<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934 (AMENDMENT NO. __ ).
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11 (c) or 240.14a-12
General Parametrics Corporation
______________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
General Parametrics Corporation
______________________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/x/ $125 per Exchange Act Rule 0-11 (c)(1)(ii), 14a-6(i)(1) or
14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rule 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
________________________________________________________________
(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 offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and date of its filing.
(1) Amount Previously Paid:
_______________________________________________________________
(2) Form, Schedule or Registration Statement No.:
_______________________________________________________________
(3) Filing Party:
_______________________________________________________________
(4) Date Filed:
_______________________________________________________________
<PAGE> 2
GENERAL PARAMETRICS CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 27, 1995
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
General Parametrics Corporation, a Delaware corporation (the "Company"), will
be held on March 27, 1995 at 9:30 a.m., local time, at the Company's
headquarters, 1250 Ninth Street, Berkeley, California for the purposes of
considering and acting upon the following proposals:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To approve the adoption of the Company's 1995 Stock Option
Plan, as adopted by theCompany's Board of Directors and the
reservation of 500,000 shares of common stock for issuance
thereunder.
3. To approve and ratify the selection of Price Waterhouse as the
Company's independent public accountants for the fiscal year
ending October 31, 1995.
4. To transact such other business as may properly come
before the meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on February 2, 1995
are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed Proxy as promptly as possible in the postage
prepaid envelope enclosed for that purpose. If you attend the meeting, you may
vote in person even though you returned a Proxy.
By Order of the Board of Directors
Joan Lope, Corporate Secretary
Date: March 15, 1995
YOUR VOTE IS IMPORTANT
_____________________________________________________________________________
In order to assure your representation at the meeting, you
are requested to complete, sign and date the enclosed proxy as promptly
as possible and return it in the enclosed envelope.
_____________________________________________________________________________
<PAGE> 3
GENERAL PARAMETRICS CORPORATION
PROXY STATEMENT FOR 1995 ANNUAL MEETING OF STOCKHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of General
Parametrics Corporation, a Delaware corporation (the "Company"), for use at
the Annual Meeting of Stockholders (the "Annual Meeting") to be held March 27,
1995 at 9:30 a.m., local time, or at any adjournment thereof, for the purposes
set forth herein and in the accompanying Notice of Annual Meeting of
Stockholders. The Annual Meeting will be held at the Company's headquarters,
1250 Ninth Street, Berkeley, California 94710. The telephone number at that
address is (510) 524-3950.
These Proxy solicitation materials were mailed on or about March 15, 1995 to
all stockholders entitled to notice of and to vote at the Annual Meeting.
RECORD DATE AND SHARES OUTSTANDING
Stockholders of record at the close of business on February 2, 1995 (the
"Record Date") are entitled to vote at the Annual Meeting. At the Record Date,
5,111,920 shares of the Company's Common Stock were issued and outstanding.
REVOCABILITY OF PROXIES
Any Proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company (Attn:
Corporate Secretary) a written notice of revocation or a duly executed
Proxy bearing a later date or by attending the Annual Meeting and voting in
person.
VOTING AND SOLICITATION
Subject to the procedural requirements of the Delaware General Corporation
law relating to cumulative voting, stockholders are entitled to cumulate votes
in the election of directors and give one candidate a number of votes equal
to the number of directors to be elected multiplied by the number of shares
held by such stockholder, or distribute the stockholders' votes on the same
principle among as many candidates as the stockholder may select, provided
that votes cannot be cast for more than the number of directors to be elected.
On all other matters, each share has one vote.
The cost of this solicitation will be borne by the Company. Proxies may
also be solicited by certain of the Company's directors, officers and regular
employees, without additional compensation, personally or by telephone or
telegram.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Proposals of stockholders of the Company which are intended to be presented
by such stockholders at the Company's 1996 Annual Meeting of Stockholders must
be received by the Company no later than November 7, 1995 in order to be
eligible for inclusion in the proxy statement and form of proxy relating to
that meeting.
ELECTION OF DIRECTORS
NOMINEES
A board of five directors is to be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for management's five nominees named below, all of whom are presently directors
of the Company. In the event that any management nominee is unable or declines
to serve as a director at the time of the Annual Meeting, the proxies will be
voted for any nominee who shall be designated by the present Board of Directors
to fill the vacancy. In the event that additional persons are nominated for
election as directors, the proxy holders intend to vote all proxies received
by them in such a manner in accordance with cumulative voting as will assure
the election of as many of the nominees listed below as possible, and, in
<PAGE> 4
such event, the specific nominees to be voted for will be determined by
the proxy holders. It is not expected that any nominee will be unable
or will decline to serve as a director. The term of office of each person
elected as a director will continue until the next annual meeting of
stockholders or until a successor has been elected and qualified.
The names of the nominees, and certain information about them as of the
Record Date, are as set forth below:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Herbert B. Baskin 61 President, Chief Executive Officer 1981
and Chairman of the Board of
Directors of the Company
J. Thomas Bentley 45 Managing Partner, Bentley Hall & 1991
Company, Director of the Company
Luther J. Nussbaum 48 Principal, Nussbaum & Associates 1994
Consulting Company, Director of
the Company
Victor D. Poor 61 Executive Officer, Airnet 1987
Communications Corporation,
Director of the Company
Eugene T. Sanders 44 Vice President, Advanced Product 1983
Development, Assistant Secretary and
Director of the Company
</TABLE>
Except as set forth below, each of the directors has been engaged in the
principal occupation described below during the past five years. There are no
family relationships among any directors or officers of the Company.
Herbert B. Baskin, a co-founder of the Company, has served as Chairman of the
Board and Chief Executive Officer of the Company since its incorporation
in September 1981. Mr. Baskin has served as President of the Company since
March, 1987 except for the period from May 1994 to early September 1994.
From 1976 to 1981, Mr. Baskin served as Vice President of Datapoint
Corporation, a computer manufacturer. From 1969 to 1980, Mr. Baskin was
also a Professor of Electrical Engineering and Computer Science at the
University of California, Berkeley. Prior thereto, Mr. Baskin was employed
by International Business Machines Corporation from 1956 to 1969 in a variety
of research and development positions.
J. Thomas Bentley joined the Company's Board of Directors in March 1991.
Mr. Bentley is a Managing Partner at Bentley Hall & Company, an investment
banking firm, a position he has held since co-founding that company in March
1990. Prior to co-founding Bentley Hall & Company, he initiated and led the
management buyout investment business for Berkeley International Capital
Corporation from March 1987 to January 1990. From November 1983 to February
1987, Mr. Bentley served as the Head of Corporate Finance for Citicorp
Investment Bank.
Luther J. Nussbaum joined the Company's Board of Directors in March 1994.
Mr. Nussbaum is a principal of Nussbaum & Associates, a private strategic
planning and information technology consulting company. Mr. Nussbaum served
from 1989 until 1992 as President and Chief Executive Officer of Evernet
Systems, Inc., a national network systems integration company. From 1986
to 1989, Mr. Nussbaum was the President and Chief Operating Officer of
Ashton-Tate, a microcomputer software company. Mr. Nussbaum entered the
computer industry as a senior vice president of marketing and operations for
Businessland, Inc., a worldwide reseller of personal computer products and
services. Mr. Nussbaum serves on the Boards of the Olson Company and Info
Touch, both of which are private companies.
Victor D. Poor joined the Company's Board of Directors in September 1987.
Mr. Poor is currently an executive officer of Airnet Communications
Corporation, a private cellular company. From November 1984 through
-2-
<PAGE> 5
January 1994, Mr. Poor was Chairman of the Board of Image Data
Corporation. Mr. Poor also served as President and Chief Executive Officer of
Image Data from November 1984 through June 1987. Prior to joining Image Data,
Mr. Poor served in various capacities for Datapoint Corporation from 1969
through 1984, most recently as an Executive Vice President, and served as a
director of Datapoint from 1980 through 1984.
Eugene T. Sanders, a co-founder of the Company, has served as the
Company's Vice President, Advanced Product Development since September 1982,
and as a director of the Company since September 1983. From 1977 to 1982, he
served as a senior development engineer for Datapoint Corporation, where he
developed a comprehensive color business graphics system.
