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:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the
[ X ] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2)
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
NDC Automation, 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):
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14a-6(i)(2) or. Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held April 25, 1997
TO ALL STOCKHOLDERS:
The Annual Meeting of Stockholders of NDC Automation, Inc., will be
held on the 25th day of April, 1997 at 10:00 a.m., Charlotte time, at the
Company's executive offices at 3101 Latrobe Drive, Charlotte, North Carolina
28211, for the following purposes, as described in the accompanying Proxy
Statement:
(1) To elect five (5) Directors.
(2) To ratify the selection of McGladrey & Pullen, LLP as the
independent auditors of NDC Automation, Inc. for the year 1997.
(3) To consider and vote on a proposal to ratify the 1997 Employee
Stock Option Plan and options granted thereunder.
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Your attention is directed to the Proxy Statement accompanying this
Notice for a more complete description of the matters to be acted upon at the
meeting. The 1996 Annual Report is also enclosed.
The Board of Directors has fixed the close of business on March 14,
1997 as the Record Date for the determination of the Stockholders entitled to
notice of, and to vote at, the Annual Meeting or any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Ralph Dollander
President
Dated: March 19, 1997
IMPORTANT - YOUR PROXY IS ENCLOSED
You are urged to sign, date, and mail your proxy even though you may
plan to attend the meeting. No postage is required if mailed in the United
States. If you attend the meeting, you may vote by proxy or you may withdraw
your proxy and vote in person. By returning your proxy promptly, a quorum will
be assured at the meeting, which will prevent costly follow-up delays. If your
shares are held in street name by a broker/dealer, your broker will supply you
with a proxy to be returned to the broker/dealer. It is important that you
return the form to the broker/dealer as quickly as possible so that the
broker/dealer may vote your shares. You may not vote your shares in person at
the meeting unless you obtain a power of attorney or legal proxy from the
broker/dealer authorizing you to vote the shares and you present this power of
attorney or proxy at the meeting.
<PAGE>
NDC AUTOMATION, INC.
PROXY STATEMENT
GENERAL
Introduction
This Proxy Statement and the accompanying Proxy are being mailed on or
about March 19, 1997 to holders of Common Stock ("Common Stock") in connection
with the solicitation of proxies for the Annual Meeting of Stockholders of NDC
Automation, Inc. (hereinafter the "Company"), which will be held at 10:00 a.m.
Charlotte time on April 25, 1997 at the Company's executive offices at 3101
Latrobe Drive, Charlotte, North Carolina 28211. The enclosed proxy is furnished
by the Board of Directors and the Management of the Company. Only Stockholders
of record at the close of business on March 14 , 1997 (the "Record Date") will
be entitled to notice of, and to vote at, the meeting. When proxies are returned
properly signed, the shares represented will be voted by the Directors' Proxy
Committee, consisting of Ralph Dollander and Thomas Watson, in accordance with
Stockholders' directions. You are urged to specify your choices by marking the
appropriate boxes on the enclosed proxy card. If the proxy is signed and
returned without specifying choices, the shares will be voted as recommended by
the Directors.
Number of Shares Outstanding and Voting
As of the close of business on the Record Date, there were 3,453,451
shares of Common Stock of the Company, $.01 par value, issued and outstanding
and entitled to vote. At the meeting, holders of Common Stock shall be entitled
to one vote per share on each matter coming before the meeting, for an aggregate
total of 3,453,451 votes. Provided a quorum is present, Directors will be
elected by a plurality vote. The affirmative vote of the holders of a majority
of the shares present in person or represented by proxy will be required to
ratify all other matters. Abstentions will be counted toward the number of
shares represented at the meeting. Broker non-votes will be disregarded.
Expenses of Solicitation
The Company will pay the costs of such solicitation of proxies,
including the cost of assembling and mailing this Proxy Statement and the
material enclosed herewith. In addition to the use of the mails, proxies may be
solicited personally, or by telephone or telegraph, by corporate officers and
some employees of the Company without additional compensation. The Company
intends to request brokers and banks holding stock in their names, or in the
names of nominees, to solicit proxies from their customers who own such stock,
where applicable, and will reimburse them for their reasonable expenses of
mailing proxy materials to their customers.
Revocation of Proxy
Stockholders who have executed and delivered proxies pursuant to this
solicitation may revoke them at any time before they are exercised by delivering
a written notice to the Secretary of the Company either at the Annual Meeting
or, prior to the meeting date, at the Company's offices at 3101 Latrobe Drive,
Charlotte, North Carolina 28211, by executing and delivering a later dated
proxy, or by attending the meeting and voting in person.
* * * * *
Your vote is important. Accordingly, you are urged to sign and return
the accompanying proxy card whether or not you plan to attend the meeting.
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ELECTION OF DIRECTORS
(Item A on Proxy Card)
The Board unanimously recommends that Stockholders vote FOR, and the
Directors' Proxy Committee intends to vote FOR, the election of the five
nominees listed on the Proxy Card, and further described in the following pages,
unless otherwise instructed on the Proxy Card. If you do not wish your shares to
be voted for a particular nominee, please so indicate in the space provided on
the Proxy Card. Directors elected at the Meeting will hold office until the next
Annual Meeting or until their successors have been elected and qualified.
MANAGEMENT
Directors and Executive Officers
The following table sets forth the names and ages of the Company's
Directors and executive officers and the positions they hold with the Company.
<TABLE>
<CAPTION>
Name Age Positions with the Company
<S> <C> <C>
Goran P. R. Netzler 58 Chairman of the Board
Ralph G. Dollander 51 President, Chief Executive Officer and Director
Jan H. L. Jutander (1) 52 Director
Richard D. Schofield (1) 60 Director
T. Randolph Whitt (1) 51 Director
Claude Imbleau 39 Treasurer, Chief Financial Officer,
Vice President Finance and
Administration, Comptroller and
Chief Accounting Officer
E. Thomas Watson 45 Secretary of the Company,
Legal Counsel
</TABLE>
(1) Member of Compensation and Audit Committee
Goran P. R. Netzler has been Chairman of the Board of Directors of the
Company since the Company's formation and Netzler & Dahlgren's President since
Netzler & Dahlgren's formation. Mr. Netzler lives and works in Sweden.
Ralph G. Dollander has been a director of the Company since November 1995
and has served as President and Chief Executive Officer since September, 1995.
Mr. Dollander received his MBA from the University of Gothenburg, Sweden, in
1969 and has served as President for two different Swedish companies since
1985. Mr. Dollander has held other various executive positions during
his career, in Sweden and in North America.
Jan H. L. Jutander has been a director of the Company since the Company's
formation, and Netzler & Dahlgren's Vice President/Operations since its
formation. Mr. Jutander lives and works in Sweden.
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<PAGE>
Richard D. Schofield has been a director of the Company since May 1994 and
has been an IBM Branch Office manager, Greater New York Regional manager and
also Manager of Field Support for IBM World Trade, Americas/Far East. IBM is a
corporation developing, manufacturing, marketing and servicing information
technology products on a worldwide basis. He also held various other positions
during his IBM career from April 1967 to April 1987.
T. Randolph Whitt has been a director of the Company since November 1995 and is
President of Hitchner, Whitt & Co., P.A., a public accounting company providing
auditing, tax and consulting services. Mr. Whitt's firm previously served as the
Company auditors prior to its initial public offering in 1990.
