<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
BARRA, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined:
------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------
(2) Form, Schedule or Registration
Statement No.:
-------------------------------------
(3) Filing Party:
----------------------------------------
Date Filed: June 28, 2000
----------------
<PAGE>
BARRA, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 28, 2000
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders of BARRA,
Inc., a Delaware corporation (the "Company"), will be held at 2100 Milvia
Street, Berkeley, California 94704, on Thursday, August 3, 2000, at 2:00 p.m.
local time, for the following purposes:
1. To elect seven directors to serve for the ensuing year and until their
successors are duly elected and qualified. Management's slate of directors
is: A. George Battle, John F. Casey, Kamal Duggirala, M. Blair Hull,
Norman J. Laboe, Clyde W. Ostler and Andrew Rudd.
2. To approve a proposal to increase the range of the size of the Board from
four (4) to seven (7) to five (5) to nine (9).
3. To ratify the adoption of the BARRA, Inc. 2000 Equity Participation Plan
and the authorization of one million one hundred thousand (1,100,000)
shares of the Company's Common Stock for issuance thereunder.
4. To amend the BARRA, Inc. Directors Option Plan to increase the number of
shares of the Corporation's Common Stock reserved for issuance thereunder
by one hundred thousand (100,000) shares, to a total of two hundred
thousand (200,000).
5. To ratify the selection of Deloitte & Touche LLP as independent auditors of
the Company for the fiscal year ending March 31, 2001.
6. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Only stockholders of record at the close of business on June 6, 2000 are
entitled to notice of and to vote at the meeting. The transfer books will not be
closed.
All stockholders are cordially invited to attend the meeting in person. Whether
or not you plan to attend the meeting, please mark, sign and date the enclosed
proxy and return it as promptly as possible in the envelope enclosed for that
purpose to assure representation of your shares and a quorum at the meeting. Any
stockholder attending the meeting may vote in person even if such shareholder
has returned a proxy.
By Order of the Board of Directors
/s/ Andrew Rudd
---------------------------
Andrew Rudd
Andrew Rudd
Chairman of the Board of Directors
Berkeley, California
June 28, 2000
<PAGE>
BARRA, INC.
2100 MILVIA STREET
BERKELEY, CA 94704
PROXY STATEMENT
2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 3, 2000
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors
(the "Board") of BARRA, Inc., a Delaware corporation ("BARRA", the "Company",
"we", "us" or "our"), for our 2000 Annual Meeting of Stockholders or at any
adjournment or postponement of the meeting.
You are invited to attend our Annual Meeting, which will be held on
August 3, 2000, beginning at 2:00 p.m. The meeting will be held at 2100 Milvia
Street, Berkeley, California.
These proxy solicitation materials are being mailed starting July 7,
2000, together with BARRA's Annual Report on Form 10-K for the fiscal year ended
March 31, 2000.
RECORD DATE
Stockholders of record at the close of business on June 6, 2000 are
entitled to receive this notice and to vote their shares at the Annual Meeting.
On the record date there were 13,761,399 shares of BARRA's common stock
outstanding.
VOTING
Your vote is important. The shares represented by the proxies we
receive will be voted as you instruct. If you give no voting instructions, the
shares will be voted as the Board recommends.
You may revoke your proxy any time before it is exercised by (1)
delivering written notice of revocation to the Secretary of the Company, (2)
timely delivery of a valid, later-dated proxy card or (3) attending the Annual
Meeting and voting in person. If your shares are held in the name of a bank,
broker or other holder of record, you must obtain a proxy card, executed in your
favor, from the holder of record to be able to vote at the Annual Meeting.
YOU MAY SAVE US THE EXPENSE OF A SECOND MAILING BY VOTING PROMPTLY.
Simply mark your proxy card, date and sign it, and return it in the enclosed
postage-paid envelope.
Each stockholder is entitled to one (1) vote per share on each
matter submitted at the meeting. The holders of a majority of the outstanding
shares of common stock, present in person or by proxy, will constitute a
quorum for the transaction of business at the Annual Meeting. Approval of the
proposals described in this Proxy Statement requires the affirmative vote of
a majority of the shares present (in person or by proxy) at the Annual
Meeting and entitled to vote.
All shares that have been properly voted and not revoked will be
voted at the Annual Meeting as our stockholders direct. If you sign your
proxy card but do not give voting instructions, the shares represented by
that proxy will be voted as recommended by the Board. If you expressly
abstain from voting on any matter, or if a broker returns a "non-vote" proxy
on any matter, then the shares will be deemed present at the meeting for
purposes of determining a quorum but will be excluded
<PAGE>
when counting the vote on that matter. However, because stockholder approval
requires the affirmative vote of at least a majority of the number of shares
constituting a quorum, in certain cases an abstention or broker non-vote can
have the same effect as a negative vote.
If any other matters properly come before the Annual Meeting, the
persons named in the enclosed proxy card will have the discretion to vote on
those matters for you. It is their intention in such situations to vote the
shares represented by the proxies as the Board recommends. On the date this
proxy statement went to press, we did not know of any other matter to be
raised at the Annual Meeting.
SOLICITATION
We will pay the expenses of soliciting proxies. We may reimburse
brokerage firms and other persons representing beneficial owners of shares for
their expenses in forwarding solicitation materials to those owners. Our
directors, officers or employees, without additional compensation may also
solicit proxies on our behalf, personally or by telephone, electronic
transmission or fax. Except as described in this paragraph, we do not currently
intend to solicit proxies other than by mail.
STOCK SPLIT
Unless the context requires otherwise, all share and per share amounts
in this Proxy Statement are adjusted to reflect a 3-for-2 stock split of our
common stock effective September 22, 1997.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
NOMINEES
Our Bylaws provide that the Board has between four (4) and seven (7)
persons, with the exact number to be fixed by the Board or stockholders. The
currently authorized number of directors is seven (7).(1) A board of seven
(7) directors is to be elected at the Annual Meeting. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for the
seven (7) nominees named below, six (6) of whom are currently directors of
BARRA. (Kamal Duggirala is currently not a director of BARRA.)
We are not aware of any nominee who will be unable or will decline to
serve as a director. If any nominee is unable or declines to serve as a director
at the time of the Annual Meeting, the proxies will be voted for any nominee
designated by the Board to fill the vacancy. The term of office of
each director will continue until the next Annual Meeting of Stockholders or
until his or her successor is duly elected and qualified.
---------------------------
(1) In Proposal No. 2, we recommend amending the Bylaws to provide that the
Board have between 5 and 9 persons, with the exact number to be fixed by the
Board or stockholders. If approved by the stockholders, the proposed
amendment would take effect after the Annual Meeting.
2
<PAGE>
Below are certain information regarding BARRA's nominees for director:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- ---------------
<S> <C> <C> <C>
A. George Battle (1)(2)(3) 56 Senior Fellow, Aspen Institute and retired Managing 1996
Partner of Market Development, Andersen Consulting
John F. Casey(3) 57 Chairman of BARRA RogersCasey, Inc., 1996
a subsidiary of BARRA
Kamal Duggirala 41 Chief Executive Officer and President of BARRA N/A
M. Blair Hull(1)(2)(3) 56 Chairman of The Hull Group Inc. 1992
Norman J. Laboe(1) 61 Of Counsel to Mackenzie & Albritton, LLP 1986
Clyde W. Ostler 53 Group Executive Vice President of Wells Fargo & Company 1999
and Vice-Chairman of Wells Fargo Bank, N.A.
Andrew Rudd 50 Chairman of the Board 1986
</TABLE>
---------------------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
(3) Member of Nominating Committee.
BUSINESS EXPERIENCE OF THE DIRECTORS
A. GEORGE BATTLE - Mr. Battle served from 1968 until his retirement in June
1995 in various roles of increasing responsibility with Andersen Consulting.
Mr. Battle has served as a Senior Fellow at the Aspen Institute, an
international nonprofit educational institution. In addition, Mr. Battle is a
Director of PeopleSoft, Inc., Ask Jeeves, Fair Isaac Company, Masters Select
Equities Fund and Masters Select International Equities Fund.
JOHN F. CASEY - Mr. Casey currently serves as the Chairman of our subsidiary
BARRA RogersCasey, Inc. Mr. Casey has been associated with Rogers Casey &
Associates, Inc. ("RogersCasey"), an investment consulting and special assets
advisory firm, since its formation in 1976 through its acquisition by BARRA in
1996. Mr. Casey served as the President and CEO of RogersCasey from 1989 until
April 1998. Mr. Casey was the founder of investment manager research at Paine,
Webber, Jackson & Curtis as well as a past director and manager of research at
Callan Associates.
KAMAL DUGGIRALA - Mr. Duggirala has served as our Chief Executive Officer
since 1999 and President since 1994. Mr. Duggirala has been associated with
BARRA and its predecessors since 1984. He served in various roles of
increasing responsibility in BARRA's Electronic Brokerage and Trader products
and Advanced Technology divisions from 1984 to October 1994. Mr. Duggirala
also serves on business boards for affiliates of BARRA.
3
<PAGE>
M. BLAIR HULL - Mr. Hull is the Chairman and founder of The Hull Group Inc.
(a Goldman Sachs company), a global market maker in equities and equity
derivatives, with related businesses in agency execution services and asset
management, and has been associated with The Hull Group Inc. and its
predecessors since its inception in 1985. Mr. Hull is a member of the Board
of Trustees of the Cincinnati Stock Exchange. Mr. Hull also serves on the
Board of Trustees of the University of California Santa Barbara Foundation
and the Investment Committee of Santa Clara University. In addition, Mr. Hull
serves on the Board of Advisors of the Illinois Institute of Technology's
Financial Markets and Trading and on Vanderbilt University's Advisory
Committee of the Financial Markets Research Center. Mr. Hull served on the
Board of Options Clearing Corporation from 1992 until 1998.
NORMAN J. LABOE - From April 1994 to the present, Mr. Laboe has served as Of
Counsel to the law firm Mackenzie & Albritton, LLP. From 1971 until 1994, Mr.
Laboe was a partner in the law firm Graham & James.
CLYDE W. OSTLER - Mr. Ostler serves as the Group Executive Vice President of
Wells Fargo and Company, responsible for the Internet Services Group, and as
the Vice-Chairman of Wells Fargo Bank, N.A. Mr. Ostler has been associated
with Wells Fargo and Company and its affiliates since 1971 and has held
various positions of responsibility including that of General Auditor from
1983 to 1986, Chief Financial Officer from 1987 to 1990, Head of Branch
Banking from 1990 to 1993 and Head of the Investment Group from 1993 to 1998.
Mr. Ostler is currently a member of numerous charitable boards external to
Wells Fargo and Company and business boards for affiliates of Wells Fargo and
Company.
ANDREW RUDD - Dr. Rudd has served as our Chairman since 1992. Dr. Rudd has
been associated with BARRA since 1975. He also served as the Chief Executive
Officer of BARRA from 1984 until 1999 and President of BARRA from 1984 to
1992. Dr. Rudd worked as a professor of finance and operations research at
Cornell University between 1977 and 1982.
There are no family relationships among any of our directors or
executive officers. The directors who are not our employees are reimbursed
for their expenses for traveling to meetings. They receive an annual
compensation of $20,000, which is paid in 25% increments immediately after
each quarterly meeting of the Board. All non-employee directors who serve as
committee chairs receive an additional $3,000 in compensation each year. This
annual stipend is also paid in 25% increments immediately after each
quarterly meeting of the Board. Pursuant to the BARRA, Inc.'s Directors
Option Plan, as amended (the "Directors Option Plan"), as of the date such
person is elected director, BARRA grants each new non-employee director
options to purchase 15,000 shares of common stock ("Initial Grant"). These
options are non-qualified stock options ("NQSOs") and vest at the rate of 20%
over a period of five years. On each anniversary of such director's Initial
Grant, NQSOs to purchase 4,000 shares of common stock ("Succeeding Grants")
are automatically granted under the Directors Option Plan. All Succeeding
Grants are fully vested and immediately exercisable on the date of grant.
BOARD MEETINGS AND COMMITTEES
Our Board held seven meetings during the fiscal year ended March 31,
2000. The Board has an Audit Committee, a Compensation Committee, and a
Nominating Committee.
4
<PAGE>
During his respective tenure for the fiscal year ended March 31, 2000, each
director attended 75% or more of the total number of meetings of the Board
and its relevant committees.(1)
AUDIT COMMITTEE - The Audit Committee includes Messrs. Battle, Hull, Laboe
and Ronald J. Lanstein.(2) The Audit Committee recommends the engagement of
independent auditors, consults with the auditors regarding the scope and
results of annual audits and the reviews of our system of internal accounting
controls. The Audit Committee met six times during the fiscal year ended
March 31, 2000. On June 23, 1999, the Audit Committee adopted an Audit
Committee Charter, which complies with Nasdaq's Marketplace Rules.
COMPENSATION COMMITTEE - The Compensation Committee includes Messrs. Battle,
Hull and Lanstein. The Compensation Committee ratifies the compensation paid to
our executive officers, approves grants of options to purchase BARRA's common
stock ("Options") under the BARRA, Inc. Stock Option Plan (the "Option Plan")
and administers Initial Grants, Succeeding Grants and other grants of options to
purchase BARRA's common stock under the Directors Option Plan ("Directors
Options"). The Compensation Committee also administers our Employee Stock
Purchase Plan ("ESPP") and the Rogers, Casey & Associates, Inc. 1992 Stock
Option Plan ("RogersCasey Plan"). The Compensation Committee met six times
during the fiscal year ended March 31, 2000.
NOMINATING COMMITTEE - The Board has established a Nominating Committee to
review and recommend candidates for the Board. The Nominating Committee
includes Messrs. Hull, Battle and Casey, and held four meetings during the
fiscal year ended March 31, 2000. If our stockholders recommend candidates to
the Board, we expect that the full Board, not the Nominating Committee, will
consider those recommendations.
REQUIRED VOTE - The affirmative vote of a majority of votes cast for each
nominee to the Board is required to elect each director, provided that a
quorum is present.
THE BOARD RECOMMENDS A VOTE "FOR" THE ELECTION OF THE ABOVE NOMINEES AS
DIRECTORS.
------------------------------------
(1) Mr. Ostler was elected to the Board on November 12, 1999 and Mr. Laboe
was appointed to the Audit Committee on January 19, 2000.
(2) Ronald J. Lanstein will retire from the Board at BARRA's Annual Meeting
on August 3, 2000.
5
<PAGE>
PRINCIPAL STOCKHOLDERS AND SHARE OWNERSHIP BY MANAGEMENT
The table below gives certain information as of June 6, 2000 regarding
the beneficial ownership of our common stock by (1) each person who is known by
us to be the beneficial owner of more than 5% of the outstanding shares of
common stock, (2) each executive officer named in the tables under "Executive
Compensation" below, (3) each director, and (4) all executive officers and
directors as a group:
<TABLE>
<CAPTION>
Number of
Name Address Shares Owned (1) Percent(2)
---- ------- ---------------- ----------
<S> <C> <C> <C>
Andrew Rudd(3) c/o BARRA, Inc. 2,819,349 19.86%
2100 Milvia Street
Berkeley, California 94704
Mellon Financial Corporation(4) c/o Mellon Financial Corporation 1,348,808 9.50%
One Mellon Center
Pittsburgh, Pennsylvania 15258
Edward D. Baker 395 Hampton Road 980,950 6.91%
Piedmont, California 94611
C. E. Beckers(5) -- 563,434 3.97%
Kamal Duggirala(6) -- 559,600 3.94%
Ronald J. Lanstein(7) -- 509,950 3.59%
James D. Kirsner(8) -- 161,957 1.14%
John F. Casey(9) -- 112,983 *
M. Blair Hull(10) -- 39,500 *
A. George Battle(11) -- 36,050 *
Norman J. Laboe(12) -- 25,500 *
Aamir Sheikh(13) -- 20,270 *
Andrew Huddart(14) -- 17,871 *
Clyde W. Ostler -- 0 *
All executive officers directors as a
group (15 persons)(15) -- 5,067,097 35.69%
</TABLE>
---------------------------
* Less than 1.0%.
(1) Except as indicated in the above chart, the related footnotes or
applicable community property laws, we believe that all persons named
in the table have sole voting and investment power over all shares of
common stock beneficially owned by them.
(2) Based on a total of 13,761,399 shares of common stock outstanding as
of June 6, 2000 plus 438,030 shares issuable upon exercise of
options granted under the Option Plan and the Directors Option Plan
where the options are currently exercisable or will become
exercisable within 60 days after June 6, 2000. There are no options
to purchase common stock under our ESPP or the RogersCasey Plan that
are held by any person referred to in the table and that will become
exercisable within 60 days after June 6, 2000.
6
<PAGE>
(3) Includes the following: (i) 2,634,601 shares held of record by the Rudd
Family Trust, dated September 12, 1997, which was formed for the
benefit of Dr. Rudd and his wife Virginia Rudd (each of whom are
trustees of the Rudd Family Trust), and for the benefit of certain
other members of the Rudd family, (ii) 28,500 shares issuable upon
exercise of Options granted under the Option Plan that are currently
exercisable or that will become exercisable within 60 days after June
6, 2000, (iii) 72,300 shares held in the Cann 1997 Trust, dated January
10, 1997, which was formed for the benefit of Dr. Rudd's four children
with Dr. Rudd's brother and brother-in-law as trustees, (iv) 50,448
shares held in trust under the California Uniform Transfers to Minors
Act for Dr. Rudd's four children, and (v) 33,500 shares held in the
Rudd Family Foundation with Dr. Rudd and his wife acting as trustees.
Dr. Rudd disclaims beneficial ownership of the 72,300 shares held under
the Cann 1997 Trust and the 50,448 shares held in the California
Uniform Transfers to Minors Act for the benefit of his children.
(4) Of the 1,348,808 shares beneficially held in the aggregate by Mellon
Financial Corporation (Mellon) and its affiliates, the following
entities are deemed to be beneficial owners of amounts in excess of
5% of our common stock: (i) Boston Group Holdings, Inc. and its
subsidiary The Boston Company,Inc. (1,068,110 shares) and (ii) The
Boston Company Asset Management, Inc. (888,400 shares). This
beneficial ownership information was derived from the Schedule 13G,
filed by Mellon with the SEC on January 27, 2000.
(5) Includes 561,650 shares held of record by Dr. Beckers and his wife
in joint tenancy with right of survivorship and 1,784 shares held of
record solely by Dr. Beckers.
