SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
EQUINOX SYSTEMS INC.
--------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
EQUINOX SYSTEMS INC.
--------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration No.:
(3) Filing Parties:
(4) Date Filed:
<PAGE>
[EQUINOX LOGO OMITTED]
Equinox Systems Inc.
One Equinox Way
Sunrise, Florida 33351
www.equinox.com
April 19, 1999
Fellow Equinox Shareholders:
I am pleased to invite you to the Annual Meeting of Shareholders of
Equinox Systems.
As stated in the attached formal notice, the meeting will be held on
June 10, 1999 at the Weston Hills Country Club in Weston, Florida and the
matters to be acted upon at the meeting are described in the attached Proxy
Statement.
Also contained in this package is the Equinox 1998 Annual Report, which
includes detailed financial information and a discussion of business activities
at Equinox. As we have done at previous annual meetings, in addition to
considering the matters described in the Proxy Statement, we will review the
highlights of the past year and discuss the opportunities ahead for Equinox.
We look forward to your participation and strongly encourage you to
sign and mail your proxy card promptly to ensure that your shares will be
represented, whether or not you plan to attend at the annual meeting.
Sincerely,
/s/ William A. Dambrackas
--------------------------
WILLIAM A. DAMBRACKAS
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
EQUINOX SYSTEMS INC.
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 10, 1999
-----------------------
To the shareholders of
Equinox Systems Inc.:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Shareholders of
Equinox Systems Inc., a Florida corporation (the "Company"), will be held at the
Weston Hills Country Club, 2600 Country Club Way, Weston, Florida on June 10,
1999 at 10:30 A.M., local time, for the following purposes:
1. To elect four Directors of the Company, to serve until the
annual meeting of shareholders to be held in 2000 or until
their respective successors are duly elected and qualified;
2. To consider and vote upon a proposal to amend the Company's
1993 Stock Option Plan (the "Plan") to increase the number of
shares of the Company's Common Stock reserved for issue and
grant under the Plan from 2,025,000 to 2,275,000; and
3. To transact such other business as may properly come before the
Meeting and any adjournments thereof.
All shareholders are cordially invited to attend, although only
shareholders of record at the close of business on April 16, 1999 will be
entitled to notice of, and to vote at, the Annual Meeting and any adjournment
thereof.
Whether or not you expect to be present, please sign, date and return
the enclosed proxy card in the enclosed pre-addressed envelope as promptly as
possible. No postage is required if mailed in the United States.
By Order of the Board of Directors,
MARK KACER
SECRETARY
Ft. Lauderdale, Florida
April 19, 1999
<PAGE>
ANNUAL MEETING OF SHAREHOLDERS
OF
EQUINOX SYSTEMS INC.
--------------------
PROXY STATEMENT
---------------------
DATE, TIME AND PLACE OF ANNUAL MEETING
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Equinox Systems Inc., a Florida
corporation (the "Company"), to be voted at the 1999 Annual Meeting of
Shareholders of the Company (the "Meeting") to be held at 10:30 A.M., local
time, June 10, 1999 at the Weston Hills Country Club, 2600 Country Club Way,
Weston, Florida, for the purposes set forth in the preceding notice. The
approximate date on which this proxy statement and the form of proxy were first
sent or given to the shareholders of the Company was April 26, 1999.
The complete mailing address of the Company's principal executive
headquarters is Equinox Systems Inc., One Equinox Way, Sunrise, Florida 33351.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Board of Directors of
the Company. The giving of a proxy does not preclude the right to vote in person
should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Meeting or by filing with the Secretary of the
Company at the Company's headquarters a written revocation or duly executed
proxy bearing a later date; however, no such revocation will be effective unless
written notice of the revocation is received by the Company at or prior to the
Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Shareholders and the enclosed proxy will be borne by
the Company. In addition to the use of mail, employees of the Company may
solicit proxies personally and by telephone and facsimile. They will receive no
compensation therefor in addition to their regular salaries. Arrangements will
be made with banks, brokers and other custodians, nominees and fiduciaries to
forward copies of the proxy material to their principals and to request
authority for the execution of proxies. The Company will reimburse such persons
for their expenses in so doing.
<PAGE>
PURPOSES OF THE MEETING
At the Meeting, the Company's shareholders will consider and vote upon
the following matters:
1. The election of four Directors of the Company, to serve until
the annual meeting of shareholders to be held in 2000 or until
their respective successors are duly elected and qualified;
2. A proposal to amend the Company's 1993 Stock Option Plan (the
"Plan") to increase the number of shares of the Company's
Common Stock reserved for issue and grant under the Plan from
2,025,000 to 2,275,000; and
3. Such other business as may properly come before the Meeting
and any adjournments thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted (i) FOR the nominees for Director named herein and (ii) FOR the
proposed amendment to the Plan and (iii) in their discretion upon such other
business as may be properly brought before the meeting and each adjournment
thereof.
OUTSTANDING SHARES AND VOTING RIGHTS
Only the holders of shares of the Company's common stock, $.01 par
value per share (the "Common Stock") at the close of business on April 16, 1999
(the "Record Date") are entitled to notice of, and to vote at, the Meeting. At
the close of business on April 1, 1999, there were 5,323,378 shares of the
Common Stock outstanding. The presence in person or by proxy of a majority of
the shares entitled to vote at the Meeting shall constitute a quorum at the
Meeting. To be elected, a Director must receive a majority of the votes cast by
the shares of Common Stock represented in person or by proxy at the meeting. The
affirmative vote of a majority of the shares of Common Stock present in person
or by proxy at the Meeting is required for the approval of the proposal to amend
the Plan and any other matter that may be submitted to a vote of the
shareholders. Abstentions are considered as shares present and entitled to vote
for purposes of determining the presence of a quorum and for purposes of
determining the outcome of any matter submitted to the shareholders for a vote,
but are not counted as votes "for" or "against" any matter. The inspector of
elections will treat shares referred to as "broker or nominee non-votes" (shares
held by brokers or nominees as to which instructions have not been received from
the beneficial owners or persons entitled to vote and the broker or nominee does
not have discretionary voting power on a particular matter) as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. For purposes of determining the outcome of any matter as to which the
proxies reflect broker or nominee non-votes, shares represented by such proxies
will be treated as not present and not entitled to vote on that subject matter
and therefor would not be considered by the inspectors when counting votes cast
on the matter (even though those shares are considered entitled to vote for
quorum purposes and may be entitled to vote on other matters). If less than a
majority of the outstanding shares of Common Stock are represented at the
Meeting, a majority of the shares so represented may adjourn the Meeting from
time to time without further notice.
2
<PAGE>
SECURITY OWNERSHIP BY CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number of shares of Common Stock of
the Company which were owned beneficially as of April 1, 1999 by (i) each person
who is known by the Company to own beneficially more than 5% of its Common
Stock, (ii) each Director, (iii) each Named Executive Officer (see "Executive
Compensation") and (iv) the Directors and Executive Officers of the Company as a
group:
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner (1) Common Stock Beneficially Owned
------------------------------------------------ ---------------------------------------
Directors and Executive Officers Shares Percent
-------------------------------------------- -------------- ----------
<S> <C> <C>
William A. Dambrackas (2) (3) 738,761 13.1%
Mark Kacer (2) 165,856 3.1%
Robert F. Gintz (2) 64,789 1.2%
Robert S. Sowell (2) 78,097 1.4%
Thomas E. Garrett (2) 25,516 *
Robert F. Williamson, Jr. (2) (4) 21,750 *
James J. Felcyn, Jr. (2) 15,000 *
--------------
All directors and executive officers
as a group (7 persons) (2) (3) (4) 1,109,769 18.8%
==============
5% Beneficial Owners,
--------------------------------------------
Greenville Capital Management, Inc.
