SCHEDULE 14A INFORMATION
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1934
(Amendment No. 1)
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DBS INDUSTRIES, INC.
(Name of Registrant as Specified In Its Charter)
_____________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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EXHIBIT A
DBS INDUSTRIES, INC.
1998 STOCK OPTION PLAN
1. PURPOSE; DEFINITIONS.
(a) PURPOSE. The purpose of the Plan is to attract, retain and
motivate employees, officers, directors, and consultants of the Company, or a
subsidiary of the Company, by giving them the opportunity to acquire Stock
ownership in the Company.
(b) DEFINITIONS. For purposes of the Plan, the following terms
have the following meanings:
(i) "Administrator" means the Compensation Committee referred
to in Section 4 in its capacity as administrator of the Plan, or the Board in
the event that it abolishes the Compensation Committee and reinvests in the
Board the administration of the Plan.
(ii) "Board" means the Board of Directors of the Company.
(iii) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(iv) "Commission" means the Securities and Exchange Commission
and successor agency.
(v) "Company" means DBS Industries, Inc., a Delaware
corporation and its subsidiaries.
(vi) "Director" shall mean a member of the Board.
(vii) "Non-Employee Director" has the meaning set forth in Rule
16b-3 under the Exchange Act, and any successor definition adopted by the
Commission.
(viii) "Effective Date" has the meaning set forth in Section 2.
(ix) "Eligible Person" shall mean, in the case of the grant of
an Incentive Stock Option Plan, all employees of the Company or a subsidiary of
the Company and, in the case of a Non-qualified Stock Option, any director,
officer or employee of the Company or other person who, in the opinion of the
Board, is rendering valuable services to the Company, including without
limitation, an independent contractor, outside consultant, or advisor to the
Company.
(x) "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, and any successor statute.
(xi) "Fair Market Value" shall mean (i) if the stock is listed
or admitted to trade on a national securities exchange, the closing price of
the Stock on the Composite Tape, as published in the Western Edition of the
<PAGE2>
Wall Street Journal, of the principal national securities exchange on which the
Stock is so listed or admitted to trade, on such date, or, if there is no
trading of the Stock on such date, then the closing price of the Stock as
quoted on such Composite Tape on the next preceding date on which there was
trading in such Stock; (ii) if the Stock is not listed or admitted to trade on
a national securities exchange, the last price for the Stock on such date, as
furnished by the National Association of Securities Dealers, Inc. ("NASD")
through the NASDAQ National Market Reporting System or a similar organization
if the NASD is no longer reporting such information; (iii) if the stock is not
reported on the National Market Reporting System, the mean between the closing
bid and asked price for the stock on such date, as furnished by the NASD; and
(iv) if the stock is not reported on the National Market Reporting System and
if bid and asked prices for the stock are not furnished by the NASD or a
similar organization, the value established by the Administrator for purposes
of granting options under the Plan.
(xii) "Grant Date" means the date of grant of any Option.
(xiii) "Incentive Stock Option" shall mean an option which is
an option within the meaning of Section 422 of the Code, the award of which
contains such provisions as are necessary to comply with that section.
(xiv) "Non-qualified Stock Option" shall mean an option which
is designated a Non-qualified Stock Option.
(xv) "Officer" shall mean an officer of the Company and an
officer who is subject to Section 16 of the Exchange Act.
(xvi) "Option" shall mean an option to purchase Common Stock
under this Plan. An Option shall be designated by the Committee as an
Incentive Stock Option or a Non-qualified Stock Option.
(xvii) "Option Agreement" means the written option agreement
covering an Option.
(xviii)"Optionee" means the holder of an option.
(xix) "Plan" means this DBS Industries, Inc. 1998 Stock Option
Plan as amended from time to time.
(xx) "Rule 16b-3" means Rule 16b-3 under Section 16 (b) of the
Exchange Act, as amended from time to time, and any successor rule.
(xxi) "Stock" means the Common Stock, par value $0.0004, of the
Company, and any successor entity.
(xxii) "Subsidiary" shall mean any corporation in an unbroken
chain of corporations beginning with the Company if, at the time of granting of
an Option, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
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(xxiii)"Tax Date" means the date defined in Section 7.
(xxiv) "Vesting Date" means the date on which an Option becomes
wholly or partially exercisable, as determined by the Administrator in its sole
discretion.