(6) Includes 457,500 shares held by Mr. Duggirala and his wife in joint
tenancy with right of survivorship, and 102,100 shares issuable upon
exercise of Options granted under the Option Plan that are currently
exercisable or that will become exercisable within 60 days after
June 6, 2000.
(7) Includes 4,500 shares issuable upon exercise of Options granted
under the Option Plan and 12,200 shares issuable upon exercise of
Directors Options granted under the Directors Option Plan that are
currently exercisable or that will become exercisable within 60 days
after June 6, 2000. Mr. Lanstein also holds with his wife 493,250
shares in joint tenancy with right of survivorship.
(8) Includes 45,000 shares held in the Kirsner Family Trust UTA, dated
May 24, 1993, with Mr. Kirsner and his wife as trustees, 2,317
shares held of record solely by Mr. Kirsner and 114,640 shares
issuable upon exercise of Options granted under the Option Plan that
are currently exercisable or that will become exercisable within 60
days after June 6, 2000.
(9) Includes 61,793 shares held of record by Mr. Casey and 51,190 shares
held of record by Mr. Casey's wife.
(10) Includes 22,500 shares held directly by Mr. Hull, 4,500 shares
issuable upon exercise of Options granted under the Option Plan and
12,500 shares issuable upon exercise of Directors Options granted
under the Directors Option Plan that are currently exercisable or
that will become exercisable within 60 days after June 6, 2000.
(11) Includes 4,500 shares issuable upon exercise of Options granted
under the Option Plan and 12,500 shares issuable upon exercise of
Directors Options granted under the Directors Option Plan that are
currently exercisable or that will become exercisable within 60 days
after June 6, 2000. Also includes 14,000 shares held of record by
Mr. Battle and 2,750 shares held in the Daniel KW Battle Trust,
which was formed in 1996 for the benefit of Mr. Battle's son with
Mr. Battle as trustee, as well as 2,000 shares and 300 shares held in
accounts for the benefit of Mr. Battle's daughter and sister,
respectively. Mr. Battle holds trading discretion over the accounts
for the 2,300 shares held by his daughter and his sister, but disclaims
beneficial ownership.
(12) Includes 8,500 shares held directly by Mr. Laboe, 4,500 shares
issuable upon exercise of Options granted under the Option Plan and
12,500 shares issuable upon exercise of Directors Options granted
7
<PAGE>
under the Directors Option Plan that are currently exercisable or
that will become exercisable within 60 days after June 6, 2000.
(13) Is composed entirely of 20,270 shares issuable upon exercise of
Options granted to Dr. Sheikh under the Option Plan that are currently
exercisable or that will become exercisable within 60 days of June 6,
2000.
(14) Includes 3,871 shares held by Mr. Huddart and 14,000 shares issuable
upon exercise of Options granted under the Option Plan that are
currently exercisable or that will become exercisable within 60 days
after June 6, 2000.
(15) Includes 4,629,067 shares held directly by these 15 persons as a
group, 388,330 shares issuable upon exercise of Options granted under
the Option Plan and 49,700 shares issuable upon exercise of Directors
Options granted under the Directors Option Plan that are currently
exercisable or that will become exercisable within 60 days after June
6, 2000.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
This summarizes compensation paid or accrued by us to our CEO and each of our 4
other most highly compensated executive officers, determined as of the end of
the last fiscal year (collectively, the "Named Officers"), during the fiscal
years ended March 31, 1998, 1999 and 2000:
SUMMARY COMPENSATION TABLE
kp_pont
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------------------
ANNUAL COMPENSATION(1) AWARDS
--------------------------------------------- ---------------------------------
SECURITIES
RESTRICTED UNDERLYING ALL OTHER
NAME AND OTHER ANNUAL STOCK AWARD(S) OPTIONS/ COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) ($) SARS (#)(2) ($)
---------------------------- ------ ------------- ------------- -------------- ----------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Andrew Rudd(3) 2000 318,750 100,000 -- -- -- 495,000
Chairman 1999 225,000 350,000 -- -- 30,000 --
1998 225,000 367,500 -- -- 37,500 --
Kamal Duggirala(4) 2000 268,750 400,000 -- -- 250,000 --
Chief Executive Officer 1999 175,000 295,000 -- -- 20,000 --
and President 1998 175,000 281,250 -- -- 32,250 --
C. E. Beckers(5) 2000 250,148 -- -- -- -- 1,086,000
Former President of BARRA 1999 166,519 275,000 -- -- 20,000 --
International, Ltd 1998 165,510 281,250 -- -- 32,250 --
James D. Kirsner 2000 225,625 165,000 -- -- 20,000 --
Chief Financial Officer 1999 152,500 222,500 -- -- 20,000 --
1998 152,500 212,500 -- -- 19,650 --
Andrew Huddart(6) 2000 237,500 170,000 -- -- 50,000 --
Executive Vice President 1999 197,500 129,000 -- -- 30,000 --
1998 126,667 25,000 -- -- 20,000 --
Aamir Sheikh(7) 2000 187,500 200,000 -- -- 25,000 --
Executive Vice President 1999 150,000 125,000 -- -- 6,000 --
1998 125,000 55,000 3,192 -- 20,000 --
</TABLE>
8
<PAGE>
---------------------------
(1) Includes amounts deferred under our 401(k) Plan.
(2) All Options granted to date under the Option Plan are NQSOs, other
than the following grants made in fiscal 2000, which were ISOs:
Options for 23,880 shares to Mr. Duggirala, Options for 15,500
shares to Mr. Kirsner, Options for 23,880 shares to Mr. Huddart and
Options for 23,880 shares to Dr. Sheikh.
(3) A founder of BARRA, Dr. Rudd has held various senior executive
positions during his tenure with the Company, including that of Chief
Executive Officer from 1984 until his resignation in August 1999. In
recognition of his almost 24 year tenure at BARRA and service as an
executive officer, the Board authorized a bonus of $495,000 to be
paid to Dr. Rudd upon his resignation as Chief Executive Officer.
(4) Mr. Duggirala was appointed Chief Executive Officer in August 1999.
(5) A portion of Dr. Beckers' cash compensation was not paid in U.S.
Dollars. For the above table, that portion of Dr. Beckers' cash
compensation has been converted into U.S. Dollars at applicable
month-end exchange rates. Dr. Beckers resigned on March 31, 2000. Upon
his resignation at the end of the fiscal year, Dr. Beckers was awarded
$1,086,000 by BARRA as payment for a one (1) year non-competition
undertaking by Dr. Beckers, as well as in recognition of his over 19
years of service to BARRA.
(6) Mr. Huddart joined BARRA and became an executive officer in August
1997. The $126,667 salary amount listed for fiscal 1998 represents
actual cash salary paid during his term of employment through March 31,
1998, based on an annualized salary for that fiscal year of $190,000.
(7) The $3,192 other annual compensation amount listed for fiscal year 1998
represents a profit-based commission paid to Dr. Sheikh for his
involvement with BARRA's research seminars.
9
<PAGE>
STOCK OPTION GRANTS
This table gives information regarding Option grants to the Named Officers
during the fiscal year ended March 31, 2000:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------- POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF STOCK
SHARES GRANTED TO PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM (1)
OPTIONS IN FISCAL PRICE(2) EXPIRATION ------------------------------
NAME GRANTED(#) YEAR ($/SHARE) DATE 5% ($) 10% ($)
---------------------------- ---------------- ---------------- ------------- ---------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Andrew Rudd -- -- -- -- -- --
Kamal Duggirala(3) 23,880 (4) 3.03 25.0000 10/27/2009 217,446 699,870
76,120 (5) 9.67 25.0000 10/27/2009 693,133 2,230,908
150,000 (5) 19.05 30.0000 10/27/2009 615,869 3,646,167
----------- ----- ------- ---------
250,000 31.75 1,526,449 6,576,942
C. E. Beckers -- -- -- -- -- --
James D. Kirsner(6) 4,500 (5) 0.57 32.0625 01/19/2010 90,738 229,947
15,500 (4) 1.96 32.0625 01/19/2010 312,541 792,040
--------- ---- ------- -------
20,000 2.53 403,279 1,021,987
Andrew Huddart(3) 23,880 (4) 3.03 20.9380 10/27/2009 314,447 796,870
26,120 (5) 3.31 20.9380 10/27/2009 343,942 871,619
---------- ---- ------- -------
50,000 6.34 658,390 1,668,489
Aamir Sheikh(3) 23,880 (4) 3.03 20.9380 10/27/2009 314,447 796,870
1,120 (5) 0.14 20.9380 10/27/2009 14,748 37,374
--------- ---- ------ ------
25,000 3.17 329,195 834,245
</TABLE>
---------------------------
(1) Gains are reported net of the Option exercise price but before taxes
associated with the exercise. The potential realizable values presented
in the table are at assumed stock price appreciation rates of 5% and
10%, compounded annually over the maximum term of the Options. The 5%
and 10% appreciation rates are disclosed in accordance with SEC rules
and are not intended to forecast possible future appreciation, if any,
in our stock price. Actual gains, if any, on Option exercises are
dependent on future performance of our common stock and the optionee's
continued employment through the vesting period.
(2) The exercise price of each Option is based on the closing price of
BARRA's common stock as quoted on NASDAQ on the date of the grant, or
if NASDAQ is closed on the date of grant, the next day that NASDAQ is
open (the "FMV"). Except for the Options granted to Mr. Duggirala
(which were granted on October 27, 1999 with exercise prices of $25.00
(19.4% over FMV) and $30.00 (43.3% over FMV)), all other Options
granted to Named Officers were granted with an exercise price equal to
the FMV.
10
<PAGE>
(3) Options were granted on October 27, 1999.
(4) All of these ISOs become exercisable in 5 equal annual installments
beginning on the first anniversary of the grant date. All of the
Options are ISOs that expire ten years after the grant date.
(5) All of these NQSOs become exercisable in 5 equal annual installments
beginning on the first anniversary of the grant date. All of the
Options are NQSOs that expire 10 years and a day after the grant date.
(6) Options were granted on January 19, 2000.
OPTION EXERCISES AND YEAR-END HOLDINGS
This table gives information regarding Options exercised by each of the
Named Officers during the last fiscal year, and the value (stock price less
exercise price) of the remaining options held by those executive officers as of
March 31, 2000 (the end of our last fiscal year):
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money
Options at Fiscal Options at Fiscal
Year End(#) Year End($)(1)
Shares ---------------------------- ------------------------------
Acquired on Value
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Andrew Rudd -- -- 29,028 51,000 506,170 716,588
Kamal Duggirala -- -- 92,650 295,850 2,196,118 2,141,818
C. E. Beckers -- -- 100,150 38,350 2,585,180 497,756
James D. Kirsner -- -- 108,940 49,560 2,954,387 416,112
Andrew Huddart -- -- 14,000 86,000 136,000 1,038,350
Aamir Sheikh -- -- 20,270 43,570 366,831 518,341
</TABLE>
---------------------------
(1) Based on the closing price of BARRA's common stock as reported on NASDAQ on
March 31, 2000 ($33.8750) less the exercise price.
COMPENSATION COMMITTEE INTERLOCKS, INSIDER PARTICIPATION AND OTHER TRANSACTIONS
During the fiscal year ended March 31, 2000, the Compensation
Committee included Messrs. Battle, Hull and Lanstein(1), who were each
members of our Board and who were not in the last three (3) years and are not
currently executive officers of BARRA.
During the fiscal year ended March 31, 2000, our entire Board, as
well as the Compensation Committee, deliberated and took action on matters
regarding executive compensation. Of our executive officers, Dr. Rudd
participated, as a member of the Board, in deliberations concerning certain
executive compensation for the fiscal year ended March 31, 2000.
During fiscal 2000, BARRA purchased an aggregate of 25,000 shares of
its own common stock from the Rudd Family Trust. On September 9, 1999, we
repurchased 10,000 shares in a private transaction for an aggregate price of
$208,125. On February 4, 2000, we repurchased 15,000 shares in a private
transaction for an aggregate price of $555,000. Dr. Rudd, our Chairman, is
(along with his wife) a beneficiary and trustee of the Rudd Family Trust.
-----------------------------
(1) Mr. Lanstein will retire from the Board on August 3, 2000.
11
<PAGE>
Mr. Laboe, a director, is Of Counsel to the law firm Mackenzie &
Albritton LLP, which we paid approximately $95,619 in fees and expenses
during the fiscal year ended March 31, 2000. We have also retained Mackenzie
& Albritton LLP during the current fiscal year. Prior to joining Mackenzie &
Albritton LLP, Mr. Laboe was a partner of Graham & James, which was and
continues to be retained by BARRA.
Mr. Hull, a director, is also Chairman of The Hull Group Inc. (a
Goldman Sachs company). During the fiscal year ended March 31, 2000, BARRA
and its affiliates received approximately $1,205,095 in revenue from certain
proprietary software and related data licensed to The Hull Group Inc. and its
affiliates.
Mr. Battle, a director, is also a director of PeopleSoft, Inc.,
which we paid approximately $642,602 in fees and expenses during the fiscal
year ended March 31, 2000.
Mr. Ostler is a Group Executive Vice President of Wells Fargo and
Company and Vice-Chairman of Wells Fargo Bank, N. A., and its affiliates which
paid BARRA approximately $266,952 in fees and expenses during the fiscal year
ended March 31, 2000.
On April 24, 1999, under automatic granting provisions of the Directors
Option Plan, Messrs. Battle, Lanstein, Laboe and Hull were each granted
Succeeding Grants to purchase 2,000 shares of common stock at an exercise price
of $20.94 (the average of the last reported bid and asked prices on that date).
These Succeeding Grants are fully vested on the date of grant, immediately
exercisable, NQSOs and expire 10 years from the grant date.
On November 12, 1999, under provisions for new non-employee directors
of the Directors Option Plan, Mr. Ostler was granted an Initial Grant of 15,000
Directors Options at an exercise price of $22.81 (the average of the last
reported bid and asked prices on that date). This Initial Grant vests equally
over a period of 5 years, is composed of NQSOs and expires 10 years from the
grant date.
REPORT OF THE COMPENSATION COMMITTEE AND
OF THE BOARD ON EXECUTIVE COMPENSATION
THE COMPENSATION COMMITTEE: Our Compensation Committee is comprised of three
independent directors and is responsible for approving and reviewing our
Executive Compensation and employee equity programs. The Compensation
Committee also acts in an advisory role with respect to our employee benefit
plans (including approval of certain benefit plans). It generally meets each
quarter and reports back to the Board on its activities at each quarterly
Board meeting or as necessary.
OVERALL PHILOSOPHY: Our approach to executive compensation is designed to enable
us to attract and retain exceptional employees who will be instrumental in
helping us achieve our strategic objectives and who can have a direct impact on
shareholder value through their actions. This philosophy is implemented through
compensation programs that are based on the following principles:
1. We have adopted a "total compensation" approach when determining
appropriate, competitive cash and equity-based compensation levels for
executives. In general, the 75th percentile level of the appropriate
market will be used as a guideline for each executive's total compensation
and benefits package.
2. Each executive's total compensation package is designed to provide an
appropriate mix of fixed and variable compensation to support a strong
pay-for-performance relationship. The variable portion of the compensation
package is tied to performance measures that influence stockholder value.
It
12
<PAGE>
includes key overall operating measures as well as metrics that are
specific to each member of management's responsibilities. Each executive
officer's achievement of these performance measures will determine whether
his/her respective compensation is at, over or below the 75th percentile
benchmark.
3. Our long-term incentive program is a significant component of total
compensation for our executives and is designed to align the interests of
our executives with those our of stockholders and to encourage executive
retention.
COMPENSATION REVIEW PROCESS: We review executive compensation annually. The
compensation program consists of three elements: (a) base salary, (b) annual
bonuses linked to the performance of both the individual executive and the
Company as a whole, and (c) long term incentives in the form of stock options.
Actual compensation rates depend on many factors including individual
responsibilities and performance, as well as relative contribution to the
success of the Company.
Additionally, our goal is to maintain a consistent compensation structure
that is benchmarked against appropriate industry standards. In this regard, when
determining the appropriate packages for each executive, we compare ourselves to
market levels within other high technology product businesses and, in a small
number of cases, to the asset management industry and related financial services
firms. We use a variety of executive compensation surveys and data that have
been produced by nationally recognized compensation consulting firms as part of
this process.
- BASE SALARY AND BONUSES: Historically, bonuses have accounted for a much
higher proportion of cash compensation at BARRA than is the case at other
similar companies. We initiated a process this fiscal year to move our
structure more in line with the appropriate industry benchmarks. In
general, this resulted in an increase in base pay and a reduction in bonus
targets, leaving total target compensation in the same range.
Our approach is to set total cash compensation at a level that keeps
BARRA competitive with the market. In Fiscal 2000, base pay was set with
this in mind. The mix of variable versus base pay depends on the nature
of the position and the executive's ability to influence the outcome.
However, on average a 60:40 ratio of base to variable pay is used as a
benchmark for our senior executives and a 40:60 ratio is used for our
Chief Executive Officer. The amount paid out under the variable
component is determined by considering the overall accomplishments of
the management team which manifests itself in the performance of the
Company in relation to the following indicators: (1) revenue growth,
pretax margins and earnings per share compared to plan for each business
segment, and (2) total stockholder return as measured by the change in
stock price during the year. Additionally, the Compensation Committee
evaluates each officer's individual performance using metrics specific
to his or her individual responsibilities.
Fiscal 2000 was a year of change in management, of redefinition of our
core business, of restructuring and of developing plans for the coming
year under the redefined structure and new organization. Because of
these changes and of numerous position rotations among senior
executives, only overall Company performance relative to plan was used
to determine executive performance. On an overall basis, however, during
fiscal 2000: (a) revenues from ongoing products, services and ventures
grew by 24%, 10% percent in excess of plan; (b) pretax margins,
excluding restructuring charges grew from 18% to 25%; and (c) our stock
price increased from $21.50 to $33.875, providing a return to
stockholders of 57%. These results were achieved in spite of significant
extra costs associated with the work needed for Year 2000 readiness,
which was accomplished successfully. Overall the Compensation Committee
believes the management team's performance exceeded expectations for
fiscal 2000.
- LONG TERM INCENTIVES: We provide long term incentives through stock options
to certain employees. For executives, the size of the grants are designed
to tie a significant reward directly to our long term success and increases
in stockholder value. As with our cash compensation program, when
determining the specific stock option grants for this year, we reviewed
option practices and grant levels at other companies through participation
in an Equity Practices Survey, and benchmarked ourselves against them. This
helped us ensure that both our approach and target grant levels were
appropriate.