P.O. Box 220 --
Rockland, DE 19732 (5) 438,085 8.1%
IG Investment Management
1 Canada Ctr.
447 Portage Avenue
Winnipeg, MB, Canada R3C 3B6(6) 318,900 5.9%
FMR Corp.
82 Devonshire Street
Boston, MA 02109 (5) 307,600 5.7%
G. Kevin Doren
8202 Avalon Drive
Mercer Island, WA 98040 (5) 284,556 5.3%
<FN>
(*) Less than 1%.
(1) Unless otherwise indicated, (i) the address of each of the beneficial
owners is c/o Equinox Systems Inc., One Equinox Way, Sunrise, FL 33351,
(ii) all shares are owned directly, (iii) each person has sole investment
and voting power, and (iv) the share ownership is as of April 1, 1999.
(2) Includes shares of Common Stock subject to stock options exercisable
within 60 days of April 1, 1999 in the following amounts: Mr. Dambrackas
(321,577), Mr. Kacer (77,446), Mr. Gintz (64,789), Mr. Sowell (69,847),
Mr. Garrett (25,516), Mr. Williamson (17,750), Mr. Felcyn (15,000) and all
directors and executive officers as a group (591,925).
(3) Includes 30,000 shares held by Mr. Dambrackas as custodian for his children.
(4) Includes 750 shares held by Mr. Williamson's spouse.
(5) Based on information included on Schedule 13 G, which reports share
ownership as of December 31, 1998.
(6) Based on information reported by the Nasdaq National Market as of
December 31, 1998.
</FN>
</TABLE>
3
<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
NOMINEES
The Articles of Incorporation of the Company provide that the Board of
Directors shall consist of at least one director, with the exact number of
directors to be fixed from time to time by resolution of the Board of Directors.
The Board of Directors has fixed the number of directors at four for the ensuing
year. Each director elected at the Meeting will serve for a term expiring at the
2000 Annual Meeting of Shareholders, expected to be held in June 2000, or until
his successor has been duly elected and qualified.
The Board of Directors has no reason to believe that any nominee will
refuse to act or be unable to serve; however, in the event that a nominee for a
directorship to be elected by the holders of Common Stock is unable to serve or
if any other unforeseen contingencies should arise, it is intended that proxies
will be voted for the remaining nominees and for such other persons as may be
designated by the Board of Directors, unless directed by a proxy to do
otherwise.
The following table sets forth certain information with respect to
each nominee for election to the Board of Directors of the Company:
<TABLE>
<CAPTION>
Director
Name (1) Position(s) with the Company Since
- ------------------------------- --------------------------------------- -----------
<S> <C> <C>
William A. Dambrackas President, Chief Executive Officer, 1983
Chairman of the Board of Directors
Mark Kacer Vice President, Finance and Administration, 1993
Chief Financial Officer and Director
Robert F. Williamson, Jr. (2) Director 1995
James J. Felcyn Jr. (2) Director 1998
<FN>
(1) See "Management - Executive Officers and Directors" for biographical
information.
(2) Member of the Audit Committee and the Compensation Committee of the Board of
Directors.
</FN>
</TABLE>
4
<PAGE>
COMMITTEES
The principal standing committees of the Board of Directors include
the Audit Committee and the Compensation Committee.
The Audit Committee is currently comprised of Mr. Felcyn and Mr.
Williamson. The Audit Committee meets with management regarding the internal
controls of the Company and the objectivity of its financial reporting. The
Committee also meets with the Company's independent auditors and with
appropriate Company financial personnel concerning these matters. Other
functions of the Audit Committee include recommending to the directors the
appointment of the independent auditors and reviewing the Company's audited
financial statements and the auditors' report thereon with the auditors and
management. The Audit Committee met once during the year ended December 31,
1998.
The Compensation Committee is currently comprised of Mr. Felcyn and
Mr. Williamson. The Compensation Committee's responsibilities consist of
recommending, reviewing and approving the salary and fringe benefits policies of
the Company, reviewing compensation policies for directors and reviewing and
approving the compensation of officers of the Company. The Compensation
Committee's responsibilities also include administering the Company's Stock
Option Plans and recommending and approving stock options granted under those
plans. The Compensation Committee also reviews the Company's employee benefit
plans and recommends amendments to the plans, subject to approval by the
Company's Board of Directors and the shareholders of the Company, where
appropriate. The Compensation Committee met two times during the year ended
December 31, 1998.
ADDITIONAL INFORMATION CONCERNING DIRECTORS
The Company pays each director who is not an officer or employee of
the Company a fee of $2,000 for attendance at each meeting of the Board of
Directors, up to a maximum of $16,000 per year. In addition, the Company's
directors are reimbursed by the Company for their travel expenses incurred in
connection with their attendance at meetings. The Company has established for
its independent directors the Directors Stock Option Plan, which provides for an
automatic grant of an option to purchase 15,000 shares of Common Stock upon a
person's election as a director and an automatic grant of an option to purchase
an additional 3,750 shares of Common Stock upon each re-election as a director
of the Company, in both instances at an exercise price equal to the fair market
value of the Common Stock on the date of the grant. A total of 120,000 shares of
Common Stock have been reserved for issuance upon exercise of options granted
under the Directors Stock Option Plan of which 41,250 are currently available
for stock option grants. Options granted under the Directors Stock Option Plan
generally become exercisable, in full, six months after the date of grant and
expire five years after the date of grant. The Board of Directors, in its
discretion, may cancel all options granted under the Directors Stock Option Plan
that remain unexercised on the date of consummation of certain corporate
transactions described in the Plan. Directors of the Company who are also
employees of the Company do not receive additional compensation for their
services as directors.
The Board of Directors of the Company held a total of eight meetings
during the year ended December 31, 1998. Each current Director attended all of
the meetings of the Board of Directors and the meetings of the committees, if
any, on which they served.
5
<PAGE>
MANAGEMENT - EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
Executive Director
Age Position(s) with the Company Officer Since
- -------------------------- ------- -------------------------------- --------- --------
<S> <C> <C> <C> <C>
William A. Dambrackas 55 President, Chief Executive Officer 1983 1983
Chairman of the Board of Directors
Mark Kacer 42 Vice President, Finance & Administration, 1990 1993
Chief Financial Officer and Director
Robert F. Gintz 42 Vice President, Development 1988 --
Robert S. Sowell 52 Vice President, Technical Operations 1995 --
Thomas E. Garrett 63 Vice President, Sales 1996 --
Robert F. Williamson, Jr. 54 Director -- 1995
James J. Felcyn, Jr. 56 Director -- 1998
</TABLE>
WILLIAM A. DAMBRACKAS founded the Company in February 1983 and has
served as President, Chief Executive Officer and a director since its inception.
Mr. Dambrackas has also served as Chairman of the Board of Directors since
February 1993. Mr. Dambrackas is currently a member of the Board of Directors of
Focus Enhancements, Inc., a supplier of video scan conversion products to the
computer display and television industries.
MARK KACER joined the Company in 1986 as Manager of Financial
Accounting. Since that time he has held several positions at the Company,
including Director, Sales and Service Administration. Since April 1992, Mr.
Kacer has served as Vice President, Finance and Administration and Chief
Financial Officer. Mr. Kacer has also served as a member of the Board of
Directors since February 1993.
ROBERT F. GINTZ joined the Company in 1985 as Director of Marketing.
Since that time he has held several positions at the Company, including Vice
President, Marketing. Since April 1993, Mr. Gintz has served as Vice President,
Development.
THOMAS E. GARRETT joined the Company in 1995 as Director of
Distribution Sales. Since August 1996, Mr. Garrett has served as Vice President,
Sales.
ROBERT S. SOWELL joined the Company in 1984 as Manager of Sales
Support. Since that time he has held several positions at the Company, including
Director, Technical Services. Since February 1995, Mr. Sowell has served as Vice
President, Technical Operations.