VOTE REQUIRED
The five nominees receiving the highest number of affirmative votes of
the shares present or represented and entitled to be voted for them shall be
elected as directors. Votes withheld from any director are counted for purposes
of determining the presence or absence of a quorum for the transaction of
business, but have no legal effect under Delaware law. While there is no
definitive statutory or case law authority in Delaware as to the proper
treatment of abstentions in the election of directors, the Company believes
that abstentions should be counted for purposes of determining whether a quorum
is present at the Annual Meeting for the transaction of business. In the
absence of controlling precedent to the contrary, the Company intends to treat
abstentions with respect to the election of directors in this manner. In a 1988
Delaware case, Berlin v. Emerald Partners. the Delaware Supreme Court held that
broker non-votes may be counted as present or represented for purposes of
determining the presence or absence of a quorum for the transaction of
business. Accordingly, the Company intends to treat non-votes with respect to
the election of directors in this manner.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file reports of
ownership on Form 3 and changes in ownership on Form 4 or 5 with the Securities
and Exchange Commission (the "SEC") and the NASDAQ. Such officers, directors
and ten percent shareholders are also required by the SEC rules to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons, the Company believes
that, during fiscal 1994 all Section 16 (a) filing requirements applicable to
its officers, directors and ten percent shareholders were complied with.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of four meetings
during fiscal 1994. During fiscal 1994, no director attended fewer than 75% of
the aggregate of all meetings of the Board of Directors and the committees, if
any, upon which such director served.
The Board of Directors has an Audit Committee, an Executive Compensation
Committee and an Investment Committee. There is no nominating committee or any
committee performing the functions of a nominating committee.
The Audit Committee recommends engagement of the Company's independent
accountants, approves services performed by such accountants, and reviews and
evaluates the Company's accounting system and its system of internal controls.
This committee, consisting of Mr. Bentley, Mr. Nussbaum and Mr. Poor held one
meeting during fiscal 1994.
The Executive Compensation Committee reviews and administers the
compensation of the officers of the Company. This committee, consisting of Mr.
Bentley, Mr. Nussbaum and Mr. Poor held four meetings during fiscal 1994. Mr.
Poor was unable to attend one of these meetings.
The Investment Committee reviews and administers the Company's investment
policy, including its marketable securities. This committee, consisting of Mr.
Bentley, Mr. Nussbaum and Mr. Poor held four meetings during fiscal 1994.
Mr. Poor was unable to attend one of these meetings.
-3-
<PAGE> 6
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation
paid by the Company for services rendered during the last fiscal year to the
company by the Chief Executive Officer and the most highly compensated
executive officers whose salary and bonus for the fiscal year exceeded $100,000
(the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
FISCAL 1994 ANNUAL COMPENSATION
<TABLE>
<CAPTION>
ALL OTHER
NAME PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
- ---- ------------------ ---- ------ ----- ------------
<S> <C> <C> <C> <C> <C>
Herbert B. Baskin Chairman of the Board, President 1994 $ 60,000 - -
and Chief Executive Officer 1993 $100,000 - -
1992 $141,000 $ 7,000 -
P. Kevin Nagle(1) President and Chief Executive
Officer 1994 $ 42,000 - -
James C. Cogan Senior Vice President, Operations 1994 $136,000 - $1,100 (2)
1993 $139,000 - -
1992 $141,000 $ 7,000 -
Anthony Spica, Jr. Vice President, Domestic Sales 1994 $132,000 - $ 500 (2)
1993 $131,000 - -
1992 $151,000 $27,000 -
</TABLE>
(1) Mr. Nagle served as President and Chief Executive Officer from May 16, 1994
to September 1, 1994.
(2) Value of life insurance premium paid on behalf of named officer.
The following table sets forth the stock options granted during fiscal 1994
for the above named individuals.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -----------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED FISCAL YEAR ($/SHARE) DATE
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Herbert B. Baskin 0 n/a n/a n/a
P. Kevin Nagle (1) 75,000 39.5% $2.38 11/30/94
James C. Cogan 0 n/a n/a n/a
Anthony Spica, Jr. 0 n/a n/a n/a
</TABLE>
(1) No options were exercised by Mr. Nagle prior to the expiration of the
option. Mr. Nagle's option would have vested at 25% per year and was granted
pursuant to the terms and conditions of the General Parametrics Corporation
1987 Stock Option Plan. Such option would have had a term of six years.
In accordance with the terms of the plan, the option expired ninety
days after the end of employment.
The following table sets forth the employee stock options exercised during
fiscal 1994 by the above named individuals and the value of all unexercised
stock options held by the above named individuals at October 31, 1994.
-4-
<PAGE> 7
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END OPTION VALUE TABLE
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR END AT FISCAL YEAR END
------------------- --------------------
SHARE ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($)(1) UNEXERCISABLE(#) UNEXERCISABLE ($)(2)
- ---- --------------- --------------- ------------------- --------------------
<S> <C> <C> <C> <C>
Herbert B. Baskin (3) 0 $0 0 $0
P. Kevin Nagle 0 $0 0 $0
James C. Cogan 0 $0 50,000/10,000 $0
Anthony Spica, Jr. 5,000 $2,065 65,001/25,000 $0
</TABLE>
(1) Value Realized is determined by multiplying the number of shares by the
difference between the closing price on the trade date and the exercise
price.
(2) All options for the named individuals were not in-the-money at fiscal
year-end.
(3) Mr. Baskin holds no employee stock options.
DIRECTORS' FEES
Mr. Bentley and Mr. Nussbaum are paid a fee of $1,000 for each regular
Board of Directors meeting attended, plus reimbursement of expenses. Mr. Poor
is paid a fee of $1,500 for each regular Board of Directors meeting. Mr.
Baskin was paid a fee of $1,000 for the one meeting that he attended while not
an officer of the Company. The remaining directors, including Mr. Baskin
receive no compensation for attending meetings.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of February 2, 1995 (i) by each
person who is known by the Company to own more than 5% of the Company's
Common Stock, (ii) by each of the Company's directors and nominees for
director, (iii) by all current officers, directors and nominees as a
group and (iv) by each of the Named Executive Officers.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED (1)
NAME AND ADDRESS OF NUMBER OF PERCENT
BENEFICIAL OWNER SHARES SHARES
---------------- ---------- ------
<S> <C> <C>
Herbert B. Baskin (2) 1,400,458 27.4 %
J. Thomas Bentley (3) 21,250 *
Luther J. Nussbaum (4) 6,250 *
Victor D. Poor (5) 23,250 *
Eugene T. Sanders (6) 374,891 7.3 %
Bary W. Pollack (7) 263,838 5.1 %
James C. Cogan (8) 50,250 *
Anthony Spica, Jr. (9) 66,253 1.3%
P. Kevin Nagle (10) 0 *
Dimension Fund Advisors Inc.(11) 273,287 5.3 %
All current officers, directors, and
as a group ( 10 persons) (12) 2,227,673 41.6 %
* Less than 1%
</TABLE>
(1) The persons named in the table have sole voting and investment power
with respect to all shares of Common Stock shown as beneficially owned by
them, subject to community property laws where applicable and the
information contained in the footnotes to this table.
(2) Mr. Baskin's mailing address is care of General Parametrics Corporation,
1250 Ninth Street, Berkeley, CA 94710.
-5-
<PAGE> 8
(3) Includes 21,250 shares subject to options exercisable by Mr. Bentley
within 60 days of February 2, 1995.
(4) Includes 6,250 shares subject to options exercisable by Mr. Nussbaum
within 60 days of February 2, 1995.
(5) Includes 21,250 shares subject to options exercisable by Mr. Poor within
60 days of February 2, 1995.
(6) Includes 35,000 shares subject to options exercisable by Mr. Sanders
within 60 days of February 2, 1995. Mr. Sanders' mailing address is
care of General Parametrics Corporation, 1250 Ninth Street, Berkeley, CA
94710.
(7) Includes 33,500 shares subject to options exercisable by Mr. Pollack
within 60 days of February 2, 1995. Mr. Pollack's mailing address is
care of General Parametrics Corporation, 1250 Ninth Street, Berkeley, CA
94710.
(8) Includes 50,000 shares subject to options exercisable by Mr. Cogan
within 60 days of February 2, 1995.
