<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 [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or 240.14a-12
</TABLE>
CAM DATA SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
CAM DATA SYSTEMS, INC.
17520 NEWHOPE STREET
FOUNTAIN VALLEY, CALIFORNIA 92708
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 6, 2000
To the stockholders of CAM Data Systems, Inc.
NOTICE IS HEREBY GIVEN THAT the 2000 Annual Meeting of Stockholders of CAM
DATA SYSTEMS, INC. (the "Company"), will be held on April 6, 2000 at 2:00 P.M.
at the Courtyard by Marriott Hotel, 9950 Slater Avenue, Fountain Valley,
California 92708 (the "Annual Meeting") for the purposes described below.
1. To elect six (6) persons to serve on the Company's Board of Directors
who shall hold office until the next annual meeting of stockholders or
until their successors are duly elected and qualified.
2. To confirm the appointment of Ernst & Young LLP as the independent
auditors of the Company for the current fiscal year ending September
30, 2000.
3. To approve an amendment to the Company's Certificate of Incorporation
to change the Company's name to "CAM Commerce Solutions."
4. To approve an amendment to the Company's Certificate of Incorporation
to increase the number of authorized shares of the Company's common
stock from 5,000,000 to 12,000,000.
5. To amend the Company's 1993 Stock Option Plan to increase the number of
shares of common stock authorized for issuance under the plan from
1,200,000 to 1,700,000 and lengthen the term of the plan from 10 years
to 20 years.
6. To transact such other business as may properly come before the meeting.
Stockholders of record at the close of business on February 7, 2000 are
entitled to notice of and to vote at the Annual Meeting and at any adjournment
thereof.
By Order of the Board of Directors
/s/ GEOFFREY D. KNAPP
-------------------------
Geoffrey D. Knapp
Secretary
February 17, 2000
IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE AT THE ANNUAL MEETING, PLEASE SIGN AND DATE
THE ENCLOSED PROXY, WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. THE PROXY IS REVOCABLE AT ANY TIME
PRIOR TO THE EXERCISE THEREOF BY WRITTEN NOTICE TO THE COMPANY, AND STOCKHOLDERS
WHO ATTEND THE ANNUAL MEETING MAY WITHDRAW THEIR PROXIES AND VOTE THEIR SHARES
PERSONALLY IF THEY SO DESIRE.
<PAGE> 3
CAM DATA SYSTEMS, INC.
17520 NEWHOPE STREET
FOUNTAIN VALLEY, CALIFORNIA 92708
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of CAM Data Systems, Inc. (the "Company") of proxies, in
the form enclosed, for use at the 2000 Annual Meeting of Stockholders of the
Company (the "Annual Meeting") to be held at the time and place and for the
purpose set forth in the attached Notice of Annual Meeting of Stockholders.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of the Company, at or before the taking of the vote at the
Annual Meeting, a written notice of revocation bearing a later date than the
proxy, (ii) duly executing a subsequent proxy relating to the same shares and
delivering it to the Secretary of the Company before the Annual Meeting, or
(iii) attending the Annual Meeting and voting in person (although attendance at
the Annual Meeting will not in and of itself constitute a revocation of a
proxy).
The cost of soliciting proxies will be borne by the Company. It is expected
that proxies will be solicited exclusively by mail; however, if it should appear
to be desirable to do so, directors, officers and employees of the Company may
communicate with stockholders, banks, brokerage houses and others by telephone
or in person to request that proxies be furnished. The Company may also
reimburse persons holding stock as nominees for reasonable expenses in sending
proxy material to their principals.
A proxy, when executed and not so revoked, will be voted in accordance with
the instructions given in the proxy. If a choice is not specified in the proxy,
the proxy will be voted "FOR" the nominees for election of directors named in
this Proxy Statement, "FOR" confirmation of the appointment of Ernst & Young LLP
as the independent auditors of the Company for the fiscal year ending September
30, 2000, "FOR" the approval of the amendment of the Company's Certificate of
Incorporation to change the Company's name to CAM Commerce Solutions, "FOR" the
approval of the Company's Certificate of Incorporation to increase the number of
authorized shares of the Company's common stock from 5,000,000 to 12,000,000,
and "FOR" the approval of the amendment to the Company's 1993 Stock Option Plan
to increase the number of shares of common stock authorized for issuance under
the plan from 1,200,000 to 1,700,000 and to increase the term of the plan from
10 years to 20 years.
Abstentions and broker non-votes each shall be included in the
determination of the number of shares present at the Annual Meeting and for the
purpose of determining whether a quorum is present, and each shall be tabulated
separately. Abstentions and broker non-votes shall not be counted in determining
whether a nominee is elected. In determining whether a proposal has been
approved, any shares not voted (whether by abstention, broker non-votes or
otherwise) have the effect of a negative vote.
Mailing of this proxy statement and the accompanying proxy is to commence
on or about February 17, 2000.
On February 7, 2000, the record date for stockholders entitled to vote at
the Annual Meeting, the Company's outstanding voting securities consisted of
2,489,000 shares of common stock, par value $.001, of which each share is
entitled to one vote.
1
<PAGE> 4
PROPOSAL 1: ELECTION OF DIRECTORS
A total of six directors are to be elected at the Annual Meeting.
Management has nominated Geoffrey D. Knapp, Walter W. Straub, David Frosh,
Corley Phillips, Frederick Haney and Scott Broomfield for election as directors,
each to hold office until the next Annual Meeting of Stockholders or until their
successors have been duly elected and qualified. While the Company's Board of
Directors has no reason to believe that any nominee will be unavailable to serve
as a director of the Company, the proxies solicited hereby will be voted for
such other persons as shall be designated by the Company's Board of Directors
should any nominee become unavailable to serve. The six nominees receiving the
highest number of votes at the Annual Meeting will be elected. Stockholders are
not entitled to cumulate their votes in the election of directors.
Information regarding the current directors and executive officers,
nominees for election as directors and significant employees of the Company
appears below. These statements are in each instance based on information
furnished to the Company by the person concerned. Information regarding
ownership of the Company's common stock by the directors and executive officers
of the Company is set forth below under "Security Ownership of Directors,
Management and Certain Beneficial Owners" contained in the succeeding table.
NOMINEES
Certain information concerning the six persons nominated at the Annual
Meeting by the Board of Directors for election as directors for the ensuing year
is set forth below:
- --------------------------------------------------------------------------------
NAME AGE POSITION WITH THE COMPANY
- --------------------------------------------------------------------------------
Geoffrey D. Knapp 41 Chief Executive Officer, Chairman
of the Board, and Secretary
- --------------------------------------------------------------------------------
David A. Frosh 41 President and Director
- --------------------------------------------------------------------------------
Walter W. Straub 56 Director
- --------------------------------------------------------------------------------
Dr. Fred M. Haney 58 Director
- --------------------------------------------------------------------------------
Corley Phillips 45 Director
- --------------------------------------------------------------------------------
Scott Broomfield 42 Director
- --------------------------------------------------------------------------------
Geoffrey D. Knapp, founder of the Company, has been a Director, and Chief
Executive Officer of the Company since its organization in September 1983. Mr.
Knapp received a bachelor's degree in marketing from the University of Oregon in
1980.
David A. Frosh joined the Company as President in June 1996. Mr. Frosh has
been a member of the board of directors since August 1991. From June 1990 to
June 1996, Mr. Frosh was employed as sales executive for the national accounts
division of Automatic Data Processing "ADP". ADP provides computerized
transaction processing, data communications and information services. From June
1988 to June 1990, Mr. Frosh served as Director of Marketing for Optima Retail
Systems, a privately held company, which manufactured and marketed inventory
control systems for the retail apparel industry. Mr. Frosh received a bachelor's
degree in marketing from Central Michigan University in 1980 and a master's
degree in business administration from Claremont Graduate School in 1999.