13
<PAGE>
CEO COMPENSATION: During the past fiscal year our co-founder, Chief Executive
Officer and Chairman, Andrew Rudd, retired from his position as Chief
Executive Officer and was succeeded in that role by our President, Kamal
Duggirala. In connection with this change, the compensation arrangements for
both Mr. Duggirala and Dr. Rudd were reviewed by the Compensation Committee.
Based upon our review of outside compensation surveys, Mr. Duggirala's base
salary, target bonus and stock option grants were adjusted. Because these
changes occurred in the middle of the fiscal year, we did not establish
specific performance metrics to derive the incentive compensation for either
Mr. Duggirala or Dr. Rudd. Instead, we used overall measures as the basis for
bonuses for each of them. In the case of Mr. Duggirala, as a performance
incentive, the Options granted to him under the Option Plan in October 1999
were granted at prices that were higher than the FMV on the date of grant, as
measured by the closing price on the day of the grant. The first 100,000
Options were granted at an exercise price of $25 per share, and the next
150,000 Options were granted at an exercise price of $30 per share. The FMV
of the stock on the day of the grant was $20.938.
BOARD OF DIRECTORS
A. George Battle * John F. Casey M. Blair Hull*
Norman J. Laboe Ronald J. Lanstein* Clyde W. Ostler
Andrew Rudd
---------------------------
* Member of the Compensation Committee
14
<PAGE>
PERFORMANCE GRAPH
The graph below compares the five-year total return to stockholders (stock price
appreciation plus reinvested dividends) for BARRA common stock with the
comparable returns of two indexes: the Frank Russell 2000 Index and the Nasdaq
Computer & Data Processing Services Index. The graph assumes that you invested
$100 in BARRA common stock and in each of the indexes on March 31, 1996, and
that all dividends were reinvested. Points on the graph represent the
performance as of March 31st of each of the years indicated. PLEASE NOTE THAT
INTERNET COMPANIES, WHICH HAVE RECENTLY EXPERIENCED SIGNIFICANT FLUCTUATIONS IN
THEIR STOCK PRICES, ARE INCLUDED IN BOTH THE FRANK RUSSELL 2000 AND THE NASDAQ
COMPUTER & DATA PROCESSING SERVICES INDEX.
PERFORMANCE COMPARISON
BARRA vs. NASDAQ COMPUTER & DATA PROCESSING SERVICES
AND vs. FRANK RUSSELL 2000
<TABLE>
<CAPTION>
----------------------------------------------------
Mar-96 Mar-97 Mar-98 Mar-99 Mar-00
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NASDAQ* 100.00 208.88 365.36 593.13 1074.85
---------------------------------------------------------------------------
BARRA 100.00 337.50 534.38 461.72 635.16
---------------------------------------------------------------------------
FRANK RUSSELL 2000 100.00 142.77 207.21 172.84 236.93
---------------------------------------------------------------------------
</TABLE>
* Computer and Data Processing Services Index
PROPOSAL NO. 2 - APPROVAL OF AMENDMENT TO THE BYLAWS TO
CHANGE THE SIZE OF THE RANGE OF THE BOARD OF DIRECTORS
Section 3.2 of the Company's Amended and Restated Bylaws (the
"Bylaws") currently sets the authorized number of directors to be not less
than four (4) and not more than seven (7). The Board has adopted, subject to
stockholder approval, a resolution to increase the minimum authorized number
of directors to five (5) and the maximum authorized number of directors to
nine (9). The number of directors will remain fixed at seven (7), until
changed in accordance with the Company's Bylaws.
The Board believes that the Company and its stockholders may benefit
from the inclusion of additional persons on the Company's Board in the
future. As the Company continues to grow, the Board believes that additional
members may be able to provide valuable expertise and experience to the
Company. At the current time, however, the Board is not planning to propose
any specific candidates. Nonetheless, the Board may do so in the future, and
the need to obtain stockholder approval at that time would substantially
delay the Company's ability to take timely action on such a candidate. Such
stockholder approval would most likely necessitate holding a special meeting
of stockholders, which would entail substantial delay and expense to the
Company. In order to avoid such
15
<PAGE>
delay and expense to the Company, the Board is proposing that the minimum
authorized number of directors be changed to five (5) and the maximum authorized
number of directors to nine (9).
PROPOSED AMENDMENT - Under the proposed amendment, if this Proposal No. 2 is
adopted, Section 3.2 of the Bylaws would read as follows:
"Section 3.2 Number and Qualification of Directors. The authorized
number of directors of this corporation shall be not less than five (5)
persons and not more than nine (9), until changed by an amendment to the
Certificate of Incorporation, or by an amendment to this Section 3.2,
adopted by approval of a majority of the outstanding shares entitled to
vote. The exact number of directors shall be fixed at seven (7), until
changed, within the limits specified above, by the amendment to this
Section 3.2 adopted by the Board of Directors or a majority of the
outstanding shares entitled to vote; provided, however, that an amendment
to the articles or this Section 3.2 reducing either the fixed number or the
minimum number of directors to a number less than five (5) cannot be
adopted if the votes cast against its adoption at a meeting or the shares
of stock not consenting in the case of an action by written consent are
equal to more than sixteen and two-thirds percent (16-2/3%) of the
outstanding shares of stock entitled to vote. The directors need not be
stockholders of this corporation."
FAILURE TO ADOPT PROPOSAL NO. 2 - If this Proposal No. 2 is NOT adopted, Section
3.2 of the Bylaws would remain as follows:
"Section 3.2 Number and Qualification of Directors. The authorized
number of directors of this corporation shall be not less than four (4)
persons and not more than seven (7), until changed by an amendment to
the Certificate of Incorporation, or by an amendment to this Section
3.2, adopted by approval of a majority of the outstanding shares
entitled to vote. The exact number of directors shall be fixed at seven
(7), until changed, within the limits specified above, by the amendment
to this Section 3.2 adopted by the Board of Directors or a majority of the
outstanding shares entitled to vote; provided, however, that an
amendment to the articles or this Section 3.2 reducing either the fixed
number or the minimum number of directors to a number less than five (5)
cannot be adopted if the votes cast against its adoption at a meeting or
the shares of stock not consenting in the case of an action by written
consent are equal to more than sixteen and two-thirds percent (16-2/3%)
of the outstanding shares of stock entitled to vote. The directors need
not be stockholders of this corporation."
REQUIRED VOTE - The affirmative vote of a majority of votes cast on this
proposal to amend the Bylaws is required to approve this proposal, provided
that a quorum is present.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE PROPOSED INCREASE
IN THE AUTHORIZED NUMBER OF DIRECTORS.
PROPOSAL NO. 3 - APPROVAL OF THE ADOPTION OF
THE 2000 EQUITY PARTICIPATION PLAN OF BARRA, INC.
The Board unanimously recommends that stockholders approve the
adoption of the 2000 Equity Participation Plan of BARRA, Inc. (the "2000
Plan"). The 2000 Plan was approved by the Board on June 7, 2000 in large part
because the current Option Plan expires on July 29, 2001. BARRA needs to be
able to continue to attract and retain the best available personnel for
positions of substantial responsibility, to
16
<PAGE>
provide additional incentive to the Company's employees, consultants, and
directors and to promote the success of the Company's business.
The 2000 Plan authorizes the grant to the Company's employees of
options that qualify as ISOs under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"). The 2000 Plan also authorizes the grant to
the Company's employees, consultants, and non-employee directors of NQSOs,
restricted stock, stock appreciation rights ("SARs") and other awards
(collectively, "Awards").
The principal features of the 2000 Plan are summarized below, but
the summary is qualified by reference to the 2000 Plan itself which is
contained in Appendix "A."
SECURITIES SUBJECT TO THE 2000 PLAN
The shares of stock subject to the 2000 Plan shall be Company Common
Stock. Under the terms of the 2000 Plan, the aggregate number of shares of
Common Stock subject to options, restricted stock, SARs and other Awards will
not exceed the sum of (i) 1,100,000 shares, (ii) the number of shares of
Common Stock that remain reserved for issuance under the Option Plan as of
June 7, 2000, (iii) the number of shares of Common Stock, if any, that, after
June 7, 2000, again become available for issuance pursuant to Section 3 of
the Option Plan as a result of Options issued thereunder expiring or become
unexercisable for any reason before being exercised in full. In addition, the
maximum number of shares which may be subject to options, restricted stock,
SARs and other Awards granted under the 2000 Plan to any individual in any
calendar year may not exceed 1,000,000, with such limitation only applying
subsequent to the fulfillment of certain conditions as defined in the 2000
Plan. As of June 7, 2000, there were 291,100 shares reserved for issuance
under the Option Plan, and 2,616,162 shares subject to outstanding options
which could expire or become unexercised for any reason before being
exercised in full. Therefore, assuming all shares subject to outstanding
Options under the Option Plan are cancelled without being exercised and no
further Options are granted under the Option Plan, the maximum number of
shares currently authorized to be issued under the 2000 Plan will be no
greater than 4,007,262.
The Board or a committee of the Board appointed to administer the
2000 Plan (the "Administrator") shall have the authority in its discretion to
adjust appropriately:
- the aggregate number of shares of Common Stock subject to the
2000 Plan;
- the number and kind of shares of Common Stock subject to
outstanding options, restricted stock, SARs and other Awards; and
- the price per share of outstanding options, restricted stock,
SARs and other Awards;
if there is any stock dividend, stock split, recapitalization, or other
subdivision, combination or reclassification of shares of Common Stock.
Shares subject to expired or canceled options will be available for
future grant or sale under the 2000 Plan. In addition, shares which are
delivered to the Company by an optionee or withheld by the Company upon the
exercise of an Award in payment of the exercise price may again be optioned,
granted or awarded under the 2000 Plan. No shares may be optioned, granted or
awarded under the 2000 Plan, however, if such action would cause an incentive
stock option to fail to qualify as an "incentive stock option" under Section
422 of the Code.
AWARDS UNDER THE 2000 PLAN
The 2000 Plan provides that the Administrator may grant or issue
stock options, SARs, restricted stock, deferred stock, dividend equivalents,
performance awards, stock payments and other stock related benefits, or any
combination thereof. Each Award will be set forth in a separate agreement
with the person receiving the Award and will indicate the type, terms and
conditions of the Award.
17
<PAGE>
NON-QUALIFIED STOCK OPTIONS will provide for the right to purchase Common Stock
at a specified price which, except with respect to NQSOs intended to qualify as
performance-based compensation under Section 162(m) of the Code, may be less
than fair market value on the date of grant (but not less than the par value),
and usually will become exercisable (in the discretion of the Administrator) in
one or more installments after the grant date, subject to the satisfaction of
individual or Company performance criteria established by the Administrator.
NQSOs may be granted for any term specified by the Administrator.
INCENTIVE STOCK OPTIONS will be designed to comply with the provisions of the
Code and will be subject to certain restrictions contained in the Code. Among
such restrictions, ISOs must have an exercise price not less than the fair
market value of a share of Common Stock on the date of grant, may only be
granted to employees, must expire within a specified period of time following
the optionee's termination of employment, and must be exercised within ten
years after the date of grant; but may be subsequently modified to disqualify
them from treatment as ISOs. In the case of an ISO granted to an individual
who owns (or is deemed to own) at least 10% of the total combined voting
power of all classes of stock of the Company ("10% Owner"), the 2000 Plan
provides that the exercise price must be at least 110% of the fair market
value of a share of Common Stock on the date of grant and the ISO must expire
no later than the fifth anniversary of the date of its grant.
RESTRICTED STOCK may be sold to participants at various prices and made
subject to such restrictions as may be determined by the Administrator.
Restricted stock, typically, may be repurchased by the Company at the
original purchase price if the conditions or restrictions are not met. In
general, restricted stock may not be sold, or otherwise hypothecated or
transferred except to certain permitted transferees as set forth in the 2000
Plan, until restrictions are removed or expire. Purchasers of restricted
stock, unlike recipients of options, will have voting rights and will receive
dividends prior to the time when the restrictions lapse.
DEFERRED STOCK may be awarded to participants, typically without payment of
consideration, but subject to vesting conditions based on performance
criteria established by the Administrator. Like restricted stock, deferred
stock may not be sold, or otherwise hypothecated or transferred except to
certain permitted transferees as set forth in the 2000 Plan, until vesting
conditions are removed or expire. Unlike restricted stock, deferred stock
will not be issued until the deferred stock Award has vested, and recipients
of deferred stock generally will have no voting or dividend rights prior to
the time when vesting conditions are satisfied.
STOCK APPRECIATION RIGHTS may be granted in connection with stock options or
other Awards, or separately. SARs granted by the Administrator in connection
with stock options or other Awards typically will provide for payments to the
holder based upon increases in the price of the Company's Common Stock over
the exercise price of the related option or other Awards, but alternatively
may be based upon criteria such as book value. Except as required by Section
162(m) of the Code with respect to an SAR intended to qualify as
performance-based compensation as described in Section 162(m) of the Code,
there are no restrictions specified in the 2000 Plan on the exercise of SARs
or the amount of gain realizable therefrom, although restrictions may be
imposed by the Administrator in the SAR agreements. The Administrator may
elect to pay SARs in cash or in Common Stock or in a combination of both.
DIVIDEND EQUIVALENTS represent the value of the dividends per share paid by the
Company, calculated with reference to the number of shares covered by the stock
options, SARs or other Awards held by the participant.
18
<PAGE>
PERFORMANCE AWARDS may be granted by the Administrator to employees or
consultants based upon, among other things, the contributions, responsibilities
and other compensation of the particular employee or consultant. Generally,
these Awards will be based upon specific performance criteria and may be paid in
cash or in Common Stock or in a combination of both. Performance Awards may
include "phantom" stock awards that provide for payments based upon increases in
the price of the Company's Common Stock over a predetermined period. Performance
Awards may also include bonuses granted by the Administrator and which may be
payable in cash or in Common Stock or in a combination of both.
STOCK PAYMENTS may be authorized by the Administrator in the form of shares of
Common Stock or an option or other right to purchase Common Stock as part of a
deferred compensation arrangement in lieu of all or any part of compensation,
including bonuses, that would otherwise be payable in cash to the key employee
or consultant.
The Administrator may designate key employees as "Section 162(m)
Participants," whose compensation for a given fiscal year may be subject to the
limit on deductible compensation imposed by Section 162(m) of the Code. The
Administrator may grant to Section 162(m) Participants restricted stock,
deferred stock, SARs, dividend equivalents, performance awards and stock
payments that vest or become exercisable upon the attainment of performance
criteria for the Company which are related to one or more of the following
performance goals: (i) pre-tax income; (ii) operating income; (iii) cash flow;
(iv) earnings per share; (v) earnings before interest, taxes, depreciation and
amortization; (vi) return on equity; (vii) return on invested capital or assets;
(viii) cost reductions or savings; and (ix) the market price of a share of the
Company's Common Stock.
GRANT AND TERMS OF OPTIONS
The Administrator shall have the authority under the 2000 Plan to
determine:
- the number of shares subject to option grants to employees,
consultants, and directors;
- whether the option grants are ISOs or NQSOs; and
- the terms and conditions of the option grants.
The Administrator may not grant an ISO under the 2000 Plan to any
10% Owner unless the stock option conforms to the applicable provisions of
Section 422 of the Code. Only the Company's employees may be granted ISOs
under the 2000 Plan. Employees, consultants, and directors may receive NQSOs
under the 2000 Plan. Each option will be evidenced by a written option
agreement.
The exercise price for the shares of Common Stock subject to each
option will be specified in each option agreement. The Administrator shall set
the exercise price at the time the option is granted. In certain instances, the
exercise price is also subject to additional rules as follows:
- In the case of options intended to qualify as performance-based
compensation, or as ISOs, the exercise price may not be less than
the FMV for the shares of Common Stock subject to such option on
the date the option is granted.
19
<PAGE>
- In the case of ISOs granted to a 10% Owner, the exercise price
may not be less than 110% of the FMV of the shares of Common
Stock subject to such option on the date the option is granted.
- In the case of NQSOs, the exercise price may not be less than the
par value for the shares of Common Stock subject to such option
on the date the option is granted.
- In the case of NQSOs granted to a 10% Owner, the exercise price
may not be less than 100% of the FMV of the shares of Common
Stock subject to such option on the date the option is granted.
For purposes of the 2000 Plan, the FMV of a share of Common Stock as
of a given date shall be (a) the closing price of a share of Common Stock on
the principal exchange on which shares of Common Stock are then trading, if
any (or as reported on any composite index which includes such principal
exchange), on the trading day of the date of grant, or if shares were not
traded on the date of grant, then on the next preceding date on which a trade
occurred, or (b) if Common Stock is not traded on an exchange but is quoted
on NASDAQ or a successor quotation system, the mean between the closing
representative bid and asked prices for the Common Stock on the trading day
of the date of grant as reported by NASDAQ or such successor quotation
system; or (c) if Common Stock is not publicly traded on an exchange and not
quoted on NASDAQ or a successor quotation system, the FMV of a share of
Common Stock as established by the Administrator acting in good faith.
TERM AND VESTING OF OPTIONS
The term of an option shall be set by the Administrator. In the case of
an ISO, the term of the option may not be longer than 10 years from the date the
ISO is granted, or if granted to a 10% Owner, five years from the date of the
grant. Except as limited by the requirements of Section 422 of the Code, the
Administrator may extend the term of any outstanding option in connection with
any termination of employment or the consulting relationship with an optionee,
or amend any other term or condition of the outstanding option relating to the
termination of an optionee.
An option is exercisable when it "vests." Each option agreement will
contain the period during which the right to exercise the option in whole or in
part vests in the optionee. At any time after the grant of an option, the
Administrator may accelerate the period during which an option vests. No portion
of an option which is unexercisable at an optionee's termination of employment,
termination of consulting relationship or termination of directorship will
subsequently become exercisable, except as may be otherwise provided by the
Administrator either in the agreement relating to the stock option or by action
following the grant of the option.
EXERCISE OF OPTIONS
An option may be exercised for any vested portion of the shares subject
to the option until the option expires. Only whole shares of Common Stock may be
purchased. An option may be exercised by delivering to the Secretary of the
Company a written notice of exercise on a form provided by the Company, together
with full cash payment for the shares in the form of cash or a check payable to
the Company in the amount of the aggregate option exercise price. However, the
Administrator may in its discretion:
- allow payment through the delivery of shares of Common Stock
which are already owned by the optionee and have been held
at least six months;
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- subject to certain timing requirements, allow payment
through the surrender of shares of Common Stock which would
otherwise be issuable on exercise of the option;
- allow payment through the delivery of property of any kind
which constitutes good and valuable consideration;
- allow payment by use of a full recourse loan from the
Company;
- allow payment through the delivery of a notice that the
optionee has placed a market sell order with a broker with
respect to shares of Common Stock then issuable on exercise
of the option, and that the broker has been directed to pay
a sufficient portion of the net proceeds of the sale to the
Company in satisfaction of the option exercise price; or
- allow payment through any combination of the foregoing.