ROBERT F. WILLIAMSON, JR. has served as a Director of the Company since
June 1995. Mr. Williamson is a founder of Data Net Corporation and has been its
Vice President - Finance and Chief Financial Officer since its inception in
1984. Data Net develops and markets Enterprise Application software and systems
that complement and enhance Enterprise Resource Planning (ERP) software deployed
in factories and warehouses.
JAMES J. FELCYN, JR. has served as a director of the Company since May
1998. Mr. Felcyn has been Chief Financial Officer and Treasurer of Citrix
Systems, Inc., a leading provider of thin client/server system software, since
July 1994. Prior to joining Citrix, Mr. Felcyn served as Chief Financial Officer
of NDL Products, Inc., a manufacturer of sporting goods. Mr. Felcyn accepted
this position in April 1994 at the request of the secured lender of NDL, and as
a condition to debtor-in-possession financing for NDL, which filed a Chapter 11
bankruptcy proceeding in the United States Bankruptcy Court for the Southern
District of Florida. Prior to that time, Mr. Felcyn was Vice President of
Finance of Boca Research, Inc., a manufacturer of computer peripheral products,
from April 1992 to December 1993. Mr. Felcyn is currently a member of the Board
of Directors of Smith-Gardner & Associates Inc., a supplier of software
solutions to the non-store marketing industry.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid by the Company
during the years ended December 31, 1998, 1997 and 1996 to its Chief Executive
Officer and the other executive officers of the Company whose aggregate
compensation exceeded $100,000 (the Chief Executive Officer and such other
executive officers are sometimes hereinafter collectively referred to as the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
All Other
Annual Long-Term Compensation
Compensation (1) Compensation (4)
------------------------- ------------- -------------
Options
Year Salary Bonus (2) Granted (3)
- ------------------------------- ------- ----------- ------------ --------------- -------------
<S> <C> <C> <C> <C> <C>
William A. Dambrackas 1998 $ 211,964 $ 325,000 140,000 $ 1,000
President 1997 201,781 198,000 97,500 24,538
1996 198,290 127,000 165,000 19,750
Mark Kacer 1998 127,516 83,000 28,000 1,000
V.P. Finance & Administration 1997 122,184 65,000 15,000 1,000
1996 120,667 37,000 82,500 1,000
Robert F. Gintz 1998 154,439 78,000 28,000 1,000
V.P. Development 1997 147,376 65,000 15,000 1,000
1996 140,283 37,000 82,500 1,000
Robert S. Sowell 1998 107,064 42,000 20,000 1,000
V.P. Technical Operations 1997 101,857 20,000 15,000 1,000
1996 100,548 13,000 30,000 1,000
Thomas E. Garrett (5) 1998 147,121 24,000 20,000 1,000
V.P. Sales 1997 130,051 -- 15,000 1,000
1996 118,961 -- 24,000 1,000
<FN>
(1) Except as noted in Footnote (4), the amounts reflected in the above
table do not include any amounts for perquisites and other personal
benefits extended to the Named Executive Officers. The aggregate amount
of such compensation for each Named Executive Officer is less than 10%
of the total of annual salary and bonus of such officer.
(2) Represents bonuses paid during the year indicated. Does not include
amounts for 1998 bonuses, which were determined and paid during 1999.
The Compensation Committee has the authority to grant discretionary
annual bonuses to its executive officers and employees. The
Compensation Committee intends to continue such policy in the future.
During February 1999, the Company paid approximately $633,000 for
bonuses for all Named Executive Officers with respect to 1998, all of
which had been accrued at December 31, 1998.
(3) See the table under "Stock Options Granted During 1998" below for
additional information about these options.
(4) Represents $1,000 matching contributions to the accounts of each Named
Executive Officer under the Company's 401(k) savings plan. Amounts paid
to Mr. Dambrackas in 1997 and 1996 include payments of $23,538 and
$18,750, respectively, for earned but unused vacation pay.
(5) Mr. Garrett's salaries shown for 1998, 1997 and 1996 include sales
commission payments of $80,358, $65,648 and $58,373, respectively.
</FN>
</TABLE>
7
<PAGE>
OPTION GRANTS TABLE
The following table sets forth certain information concerning grants of
stock options made during 1998 to the Named Executive Officers all of which were
made pursuant to the Company's 1993 Stock Option Plan. The Board of Directors
did not grant any stock appreciation rights in 1998.
<TABLE>
<CAPTION>
STOCK OPTIONS GRANTED DURING 1998
Potential Realizable Value at
% of Total Assumed Annual Rates of
Options Stock Price Appreciation for
Number Granted to Exercise Full Option Term (4)
of Options Employees Price Expiration -------------------------------
Granted in 1998 (3) Per Share Date 5% 10%
- -------------------------- -------------- ----------- --------- ----------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
105,000 (1) 31.4% $ 7.84 7-6-08 $ 517,706 $ 1,311,969
William A. Dambrackas 35,000 (2) 10.5 7.84 7-6-08 172,569 437,323
21,000 (1) 6.3 7.84 7-6-08 103,541 262,394
Mark Kacer 7,000 (2) 2.1 7.84 7-6-08 34,514 87,465
21,000 (1) 6.3 7.84 7-6-08 103,541 262,394
Robert F. Gintz 7,000 (2) 2.1 7.84 7-6-08 34,514 87,465
15,000 (1) 4.5 7.84 7-6-08 73,958 187,424
Robert Sowell 5,000 (2) 1.5 7.84 7-6-08 24,653 62,475
15,000 (1) 4.5 7.84 7-6-08 73,958 187,424
Thomas E. Garrett 5,000 (2) 1.5 7.84 7-6-08 24,653 62,475
<FN>
(1) 3/16 of the number of shares granted to each Executive Officer became
exercisable six months after the date of grant and the balance of the
shares become exercisable in 13 equal quarterly installments
thereafter.
(2) Grants are exercisable on July 1, 2007.
(3) Options to purchase 352,750 shares were granted in the year ended
December 31, 1998. Of such amount, 18,750 options were granted to
non-employee directors pursuant to the Company's Directors Stock Option
Plan. The percentage shown in this column represents the percentage
arrived at by dividing the number of options granted to the Named
Executive Officers by the total number of options (334,000) granted to
employees.
(4) The potential realizable value portion of the foregoing table
illustrates the value that might be realized upon exercise of the
options immediately prior to the expiration of their term, assuming an
initial value of $7.84 per share, and the specified compound rates of
appreciation of the Common Stock over the term of the options. These
numbers do not take into account the terms of such options providing
for forfeiture of unexercised options following termination of
employment, nontransferability or applicable vesting schedules.
</FN>
</TABLE>
8
<PAGE>
AGGREGATED YEAR-END OPTION VALUE TABLE
The following table sets forth certain information concerning (i)
options exercised during 1998 by the Named Executive Officers, the value
realized at the time of exercise, and (ii) the number and value of unexercised
stock options held by the Named Executive Officers as of December 31, 1998,
assuming a value per share of Common Stock of $11.44 which was the average of
the high and low sales price for the Common Stock on the Nasdaq National Market
System on December 31, 1998. (The Board of Directors has never granted any stock
appreciation rights).