Walter W. Straub has been a Director of the Company since May 1989. He is
also currently, and has been since October 1983, President, Chief Executive and
Director of Rainbow Technologies, Inc., a public company engaged in the business
of designing, developing, manufacturing and marketing of proprietary
computer-related security products. Mr. Straub received a bachelor's degree in
electrical engineering in 1965 and a master's degree in finance in 1970 from
Drexel University.
Dr. Fred M. Haney joined the Company as Director in September 1996. Dr.
Haney has been the President of Venture Management Company, Palos Verdes
Estates, California, since 1991. From 1984 to 1991, he was founder and manager
of 3I Ventures, California, a high technology venture capital fund. Dr. Haney
has extensive experience in strategic planning, operations and finance in the
information and computer industry. Dr. Haney holds a doctorate in computer
science from Carnegie-Mellon University.
2
<PAGE> 5
Corley Phillips joined the Company as Director in September 1996. Mr.
Phillips is an independent investor. From 1996 to 1997, Mr. Phillips served as
President, CEO and Director for Telephone Response Technologies, a Roseville,
California-based developer of computer technology software. From 1995 to 1996,
Mr. Phillips served as Vice President of marketing and product support for State
of The Art, an accounting software company based in Irvine, California. From
1990 to 1994, Mr. Phillips served as President and CEO of Manzanita Software
Systems, a developer of Windows-based accounting software. From 1984 to 1990,
Mr. Phillips was President and co-founder of Grafpoint, a developer of software
for computer applications based in San Jose, California. Mr. Phillips has also
held various sales and marketing positions with Envision Technology and
Hewlett-Packard. Mr. Phillips holds both a bachelor's degree and a master's
degree in electrical engineering from Washington University in St. Louis,
Missouri, as well as a master's degree in business administration from Santa
Clara University in Santa Clara, California.
Scott Broomfield joined the Company as Director in March 1999. Mr.
Broomfield has been, since 1997, Chief Executive and a Director of Centura
Software, Inc., a public company engaged in the business of providing a suite of
products usable by application developers to build and deploy component based
distributed business applications. From February 1993 to December 1997, Mr.
Broomfield was a principal with the firm of Hickey & Hill Incorporated "H & H".
In this capacity, Mr. Broomfield assisted companies with executive management,
strategy, operational and financial consulting, business planning and business
development. Prior to joining H & H, Mr. Broomfield held senior management
positions at Trilogy Systems, Inc., and Digital Equipment Corporation. Mr.
Broomfield has a bachelor's degree in psychology from Azusa Pacific University
and master's degree in business administration from Santa Clara University.
STRUCTURE AND FUNCTION OF THE BOARD OF DIRECTORS
During the Company's fiscal year ended September 30, 1999, the Board of
Directors held four meetings. Each incumbent director attended 100% of the total
number of meetings of the Board of Directors.
The Company has a Compensation Committee, which consists of Geoffrey D.
Knapp, Walter Straub, and Frederick Haney. The Compensation Committee consults
with the Board of Directors concerning compensation for the Company's executive
officers. During fiscal 1999, the Compensation Committee held one meeting. The
Company has an Audit Committee, which consists of Walter W. Straub and Corley
Phillips. The Audit Committee makes recommendations to the Board of Directors
concerning the engagement of independent auditors, reviews with the independent
auditors the plans and results of the audit and reviews the adequacy of the
Company's internal accounting controls. The Audit Committee held one meeting
during fiscal 1999. The Company has an Option Committee, which consists of
Walter Straub, Corley Phillips, Frederick Haney, and Scott Broomfield. The
Option Committee administers the Company's 1993 Stock Option Plan. There is no
nominating committee of the Board of Directors; the Board of Directors meets as
a whole to nominate individuals for election as directors.
EXECUTIVE OFFICERS
In addition to Mr. Knapp, the Company has two other executive officers,
David Frosh, President, and Paul Caceres Jr., Chief Financial Officer and Chief
Accounting Officer. The executive officers serve at the discretion of the Board
of Directors.
Paul Caceres, Jr. has been the Chief Financial Officer and Chief Accounting
Officer of the Company since September 1987. From 1982 to 1987, Mr. Caceres was
employed by Arthur Young & Company, the predecessor to Ernst & Young LLP, as an
Audit Senior and in 1987, was promoted to Audit Manager. He received a
bachelor's degree in business administration from the University of Southern
California in 1982.
3
<PAGE> 6
SECURITY OWNERSHIP OF DIRECTORS, MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth as of December 31, 1999, certain information
regarding ownership of the Company's common stock by (i) each person that the
Company knows is the beneficial owner of more than 5% of the Company's
outstanding common stock, (ii) each current director and executive officer of
the Company and all nominees for director, and (iii) all directors and officers
as a group.
<TABLE>
- -------------------------------------------------------------------------------------------------
SHARES BENEFICIALLY OWNED
- -------------------------------------------------------------------------------------------------
NAME AND ADDRESS OF AMOUNT & NATURE OF
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNER(9) PERCENTAGE OF CLASS(10)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Geoffrey D. Knapp(1) 324,000(2) 11.96%
- -------------------------------------------------------------------------------------------------
Common Stock Paul Caceres Jr.(1) 23,000(3) *
- -------------------------------------------------------------------------------------------------
Common Stock Walter W. Straub(1) 92,000(4) 3.40%
- -------------------------------------------------------------------------------------------------
Common Stock David Frosh(1) 19,000(5) *
- -------------------------------------------------------------------------------------------------
Common Stock Corley Phillips(1) 41,500(6) 1.53%
- -------------------------------------------------------------------------------------------------
Common Stock Fred Haney(1)23,000(7) 23,000(7) *
- -------------------------------------------------------------------------------------------------
Common Stock Scott Broomfield(1) 8,000(8) *
- -------------------------------------------------------------------------------------------------
Common Stock All Directors and
Officers as a Group
(of 7 persons)(1) 528,000 20%
- -------------------------------------------------------------------------------------------------
</TABLE>
* percentage is less than 1%.
(1) The address of each beneficial owner is in care of CAM Data Systems, Inc.,
17520 Newhope Street, Fountain Valley, California 92708.
(2) Includes (i) an aggregate of 3,100 shares of common stock held in trust for
three daughters of Mr. Geoffrey Knapp over which he has shared voting power
(ii) options to purchase an aggregate of 10,000 shares until the sooner of
October 12, 2002, or twelve months after ceasing to serve as a director at
a price of $2.34 per share (iii) options to purchase an aggregate of 50,000
shares until the sooner of October 20, 2003, or twelve months after ceasing
to serve as a director at a price of $1.93 per share (iv) options to
purchase an aggregate of 15,000 shares until the sooner of December 16,
2006, or twelve months after ceasing to serve as a director at a price of
$3.75 per share.
(3) Includes options to purchase (i) an aggregate of 15,000 shares of common
stock until the sooner of January 3, 2004, or twelve months after ceasing
to serve as a director at a price of $2.13 per share (ii) an aggregate of
8,000 shares until the sooner of December 16, 2006, or twelve months after
ceasing to serve as a director at a price of $3.75 per share.