ELIGIBILITY
The Company's employees and consultants are eligible to receive
Awards under the 2000 Plan. The Administrator determines which of the
Company's employees will be granted options, restricted stock, SARs and other
Awards. No person is entitled to participate in the 2000 Plan as a matter of
right. Only those employees and consultants who are selected to receive
grants by the Administrator may participate in the 2000 Plan. Independent
non-employee directors are also eligible to receive grants under the 2000
Plan.
ADMINISTRATION OF THE 2000 PLAN
All decisions, determinations and interpretations of the Administrator
shall be final and binding on all holders. The Administrator has the power to:
- construe and interpret the terms of the 2000 Plan and Awards
granted pursuant to the 2000 Plan;
- adopt rules for the administration, interpretation and
application of the 2000 Plan that are consistent with the
2000 Plan; and
- interpret, amend or revoke any of the newly adopted rules of
the 2000 Plan.
AWARDS NOT TRANSFERABLE
Awards may not be sold, pledged, transferred, or disposed of in any
manner other than to certain permitted transferees as provided for in the
2000 Plan and by will or by the laws of descent and distribution and may be
exercised, during the lifetime of the holder, only by the holder or such
permitted transferees.
CERTAIN RESTRICTIONS ON RESALE
Employees, officers and directors who are "affiliates" of the
Company as defined by the rules and regulations under the Securities Act of
1933 may offer or sell the shares of Common Stock they acquire upon exercise
of their options under the 2000 Plan only if they make such offers and sales:
- pursuant to an effective registration statement under the
Securities Act of 1933;
- pursuant to an appropriate exemption from the registration
requirements of the Securities Act of 1933; or
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- within the limitations and subject to the conditions set
forth in Rule 144 under the Securities Act of 1933.
AMENDMENT AND TERMINATION OF THE 2000 PLAN
The Board may not, without prior stockholder approval:
- amend the 2000 Plan so as to increase the number of
shares of stock that may be issued under the Plan; or
- extend the term of the 2000 Plan.
The 2000 Plan will be in effect for 10 years after the date the 2000
Plan is approved by the stockholders, unless the Board terminates the 2000
Plan at an earlier date. The Board may terminate the 2000 Plan at any time
with respect to any shares not then subject to an option under the 2000 Plan.
Except as indicated above, the Board may also modify the 2000 Plan from time
to time.
ROLL-OVER OF UNVESTED AND EXPIRING OPTIONS FROM OPTION PLAN
Under the terms of the 2000 Plan, the aggregate number of shares of
Common Stock subject to options, restricted stock, SARs and other Awards will
include the number of shares of Common Stock that remain reserved for
issuance under the Option Plan as of June 7, 2000, and the number of shares
of Common Stock that, after June 7, 2000, again become available for
issuance pursuant to Section 3 of the Option Plan as a result of stock
options issued thereunder expiring or become unexercisable for any reason
before being exercised in full.
FEDERAL INCOME TAX CONSEQUENCES ASSOCIATED WITH THE 2000 PLAN
The following is a general summary under current law of the material
federal income tax consequences to participants in the 2000 Plan. This
summary deals with the general tax principles that apply and is provided only
for general information. Some kinds of taxes, such as state and local income
taxes, are not discussed. Tax laws are complex and subject to change and may
vary depending on individual circumstances and from locality to locality. The
summary does not discuss all aspects of income taxation that may be relevant
in light of a holder's personal investment circumstances. This summarized
tax information is not tax advice.
NON-QUALIFIED STOCK OPTIONS - For federal income tax purposes, if an optionee
is granted NQSOs under the 2000 Plan, the optionee will not have taxable
income on the grant of the option, nor will the Company be entitled to any
deduction. Generally, on exercise of NQSOs the optionee will recognize
ordinary income, and the Company will be entitled to a deduction, in an
amount equal to the difference between the option exercise price and the FMV
of the Common Stock on the date of exercise. The optionee's basis for the
stock for purposes of determining gain or loss on subsequent disposition of
such shares generally, will be the FMV of the Common Stock on the date the
optionee exercises the option. Any subsequent gain or loss will be generally
taxable as capital gains or losses.
INCENTIVE STOCK OPTIONS - There is no taxable income to an optionee when an
optionee is granted an ISO or when that option is exercised. However, the
amount by which the FMV of the shares at the time of exercise exceeds the
option price will be an "item of adjustment" for the optionee for purposes of
the alternative minimum tax. Gain realized by the optionee on the sale of an
ISO is taxable at capital gains rates, and no tax deduction is available to
the Company, unless the optionee disposes of the shares within (A) two years
after the date of grant of the option or (B) within one year of the date the
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shares were transferred to the optionee. If the shares of Common Stock are
sold or otherwise disposed of before the end of the one-year and two-year
periods specified above, the difference between the option exercise price and
the FMV of the shares on the date of the option's exercise will be taxed at
ordinary income rates, and the Company will be entitled to a deduction to the
extent the optionee must recognize ordinary income. If such a sale or
disposition takes place in the year in which the optionee exercise the
option, the income the optionee recognizes upon sale or disposition of the
shares will not be considered income for alternative minimum tax purposes.
Otherwise, if the optionee sells or otherwise disposes the shares before the
end of the one-year and two-year periods specified above, the maximum amount
that will be included as alternative minimum tax income is the gain, if any,
the optionee recognizes on the disposition of the shares.
An ISO exercised more than three months after an optionee terminates
employment, other than by reason of death or disability, will be taxed as a
NQSO, and the optionee will have been deemed to have received income on the
exercise taxable at ordinary income rates. The Company will be entitled to a tax
deduction equal to the ordinary income, if any, realized by the optionee.
STOCK APPRECIATION RIGHTS - No taxable income is generally recognized upon
the receipt of an SAR, but upon exercise of the SAR the FMV of the shares (or
cash in lieu of shares) received generally will be taxable as ordinary income
to the recipient in the year of such exercise. The Company generally will be
entitled to a compensation deduction for the same amount that the recipient
recognizes as ordinary income.
RESTRICTED STOCK AND DEFERRED STOCK - An employee to whom restricted or
deferred stock is issued generally will not recognize taxable income upon
such issuance and the Company generally will not then be entitled to a
deduction. However, when restrictions on shares of restricted stock lapse,
such that the shares are no longer subject to a substantial risk of
forfeiture, the employee generally will recognize ordinary income and the
Company generally will be entitled to a deduction for an amount equal to the
excess of the FMV of the shares at the date such restrictions lapse over the
purchase price therefor. Similarly, when deferred stock vests and is issued
to the employee, the employee generally will recognize ordinary income and
the Company generally will be entitled to a deduction for the amount equal to
the FMV of the shares at the date of issuance.
DIVIDEND EQUIVALENTS - A recipient of a dividend equivalent award generally will
not recognize taxable income at the time of grant, and the Company will not be
entitled to a deduction at that time. When a dividend equivalent is paid, the
participant generally will recognize ordinary income, and the Company will be
entitled to a corresponding deduction.
PERFORMANCE AWARDS - A participant who has been granted a performance award
generally will not recognize taxable income at the time of grant, and the
Company will not be entitled to a deduction at that time. When an award is paid,
whether in cash or Common Stock, the participant generally will recognize
ordinary income, and the Company will be entitled to a corresponding deduction.
STOCK PAYMENTS - A participant who receives a stock payment in lieu of a cash
payment that would otherwise have been made will generally be taxed as if the
cash payment has been received, and the Company generally will be entitled to a
deduction for the same amount.
DEFERRED COMPENSATION - Participants who defer compensation generally will
recognize no income, gain or loss for federal income tax purposes when NQSOs are
granted in lieu of amounts otherwise payable, and the Company will not be
entitled to a deduction at that time. When and to the extent such NQSOs are
exercised, the rules regarding NQSOs outlined above will generally apply.
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SECTION 162(m) OF THE CODE - In general, under Section 162(m), income tax
deductions of publicly-held corporations may be limited to the extent total
compensation (including base salary, annual bonus, stock option exercises and
non-qualified benefits paid) for certain executive officers exceeds $1
million (less the amount of any "excess parachute payments" as defined in
Section 280G of the Code) in any one year. However, under Section 162(m), the
deduction limit does not apply to certain "performance-based compensation"
established by an independent compensation committee which is adequately
disclosed to, and approved by, stockholders. In particular, stock options and
SARs will satisfy the "performance-based compensation" exception if the
awards are made by a qualifying compensation committee, the plan sets the
maximum number of shares that can be granted to any person within a specified
period and the compensation is based solely on an increase in the stock price
after the grant date (i.e. the option exercise price is equal to or greater
than the fair market value of the stock subject to the award on the grant
date). Performance or incentive awards granted under the 2000 Plan may
qualify as "qualified performance-based compensation" for purposes of Section
162(m) if such awards are granted or vest upon the pre-established objective
performance goals described above.
The Company has attempted to structure the 2000 Plan in such a manner that
the Administrator can determine the terms and conditions of stock options,
SARs and performance and incentive awards granted thereunder such that
remuneration attributable to such awards will not be subject to the
$1,000,000 limitation. The Company has not, however, requested a ruling from
the Internal Revenue Service or an opinion of counsel regarding this issue.
This discussion will neither bind the Internal Revenue Service nor preclude
the Internal Revenue Service from adopting a contrary position.
REQUIRED VOTE - The affirmative vote of a majority of votes cast on this
proposal to adopt the 2000 Plan is required to approve this proposal,
provided that a quorum is present. The Company's directors have an interest
in approval of this Proposal No. 3, in that they will be eligible to receive
Awards under the 2000 Plan.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL TO APPROVE THE
ADOPTION OF THE 2000 EQUITY PARTICIPATION PLAN OF BARRA, INC.
PROPOSAL NO. 4 - APPROVAL OF AMENDMENT TO BARRA INC.
DIRECTORS OPTION PLAN TO AUTHORIZE THE ISSUANCE OF
AN ADDITIONAL 100,000 SHARES THEREUNDER
The Board unanimously recommends that stockholders approve the
amendment to the Directors Plan to authorize the issuance of an additional
100,000 shares of Common Stock thereunder. The Directors Plan was adopted by
the Board on April 24, 1997 and approved at the Annual Meeting of our
Stockholders held on July 31, 1997. It was later amended by the Board on
August 5, 1999.
PURPOSE - The purpose of the amendment to the Directors Plan is to continue to
give directors of the Company an opportunity to acquire an equity interest in
the Company and to further align their interests with the interests of the
Company's stockholders. The Company believes that a specific plan to permit its
non-employee directors to receive options to purchase Common Stock of the
Company is important to the Company's ability to continue to attract and retain
well-qualified directors.
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SUMMARY OF PROPOSED AMENDMENTS TO DIRECTORS PLAN
If this Proposal No. 4 is approved, the aggregate number of shares that may
be issued pursuant to the Directors Plan will increase from 100,000 to
200,000.
SUMMARY OF CURRENT TERMS OF DIRECTORS PLAN
ADMINISTRATION - The Directors Plan is administered by a Committee consisting
solely of not less than two "Outside Directors" as defined in the Directors Plan
(the "Committee"). The interpretation by the Committee of any of the provisions
of the Directors Plan or any option granted under the Directors Plan ("Directors
Options") is final and conclusive.
ELIGIBILITY - The Directors Plan permits the Company to grant NQSOs to purchase
shares of Common Stock of the Company in accordance with a fixed formula
(described below) to non-employee directors of the Company. In addition, the
Directors Plan allows discretionary grants of ISOs to employee directors and
NQSOs to all directors. There are currently five non-employee directors and two
employee directors. The Company receives no consideration from optionees at the
time Directors Options are granted under the Directors Plan.
TERMS OF DIRECTORS OPTIONS
STOCK SUBJECT TO OPTIONS. The stock subject to Directors Options under the
Directors Plan consists of shares of the Company's authorized but unissued
Common Stock. The aggregate number of shares that may be issued pursuant to the
Directors Plan is currently 100,000 shares, subject to adjustment as provided in
the Directors Plan. In the event that any outstanding Directors Option under the
Directors Plan expires or terminates for any reason without being exercised in
whole or in part, the shares of Common Stock allocable to the unexercised
portion of such Directors Option will be available again for the grant of
Directors Options under the Directors Plan.
FORMULA FOR OPTION GRANTS. Initial Grants and Successor Grants are NQSOs and
are currently made automatically to non-employee directors under the
Directors Plan in accordance with a non-discretionary formula. Following the
adoption of the Directors Plan by the Board and Stockholders in 1997, each
non-employee director then in office received Initial Grants of 5,000 shares
and each person who subsequently became a non-employee director and was
eligible to participate in the Directors Plan received an Initial Grant of
10,000 shares. The initial version of the Directors Plan also provided that
on each anniversary of a director's Initial Grant, if the optionee was still
a non-employee member of the Board, the optionee received a Successor Grant
for an additional 2,000 shares. On August 5, 1999 the Directors Plan was
amended by the Board to increase the amount of the Initial Grant to 15,000
shares and the Successor Grant to 4,000 shares. The Directors Plan also
provides that ISOs may be granted to employee directors and NQSOs may be
granted to all directors at the discretion of the Committee ("Discretionary
Grants").
EXERCISE PRICE. The exercise price for all ISOs will be the FMV of the
Company's Common Stock at the time the Directors Option is granted, except
that, for ISOs, the price shall be 110% of FMV for any director who is a 10%
Owner.
VESTING AND TERM OF OPTION GRANTS. Options granted under the Directors Plan will
become exercisable as they vest. NQSOs granted pursuant to Initial Grants will
vest over a period of five years at a rate of twenty percent (20%) on the
anniversary dates of the grant so long as the optionee is continuously a
director of the Company. NQSOs granted pursuant to Succeeding Grants will be
immediately vested.
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ISOs will vest according to a vesting schedule determined by the Committee;
provided however, that the rate of vesting shall be no longer than twenty
percent (20%) per year over five years from the date of grant. Each Directors
Option will have a term as specified by the Committee at the date of grant and
shall be stated in the Option Agreement. However, an option may not be exercised
more than ten (10) years from the date of grant, and will terminate earlier if
the optionee ceases to be a director.
TERMINATION OF SERVICE. If the optionee's service as a director of the Company
is terminated for any reason, including death and disability, Directors Options
under the Director Plan, to the extent vested and exercisable on the termination
date, may be exercised not later than ninety (90) days (or such other period of
time as is determined by the Committee) after termination date. Unless otherwise
determined at the discretion of the Board, all Directors Options granted under
the Director Plan that are not vested and exercisable on the date of
termination, shall automatically terminate.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
Pursuant to the terms of the Directors Plan, the aggregate number of
shares that may be issued pursuant to the Directors Plan and the shares subject
to outstanding Directors Options (but not the numbers of shares subject to any
future Initial Grants or Succeeding Grants) shall be subject to automatic pro
rata adjustment as to the number and price of shares, in the event of changes in
the outstanding Common Stock by reason of stock dividends, stock splits, reverse
stock splits, reclassifications, recapitalizations, reorganizations and other
relevant changes in capitalization. In the event of a merger, consolidation,
dissolution or liquidation of the Company, the sale of substantially all of the
assets of the Company or any other similar corporate transaction, the vesting of
all Directors Options granted pursuant to the Directors Plan will accelerate and
the Directors Options will become exercisable in full.
AMENDMENT AND TERMINATION OF DIRECTORS PLAN
Generally, the Board may terminate or amend the Directors Plan at any
time. However, the Board may not, among other matters, without stockholder
approval, increase the total number of shares of Common Stock available for
issuance under the Directors Plan or change the class of persons eligible to
receive Directors Options. In addition, no amendment of the Directors Plan or of
any outstanding Directors Option may adversely affect any outstanding Directors
Option without the written consent of the optionee.
TERM OF DIRECTORS PLAN
Options may be granted pursuant to the Directors Plan from time to time
until ten years from the date the Directors Plan was adopted by the Board, which
will be April 24, 2007.
FEDERAL INCOME TAX INFORMATION
THE FOLLOWING INFORMATION IS A GENERAL SUMMARY AS OF THE DATE OF THIS PROXY
STATEMENT OF THE FEDERAL INCOME TAX CONSEQUENCES TO THE COMPANY AND OPTIONEES OF
PARTICIPATION IN THE DIRECTORS PLAN. THE FEDERAL TAX LAWS MAY CHANGE AND THE
FEDERAL, STATE AND LOCAL TAX CONSEQUENCES FOR EACH OPTIONEE WILL DEPEND UPON HIS
OR HER INDIVIDUAL CIRCUMSTANCES.
INCENTIVE STOCK OPTIONS - When an Directors Option granted under the Directors
Plan qualifies as an ISO, the optionee does not recognize income for federal
income tax purposes upon the grant or exercise of the ISO (unless the
alternative minimum tax applies as discussed below). Upon a sale of the shares
(assuming that the sale occurs no sooner than two years after the grant of the
Directors Option and one
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year after the receipt of the shares by the optionee), any gain or loss will be
treated as long-term capital gain or loss for federal income tax purposes.
In order for a Directors Option to qualify as an ISO, it must be
exercised while the optionee is an employee of the Company or of a parent or
subsidiary of the Company, or within ninety (90) days after the optionee ceases
to be an employee for any reason other than death, in which case there is no
statutory limitation, or permanent and total disability, in which case the
exercise may occur within one year after termination of employment.
The favorable federal income tax consequences described above will not
apply to the extent the optionee disposes of the shares acquired within one year
of the date of exercise or within two years of the date of grant of the
Directors Option (hereinafter a "disqualifying disposition"). A disqualifying
disposition does not include the disposition of shares acquired upon exercise of
a Directors Option after the employee's death and, under certain circumstances,
the disposition of shares (acquired by exercising an ISO) by an insolvent
individual to a trustee, receiver or other similar fiduciary in an insolvency
proceeding.
In the event of a disqualifying disposition, the optionee generally
will recognize ordinary income in the year of disposition equal to the amount
by which the FMV of the stock at the date of exercise exceeds the option
exercise price. Any additional gain will be long-term or short-term gain,
depending on how long the optionee has held the stock. The income recognized
on a disqualifying disposition will be added to the optionee's tax basis for
determining gain or loss with respect to a subsequent sale of his or her
stock.