(9) Includes 65,001 shares subject to options exercisable by Mr. Spica within
60 days of February 2, 1995.
(10) Mr. Nagle served as President and Chief Executive Officer from May 16,
1994 to September 1, 1994.
(11) Dimension Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 273,287 shares of the
Company's stock as of December 31, 1994, all of which shares are held in
portfolios of DFA Investment Dimensions Group Inc., a registered open-end
investment company, or in a series of the DFA Investment Trust Company, a
Delaware business trust, or the DFA Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund Advisors
Inc. serves as investment manager. Dimensional disclaims beneficial
ownership of all such shares. Dimension Fund Advisors Inc.'s address is
1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401.
(12) Includes 249,751 shares subject to options held by 10 persons and
exercisable within 60 days of February 2, 1995.
APPROVAL OF ADOPTION OF 1995 STOCK OPTION PLAN
GENERAL
At the Annual Meeting, the stockholders are being asked to approve the
adoption of the Company's 1995 Stock Option (the "1995 Plan"), as adopted by the
Board of Directors and the reservation of 500,000 shares of Common Stock for
issuance thereunder. The Board has also terminated the Company's 1986 Stock
Option Plan (the "1986 Plan") with respect to future option grants. The 1986
Plan will remain in effect as to currently outstanding options granted under
such plan. All grants of options made under the 1995 Plan will be subject to
stockholder approval. As of February 2, 1995, the closing price of the
Company's Common Stock was $1.75 per share.
The 1995 Plan will authorize the Board of Directors to grant incentive and
nonstatutory stock options. The provisions of these options are outlined
below.
PURPOSES
The purposes of the 1995 Plan are to attract and retain personnel for
positions of substantial responsibility, to provide additional incentive to
the employees and consultants of the Company and its subsidiaries and to
promote the success of the Company's business.
ADMINISTRATION
With respect to grants of options to employees who are also officers or
directors of the Company, the 1995 Plan shall be administered by (i) the Board
of Directors of the Company if the Board may administer the 1995 Plan in
compliance with Rule 16b-3 ("Rule 16b-3") promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act") with respect to a plan intended to
qualify under Rule 16b-3 as a discretionary plan or (ii) a committee
designated by the Board of Directors to administer the 1995 Plan, which
committee shall be constituted in such a manner as to permit the 1995 Plan
to comply with Rule 16b-3 with respect to a plan intended to qualify thereunder
as a discretionary plan. With respect to the grants of options to employees
or consultants who are neither officers or directors
-6-
<PAGE> 9
of the Company, the 1995 Plan shall be administered by (i) the Board of
Directors or (ii) a committee designated by the Board, which committee shall
be constituted in such a manner as to satisfy the legal requirements relating
to the administration of incentive stock option plans, if any, of applicable
laws and of the Internal Revenue Code of 1986, as amended (the "Code"). If
permitted by Rule 16b-3, the 1995 Plan may be administered by different bodies
with respect to directors, non-director officers and employees who
are neither officers nor directors and consultants who are not directors.
Members of the Board of Directors will receive no additional compensation for
their services in connection with the administration of the 1995 Plan.
ELIGIBILITY
The 1995 Plan provides that options may be granted to employees (including
officers and directors employed by the Company) and to consultants of the
Company and any future subsidiaries. As of February 2, 1995, there were 49
persons eligible to be granted options under the 1995 Plan. The Board of
Directors or its committee (collectively referred to hereinafter as
the "Board") selects the participants and the number of shares to be subject to
each option taking into account the duties and responsibilities of the
employee or consultant, as the case may be, the value of the participant's
services, his or her present and potential contribution to the success of the
Company, the anticipated number of years of future service of the
employee and other relevant factors. Incentive stock options may be
granted only to employees, including officers, of the Company and its
current and future subsidiaries. Nonstatutory stock options may be
granted to employees or consultants of the Company.
TERMS OF STOCK OPTIONS
The terms of options granted under the 1995 Plan are determined by the
Board. Each option is evidenced by a written stock option agreement between
the Company and the participant and is subject to the following additional
terms and conditions:
Exercise of the Option. The Board determines on the date of grant
the rate at which shares subject to an option vest and the terms upon
which options are exercisable. The form of option agreement currently used
by the Company generally provides that options vest as to 25% of the
shares on each of the first, second, third and fourth anniversaries of the
option grant date. The Board may determine at any time to change the
vesting rate or terms of exercise of options granted in the future and may
determine at any time to change the form or forms of option agreement used
as to future grants of options.
An option is exercised by giving notice of exercise to the Company,
specifying the number of full shares of Common Stock to be purchased and
tendering payment to the Company of the purchase price. The means of
payment for shares issued upon exercise of an option is specified in each
option agreement. The 1995 Plan provides that such means may be by one or
more of the following: cash, check, delivery of the participant's
promissory note, shares of the Company's Common Stock, delivery of
documentation to effect simultaneous exercise and sale of shares
sufficient to pay the exercise price, a reduction in the amount of Company
liability to the participant or any combination of such methods of
payment, or such other consideration or method of payment as is determined
by the Board and is permitted under the Delaware General Corporation Law.
Exercise Price. The exercise price of options granted under the
1995 Plan is determined by the Board. In the case of an incentive stock
option granted to an employee, the option price may not be less than 100%
of the fair market value of the Common Stock on the date the option is
granted, with the exception that in the case of an option granted to a
stockholder who, immediately prior to such grant, owns stock representing
more than 10% of the voting power or value of all classes of stock of the
Company or any parent or subsidiary of the Company, the exercise price
must not be less than 110% of such fair market value on the date of grant.
In the case of a nonstatutory option granted to any other eligible person,
the per share exercise price shall be determined by the Board in its
discretion.
Termination of Employment or Consulting Relationship. If the
participant's employment or consulting relationship with the Company or
its subsidiaries is terminated for any reason other than death or
disability, the participant may, but only within such period of time after
such termination as is determined by the Board, not exceeding three months
in the case of an incentive stock option, exercise his option to the
extent the option was exercisable at the date of termination. To the
extent the participant was not entitled to exercise the option at the date
of termination, or if he does not exercise the option within the time
specified above, the option terminates.
-7-
<PAGE> 10
Disability. If a participant is unable to continue his employment
or consulting relationship with the Company or its subsidiaries as a
result of his total and permanent disability, the participant may, but
only within twelve months from the date of termination, exercise his
option to the extent the option was exercisable at the date of
termination. To the extent the participant was not entitled to exercise
the option at the date of termination, or if he does not exercise the
option within the time specified above, the option terminates.
Death. If a participant should die while employed by or
consulting for the Company or its subsidiaries, the option may be
exercised at any time within twelve months of the date of death, but only
to the extent the option was exercisable at the date of the employee or
consultant's death. Any such exercise of an option following the death of
an employee or consultant of the Company may only be exercised by such
participant's estate or by a person who acquired the right to exercise the
option by bequest or inheritance.
Termination of Options. The term of each option will be fixed by
the Board, provided, however, that all incentive stock options granted
under the 1995 Plan expire no later than ten years after the date of
grant. However, options granted to a participant who, immediately before
the grant of such option, owns stock representing more than 10% of the
voting power of all classes of stock of the Company or any parent or
subsidiary of the Company, shall have a five year term unless otherwise
provided in the option agreement.
Nontransferability of Options. An option is not transferable by
the participant other than by will or the laws of descent and distribution
or pursuant to a qualified domestic relations order, and is exercisable
during the participant's lifetime only by the participant or a permitted
transferee. In the event of the participant's death, options may be
exercised by a person who acquires the right to exercise the option by
bequest or inheritance.
Section 162(m) Limitation. No employee may be granted, in any
fiscal year of the Company, options to purchase more than 300,000 shares,
which limitation is intended to qualify options granted under the 1995
Plan as performance-based compensation for purposes of the cap on tax
deduction of executive compensation under Section 162(m) of the Internal
Revenue Code of 1986, as amended.
CAPITAL CHANGES
In the event any change, such as a stock split or payment of a stock dividend,
is made in the Company's capitalization which results in an increase or
decrease in the number of outstanding shares of Common Stock without receipt of
consideration by the Company (provided that issuance of Common Stock upon
conversion of any convertible securities shall not be deemed to have
been effected without receipt of consideration), an appropriate proportionate
adjustment shall be made in the exercise price and in the number of shares
subject to options outstanding under the 1995 Plan, as well as in the
number of shares reserved for issuance under the 1995 Plan.