STOCK OPTIONS EXERCISED DURING 1998 AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Number of Value of Unexercised
Shares Unexercised Options In-the-Money Options
Acquired on at December 31, 1998 at December 31, 1998
Exercise Exercisable (E) Exercisable (E)
During 1998 Value Realized Unexercisable (U) Unexercisable (U)
- ------------------------- ------------- ---------------- -------------------- --------------------
<S> <C> <C> <C> <C>
William A. Dambrackas 80,616 $ 368,752 245,637 (E) $ 1,392,762 (E)
291,863 (U) 1,269,604 (U)
Mark Kacer 122,910 816,668 53,444 (E) 244,239 (E)
81,896 (U) 380,816 (U)
Robert F. Gintz 196,167 1,964,907 40,787 (E) 210,869 (E)
81,896 (U) 380,816 (U)
Robert S. Sowell 15,000 177,562 57,655 (E) 358,614 (E)
44,845 (U) 192,385 (U)
Thomas E. Garrett 11,625 112,279 11,264 (E) 64,993 (E)
49,986 (U) 232,935 (U)
</TABLE>
9
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's directors and executive officers, and persons who
own more than 10 percent of the Company's Common Stock, to file with the
Securities and Exchange Commission (the "SEC") initial reports of ownership and
reports of changes in ownership of Common Stock. Officers, directors and greater
than 10 percent shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and representations that no other reports were
required during the last fiscal year, all Section 16(a) filing requirements
applicable to its officers, directors and greater than 10 percent beneficial
owners were complied with.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee's general philosophy with respect to the
compensation of its executive officers is to offer competitive compensation
programs designed to attract and retain key executives critical to the long-term
success of the Company and to recognize an individual's contribution and
personal performance. Such compensation programs include a base salary and
annual bonus as well as a stock option plan designed to provide long-term
incentives.
The Chief Executive Officer's 1998 salary was established by the
Compensation Committee in January 1998. The Compensation Committee determined
the base salary based upon a number of factors including the Chief Executive
Officer's contribution to the Company since its inception, his level of base
salary in prior years, his accomplishments in the prior year in relation to
objective goals and the compensation of chief executives in similarly situated
companies. The bonus determined and paid in 1998 related to the Chief Executive
Officer's performance in the prior year. The amount of the bonus was
discretionary on the part of the Compensation Committee and was based upon prior
years' bonuses, accomplishments of the Chief Executive Officer in 1997 toward
goals established in 1997, and the compensation paid to chief executive officers
in similarly situated companies.
The 1998 salaries of the other Named Executive Officers were also
established in January 1998 by the Compensation Committee. The base salaries of
the other Named Executive Officers were determined by considering a number of
factors including the individual officers' years of service with the Company,
their level of base salary in prior years, responsibilities and importance to
the Company, accomplishments in relation to specific goals, and the compensation
of similarly situated officers in similarly situated companies. The bonuses
determined and paid in 1998 related to the executive officers' performance in
the prior year. The amounts of the bonuses were discretionary on the part of the
Compensation Committee. One of the most significant factors considered was the
input of the Chief Executive Officer as to the performance of the other
executive officers.
While the Compensation Committee does review the Named Executive
Officers' performance against objective goals and in light of similarly situated
officers in similarly situated companies, the review and analysis is informal
and subjective. The Compensation Committee does not review formal analyses or
documentation, but instead relies on the business experience and judgement of
its individual members.
The Company maintains the 1993 Stock Option Plan, which is designed to
attract and retain qualified and competent persons who are involved in the
business of the Company, including key employees and officers and directors upon
whose efforts and judgment the success of the Company is largely dependent,
through the encouragement of stock ownership in the Company by such persons. In
1998, Mr. Dambrackas, the other Named Executive Officers and other key employees
of the Company were granted an aggregate of 334,000 stock options under the 1993
Stock Option Plan.
ROBERT F. WILLIAMSON, JR.
JAMES J. FELCYN, JR.
10
<PAGE>
PERFORMANCE GRAPH
The following graph shows the cumulative total return on the Company's
Common Stock since December 31, 1993, compared to the returns of Nasdaq
Composite Index, the Nasdaq Computer Manufacturer Index and an industry group
index described below. The graph assumes $100 was invested on December 31, 1993
in the Company's Common Stock, the Nasdaq Index, the Nasdaq Computer
Manufacturer Index and the industry group index.
60 MONTH CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
12/93 12/94 12/95 12/96 12/97 12/98
--------------------------------- -------- --------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Equinox Systems Inc. $ 100 $147 $ 169 $ 200 $ 378 $ 400
Nasdaq Stock market - U.S. 100 98 138 170 209 293
Nasdaq Computer Manufacturer 100 110 173 232 281 610
Industry Group 100 94 147 148 94 91
<FN>
(1) Cumulative total return is defined as stock price appreciation plus
dividends paid, assuming reinvestment of all such dividends.
(2) The industry group index is comprised of eight other high technology
companies which operate in the same industry, offer similar type
products and have similar type customers to that of the Company. The
index includes: ACT Network Inc., Ariel Corporation, Boca Research,
Inc., Brooktrout Technology, Inc., Digi International Inc., Interphase
Corporation, Performance Technologies Incorporated and SBE, Inc.
Investments in the industry group index have been weighted based on the
company's relative market capitalization at the beginning of each year.
It is the intention of the Company to replace the Nasdaq Computer
Manufacturer Index with the industry group index shown above in future
years.
</FN>
</TABLE>
11
<PAGE>
PROPOSAL TO APPROVE AMENDMENT TO THE COMPANY'S
1993 STOCK OPTION PLAN
(PROPOSAL NO. 2)
On February 27, 1999, the Compensation Committee of the Company's Board
of Directors adopted, subject to approval by the Company's shareholders, an
amendment to the 1993 Stock Option Plan ("the 1993 Plan" or "the Plan") to
increase the number of shares eligible for grant under the Plan from 2,025,000
to 2,275,000. The material features of the Plan, as amended by the foregoing
amendment (the "Amendment") are discussed below, but the description is subject
to, and is qualified in its entirety by, the full text of the Plan, including
the Amendment, attached hereto as Exhibit A. The bold faced portions of the Plan
reflect the proposed Amendment to be voted on at the Annual Meeting. Unless the
context otherwise requires, the "Plan" refers to the Plan as amended by the
Amendment.
Approval of the Amendment to the 1993 Plan by the Company's shareholders
is one of the conditions of Rule 16b-3, a rule promulgated by the SEC that
provides an exception from the operation of the "short-swing profit" recovery
provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), with respect to the acquisition of options and certain
other transactions by officers and directors of the Company. The Board of
Directors believes that stock options are an important incentive to attract and
retain qualified and competent personnel. Substantially all shares previously
reserved under the Plan have been granted by the Board of Directors to key
employees and officers of the Company. The Compensation Committee has determined
that, from time to time, additional grants of stock options to key employees and
officers will further the interest of the Company. Accordingly, shareholder
approval of the Amendment is being sought in connection with this Proxy
Statement.
The purpose of the 1993 Plan is to advance the interests of the Company
and by providing an additional incentive to attract and retain qualified and
competent persons who provide management services, and upon whose efforts and
judgment the success of the Company is largely dependent, through the
encouragement of stock ownership in the Company by such persons. In furtherance
of this purpose, the 1993 Plan authorizes the granting of incentive or
nonqualified stock options to purchase Common Stock to persons satisfying the
description above, to be selected from the class of all regular employees of the
Company, including directors and officers, the financing of the exercise of
options and the amount of taxes payable in connection therewith, and the use of
already owned Common Stock as payment of the exercise price for options granted
under the 1993 Plan (such provisions being at times referred to herein as the
"Stock Swap").
The 1993 Plan is administered by a committee consisting of two or more
directors designated by the Board of Directors (the "Committee"). The Board has
designated its Compensation Committee to administer the 1993 Plan. The Committee
in its sole discretion, determines the persons to be awarded options, the number
of shares subject thereto and the exercise price and other terms thereof. In
addition, the Committee has full power and authority to construe and interpret
the 1993 Plan, and the acts of the Committee are final, conclusive and binding
upon all interested parties, including the Company, its shareholders, its
officers and employees, recipients of grants under the 1993 Plan and all persons
or entities claiming by or through such persons.