ALTERNATIVE MINIMUM TAX - The excess of the stock's FMV over the option
exercise price of an ISO, which is generally not subject to tax at the time
of exercise, is treated as an item of income in determining an individual
taxpayer's alternative minimum tax liability. It is advisable for all
optionees holding ISOs to attempt to forecast their income tax liabilities
before deciding when to exercise ISOs, or even whether to receive stock
compensation in the form of ISOs. The alternative minimum tax risk can make
ISOs unappealing if the potential spread on exercise of the option in any
particular year will be substantial.
NON-QUALIFIED STOCK OPTIONS - Options granted under the Directors Plan that
do not qualify as ISOs are considered NQSOs and will not qualify for any
special tax benefits to the optionee. Because the Company's Directors Options
are not deemed to have a readily ascertainable value, an optionee will not
recognize any taxable income at the time an NQSO is granted. However, upon
exercise of an NQSO, the optionee generally must include in income as
compensation an amount equal to the difference between the FMV of the shares
on the date of exercise and the optionee's exercise price. The included
amount will be treated as ordinary income by the optionee and will be subject
to withholding by the Company for each optionee who is also an employee of
the Company. Upon resale of the shares by the optionee, any subsequent
appreciation or depreciation in the value of the shares will be treated as
capital gain or loss.
TAX TREATMENT OF THE COMPANY - The Company generally will be allowed a tax
deduction to the extent and in the year that compensation income is recognized
by the optionee upon the exercise of NQSOs, provided the Company has withheld
income taxes in accordance with the law. The Company receives no deduction in
connection with the exercise of an ISO. In the event of a disqualifying
disposition of an ISO, however, the Company will be allowed a deduction for the
amount of income recognized by the optionee with respect to his or her exercise
for the tax year of the Company in which the disqualifying disposition occurs.
Notwithstanding the foregoing, the Code, limits the tax deduction for expenses
in
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connection with remuneration of the Company's Chief Executive Officer and its
four other most highly compensated executive officers during any fiscal year to
the extent the remuneration of any such person exceeds $1,000,000 for such
fiscal year.
ERISA
The Company believes that the Directors Plan is not subject to any of
the provisions of ERISA.
REQUIRED VOTE
The amendment of the Directors Plan requires the affirmative vote of
the majority of shares of Common Stock present in person or represented by a
proxy at the Annual Meeting and entitled to vote thereon. The Company's
directors have an interest in approval of this Proposal No. 4, in that the
non-employee directors have received Directors Options pursuant to the Directors
Plan and that the non-employee directors will and all other directors may
receive additional Directors Option grants.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE AMENDMENT OF THE
DIRECTORS PLAN.
PROPOSAL NO. 5 - APPROVAL OF AUDITORS
The Board has selected Deloitte & Touche LLP as our independent
auditors for the fiscal year ending March 31, 2001, subject to the approval
of our stockholders. If a majority of our stockholders do not ratify the
selection of Deloitte & Touche LLP as our independent auditors, the Board
will reconsider its selection.
Deloitte & Touche LLP has audited our financial statements since 1986.
Its representatives are expected to be at the Annual Meeting to answer
appropriate questions. They will also have the opportunity to make a statement
if they desire to do so.
REQUIRED VOTE
The affirmative vote of a majority of votes cast on this proposal to
approve the auditors is required to approve this proposal, provided that a
quorum is present.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE SELECTION OF DELOITTE &
TOUCHE LLP AS INDEPENDENT AUDITORS.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers, and 10% Owners, to file with the Securities
and Exchange Commission ("SEC") reports of holdings and transactions in our
common stock. Our officers, directors and 10% Owners are required by SEC
regulation to furnish us with copies of all reports they file under Section
16(a).
During the fiscal year ended March 31, 2000, BARRA filed a Form 3 on
behalf of Mr. Ostler on an untimely basis. The Form 3, as subsequently
amended, reported the grant to Mr. Ostler of 15,000 Directors Options to
purchase BARRA Common Stock. Based on our records and other information
provided to us, we believe that, except for the late filing of this Form 3,
our directors and executive officers, as well as our 10% Owners, met all
applicable SEC filing requirements.
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DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR YEAR 2001 ANNUAL MEETING
The Company must receive stockholder proposals intended to be
included in its proxy statement for the Year 2001 Annual Meeting of
Stockholders no later than March 9, 2001. Stockholders who want to present a
proposal at the Year 2001 Annual Meeting that is not included in BARRA's
proxy statement should notify the Secretary of the Company of the proposal by
May 23, 2001. Without that notice, proxy holders appointed by the Board will
be entitled to exercise their discretionary voting authority when the
proposal is raised at the annual meeting, without any mention of the proposal
in the proxy statement.
OTHER MATTERS
The Board knows of no other matters to be submitted to the meeting.
If any other matters properly come before the meeting, then the persons named
in the enclosed form of proxy will vote the shares they represent in such
manner as the Board may recommend.
BY ORDER OF THE BOARD
Andrew Rudd
Chairman of the Board
June 28, 2000
A copy of the Company's Annual Report to the Securities and Exchange
Commission on Form 10-K for the year ended March 31, 2000 is available
without charge upon written request to: Jennifer Hinchman, Investor
Relations, BARRA, Inc., 2100 Milvia Street, Berkeley, CA 94704.
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APPENDIX A
THE 2000 EQUITY PARTICIPATION PLAN
OF
BARRA, INC.
BARRA, Inc. a Delaware corporation, has adopted The 2000 Equity
Participation Plan of BARRA, Inc. (the "Plan"), effective June 7, 2000 (the
"Effective Date"), for the benefit of its eligible employees, consultants and
directors.
The purposes of the Plan are as follows:
(1) To provide an additional incentive for directors, key Employees and
Consultants (as such terms are defined below) to further the growth, development
and financial success of the Company by personally benefiting through the
ownership of Company stock and/or rights which recognize such growth,
development and financial success.
(2) To enable the Company to obtain and retain the services of
directors, key Employees and Consultants considered essential to the long range
success of the Company by offering them an opportunity to own stock in the
Company and/or rights which will reflect the growth, development and financial
success of the Company.
ARTICLE I.
DEFINITIONS
1.1. GENERAL. Wherever the following terms are used in the Plan they
shall have the meanings specified below, unless the context clearly indicates
otherwise.
1.2. ADMINISTRATOR. "Administrator" shall mean the entity that conducts
the general administration of the Plan as provided herein. With reference to the
administration of the Plan with respect to Options granted to Independent
Directors, the term "Administrator" shall refer to the Board. With reference to
the administration of the Plan with respect to any other Award, the term
"Administrator" shall refer to the Committee unless the Board has assumed the
authority for administration of the Plan generally as provided in Section 10.1.
1.3. AWARD. "Award" shall mean an Option, a Restricted Stock award, a
Performance Award, a Dividend Equivalents award, a Deferred Stock award, a Stock
Payment award or a Stock Appreciation Right which may be awarded or granted
under the Plan (collectively, "Awards").
1.4. AWARD AGREEMENT. "Award Agreement" shall mean a written agreement
executed by an authorized officer of the Company and the Holder which shall
contain such terms and conditions with respect to an Award as the Administrator
shall determine, consistent with the Plan.
1.5. AWARD LIMIT. "Award Limit" shall mean 1,000,000 shares of Common
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Stock, as adjusted pursuant to Section 11.3 of the Plan.
1.6. BOARD. "Board" shall mean the Board of Directors of the Company.
1.7. CHANGE IN CONTROL. "Change in Control" shall mean a change in
ownership or control of the Company effected through any of the following
transactions:
(a) any person or related group of persons (other than the
Company or a person that, prior to such transaction, directly or indirectly
controls, is controlled by, or is under common control with, the Company)
directly or indirectly acquires beneficial ownership (within the meaning of Rule
13d-3 under the Exchange Act) of securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's outstanding securities
pursuant to a tender or exchange offer made directly to the Company's
stockholders which the Board does not recommend such stockholders to accept; or
(b) there is a change in the composition of the Board over a
period of thirty-six (36) consecutive months (or less) such that a majority of
the Board members (rounded up to the nearest whole number) ceases, by reason of
one or more proxy contests for the election of Board members, to be comprised of
individuals who either (i) have been Board members continuously since the
beginning of such period or (ii) have been elected or nominated for election as
Board members during such period by at least a majority of the Board members
described in clause (i) who were still in office at the time such election or
nomination was approved by the Board; or
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation (or other entity), other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 66-2/3% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; provided, however, that a merger
or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person acquires more than 25% of the combined
voting power of the Company's then outstanding securities shall not constitute a
Change in Control; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets; or
(e) any person is or becomes the beneficial owner of securities
of the Company representing ten percent (10%) or more of the combined voting
power of the Company's then outstanding securities and (A) the identity of the
Chief Executive Officer of the Company is changed during the period beginning
sixty (60) days before the attainment of the ten percent (10%) beneficial
ownership and ending two (2) years thereafter, or (B) individuals constituting
at least one-third (1/3) of the members of the Board at the beginning of such
period
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shall leave the Board during the period beginning sixty (60) days before the
attainment of the ten percent (10%) beneficial ownership and ending two (2)
years thereafter.
1.8. CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.9. COMMITTEE. "Committee" shall mean the Compensation Committee of the
Board, or another committee or subcommittee of the Board, appointed as provided
in Section 10.1.
1.10. COMMON STOCK. "Common Stock" shall mean the common stock of the
Company, par value $0.01 per share, and any equity security of the Company
issued or authorized to be issued in the future, but excluding any preferred
stock and any warrants, options or other rights to purchase Common Stock.
1.11. COMPANY. "Company" shall mean BARRA, Inc. a Delaware corporation.
1.12. CONSULTANT. "Consultant" shall mean any consultant or adviser if:
(a) the consultant or adviser renders bona fide services to the Company;
(b) the services rendered by the consultant or adviser are not in
connection with the offer or sale of securities in a capital-raising transaction
and do not directly or indirectly promote or maintain a market for the Company's
securities; and
(c) the consultant or adviser is a natural person who has contracted
directly with the Company to render such services.
1.13. DEFERRED STOCK. "Deferred Stock" shall mean Common Stock awarded
under Article VIII of the Plan.
1.14. DIRECTOR. "Director" shall mean a member of the Board.
1.15. DIVIDEND EQUIVALENT. "Dividend Equivalent" shall mean a right to
receive the equivalent value (in cash or Common Stock) of dividends paid on
Common Stock, awarded under Article VIII of the Plan.
1.16. DRO. "DRO" shall mean a domestic relations order as defined by the
Code or Title I of the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder.
1.17. EMPLOYEE. "Employee" shall mean any officer or other employee (as
defined in accordance with Section 3401(c) of the Code) of the Company, or of
any corporation, which is a Subsidiary.
1.18. EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange
Act
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of 1934, as amended.
1.19. FAIR MARKET VALUE. "Fair Market Value" of a share of Common Stock
as of a given date shall be (a) the closing price of a share of Common Stock on
the principal exchange on which shares of Common Stock are then trading, if any
(or as reported on any composite index which includes such principal exchange),
on such date, or if shares were not traded on such date, on the next preceding
date on which a trade occurred, or (b) if Common Stock is not traded on an
exchange but is quoted on NASDAQ or a successor quotation system, the mean
between the closing representative bid and asked prices for the Common Stock on
such date (or such next preceding date, as applicable), as reported by NASDAQ or
such successor quotation system; or (c) if Common Stock is not publicly traded
on an exchange and not quoted on NASDAQ or a successor quotation system, the
Fair Market Value of a share of Common Stock as established by the Administrator
acting in good faith.
1.20. HOLDER. "Holder" shall mean a person who has been granted or
awarded an Award.
1.21. INCENTIVE STOCK OPTION. "Incentive Stock Option" shall mean an
option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Administrator.
1.22. INDEPENDENT DIRECTOR. "Independent Director" shall mean a member
of the Board who is not an Employee of the Company.
1.23. NON-QUALIFIED STOCK OPTION. "Non-Qualified Stock Option" shall
mean an Option that is not designated as an Incentive Stock Option by the
Administrator.
1.24. OPTION. "Option" shall mean a stock option granted under Article
IV of the Plan. An Option granted under the Plan shall, as determined by the
Administrator, be either a Non-Qualified Stock Option or an Incentive Stock
Option; PROVIDED, HOWEVER, that Options granted to Independent Directors and
Consultants shall be Non-Qualified Stock Options.
1.25. PERFORMANCE AWARD. "Performance Award" shall mean a cash bonus,
stock bonus or other performance or incentive award that is paid in cash, Common
Stock or a combination of both, awarded under Article VIII of the Plan.
1.26. PERFORMANCE CRITERIA. "Performance Criteria" shall mean the
following business criteria with respect to the Company, any Subsidiary or any
division or operating unit: (a) net income, (b) pre-tax income, (c) operating
income, (d) cash flow, (e) earnings per share, (f) return on equity, (g) return
on invested capital or assets, (h) cost reductions or savings, (i) funds from
operations, (j) appreciation in the fair market value of Common Stock and (k)
earnings before any one or more of the following items: interest, taxes,
depreciation or amortization.
1.27. PLAN. "Plan" shall mean The 2000 Equity Participation Plan of
BARRA, Inc.
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1.28. RESTRICTED STOCK. "Restricted Stock" shall mean Common Stock
awarded under Article VII of the Plan.
1.29. RULE 16b-3. "Rule 16b-3" shall mean that certain Rule 16b-3 under
the Exchange Act, as such Rule may be amended from time to time.
1.30. SECTION 162(m) PARTICIPANT. "Section 162(m) Participant" shall
mean any key Employee designated by the Administrator as a key Employee whose
compensation for the fiscal year in which the key Employee is so designated or a
future fiscal year may be subject to the limit on deductible compensation
imposed by Section 162(m) of the Code.
1.31. SECURITIES ACT. "Securities Act" shall mean the Securities Act of
1933, as amended.
1.32. STOCK APPRECIATION RIGHT. "Stock Appreciation Right" shall mean a
stock appreciation right granted under Article IX of the Plan.
1.33. STOCK PAYMENT. "Stock Payment" shall mean (a) a payment in the
form of shares of Common Stock, or (b) an option or other right to purchase
shares of Common Stock, as part of a deferred compensation arrangement, made in
lieu of all or any portion of the compensation, including without limitation,
salary, bonuses and commissions, that would otherwise become payable to a key
Employee or Consultant in cash, awarded under Article VIII of the Plan.
1.34. SUBSIDIARY. "Subsidiary" shall mean any corporation in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then 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.
1.35. SUBSTITUTE AWARD. "Substitute Award" shall mean an Option granted
under this Plan upon the assumption of, or in substitution for, outstanding
equity awards previously granted by a company or other entity in connection with
a corporate transaction, such as a merger, combination, consolidation or
acquisition of property or stock; PROVIDED, HOWEVER, that in no event shall the
term "Substitute Award" be construed to refer to an award made in connection
with the cancellation and repricing of an Option.
1.36. TERMINATION OF CONSULTANCY. "Termination of Consultancy" shall
mean the time when the engagement of a Holder as a Consultant to the Company or
a Subsidiary is terminated for any reason, with or without cause, including, but
not by way of limitation, by resignation, discharge, death or retirement; but
excluding terminations where there is a simultaneous commencement of employment
with the Company or any Subsidiary. The Administrator, in its absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Consultancy, including, but not by way of limitation, the
question of whether a Termination of Consultancy resulted from a discharge for
good cause, and all questions of whether a particular leave of absence
constitutes a Termination of Consultancy.
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Notwithstanding any other provision of the Plan, the Company or any Subsidiary
has an absolute and unrestricted right to terminate a Consultant's service at
any time for any reason whatsoever, with or without cause, except to the extent
expressly provided otherwise in writing.
1.37. TERMINATION OF DIRECTORSHIP. "Termination of Directorship" shall
mean the time when a Holder who is an Independent Director ceases to be a
Director for any reason, including, but not by way of limitation, a termination
by resignation, failure to be elected, death or retirement. The Board, in its
sole and absolute discretion, shall determine the effect of all matters and
questions relating to Termination of Directorship with respect to Independent
Directors.
1.38. TERMINATION OF EMPLOYMENT. "Termination of Employment" shall mean
the time when the employee-employer relationship between a Holder and the
Company or any Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding (a) terminations where
there is a simultaneous reemployment or continuing employment of a Holder by the
Company or any Subsidiary, (b) at the discretion of the Administrator,
terminations which result in a temporary severance of the employee-employer
relationship, and (c) at the discretion of the Administrator, terminations which
are followed by the simultaneous establishment of a consulting relationship by
the Company or a Subsidiary with the former employee. The Administrator, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for good cause, and all questions of whether a particular leave of absence
constitutes a Termination of Employment; PROVIDED, HOWEVER, that, with respect
to Incentive Stock Options, unless otherwise determined by the Administrator in
its discretion, a leave of absence, change in status from an employee to an
independent contractor or other change in the employee-employer relationship
shall constitute a Termination of Employment if, and to the extent that, such
leave of absence, change in status or other change interrupts employment for the
purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under said Section.
ARTICLE II.
SHARES SUBJECT TO PLAN
2.1. SHARES SUBJECT TO PLAN.
(a) The shares of stock subject to Awards shall be Common
Stock, initially shares of the Company's Common Stock, par value
$0.01 per share. Subject to Section 11.3, the aggregate number of
such shares which may be issued upon exercise of such Options or
rights or upon any Awards under the Plan shall not exceed the sum of
(i) 1,100,000 Shares, (ii) the number of shares of Common Stock that
remain reserved for issuance under the Company's Stock Option Plan
(the "Prior Plan") as of June 7, 2000 and (iii) the number of shares
of Common Stock, if any, that, after June 7, 2000, again become
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available for issuance pursuant to Section 3 of the Prior Plan as a
result of stock options issued thereunder expiring or become
unexercisable for any reason before being exercised in full. The shares
of Common Stock issuable upon exercise of such Options or rights or upon
any Awards may be either previously authorized but unissued shares or
treasury shares.
(b) The maximum number of shares which may be subject to Awards,
granted under the Plan to any individual in any calendar year shall not
exceed the Award Limit. To the extent required by Section 162(m) of the
Code, shares subject to Options, which are canceled, continue to be
counted against the Award Limit.