Claude Imbleau has served as Vice President/Finance and Administration
since May 1988 and as Comptroller and Chief Accounting Officer since January
1987. During 1992 Mr. Imbleau was elected Chief Financial Officer, and in
February 1993 he was elected Treasurer. Since January 1984, he has served the
Company and its predecessors in various executive capacities.
E. Thomas Watson has served as Secretary of the Company since February 1993
and served as Assistant Secretary of the Company and its predecessors prior to
that date. Mr. Watson is a partner in the law firm of Parker, Poe, Adams &
Bernstein in Charlotte, North Carolina.
The Board of Directors currently consists of five members, including two
independent directors, Messrs. Schofield and Whitt.
Directors are generally elected to serve for a term of one year or until
their successors shall have been elected and qualified. Officers of the Company
are elected by the Board of Directors to hold office until the first meeting of
the Board of Directors following the next annual meeting of stockholders and
until their successors are elected and qualified.
Audit Committee
The Audit Committee during 1996 was comprised of Messrs. Jutander,
Schofield, and Whitt. The Audit Committee met three times in fiscal year
1996. The function of the Audit Committee is to recommend the appointment of the
Company's independent auditors, determine the scope of the annual audit to be
made, review the conclusions of such auditors and report the findings and
recommendations thereof to the Board, review with the Company's auditors the
adequacy of the Company's system of internal controls and procedures and the
role of management in connection therewith, oversee litigation in which the
Company is involved, review transactions between the Company and its officers,
directors and principal stockholders, monitor the Company's practices and
programs with respect to public interest issues and perform such other duties
and undertake such other responsibilities as the Board from time to time may
determine.
Compensation Committee
The Compensation Committee during 1996 was comprised of Messrs. Jutander,
Schofield and Whitt. The Compensation Committee held three meetings in
fiscal 1996. The Compensation Committee exercises the authority of the Board of
Directors with respect to reviewing and determining compensation, non-cash
perquisites and all other benefits granted to the principal officers
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<PAGE>
of the Company which are not available to other employees, authorizing payment
of bonuses otherwise than under an employee benefit plan and authorization,
establishment and maintenance of all employee stock option plans.
The Company currently has no standing Nominating Committee.
During the fiscal year 1996, there were three meetings of the Board of
Directors of the Company. During the fiscal year 1996 each director attended at
least two-thirds of the meetings of the Board of Directors of the Company and
each committee of which he was a member.
Security Ownership of Management and Others
The following table sets forth, as of January 22, 1997, information as
to the beneficial ownership of the Company's common stock by (i) each person
known to the Company as having beneficial ownership of more than 5% of the
Company's Common Stock, (ii) each "named executive officer" as defined in Item
402(a) (3) of Regulation S-K under the Securities Exchange Act of 1934, and (iv)
all Directors and executive officers of the Company as a group.
Name of Beneficial Owner (1) Amount and Nature Percentage
of Beneficial Ownership of Class
---------------------------- ----------------------- ----------
Apogeum AB (7)(11) 550,000 15.9%
Gunnar K. Lofgren (2)(3)(5) 272,140 7.9%
Goran P. R. Netzler (7) 200,640 5.8%
Jan H. L. Jutander (7) 200,640 5.8%
Ralph G. Dollander (6) 20,000 *
Richard D. Schofield (8) - -
T. Randolph Whitt (10) 1,000 *
E. Thomas Watson (9) - -
Claude Imbleau (4)(6) 14,250 *
Arne Nilsson (7) 200,640 5.8%
Anders Dahlgren (7) 200,640 5.8%
All directors and executive officers
as a group (seven persons) 986,530 28.6%
* Less than one percent
(1) Unless otherwise noted, each person has sole voting and investment
power over the shares listed opposite his name
(2) Includes 61,750 shares that Mr. Lofgren has the right to acquire upon
exercise of options exercisable.
(3) Includes 100,000 shares that are beneficially owned by M-P limited
partnership of which Mr. Lofgren has full voting rights.
(4) Includes 11,250 shares that Mr. Imbleau has the right to acquire upon
the exercise of options.
(5) The address of such person is as follows: 225 Beckham Court, Charlotte,
NC 28211.
(6) The address of such person is as follows: 3101 Latrobe Drive,
Charlotte, NC 28211.
(7) The address of such person is as follows: Munkekullen, SE-430 40, Saro,
Sweden.
(8) The address of such person is as follows: 1131 Asheford Green Ave.,
Concord, NC 28027
(9) The address of such person is as follows: 2600 Charlotte Plaza,
Charlotte, NC 28244
(10) The address of such person is an follows: 930 East Blvd., Charlotte, NC
28203
(11) Apogeum AB is controlled by Dr. Goran P.R. Netzler, Jan H.L. Jutander,
Arne Nilson and Anders Dahlgren. Apogeum is the Parent Company of
Netzler & Dahlgren Co. AB.
4
<PAGE>
EXECUTIVE COMPENSATION
Compensation For Officers
The following table sets forth the annual and long-term compensation
attributable for services rendered in the fiscal year 1996 by Ralph Dollander.
At November 30, 1996 Mr. Dollander was the only executive officer of the Company
whose annual compensation exceeded $100,000.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Annual Compensation Compensation
Awards
Name and Other Annual Securities Underlying
Principal Position Year Salary(1) Bonus(2) Compensation(3) Options/SARs
<S> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------
Ralph G. Dollander
President and Chief 1996 $107,216 $12,700 $6,577 0
Executive Officer
</TABLE>
(1) Does not include certain prerequisites such as the use of an
automobile; payment of all such items did not exceed, in the aggregate,
the lesser of either $50,000 or 10% of the annual salary.
(2) The amount includes a $700 contribution to the Company's profit sharing
401(k) for the year indicated.
(3) Amounts disbursed to cover certain educational expenses of Mr.
Dollander's family.
Employment Contract
The Company has an employment contract with Mr. Ralph Dollander, the Company's
President. It provides for an annual base salary of $120,000 for 1996, the
initial contract year, subject to cost of living adjustments and discretionary
increases approved by the Board of Directors upon the recommendation of the
Compensation Committee. In addition to the base salary Mr. Dollander receives
$12,000 toward a retirement plan and receives compensation to contribute to the
educational expenses of his family. Mr. Dollander's contract expires on March 1,
1999 and will be automatically renewed for successive one year terms,
thereafter, unless terminated by either party. Mr. Dollander is also entitled to
receive six months of base salary in the event he elects to terminate his
employment following a change of control of the Company (as defined in his
contract). The contract requires Mr. Dollander to devote his full time,
attention and best efforts to the Company's business. It also states that at no
time will he devote less time than is necessary to discharge his duties to the
Company. Mr. Dollander's contract also contained restrictive covenants pursuant
to which he has agreed not to compete with the Company for business in North
America during the term of his employment and for a period of one year following
his termination from the Company.
5
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Stock Options
The following charts show stock option grants, exercises and
values for Mr. Dollander under the proposed 1997 NDC Automation, Inc.
Stock Option Plan.
Option/SAR Grants under Proposed Plan
Individual Grants
Number of
Securities
Underlying % of Total
Options/ Options/SARs Exercise or
Name SARs Granted Granted to Base Price Expiration
(#) Employees ($/Sh)(1) Date
- - -------------------------------------------------------------------------------
Ralph G. Dollander 60,000 (2) 26.7% $.50 12/31/2001
(1) Stock options were granted at the mean between the bid and ask price
for the day ending December 31, 1996; such options were approved by the
Board of Directors but remain to be ratified at the 1997 shareholders
annual meeting.