TERMS AND CONDITIONS
All options granted under the Plan are to be evidenced by a written
agreement between the Company and the grantee. Such agreements are to contain
vesting schedules and other terms and conditions as the Committee prescribes,
consistent with the Plan.
Since July 1996, all option recipients have also entered into a "Trade
Secrets and Non-Compete Agreement" which, if violated, will cancel stock options
granted after June 20, 1996 and require the option recipient to return to the
Company any profit realized from the exercise of stock options after the
violation or up to one year before the violation. The "Trade Secrets and
Non-Compete Agreement" for executive officers, in addition to the conditions
above, also applies to stock options granted to them prior to June 20, 1996.
12
<PAGE>
Under the 1993 Plan, the option price per share is the amount determined
in the discretion of the Committee, provided that the option price per share for
incentive stock options may not be less than the fair market value of the
underlying shares on the date of grant. As long as the Common Stock is approved
for quotation on the Nasdaq National Market, then for purposes of the Plans, the
term "fair market value" is defined as the mean of the closing bid and asked
prices for the Common Stock quoted on the Nasdaq National Market. On April 1,
1999, the closing bid and asked prices per share of Common Stock as reported on
the Nasdaq National Market were $9.13 and $9.38 respectively. The exercise price
of an option may be paid in cash, or at the sole discretion of the Committee, by
delivery of already owned shares of Common Stock having a fair market value
equal to the exercise price, or by a combination of the foregoing. The 1993 Plan
also authorizes the Company to make loans to optionees to enable them to
exercise their options. Such loans must (i) provide for recourse to the
optionee, (ii) bear interest at a rate no less than the prime rate of interest
of the Company's principal lender, and (iii) be secured by the shares of Common
Stock purchased. Cash payments will be used by the Company for general corporate
purposes. Payments made in Common Stock must be made by delivery of stock
certificates in negotiable form.
The use of already owned shares of Common Stock applies to payment for
the exercise of an option in a single transaction and to the "pyramiding" of
already owned shares in successive, simultaneous option exercises. In general,
pyramiding permits an option holder to start with as little as one share of
Common Stock and exercise an entire option to the extent then exercisable (no
matter what the number of shares subject thereto). By utilizing already owned
shares of Common Stock, no cash (except for fractional share adjustments) is
needed to exercise an option. Consequently, the optionee would receive Common
Stock equal in value to the spread between the fair market value of the shares
subject to the option and the exercise price of the option.
No option granted under the Plan is assignable or transferable, other
than by will or by the laws of descent and distribution. During the lifetime of
an optionee, an option is exercisable only by such optionee. The expiration date
of an option granted pursuant to the 1993 Plan will be determined by the
Committee at the time of the grant, but in no event will an option be
exercisable after the expiration of 10 years from the date of grant. An option
may be exercised at any time or from time to time or only after a period of time
or in installments, as the Committee determines. Options granted on or prior to
February 24, 1996 also become exercisable immediately upon the occurrence of
certain events or transactions. On February 24, 1996, the Compensation Committee
amended the Plan to eliminate this automatic vesting for options granted after
that date, however the Committee may grant options with special vesting
provisions or accelerate vesting on any option.
The unexercised portion of any option granted under the Plan shall
automatically be terminated (a) three months after the date on which the
optionee's employment is terminated for any reason other than (i) Cause (as
defined in the Plans); or (ii) death; (b) immediately upon the termination of
the optionee's employment for Cause; (c) one year after the date on which the
optionee's employment is terminated by reason of mental or physical disability;
or (d) (i) one year after the date on which the optionee's employment is
terminated by reason of the death of the employee; or (ii) three months after
the date on which the optionee shall die if such death shall occur during the
one year period following the termination of the optionee's employment by reason
of mental or physical disability.
To prevent dilution of the rights of a holder of an option, the Plan
provides for adjustment of the number of shares for which options may be
granted, the number of shares subject to outstanding options and the exercise
price of outstanding options in the event of any subdivision or consolidation of
shares, any stock dividend, recapitalization or other capital adjustment of the
Company. Provisions governing the effect upon options of a merger, consolidation
or other reorganization of the Company are also included in the Plan.
AMENDMENTS
The Plan will expire on February 22, 2003, and any option outstanding on
such date will remain outstanding until it has either expired or has been
exercised. The Committee may amend, suspend or terminate the 1993 Plan at any
time, provided that such amendment may not adversely affect the rights of an
optionee under an outstanding option without the affected optionee's written
consent. In addition, the Committee may not amend the 1993 Plan to (a) increase
the number of shares of Common Stock reserved for issuance or change the class
of persons eligible to receive options, without first obtaining shareholder
approval, (b) permit the granting of options that expire beyond the maximum
10-year period, or (c) extend the termination date of the 1993 Plan.
13
<PAGE>
FEDERAL INCOME TAX EFFECTS
The Plan is not qualified under the provisions of Section 401(a) of the
Code, nor is it subject to any of the provisions of the Employee Retirement
Income Security Act of 1974, as amended.
The Plan permits the Committee to grant either "incentive stock options"
or nonqualified stock options. To date, all options granted under the Plan have
been nonqualified stock options. An optionee granted a nonqualified stock option
will generally recognize, at the date of exercise of such nonqualified stock
option, ordinary income equal to the difference between the exercise price and
the fair market value of the shares of Common Stock subject to the nonqualified
stock option. This taxable ordinary income will be subject to Federal income tax
withholding. A Federal income tax deduction will be allowed to the Company in an
amount equal to the ordinary income to be recognized by the optionee, provided
that such amount constitutes an ordinary and necessary business expense to the
Company and is reasonable, and the Company satisfies any applicable withholding
obligation with respect to such income.
The Federal income tax treatment is somewhat different for officers and
directors of the Company ("Reporting Persons") as a result of the short-swing
profit recovery provisions of Section 16(b) of the Exchange Act. If a Reporting
Person exercises an option prior to the expiration of the holding period
required by Rule 16b-3 (which holding period lasts for six months following the
acquisition of the option), unless the Reporting Person makes an 83(b) Election,
as described below, the Reporting Person will recognize ordinary income upon the
expiration of the holding period or such earlier date on which the person ceases
to be a Reporting Person. The amount of ordinary income will be equal to the
difference between the exercise price of the option and the fair market value of
the shares at the time that the income is recognized. A Reporting Person,
however, is entitled to elect under Section 83(b) of the Code (the "83(b)
Election"), within 30 days after exercising an option, to treat as ordinary
income the excess of the fair market value of the shares covered by the option
on the date of exercise over the exercise price and no further ordinary income
will be recognized irrespective of whether the fair market value of the shares
has increased or decreased at the expiration of the applicable period under
Section 16(b). The Company's deduction is dependent upon when a Reporting Person
recognizes ordinary income.
If an optionee exercises a nonqualified stock option by delivering other
shares, the optionee will not recognize gain or loss with respect to the
exchange of such shares, even if their then fair market value is different from
the optionee's tax basis. The optionee, however, will be taxed as described
above with respect to the exercise of the nonqualified stock option as if he had
paid the exercise price in cash, and the Company likewise generally will be
entitled to an equivalent tax deduction. Provided a separate identifiable stock
certificate is issued therefor, the optionee's tax basis in that number of
shares received on such exercise (which is equal to the number of shares
surrendered on such exercise) will be equal to his tax basis in the shares
surrendered and his holding period for such number of shares received will
include his holding period for the shares surrendered. The optionee's tax basis
and holding period for the additional shares received on exercise of a
nonqualified stock option paid for, in whole or in part, with shares will be the
same as if the optionee had exercised the nonqualified stock option solely for
cash.