2.2. ADD-BACK OF OPTIONS AND OTHER RIGHTS. If any Option, or other right
to acquire shares of Common Stock under any other Award under the Plan, expires
or is canceled without having been fully exercised, or is exercised in whole or
in part for cash as permitted by the Plan, the number of shares subject to such
Option or other right but as to which such Option or other right was not
exercised prior to its expiration, cancellation or exercise may again be
optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. Furthermore, any shares subject to Awards which are adjusted pursuant to
Section 11.3 and become exercisable with respect to shares of stock of another
corporation shall be considered cancelled and may again be optioned, granted or
awarded hereunder, subject to the limitations of Section 2.1. Shares of Common
Stock which are delivered by the Holder or withheld by the Company upon the
exercise of any Award under the Plan, in payment of the exercise price thereof
or tax withholding thereon, may again be optioned, granted or awarded hereunder,
subject to the limitations of Section 2.1. If any shares of Restricted Stock are
surrendered by the Holder or repurchased by the Company pursuant to Section 7.4
or 7.5 hereof, such shares may again be optioned, granted or awarded hereunder,
subject to the limitations of Section 2.1. Notwithstanding the provisions of
this Section 2.2, no shares of Common Stock may again be optioned, granted or
awarded if such action would cause an Incentive Stock Option to fail to qualify
as an incentive stock option under Section 422 of the Code.
ARTICLE III.
GRANTING OF AWARDS
3.1. AWARD AGREEMENT. Each Award shall be evidenced by an Award
Agreement. Award Agreements evidencing Awards intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 162(m) of the Code. Award Agreements evidencing
Incentive Stock Options shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 422 of the Code.
3.2. PROVISIONS APPLICABLE TO SECTION 162(m) PARTICIPANTS.
(a) The Committee, in its discretion, may determine whether an
Award is to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of
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the Code.
(b) Notwithstanding anything in the Plan to the contrary, the
Committee may grant any Award to a Section 162(m) Participant, including
Restricted Stock the restrictions with respect to which lapse upon the
attainment of performance goals which are related to one or more of the
Performance Criteria and any performance or incentive award described in
Article VIII that vests or becomes exercisable or payable upon the
attainment of performance goals which are related to one or more of the
Performance Criteria.
(c) To the extent necessary to comply with the performance-based
compensation requirements of Section 162(m)(4)(C) of the Code, with
respect to any Award granted under Articles VII and VIII which may be
granted to one or more Section 162(m) Participants, no later than ninety
(90) days following the commencement of any fiscal year in question or
any other designated fiscal period or period of service (or such other
time as may be required or permitted by Section 162(m) of the Code), the
Committee shall, in writing, (i) designate one or more Section 162(m)
Participants, (ii) select the Performance Criteria applicable to the
fiscal year or other designated fiscal period or period of service,
(iii) establish the various performance targets, in terms of an
objective formula or standard, and amounts of such Awards, as
applicable, which may be earned for such fiscal year or other designated
fiscal period or period of service and (iv) specify the relationship
between Performance Criteria and the performance targets and the amounts
of such Awards, as applicable, to be earned by each Section 162(m)
Participant for such fiscal year or other designated fiscal period or
period of service. Following the completion of each fiscal year or other
designated fiscal period or period of service, the Committee shall
certify in writing whether the applicable performance targets have been
achieved for such fiscal year or other designated fiscal period or
period of service. In determining the amount earned by a Section 162(m)
Participant, the Committee shall have the right to reduce (but not to
increase) the amount payable at a given level of performance to take
into account additional factors that the Committee may deem relevant to
the assessment of individual or corporate performance for the fiscal
year or other designated fiscal period or period of service.
(d) Furthermore, notwithstanding any other provision of the Plan
or any Award which is granted to a Section 162(m) Participant and is
intended to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code shall be subject to any additional
limitations set forth in Section 162(m) of the Code (including any
amendment to Section 162(m) of the Code) or any regulations or rulings
issued thereunder that are requirements for qualification as
performance-based compensation as described in Section 162(m)(4)(C) of
the Code, and the Plan shall be deemed amended to the extent necessary
to conform to such requirements.
3.3. LIMITATIONS APPLICABLE TO SECTION 16 PERSONS. Notwithstanding any
other provision of the Plan, the Plan, and any Award granted or awarded to any
individual who is
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then subject to Section 16 of the Exchange Act, shall be subject to any
additional limitations set forth in any applicable exemptive rule under Section
16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange
Act) that are requirements for the application of such exemptive rule. To the
extent permitted by applicable law, the Plan and Awards granted or awarded
hereunder shall be deemed amended to the extent necessary to conform to such
applicable exemptive rule.
3.4. CONSIDERATION. In consideration of the granting of an Award under
the Plan, the Holder shall agree, in the Award Agreement, to remain in the
employ of (or to consult for or to serve as an Independent Director of, as
applicable) the Company or any Subsidiary for a period of at least one year (or
such shorter period as may be fixed in the Award Agreement or by action of the
Administrator following grant of the Award) after the Award is granted (or, in
the case of an Independent Director, until the next annual meeting of
stockholders of the Company).
3.5. AT-WILL EMPLOYMENT. Nothing in the Plan or in any Award Agreement
hereunder shall confer upon any Holder any right to continue in the employ of,
or as a Consultant for, the Company or any Subsidiary, or as a director of the
Company, or shall interfere with or restrict in any way the rights of the
Company and any Subsidiary, which are hereby expressly reserved, to discharge
any Holder at any time for any reason whatsoever, with or without cause, except
to the extent expressly provided otherwise in a written employment agreement
between the Holder and the Company and any Subsidiary.
ARTICLE IV.
GRANTING OF OPTIONS TO EMPLOYEES,
CONSULTANTS AND INDEPENDENT DIRECTORS
4.1. ELIGIBILITY. Any Employee or Consultant selected by the Committee
pursuant to Section 4.4(a)(i) shall be eligible to be granted an Option. Each
Independent Director of the Company shall be eligible to be granted Options at
the times and in the manner set forth in Section 4.5.
4.2. DISQUALIFICATION FOR STOCK OWNERSHIP. No person may be granted an
Incentive Stock Option under the Plan if such person, at the time the Incentive
Stock Option is granted, owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any
then existing Subsidiary or parent corporation (within the meaning of Section
422 of the Code) unless such Incentive Stock Option conforms to the applicable
provisions of Section 422 of the Code.
4.3. QUALIFICATION OF INCENTIVE STOCK OPTIONS. No Incentive Stock Option
shall be granted to any person who is not an Employee.
4.4. GRANTING OF OPTIONS TO EMPLOYEES AND CONSULTANTS.
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(a) The Committee shall from time to time, in its absolute
discretion, and subject to applicable limitations of the Plan:
(i) Determine which Employees are key Employees and
select from among the key Employees or Consultants (including
Employees or Consultants who have previously received Awards
under the Plan) such of them as in its opinion should be granted
Options;
(ii) Subject to the Award Limit, determine the number of
shares to be subject to such Options granted to the selected key
Employees or Consultants;
(iii) Subject to Section 4.3, determine whether such
Options are to be Incentive Stock Options or Non-Qualified Stock
Options and whether such Options are to qualify as
performance-based compensation as described in Section
162(m)(4)(C) of the Code; and
(iv) Determine the terms and conditions of such Options,
consistent with the Plan; PROVIDED, HOWEVER, that the terms and
conditions of Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code
shall include, but not be limited to, such terms and conditions
as may be necessary to meet the applicable provisions of Section
162(m) of the Code.
(b) Upon the selection of a key Employee or Consultant to be
granted an Option, the Committee shall instruct the Secretary of the
Company to issue the Option and may impose such conditions on the grant
of the Option as it deems appropriate.
(c) Any Incentive Stock Option granted under the Plan may be
modified by the Committee, with the consent of the Holder, to disqualify
such Option from treatment as an "incentive stock option" under Section
422 of the Code.
4.5. OPTIONS IN LIEU OF CASH COMPENSATION. Options may be granted under
the Plan to Employees and Consultants in lieu of cash bonuses which would
otherwise be payable to such Employees and Consultants and to Independent
Directors in lieu of directors' fees which would otherwise be payable to such
Independent Directors, pursuant to such policies which may be adopted by the
Administrator from time to time.
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ARTICLE V.
TERMS OF OPTIONS
5.1. OPTION PRICE. The price per share of the shares subject to each
Option granted to Employees and Consultants shall be set by the Committee;
PROVIDED, HOWEVER, that such price shall be no less than the par value of a
share of Common Stock, unless otherwise permitted by applicable state law, and:
(a) in the case of Options intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of
the Code, such price shall not be less than 100% of the Fair Market
Value of a share of Common Stock on the date the Option is granted;
(b) in the case of Incentive Stock Options such price shall not
be less than 100% of the Fair Market Value of a share of Common Stock on
the date the Option is granted (or the date the Option is modified,
extended or renewed for purposes of Section 424(h) of the Code);
(c) in the case of Incentive Stock Options granted to an
individual then owning (within the meaning of Section 424(d) of the
Code) more than 10% of the total combined voting power of all classes of
stock of the Company or any Subsidiary or parent corporation thereof
(within the meaning of Section 422 of the Code), such price shall not be
less than 110% of the Fair Market Value of a share of Common Stock on
the date the Option is granted (or the date the Option is modified,
extended or renewed for purposes of Section 424(h) of the Code).
5.2. OPTION TERM. The term of an Option granted to an Employee or
Consultant shall be set by the Committee in its discretion; PROVIDED, HOWEVER,
that, in the case of Incentive Stock Options, the term shall not be more than
ten (10) years from the date the Incentive Stock Option is granted, or five (5)
years from the date the Incentive Stock Option is granted if the Incentive Stock
Option is granted to an individual then owning (within the meaning of Section
424(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Company or any Subsidiary or parent corporation thereof
(within the meaning of Section 422 of the Code). Except as limited by
requirements of Section 422 of the Code and regulations and rulings thereunder
applicable to Incentive Stock Options, the Committee may extend the term of any
outstanding Option in connection with any Termination of Employment or
Termination of Consultancy of the Holder, or amend any other term or condition
of such Option relating to such a termination.
5.3. OPTION VESTING
(a) The period during which the right to exercise, in whole or
in part, an Option granted to an Employee or a Consultant vests in the
Holder shall be set by the Committee and the Committee may determine
that an Option may not be exercised in
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whole or in part for a specified period after it is granted. At any time
after grant of an Option, the Committee may, in its sole and absolute
discretion and subject to whatever terms and conditions it selects,
accelerate the period during which an Option granted to an Employee or
Consultant vests.
(b) No portion of an Option granted to an Employee or Consultant
which is unexercisable at Termination of Employment or Termination of
Consultancy, as applicable, shall thereafter become exercisable, except
as may be otherwise provided by the Committee either in the Award
Agreement or by action of the Committee following the grant of the
Option.
(c) To the extent that the aggregate Fair Market Value of stock
with respect to which "incentive stock options" (within the meaning of
Section 422 of the Code, but without regard to Section 422(d) of the
Code) are exercisable for the first time by a Holder during any calendar
year (under the Plan and all other incentive stock option plans of the
Company and any parent or subsidiary corporation, within the meaning of
Section 422 of the Code) of the Company, exceeds $100,000, such Options
shall be treated as Non-Qualified Options to the extent required by
Section 422 of the Code. The rule set forth in the preceding sentence
shall be applied by taking Options into account in the order in which
they were granted. For purposes of this Section 5.3(c), the Fair Market
Value of stock shall be determined as of the time the Option with
respect to such stock is granted.
5.4. SUBSTITUTE AWARDS.
Notwithstanding the foregoing provisions of this Article V to the
contrary, in the case of an Option that is a Substitute Award, the price per
share of the shares subject to such Option may be less than the Fair Market
Value per share on the date of grant, PROVIDED, that the excess of:
(a) the aggregate Fair Market Value (as of the date such
Substitute Award is granted) of the shares subject to the Substitute
Award; over
(b) the aggregate exercise price thereof; does not exceed the
excess of;
(c) the aggregate Fair Market Value (as of the time immediately
preceding the transaction giving rise to the Substitute Award, such fair
market value to be determined by the Committee) of the shares of the
predecessor entity that were subject to the grant assumed or substituted
for by the Company; over
(d) the aggregate exercise price of such shares.
5.5. EARLY EXERCISABILITY. The Committee may provide in the terms of an
Option that the Holder may, at any time before the Holder's Termination of
Employment, Termination of Consultancy or Termination of Directorship, exercise
the Option in whole or in
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part prior to the full vesting of the Option; PROVIDED, HOWEVER, that shares of
Common Stock acquired upon exercise of an Option which has not fully vested may
be subject to any forfeiture, transfer or other restrictions as the Committee
may determine in its sole discretion.
ARTICLE VI.
EXERCISE OF OPTIONS
6.1. PARTIAL EXERCISE. An exercisable Option may be exercised in whole
or in part. However, an Option shall not be exercisable with respect to
fractional shares and the Administrator may require that, by the terms of the
Option, a partial exercise be with respect to a minimum number of shares.
6.2. MANNER OF EXERCISE. All or a portion of an exercisable Option shall
be deemed exercised upon delivery of all of the following to the Secretary of
the Company or his office:
(a) A written notice complying with the applicable rules
established by the Administrator stating that the Option, or a portion
thereof, is exercised. The notice shall be signed by the Holder or other
person then entitled to exercise the Option or such portion of the
Option;
(b) Such representations and documents as the Administrator, in
its absolute discretion, deems necessary or advisable to effect
compliance with all applicable provisions of the Securities Act and any
other federal or state securities laws or regulations. The Administrator
may, in its absolute discretion, also take whatever additional actions
it deems appropriate to effect such compliance including, without
limitation, placing legends on share certificates and issuing
stop-transfer notices to agents and registrars;
(c) In the event that the Option shall be exercised pursuant to
Section 11.1 by any person or persons other than the Holder, appropriate
proof of the right of such person or persons to exercise the Option; and
(d) Full cash payment to the Secretary of the Company for the
shares with respect to which the Option, or portion thereof, is
exercised. However, the Administrator, may in its discretion (i) allow a
delay in payment up to thirty (30) days from the date the Option, or
portion thereof, is exercised; (ii) allow payment, in whole or in part,
through the delivery of shares of Common Stock which have been owned by
the Holder for at least six months, duly endorsed for transfer to the
Company with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof;
(iii) allow payment, in whole or in part, through the surrender of
shares of Common Stock then issuable upon exercise of the Option having
a Fair Market Value on the date of Option exercise equal to the
aggregate exercise price of the Option or exercised portion thereof;
(iv) allow payment, in whole or in part, through
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the delivery of property of any kind which constitutes good and valuable
consideration; (v) allow payment, in whole or in part, through the
delivery of a full recourse promissory note bearing interest (at no less
than such rate as shall then preclude the imputation of interest under
the Code) and payable upon such terms as may be prescribed by the
Administrator; (vi) allow payment, in whole or in part, through the
delivery of a notice that the Holder has placed a market sell order with
a broker with respect to shares of Common Stock then issuable upon
exercise of the Option, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price, PROVIDED that payment of such
proceeds is then made to the Company upon settlement of such sale; or
(vii) allow payment through any combination of the consideration
provided in the foregoing subparagraphs (ii), (iii), (iv), (v) and (vi).
In the case of a promissory note, the Administrator may also prescribe
the form of such note and the security to be given for such note. The
Option may not be exercised, however, by delivery of a promissory note
or by a loan from the Company when or where such loan or other extension
of credit is prohibited by law.
6.3. CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES. The Company shall not
be required to issue or deliver any certificate or certificates for shares of
stock purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;
(b) The completion of any registration or other qualification of
such shares under any state or federal law, or under the rulings or
regulations of the Securities and Exchange Commission or any other
governmental regulatory body which the Administrator shall, in its
absolute discretion, deem necessary or advisable;
(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Administrator shall, in
its absolute discretion, determine to be necessary or advisable;
(d) The lapse of such reasonable period of time following the
exercise of the Option as the Administrator may establish from time to
time for reasons of administrative convenience; and
(e) The receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax, which in the
discretion of the Administrator may be in the form of consideration used
by the Holder to pay for such shares under Section 6.2(d).
6.4. RIGHTS AS STOCKHOLDERS. Holders shall not be, nor have any of the
rights or privileges of, stockholders of the Company in respect of any shares
purchasable upon the exercise of any part of an Option unless and until
certificates representing such shares have been issued by the Company to such
Holders.
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6.5. OWNERSHIP AND TRANSFER RESTRICTIONS. The Administrator, in its
absolute discretion, may impose such restrictions on the ownership and
transferability of the shares purchasable upon the exercise of an Option as
it deems appropriate. Any such restriction shall be set forth in the
respective Award Agreement and may be referred to on the certificates
evidencing such shares. The Holder shall give the Company prompt notice of
any disposition of shares of Common Stock acquired by exercise of an
Incentive Stock Option within (a) two years from the date of granting
(including the date the Option is modified, extended or renewed for purposes
of Section 424(h) of the Code) such Option to such Holder or (b) one year
after the transfer of such shares to such Holder.
6.6. LIMITATIONS ON EXERCISE OF OPTIONS GRANTED TO INDEPENDENT
DIRECTORS. No Option granted to an Independent Director may be exercised to any
extent by anyone after the first to occur of the following events:
(a) The expiration of twelve (12) months from the date of the
Holder's death;
(b) the expiration of twelve (12) months from the date of the
Holder's Termination of Directorship by reason of his permanent and
total disability (within the meaning of Section 22(e)(3) of the Code);
(c) the expiration of three (3) months from the date of the
Holder's Termination of Directorship for any reason other than such
Holder's death or his permanent and total disability, unless the Holder
dies within said three-month period; or
(d) The expiration of ten (10) years from the date the Option
was granted.
6.7. ADDITIONAL LIMITATIONS ON EXERCISE OF OPTIONS. Holders may be
required to comply with any timing or other restrictions with respect to the
settlement or exercise of an Option, including a window-period limitation, as
may be imposed in the discretion of the Administrator.
ARTICLE VII.
AWARD OF RESTRICTED STOCK
7.1. ELIGIBILITY. Subject to the Award Limit, Restricted Stock may be
awarded to any Employee who the Committee determines is a key Employee or any
Consultant who the Committee determines should receive such an Award.
7.2. AWARD OF RESTRICTED STOCK
(a) The Committee may from time to time, in its absolute
discretion:
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(i) Determine which Employees are key Employees and
select from among the key Employees or Consultants (including
Employees or Consultants who have previously received other
awards under the Plan) such of them as in its opinion should be
awarded Restricted Stock; and
(ii) Determine the purchase price, if any, and other
terms and conditions applicable to such Restricted Stock,
consistent with the Plan.