2. EFFECTIVE DATE; TERM OF PLAN. The Effective Date of this Plan shall
be upon shareholder approval of this Plan within 12 months of the date of Board
approval. Any Options granted prior to shareholder approval of the Plan,
shall, upon shareholder approval, be deemed issued as of the grant date. This
Plan, but not Options already granted, shall terminate automatically ten years
after its adoption by the Board, unless terminated earlier by the Board under
Section 13. No Options shall be granted after termination of this Plan but all
Options granted prior to termination shall remain in effect in accordance with
their terms.
3. NUMBER AND SOURCE OF SHARES OF STOCK SUBJECT TO THE PLAN. Subject
to the provisions of Section 8, the total number of shares of Stock with
respect to which Options may be granted under this Plan is Five Hundred
Thousand (500,000) shares of Stock. The shares of Stock covered by any
canceled, expired or terminated Option or the unexercised portion thereof shall
become available again for grant under this Plan. The shares of Stock to be
issued hereunder upon exercise of an Option may consist of authorized and
unissued shares or treasury shares.
4. ADMINISTRATION OF THE PLAN. This Plan shall be administered by a
committee of at least two (2) members of the Board to which administration of
this Plan is delegated by the Board, all of whom shall be Non-Employee
Directors (the "Compensation Committee"). The "Administrator" shall mean the
"Compensation Committee" referred to in this Section 4 in its capacity as
administrator of the Plan in accordance with this Section 4. The Administrator
may delegate non-discretionary administrative duties to such employees of the
Company, or a Subsidiary, as it deems proper.
Subject to the express provisions of this Plan, the Administrator shall
have the authority to construe and interpret this Plan and any agreements
defining the rights and obligations of the Company and Optionees under this
Plan, to further define the terms used in this Plan, to prescribe, amend and
rescind rules and regulations relating to the administration of this Plan, to
determine the duration and purposes of leaves of absence which may be granted
to Optionees without constituting a termination of their employment for
purposes of this Plan and to make all other determinations necessary or
advisable for the administration of this Plan.
Any decision or action of the Administrator in connection with this Plan
or Options granted or shares of Stock purchased under this Plan shall be final
and binding. The Administrator shall not be liable for any division, action or
omission respecting this Plan, or any Options granted or shares of Stock sold
under this Plan. The Board at any time may abolish the Compensation Committee
and reinvest in the Board the administration of the Plan.
To the extent permitted by applicable law in effect from time to time, no
member of the Compensation Committee or the Board of Directors shall be liable
for any action or omission of any other member of the Compensation Committee or
the Board of Directors nor for any act or omission on the member's own part,
excepting only the member's own willful misconduct or gross negligence, arising
out of or related to the Plan. The Company shall pay expenses incurred by, and
satisfy a judgment or fine rendered or levied against, a present or former
director or member of the Compensation Committee or Board in any action against
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such person (whether or not the Company is joined as a party defendant) to
impose liability or a penalty on such person for an act alleged to have been
committed by such person while a director or member of the Compensation
Committee or Board arising with respect to the Plan or administration thereof
or out of membership on the Compensation Committee or Board or by the Company,
or all or any combination of the preceding; provided, the director or
Compensation Committee member was acting in good faith, within what such
director or Compensation Committee member reasonably believed to have been
within the scope of his or her employment or authority and for a purpose which
he or she reasonably believed to be in the best interests of the Company or its
shareholders. Payments authorized hereunder include amounts paid and expenses
incurred in settling any such action or threatened action. The provisions of
this section shall apply to the estate, executor, administrator, heirs,
legatees or devisees of a director or Compensation Committee member, and the
term "person" as used on this section shall include the estate, executor,
administrator, heirs, legatees, or devisees of such person.
5. GRANT OF OPTIONS; TERMS AND CONDITIONS OF GRANT.
(a) GRANT OF OPTIONS. One or more Options may be granted to any
Eligible Person. Subject to the express provisions of the Plan, the
Administrator shall determine from the Eligible Persons those individuals to
whom Options under the Plan may be granted. Each Option so granted shall be
designated by the Administrator as either a Non-qualified Stock Option or an
Incentive Stock Option.
Subject to the express provisions of the Plan, the Administrator shall
specify the Grant Date, the number of shares of Stock covered by the Option,
the exercise price and the terms and conditions for exercise of the Options.