OPTIONS GRANTED AND OUTSTANDING UNDER THE 1993 PLAN
As of April 1, 1999, the Board of Directors had granted nonqualified
stock options under the 1993 Plan to purchase a total of 1,816,712 shares of
Common Stock of which 1,175,597 are outstanding (as shown in the following
table). All stock options granted have an exercise price equal to the fair
market value of the Common Stock as determined by the Compensation Committee as
of the date of the grant and have a term of ten (10) years. Options granted to
employees other than the Named Executive Officers will become exercisable in 16
equal quarterly installments beginning with the date of grant. Options granted
to the Named Executive Officers will have 3/16 of the total number of shares
granted becoming exercisable six months after the date of grant and the balance
exercisable in 13 equal quarterly installments thereafter except for certain
options granted that are exercisable on July 1, 2007. For additional information
about such option grants, see "Executive Compensation" above.
14
<PAGE>
STOCK OPTIONS OUTSTANDING PURSUANT TO THE 1993 PLAN
<TABLE>
<CAPTION>
Outstanding Options
---------------------------------------- -------------------
<S> <C>
William A. Dambrackas 537,500
Mark Kacer 116,692
Robert F. Gintz 122,683
Robert S. Sowell 87,500
Thomas E. Garrett 61,250
------------
Total of all executive officers as a group
(5 persons) 925,625
============
Total of all employees as a group,
including executive officers (45 persons) 1,175,597
============
</TABLE>
Because persons to whom future grants of stock options are to be made
will be determined from time to time by the Compensation Committee in its
discretion, it is impossible at this time to indicate the precise number, name
or position of persons who will hereafter receive options or the number of
option shares which will be granted under the 1993 Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THIS PROPOSAL TO
AMEND THE COMPANY'S 1993 STOCK OPTION PLAN.
RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Company's independent certified public accountant for the year ended
December 31, 1998 was, and for the year ended December 31, 1999 will be, the
firm of Arthur Andersen LLP. Representatives of such firm are expected to attend
the Meeting and will have an opportunity to make a statement or to respond to
appropriate questions from shareholders.
SHAREHOLDER PROPOSALS
Any proposal by a shareholder intended to be presented at the 2000
Annual Meeting of Shareholders must be received by the Company no later than
January 6, 2000 for inclusion in the Company's proxy statement and form of proxy
relating to such meeting.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented at the
Meeting. Should any unanticipated business properly come before the Meeting,
however, it is intended that the holders of proxies solicited hereby will vote
thereon at their discretion.
The Company's Annual Report to its shareholders is being mailed with
this proxy statement; however, the Annual Report does not form a part of this
proxy statement or the Company's solicitation of proxies.
By Order of the Board of Directors,
MARK KACER
SECRETARY
Ft. Lauderdale, Florida
April 19, 1999
15
<PAGE>
EXHIBIT A
(AMENDMENT IN BOLD)
EQUINOX SYSTEMS INC.
------------------------------------------
1993 STOCK OPTION PLAN, AS AMENDED
------------------------------------------
1. PURPOSE. The purpose of this Plan is to advance the interests of EQUINOX
SYSTEMS INC., a Florida corporation (the "Company"), by providing an
additional incentive to attract and retain qualified and competent persons
who are key employees of the Company, and upon whose efforts and judgment
the success of the Company is largely dependent, through the encouragement
of stock ownership in the Company by such persons.
2. DEFINITIONS. As used herein, the following terms shall have the meaning
indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Committee" shall mean the stock option committee appointed by the
Board pursuant to Section 13 hereof or, if not appointed, the
Board.
(c) "Common Stock" shall mean the Company's Common Stock, par value
$0.01 per share.
(d) "Director" shall mean a member of the Board.
(e) "Disinterested Person" shall mean a Director who is not, during
the one year prior to his or her service as an administrator of
this Plan, or during such service, granted or awarded equity
securities pursuant to this Plan or any other plan of the Company
or any of its affiliates, except that:
(i) participation in a formula plan meeting the conditions in
paragraph (c)(2)(ii) of Rule 16b-3 promulgated under the
Securities Exchange Act shall not disqualify a Director from
being a Disinterested Person; and
(ii) participation in an ongoing securities acquisition plan
meeting the conditions in paragraph (d)(2)(i) of Rule 16b-3
promulgated under the Securities Exchange Act shall not
disqualify a Director from being a Disinterested Person; and
(iii) an election to receive an annual retainer fee in either cash
or an equivalent amount of securities, or partly in cash and
partly in securities, shall not disqualify a director from
being a Disinterested Person.
(f) "Fair Market Value" of a Share on any date of reference shall be
the "Closing Price" (as defined below) of the Common Stock on the
business day immediately preceding such date, unless the Committee
in its sole discretion shall determine otherwise in a fair and
uniform manner. For the purpose of determining Fair Market Value,
the "Closing Price" of the Common Stock on any business day shall
be
(i) if the common Stock is listed or admitted for trading on any
United States national securities exchange, or if actual
transaction are otherwise reported on a consolidated
transaction reporting system, the last reported sale price
of Common Stock on such exchange or reporting system, as
reported in any newspaper of general circulation,
A-1
<PAGE>
(ii) if the Common Stock is quoted on the National Association
of Securities Dealers Automated Quotations System
("NASDAQ"), any similar system of automated dissemination of
quotations of securities prices in common use, the mean
between the closing high bid and low asked quotations for
such day of Common Stock on such system, or
(iii) if neither clause (i) or (ii) is applicable, the mean
between the high bid and low asked quotations for the Common
Stock as reported by the National Quotation Bureau,
Incorporated if at least two securities dealers have
inserted both bid and asked quotations for common Stock on
at least five of the ten preceding days.
(g) "Incentive Stock Option" shall mean an incentive stock option as
defined in Section 422 of the Internal Revenue Code.
(h) "Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(i) "Non-Statutory Stock Option" shall mean an Option which is not an
Incentive Stock Option.
(j) "Officer" shall mean the Company's president, principal financial
officer, principal accounting officer and any other person who the
Company identifies as an "executive officer" for purposes of
reports or proxy materials filed by the Company pursuant to the
Securities Exchange Act.
(k) "Option" (when capitalized) shall mean any option granted under
this Plan.
(l) "Optionee" shall mean a person to whom a stock option is granted
under this Plan or any person who succeeds to the rights of such
person under this Plan by reason of the death of such person.
(m) "Plan" shall mean this Stock Option Plan for the Company.
(n) "Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(o) "Share(s)" shall mean a share or shares of the Common Stock.
3. SHARES AND OPTIONS. The Company may grant to Optionees from time to time
Options to purchase an aggregate of up to TWO MILLION TWO HUNDRED AND
SEVENTY FIVE THOUSAND (2,275,000) Shares from Shares held in the Company's
treasury or from authorized and unissued Shares. If any Option granted
under the Plan shall terminate, expire, or be canceled or surrendered as to
any Shares, new Options may thereafter be granted covering such Shares. An
Option granted hereunder shall be either an Incentive Stock Option or a
Non-Statutory Stock Option as determined by the Committee at the time of
grant of such Option and shall clearly state whether it is an Incentive
Stock Option or Non-Statutory Stock Option. All Incentive Stock Options
shall be granted within 10 years from the effective date of this Plan.
4. DOLLAR LIMITATION. Options otherwise qualifying as Incentive Stock Options
hereunder will not be treated as Incentive Stock Options only to the extent
that the aggregate fair market value (determined at the time the Option is
granted) of the Shares, with respect to which Options meeting the
requirements of Internal Revenue Code Section 422(b) are exercisable for
the first time by an individual during any calendar year (under all plans
of the Company), exceeds $100,000. Notwithstanding any other provision of
this Plan, no Plan participant may be granted options for more than 40% of
the aggregate number of shares available under the Plan.