In the event of the proposed dissolution or liquidation of the Company, each
outstanding option shall terminate immediately prior to the consummation of
such proposed action. In the event of the merger of the Company with or into
another corporation, or of a sale of substantially all the Company's assets,
each option under the 1995 Plan may be assumed or an equivalent option may be
substituted by such successor corporation or by a parent or subsidiary of such
successor corporation. The Board may, in lieu of such assumption or
substitution, provide for the participant to have the right to exercise
the option as to all of the optioned stock, including shares as to which the
option would not otherwise be exercisable. If the Board makes an option fully
exercisable in lieu of an assumption or substitution in the event of a
merger, the Board shall notify the participant that the option shall be fully
exercisable for a period of 15 days from the date of such notice, and
the option will terminate upon the expiration of such period.
AMENDMENT AND TERMINATION
The Board may amend, alter, suspend or discontinue the 1995 Plan at any time,
but such amendment, alteration, suspension or discontinuation shall not
adversely affect any stock options then outstanding under the 1995 Plan without
the participant's consent. To the extent necessary and desirable to comply with
Rule 16b-3 or Section 422 of the Code (or any other applicable law or
regulation), the Company will obtain stockholder approval of any amendment to
the 1995 Plan in such a manner and to such a degree as required. Subject to
the specific terms of the 1995 Plan, the Board may accelerate any option or
waive any conditions or restrictions pertaining to such option or shares of
stock relating thereto at any time. The Board may also substitute new
stock options for previously granted stock options, including previously
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<PAGE> 11
granted stock options having higher option prices and may reduce the exercise
price of any option to the then current fair market value if the fair market
value of the Common Stock covered by such option shall have declined since the
date the option was granted. The 1995 Plan shall continue in effect for a term
of ten years unless sooner terminated as described above.
CERTAIN FEDERAL INCOME TAX INFORMATION UNDER CURRENT LAW
FEDERAL INCOME TAX ASPECTS OF THE PLAN
The following is a brief summary of the Federal income tax consequences of
transactions under the Plan based on Federal securities and income tax laws in
effect on January 1, 1995. This summary is not intended to be exhaustive
and does not discuss the tax consequences of a participant's death or
provisions of the income tax laws of any municipality, state or foreign
country in which an optionee may reside.
NONSTATUTORY OPTIONS
General Rules: An optionee will not recognize any taxable income at the time he
is granted a nonstatutory option. Upon exercise of the option, the optionee
will generally recognize compensation income for federal tax purposes measured
by the excess, if any, of the then fair market value of the shares over the
exercise price. In certain circumstances, where the shares are subject to
a substantial risk of forfeiture when acquired or where the optionee is an
officer, director or 10% shareholder of the Company, the date of taxation may be
deferred unless the optionee files an election with the Internal Revenue
Service under Section 83(b) of the Code.
Withholding: Any compensation income recognized by an optionee who is also an
employee will be treated as wages and will be subject to tax withholding by the
Company out of the current compensation paid to the optionee. If such current
compensation is insufficient to pay the withholding tax, the optionee will be
required to make direct payment to the Company for the tax liability.
Gain or Loss on Sale: Upon a resale of such shares by the optionee, any
difference between the sales price and the exercise price, to the extent not
recognized as ordinary income as described above, will be treated as capital
gain or loss.
The Company will be entitled to a tax deduction in the amount and at the time
that the optionee recognizes ordinary income with respect to shares acquired
upon exercise of a nonstatutory option.
INCENTIVE STOCK OPTIONS
General Rules: If an option granted under the Plan is treated as an incentive
stock option under the Code, the optionee will recognize no income upon grant
of the option, and will recognize no income upon exercise of the option unless
the alternative minimum tax rules apply. The Company will not be allowed a
deduction for federal tax purposes in connection with the exercise of an
incentive stock option.
Holding Periods: Upon the sale of the shares at least two years after the grant
of the option and one year after exercise of the option (the "statutory holding
periods"), any gain will be taxed to the optionee as long-term capital gain. If
the statutory holding periods are not satisfied (i.e., the optionee makes a
"disqualifying disposition"), the optionee will recognize compensation income
equal to the difference between the exercise price and the lower of (i)
the fair market value of the stock at the date of the option exercise or (ii)
the sale price of the stock, and the Company will be entitled to a
deduction in the same amount. Any additional gain or loss recognized on a
disqualifying disposition of the shares will be characterized as capital
gain or loss. A different rule for measuring ordinary income may apply if
shares are purchased by an optionee who is subject to Section 16(b) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the optionee subsequently disposes of such shares prior to the expiration of
statutory holding periods. In the event of a disqualifying disposition,
the Company will be entitled to a deduction in the same amount as the ordinary
income recognized by the optionee. Any gain recognized in excess of the amount
treated as ordinary income will be characterized as capital gain.
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<PAGE> 12
REQUIRED VOTE
The approval of the adoption of the 1995 Plan requires the affirmative
vote of the holders of a majority of the shares of the Company's Common Stock
present or represented and entitled to vote at the Annual Meeting (the "Voting
Shares"). Such affirmative votes must also constitute at least a majority of
the required quorum. The required quorum is a majority of the shares
outstanding on the Record Date. Votes against the proposal are counted for
purposes of determining the presence or absence of a quorum and are also
counted as having "voted" with respect to the proposal for purposes of
determining whether the requisite majority of the Voting Shares has been
obtained, but are treated as votes against the proposal. While there is no
definitive statutory or case law in California as to the proper treatment of
abstentions or broker non-votes in the counting of the votes with respect to a
proposal such as approval of the 1995 Plan, based on Delaware case law
addressing their treatment, the Company believes that both abstentions and
broker non-votes should be counted for purposes of determining whether a quorum
is present at the Annual Meeting. The Company further believes that both
abstentions and broker non-votes should be counted for purposes of determining
whether the requisite majority of the Voting Shares has been obtained. In the
absence of controlling precedent to the contrary, the Company intends to treat
abstentions and broker non-votes on this proposal in this manner.
RECOMMENDATION
MANAGEMENT RECOMMENDS A VOTE FOR THE APPROVAL OF THE ADOPTION OF THE
1995 PLAN.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Price Waterhouse, independent
accountants, to audit the financial statements of the Company for the fiscal
year ending October 31, 1995. Price Waterhouse has audited the financial
statements of the Company beginning with the fiscal year ended October 31,
1983. The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock represented and voting at the meeting will be required
to approve and ratify the Board's selection of Price Waterhouse. THE BOARD OF
DIRECTORS RECOMMENDS VOTING "FOR" APPROVAL AND RATIFICATION OF SUCH SELECTION.
A representative of Price Waterhouse is expected to be available at the
Annual Meeting to make a statement if such representative desires to do so and
to respond to appropriate questions.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting.
If any other matters properly come before the meeting, it is the intention
of the persons named in the enclosed proxy to vote the shares they
represent as the Board of Directors may recommend.
It is important that your shares be represented at the meeting, regardless
of the number of shares which you hold. You are, therefore, urged to
execute and return the accompanying proxy in the envelope which has been
enclosed, at your earliest convenience.
THE BOARD OF DIRECTORS
Dated: March 15, 1995
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<PAGE> 13
GENERAL PARAMETRICS CORPORATION
1995 STOCK PLAN
1. Purposes of the Plan. The purposes of this Stock Plan are:
- - to attract and retain the best available personnel for positions of
substantial responsibility,
- - to provide additional incentive to Employees and Consultants, and
- - to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the
time of grant.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the
Plan.
(b) "Applicable Laws" means the legal requirements relating to
the administration of stock option plans under state corporate and
securities laws and the Code.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a Committee appointed by the Board in
accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means General Parametrics Corporation, a Delaware
corporation.
(h) "Consultant" means any person, including an advisor, engaged
by the Company or a Parent or Subsidiary to render services and who is
compensated for such services. The term "Consultant" shall not include
Directors who are paid only a director's fee by the Company or who are
not compensated by the Company for their services as Directors.