If the Administrator fails to specify the Grant Date, the Grant Date shall be
the date of the action taken by the Administrator to grant the Option. As soon
as practicable after the Grant Date, the Company will provide the Optionee with
a written Option Agreement in the form approved by the Administrator, which
sets out the Grant Date, the number of shares of Stock covered by the Option,
the exercise price and the terms and conditions for exercise of the Option.
The Administrator may, in its absolute discretion, grant Options under
this Plan at any time and from time to time before the expiration of ten years
from the Effective Date to an Eligible Person.
(b) GENERAL TERMS AND CONDITIONS. Except as otherwise provided
herein, the Options shall be subject to the following terms and conditions and
such other terms and conditions not inconsistent with this Plan as the
Administrator may impose:
(i) EXERCISE OF OPTION. In order to exercise all or any
portion of any Option granted under this Plan, an Optionee must remain as an
officer, employee, consultant or director of the Company, or a Subsidiary,
until the Vesting Date. The Option shall be exercisable on or after each
Vesting Date in accordance with the terms set forth in the Option Agreement.
(ii) OPTION TERM. Each Option and all rights or obligations
thereunder shall expire on such date as shall be determined by the
Administrator, but not later than 10 years after the grant of the Option (5
years in the case of an Incentive Stock Option when the Optionee owns more than
10% of the total combined voting power of all classes of stock of the Company),
and shall be subject to earlier termination as hereinafter provided.
<PAGE5>
(iii) EXERCISE PRICE. The Exercise Price of any Option shall
be determined by the Administrator, but in the case of Incentive Stock Options
shall not be less than 100% (110% in the case of an Optionee who owns more than
10% of the total combined voting power of all classes of stock of the Company)
of the Fair Market Value of the Stock on the date the Incentive Stock Option is
granted.
(iv) METHOD OF EXERCISE. To the extent the right to purchase
shares of Stock has accrued, Options may be exercised, in whole or in part,
from time to time in accordance with their terms by written notice from the
Optionee to the Company stating the number of shares of Stock with respect to
which the Option is being exercised and accompanied by payment in full of the
exercise price. Payment may be made in cash, certified check or, at the
absolute discretion of the Administrator, by non-certified check.
(v) RESTRICTIONS ON STOCK; OPTION AGREEMENT. At the time it
grants Options under this Plan, the Company may retain, for itself or others,
rights to repurchase the shares of Stock acquired under the Option or impose
other restrictions on such shares. The terms and conditions of any such rights
or other restrictions shall be set forth in the Option Agreement evidencing the
Option. No Option shall be exercisable until after execution of the Option
Agreement by the Company and the Optionee.
(vi) NON-ASSIGNABILITY OF OPTION RIGHTS. No Option shall be
transferable other than by will or by the laws of descent and distribution.
During the lifetime of an Optionee, only the Optionee may exercise an Option.
(vii) EXERCISE AFTER CERTAIN EVENTS.
(1) TERMINATION OF EMPLOYMENT/CONSULTING/DIRECTORSHIP.
If for any reason other than permanent and total disability or death (as
defined below) an Optionee ceases to be employed by or to be a consultant or
director of the Company, or a Subsidiary, Incentive Stock Options held at the
date of such termination (to the extent then exercisable) may be exercised, in
whole or in part, at any time within three months after the date of such
termination or such lesser period specified in the Option Agreement (but in no
event after the earlier of (i) the expiration date of the Option as set forth
in the Option Agreement, and (ii) ten years from the Grant Date) and Non-
qualified Stock Options held at the date of such termination (to the extent
then exercisable) may be exercised, in whole or in part, at any time within the
period specified in the Option Agreement (but in no event after the earlier of
(i) the expiration date of the Option as set forth in the Option Agreement, and
(ii) ten years from the Grant Date), or such less period specified by the
Administrator.
If an Optionee granted an Incentive Stock Option
terminates employment but continues as a consultant, advisor or in a similar
capacity to the Company or a Subsidiary, Optionee need not exercise the Option
within three months of termination of employment but shall be entitled to
exercise within three months of termination of services to the Company or the
Subsidiary (one year in the event of permanent disability or death). However,
if Optionee does not exercise within three months of termination of employment,
the Option will not qualify as an Incentive Stock Option.