(b) The Committee shall establish the purchase price, if any,
and form of payment for Restricted Stock; PROVIDED, HOWEVER, that such
purchase price shall be no less than the par value of the Common Stock
to be purchased, unless otherwise permitted by applicable state law. In
all cases, legal consideration shall be required for each issuance of
Restricted Stock.
(c) Upon the selection of a key Employee or Consultant to be
awarded Restricted Stock, the Committee shall instruct the Secretary of
the Company to issue such Restricted Stock and may impose such
conditions on the issuance of such Restricted Stock as it deems
appropriate.
7.3. RIGHTS AS STOCKHOLDERS. Subject to Section 7.4, upon delivery of
the shares of Restricted Stock to the escrow holder pursuant to Section 7.6, the
Holder shall have, unless otherwise provided by the Committee, all the rights of
a stockholder with respect to said shares, subject to the restrictions in his
Award Agreement, including the right to receive all dividends and other
distributions paid or made with respect to the shares; PROVIDED, HOWEVER, that
in the discretion of the Committee, any extraordinary distributions with respect
to the Common Stock shall be subject to the restrictions set forth in Section
7.4.
7.4. RESTRICTION. All shares of Restricted Stock issued under the Plan
(including any shares received by holders thereof with respect to shares of
Restricted Stock as a result of stock dividends, stock splits or any other form
of recapitalization) shall, in the terms of each individual Award Agreement, be
subject to such restrictions as the Committee shall provide, which restrictions
may include, without limitation, restrictions concerning voting rights and
transferability and restrictions based on duration of employment with the
Company, Company performance and individual performance; PROVIDED, HOWEVER,
that, except with respect to shares of Restricted Stock granted to Section
162(m) Participants, by action taken after the Restricted Stock is issued, the
Committee may, on such terms and conditions as it may determine to be
appropriate, remove any or all of the restrictions imposed by the terms of the
Award Agreement. Restricted Stock may not be sold or encumbered until all
restrictions are terminated or expire. If no consideration was paid by the
Holder upon issuance, a Holder's rights in unvested Restricted Stock shall
lapse, and such Restricted Stock shall be surrendered to the Company without
consideration, upon Termination of Employment or, if applicable, upon
Termination of Consultancy with the Company; PROVIDED, HOWEVER, that the
Committee in its
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sole and absolute discretion may provide that such rights shall not lapse in the
event of a Termination of Employment following a "change of ownership or
control" (within the meaning of Treasury Regulation Section 1.162-27(e)(2)(v) or
any successor regulation thereto) of the Company or because of the Holder's
death or disability; PROVIDED, FURTHER, except with respect to shares of
Restricted Stock granted to Section 162(m) Participants, the Committee in its
sole and absolute discretion may provide that no such lapse or surrender shall
occur in the event of a Termination of Employment, or a Termination of
Consultancy, without cause or following any Change in Control of the Company or
because of the Holder's retirement, or otherwise.
7.5. REPURCHASE OF RESTRICTED STOCK. The Committee shall provide in the
terms of each individual Award Agreement that the Company shall have the right
to repurchase from the Holder the Restricted Stock then subject to restrictions
under the Award Agreement immediately upon a Termination of Employment or, if
applicable, upon a Termination of Consultancy between the Holder and the
Company, at a cash price per share equal to the price paid by the Holder for
such Restricted Stock; PROVIDED, HOWEVER, that the Committee in its sole and
absolute discretion may provide that no such right of repurchase shall exist in
the event of a Termination of Employment following a "change of ownership or
control" (within the meaning of Treasury Regulation Section 1.162-27(e)(2)(v) or
any successor regulation thereto) of the Company or because of the Holder's
death or disability; PROVIDED, FURTHER, that, except with respect to shares of
Restricted Stock granted to Section 162(m) Participants, the Committee in its
sole and absolute discretion may provide that no such right of repurchase shall
exist in the event of a Termination of Employment or a Termination of
Consultancy without cause or following any Change in Control of the Company or
because of the Holder's retirement, or otherwise.
7.6. ESCROW. The Secretary of the Company or such other escrow holder as
the Committee may appoint shall retain physical custody of each certificate
representing Restricted Stock until all of the restrictions imposed under the
Award Agreement with respect to the shares evidenced by such certificate expire
or shall have been removed.
7.7. LEGEND. In order to enforce the restrictions imposed upon shares of
Restricted Stock hereunder, the Committee shall cause a legend or legends to be
placed on certificates representing all shares of Restricted Stock that are
still subject to restrictions under Award Agreements, which legend or legends
shall make appropriate reference to the conditions imposed thereby.
7.8. SECTION 83(b) ELECTION. If a Holder makes an election under Section
83(b) of the Code, or any successor section thereto, to be taxed with respect to
the Restricted Stock as of the date of transfer of the Restricted Stock rather
than as of the date or dates upon which the Holder would otherwise be taxable
under Section 83(a) of the Code, the Holder shall deliver a copy of such
election to the Company immediately after filing such election with the Internal
Revenue Service.
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ARTICLE VIII.
PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, DEFERRED STOCK,
STOCK PAYMENTS
8.1. ELIGIBILITY. Subject to the Award Limit, one or more Performance
Awards, Dividend Equivalents, awards of Deferred Stock, and/or Stock Payments
may be granted to any Employee whom the Committee determines is a key Employee
or any Consultant whom the Committee determines should receive such an Award.
8.2. PERFORMANCE AWARDS. Any key Employee or Consultant selected by the
Committee may be granted one or more Performance Awards. The value of such
Performance Awards may be linked to any one or more of the Performance Criteria
or other specific performance criteria determined appropriate by the Committee,
in each case on a specified date or dates or over any period or periods
determined by the Committee. In making such determinations, the Committee shall
consider (among such other factors as it deems relevant in light of the specific
type of award) the contributions, responsibilities and other compensation of the
particular key Employee or Consultant.
8.3. DIVIDEND EQUIVALENTS.
(a) Any key Employee or Consultant selected by the Committee may
be granted Dividend Equivalents based on the dividends declared on
Common Stock, to be credited as of dividend payment dates, during the
period between the date a Stock Appreciation Right, Deferred Stock or
Performance Award is granted, and the date such Stock Appreciation
Right, Deferred Stock or Performance Award is exercised, vests or
expires, as determined by the Committee. Such Dividend Equivalents shall
be converted to cash or additional shares of Common Stock by such
formula and at such time and subject to such limitations as may be
determined by the Committee.
(b) Any Holder of an Option who is an Employee or Consultant
selected by the Committee may be granted Dividend Equivalents based on
the dividends declared on Common Stock, to be credited as of dividend
payment dates, during the period between the date an Option is granted,
and the date such Option is exercised, vests or expires, as determined
by the Committee. Such Dividend Equivalents shall be converted to cash
or additional shares of Common Stock by such formula and at such time
and subject to such limitations as may be determined by the Committee.
(c) Any Holder of an Option who is an Independent Director
selected by the Board may be granted Dividend Equivalents based on the
dividends declared on Common Stock, to be credited as of dividend
payment dates, during the period between the date an Option is granted,
and the date such Option is exercised, vests or expires, as determined
by the Board. Such Dividend Equivalents shall be converted to cash or
additional shares of Common Stock by such formula and at such time and
subject to such limitations as may be determined by the Board.
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(d) Dividend Equivalents granted with respect to Options
intended to be qualified performance-based compensation for purposes of
Section 162(m) of the Code shall be payable, with respect to
pre-exercise periods, regardless of whether such Option is subsequently
exercised.
8.4. STOCK PAYMENTS. Any key Employee or Consultant selected by the
Committee may receive Stock Payments in the manner determined from time to time
by the Committee. The number of shares shall be determined by the Committee and
may be based upon the Performance Criteria or other specific performance
criteria determined appropriate by the Committee, determined on the date such
Stock Payment is made or on any date thereafter.
8.5. DEFERRED STOCK. Any key Employee or Consultant selected by the
Committee may be granted an award of Deferred Stock in the manner determined
from time to time by the Committee. The number of shares of Deferred Stock shall
be determined by the Committee and may be linked to the Performance Criteria or
other specific performance criteria determined to be appropriate by the
Committee, in each case on a specified date or dates or over any period or
periods determined by the Committee. Common Stock underlying a Deferred Stock
award will not be issued until the Deferred Stock award has vested, pursuant to
a vesting schedule or performance criteria set by the Committee. Unless
otherwise provided by the Committee, a Holder of Deferred Stock shall have no
rights as a Company stockholder with respect to such Deferred Stock until such
time as the Award has vested and the Common Stock underlying the Award has been
issued.
8.6. TERM. The term of a Performance Award, Dividend Equivalent, award
of Deferred Stock and/or Stock Payment shall be set by the Committee in its
discretion.
8.7. EXERCISE OR PURCHASE PRICE. The Committee may establish the
exercise or purchase price of a Performance Award, shares of Deferred Stock, or
shares received as a Stock Payment; PROVIDED, HOWEVER, that such price shall not
be less than the par value for a share of Common Stock, unless otherwise
permitted by applicable state law.
8.8. EXERCISE UPON TERMINATION OF EMPLOYMENT, TERMINATION OF CONSULTANCY
OR TERMINATION OF DIRECTORSHIP. A Performance Award, Dividend Equivalent, award
of Deferred Stock and/or Stock Payment is exercisable or payable only while the
Holder is an Employee, Consultant or Independent Director, as applicable;
PROVIDED, HOWEVER, that the Administrator in its sole and absolute discretion
may provide that the Performance Award, Dividend Equivalent, award of Deferred
Stock and/or Stock Payment may be exercised or paid subsequent to a Termination
of Employment following a "change of control or ownership" (within the meaning
of Section 1.162-27(e)(2)(v) or any successor regulation thereto) of the
Company; PROVIDED, FURTHER, that except with respect to Performance Awards
granted to Section 162(m) Participants, the Administrator in its sole and
absolute discretion may provide that Performance Awards may be exercised or paid
following a Termination of Employment or a Termination of Consultancy without
cause, or following a Change in Control of the Company, or because of the
Holder's retirement, death or disability, or otherwise.
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8.9. FORM OF PAYMENT. Payment of the amount determined under Section 8.2
or 8.3 above shall be in cash, in Common Stock or a combination of both, as
determined by the Committee. To the extent any payment under this Article VIII
is effected in Common Stock, it shall be made subject to satisfaction of all
provisions of Section 6.3.
ARTICLE IX.
STOCK APPRECIATION RIGHTS
9.1. GRANT OF STOCK APPRECIATION RIGHTS. A Stock Appreciation Right may
be granted to any key Employee or Consultant selected by the Committee. A Stock
Appreciation Right may be granted (a) in connection and simultaneously with the
grant of an Option, (b) with respect to a previously granted Option, or (c)
independent of an Option. A Stock Appreciation Right shall be subject to such
terms and conditions not inconsistent with the Plan as the Committee shall
impose and shall be evidenced by an Award Agreement.
9.2. COUPLED STOCK APPRECIATION RIGHTS.
(a) A Coupled Stock Appreciation Right ("CSAR") shall be related
to a particular Option and shall be exercisable only when and to the
extent the related Option is exercisable.
(b) A CSAR may be granted to the Holder for no more than the
number of shares subject to the simultaneously or previously granted
Option to which it is coupled.
(c) A CSAR shall entitle the Holder (or other person entitled to
exercise the Option pursuant to the Plan) to surrender to the Company
unexercised a portion of the Option to which the CSAR relates (to the
extent then exercisable pursuant to its terms) and to receive from the
Company in exchange therefor an amount determined by multiplying the
difference obtained by subtracting the Option exercise price from the
Fair Market Value of a share of Common Stock on the date of exercise of
the CSAR by the number of shares of Common Stock with respect to which
the CSAR shall have been exercised, subject to any limitations the
Committee may impose.
9.3. INDEPENDENT STOCK APPRECIATION RIGHTS.
(a) An Independent Stock Appreciation Right ("ISAR") shall be
unrelated to any Option and shall have a term set by the Committee. An
ISAR shall be exercisable in such installments as the Committee may
determine. An ISAR shall cover
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such number of shares of Common Stock as the Committee may determine.
The exercise price per share of Common Stock subject to each ISAR shall
be set by the Committee. An ISAR is exercisable only while the Holder is
an Employee or Consultant; provided that the Committee may determine
that the ISAR may be exercised subsequent to Termination of Employment
or Termination of Consultancy without cause, or following a Change in
Control of the Company, or because of the Holder's retirement, death or
disability, or otherwise.
(b) An ISAR shall entitle the Holder (or other person entitled
to exercise the ISAR pursuant to the Plan) to exercise all or a
specified portion of the ISAR (to the extent then exercisable pursuant
to its terms) and to receive from the Company an amount determined by
multiplying the difference obtained by subtracting the exercise price
per share of the ISAR from the Fair Market Value of a share of Common
Stock on the date of exercise of the ISAR by the number of shares of
Common Stock with respect to which the ISAR shall have been exercised,
subject to any limitations the Committee may impose.
9.4. PAYMENT AND LIMITATIONS ON EXERCISE.
(a) Payment of the amounts determined under Section 9.2(c) and
9.3(b) above shall be in cash, in Common Stock (based on its Fair Market
Value as of the date the Stock Appreciation Right is exercised) or a
combination of both, as determined by the Committee. To the extent such
payment is effected in Common Stock, it shall be made subject to
satisfaction of all provisions of Section 6.3 above pertaining to
Options.
(b) Holders of Stock Appreciation Rights may be required to
comply with any timing or other restrictions with respect to the
settlement or exercise of a Stock Appreciation Right, including a
window-period limitation, as may be imposed in the discretion of the
Committee.
ARTICLE X.
ADMINISTRATION
10.1. COMPENSATION COMMITTEE. The Compensation Committee (or another
committee or a subcommittee of the Board assuming the functions of the Committee
under the Plan) shall consist solely of two or more Independent Directors
appointed by and holding office at the pleasure of the Board, each of whom is
both a "non-employee director" as defined by Rule 16b-3 and an "outside
director" for purposes of Section 162(m) of the Code. Appointment of Committee
members shall be effective upon acceptance of appointment. Committee members may
resign at any time by delivering written notice to the Board. Vacancies in the
Committee may be filled by the Board.
10.2. DUTIES AND POWERS OF COMMITTEE. It shall be the duty of the
Committee to
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conduct the general administration of the Plan in accordance with its
provisions. The Committee shall have the power to interpret the Plan and the
Award Agreements, and to adopt such rules for the administration,
interpretation, and application of the Plan as are consistent therewith, to
interpret, amend or revoke any such rules and to amend any Award Agreement
provided that the rights or obligations of the Holder of the Award that is the
subject of any such Award Agreement are not affected adversely. Any such grant
or award under the Plan need not be the same with respect to each Holder. Any
such interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan except with respect to matters
which under Rule 16b-3 or Section 162(m) of the Code, or any regulations or
rules issued thereunder, are required to be determined in the sole discretion of
the Committee. Notwithstanding the foregoing, the full Board, acting by a
majority of its members in office, shall conduct the general administration of
the Plan with respect to Options and Dividend Equivalents granted to Independent
Directors.
10.3. MAJORITY RULE; UNANIMOUS WRITTEN CONSENT. The Committee shall act
by a majority of its members in attendance at a meeting at which a quorum is
present or by a memorandum or other written instrument signed by all members of
the Committee.
10.4. COMPENSATION; PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS. Members
of the Committee shall receive such compensation for their services as members
as may be determined by the Board. All expenses and liabilities which members of
the Committee incur in connection with the administration of the Plan shall be
borne by the Company. The Committee may, with the approval of the Board, employ
attorneys, consultants, accountants, appraisers, brokers, or other persons. The
Committee, the Company and the Company's officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee or the Board in good faith shall be final and binding upon all
Holders, the Company and all other interested persons. No members of the
Committee or Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or Awards, and all
members of the Committee and the Board shall be fully protected by the Company
in respect of any such action, determination or interpretation.
10.5. DELEGATION OF AUTHORITY TO GRANT AWARDS. The Committee may, but
need not, delegate from time to time some or all of its authority to grant
Awards under the Plan to a committee consisting of one or more members of the
Committee or of one or more officers of the Company; provided, however, that the
Committee may not delegate its authority to grant Awards to individuals (i) who
are subject on the date of the grant to the reporting rules under Section 16(a)
of the Exchange Act, (ii) who are Section 162(m) Participants or (iii) who are
officers of the Company who are delegated authority by the Committee hereunder.
Any delegation hereunder shall be subject to the restrictions and limits that
the Committee specifies at the time of such delegation of authority and may be
rescinded at any time by the Committee. At all times, any committee appointed
under this Section 10.5 shall serve in such capacity at the pleasure of the
Committee.
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ARTICLE XI.
MISCELLANEOUS PROVISIONS
11.1. NOT TRANSFERABLE. No Award under the Plan may be sold, pledged,
assigned or transferred in any manner other than by will or the laws of descent
and distribution or, subject to the consent of the Administrator, pursuant to a
DRO, unless and until such Award has been exercised, or the shares underlying
such Award have been issued, and all restrictions applicable to such shares have
lapsed. No Award or interest or right therein shall be liable for the debts,
contracts or engagements of the Holder or his successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
During the lifetime of the Holder, only he may exercise an Option or
other Award (or any portion thereof) granted to him under the Plan, unless it
has been disposed of with the consent of the Administrator pursuant to a DRO.
After the death of the Holder, any exercisable portion of an Option or other
Award may, prior to the time when such portion becomes unexercisable under the
Plan or the applicable Award Agreement, be exercised by his personal
representative or by any person empowered to do so under the deceased Holder's
will or under the then applicable laws of descent and distribution.
11.2. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. Except as
otherwise provided in this Section 11.2, the Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Administrator. However, without approval of the Company's
stockholders given within twelve months before or after the action by the
Administrator, no action of the Administrator may, except as provided in Section
11.3, increase the limits imposed in Section 2.1 on the maximum number of shares
which may be issued under the Plan. No amendment, suspension or termination of
the Plan shall, without the consent of the Holder alter or impair any rights or
obligations under any Award theretofore granted or awarded, unless the Award
itself otherwise expressly so provides. No Awards may be granted or awarded
during any period of suspension or after termination of the Plan, and in no
event may any Incentive Stock Option be granted under the Plan after the first
to occur of the following events:
(a) The expiration of ten years from the date the Plan is
adopted by the Board; or
(b) The expiration of ten years from the date the Plan is
approved by the Company's stockholders under Section 11.4.
11.3. CHANGES IN COMMON STOCK OR ASSETS OF THE COMPANY, ACQUISITION OR
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LIQUIDATION OF THE COMPANY AND OTHER CORPORATE EVENTS.