A-2
<PAGE>
5. CONDITIONS FOR GRANT OF OPTIONS
(a) Each Option shall be evidenced by an option agreement that may contain
any term deemed necessary or desirable by the Committee, provided such
terms are not inconsistent with this Plan or any applicable law.
Optionees shall be those persons selected by the Committee from the
class of all regular employees of the Company, including employees who
are also Directors or Officers. Any person who files with the
Committee, in a form satisfactory to the Committee, a written waiver of
eligibility to receive any Option under this Plan shall not be eligible
to receive any Option under this Plan for the duration of such waiver.
(b) In granting Options, the Committee may take into consideration the
contribution the person has made to the success of the Company and such
other factors as the Committee shall determine. The Committee shall
also have the authority to consult with and receive recommendations
from officers and other personnel of the Company with regard to these
matters. The Committee may from time to time in granting Options under
the Plan prescribe such other terms and conditions concerning such
Options as it deems appropriate, including, without limitation,
(i) prescribing the date or dates on which the Option becomes
exercisable,
(ii) providing that the Option rights accrue or become exercisable in
installments over a period of years, or upon the attainment of
stated goals or both, or
(iii) relating an Option to the continued employment of the Optionee
for a specified period of time, provided that such terms and
conditions are not more favorable to an Optionee than those
expressly permitted herein.
(c) The Options granted to employees under this Plan shall be in addition
to regular salaries, pension, life insurance or other benefits related
to their employment with the Company. Neither the Plan nor any Option
granted under the Plan shall confer upon any person any right to
employment or continuance of employment by the Company.
(d) Notwithstanding any other provision of this Plan, and in addition to
any other requirements of this Plan, Options may not be granted to a
Director or Officer unless the grant of such Options is authorized by,
and all of the terms of such Options are determined by, a Committee
that is appointed in accordance with Section 13 of this Plan and all of
whose members are Disinterested Persons.
6. OPTION PRICE. The option price per Share of any Option shall be any price
determined by the Committee but shall not be less than the par value per
Share; provided, however, that in no event shall the option price per Share
of any Incentive Stock Option be less than the Fair Market Value of the
Shares underlying such Option on the date such Option is granted.
7. EXERCISE OF OPTIONS. An Option shall be deemed exercised when
(i) the Company has received written notice of such exercise in
accordance with the terms of the Option,
(ii) full payment of the aggregate option price of the Shares as to
which the Option is exercised has been made, and
(iii) arrangements that are satisfactory to the Committee in its sole
discretion have been made for the Optionee's payment to the
Company of the amount that is necessary for the Company employing
the Optionee to withhold in accordance with applicable Federal or
state tax withholding requirements.
A-3
<PAGE>
Unless further limited by the Committee in any Option, the option price of
any Shares purchased shall be paid in cash, by certified or official bank
check, by money order, with Shares or by a combination of the above;
provided further, however, that the Committee in its sole discretion may
accept a personal check in full or partial payment of any Shares. If the
exercise price is paid in whole or in part with Shares, the value of the
Shares surrendered shall be their Fair Market Value on the date the Option
is exercised. The Company in its sole discretion may, on an individual
basis or pursuant to a general program established by the Committee in
connection with this Plan, lend money to an Optionee to exercise all or a
portion of an Option granted hereunder. If the exercise price is paid in
whole or part with Optionee's promissory note, such note shall
(i) provide for full recourse to the maker,
(ii) be collateralized by the pledge of the Shares that the Optionee
purchases upon exercise of such Option,
(iii) bear interest at a rate no less than the rate of interest payable
by the Company to its principal lender, and
(iv) contain such other terms as the Committee in its sole discretion
shall require.
No Optionee shall be deemed to be a holder of any Shares subject to an
Option unless and until a stock certificate or certificates for such Shares
are issued to such person(s) under the terms of this Plan. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued,
except as expressly provided in Section 10 hereof.
8. EXERCISABILITY OF OPTIONS. Any option shall become exercisable in such
amounts, at such intervals and upon such terms as the Committee shall
provide in such Option, except as otherwise provided in this Section 8.
(a) The expiration date of an Option shall be determined by the Committee
at the time of grant, but in no event shall an Option be exercisable
after the expiration of 10 years from the date of grant of the Option.
(b) Unless otherwise provided in any Option, each outstanding Option
granted on or prior to February 24, 1996 shall become immediately
fully exercisable
(i) if there occurs any transaction (which shall include a series of
transactions occurring within 60 days or occurring pursuant to a
plan), that has the result that shareholders of the Company
immediately before such transaction cease to own at least 51
percent of the voting stock of the Company or of any entity that
results from the participation of the Company in a
reorganization, consolidation, merger, liquidation or any other
form of corporate transaction;
(ii) if the shareholders of the Company shall approve a plan of
merger, consolidation, reorganization, liquidation or dissolution
in which the Company does not survive (unless the approved
merger, consolidation, reorganization, liquidation or dissolution
is subsequently abandoned); or
(iii) if the shareholders of the Company shall approve a plan for the
sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company (unless
such plan is subsequently abandoned).
(c) The Committee may in its sole discretion accelerate the date on which
any Option may be exercised and may accelerate the vesting of any
Shares subject to any Option or previously acquired by the exercise of
any Option.
(d) Options granted to Officers and Directors shall not be exercisable
until the expiration of a period of at least six months following the
date of grant.
A-4
<PAGE>
9. TERMINATION OF OPTION PERIOD
(a) The unexercised portion of any Option shall automatically and without
notice terminate and become null and void at the time of the earliest
to occur of the following:
(i) three months after the date on which the Optionee's employment is
terminated or, in the case of a Non-Statutory Stock Option, and
unless the Committee shall otherwise determine in writing in its
sole discretion, the date on which the Optionee's employment is
terminated, in either case for any reason other than by reason of
(A) Cause, which, solely for purposes of this Plan, shall mean the
termination of the Optionee's employment by reason of the
Optionee's wilful misconduct or gross negligence,
(B) a mental or physical disability as determined by a medical
doctor satisfactory to the Committee, or
(C) death;
(ii) immediately upon the termination of the Optionee's employment for
Cause;
(iii) one year after the date on which the Optionee's employment is
terminated by reason of a mental or physical disability (within
the meaning of Internal Revenue Code Section 22(e)) as determined
by a medical doctor satisfactory to the Committee; or
(iv) (A) twelve months after the date of termination of the Optionee's
employment by reason of death of the employee, or
(B) three months after the date on which the Optionee shall die if
such death shall occur during the one year period specified in
Subsection 9(a)(iii) hereof.
(b) The Committee in its sole discretion may by giving written notice
("cancellation notice") cancel, effective upon the date of the
consummation of any corporate transaction described in Subsections
8(b)(ii) or(iii) hereof, any Option that remains unexercised on such
date. Such cancellation notice shall be given a reasonable period of
time prior to the proposed date of such cancellation and may be given
either before or after approval of such corporate transaction.
10. ADJUSTMENT OF SHARES
(a) If at any time while the Plan is in effect or unexercised Options are
outstanding, there shall be any increase or decrease in the number of
issued and outstanding Shares through the declaration of a stock
dividend or through any recapitalization resulting in a stock split-up,
combination or exchange of Shares, then and in such event:
(i) appropriate adjustment shall be made in the maximum number of
Shares available for grant under the Plan, so that the same
percentage of the Company's issued and outstanding Shares shall
continue to be subject to being so optioned; and
(ii) appropriate adjustment shall be made in the number of Shares and
the exercise price per Share thereof then subject to any
outstanding Option, so that the same percentage of the Company's
issued and outstanding Shares shall remain subject to purchase at
the same aggregate exercise price.