(2) 20,000 Options become exercisable in each of the following fiscal years
ending November 30, 1997, 1998 and 1999, based on performance criteria.
No stock options were exercised by any of the Company's officers during
fiscal year 1996. The following table details the Proposed Plan
value of unexercised options on an aggregate basis.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises under Proposed Plan
and FY-End Option/SAR Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options Options
(#) ($)(2)
Shares Acquired on Value Realized Exercisable/ Exercisable/
Name Exercise(#)(1) ($)(2) Unexercisable Unexercisable
- - ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ralph G. Dollander 0 $ 0 0/60,000 $0/$0
</TABLE>
(1) Upon the exercise of an option, the optionee must pay the exercise price in
cash.
(2) Represents the difference between the fair market value of the common stock
underlying the option and the exercise price at exercise, or fiscal
year-end, respectively.
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CERTAIN TRANSACTIONS
Netzler & Dahlgren
Netzler & Dahlgren, a Swedish based company engaged in the manufacturing of
Automatic Guided Vehicle (AGV) controls and components, is controlled by Messrs.
Netzler, Dahlgren, Jutander, Nilsson and Apogeum AB, who collectively own
approximately thirty-nine percent (39%) of the Company's outstanding Common
Stock at the date hereof.
Pursuant to the Master License Agreement, Netzler & Dahlgren is entitled to
a ten percent royalty on fees received by the Company from its licensing of AGV
control technology. During the fiscal years ended November 30, 1996, 1995 and
1994, the Company incurred royalties to Netzler & Dahlgren in the aggregate
amounts of $0, $500 and $1,250 and purchased hardware, software and consulting
services from Netzler & Dahlgren in the aggregate amounts of $1,049,324,
$737,375, and $550,000, respectively. There were no interest charges in 1996
compared to $279,540 in 1995 and $428,717 in 1994 stemming from delayed payment
of trade payables to Netzler & Dahlgren. In addition, consulting charges of
$233,000 were incurred in 1994 relating to the Company's arbitration proceeding
with a former major customer, Schlafhorst, Inc. There were no such expenses
incurred in 1995 or 1996.
In 1996, the Company received fees totaling $174,750 from Netzler & Dahlgren
relating to laser products sales .
Compensation of Directors
Director compensation is $5,000 annually, paid in arrears, except that
Company's President and Chief Executive Officer receives no separate
compensation for his service as a director and the Chairman receives $7,500
annually. Directors who serve on the audit and compensation committees receive
$1,500 annually to chair the committee and other participants receive $1,000
annually. Mr. Anders Dahlgren, a former director, who is not seeking a further
term as a director serves as a consultant to the Board of Directors and receives
$5000 annually for his services.
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
directors, officers and holders of more than 10% of the Company's Common Stock
to file with the Securities and Exchange commission initial reports of ownership
and reports of changes in ownership of Common Stock and any other equity
securities of the Company. To the Company's knowledge, based solely upon a
review of the forms, reports and certificates filed with the Company by such
persons, all such Section 16 (a) filing requirements were complied with by such
persons in 1996.
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RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(Item B on Proxy Card)
Subject to Stockholder ratification, the Board of Directors has appointed
the firm of McGladrey & Pullen, LLP, as independent public auditors for the year
1997. McGladrey & Pullen, LLP, has audited the Company's books since May 25,
1989.
The Board recommends that Stockholders vote FOR, and the Directors' Proxy
Committee intends to vote FOR ratification, unless otherwise instructed on the
Proxy Card. If the Stockholders do not ratify this selection, other independent
auditors will be appointed by the Board upon recommendation of the Audit
Committee.
One or more representatives of McGladrey & Pullen, LLP, will attend the
Annual Meeting. They will have the opportunity to make a statement, if they
desire to do so, and are expected to be available to respond to appropriate
questions.
APPROVAL OF
THE NDC AUTOMATION, INC. 1997 STOCK OPTION PLAN
(Item C on Proxy Card)
On December 7, 1996, the Compensation Committee of the Board of Directors
adopted the NDC Automation, Inc. 1997 Stock Option Plan (the "Stock Option
Plan"), subject to the approval of the Stockholders as and to the extent
required in order for the Stock Option Plan to comply with the requirements of
Rule 16b-3 promulgated by the Securities and Exchange Commission. The purpose of
the Stock Option Plan is to secure, for the Company and its shareholders, the
benefits of the incentive inherent in common stock ownership by the employees of
the Company; to provide additional incentive by conditioning the exercise of the
options granted thereunder on the attainment of certain performance targets by
the Company; and to encourage cooperation among all employees to work for the
Company's benefit.
The full text of the Stock Option Plan appears as Exhibit A to this Proxy
Statement. Its essential features are summarized below, but this summary is
qualified in its entirety by reference to the full text.
Under the Stock Option Plan, the Compensation Committee shall from time to
time determine and designate the employees of the Company who may receive
options. In making any such award, the Committee may take into account the
nature of services rendered by an employee, salary or other compensation earned
by the employee, the capacity of the employee to contribute to the success of
the Company, and any other factor the Compensation Committee may consider
relevant. The Compensation Committee may award options to purchase up to an
aggregate of 225,000 shares of Common Stock (subject to adjustment in certain
events, including changes in capitalization). In the event that an outstanding
option terminates for any reason, the shares of Common Stock subject to the
unexercised option or portion thereof shall again be available for grants under
the Stock Option Plan.
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An option granted under the Stock Option Plan (evidenced by an agreement in
a form approved by the Compensation Committee) entitles the optionee to purchase
shares of Common Stock at an option exercise price determined by the
Compensation Committee (but not less than 100% of the fair market value of the
shares of Common Stock subject to the option on the date of grant). The term of
the options will be determined by the Compensation Committee that may, in its
discretion, provide for a vesting schedule whereunder the optionee would be able
to exercise his option as to a specified percentage of optioned shares after a
specified period from the date of grant. The Compensation Committee may also
condition the exercise of any option on the attainment of certain performance
goals by the Company, a division within the Company, and/or the optionee.
The Stock Option Plan provides that an option shall terminate and may not
be exercised if the optionee ceases to be employed by the Company.
Options granted under the Stock Option Plan are non-transferable and
nonassignable by the optionee other than by will or the laws of descent or
distribution and are exercisable during his lifetime only by optionee. Upon the
exercise of an option, the option price is payable in United States dollars, in
cash, including by check. The Company receives no consideration upon the grant
of the options. Any proceeds received by the Company from the sale of Common
Stock on the exercise of an option shall be used for general corporate purposes.
No less than 100 shares of common stock may be purchased at any one time upon
the exercise of options unless the total number purchased is the total number at
the time purchasable under the available options.
Upon the occurrence of certain events involving the recapitalization or
reorganization of the company, the Compensation Committee will make appropriate
adjustments to the number of shares covered by each outstanding option and the
per share exercise price or make other appropriate adjustments, in its
discretion, to prevent dilution or enlargement of rights.