(i) "Continuous Status as an Employee or Consultant" means that
the employment or consulting relationship with the Company, any Parent,
or Subsidiary, is not interrupted or terminated. Continuous Status as an
Employee or Consultant shall not be considered interrupted in the case
of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent,
any Subsidiary, or any successor. A leave of absence approved by the
Company shall include sick leave, military leave, or any other personal
leave approved by an authorized representative of the Company. For
purposes of Incentive Stock Options, no such leave may exceed 90 days,
unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of
absence approved by the Company is not so guaranteed, on the 91st day
of such leave any Incentive Stock Option held by the Optionee shall
cease to be treated as an Incentive Stock Option and shall be treated
for tax purposes as a Nonstatutory Stock Option.
(j) "Director" means a member of the Board.
(k) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(l) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a director's fee by the
Company shall be sufficient to constitute "employment" by the Company.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
<PAGE> 14
(n) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without
limitation the Nasdaq National Market of the National
Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") System, the Fair Market Value of a Share of Common
Stock shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such system
or exchange (or the exchange with the greatest volume of trading
in Common Stock) on the last market trading day prior to the day
of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but
not on the Nasdaq National Market thereof) or is regularly
quoted by a recognized securities dealer but selling prices are
not reported, the Fair Market Value of a Share of Common Stock
shall be the mean between the high bid and low asked prices for
the Common Stock on the last market trading day prior to the day
of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith
by the Administrator.
(o) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of
the Code and the regulations promulgated thereunder.
(p) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(q) "Notice of Grant" means a written notice evidencing certain
terms and conditions of an individual Option. The Notice of
Grant is part of the Option Agreement.
(r) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(s) "Option" means a stock option granted pursuant to the Plan.
(t) "Option Agreement" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the
terms and conditions of the Plan.
(u) "Option Exchange Program" means a program whereby outstanding
options are surrendered in exchange for options with a lower
exercise price.
(v) "Optioned Stock" means the Common Stock subject to an Option.
(w) "Optionee" means an Employee or Consultant who holds an
outstanding Option.
(x) "Parent" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(y) "Plan" means this 1995 Stock Option Plan.
(z) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being
exercised with respect to the Plan.
(aa) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.
(bb) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
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<PAGE> 15
3. Stock Subject to the Plan. Subject to the provisions of Section
12 of the Plan, the maximum aggregate number of Shares which may be
optioned and sold under the Plan is 500,000 Shares. The Shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been
issued under the Plan, whether upon exercise of an Option, shall
not be returned to the Plan and shall not become available for future
distribution under the Plan, except that if Shares of Restricted Stock
are repurchased by the Company at their original purchase price, and
the original purchaser of such Shares did not receive any benefits of
ownership of such Shares, such Shares shall become available for future
grant under the Plan. For purposes of the preceding sentence, voting
rights shall not be considered a benefit of Share ownership.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. If permitted by
Rule 16b-3, the Plan may be administered by different bodies
with respect to Directors, Officers who are not Directors, and
Employees who are neither Directors nor Officers.
(ii) Administration With Respect to Directors and
Officers Subject to Section 16(b). With respect to Option
grants made to Employees who are also Officers or Directors
subject to Section 16(b) of the Exchange Act, the Plan shall be
administered by (A) the Board, if the Board may administer the
Plan in compliance with the rules governing a plan intended to
qualify as a discretionary plan under Rule 16b-3, or (B) a
committee designated by the Board to administer the Plan, which
committee shall be constituted to comply with the rules
governing a plan intended to qualify as a discretionary plan
under Rule 16b-3. Once appointed, such Committee shall continue
to serve in its designated capacity until otherwise directed by
the Board. From time to time the Board may increase the size of
the Committee and appoint additional members, remove members
(with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the
Committee and thereafter directly administer the Plan, all to
the extent permitted by the rules governing a plan intended to
qualify as a discretionary plan under Rule 16b-3.
(iii) Administration With Respect to Other Persons. With
respect to Option grants made to Employees or Consultants who
are neither Directors nor Officers of the Company, the Plan
shall be administered by (A) the Board or (B) a committee
designated by the Board, which committee shall be constituted
to satisfy Applicable Laws. Once appointed, such Committee
shall serve in its designated capacity until otherwise directed
by the Board. The Board may increase the size of the Committee
and appoint additional members, remove members (with or without
cause) and substitute new members, fill vacancies (however
caused), and remove all members of the Committee and thereafter
directly administer the Plan, all to the extent permitted by
Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions
of the Plan, and in the case of a Committee, subject to
the specific duties delegated by the Board to such Committee,
the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock,
in accordance with Section 2(n) of the Plan;
(ii) to select the Consultants and Employees to whom Options
may be granted hereunder;
(iii) to determine whether and to what extent Options are
granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;
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<PAGE> 16
(v) to approve forms of agreement for use under the
Plan;
(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted
hereunder. Such terms and conditions include, but are
not limited to, the exercise price, the time or times
when Options may be exercised (which may be based on
performance criteria), any vesting acceleration or
waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or the shares of Common
Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion,
shall determine;
(vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of
the Common Stock covered by such Option shall have
declined since the date the Option was granted;
(viii) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations
relating to sub-plans established for the purpose of
qualifying for preferred tax treatment under foreign
tax laws;
(x) to modify or amend each Option (subject to Section 14(c)
of the Plan), including the discretionary authority to
extend the post-termination exercisability period of
Options longer than is otherwise provided for in the
Plan;
(xi) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of
an Option previously granted by the Administrator;
(xii) to institute an Option Exchange Program;
(xiii) to determine the terms and restrictions applicable to
Options; and
(xiv) administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and
binding on all Optionees and any other holders of Options.
5. Eligibility. Nonstatutory Stock Options may be granted to Employees
and Consultants. Incentive Stock Options may be granted only to Employees. If
otherwise eligible, an Employee or Consultant who has been granted an Option
may be granted additional Options.
6. Limitations.
(a) Each Option shall be designated in the Notice of Grant as either
an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate
Fair Market Value:
(i) of Shares subject to an Optionee's Incentive Stock
Options granted by the Company, any Parent or
Subsidiary, which
(ii) become exercisable for the first time during any
calendar year (under all plans of the Company or any
Parent or Subsidiary)
exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 6(a), Incentive Stock Options shall
be taken into account in the order in which they were granted, and the Fair
Market Value of the Shares shall be determined as of the time of grant.
(b) Neither the Plan nor any Option shall confer upon an Optionee
any right with respect to continuing the Optionee's employment or
consulting relationship with the Company, nor shall they interfere in
any way with the
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<PAGE> 17
Optionee's right or the Company's right to terminate such employment
or consulting relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options
to Employees:
(i) No Employee shall be granted, in any fiscal year of the
Company, Options to purchase more than 300,000 Shares.
(ii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's
capitalization as described in Section 12.
(iii) If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with a
transaction described in Section 12), the canceled Option will be
counted against the limit set forth in Section 6(c)(i). For this
purpose, if the exercise price of an Option is reduced, the transaction
will be treated as a cancellation of the Option and the grant of a new
Option.
7. Term of Plan. Subject to Section 18 of the Plan, the Plan shall become
effective upon the earlier to occur of its adoption by the Board or its
approval by the shareholders of the Company as described in Section 18
of the Plan. It shall continue in effect for a term of ten (10) years
unless terminated earlier under Section 14 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Notice
of Grant; provided, however, that in the case of an Incentive Stock
Option, the term shall be ten (10) years from the date of grant or such
shorter term as may be provided in the Notice of Grant. Moreover, in
the case of an Incentive Stock Option granted to an Optionee who, at
the time the Incentive Stock Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock
of the Company or any Parent or Subsidiary, the term of the Incentive
Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Notice of Grant.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be determined by
the Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes
of stock of the Company or any Parent or Subsidiary, the per
Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the grant.
(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share
exercise price shall be no less than 100% of the Fair Market
Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be determined by the Administrator.
(b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option
may be exercised and shall determine any conditions which must be
satisfied before the Option may be exercised. In so doing, the
Administrator may specify that an Option may not be exercised until the
completion of a service period.