(4) Includes options to purchase (i) an aggregate of 7,500 shares until the
sooner of October 19, 2003, or twelve months after ceasing to serve as a
director at a price of $1.75 per share (ii) an aggregate of 7,500 shares
until the sooner of May 25, 2005, or twelve months after ceasing to serve
as a director at a price of $2.38 per share (iii) an aggregate of 7,500
shares until the sooner of May 9, 2006, or twelve months after ceasing to
serve as a director at a price of $2.50 per share (iv) an aggregate of
7,500 shares until the sooner of May 8, 2007, or twelve months after
ceasing to serve as a director at a price of $3.38 per share (v) an
aggregate of 4,400 shares until the sooner of May 8, 2007, or twelve months
after ceasing to serve as a director at a price of $3.38 per share (vi) an
aggregate of 10,000 shares until the sooner of May 7, 2008, or twelve
months after ceasing to serve as a director at a price of $2.75 per share
(vii) an aggregate of 7,500 shares until the sooner of May 6, 2009, or
twelve months after ceasing to serve at a director at a price of $5.38 per
share.
(5) Includes options to purchase (i) an aggregate of 7,500 shares until the
sooner of May 9, 2006, or twelve months after ceasing to serve as a
director at a price of $5.50 per share (ii) an aggregate of 7,100 shares
until the sooner of June 10, 2006, or twelve months after ceasing to serve
as a director at a price of $2.50 per share (iii) an aggregate of 4,400
shares until the sooner of May 8, 2007, or twelve months after ceasing to
serve as a director at a price of $3.38 per share.
(6) Includes options to purchase (i) an aggregate of 5,000 shares until the
sooner of September 23, 2006, or twelve months after ceasing to serve as a
director at a price of $2.50 per share (ii) an aggregate of 7,500 shares
until the sooner of May 8, 2007, or twelve months after ceasing to serve as
a director at a price of $3.38 per share (iii) an aggregate of 10,000
shares until the sooner of May 7, 2008, or twelve months after ceasing to
serve as a director at a price of $2.75 per share (iv) an aggregate of
7,500 shares until the sooner of May 6, 2009, or twelve months after
ceasing to serve at a director at a price of $5.38 per share.
4
<PAGE> 7
(7) Includes options to purchase (i) an aggregate of 5,000 shares until the
sooner of September 23, 2006, or twelve months after ceasing to serve as a
director at a price of $2.50 per share (ii) an aggregate of 10,000 shares
until the sooner of May 7, 2008, or twelve months after ceasing to serve as
a director at a price of $2.75 per share (iii) an aggregate of 7,500 shares
until the sooner of May 6, 2009, or twelve months after ceasing to serve as
a director at a price of $5.38 per share.
(8) Includes options to purchase (i) an aggregate of 7,500 shares until the
sooner of May 6, 2009, or twelve months after ceasing to serve at a
director at a price of $5.38 per share (ii) an aggregate of 360 shares
until the sooner of April 22, 2009, or twelve months after ceasing to serve
as a director at a price of $5.25 per share.
(9) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options or warrants held by that person
that are currently exercisable, or will become exercisable within 60 days
from the date hereof, are deemed outstanding. Such shares, however, are not
deemed outstanding for purposes of computing the percentage ownership of
any other person.
(10) The percentage of ownership of the class of voting securities in the above
table has been calculated by dividing (i) the aggregate number of shares of
such class actually owned plus all shares of such class which may be deemed
to be "beneficially owned," by (ii) the number of shares of such class
actually outstanding plus the number of shares of such class such
"beneficial owner" may be deemed to "beneficially own" assuming no other
acquisitions of shares of such class through the exercise of any option,
warrant or right by any other person.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS.
In May 1999, the Company granted options to purchase 7,500 shares of common
stock to each outside director, as compensation for serving as such, and these
options were issued at the current market price of $5.375 per share. These
options were granted under the terms and conditions of the Company's 1993 Stock
Option Plan.
In addition, directors who are not also executive officers of the Company
are entitled to an expense reimbursement for attending meetings of the Board of
Directors.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of the
Company's common stock to file reports of ownership and changes in ownership
with the Securities and Exchange Commission "SEC". Officers, directors and
greater than ten percent stockholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file. Management
believes all such individuals were in compliance with Section 16(a) at December
31, 1999.
5
<PAGE> 8
COMPENSATION OF OFFICERS
The following table sets forth information concerning compensation paid
by the Company for services rendered to the Company during fiscal year ended
September 30, 1999, and the prior two fiscal years, to the Company's Chief
Executive Officer and each additional executive officer whose total compensation
exceeded $100,000 ("Named Executive Officer"):
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------------------
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
- -----------------------------------------------------------------------------------------------------------------
AWARDS
- -----------------------------------------------------------------------------------------------------------------
SECURITIES
UNDERLYING
NAME AND OTHER ANNUAL OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION SARS(#) COMPENSATION(2)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Geoffrey Knapp 1999 $222,500 $140,400 -- 0 $8,800
Chairman of the 1998 $209,200 $ -- -- 0 $8,100
Board and CEO 1997 $200,700 $ -- -- 20,000 $7,500
David Frosh 1999 $133,900 $109,200 -- 0 $ --
President 1998 $128,800 $ -- -- 0 $ --
1997 $127,500 $ -- -- 0 $ --
Paul Caceres Jr 1999 $136,800 $ 62,400 -- 0 $4,500
CFO and CAO 1998 $131,700 $ -- -- 0 $4,700
1997 $127,700 $ -- -- 10,000 $4,900
</TABLE>
- -------------------
(1) Bonuses paid to the Named Executive Officers are pursuant to annual
incentive compensation programs established each year for selected
employees of the Company, including the Company's executive officers. Under
this program, performance goals, relating to such matters as sales growth,
gross profit margin and net income as a percentage of sales and individual
efforts were established each year. Incentive compensation, in the form of
cash bonuses, was awarded based on the extent to which the Company and the
individual achieved or exceeded the performance goals.
(2) All other compensation consists of interest on employee notes payable to
the Company and the amortization of the notes that was declared
compensation during the year.
STOCK OPTIONS GRANTED AND EXERCISED DURING 1999
There were no options granted to any of the Named Executive Officers in
fiscal year 1999; therefore, no table of options granted is presented.
The following table sets forth certain information concerning options
exercised by the Named Executive Officers during the fiscal year covered by this
report, and outstanding options at the end of such year held by the Named
Executive Officers.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
AGGREGATE OPTION EXERCISES AND FISCAL YEAR END OPTION VALUES
- -----------------------------------------------------------------------------------------------------------------
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE AT SEPTEMBER 30, 1999 SEPTEMBER 30, 1999
NAME EXERCISE REALIZED(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Geoffrey Knapp -- -- 74,000/6,000 $595,400/$39,800
David Frosh -- -- 55,900/36,000 $420,400/$283,500
Paul Caceres -- -- 52,000/3,000 $423,300/$19,900
</TABLE>
- ----------------------
(1) Market value of the underlying securities at the exercise date minus the
exercise price of the options.
(2) Calculated based on the closing bid price for a share of the Company's
common stock as reported by NASDAQ on September 30, 1999, which was
$10.375.
6
<PAGE> 9
REPORT OF COMPENSATION COMMITTEE
TO: THE BOARD OF DIRECTORS
As members of the Compensation Committee, it is our duty to review and
recommend the compensation levels for members of the Company's management,
evaluate the performance of management and administer the Company's various
incentive plans. This Committee has reviewed in detail the Compensation of the
Company's three executive officers. In the opinion of the Committee, the
compensation of the three executive officers of the Company is reasonable in
view of its performance and the respective contributions of such officers to the
Company's performance.
In determining the management compensation, this Committee compares the
compensation paid to management to the level and structure of compensation paid
to management of competing companies. Additionally, the Committee considers the
sales and earnings performance of the Company compared to competing and
similarly situated companies. The Committee also takes into account such
relevant external factors as general economic conditions, geographic market of
work place, stock price performance and stock market prices.