(2) PERMANENT DISABILITY AND DEATH. If an Optionee
becomes permanently and totally disabled (within the meaning of Section
22(e)(3) of the Code), or dies while employed by the Company, or while acting
as an officer, consultant or director of the Company, or a Subsidiary, (or, if
<PAGE6>
the Optionee dies within the period that the Option remains exercisable after
termination of employment or affiliation), Incentive Stock Options then held
(to the extent then exercisable) may be exercised by the Optionee, the
Optionee's personal representative, or by the person to whom the Incentive
Stock Option is transferred by will or the laws of descent and distribution, in
whole or in part, at any time within one year after the disability or death or
any lesser period specified in the Option Agreement (but in no event after the
earlier of (i) the expiration date of the Option as set forth in the Option
Agreement, and (ii) ten years from the Grant Date). Non-qualified Stock
Options shall not be limited to such one year exercise period upon permanent
disability or death and may be exercised at any time specified in the Option
Agreement (but in no event after the earlier of (i) the expiration date of the
Option as set forth in the Option Agreement, and (ii) ten years from the Grant
Date) or such lesser period specified by the Administrator.
(viii) COMPLIANCE WITH SECURITIES LAWS. The Company shall not
be obligated to issue any shares of Stock upon exercise of an Option unless
such shares are at that time effectively registered or exempt from registration
under the federal securities laws and the offer and sale of the shares of Stock
are otherwise in compliance with all applicable securities laws. Upon
exercising all or any portion of an Option, an Optionee may be required to
furnish representations or undertakings deemed appropriate by the Company to
enable the offer and sale of the shares of Stock or subsequent transfers of any
interest in such shares to comply with applicable securities laws. Evidences
of ownership of shares of Stock acquired upon exercise of Options shall bear
any legend required by, or useful for purposes of compliance with, applicable
securities laws, this Plan or the Option Agreement evidencing the Option.
6. LIMITATIONS ON GRANT OF INCENTIVE STOCK OPTIONS.
(a) The aggregate Fair Market Value (determined as of the Grant
Date) of the Stock for which Incentive Stock Options may first become
exercisable by any Optionee during any calendar year under this Plan, together
with that of Stock subject to Incentive Stock Options first exercisable (other
than as a result of acceleration pursuant to Section 9(a)) by such Optionee
under any other plan of the Company or any Subsidiary, shall not exceed
$100,000.
(b) There shall be imposed in the Option Agreement relating to
Incentive Stock Options such terms and conditions as are required in order that
the Option be an "incentive stock option" as that term is defined in
Section 422 of the Code.
(c) No Incentive Stock Option may be granted to any person who, at
the time the Incentive Stock Option is granted, owns shares of outstanding
Stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company, unless the exercise price of such Option is at
least 110% of the Fair Market Value of the Stock (determined as of the Grant
Date) subject to the Option and such Option by its terms is not exercisable
after the expiration of five years from the Grant Date.
(d) No Incentive Stock Option may be granted to any person who is
not an employee of the Company or a Subsidiary of the Company.
7. PAYMENT OF TAXES. Upon the disposition by an Optionee or other
person of shares of an Option prior to satisfaction of the holding period
requirements of Section 422 of the Code, or upon the exercise of a Non-
qualified Stock Option, the Company shall have the right to require such
Optionee or such other person to pay by cash, or check payable to the Company,
<PAGE7>
the amount of any taxes which the Company may be required to withhold with
respect to such transactions. Any such payment must be made promptly when the
amount of such obligation becomes determinable (the "Tax Date"). The
Administrator may, in lieu of such cash payment, withhold that number of Shares
sufficient to satisfy such withholding.
8. ADJUSTMENT FOR CHANGES IN CAPITALIZATION. The existence of
outstanding Options shall not affect the Company's right to effect adjustments,
recapitalizations, reorganizations or other changes in its or any other
corporation's capital structure or business, any merger or consolidation, any
issuance of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock, the dissolution or liquidation of the Company's or any
other corporation's assets or business or any other corporate act whether
similar to the events described above or otherwise. Subject to Section 9, if
the outstanding shares of the Stock are increased or decreased in number or
changed into or exchanged for a different number or kind of securities of the
Company or any other corporation by reason of a recapitalization,
reclassification, stock split, combination of shares, stock dividend or other
event, an appropriate adjustment of the number and kind of securities with
respect to which Options may be granted under this Plan, the number and kind of
securities as to which outstanding Options may be exercised, and the exercise
price at which outstanding Options may be exercised will be made.