(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the
Administrator shall determine the acceptable form of consideration at
the time of grant. Such consideration may consist entirely of:
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<PAGE> 18
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been
owned by the Optionee for more than six months on
the date of surrender, and (B) have a Fair Market
Value on the date of surrender equal to the
aggregate exercise price of the Shares as to
which said Option shall be exercised;
(v) delivery of a properly executed exercise notice
together with such other documentation as the
Administrator and the broker, if applicable,
shall require to effect an exercise of the
Option and delivery to the Company of the sale
or loan proceeds required to pay the exercise
price;
(vi) a reduction in the amount of any Company
liability to the Optionee, including any
liability attributable to the Optionee's
participation in any Company-sponsored deferred
compensation program or arrangement;
(vii) any combination of the foregoing methods of
payment; or
(viii) such other consideration and method of payment
for the issuance of Shares to the extent
permitted by Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and
at such times and under such conditions as determined by the Administrator and
set forth in the Option Agreement.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives:
(i) written notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the stock
certificate evidencing such Shares is issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 12 of the
Plan.
Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Employment or Consulting Relationship. Upon
termination of an Optionee's Continuous Status as an Employee or Consultant,
other than upon the Optionee's death or Disability, the Optionee may exercise
his or her Option, but only within such period of time as is specified in the
Notice of Grant, and only to the extent that the Optionee was entitled to
exercise it at the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant). In
the absence of a specified time in the Notice of Grant, the Option shall
remain exercisable for 90 days following the Optionee's termination of
Continuous Status as an Employee or Consultant. In the case of an Incentive
Stock Option, such period of time shall not exceed ninety (90) days from the
date of termination. If, at the date of termination, the Optionee is not
entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her
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<PAGE> 19
Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the
Plan.
(c) Disability of Optionee. In the event that an Optionee's
Continuous Status as an Employee or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option at any time
within twelve (12) months from the date of such termination, but only to the
extent that the Optionee was entitled to exercise it at the date of such
termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). If, at the date of termination,
the Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered
by such Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an
Optionee, the Option may be exercised at any time within twelve (12) months
following the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant), by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent that the Optionee was entitled to
exercise the Option at the date of death. If, at the time of death, the
Optionee was not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall immediately
revert to the Plan. If, after death, the Optionee's estate or a person
who acquired the right to exercise the Option by bequest or inheritance does
not exercise the Option within the time specified herein, the Option
shall terminate, and the Shares covered by such Option shall revert to the
Plan.
(e) Rule 16b-3. Options granted to individuals subject to
Section 16 of the Exchange Act ("Insiders") must comply with the applicable
provisions of Rule 16b-3 and shall contain such additional conditions or
restrictions as may be required thereunder to qualify for the maximum
exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
11. Non-Transferability of Options. An Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
12. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
Sale.
(a) Changes in Capitalization. Subject to any required action
by the shareholders of the Company, the number of shares of Common Stock
covered by each outstanding Option, and the number of shares of Common Stock
which have been authorized for issuance under the Plan but as to which no
Options have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Board may, in the exercise of its
sole discretion in such instances, declare that any Option shall terminate as
of a date fixed by the Board and give each Optionee the right to exercise his
or her Option as to all or any part of the Optioned Stock, including Shares as
to which the Option would not otherwise be exercisable.
(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option may be assumed or an
equivalent option may be substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. The Administrator may, in lieu of
such assumption or substitution, provide for the Optionee to have the right to
exercise the Option as to all or a
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<PAGE> 20
portion of the Optioned Stock, including Shares as to which it would not
otherwise be exercisable. If the Administrator makes an Option exercisable
in lieu of assumption or substitution in the event of a merger or sale of
assets, the Administrator shall notify the Optionee that the Option shall be
fully exercisable for a period of fifteen (15) days from the date of such
notice, and the Option will terminate upon the expiration of such period. For
the purposes of this paragraph, the Option shall be considered assumed if,
following the merger or sale of assets, the option confers the right to
purchase, for each Share of Optioned Stock subject to the Option immediately
prior to the merger or sale of assets, the consideration (whether stock, cash,
or other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger
or sale of assets was not solely common stock of the successor corporation or
its Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of
the Option, for each Share of Optioned Stock subject to the Option, to be
solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common
Stock in the merger or sale of assets.
13. Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) Shareholder Approval. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to
comply with Rule 16b-3 or with Section 422 of the Code (or any successor rule
or statute or other applicable law, rule or regulation, including the
requirements of any exchange or quotation system on which the Common Stock is
listed or quoted). Such shareholder approval, if required, shall be obtained
in such a manner and to such a degree as is required by the applicable law,
rule or regulation.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
15. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, Applicable
Laws, and the requirements of any stock exchange or quotation system upon
which the Shares may then be listed or quoted, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of
an Option, the Company may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to sell
or distribute such Shares if, in the opinion of counsel for the Company, such
a representation is required.
16. Liability of Company.
(a) Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
(b) Grants Exceeding Allotted Shares. If the Optioned Stock covered
by an Option exceeds, as of the date of grant, the number of Shares which may
be issued under the Plan without additional shareholder approval, such Option
shall
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<PAGE> 21
be void with respect to such excess Optioned Stock, unless shareholder
approval of an amendment sufficiently increasing the number of Shares subject
to the Plan is timely obtained in accordance with Section 14(b) of the Plan.
17. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
18. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before
or after the date the Plan is adopted. Such shareholder approval shall be
obtained in the manner and to the degree required under applicable federal
and state law.
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<PAGE> 22
GENERAL PARAMETRICS CORPORATION
1995 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the General
Parametrics Corporation 1995 Stock Option Plan shall have the same defined
meanings in this Option Agreement.
19. NOTICE OF STOCK OPTION GRANT
[Optionee's Name and Address]
You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:
Grant Number _________________________
Date of Grant _________________________
Vesting Commencement Date _________________________
Exercise Price per Share $________________________
Total Number of Shares Granted _________________________
Total Exercise Price $________________________
Type of Option: ___ Incentive Stock Option
___ Nonstatutory Stock Option
Term/Expiration Date: _________________________
Vesting Schedule:
This Option may be exercised, in whole or in part, in accordance with
the following schedule:
25% percent of the Shares subject to the Option shall vest on the first,
second, third and fourth anniversary of the Vesting Commencement Date.
Termination Period:
This Option may be exercised for three (3) months after termination of
the Optionee's employment or consulting relationship with the Company.
Upon the death or Disability of the Optionee, this Option may be
exercised for such longer period as provided in the Plan. In the event
of the Optionee's change in status from Employee to Consultant or
Consultant to Employee, this Option Agreement shall remain in
effect.
In no event shall this Option be exercised later than the Term/Expiration
Date as provided above.
<PAGE> 23
20. AGREEMENT
(a) Grant of Option. The Plan Administrator of the Company hereby
grants to the Optionee named in the Notice of Grant attached as Part I
of this Agreement (the "Optionee"), an option (the "Option") to purchase
the number of Shares, as set forth in the Notice of Grant, at the
exercise price per share set forth in the Notice of Grant (the "Exercise
Price"), subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 14(c) of the Plan,
in the event of a conflict between the terms and conditions of the Plan
and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock
Option ("ISO"), this Option is intended to qualify as an Incentive
Stock Option under Section 422 of the Code. However, if this Option
is intended to be an Incentive Stock Option, to the extent that it
exceeds the $100,000 rule of Code Section 422(d) it shall be treated
as a Nonstatutory Stock Option ("NSO").
(b) Exercise of Option.
(a) Right to Exercise. This Option is exercisable during
its term in accordance with the Vesting Schedule set out in the
Notice of Grant and the applicable provisions of the Plan and this
Option Agreement. In the event of Optionee's death, Disability or
other termination of Optionee's employment or consulting relationship,
the exercisability of the Option is governed by the applicable
provisions of the Plan and this Option Agreement.
(ii) Method of Exercise. This Option is exercisable by delivery
of an exercise notice, in the form attached as Exhibit A (the "Exercise
Notice"), which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised (the
"Exercised Shares"), and such other representations and agreements as may
be required by the Company pursuant to the provisions of the Plan. The
Exercise Notice shall be signed by the Optionee and shall be delivered in
person or by certified mail to the Secretary of the Company. The Exercise
Notice shall be accompanied by payment of the aggregate Exercise Price as
to all Exercised Shares. This Option shall be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice accompanied
by such aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with all relevant provisions
of law and the requirements of any stock exchange or quotation service
upon which the Shares are then listed. Assuming such compliance, for
income tax purposes the Exercised Shares shall be considered transferred
to the Optionee on the date the Option is exercised with respect to such
Exercised Shares.