The Compensation Committee granted and on December 31, 1996 the Board of
Directors approved the options as indicated below, exercisable pursuant to a
vesting schedule commencing November 30, 1997, subject to certain conditions
(including Stockholder approval as and to the extent required by Rule 16b-3), at
a price established by calculating the mean between the bid and asked prices
last reported by the National Association of Securities Dealers, Inc. for the
over-the-counter market on effective date of the grant.
Set forth below is information with respect to options granted under the
Stock Option Plan to individual directors and officers to the Company:
NEW PLAN BENEFITS
Name Dollar Value($)(1) Number of units
- - ---------------------------------------------------------------------------
Ralph G. Dollander 0 60,000 (2)
Chief Executive Officer
Claude Imbleau 0 30,000 (3)
Chief Financial Officer
- - ---------------------------------------------------------------------------
(1) Stock options were granted at the mean between the bid and ask price for
the day ending December 31, 1996 approved by the Board of Directors. The
exercise price of all options is $0.50.
(2) 20,000 Options for each of the years 1997, 1998, and 1999 based on
performance criteria.
(3) 10,000 Options for each of the years 1997, 1998, and 1999 based on
performance criteria.
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As of January 31, 1997, 225,000 shares of Common Stock were subject to
outstanding options under the Stock Option Plan. Providing the exercise criteria
have been met, the options may be exercised by the optionee through November 30,
2007. As of January 31, 1997, the market price for the Common Stock was $0.46875
per share.
The Compensation Committee may from time to time alter, amend, suspend or
discontinue this Stock Option plan or revise it in any respect whatsoever for
the purpose of maintaining or improving the effectiveness of the Stock Option
Plan as an incentive device, or conforming the Stock Option Plan to applicable
governmental regulations or to any change in applicable law or regulations, or
for any other purpose permitted by law; provided, however, that no such action
by the Committee shall adversely affect any benefit heretofore granted under the
Stock Option Plan without the consent of the holder so affected.
Approval by Stockholders
The Board recommends that Stockholders vote FOR , and the Directors' Proxy
Committee intends to vote FOR ratification of the Stock Option Plan, unless
otherwise instructed on the Proxy Card.
OTHER MATTERS TO COME BEFORE THE MEETING
If any business not described herein should properly come before the
meeting, the members of the Director's Proxy Committee will vote the shares
represented by them in accordance with their best judgment. At the time this
proxy statement went to press, the Company knew of no other matters which might
be presented for Stockholder action at the meeting.
STOCKHOLDER PROPOSALS
Should a stockholder desire to include in next year's proxy statement a
proposal other than those made by the Board, such proposal must be sent to the
Secretary of the Company at 3101 Latrobe Drive, Charlotte, North Carolina 28211,
and must be received by November 7, 1997.
The above Notice and Proxy Statement are sent by order of the Board of
Directors.
Ralph G. Dollander
President
10
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NDC AUTOMATION, INC.
1997 EMPLOYEE INCENTIVE STOCK OPTION PLAN
ARTICLE I
PURPOSE; EFFECTIVE DATE; DEFINITIONS
1.1 Purpose. The NDC Automation, Inc. 1997 Incentive Stock Option Plan is
intended to secure for NDC Automation, Inc. (the "Company") and its shareholders
the benefits of the incentive inherent in common stock ownership by the
employees of the Company; to provide additional incentive by conditioning the
exercise of the options granted hereunder on the attainment of performance goals
as determined for each participating employee by the Committee; and to encourage
cooperation among all employees to work for the Company's benefit.
1.2 Effective Date. This Plan shall be effective upon adoption by the
Compensation Committee, but shall be subject to ratification by a majority of
the shareholders at the next following annual shareholders' meeting.
1.3 Definitions. Throughout this Plan, the following words and phrases
shall have the meanings indicated:
(a) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor revenue laws of the United
States.
(b) "Committee" shall mean the Compensation Committee or any
successor committee of directors of the Company designated
by the Board of Directors to administer this Plan;
(c) "Common Stock" shall mean the common stock of the Company;
(d) "Company" shall mean NDC Automation, Inc., a Delaware
corporation, and any of its Subsidiaries;
(e) "Employee" shall mean any person who is and has been
engaged by the Company or a subsidiary or affiliate of the
Company as a full-time employee for at least fifty-two (52)
consecutive weeks;
"Fair Market Value" shall mean, with respect to a share
of Common Stock from time to time, (i) if the Common Stock is
traded on the National Market System, the average of the last
asking price of a share of Common Stock for the period of two
(2) trading days ending on the applicable date or, if there is
no trading on such date, the period of two (2) trading days
immediately preceding such date, as published in the NASDAQ
National Market Issues report in the EASTERN EDITION of THE WALL
STREET JOURNAL, (ii) if the Common Stock is not traded on the
National Market System, but such Common stock is listed on a
national securities exchange, the mean between the highest price
and the lowest price at which the Common Stock shall have been
sold in a regular way on a national securities exchange on the
applicable date or, if there are no sales on said date, then on
the next preceding date on which there were sales of Common
Stock, (iii) if the Common Stock is not traded on the National
Market
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System or listed on a national securities exchange, the
mean between the bid and asked prices last reported by the
National Association of Securities Dealers, Inc. for the
over-the-counter market on the applicable date or, if no bid and
asked prices are reported on said date, then on the next
preceding date on which there were such quotations, or (iv) if
the Common Stock is not traded on the National Market System or
listed on a national securities exchange and quotations for the
Common Stock are not reported by the National Association of
Securities Dealers, Inc., the fair market value determined by
the Committee on the basis of available prices for the Common
Stock or in such manner as the Committee shall agree;
(g) "Option" shall mean an option to purchase a share of Common
Stock granted by the Committee to an Employee pursuant to
this Plan; "Options" shall mean the option to purchase
multiple shares of such Common Stock;
(h) "Option Agreement" shall mean a written agreement between
Company and an Employee pursuant to which an Option is
granted;
(i) "Option Shares" shall mean the shares of Common Stock
purchased upon the exercise of Options.
(j) "Plan" shall mean this NDC Automation, Inc. 1997 Employee
Incentive Stock Option Plan and any amendments adopted at
any time hereto;
(k) "Subsidiary" shall mean a subsidiary corporation of the
Company as defined in Sections 424(f) and 424(g) of the
Code.
ARTICLE II
ELIGIBILITY; SHARES SUBJECT TO THE PLAN
2.1 Eligibility. The Committee shall from time to time determine and
designate the Employees of the Company who may receive Options under the Plan
and the number of Options and restrictions applicable upon their exercise (if
any) to be awarded each such Employee. In making any such award, the Committee
may take into account the nature of services rendered by an Employee, salary or
other compensation earned by the Employee, the capacity of the Employee to
contribute to the success of the Company, and other factors that the Committee
may consider relevant.
2.2 Shares Subject to the Plan. Subject to the provisions of Section
3.1(e), the maximum number of shares of stock that may be issued under the Plan
shall not exceed in the aggregate 225,000 shares of Common Stock. No more than
75,000 shares may be made the subject of Options issued in a single fiscal year,
and no more than 30,000 shares in a single fiscal year may be made the subject
of Options awarded to executive officers of the Company. Such shares may be
authorized and unissued shares, or authorized and issued shares that have been
reacquired by the Company as treasury stock. If any Options granted under the
Plan shall for any reason terminate or expire or be surrendered without having
been exercised in full, the shares not purchased under such Options shall be
available again for grant of new Options under the Plan.