Management compensation is comprised of 60% to 70% of fixed salary, and 30%
to 40% variable compensation based on performance factors. Stock options are
granted at the discretion of the Board of Directors, and there is no set minimum
or maximum amount of options that can be issued. Performance factors that
determine management compensation are sales, net income of the Company, and
individual performance.
The committee examines compilations of executive compensation such as
various industry compensation surveys for middle market companies. In 1999, the
compensation for the Chief Executive Officer was comparable to other Chief
Executive Officers of middle market companies in related industries.
Mr. Knapp, a member of the Committee, is also an executive officer of the
Company. However, Mr. Knapp abstained from any considerations with respect to
any decision directly affecting his compensation.
COMPENSATION COMMITTEE
WALTER STRAUB, FRED HANEY, AND GEOFFREY D. KNAPP
DECEMBER 1, 1999
The Report shall not be deemed to be incorporated by reference in any
document previously or subsequently filed with the Securities and Exchange
Commission that incorporates by reference all or any portion of this proxy
statement, unless the report is specifically incorporated by reference.
7
<PAGE> 10
PERFORMANCE GRAPH
The following graph shows the performance of the Company's stock for the
last five fiscal years in relation to the Total Return Index for The NASDAQ
Stock Market (US Companies) and also compared to the NASDAQ Computer and Data
Processing Stocks Total Return Index.
STOCK PRICE PERFORMANCE GRAPH
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NASDAQ STOCK MARKET 100 138 164 225 229 372
NASDAQ RETAIL TRADE STOCKS 100 110 132 151 130 158
CAM DATA SYSTEMS STOCK 100 363 463 288 344 1038
</TABLE>
This stock price data is prepared from data generated under the assumption
of dividend reinvestment.
THE STOCK PRICE PERFORMANCE GRAPHIS PURELY HISTORICAL INFORMATION AND SHOULD
NOT BE RELIED UPON AS INDICATIVE OF FUTURE PRICE PERFORMANCE.
FAMILY RELATIONSHIPS
There are no family relationships between any director and/or executive
officer of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During the fiscal year ended September 30, 1999, the Company granted
non-qualified options to certain employees and directors to purchase an
aggregate of 185,400 shares of common stock of the Company at a price ranging
from $3.13 to $5.38 per share expiring ten years from the date of grant.
PROPOSAL 2: CONFIRMATION OF INDEPENDENT AUDITORS
It is proposed that the stockholders confirm the appointment by the Board
of Directors of Ernst & Young LLP as independent auditors for the Company for
the 2000 fiscal year. Ernst & Young LLP has been the independent auditors of the
Company for many years. Representatives of Ernst & Young LLP are not expected to
be present at the Annual Meeting.
Confirmation by the stockholders of the appointment of the auditors
requires the affirmative vote of the holders of a majority of the shares of the
common stock represented in person or by proxy at the Annual Meeting and
entitled to vote. In the event such confirmation is not obtained, the Board of
Directors will consider alternative independent auditors.
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RECOMMENDATION
The Board of Directors unanimously recommends that the Company's
stockholders vote FOR confirmation of Ernst & Young LLP as independent auditors
for the 2000 fiscal year.
PROPOSAL 3: CHANGE NAME TO CAM COMMERCE SOLUTIONS
The Board of Directors proposes amending the Company's Certificate of
Incorporation to change the Company's name from CAM Data Systems, Inc. to "CAM
Commerce Solutions" in order to better represent its business model, target
markets, and opportunities for the future. The Company while maintaining its
traditional business focus of providing "one source" solutions for automating
traditional retailers, expects an increasing amount of business to come from
E-commerce related revenue sources in the future. Furthermore, the Company's
target market has expanded beyond the traditional retailer to both virtual
retailers and other businesses that want to sell products on the web. This will
provide an opportunity for new revenue sources that include: shared hosting of
its new i.STAR web site product; web consulting services for retailers wishing
to modify the look and feel of their i.STAR internet storefront sites; credit
card processing; direct sales of software and hardware products to retailers
through the Company's web site; and other opportunities as the result of
strategic partnerships to deploy and deliver the Company's software products for
traditional and web retailing.
In light of the Company's new products, changing business model, and new
opportunities, management believes the name change is important in building our
brands and creating a company image that best fits the Company. The Company will
now provide all different kinds of "commerce" solutions for the traditional and
web retailer that were not even possible when the Company started in 1983 and
thus the term "Commerce Solutions" will identify our business model both
currently and for the future, far better than "Data Systems."
RECOMMENDATION
The Board of Directors unanimously recommends that the Company's
stockholders vote "FOR" approval of the name change to CAM Commerce Solutions.
Approval of the name change by the Company's stockholders requires the
affirmative vote of the holders of a majority of the shares of common stock
outstanding.
PROPOSAL 4: TO APPROVE AN INCREASE IN THE NUMBER
OF AUTHORIZED COMMON SHARES TO TWELVE MILLION.
The Board of Directors proposes an amendment to the Company's Certificate
of Incorporation to increase the number of authorized number of shares of common
stock from 5,000,000 to 12,000,000.
The proposed additional shares may be used in connection with possible
stock splits or dividends, management incentive and employee benefit plans,
investments, acquisitions, equity financings, and for other purposes. At this
time, the Company has no present plans, understandings, or agreements for the
issuance or use of the proposed additional shares of common stock. Nevertheless,
the Board of Directors believes that the proposed increase is desirable so that,
as the need arises, the Company will be able to issue the shares of common stock
without the expense and delay of a special stockholders' meeting.
Authorized but unissued shares of the Company's common stock may be issued
at such times, for such purposes and for such consideration as the Board of
Directors may determine to be appropriate without further authority from the
Company's stockholders, except as otherwise required by Delaware law or the
rules of The Nasdaq Stock Market.
Although the Board of Directors has no present intention of doing so, the
Company's authorized but unissued common stock could be issued in one or more
transactions which would make more difficult or costly, and less likely, a
takeover of the Company. The Board of Directors is not presently aware of any
plans to acquire control of the Company.
The adoption of the proposed amendment of the Certificate of Incorporation
to increase the number of authorized shares of common stock from 5,000,000 to
12,000,000 shares will require the affirmative vote of the holders of a majority
of the outstanding shares of common stock.
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<PAGE> 12
RECOMMENDATION
The Board of Directors unanimously recommends a vote "FOR" the adoption of
the proposed amendment to the Company's Certificate of Incorporation.
PROPOSAL 5: AMENDMENT TO 1993 STOCK OPTION PLAN
Stockholders are being asked to consider and vote upon a proposal to amend
the Company's 1993 Stock Option Plan (the "1993 Plan") to increase from
1,200,000 to 1,700,000 the number of shares of the Company's common stock for
which options may be granted to directors, officers and employees of , and
consultants to, the Company, and to increase the term of the 1993 Plan from 10
years to 20 years.
Description of the Plan
Under the Company's existing 1993 Plan as currently in effect, only 100,000
shares of common stock remain available for the grant of options. The Company's
Board of Directors believes it to be in the best interests of the Company and
its stockholders to increase the number the number of shares available for the
grant of options to provide incentives to officers and other key employees of
the Company to remain with and increase their efforts on behalf of the Company,
and to enable the Company's management to grant options to non-employee
directors, consultants, major vendors and others expected to provide significant
services to the Company. Accordingly, on November 1, 1999, the Company's Board
of Directors unanimously approved an amendment to the 1993 Plan to increase by
500,000 the number of shares of the Company's common stock available for the
grant of options thereunder, and directed that this amendment to the 1993 Plan
be submitted to the Company's stockholders at the Annual Meeting for their
approval. The Board of Directors also approved an amendment to the 1993 Plan to
increase its term from 10 years to 20 years.