(c) Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
(i) cash; or
(ii) check; or
(iii) delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price; or
(iv) surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for
more than six (6) months on the date of surrender, and (ii) have a Fair
Market Value on the date of surrender equal to the aggregate Exercise
Price of the Exercised Shares; or
(v) delivery of Optionee's promissory note (the "Note") in the
form attached hereto as Exhibit C, in the amount of the aggregate
Exercise Price of the Exercised Shares together with the execution and
delivery by the Optionee of the Security Agreement attached hereto as
Exhibit B. The Note shall bear interest at a rate no less than the
"applicable federal rate" prescribed under the Code and its regulations
at time of purchase, and shall be secured by a pledge of the Shares
purchased by the Note pursuant to the Security Agreement.
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<PAGE> 24
(d) Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by the
Optionee. The terms of the Plan and this Option Agreement shall be binding
upon the executors, administrators, heirs, successors and assigns of the
Optionee.
(e) Term of Option. This Option may be exercised only within the
term set out in the Notice of Grant, and may be exercised during such term only
in accordance with the Plan and the terms of this Option Agreement.
(f) Tax Consequences. Some of the federal tax consequences relating
to this Option, as of the date of this Option, are set forth below. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.
(i) Exercising the Option.
(A) Nonstatutory Stock Option. The Optionee may incur
regular federal income tax and state income tax liability upon exercise of a
NSO. The Optionee will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the
Fair Market Value of the Exercised Shares on the date of exercise over
their aggregate Exercise Price. If the Optionee is an Employee or a former
Employee, the Company will be required to withhold from his or her
compensation or collect from Optionee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation
income at the time of exercise, and may refuse to honor the exercise
and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.
(B) Incentive Stock Option. If this Option qualifies
as an ISO, the Optionee will have no regular federal income tax or state income
tax liability upon its exercise, although the excess, if any, of the Fair
Market Value of the Exercised Shares on the date of exercise over their
aggregate Exercise Price will be treated as an adjustment to alternative
minimum taxable income for federal tax purposes and may subject the Optionee to
alternative minimum tax in the year of exercise. In the event that the
Optionee undergoes a change of status from Employee to Consultant, any
Incentive Stock Option of the Optionee that remains unexercised shall
cease to qualify as an Incentive Stock Option and will be treated for
tax purposes as a Nonstatutory Stock Option on the ninety-first (91st) day
following such change of status.
(ii) Disposition of Shares.
(A) NSO. If the Optionee holds NSO Shares for at
least one year, any gain realized on disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes.
(B) ISO. If the Optionee holds ISO Shares for at
least one year after exercise and two years after the grant date, any gain
realized on disposition of the Shares will be treated as long-term capital gain
for federal income tax purposes. If the Optionee disposes of ISO Shares within
one year after exercise or two years after the grant date, any gain realized on
such disposition will be treated as compensation income (taxable at ordinary
income rates) to the extent of the excess, if any, of the lesser of (A) the
difference between the Fair Market Value of the Shares acquired on the date of
exercise and the aggregate Exercise Price, or (B) the difference between the
sale price of such Shares and the aggregate Exercise Price.
(iii) Notice of Disqualifying Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii)
one year after the exercise date, the Optionee shall immediately notify the
Company in writing of such disposition. The Optionee agrees that he or she
may be subject to income tax withholding by the Company on the compensation
income recognized from such early disposition of ISO Shares by payment in
cash or out of the current earnings paid to the Optionee.
(g) Entire Agreement; Governing Law. The Plan is incorporated herein
by reference. The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may
not be modified adversely to the Optionee's interest except by means of a
writing signed by the Company and Optionee. This agreement is governed by
California law except for that body of law pertaining to conflict of laws.
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<PAGE> 25
By your signature and the signature of the Company's representative below, you
and the Company agree that this Option is granted under and governed by the
terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option
Agreement. Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Administrator upon any questions
relating to the Plan and Option Agreement. Optionee further agrees to notify
the Company upon any change in the residence address indicated below.
OPTIONEE: GENERAL PARAMETRICS CORPORATION
____________________________________ By:______________________________
Signature
____________________________________ Title:______________________________
Print Name
____________________________________
Residence Address
____________________________________
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<PAGE> 26
CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and hereby approves the
terms and conditions of the Plan and this Option Agreement. In consideration
of the Company's granting his or her spouse the right to purchase Shares as set
forth in the Plan and this Option Agreement, the undersigned hereby agrees to
be irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.
_______________________________________
Spouse of Optionee
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<PAGE> 27
EXHIBIT A
GENERAL PARAMETRICS CORPORATION
1995 STOCK OPTION PLAN
EXERCISE NOTICE
General Paramerics Corporation
1250 Ninth Street
Berkeley, CA 94710
Attention: Secretary
21. Exercise of Option. Effective as of today, ________________,
1995, the undersigned ("Purchaser") hereby elects to purchase ______________
shares (the "Shares") of the Common Stock of General Parametrics Corporation
(the "Company") under and pursuant to the 1995 Stock Option Plan (the "Plan")
and the Stock Option Agreement dated _____________, 19___ (the "Option
Agreement"). The purchase price for the Shares shall be $_____________, as
required by the Option Agreement.
22. Delivery of Payment. Purchaser herewith delivers to the Company
the full purchase price for the Shares.
23. Representations of Purchaser. Purchaser acknowledges that
Purchaser has received, read and understood the Plan and the Option Agreement
and agrees to abide by and be bound by their terms and conditions.
24. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
A share certificate for the number of Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment
will be made for a dividend or other right for which the record date is prior
to the date the stock certificate is issued, except as provided in Section 12
of the Plan.
25. Tax Consultation. Purchaser understands that Purchaser may
suffer adverse tax consequences as a result of Purchaser's purchase or
disposition of the Shares. Purchaser represents that Purchaser has consulted
with any tax consultants Purchaser deems advisable in connection with the
purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.
26. Entire Agreement; Governing Law. The Plan and Option Agreement
are incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by California law except for that body of law pertaining to conflict
of laws.
Submitted by: Accepted by:
PURCHASER: GENERAL PARAMETRICS CORPORATION
__________________________ By: ___________________________
Signature
__________________________ Its: ___________________________
Print Name
Address: Address:
__________________________ 1250 Ninth Street
__________________________ Berkeley, CA 94710
<PAGE> 28
EXHIBIT B
SECURITY AGREEMENT
This Security Agreement is made as of __________, 1995 between General
Parametrics Corporation, a California corporation ("Pledgee"), and
_________________________ ("Pledgor").
Recitals
Pursuant to Pledgor's election to purchase Shares under the Option
Agreement dated ________ (the "Option"), between Pledgor and Pledgee under
Pledgee's 1995 Stock Option Plan, and Pledgor's election under the terms of the
Option to pay for such shares with his promissory note (the "Note"), Pledgor
has purchased _________ shares of Pledgee's Common Stock (the "Shares") at a
price of $________ per share, for a total purchase price of $__________. The
Note and the obligations thereunder are as set forth in Exhibit C to the
Option.
NOW, THEREFORE, it is agreed as follows:
27. Creation and Description of Security Interest. In consideration
of the transfer of the Shares to Pledgor under the Option Agreement, Pledgor,
pursuant to the California Commercial Code, hereby pledges all of such Shares
(herein sometimes referred to as the "Collateral") represented by certificate
number ______, duly endorsed in blank or with executed stock powers, and
herewith delivers said certificate to the Secretary of Pledgee
("Pledgeholder"), who shall hold said certificate subject to the terms and
conditions of this Security Agreement.
The pledged stock (together with an executed blank stock assignment for
use in transferring all or a portion of the Shares to Pledgee if, as and when
required pursuant to this Security Agreement) shall be held by the Pledgeholder
as security for the repayment of the Note, and any extensions or renewals
thereof, to be executed by Pledgor pursuant to the terms of the Option, and the
Pledgeholder shall not encumber or dispose of such Shares except in accordance
with the provisions of this Security Agreement.