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ARTICLE III
STOCK OPTIONS
3.1 Grant; Terms and Conditions. The Committee from time to time may
grant Options under this Plan to the Employees, which grant shall be evidenced
by Option Agreements, which Option Agreements shall be in such form and contain
such provisions as the Committee shall from time to time approve consistent with
this Plan. No Employee may receive Options except if he has first signed an
Option Agreement. The Option Agreements need not be identical, but each Option
Agreement by appropriate language shall include the substance of all of the
following terms and conditions:
(a) Number of Shares. Each Option Agreement shall state the
number of shares to which it pertains.
(b) Option Price. Each Option Agreement shall state the Option
Exercise Price, which shall not be less than 100% of the Fair Market
Value of the shares of Common Stock subject to the Option on the date
of granting the Option.
(c) Date of Grant. The date when an option shall be deemed to
have been granted shall be the date on which the last action needed to
be taken by the Company to make the Option binding shall have been
completed.
(d) Medium and Time of Payment. Upon the exercise of the Option,
the Option Exercise Price shall be payable in United States dollars, in
cash (including by check).
(e) Term and Exercise of Options. The term of each Option shall
be determined by the Committee. Not less than one hundred
(100) shares may be purchased at any one time unless the
number purchased is the total number at the time
purchasable under the available Options. No Option may be
exercised except more than two years after its date of
grant, and no Common Stock acquired as a result of such
exercise may be conveyed by the Optionee for at least one
year after the date of the issuance to him/her of such
Common Stock.
(f) Assignment or Transfer of Options. During the lifetime of the
optionee, Options shall be exercisable only by him and shall not be
assignable or transferable by him and no other person shall acquire any
rights therein. An Option may be transferred (unless the Committee
otherwise prescribes) by will or the laws of descent or distribution.
(g) Recapitalization; Reorganization. Subject to any required
action by the shareholders of the Company, the maximum number of shares
of Common Stock that may be issued under this Plan pursuant to Section
2.2 above, the number of shares of Common Stock covered by each
outstanding Option and the per share Option Exercise Price under each
outstanding Option shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Common Stock resulting
from a subdivision or consolidation of shares or the payment of a stock
dividend (but only on the Common Stock) or any other increase or
decrease in the number of such shares affected without receipt of
consideration by the Company.
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Subject to any required action by the shareholders, if the
Company is the surviving corporation in any merger, each outstanding
Option shall pertain to and apply to the securities or other
consideration that a holder of the number of shares of Common Stock
subject to the Option would have been entitled to receive in the merger.
A dissolution, liquidation or consolidation of the Company or a merger in
which the Company is not the surviving corporation, other than a merger
effected for the purpose of changing the Company's domicile, shall cause
each outstanding Option to terminate, provided that each optionee shall,
in such event, have the right immediately prior to such dissolution,
liquidation, merger or consolidation, to exercise his Option in whole or
in part if the same be otherwise exercisable without regard to any
restriction. In the case of a merger effected for the purpose of changing
the Company's domicile, each outstanding Option shall continue in effect
in accordance with its terms and shall apply to the same number of shares
of common stock of such surviving corporation as the number of shares of
Common Stock to which it applied immediately prior to such merger,
adjusted for any increase or decrease in the number of outstanding shares
of common stock of the surviving corporation effected without receipt of
consideration.
In the event of a change in the Common Stock as presently
constituted, which change is limited to a change of all of the authorized
shares with par value into the same number of shares with a different par
value or without par value, the shares resulting from any such change
shall be deemed to be the Common Stock within the meaning of the Plan.
The foregoing adjustments shall be made by the Committee, whose
determination shall be final, binding and conclusive.
Except as expressly provided in this subsection, the optionee
shall have no rights by reason of (i) any subdivision or consolidation of
shares of any class, (ii) any stock dividend, (iii) any other increase or
decrease in the number of shares of stock of any class, (iv) any
dissolution, liquidation, merger, or consolidation or spin-off, split-off
or split-up of assets of the Company or stock of another corporation, or
(v) any issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class. Moreover,
except as expressly provided in this subsection, the occurrence of one or
more of the above-listed events shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of
shares of Common Stock subject to the Option (or the number of shares
with respect to a related Stock Appreciation Right).
The grant of Options pursuant to the Plan shall not affect in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or any part of its business or assets.
(h) Rights as a Shareholder. An optionee or a transferee of an
Option shall have no rights as a shareholder with respect to any shares
covered by his Option until the date of the issuance of a stock
certificate to him for those shares upon payment of the exercise price.
No adjustments shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other
rights for which the record date is prior to the date such stock
certificate is issued, except as provided in subsection 3.1(e).
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(i) Modification, Extension, and Renewal of Options. Subject to
the terms and conditions and within the limitations of the Plan, the
Committee may modify, extend or renew outstanding Options granted under
the Plan, or accept the surrender of outstanding Options (to the extent
not theretofore exercised) and authorize the granting of new Options in
substitution therefor (to the extent not theretofore exercised). No
modification of an Option shall, without the consent of the optionee,
alter or impair any rights or obligations under any Option theretofore
granted under the Plan.
(j) Exercisability and Term of Options. Options granted pursuant
to this Plan are intended to constitute "incentive stock options" under
Section 422(b) of the Code, and notwithstanding anything herein to the
contrary, such Options shall at all times be subject to all applicable
restrictions required by the Code to be eligible for such status.
Every Option Agreement shall provide that unless an Option has
earlier terminated, Options granted pursuant to this Plan shall be
exercisable at any time on or after the date of exercise set forth in the
Option Agreement and before the date that is ten (10) years after the
date of grant; provided, however, an Option shall terminate and may not
be exercised if the Employee to whom it is granted ceases to be employed
by the Company, except that (1) if such Employee's employment terminates
for any reason other than conduct that in the judgment of the Committee
involves dishonesty or action by the Employee that is detrimental to the
best interest of the Company, the Employee may at any time within three
months after termination of his employment exercise his Option but only
to the extent the Option was exercisable by him on the date of
termination of his employment; (2) that if such Employee's employment
terminates on account of total and permanent disability, the Employee may
at any time within one year after termination of his employment exercise
his Option but only to the extent the Option was exercisable on the date
of his termination of employment; or (3) that if such Employee dies while
in the employ of the Company, or within the three or twelve month period
following termination of his employment as described in (1) or (2) above,
his Option may be exercised at any time within twelve months following
his death by the person or persons to whom his rights under the Option
shall pass by will or by the laws of descent and distribution, but only
to the extent that such Option was exercisable by him on the date of his
termination of employment. Each Option Agreement may provide for
acceleration of exercisability in the event of retirement, death or
disability. Notwithstanding anything to the contrary in this subsection,
an Option may not be exercised by anyone after the expiration of its
term.
3.2 Other Provisions. The Option Agreements authorized under the Plan
shall contain such other provisions, including, without limitation, restrictions
upon the exercise of the Option and the consideration to be received by the Com-
pany as payment for the Common Stock, as the Committee shall deem advisable.
(For example, the Committee could provide as to any Option for a vesting
schedule whereunder the optionee would be able to exercise his Option as to (for
example) one-third of his Option Shares after a period of (for example) one
year from the date of grant of the Option, another one-third after two years,
and so on. The Committee could further provide for the conditioning of the
exercise of any Option on the attainment of certain performance goals by the
Company, a division within the Company and/or the Optionee.)