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<PAGE>
(b) Subject to the specific terms of any Option, the Committee may change
the terms of Options outstanding under this Plan, with respect to the
option price or the number of Shares subject to the Options, or both,
when, in the Committee's sole discretion, such adjustments become
appropriate by reason of a corporate transaction described in
Subsections 8(b)(ii) or (iii) hereof.
(c) Except as otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class, or securities
convertible into shares of capital stock of any class, either in
connection with direct sale or upon the exercise of rights or warrants
to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect
to the number of or exercise price of Shares then subject to
outstanding Options granted under the Plan.
(d) Without limiting the generality of the foregoing, the existence of
outstanding Options granted under the Plan shall not affect in any
manner the right or power of the Company to make, authorize or
consummate
(i) any or all adjustments, recapitalizations, reorganizations
or other changes in the Company's capital structure or
its business;
(ii) any merger or consolidation of the Company;
(iii) any issue by the Company of debt securities, or preferred or
preference stock that would rank above the Shares subject to
outstanding Options;
(iv) the dissolution or liquidation of the Company;
(v) any sale, transfer or assignment of all or any part of the
assets or business of the Company; or
(vi) any other corporate act or proceeding, whether of a similar
character or otherwise.
11. TRANSFERABILITY OF OPTIONS. Each Option shall provide that such Option
shall not be transferable by the Optionee otherwise than by will or the
laws of descent and distribution, and each Option shall be exercisable
during the Optionee's lifetime only by the Optionee.
12. ISSUANCE OF SHARES. As a condition of any sale or issuance of Shares upon
exercise of any Option, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to
assure compliance with any such law or regulation including, but not
limited to, the following:
(a) a representation and warranty by the Optionee to the Company, at the
time any Option is exercised, that he is acquiring the Shares to be
issued to him for investment and not with a view to, or for sale in
connection with, the distribution of any such Share and
(b) a representation, warranty and/or agreement to be bound by any legends
that are, in the opinion of the Committee, necessary or appropriate to
comply with the provisions of any securities law deemed by the
Committee to be applicable to the issuance of the Shares and are
endorsed upon the Share certificates.
13. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Committee, which shall consist of
not less than two Directors, each of whom shall be Disinterested
Persons to the extent required by Section 5(d) hereof. The Committee
shall have all of the powers of the Board with respect to the Plan. Any
member of the Committee may be removed at any time, with or without
cause, by resolution of the Board and any vacancy occurring in the
membership of the Committee may be filled by appointment by the Board.
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<PAGE>
(b) The Committee, from time to time, may adopt rules and regulations for
carrying out the purposes of the Plan. The Committee's determinations
and its interpretation and construction of any provision of the Plan
shall be final and conclusive.
(c) Any and all decisions or determinations of the Committee shall be made
either
(i) by a majority vote of the members of the Committee at a meeting or
(ii) without a meeting by the unanimous written approval of the members
of the Committee.
14. INCENTIVE OPTIONS FOR 10% SHAREHOLDERS. Notwithstanding any other
provisions of the Plan to the contrary, an Incentive Stock Option shall not
be granted to any person owning directly or indirectly (through attribution
under Section 424(d) of the Internal Revenue Code) at the date of grant,
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company (or of its subsidiary [as defined in
Section 424 of the Internal Revenue Code] at the date of grant) unless the
option price of such Option is at least 110% of the Fair Market Value of
the Shares subject to such Option on the date the Option is granted, and
such Option by its terms is not exercisable after the expiration of five
years from the date such Option is granted.
15. INTERPRETATION.
(a) The Plan shall be administered and interpreted so that all Incentive
Stock Options granted under the Plan will qualify as Incentive Stock
Options under Section 422 of the Internal Revenue Code. If any
provision of the Plan should be held invalid for the granting of
Incentive Stock Options or illegal for any reason, such determination
shall not affect the remaining provisions hereof, but instead the Plan
shall be construed and enforced as if such provision had never been
included in the Plan.
(b) This plan shall be governed by the laws of the State of Florida.
(c) Headings contained in this Plan are for convenience only and shall in
no manner be construed as part of this Plan.
(d) Any reference to the masculine, feminine, or neuter gender shall be a
reference to such other gender as is appropriate.
16. AMENDMENT AND DISCONTINUATION OF THE PLAN. Either the Board or the
Committee may from time to time amend the Plan or any Option; provided,
however, that, except to the extent provided in Section 10, no such
amendment may, without approval by the shareholders of the Company,
(a) materially increase the benefits accruing to participants under the
Plan,
(b) materially increase the number of securities which may be issued under
the Plan, or
(c) materially modify the requirements as to eligibility for participation
in the Plan; and provided further, that, except to the extent provided
in Section 9, no amendment or suspension of the Plan or any Option
issued hereunder shall substantially impair any Option previously
granted to any Optionee without the consent of such Optionee.
17. EFFECTIVE DATE AND TERMINATION DATE. The effective date of the Plan is the
date on which the Board adopts this Plan, and the Plan shall terminate on
the 10th anniversary of the effective date.
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<PAGE>
COMMON STOCK PROXY
EQUINOX SYSTEMS INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of shares of Common Stock of EQUINOX SYSTEMS
INC., a Florida Corporation (the"Company"), hereby appoints William A.
Dambrackas and Mark Kacer, and each or either of them, the proxy or
proxies of the undersigned, with full power of substitution to such proxy
and substitute, to vote all shares of Common Stock of the Company which
the undersigned is entitled to vote at the Annual Meeting of Shareholders
of the Company to be held at The Weston Hills Country Club, 2600 Country
Club Way, Weston, Florida at 10:30 a.m., local time, June 10, 1999, and at
all adjournments thereof with authority to vote said Common Stock on the
matters set forth on the reverse side:
The shares of Common Stock represented by this Proxy will be voted in the
manner directed herein by the undersigned shareholder, who shall be
entitled to one vote for each share of Common Stock held. If no direction
is made, this Proxy will be voted for each item listed on the reverse
side.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
<PAGE>
Please mark, sign, date and mail your
proxy card back as soon as possible
Annual Meeting of Shareholders
EQUINOX SYSTEMS INC.
June 10, 1999
Please Detach and Mail in the Envelope Provided
A [X] Please mark your
votes as in this
examples.
FOR nominees WITHHOLD The Board of Directors
Listed at right, AUTHORITY recommends a vote FOR
except as marked to vote each prosposal
to the contrary for nominees
below)
1. ELECTION NOMINEES: William A. Dambrackas
OF Mark Kacer
DIRECTORS ----------- ------------- James J. Felcyn, Jr.
Robert F. Williamson, Jr.
(Instruction: To withhold authority to vote for any individual nomininee, strike
a line through that nominee's name on the list at right.)
FOR AGAINST ABSTAIN
2. AMENDMENT TO THE 1993 STOCK
OPTION PLAN ------ --------- --------
Amendment to reserve an additional 250,000 shares of Common Stock for
issuance upon exercise of stock options under the 1993 Stock Option Plan.
3. In their discretion, upon such other business as may be properly brought
before the meeting and each adjournment thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED, IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR EACH OF THE MATTERS MENTIONED.
PLEASE MARK, SIGN, DATE AND RETURN USING THE ENCLOSED ENVELOPE. Y0UR PROMPT
ATTENTION WILL BE APPRECIATED.
(Signature)_______________________ (Signature)________________ Date , 1999
Note: PLEASE SIGN YOUR NAME EXACTLY AS IT APPEARS ABOVE EXECUTORS,
ADMINISTRATORS, TRUSTEES, GUARDIANS, ATTORNEYS AND AGENTS SHOULD GIVE THEIR FULL
TITLES AND SUBMIT EVIDENCE OF APPOINTMENT UNLESSS PREVIOUSLY FURNISHED TO THE
COMPANY OR ITS TRANSFER AGENT. ALL JOINT OWNERS SHOULD SIGN.