28. Pledgor's Representations and Covenants. To induce Pledgee to
enter into this Security Agreement, Pledgor represents and covenants to
Pledgee, its successors and assigns, as follows:
(a) Payment of Indebtedness. Pledgor will pay the principal
sum of the Note secured hereby, together with interest thereon, at the time and
in the manner provided in the Note.
(b) Encumbrances. The Shares are free of all other
encumbrances, defenses and liens, and Pledgor will not further encumber the
Shares without the prior written consent of Pledgee.
(c) Margin Regulations. In the event that Pledgee's Common
Stock is now or later becomes margin-listed by the Federal Reserve Board and
Pledgee is classified as a "lender" within the meaning of the regulations under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G"),
Pledgor agrees to cooperate with Pledgee in making any amendments to the Note
or providing any additional collateral as may be necessary to comply with such
regulations.
29. Voting Rights. During the term of this pledge and so long as all
payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Shares pledged
hereunder.
30. Stock Adjustments. In the event that during the term of the
pledge any stock dividend, reclassification, readjustment or other changes are
declared or made in the capital structure of Pledgee, all new, substituted and
additional shares or other securities issued by reason of any such change shall
be delivered to and held by the Pledgee under the terms of this Security
Agreement in the same manner as the Shares originally pledged hereunder. In
the event of substitution of such securities, Pledgor, Pledgee and Pledgeholder
shall cooperate and execute such documents as are reasonable so as to provide
for the substitution of such Collateral and, upon such substitution, references
to "Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.
31. Options and Rights. In the event that, during the term of this
pledge, subscription Options or other rights or options shall be issued in
connection with the pledged Shares, such rights, Options and options shall be
the property of Pledgor and, if exercised by Pledgor, all new stock or other
securities so acquired by Pledgor as it relates to the pledged Shares then held
by Pledge-
<PAGE> 29
holder shall be immediately delivered to Pledgeholder, to be held under the
terms of this Security Agreement in the same manner as the Shares pledged.
32. Default. Pledgor shall be deemed to be in default of the Note
and of this Security Agreement in the event:
(a) Payment of principal or interest on the Note shall be
delinquent for a period of 10 days or more; or
(b) Pledgor fails to perform any of the covenants set forth in
the Option or contained in this Security Agreement for a period of 10 days
after written notice thereof from Pledgee.
In the case of an event of Default, as set forth above, Pledgee shall
have the right to accelerate payment of the Note upon notice to Pledgor, and
Pledgee shall thereafter be entitled to pursue its remedies under the
California Commercial Code.
33. Release of Collateral. Subject to any applicable contrary rules
under Regulation G, there shall be released from this pledge a portion of the
pledged Shares held by Pledgeholder hereunder upon payments of the principal of
the Note. The number of the pledged Shares which shall be released shall be
that number of full Shares which bears the same proportion to the initial
number of Shares pledged hereunder as the payment of principal bears to the
initial full principal amount of the Note.
34. Withdrawal or Substitution of Collateral. Pledgor shall not
sell, withdraw, pledge, substitute or otherwise dispose of all or any part of
the Collateral without the prior written consent of Pledgee.
35. Term. The within pledge of Shares shall continue until the
payment of all indebtedness secured hereby, at which time the remaining pledged
stock shall be promptly delivered to Pledgor, subject to the provisions for
prior release of a portion of the Collateral as provided in paragraph 7 above.
36. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for
the property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due
and payable, and Pledgee may proceed as provided in the case of default.
37. Pledgeholder Liability. In the absence of willful or gross
negligence, Pledgeholder shall not be liable to any party for any of his acts,
or omissions to act, as Pledgeholder.
38. Invalidity of Particular Provisions. Pledgor and Pledgee agree
that the enforceability or invalidity of any provision or provisions of this
Security Agreement shall not render any other provision or provisions herein
contained unenforceable or invalid.
39. Successors or Assigns. Pledgor and Pledgee agree that all of the
terms of this Security Agreement shall be binding on their respective
successors and assigns, and that the term "Pledgor" and the term "Pledgee" as
used herein shall be deemed to include, for all purposes, the respective
designees, successors, assigns, heirs, executors and administrators.
40. Governing Law. This Security Agreement shall be interpreted and
governed under the laws of the State of California.
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<PAGE> 30
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"PLEDGOR" By: _______________________________________________
____________________________________________
Print Name
Address: ___________________________________
___________________________________
"PLEDGEE" General Parametrics Corporation,
a Delaware corporation
By: ________________________________________
Title: _____________________________________
"PLEDGEHOLDER" ________________________________________________
Secretary of General Parametrics Corporation
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<PAGE> 31
EXHIBIT C
NOTE
$_______________ [City, State]
______________, 19___
FOR VALUE RECEIVED, _______________ promises to pay to General
Parametrics Corporation, a Delaware corporation (the "Company"), or order, the
principal sum of _______________________ ($_____________), together with
interest on the unpaid principal hereof from the date hereof at the rate of
_______________ percent (____%) per annum, compounded semiannually.
Principal and interest shall be due and payable on __________, ______.
Should the undersigned fail to make full payment of principal or interest for a
period of 10 days or more after the due date thereof, the whole unpaid balance
on this Note of principal and interest shall become immediately due at the
option of the holder of this Note. Payments of principal and interest shall be
made in lawful money of the United States of America.
The undersigned may at any time prepay all or any portion of the
principal or interest owing hereunder.
This Note is subject to the terms of the Option, dated as of
________________. This Note is secured in part by a pledge of the Company's
Common Stock under the terms of a Security Agreement of even date herewith and
is subject to all the provisions thereof.
The holder of this Note shall have full recourse against the
undersigned, and shall not be required to proceed against the collateral
securing this Note in the event of default.
In the event the undersigned shall cease to be an employee or consultant
of the Company for any reason, this Note shall, at the option of the Company,
be accelerated, and the whole unpaid balance on this Note of principal and
accrued interest shall be immediately due and payable.
Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
undersigned.
____________________________________
____________________________________
<PAGE> 32
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
GENERAL PARAMETRICS CORPORATION
Proxy for 1995 Annual Meeting of Stockholders to be held March 27, 1995
The undersigned stockholder of General Parametrics Corporation (the "Company")
hereby revokes all previous proxies and appoints Herbert B. Baskin and William
A. Spazante or either of them, with full power of substitution, as the proxy of
the undersigned to vote and otherwise represent all of the shares registered in
the name of the undersigned at the 1995 Annual Meeting of Stockholders of the
Company to be held on March 27, 1995 at 9:30 a.m. at the Company's
headquarters, 1250 Ninth Street, Berkeley, California, and any adjournment
thereof, with the same effect as if the undersigned were present and voting
such shares, on the following matters and in the following manner:
1. Election of Directors
/ / FOR all nominees listed below (except as indicated).
/ / WITHHOLD authority to vote for all nominees listed below.
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THAT NOMINEE'S NAME IN LIST BELOW:
HERBERT B. BASKIN, J. THOMAS BENTLEY, LUTHER J. NUSSBAUM, VICTOR D. POOR,
EUGENE T. SANDERS
2. The approval of the adoption of the Company's 1995 Stock Option Plan, as
adopted by the Company's Board of Directors and the reservation of 500,000
shares of Common Stock for issuance thereof:
/ / FOR / / AGAINST / / ABSTAIN
3. The approval of the Board of Directors' selection of Price Waterhouse LLP
as independent public accountants for the Company for the current fiscal year
ending October 31, 1995:
/ / FOR / / AGAINST / / ABSTAIN
(continued on reverse side)
<PAGE> 33
and, in their discretion, upon such other matters, which may properly come
before the meeting or any adjournment or adjournments thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED FOR EACH OF THE ABOVE PERSONS AND PROPOSALS, AND FOR
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AS THE PROXYHOLDERS
DEEM ADVISABLE.
________________________________
(stockholder's signature)
________________________________
(name typed or printed)
Date: ___________________, 1995
I plan to attend the meeting:
/ / Yes / / No
Sign exactly as your name (s) appears
on your stock certificate. A corporation
is requested to sign its name by its
President or other authorized officer,
with the office held designated.
Executors, administrators, trustees,
etc., are requested to so indicate when
signing. If stock is registered in two
names, both should sign.
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE MARK, SIGN AND
DATE THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