9. DISSOLUTION, LIQUIDATION, MERGER.
(a) COMPANY NOT THE SURVIVOR. In the event of a dissolution or
liquidation of the Company, a merger, consolidation, combination or
reorganization in which the Company is not the surviving corporation, or a sale
of substantially all of the assets of the Company (as determined in the sole
discretion of the Board of Directors), the Administrator, in its absolute
discretion, may cancel each outstanding Option upon payment in cash to the
Optionee of the amount by which any cash and the fair market value of any other
property which the Optionee would have received as consideration for the shares
of Stock covered by the Option if the Option had been exercised before such
liquidation, dissolution, merger, consolidation, combination, reorganization or
sale exceeds the exercise price of the Option or negotiate to have such option
assumed by the surviving corporation. In addition to the foregoing, in the
event of a dissolution or liquidation of the Company, or a merger,
consolidation, combination or reorganization, in which the Company is not the
surviving corporation, the Administrator, in its absolute discretion, may
accelerate the time within which each outstanding Option may be exercised or
negotiate to have such option assumed by the surviving corporation.
(b) COMPANY IS THE SURVIVOR. In the event of a merger,
consolidation, combination or reorganization in which the Company is the
surviving corporation, the Board of Directors shall determine the appropriate
adjustment of the number and kind of securities with respect to which
outstanding Options may be exercised, and the exercise price at which
outstanding Options may be exercised. The Board of Directors shall determine,
in its sole and absolute discretion, when the Company shall be deemed to
survive for purposes of this Plan.
10. CHANGE OF CONTROL. If there is a "change of control" in the
Company, all outstanding Options shall fully vest immediately upon the
Company's public announcement of such a change. A "change of control" shall
mean an event involving one transaction or a related series of transactions, in
which (i) the Company issues securities equal to 25% or more of the Company's
issued and outstanding voting securities, determined as a single class, to any
individual, firm, partnership, limited liability company, or other entity,
including a "group" within the meaning of SEC Exchange Act Rule 13d-3, (ii) the
Company issues voting securities equal to 25% or more of the issued and
<PAGE8>
outstanding voting stock of the Company in connection with a merger,
consolidation other business combination, (iii) the Company is acquired in a
merger or other business combination transaction in which the Company is not
the surviving company, or (iv) all or substantially all of the Company's assets
are sold or transferred. See Section 9 with respect to Options vesting upon
the occurrence of either of the events described in (iii) or (iv) of this
Section 10 and the result upon the non-exercise of the Options.
11. SUSPENSION AND TERMINATION. In the event the Board or the
Administrator reasonably believes an Optionee has committed an act of
misconduct including, but limited to acts specified below, the Administrator
may suspend the Optionee's right to exercise any Option granted hereunder
pending final determination by the Board or the Administrator. If the
Administrator determines that an Optionee has committed an act of embezzlement,
fraud, breach of fiduciary duty or deliberate disregard of the Company rules or
rules made by a supervisor, or if an Optionee makes an unauthorized disclosure
of any Company trade secret or confidential information, engages in any conduct
constituting unfair competition, induces any Company customer to breach a
contract with the Company or induces any principal for whom the Company acts as
agent to terminate such agency relationship, neither the Optionee nor his
estate shall be entitled to exercise any Option hereunder. In making such
determination, the Board or the Administrator shall give the Optionee an
opportunity to appear and present evidence on the Optionee's behalf. The
determination of the Board or the Administrator shall be final and conclusive.
12. NO RIGHTS AS SHAREHOLDER OR TO CONTINUED EMPLOYMENT. An Optionee
shall have no rights as a shareholder with respect to any shares of Stock
covered by an Option. An Optionee shall have no right to vote any shares of
Stock, or to receive distributions of dividends or any assets or proceeds from
the sale of Company assets upon liquidation until such Optionee has effectively
exercised the Option and fully paid for such shares of Stock. Subject to
Sections 8 and 9, no adjustment shall be made for dividends or other rights for
which the record date is prior to the date title to the shares of Stock has
been acquired by the Optionee. The grant of an Option shall in no way be
construed so as to confer on any Optionee the rights to continued employment by
the Company, or a Subsidiary.
13. TERMINATION; AMENDMENT. The Board may amend, suspend or terminate
this Plan at any time and for any reason, but no amendment, suspension or
termination shall be made which would impair the right of any person under any
outstanding Options without such person's consent not unreasonably withheld.
Further, any amendment which materially increases the benefits accruing to
participants under this Plan, shall be subject to the approval of the Company's
shareholders.
14. GOVERNING LAW. This Plan and the rights of all persons under this
Plan shall be construed in accordance with and under applicable provisions of
the laws of the State of California.