If an option granted under the 1993 Plan expires or terminates, the shares
subject to any unexercised portion of that option will again become available
for the issuance of further options under the 1993 Plan. Options granted under
the 1993 Plan will be exclusively "nonstatutory options" that will not qualify
as "incentive stock options" under Section 422A of the Internal Revenue Service
Code of 1986. Unless the proposed amendment is adopted, the 1993 Plan will
terminate on April 15, 2003, and no options may be granted under the 1993 Plan
thereafter. As of the date of this Proxy Statement, options to purchase an
aggregate of 1,100,000 shares have been granted under the 1993 Plan.
The 1993 Plan is administered by the Board of Directors, or by a committee
consisting of at least two members of the Board of Directors who have been
appointed by the Board (the "Committee"). The Board or the Committee, as the
case may be, has the authority to select the persons to receive options granted
under the 1993 Plan, the extent of their participation, and the terms and
conditions of each option, subject to certain limitations set forth in the 1993
Plan. Full and part time employees, officers, non-employee directors,
consultants, major vendors, and others expected to provide significant services
to the Company may be granted nonstatutory options under the 1993 Plan. The
Company presently employs approximately 185 persons on a full-time basis, all of
whom are eligible for the selection as participants in the 1993 Plan. Each
member of the Committee automatically receives an option for 7,500 shares of
common stock of the Company at a price equal to the fair market value on each
anniversary date of his service as a member of the Committee, provided he is a
member of the Committee at such anniversary date.
Options granted under the 1993 Plan will become exercisable in accordance
with the terms of the grant made by the Board or the Committee, as set forth in
a written stock option agreement to be entered into by all participants
receiving options granted under the 1993 Plan. The Board or the Committee has
discretionary authority to select participants from among eligible persons and
to determine at the time an option is granted, when and in what increments
shares covered by the option may be purchased. Options may be granted on terms
providing that they will be exercisable either in whole or in part at any time
or times during their respective terms, or only in specified percentages at
stated time periods or intervals during the term of the option.
The Board or Committee may in its discretion also include in a stock option
agreement a provision making the exercise price of any option granted under the
1993 Plan payable in full (i ) by cash, by cancellation of indebtedness owed by
the Company to optionee, or by any combination of the foregoing, or (ii) by a
full recourse promissory note executed by the
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<PAGE> 13
optionee. If payment is made bymeans of a promissory note, the shares purchased
generally would be held in pledge to secure payment of the note. Unless and
until the purchaser defaulted under the promissory note or governing
instruments, the shares so pledged would remain registered in the name of the
purchaser, and the purchaser would been titled to vote the shares and to receive
all dividends and any other amounts accruing as a result of his or her ownership
of such shares.
If an optionee's employment is terminated other than for cause (as defined
in each option agreement), the employee will have the right to exercise his
option to the extent then exercisable, at any time within a three (3) month
period thereafter, to the extent he was entitled to exercise the option prior
thereto. If an optionee dies while still employed, the option may be exercised
within twelve (12) months thereafter, by his estate, of by the person or persons
to whom his rights under the option passed by will or the laws of descent or
distribution, but only to the extent the options were exercisable at the time of
death. Options granted under the 1993 Plan will not be transferable except by
will and the laws of descent and distribution. During the life of the person to
whom the option is granted, that person alone may exercise it.
Within the limits of the 1993 Plan, the Board or Committee may also modify,
extend or renew outstanding options or accept the cancellation of outstanding
options (to the extent not previously exercised) for the granting of new options
in substitution therefore. However, no modification of any option which alters
or impairs any rights or obligations under any option previously granted may be
made without the consent of the optionee.
For employees holding more than ten percent (10%) of the total combined
voting power of all classes of outstanding stock, the purchase price of each
option granted under the 1993 Plan cannot be less than 110% of the fair market
value per share of the Company's common stock subject thereto on the date of the
grant. For all other participants, the option exercise price may not be less
than the fair market value per share of the Company's common stock subject
thereto on the date of the grant. The fair market value per share will generally
be the closing bid quotation for a share of the Company's common stock on the
date an option is or was granted under the 1993 Plan. If there is no market
price available on such date, the fair market value per share will be determined
on the basis of factors deemed relevant by the Committee, including without
limitation the book value of the shares on such date and the earnings of the
Company.
The Board of Directors may, without affecting any outstanding options, from
time to time revise or amend the 1993 Plan, and may suspend or discontinue it at
any time. However, no such revision or amendment may either increase the number
of shares subject to the 1993 Plan (with the exception of adjustments resulting
from changes in capitalization) or change the class of participants eligible to
receive options granted under the 1993 Plan without stockholder approval.
In the event that the Company should elect to dissolve, merge or
consolidate with any other corporation, sell substantially all of its assets to
another person or entity, or enter into any other reorganization in a
transaction which the company is not the surviving corporation, the date of
exercisability of each option outstanding under the 1993 Plan will be
accelerated to date prior to such transaction unless provision is made in
connection with such transaction for the option or substitution of new options
with appropriate adjustments by the surviving corporation.
The foregoing description of the 1993 Plan is only a summary of the
principle terms of the 1993 Plan, does not purport to be complete, and reference
is made to the 1993 Plan which sets forth in detail all of the terms and
conditions upon which options can be granted thereunder. A complete copy of the
1993 Plan, as amended, will be provided without charge, upon written request, to
any stockholder to whom this Notice of Annual Meeting and Proxy Statement is
being sent, addressed to Corporate Secretary, CAM Data Systems, Inc., 17520
Newhope Street, Fountain Valley, California 92708.
FEDERAL INCOME TAX CONSEQUENCES
At the time of the grant of an option under the 1993 Plan, the optionee
will recognize no taxable income, and the Company will not be entitled to a
deduction, as long as such options are not actively traded on an established
market and their fair market value cannot otherwise be measured with reasonable
accuracy. However, upon the exercise of an option the optionee will recognize
taxable income in the amount by which the then fair market value of the shares
of the Company's common stock acquired upon exercise exceeds the aggregate
exercise price therefore, with the Company being entitled to a compensation
deduction for federal income tax purposes in an equal amount. The amount of such
taxable income will be characterized as compensation income to the optionee.
Persons that may be subject to the application of the provisions of Section
16(b) are subject to certain additional rules.
Upon subsequent disposition of shares of common stock acquired upon
exercise of an option, the optionee will recognize capital gain or loss in an
amount equal to the difference between the proceeds received upon disposition
and the
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<PAGE> 14
basis for the shares (the basis being equal to the sum of the price paid
for the shares upon exercise and the amount of ordinary income recognized on
account thereof), provided that the shares were held as a capital asset. Any
capital gain or loss to the optionee will be characterized as long or short
term, depending upon whether the holding period for long-term capital gain
treatment has been met.
RECOMMENDATION
The Company's Board of Directors has unanimously recommended that the
Company's stockholders vote FOR approval of the amendment to the 1993 Plan.
Approval of the amendment to the 1993 Plan by the Company's stockholders will
require the affirmative vote of the holders of a majority of the shares of
common stock represented in person or by proxy at the Annual Meeting and
entitled to vote.
OTHER BUSINESS
The Board of Directors knows of no matters other than those described
herein which are to be brought before the 2000 Annual Meeting of Stockholders.