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ARTICLE IV
MISCELLANEOUS
4.1 Amendment, Modification, Suspension or Discontinuance of Plan. The
Committee may from time to time alter, amend, suspend or discontinue this Plan
or revise it in any respect whatsoever for the purpose of maintaining or
improving the effectiveness of the Plan as an incentive device, or conforming
the Plan to applicable governmental regulations or to any change in applicable
law or regulations, or for any other purpose permitted by law; provided,
however, that no such action by the Committee shall adversely affect any Benefit
theretofore granted under the Plan without the consent of the holder so
affected.
4.2 Governing Law. This Plan and all rights and obligations hereunder
shall be construed in accordance with and governed by the laws of the State of
North Carolina.
4.3 Designation. This Plan may be referred to in other documents and
instruments as the "NDC Automation, Inc. 1997 Employee Incentive Stock Option
Plan".
4.4 Reservation of Shares. The Company during the term of this Plan,
shall at all times reserve and keep available, and will seek or obtain from any
regulatory body having jurisdiction any requisite authority in order to issue
such number of shares of its Common Stock as shall be sufficient to satisfy the
requirements of the Plan. Inability of the Company to obtain from any regulatory
body having jurisdiction authority deemed by the Company's counsel to be
necessary to the lawful issuance of any shares of its Common Stock hereunder
shall relieve the Company of any liability in respect of the nonissuance or sale
of such stock as to which such requisite authority shall not have been obtained.
4.5 Application of Funds. The proceeds received by the Company from the
sale of Common Stock pursuant to Options will be used for general corporate
purposes.
4.6 No Obligation to Exercise. The granting of an Option shall impose no
obligation upon the optionee to exercise that Option.
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INCENTIVE STOCK OPTION AGREEMENT
Pursuant to
NDC AUTOMATION, INC.
1997 EMPLOYEE INCENTIVE STOCK OPTION PLAN
This Incentive Stock Option Agreement ("Agreement") is entered into as
of this____ day of _________, 1997, between NDC Automation, Inc. (the
"Company"), and ________________, (the "Optionee").
WHEREAS, the Company has adopted the NDC Automation, Inc. 1997 Employee
Incentive Stock Option Plan (the "Plan") pursuant to which the Company may, from
time to time, make awards of Options (as hereinafter defined) to and enter into
Incentive Stock Option Agreements with certain of its eligible employees as
defined in the Plan;
WHEREAS, pursuant to the Plan, the Company has determined to offer to
the Optionee an Option to purchase Common Stock of the Company which Option
shall be subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereby agree as
follows:
1. Definitions. For purposes of this Agreement, the following
terms shall have the meanings indicated:
(a) "Act" shall have the meaning indicated in paragraph 8
hereof.
(b) "Agreement" shall mean this Incentive Stock Option
Agreement between the Company and the Optionee by which the
Option is granted to the Optionee pursuant to the Plan.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Cause" shall mean any act, action or series of acts or
actions or any omission, omissions, or series of omissions,
which result in, or which have the effect of resulting in (i)
the commission of a crime by the Optionee involving moral
turpitude, or which crime has a material adverse impact on the
Company or its business interests; or (ii) gross negligence,
or willful misconduct which is continuous and results in
material damage to the Company; or (iii) a degree of Optionee
misconduct which would reasonably be considered sufficient
grounds for dismissal of Optionees of similar rank, position
and duties, in normal commercial contexts or pursuant to any
written employment contract in effect between Company and
Optionee; or (iv) the willful failure of the Optionee to
follow the reasonable directives of the Board of Directors.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor revenue laws of the United States.
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(f) "Committee" shall meant he Compensation Committee or any
successor committee of directors of the Company designated by
the Board of Directors to administer the Plan.
(g) "Common Stock" shall mean the common stock of the Company.
(h) "Company" shall mean NDC Automation, Inc. and any of its
Subsidiaries.
(i) "Disability" shall mean the inability or failure of the
Optionee to perform those duties for the Company traditionally
assigned to and performed by such Optionee because of the
Optionee's then existing physical or mental condition,
impairment or incapacity. The fact of disability shall be
determined by the Committee, which may consider such evidence
as they consider desirable under the circumstances, the
determination of which shall be final and binding upon all
parties.
(j) "Employee" shall mean any person engaged by the Company
(or a subsidiary or affiliate of the Company) as a full-time
employee for at least fifty-two (52) consecutive weeks.
(k) "Exercise Date" shall have the meaning indicated in
paragraph 3 hereof.
(l) "Fair Market Value" shall mean, with respect to a share of
Common Stock from time to time, (i) if the Common Stock is
traded on the National Market System, the average of the last
asking price of a share of Common Stock for the period of two
(2) trading days ending on the -applicable date or, if there
is no trading on such date, the period of two (2) trading days
immediately preceding such date, as published in the NASDAQ
National Market Issues report in the EASTERN EDITION of THE
WALL STREET JOURNAL, (ii) if the Common Stock is not traded on
the National Market System but such Common Stock is listed on
a national securities exchange, the mean between the highest
price and the lowest price at which the Common Stock shall
have been sold in a regular way on a national securities
exchange on the applicable date or, if there are no sales on
said date, then on the next preceding date on which there were
sales of Common Stock, (iii) if the Common Stock is not traded
on the National Market System or listed on a national
securities exchange, the mean between the bid and asked prices
last reported by the National Association of Securities
Dealers, Inc. for the over-the-counter market on the
applicable date or, if no bid and asked prices are reported on
said date, then on the next preceding date on which there were
such quotations, or (iv) if the Common Stock is not traded on
the National Market System or listed on a national securities
exchange and quotations for the common Stock are not reported
by the National Association of Securities Dealers, Inc., the
fair market value determined by the Committee on the basis of
available prices for the Common Stock or in such manner as the
Committee shall agree.
(m) "Involuntary Termination Without Cause" shall mean either
(1) the dismissal of, or the request for the resignation of,
the Optionee, by reason of a court order, order of any court
appointed liquidator or trustee of the Company, or the order
or request of any creditors committee of the Company
constituted under the federal bankruptcy laws, provided that
such order or request contains no specific reference
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to Cause; or (ii) the dismissal of, or the request for the
resignation of, an Optionee, or the giving of notice of, or
the non-renewal of an employment contract for a fixed term by
a duly constituted corporate officer of the Company, or by the
Board of Directors of the Company, for any reason other than
for Cause.
(n) "Notice" shall have the meaning indicated in paragraph 3
hereof.
(o) "Options" shall mean the options to purchase shares of
Common Stock granted by the Committee to the Optionee pursuant
to this Agreement.
(p) "Option Exercise Price" shall have the meaning indicated
in paragraph 2.
(q) "Option Period" shall mean the period commencing on the
date of this Agreement and ending at the close of business ten
years and thirty days from the date hereof.
(r) "Option Shares" shall mean the shares of Common Stock
purchased upon exercise of Options.
(s) "Optionee" shall mean the individual executing this
Agreement, and, as applicable, the estate, personal
representative or beneficiary to whom this Option may be
transferred pursuant to this Agreement by will or by the laws
of interstate succession or of descent and distribution.
(t) "Plan" shall mean the NDC Automation, Inc. 1997 Employee
Incentive Stock Option Plan and any amendments thereto.
