plan or the grant of any Option shall not be
construed as giving a Participant the right to continued employment
with the Company or any Subsidiary of the Company. Furthermore, the
Company or any Subsidiary of the Company may at any time dismiss a
Participant from employment, free from any liability or claim under
the Plan, unless otherwise expressly provided in the Plan or any
Option agreement.
EFFECT OF TERMINATION OF EMPLOYMENT
If the employment or consulting, service or similar relationship of a
Participant with the Company shall terminate for any reason other than
Cause, "permanent and total disability" (within the meaning of Section
22(e)(3) of the Code) or the death of the Participant (a) Options
granted to such Participant, to the extent that they were exercisable
at the time of such termination, shall remain exercisable until the
expiration of one month after such termination, on which date they
shall expire, and (b) Options granted to such Participant, to the
extent that they were not exercisable at the time of such termination,
shall expire at the close of business on the date of such termination;
provided, however, that no Option shall be exercisable after the
expiration of its term.
9.1 If the employment or consulting, service or similar relationship of a
Participant with the Company shall terminate on account of the
"permanent and total disability" (within the meaning of Section
22(e)(3) of the Code) or the death of the Participant (a) Options
granted to such Participant, to the extent that they were exercisable
at the time of such termination, shall remain exercisable until the
expiration of one year after such termination, on which date they
shall expire, and (b) Options granted to such Participant, to the
<PAGE>
extent that they were not exercisable at the time of such termination,
shall expire at the close of business on the date of such termination;
provided, however, that no Option shall be exercisable after the
expiration of its term.
In the event of the termination of a Participant's employment or other
relationship for Cause, all outstanding Options granted to such
Participant shall expire at the commencement of business on the date
of such termination.
9. INDEMNIFICATION OF COMPENSATION COMMITTEE
In addition to such other rights of indemnification as they may have as
members of the Board or the Compensation Committee, the members of the
Compensation Committee shall be indemnified by the Company against the
reasonable expenses, including attorneys' fees actually and necessarily
incurred in connection with the defense of any action, suit or proceeding
(or in connection with any appeal therein), to which they or any of them
may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any Option granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such
action, suit or proceeding that such Compensation Committee member is
liable for gross negligence or misconduct in the performance of his duties;
provided that within 60 days after institution of any such action, suit or
proceeding a Compensation Committee member shall in writing offer the
Company the opportunity, at its own expense, to handle and defend the same.
WITHHOLDING TAXES
Whenever the Company proposes or is required to issue or transfer shares of
Common Stock under the Plan, the Company shall have the right to require
the Participant to remit to the Company an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements prior to the
delivery of any certificate or certificates for such shares. Alternatively,
the Company may issue or transfer such shares of Common Stock net of the
number of shares sufficient to satisfy the withholding tax requirements.
For withholding tax purposes, the shares of Common Stock shall be valued on
the date the withholding obligation is incurred.
NEWLY ELIGIBLE EMPLOYEES
Except as otherwise provided herein, the Compensation Committee shall be
entitled to make such rules, regulations, determinations and awards as it
deems appropriate in respect of any employee who becomes eligible to
participate in the Plan.
TERMINATION AND AMENDMENT OF PLAN
The Board of Directors may at any time suspend or discontinue the Plan or
revise or amend it in any respect whatsoever, provided, however, that
without approval of the holders of a majority of the outstanding shares of
Common Stock present in person or by proxy at an annual or special meeting
of stockholders, no revision or amendments shall (i) increase the number of
shares of Common Stock that may be issued under the Plan, except as
provided in Section 8 hereof, (ii) materially increase the benefits
accruing to individuals holding Options granted pursuant to the Plan or
(iii) materially modify the requirements as to eligibility for
participation in the Plan.
GENDER AND NUMBER
Except when otherwise indicated by the context, words in the masculine
gender when used in the Plan shall include the feminine gender and vice
versa, and the singular shall include the plural and the plural shall
include the singular.
GOVERNING LAW
The Plan, and all agreements hereunder, shall be construed in accordance
with and governed by the laws of the State of Texas.
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EFFECTIVE DATE OF PLAN
The effective date of the Plan is March 1, 1999. The Plan, each amendment
to the Plan, and each Option granted under the Plan is conditioned on and
shall be of no force or effect until approval of the Plan and each
amendment of the Plan by the holders of a majority of the shares of Common
Stock of the Company.
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