However, if any other proper matters are brought before the Annual Meeting, the
persons named in the enclosed proxy will vote in accordance with their judgment
on such matters. Holders of a majority of the outstanding shares of the
Company's common stock must be present, either in person or by proxy, in order
for the Annual Meeting to be held. The proxy is revocable at any time and will
not affect your right to vote in person if you attend the Annual Meeting.
ANNUAL REPORTS
The Company's 1999 Annual Report to Stockholders, which includes audited
financial statements for the Company's fiscal year ended September 30, 1999,
will accompany this proxy statement being mailed to stockholders of record on
February 17, 2000. A copy of the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1999, and any amendments thereto, is available
without charge to any stockholder of the Company upon written request to CAM
Data Systems, Inc., 17520 Newhope Street, Fountain Valley, California 92708,
Attention: Finance department.
SUBMISSION OF STOCKHOLDERS PROPOSALS
Stockholders of the Corporation wishing to include proposals to be put
before the stockholders at the Annual Meeting of Stockholders of the Company to
be held in 2001, must submit the same in writing so as to be received at the
executive offices of the Company on or before December 1, 2000. Such proposals
must also meet the other requirements of the rules of Securities and Exchange
Commission relating to stockholders' proposals.
BY ORDER OF THE BOARD OF DIRECTORS:
/s/ GEOFFREY D. KNAPP
- --------------------------------
Geoffrey D. Knapp
Secretary
Dated: Fountain Valley, California
February 7, 2000
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<PAGE> 15
CAM DATA SYSTEMS, INC.
ANNUAL MEETING OF SHAREHOLDERS - APRIL 6, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of CAM Data Systems, Inc. (the "Company")
hereby appoints Geoffrey D. Knapp, the Secretary of the Company, or failing him
Paul Caceres Jr., the Chief Financial Officer of the Company, or instead of
either of the foregoing, an officer of the Company, as the nominee of the
undersigned to attend and to act for and on behalf of the undersigned at the
annual meeting of shareholders of the Company to be held on April 6, 2000 at
2:00 P.M., Pacific Standard Time, and at any adjournments thereof, to the same
extent and with same power as if the undersigned were personally present at said
meeting or such adjournment or adjournments thereof and, without limiting the
generality of the power hereby conferred, the nominees named above are
specifically directed to vote as indicated on the reverse side hereof.
SEE REVERSE SIDE
<PAGE> 16
Please date, sign and mail your proxy card back as soon as possible!
Annual Meeting of Shareholders
CAM DATA SYSTEMS, INC.
April 6, 2000
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES"
IN ITEM 1 AND "FOR" ITEMS 2 THROUGH 5
1. ELECTION OF DIRECTORS FOR_____ WITHHELD_____
Nominees:
Geoffrey D. Knapp
Walter Straub
David Frosh
Corley Phillips
Frederick Haney
Scott Broomfield
Withheld for the following only: (Write the name of the nominee(s) in
the space below:
----------------------------------------------------------------------
2. PROPOSAL TO CONFIRM THE APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS OF THE COMPANY
FOR_____ AGAINST_____ ABSTAIN_____
3. TO APPROVE AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
TO CHANGE THE COMPANY'S NAME TO "CAM COMMERCE SOLUTIONS"
FOR_____ AGAINST_____ ABSTAIN_____
4. TO APPROVE AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF THE COMPANY'S COMMON
STOCK
FOR_____ AGAINST_____ ABSTAIN_____
<PAGE> 17
5. TO AMEND THE COMPANY'S 1993 STOCK OPTION PLAN TO INCREASE THE
NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE UNDER
THE PLAN AND TO LENGTHEN THE TERM OF THE PLAN
FOR_____ AGAINST_____ ABSTAIN_____
NOTE: In the event that no specifications have been made with
respect to any manner in which the named proxy nominees are
required to vote on any matter in this proxy, nominees are
instructed to vote the shares represented by this proxy for
any matter.
If there are amendments or variations to the matters proposed at
the meeting, or at any adjournment or adjournments thereof, or if
any other business properly comes before the meeting, this proxy
confers discretionary authority on the proxy nominees named herein
to vote on such amendments, variations or other business.
IMPORTANT: Please SIGN, DATE AND RETURN this proxy as soon as
possible to American Stock Transfer & Trust Company,
40 Wall Street, New York, New York 10005, Attn: Proxy
Dept.
SIGNATURE__________________________ DATE_________________
SIGNATURE__________________________ DATE_________________
Signature if Held Jointly
Note: Please sign exactly as name appears hereon. When shares
are held by joint tenants, both should sign. When signing
as attorney, as executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign in full corporate name by
president or other authorized officer. If a partnership,
please sign in partnership name by an authorized person.
<PAGE> 18
APPENDIX
CAM DATA SYSTEMS, INC.
1993 STOCK OPTION PLAN
AS AMENDED
1. Purpose of Plan. The purpose of this 1993 Stock Option Plan (the
"Plan") of CAM Data Systems, Inc., a Delaware corporation (the "Company"), is to
promote the interests of the Company and its shareholders by providing officers,
directors, and employees of the Company, and its subsidiaries, with an
opportunity to acquire a proprietary interest in the Company and thereby develop
a stronger incentive to put forth maximum effort for the continued success and
growth of the Company and its subsidiaries. In addition, the opportunity to
acquire a proprietary interest in the Company will aid in attracting and
retaining personnel of outstanding ability.
2. Administration of Plan. This Plan shall be administered by a
committee of two or more persons who are "Non-Employee Directors" within the
meaning of Rule 16b-3 of the Securities and Exchange Commission (the
"Committee") appointed by the Company's board of directors (the "Board"). A
majority of the members of the Committee shall constitute a quorum for any
meeting of the Committee, and the acts of a majority of the members present at
any meeting at which a quorum is present or the acts unanimously approved in
writing by all members of the Committee shall be the acts of the Committee.
Subject to the provisions of this Plan, the Committee may from time to time
adopt such rules for the administration of this Plan as it deems appropriate.
The decision of the Committee on any matter affecting this Plan or the rights
and obligations arising under this Plan or any option granted hereunder shall be
final, conclusive and binding upon all persons, including without limitation the
Company, shareholders, employees and optionees. To the full extent permitted by
law, no member of the Committee shall be liable for any action or determination
taken or made in good faith with respect to this Plan or any option granted
hereunder.
3. Shares Subject to Plan. The shares that are subject to options
granted under this Plan shall be authorized but previously unissued shares of
common stock (the "Common Shares") of the Company, par value $.001, and they
shall not exceed 1,200,000 Common Shares in the aggregate, except that, if any
option lapses or terminates for any reason before such option has been
completely exercised, the shares covered by the unexercised portion of such
option may again be made subject to options granted under this Plan. Appropriate
adjustments in the number of Common Shares and in the option price per share may
be made by the Committee, in its sole discretion, to give effect to adjustments
made in the number of outstanding Common Shares of the Company through a merger,
consolidation, recapitalization, reclassification, combination, stock dividend,
stock split or other relevant change, provided that fractional shares shall be
rounded to the nearest whole share.
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4. Eligible Employees. Options may be granted under this Plan to any
officer, director or employee of the Company or any subsidiary thereof,
including consultants and advisors. References herein to "employment" and
similar terms shall include the providing of services in any such capacity.