(u) "Retirement" shall mean, with respect to the Optionee, the
retirement of the Optionee from employment with the Company in
accordance with the Company's retirement policy as may be in
effect from time to time.
(v) "Subsidiary" shall mean any subsidiary corporation of NDC
Automation, Inc. as defined in Sections 424(f) and 424(g) of
the Code.
(w) "Termination" shall mean the cessation of Optionee's
status as an Employee for any reason.
2. Grant of Option. Subject to the terms and conditions set forth
herein, the Company hereby grants to the Optionee Options to
purchase from the Company up to but not exceeding in the
aggregate shares of the Company's Common Stock at an Option
Exercise Price of $_________ per share (which shall be not
less than 100% of the Fair Market Value of the Common Stock on
the date of grant of the Options).
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3. Exercise of Option.
(a) The Options granted hereunder may only be exercised upon
the attainment, by the dates indicated, of the following performance benchmarks:
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(b) Options first available for exercise after a given date
may be exercised only if as of that date Optionee is an Employee in good
standing with the Company and has not been given and has not given to Company
notice of intended termination of his employment by Company or non-renewal of
any employment contract for a fixed term. Options may not be exercised until two
years or more after the date of grant and Common Stock acquired as a result of
the exercise of an Option may not be conveyed by the Optionee for at least one
year after the issuance to him/her of such Common Stock.
(c) In the event of the Optionee's Retirement the Committee in
its sole and absolute discretion may accelerate, in whole or in part, the
exercise schedule in this subparagraph (a), which acceleration may, in the sole
discretion of the Committee, be made conditional upon certain covenants or
agreements by the Optionee with the Company.
(d) No less than 100 shares of Company Stock may be purchased
upon any exercise of the Options granted hereby unless the number of shares
purchased at such time is the total number of shares then available for
exercise.
(e) In no event shall an Option be exercisable for a
fractional share.
(f) An Option shall be exercised by the Optionee delivering to
the Chief Financial Officer of the Company (or his/her designee), from time to
time, on any business day during the Option Period (the "Exercise Date") written
notice specifying the number of shares the Optionee then desires to purchase
(the "Notice"), and cash or certified or cashiers check made payable to the
order of the Company for an amount in United States dollars equal to the total
Option Exercise Price for the number of shares specified in the Notice (being
the number of Options exercised multiplied by the per share Option Exercise
Price) such payment to be delivered with the Notice. In all cases, the Notice
shall state that the Optionee acknowledges that payment of the Total Option
Price is his absolute and personal liability enforceable by the Company against
him or his estate.
(g) Within five business days after the Exercise Date, subject
to the receipt of payment in cash of the Total Option Price and of any payment
of federal, state or local income tax withholding or other employment tax that
may be due upon the issuance of the Option Shares as determined and computed by
the Company pursuant to paragraph 6 below, the Company shall issue to the
Optionee the number of shares with respect to which such Option shall be so
exercised, and shall deliver to the Optionee a certificate or certificates
therefor.
(h) Options are not transferable by the Optionee otherwise
than by will or by the laws of intestate succession or of descent and
distribution and are exercisable during Optionee's lifetime only by him. No
assignment or transfer of this Option, or of the rights represented thereby,
whether voluntary or involuntary, by operation of law or otherwise, except by
will or the laws of intestate succession or of descent and distribution, shall
vest in the assignee or transferee any interest or right herein whatsoever, but
immediately upon any attempt to assign or transfer this Option the same shall
terminate and be of no force or effect.
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4. Termination. The Options granted hereby shall terminate and be of no
force or effect upon and following the occurrence of any of the following
events:
(a) The expiration of the Option Period;
(b) Termination of the Optionee's status as an Employee of the
Company, for any reason other than the Optionee's death, Disability or
Involuntary Termination Without Cause;
(c) The expiration of three months after the date of the
Optionee's Involuntary Termination Without Cause. During such three-month
period, the Optionee shall have the right to exercise the Option hereby granted
in accordance with the terms of this Agreement but only to the extent the Option
was exercisable on the date of the Termination of the Optionee's status as an
Employee.
(d) The expiration of twelve months after Termination of the
Optionee's status as an Employee as a result of the Optionee's Disability.
During such twelve month period, the Optionee shall have the right to exercise
the Option hereby granted in accordance with the terms of this Agreement but
only to the extent the Option was exercisable on the date of the Termination of
the Optionee's status as an Employee.
(e) In the event of the death of the Optionee while an
Employee, or, in the event of the death of the Optionee after termination
described in subparagraph (c) or (d) above but within the three month or twelve
month period described in subparagraph (c) or (d) above, upon the expiration of
twelve months following the Optionee's death. During such extended period, the
Option may be exercised by the person or persons to whom his rights under the
Option shall pass by will or by the laws of descent and distribution but only to
the extent the Option was exercisable on the date of the termination of the
Optionee's status as an Employee.
(f) To the extent set forth in paragraph 7 below, upon the
dissolution, liquidation, consolidation or merger of the Company and to the
extent set forth in subparagraph 3(f) above upon an attempted assignment or
transfer of the Option.
Any determination made by the Committee with respect to any matter
referred to in this paragraph 4 shall be final and conclusive on all persons
affected thereby.
5. Rights as Shareholder. An Optionee shall have no rights as a
shareholder of the Company with respect to any shares covered by Options until
the date of the issuance of a stock certificate to him for those shares upon
payment of the exercise price in accordance with the terms and provisions
hereof. Subject to paragraph 7 below, no adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date
such stock certificate is issued.
6. Payment of Withholding Taxes. Upon the Optionee's exercise of his
Option with respect to any of the Option Shares in accordance with the
provisions of paragraph 4 above, the Optionee shall pay to the Company at the
time of delivery of the Notice and the Total Option Price the amount of any
foreign state, federal, state or local income tax withholding or other
employment tax that may be due upon the exercise of the Option. The
determination of the amount of any such foreign state, federal, state or local
income tax withholding or other employment tax due in such event shall be made
by the Company and shall be binding on the Optionee.
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7. Recapitalization; Reorganization. Subject to any required action by
the shareholders of the Company, the maximum number of shares of Common Stock
that may be issued under this Plan pursuant to Section 2.2 above, the number of
shares of Common Stock covered by each outstanding Option and the per share
exercise price under each outstanding Option shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock
resulting from a subdivision or consolidation of shares or the payment of a
stock dividend (but only on the Common Stock) or any other increase or decrease
in the number of such shares affected without receipt of consideration by the
Company.
Subject to any required action by the shareholders, if the Company is
the surviving corporation in any merger, each outstanding Option shall pertain
to and apply to the securities or other consideration that a holder of the
number of shares of Common Stock subject to the Option would have been entitled
to receive in the merger. A dissolution, liquidation or consolidation of the
Company or a merger in which the Company is not the surviving corporation, other
than a merger effected for the purpose of changing the Company's domicile, shall
cause each outstanding Option to terminate, provided that each optionee shall,
in such event, have the right immediately prior to such dissolution,
liquidation, merger or consolidation, to exercise his Option in whole or in part
if the same be otherwise exercisable without regard to any restriction. In the
case of a merger effected for the purpose of changing the Company's domicile,
each outstanding Option shall continue in effect in accordance with its terms
and shall apply to the same number of shares of common stock of such surviving
corporation as -the number of shares of Common Stock to which it applied
immediately prior to such merger, adjusted for any increase or decrease in the
number of outstanding shares of common stock of the surviving corporation
effected without receipt of consideration:
In the event of a change in the Common Stock as presently constituted,
which change is limited to a change of all of the authorized shares with par
value into the same number of shares with a different par value or without par
value, the shares resulting from any such change shall be deemed to be the
Common Stock within the meaning of the Plan.