5. Granting of Options. Subject to the terms and conditions of this
Plan, the Committee may, from time to time, prior to April 15, 2003, grant to
such eligible employees as the Committee may determine options to purchase such
number of Common Shares of the Company on such terms and conditions as the
Committee may determine. In determining the employees to whom options shall be
granted and the number of Common Shares to be covered by each option, the
Committee may take into account the nature of the services rendered by the
respective employees, their present and potential contributions to the success
of the Company, and such other factors as the Committee, in its sole discretion,
shall deem relevant. The date and time of approval by the Committee of the
granting of an option shall be considered the date and the time of the grant of
such option. Options granted under this Plan will be exclusively "Nonstatutory
Options" that will not qualify for incentive option treatment pursuant to
Section 422A of the Internal Revenue Code of 1986 ("the Code" ). This Plan does
not limit the number of shares as to which options may be granted to any one
participant (including executive officers and directors of the Company), but no
employee may be granted Stock Options which first become exercisable in any
calendar year to purchase shares of Common Stock having a fair market value
(determined at the time of the grant of the option) in excess of $100,000,
reduced by the fair market value (similarly determined) of any shares subject to
stock options granted under any other plan of the Company which also become
exercisable in such calendar year. Commencing May 25, 1995, each then current
member of the Committee shall be automatically granted an option to purchase
7,500 Common Shares. Thereafter, each Committee member shall be automatically
granted an option to purchase 7,500 Common Shares on each yearly anniversary
date of their appointment to the Committee, provided they continue to serve on
the Committee on such anniversary date. To the extent practicable, all
appointments and reappointments to the Committee will take place at the Annual
Stockholders' Meeting. Each option will be granted at an exercise price equal to
Fair Market Value (as defined below).
6. Option Price. The purchase price of each Common Share subject to an
option shall be fixed by the Committee and shall not be less than 100% of the
Fair Market Value (as defined below) of a Common Share on the date of grant. The
purchase price of each Common Share stock option that is granted to an employee
who owns at the time such option is granted, stock of the Company (or of any
parent or subsidiary of the Company) possessing more than 10% of the total
combined voting power of all classes of stock therein (a "10% Shareholder")
shall, notwithstanding anything stated in the immediately preceding sentence, be
not less than 110% of the Fair Market Value of a Common Share on the date of
grant.
For purposes of this Plan, the "Fair Market Value" of a Common Share at
a specified date shall, unless otherwise expressly provided in this Plan, mean
the closing price of a Common Share on the date immediately preceding such date
or, if no sale of such shares shall have occurred on that date, on the next
preceding day on which a sale of such shares occurred, on the
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<PAGE> 20
National Association of Securities Dealers, Inc. Automated Quotations Small
Capitalization Market, or, if such shares are not quoted on the National
Association of Securities Dealers, Inc. Automated Quotations System, the mean
between the closing "bid" and the closing "asked" quotation of such a share on
the date immediately preceding the date as of which such Fair Market Value is
being determined, or, if no closing bid or asked quotation is made on that date,
on the next preceding day on which a quotation is made, on the National
Association of Securities Dealers, Inc. Automated Quotations System or any
system then in use, provided that if the shares in question are not quoted on
any such system, Fair Market value shall be what the Committee determines in
good faith to be 100% of the fair market value of such a share as of the date in
question. Notwithstanding anything stated in this paragraph, if the applicable
securities exchange or system has closed for the day by the time the
determination is being made, all references in this paragraph to the date
immediately preceding the date in question shall be deemed to be references to
the date in question.
7. Option Period.
(a) No option may be exercised prior to one (1) year from the
date it was granted except:
(i) upon the occurrence of the disability of the holder
of option while employed by the Company or a parent
or subsidiary thereof; or
(ii) the expiration of the period after the termination
of the optionee's employment within which the
option is exercisable as specified in paragraph
9(b) or 9(c), whichever is applicable;
(iii) the death of the holder while so employed or within
three (3) months after the termination of such
employment; or
(iv) upon a Change in Control as defined in paragraph
10(b) of this Plan; or
(v) pursuant to paragraph 11(b) of this plan,
In addition, no option may be exercised prior to such time as the shareholders
of the Company shall have approved this Plan at a duly held shareholders'
meeting of the Company and a registration statement covering the Common Shares
for which the option may be exercised shall have become effective under the
Securities Act of 1933, as amended ("Shareholder Approval and Registration"),
subject to the foregoing limitations, each option agreement provided for in
paragraph 15 hereof shall specify when the option shall become exercisable.
(b) Each option granted under this Plan and all rights to
purchase shares thereunder shall cease on the earliest of:
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<PAGE> 21
(i) ten (10) years after the date such option is
granted or on such date prior thereto as may be
fixed by the Committee on or before the date such
option is granted;
(ii) April 16, 1993, if the shareholders of the Company
shall not have approved this Plan prior to that
date at a duly held shareholders, meeting; or
(iii) the date, if any, fixed for cancellation pursuant
to paragraph 11(b) of this Plan.
In no event shall any option be exercisable at any time after its original
expiration date. When an option is no longer exercisable, it shall be deemed to
have lapsed or terminated and will no longer be outstanding.
8. Manner of Exercising Options. A person entitled to exercise an option
may, subject to its terms and conditions and the terms and conditions of this
Plan, exercise it in whole at any time, or in part from time to time, by
delivering to the Company at its principal executive office, to the attention of
its Chief Financial Officer, written notice of exercise, specifying the number
of shares with respect to which the option is being exercised, accompanied by
payment in full of the purchase price of the shares to be purchased at that
time. The purchase price of each share on the exercise of any option shall be
paid in full in cash (including check, bank draft or money order) at the time of
exercise. The shares shall not be issued until full payment therefore has been
made, and the granting of an option to an individual shall give such individual
no rights as a shareholder prior to the issuance of such shares.
9. Transferability and Termination of Options.
(a) During the lifetime of an optionee, only such optionee or
his or her guardian or legal representative may exercise
the option. No option shall be assignable or transferable
by the optionee otherwise than by will or the laws of
descent and distribution or pursuant to a qualified
domestic relations order.
(b) During the lifetime of an optionee, an option may be
exercised only while the optionee is an employee of the
Company or of a parent or subsidiary thereof, and only if
such individual has been continuously so employed since
the date the option was granted, except that:
(i) as to any individual who has been continuously
employed by the Company (or a parent or subsidiary
thereof) for at lease twelve (12) full calendar
months following the grant of the option, such
individual may exercise the option within three (3)
months after termination of such individual's
employment to the extent that the
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<PAGE> 22
option was exercisable immediately prior to such
individual's termination of employment;
(ii) in the case of an employee who is disabled (within
the meaning of Section 22(e)(3) of the Code) while
employed, such individual or his or her legal
representative may exercise the option within one
(1) year after termination of such individual's
employment;
(iii) as to any individual whose termination of
employment occurs following a Change of Control as
defined in paragraph 10(b) of this Plan, such
individual may exercise the option within three (3)
months after termination; and
(iv) as to any individual whose termination of
employment occurs following a declaration pursuant
to paragraph 11(b) of this Plan, such individual
may exercise the option at any time permitted by
such declaration.
(c) An option may be exercised after the death of the optionee
by such individual's legal representatives, heirs or
legatees, but only within one (1) year after the death of
such optionee.
(d) In the event of the disability (within the meaning of
Section 22(e)(3) of the Code) or death of an optionee, any
option held by such individual or his or her legal
representative that was not previously exercisable shall
become immediately exercisable in full if Shareholder
Approval and Registration have been completed and if the
disabled or deceased individual shall have been
continuously employed by the Company or a parent or
subsidiary thereof between the date such option was
granted and the date of such disability, or, in the event
of death, a date not more than three (3) months prior to
such date. If Shareholder Approval and Registration are
completed after such date of death or disability but prior
to the expiration of the option under paragraph 7(b), the
option shall become immediately exercisable in full upon
such completion of Shareholder Approval and Registration.
10. Change in Control.
(a) Anything to the contrary in this Plan notwithstanding, in
the event of a "Change in Control, of the Company, as
defined in paragraph 10(b), an option held by a person
under this Plan that shall not have expired shall become
immediately exercisable in full, provided Shareholder
Approval and Registration shall have been completed prior
to exercise of the option.
(b) A "Change in Control", for purposes of this Plan, means,
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(i) a majority of the directors of the Company shall be
persons other than persons:
(A) for whose election proxies shall have been
solicited by the Board of Directors of the
Company; or
(B) who are then serving as directors appointed
by the Board of Directors to fill vacancies
on the Board of Directors caused by death or
resignation (but not by removal) or to fill
newly-created directorships;
(ii) during the fiscal years ended September 30, 1993,
1994, 1995 and 1996 and thereafter, 50%, 45%, 40%
and 35%, respectively, or more of the outstanding
voting stock of the Company shall have been
acquired or beneficially owned (as defined in Rule
13d-3 under the Securities Exchange Act of 15-14,
as amended, or any successor rule thereto) by any
person (other than the Company, subsidiary of the
Company or the person holding the option) or group
of persons (which group does not include the person
holding the option) acting in concert; or
(iii) The shareholders of the Company shall have approved
a definitive agreement or plan to:
(A) merge or consolidate the Company with or
into another corporation (other than (1) a
merger or consolidation with a subsidiary of
the Company or (2) a merger in which the
Company is the surviving corporation and
either (a) no outstanding voting stock of
the Company (other than fractional shares)
held by shareholders immediately prior to
the merger is converted into cash,
securities, or other property, or (b) all
holders of outstanding voting stock of the
Company (other than fractional shares)
immediately prior to the merger have
substantially the same proportionate
ownership of the voting stock of the company
or of its parent corporation immediately
after the merger);
provided, however, that if the transaction
contemplated by such definitive agreement or plan
approved by the shareholders of the Company is not
actually consummated, a Change in Control shall
retroactively be deemed not to have occurred and
the acceleration of the exercise dates of options
pursuant to paragraph 10(a) shall be deemed null
and void;
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(B) exchange, pursuant to a statutory exchange
of shares of voting stock of the Company
held by shareholders of the Company
immediately prior to the exchange, shares of
one or more classes or series of voting
stock of the Company for cash, securities or
other property;
(C) sell or otherwise dispose of all or
substantially all of the assets of the
Company (in one transaction or a series of
transactions); or
(D) liquidate or dissolve the Company;
unless a majority of the voting stock (or the voting equity interest) of the
surviving corporation or of any corporation (or other entity) acquiring all or
substantially all of the assets of the Company (in the case of a merger,
consolidation or disposition of assets) or the Company or its parent corporation
(in the case of a statutory share exchange) is beneficially owned by the person
holding the option or a group of persons that includes the person holding the
option acting in concert.
11. Dissolution, Liquidation, Merger. In the event of the proposed
dissolution or liquidation of the Company or in the event of a proposed sale of
substantially all of the assets of the Company or in the event of a proposed
merger or consolidation of the Company with or into any other corporation,
regardless of whether the Company is the surviving corporation, or a statutory
share exchange involving capital stock of the Company (such dissolution,
liquidation, sale, merger, consolidation or exchange being herein call an
"Event"), the Committee shall do one of the following:
(a) If the Event is a merger or consolidation or statutory
share exchange, make appropriate provision for the
protection of the outstanding options granted under this
Plan by the substitution, in lieu of such options, of
options to purchase appropriate voting common stock (the
"Survivor's Stock") of the corporation surviving any
merger or consolidation or, if appropriate, the parent
corporation of the Company or such surviving corporation,
or, alternatively, by the delivery of a number of shares
of the Survivor's Stock which has a Fair Market Value as
of the effective date of the Event equal to the product of
(i) the amount by which the Event Proceeds per Common
Share (as defined in paragraph 11(b) below) exceeds the
option exercise price per share times (ii) the number of
Common Shares covered by the option, or
(b) At least ten (10) days prior to the actual effective date
of an Event, declare, and provide written notice to each
optionee of the declaration, that each outstanding option,
whether or not then exercisable, shall be cancelled at the
time of, or immediately prior to the occurrence of, the
Event (unless it shall have been exercised prior to the
occurrence of the Event) in exchange
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for payment to each optionee, within ten (10) days after
the Event, of cash equal to the amount (if any), for each
share covered by the cancelled option, by which the Event
Proceeds per Common Share (as hereinafter defined) exceeds
the exercise price per Common Share covered by such
option, provided that no such declaration shall be made
unless Shareholder Approval and Registration shall have
been completed. At the time of the declaration provided
for in the immediately preceding sentence, each option
shall immediately become exercisable in full and each
optionee shall have the right, during the period preceding
the time of cancellation of the option, to exercise his or
her option as to all or any part of the shares covered
thereby. In the event of a declaration pursuant to this
paragraph 11(b), each outstanding option granted pursuant
to this Plan that shall not have been exercised prior to
the Event, as provided in the declaration pursuant to the
paragraph 11(b), each outstanding option granted pursuant
to this Plan that shall not have been exercised prior to
the Event, shall be cancelled at the time of, or
immediately prior to, the Event, as provided in the
declaration, and this Plan shall terminate at the time of
such cancellation, subject to the payment obligations of
the Company provided in this paragraph 11(b). For purposes
of this paragraph, "Event Proceeds per Common Share" shall
mean the cash plus the Fair Market Value, as determined in
good faith by the Committee, or the non-cash consideration
to be received per Common Share by the shareholders of the
company upon the occurrence of the Event.
12. Tax Withholding. Delivery of Common Shares upon exercise of a
nonstatutory stock option shall be subject to any required withholding taxes. A
person exercising such an option, as a condition precedent to receiving the
Common shares, shall pay the Company a cash amount equal to the amount of any
required withholdings.
13. Termination of Employment. Neither the transfer of employment of an
individual to whom an option is granted between any combination of the Company,
a parent corporation and a subsidiary thereof, nor a leave of absence granted to
such individual and approved by the Committee, shall be deemed a termination of
employment for purposes of this Plan. The terms "parent" or "parent corporation"
and "subsidiary" as used in this Plan shall have the meaning ascribed to "parent
corporation" and "subsidiary corporation," respectively, in Sections 425(a) and
(f) of the Code.
14. Other Terms and Conditions. The Committee shall have the power,
subject to the limitations contained herein, to fix any other terms and
conditions for the grant or exercise of any option under this Plan. Nothing
contained in this Plan or in any option granted pursuant to this Plan, shall
confer upon a person holding an option any right to continued employment by the
Company or any parent or subsidiary of the Company or limit in any way the right
of the Company or any such parent or subsidiary to terminate the employment of
an employee at any time.
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15. Option Agreements. All options granted under this Plan shall be
evidenced by a written agreement in such form or forms as the Committee may from
time to time determine, which agreement shall, among other things, designate
that the options granted are nonstatutory options.
16. Amendment and Discontinuance of Plan. The Board may at any time
amend, suspend or discontinue the Plan; provided, however, that no amendment by
the Board shall, without further approval of the shareholders of the Company:
(a) change the class of employees eligible to receive options;
(b) except as provided in paragraph 3 hereof, increase the
total number of Common Shares of the Company which may be
made subject to options granted under the Plan;
(c) increase the benefits accruing to participants under the
plan; or
(d) extend the term of this Plan beyond April 15, 2003;
No amendment to the Plan shall, without the consent of the holder of the option,
alter or impair any options previously granted under the Plan.
17. Effective Date. This Plan shall be effective upon approval thereof
by each of the Board and Shareholders.
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