The foregoing adjustments shall be made by the Committee, whose
determination shall be final, binding and conclusive.
Except as expressly provided in this subsection, the Optionee shall
have no rights by reason of (i) any subdivision or consolidation of shares of
any class, (ii) any stock dividend, (iii) any other increase or decrease in the
number of shares of stock of any class, (iv) any dissolution, liquidation,
merger or consolidation or spin-off, split-off or split-up of assets of the
Company or stock of another corporation, or (v) any issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class. Moreover, except as expressly provided in this subsection, the
occurrence of one or more of the above-listed events shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number of price
of shares of Common stock subject to the Option (or the number of shares with
respect to a related Stock Appreciation Right).
The grant of an Option pursuant to the Plan shall not affect in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
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8. No Registration Rights.
(a) Anything in this Agreement to the contrary
notwithstanding, if, at any time specified herein for the issuance of Option
Shares, any law, regulation or requirements of any governmental authority having
jurisdiction in the premises shall require either the Company or the Optionee to
take any action in connection with the shares then to be issued, the issue of
such shares shall be deferred until such action shall have been taken.
Nothing in this Agreement shall be construed to obligate the Company at
any time to file or maintain the effectiveness of a registration statement under
the Securities Act of 1933 (the "Act") or under the securities laws of any
jurisdiction, or to take or cause to be taken any action which may be necessary
in order to provide an exemption from the registration requirements of the Act
under Rule 144 or any other exemption with respect to the Option Shares or
otherwise for resale or distribution by the Optionee (or by the executor or
administrator of such Optionee's estate or a person who acquired the Option or
any Option Shares or other rights by bequest or inheritance or by reason of the
death of the Optionee) as a result of the exercise of an Option granted pursuant
to this Agreement.
(b) In the discretion of the Committee, upon the exercise of
the Option and as a condition thereto, the person acquiring Option Shares shall
be required at the time of such acquisition to represent to the Company, in form
satisfactory to counsel for the Company, that he is acquiring such Option Shares
for investment for his own account and not with a view to the resale or
distribution of any thereof, as such terms are defined in the rules and
regulations of the Securities and Exchange Commission promulgated under the Act,
and shall agree that none of such Option Shares will be sold, transferred or
otherwise disposed of unless: (i) a registration statement under the Act shall
at the time of disposition be effective with respect to the Option Shares, sold,
transferred or otherwise disposed of; (ii) the Company shall have received an
opinion of counsel or other information and representations, satisfactory to it,
to the effect that registration under the Act is not required, by reason of the
application of Rule 144 or otherwise, for such sale, transfer or other
disposition; or (iii) a "no-action" letter shall have been received from the
staff of the Securities and Exchange Commission to the effect that such sale,
transfer or other disposition may be made without registration.
(c) In the discretion of the Committee, such certificate
representing such Option Shares shall bear a legend in substantially the
following form:
"The securities represented by this certificate have not been registered under
the Securities Act of 1933 or the applicable securities act of any state. No
sale, offer to sell or other transfer of the securities represented by this
certificate may be made unless a registration statement under said acts is in
effect with respect to the securities, or an exemption from the registration
provisions of such acts is then in fact applicable."
(d) In the discretion of the Committee, the Company's stock
transfer agent shall be instructed not to transfer any such Option Shares except
upon proof of compliance with the restrictions on transfer contained in the
investment representation required to be given to the Company in connection with
the issuance or distribution of such Option Shares pursuant to subparagraph (b)
above. In addition, the Company may take, or cause to be taken, such other
measures as it may deem appropriate to ensure compliance with the provisions of
the Act and the rules and regulations thereunder.
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<PAGE>
9. Resolution of Disputes. Any dispute or disagreement that arises
under, or as a result of, or pursuant to, this Agreement shall be determined by
the Committee in its absolute and uncontrolled discretion, and any such
determination or other determination by the Committee under or pursuant to this
Agreement and any interpretation by the Committee of the terms of this
Agreement, shall be final, binding and conclusive on all parties affected
thereby. Provided, however, that the Board of Directors of the Company shall
have the right, in its absolute and uncontrolled discretion, to overrule or
modify any determination or interpretation made by the Committee, and in such
event, the determinations or interpretations of the Board of Directors shall be
final, binding and conclusive on all parties affected thereby.
10. Miscellaneous.
(a) Binding on Successors and Representatives. This Agreement
shall be binding not only upon the parties hereto, but also on their heirs,
executors, administrators, personal representatives, successors and assigns
(including any transferee of a party to this Agreement); and the parties agree,
for themselves and their successors, assigns and representatives, to execute any
instrument which may be necessary legally to effect the terms and conditions of
this Agreement.
(b) Entire Agreement; Relationship to Plan. This Agreement,
together with the Plan, constitute the entire agreement of the parties with
respect to the Options and supersedes any previous agreement, whether written or
oral, with respect thereto. This Agreement has been entered into in compliance
with the terms of the Plan, and wherever a conflict may arise between the terms
of this Agreement and the terms of the Plan, the terms of the Plan shall
control.
(c) Amendment. Neither this Agreement nor any of the terms and
conditions herein set forth may be altered or amended verbally, and any such
alteration or amendment shall only be effective when reduced to writing and
signed by each of the parties, or their respective successors and assigns.
(d) Construction of Terms. Any reference to the masculine
shall include the feminine or neuter, and any reference herein to the singular
or plural shall be construed as plural or singular whenever the context
requires.
(e) Notices. All notices, requests and amendments under this
Agreement shall be in writing, and notices shall be deemed to have been given
when personally delivered or sent prepaid registered mail:
(i) if to the Company, at the following address:
NDC Automation, Inc.
3101 Latrobe Drive
Charlotte, North Carolina 28211
Attention: Chief Financial Officer
or at such other address as the Company
shall designate by notice.
(ii) if to the Optionee, to the Optionee's address
appearing in the Company's employment records, or at
such other address as the Optionee shall designate by
notice.
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<PAGE>
(f) Governing Law. This Agreement is entered into in the State
of North Carolina and shall be governed by the laws of North Carolina and the
parties hereby consent to the jurisdiction of the Superior Court of Mecklenburg
County, North Carolina for purposes of adjudicating any issue hereunder.
(g) Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provisions were omitted.
(h) Employment. Nothing in this Agreement or the Plan shall be
interpreted as altering the employment relationship between the Company and the
Optionee or as creating any expectation or of commitment to continuing
employment of the Optionee by Company.
(i) Incentive Stock Option. The Options are intended to
qualify as "incentive stock options" under ss.422(b) of the Code, and,
notwithstanding anything else herein to the contrary, the grant and exercise of
the Options shall be subject to all applicable restrictions necessary for
qualification for such status as the same may be in effect from time to time.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
NDC AUTOMATION, INC.
By:
------------------------------------
Title:
---------------------------------
OPTIONEE:
--------------------------------(SEAL)
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