(a) Subject to Section 11.3 (d), in the event that the
Administrator determines that any dividend or other distribution
(whether in the form of cash, Common Stock, other securities, or other
property), recapitalization, reclassification, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, liquidation, dissolution, or sale, transfer,
exchange or other disposition of all or substantially all of the assets
of the Company, or exchange of Common Stock or other securities of the
Company, issuance of warrants or other rights to purchase Common Stock
or other securities of the Company, or other similar corporate
transaction or event, in the Administrator's sole discretion, affects
the Common Stock such that an adjustment is determined by the
Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the Plan or with respect to an Award, then the
Administrator shall, in such manner as it may deem equitable, adjust any
or all of
(i) the number and kind of shares of Common Stock (or
other securities or property) with respect to which Awards may
be granted or awarded (including, but not limited to,
adjustments of the limitations in Section 2.1 on the maximum
number and kind of shares which may be issued and adjustments of
the Award Limit),
(ii) the number and kind of shares of Common Stock (or
other securities or property) subject to outstanding Awards, and
(iii) the grant or exercise price with respect to any
Award.
(b) Subject to Section 11.3(d), in the event of any transaction
or event described in Section 11.3(a) or any unusual or nonrecurring
transactions or events affecting the Company, any affiliate of the
Company, or the financial statements of the Company or any affiliate, or
of changes in applicable laws, regulations, or accounting principles,
the Administrator, in its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, either by the terms of the
Award or by action taken prior to the occurrence of such transaction or
event and either automatically or upon the Holder's request, is hereby
authorized to take any one or more of the following actions whenever the
Administrator determines that such action is appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or with respect to any
Award under the Plan, to facilitate such transactions or events or to
give effect to such changes in laws, regulations or principles:
(i) To provide for either the purchase of any such Award
for an amount of cash equal to the amount that could have been
attained upon the exercise of such Award or realization of the
Holder's rights had such Award been currently exercisable or
payable or fully
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vested or the replacement of such Award with other rights or
property selected by the Administrator in its sole discretion;
(ii) To provide that the Award cannot vest, be exercised
or become payable after such event;
(iii) To provide that such Award shall be exercisable as
to all shares covered thereby, notwithstanding anything to the
contrary in Section 5.3 or 5.4 or the provisions of such Award;
(iv) To provide that such Award be assumed by the
successor or survivor corporation, or a parent or subsidiary
thereof, or shall be substituted for by similar options, rights
or awards covering the stock of the successor or survivor
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; and
(v) To make adjustments in the number and type of shares
of Common Stock (or other securities or property) subject to
outstanding Awards, and in the number and kind of outstanding
Restricted Stock or Deferred Stock and/or in the terms and
conditions of (including the grant or exercise price), and the
criteria included in, outstanding options, rights and awards and
options, rights and awards which may be granted in the future.
(vi) To provide that, for a specified period of time
prior to such event, the restrictions imposed under an Award
Agreement upon some or all shares of Restricted Stock or
Deferred Stock may be terminated, and, in the case of Restricted
Stock, some or all shares of such Restricted Stock may cease to
be subject to repurchase under Section 7.5 or forfeiture under
Section 7.4 after such event.
(vii) Notwithstanding any other provision of the Plan,
unless otherwise determined by the Board, upon a Change in
Control each outstanding Award shall terminate and thereupon
become null and void; provided, however, that the Holder shall
be given not less than ten (10) days' prior written notice of
such event and during such period each Award shall automatically
become fully exercisable for all of the shares of Common Stock
at the time subject to such rights and may be exercised for any
or all of those shares as fully-vested shares of Common Stock.
(c) Subject to Sections 11.3(d), 3.2 and 3.3, the Administrator
may, in its discretion, include such further provisions and limitations
in any Award, agreement or certificate, as it may deem equitable and in
the best interests of the Company.
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(d) With respect to Awards which are granted to Section 162(m)
Participants and are intended to qualify as performance-based
compensation under Section 162(m)(4)(C), no adjustment or action
described in this Section 11.3 or in any other provision of the Plan
shall be authorized to the extent that such adjustment or action would
cause such Award to fail to so qualify under Section 162(m)(4)(C), or
any successor provisions thereto. No adjustment or action described in
this Section 11.3 or in any other provision of the Plan shall be
authorized to the extent that such adjustment or action would cause the
Plan to violate Section 422(b)(1) of the Code. Furthermore, no such
adjustment or action shall be authorized to the extent such adjustment
or action would result in short-swing profits liability under Section 16
or violate the exemptive conditions of Rule 16b-3 unless the
Administrator determines that the Award is not to comply with such
exemptive conditions. The number of shares of Common Stock subject to
any Award shall always be rounded to the next whole number.
(e) Notwithstanding the foregoing, in the event that the Company
becomes a party to a transaction that is intended to qualify for
"pooling of interests" accounting treatment and, but for one or more of
the provisions of this Plan or any Award Agreement would so qualify,
then this Plan and any Award Agreement shall be interpreted so as to
preserve such accounting treatment, and to the extent that any provision
of the Plan or any Award Agreement would disqualify the transaction from
pooling of interests accounting treatment (including, if applicable, an
entire Award Agreement), then such provision shall be null and void. All
determinations to be made in connection with the preceding sentence
shall be made by the independent accounting firm whose opinion with
respect to "pooling of interests" treatment is required as a condition
to the Company's consummation of such transaction.
(f) The existence of the Plan, the Award Agreement and the
Awards granted hereunder shall not affect or restrict in any way the
right or power of the Company or the shareholders of the Company to make
or authorize any adjustment, recapitalization, reorganization or other
change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of stock or of options, warrants
or rights to purchase stock or of bonds, debentures, preferred or prior
preference stocks whose rights are superior to or affect the Common
Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the
company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
11.4. APPROVAL OF PLAN BY STOCKHOLDERS. The Plan will be submitted for
the approval of the Company's stockholders within twelve months after the date
of the Board's initial adoption of the Plan. Awards may be granted or awarded
prior to such stockholder approval, provided that such Awards shall not be
exercisable nor shall such Awards vest prior to the time when the Plan is
approved by the stockholders, and provided further that if such approval has not
been obtained at the end of said twelve-month period, all Awards previously
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granted or awarded under the Plan shall thereupon be canceled and become null
and void. In addition, if the Board determines that Awards other than Options or
Stock Appreciation Rights which may be granted to Section 162(m) Participants
should continue to be eligible to qualify as performance-based compensation
under Section 162(m)(4)(C) of the Code, the Performance Criteria must be
disclosed to and approved by the Company's stockholders no later than the first
stockholder meeting that occurs in the fifth year following the year in which
the Company's stockholders previously approved the Performance Criteria.
11.5. TAX WITHHOLDING. The Company shall be entitled to require payment
in cash or deduction from other compensation payable to each Holder of any sums
required by federal, state or local tax law to be withheld with respect to the
issuance, vesting, exercise or payment of any Award. The Administrator may in
its discretion and in satisfaction of the foregoing requirement allow such
Holder to elect to have the Company withhold shares of Common Stock otherwise
issuable under such Award (or allow the return of shares of Common Stock) having
a Fair Market Value equal to the sums required to be withheld. Notwithstanding
any other provision of the Plan, the number of shares of Common Stock which may
be withheld with respect to the issuance, vesting, exercise or payment of any
Award (or which may be repurchased from the Holder of such Award within six
months after such shares of Common Stock were acquired by the Holder from the
Company) in order to satisfy the Holder's federal and state income and payroll
tax liabilities with respect to the issuance, vesting, exercise or payment of
the Award shall be limited to the number of shares which have a Fair Market
Value on the date of withholding or repurchase equal to the aggregate amount of
such liabilities based on the minimum statutory withholding rates for federal
and state tax income and payroll tax purposes that are applicable to such
supplemental taxable income.
11.6. LOANS. The Committee may, in its discretion, extend one or more
loans to key Employees in connection with the exercise or receipt of an Award
granted or awarded under the Plan, or the issuance of Restricted Stock or
Deferred Stock awarded under the Plan. The terms and conditions of any such loan
shall be set by the Committee.
11.7. FORFEITURE PROVISIONS. Pursuant to its general authority to
determine the terms and conditions applicable to Awards under the Plan, the
Administrator shall have the right to provide, in the terms of Awards made under
the Plan, or to require a Holder to agree by separate written instrument, that
(a) (i) any proceeds, gains or other economic benefit actually or constructively
received by the Holder upon any receipt or exercise of the Award, or upon the
receipt or resale of any Common Stock underlying the Award, must be paid to the
Company, and (ii) the Award shall terminate and any unexercised portion of the
Award (whether or not vested) shall be forfeited, if (b)(i) a Termination of
Employment, Termination of Consultancy or Termination of Directorship occurs
prior to a specified date, or within a specified time period following receipt
or exercise of the Award, or (ii) the Holder at any time, or during a specified
time period, engages in any activity in competition with the Company, or which
is inimical, contrary or harmful to the interests of the Company, as further
defined by the Administrator or (iii) the Holder incurs a Termination of
Employment, Termination of Consultancy or
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Termination of Directorship for cause.
11.8. EFFECT OF PLAN UPON OPTIONS AND COMPENSATION PLANS. The adoption
of the Plan shall not affect any other compensation or incentive plans in effect
for the Company or any Subsidiary. Nothing in the Plan shall be construed to
limit the right of the Company (a) to establish any other forms of incentives or
compensation for Employees, Directors or Consultants of the Company or any
Subsidiary or (b) to grant or assume options or other rights or awards otherwise
than under the Plan in connection with any proper corporate purpose including
but not by way of limitation, the grant or assumption of options in connection
with the acquisition by purchase, lease, merger, consolidation or otherwise, of
the business, stock or assets of any corporation, partnership, limited liability
company, firm or association.
11.9. COMPLIANCE WITH LAWS. The Plan, the granting and vesting of
Awards under the Plan and the issuance and delivery of shares of Common Stock
and the payment of money under the Plan or under Awards granted or awarded
hereunder are subject to compliance with all applicable federal and state
laws, rules and regulations (including but not limited to, state and federal
securities law and federal margin requirements) and to such approvals by any
listing, regulatory or governmental authority as may, in the opinion of
counsel for the Company, be necessary or advisable in connection therewith.
Any securities delivered under the Plan shall be subject to such
restrictions, and the person acquiring such securities shall, if requested by
the Company, provide such assurances and representations to the Company as
the Company may deem necessary or desirable to assure compliance with all
applicable legal requirements. To the extent permitted by applicable law, the
Plan and Awards granted or awarded hereunder shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.
11.10. TITLES. Titles are provided herein for convenience only and are
not to serve as a basis for interpretation or construction of the Plan.
11.11. GOVERNING LAW. The Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
Delaware without regard to conflicts of laws thereof.
* * *
I hereby certify that the foregoing Plan was duly adopted by the Board
of Directors of BARRA, Inc. on June 7, 2000.
Executed on this 26th day of June 2000.
/s/ Kamal Duggirala
-------------------------------------
Kamal Duggirala
President and Chief Executive Officer
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APPENDIX B
BARRA, INC.
DIRECTORS OPTION PLAN
SECTION 1
PURPOSE
The purpose of the BARRA, Inc. Directors Option Plan is to provide a means
whereby BARRA, Inc., a Delaware corporation (the "Corporation"), may attract
and retain able persons as members of the Board (as defined below) and to
provide a means whereby those Board members can acquire and maintain stock
ownership, thereby strengthening their concern for the long-term welfare of the
Corporation. A further purpose of the Plan (as defined below) is to provide such
Board members with additional incentive and reward opportunities designed to
enhance the profitable growth of the Corporation over the long term.
Accordingly, the Plan provides for granting Incentive Stock Options (as defined
below), options which do not constitute Incentive Stock Options, or any
combination of the foregoing, as is best suited to the circumstances of the
particular Board member as provided herein.
SECTION 2
DEFINITIONS
The following definitions shall be applicable during the term of the Plan unless
specifically modified by any paragraph:
(a) AWARD means, individually or collectively, any Option granted
pursuant to the Plan.
(b) BOARD means the board of directors of BARRA, Inc.
(c) CODE means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any Section of the Code shall be deemed
to include any amendments or successor provisions to such Section
and any regulations under such Section.
(d) COMMON STOCK means the common stock of BARRA, Inc.
(e) CORPORATION means BARRA, Inc.
(f) CORPORATE CHANGE means one of the following events: (i) the
merger, consolidation or other reorganization of the Corporation
in which the outstanding Common Stock is converted into or
exchanged for a different class of securities of the Corporation,
a class of securities of any other issuer (except a Subsidiary or
Parent Corporation), cash or other property other than (a) a
merger, consolidation or reorganization of the Corporation which
would result in the voting stock of the Corporation outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity), in combination with the
ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of the Corporation, at least sixty
percent (60%) of the combined voting power of the voting stock of
the Corporation or such surviving entity outstanding immediately
after such merger, consolidation or reorganization of the
Corporation, or (b) merger, consolidation or reorganization of
the Corporation effected to implement a recapitalization of the
Corporation (or similar transaction) in which no person acquires
more than forty-nine percent (49%) of the combined voting power
of the Corporation's then outstanding stock; (ii) the sale, lease
or exchange of all or substantially all of the assets of the
Corporation to any other corporation or entity (except a
Subsidiary or Parent Corporation); (iii) the adoption by the
stockholders of the Corporation of a plan of liquidation and
dissolution; (iv) the acquisition (other than acquisition
pursuant to any other clause of this definition) by any person or
entity, including without limitation a "group" as contemplated by
Section 13(d)(3)
<PAGE>
of the Exchange Act, of beneficial ownership, as contemplated by
such Section, of more than twenty-five percent (25%) (based on
voting power) of the Corporation's outstanding capital stock or
acquisition by a person or entity who currently has beneficial
ownership which increases such person's or entity's beneficial
ownership to fifty percent (50%) or more (based on voting power)
of the Corporation's outstanding capital stock; or (v) as a
result of or in connection with a contested election of
directors, the persons who were directors of the Corporation
before such election shall cease to constitute a majority of the
Board. Notwithstanding the provisions of clause (iv) above, a
Corporate Change shall not be considered to have occurred upon
the acquisition (other than acquisition pursuant to any other
clause of the preceding sentence) by any person or entity,
including without limitation a "group" as contemplated by Section
13(d)(3) of the Exchange Act, of beneficial ownership, as
contemplated by such Section, of more than twenty-five percent
(25%) (based on voting power) of the Corporation's outstanding
capital stock or the requisite percentage to increase their
ownership to fifty percent (50%) resulting from a public offering
of securities of the Corporation under the Securities Act of
1933, as amended.
(g) EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
(h) FAIR MARKET VALUE means, as of any specified date, the average of
the last best reported bid and asked prices of the Common Stock
on the National Association of Securities Dealers Automated
Quotation (NASDAQ) system (or, if the Common Stock is not listed
on such exchange, such other national securities exchange on
which the Common Stock is then listed) on that date, or if no
prices are reported on that date, on the last preceding date on
which such prices of the Common Stock are so reported. If the
Common Stock is not then listed on any national securities
exchange but is traded over the counter at the time determination
of its Fair Market Value is required to be made hereunder, its
Fair Market Value shall be deemed to be equal to the average
between the reported high and low sales prices of Common Stock on
the most recent date on which Common Stock was publicly traded.
If the Common Stock is not publicly traded at the time a
determination of its value is required to be made hereunder, the
determination of its Fair Market Value shall be made by the Board
in such manner as it deems appropriate (such determination will
be made in good-faith as required by Section 422(c)(1) of the
Code and may be based on the advice of an independent investment
banker or appraiser recognized to be expert in making such
valuations).
(i) HOLDER means an individual who has been granted an Award.
(j) INCENTIVE STOCK OPTION means an Option within the meaning of
Section 422 of the Code.
(k) NON-EMPLOYEE DIRECTOR means a member of the Board who is not an
employee of the Corporation, its Parent Corporation or its
Subsidiary.
(l) OPTION means an Award granted under Section 7 of the Plan and
includes both Incentive Stock Options to purchase Common Stock
and Options which do not constitute Incentive Stock Options to
purchase Common Stock.
(m) OPTION AGREEMENT means a written agreement between the
Corporation and an employee or director with respect to an
Option.
(n) OPTIONEE means an employee, director or individual who has been
granted an Option.
(o) OUTSIDE DIRECTOR refers to a member of the Board who qualifies as
an "outside director" as such term is used in Section 162(m) of
the Code and defined in any applicable Treasury Regulations
promulgated thereunder, including Treasury Regulation
Section 1.162-27(e)(3).
(p) PARENT CORPORATION shall have the meaning set forth in Section
424(e) of the Code.
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(q) PLAN means the BARRA, Inc. Directors Option Plan.
(r) RULE 16b-3 means Rule 16b-3 of the General Rules and
Regulations of the Securities and Exchange Commission under
the Exchange Act, as such rule is currently in effect or as
hereafter modified or amended.
(s) SUBSIDIARY means a company (whether a corporation,
partnership, joint venture or other form of entity) in which
the Corporation, or a corporation in which the Corporation
owns a majority of the shares of capital stock, directly or
indirectly, owns an equity interest of fifty percent (50%) or
more, except solely with respect to the issuance of Incentive
Stock Options the term "Subsidiary" shall have the same
meaning as the term "subsidiary corporation" as defined in
Section 424(f) of the Code.
SECTION 3
EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be effective as of April 24, 1997 the date of its adoption by the
Board, provided that the Plan is approved by the stockholders of the Corporation
within twelve (12) months before or thereafter and on or prior to the date of
the first annual meeting of stockholders of the Corporation held subsequent to
the acquisition of an equity security by a Holder hereunder for which exemption
is claimed under Rule 16b-3. Notwithstanding any provision of the Plan or of any
Option Agreement, no Option shall be exercisable prior to such stockholder
approval. No further Awards may be granted under the Plan after ten (10) years
from the date the Plan is adopted by the Board or the date the Plan is approved
by the Corporation's shareholders, whichever is earlier. Subject to the
provisions of Section 9, the Plan shall remain in effect until all Options
granted under the Plan have been exercised or have expired by reason of lapse of
time and all restrictions imposed upon restricted stock awards have lapsed. Any
option exercised before shareholder approval is obtained must be rescinded if
shareholder approval is not obtained within twelve (12) months before or after
the Plan is adopted. Such shares shall not be counted in determining whether
such approval is granted.
SECTION 4
ADMINISTRATION
(a) The Plan shall be administered by the Committee, which shall be
composed as hereinafter set forth in Section 4(b).
(b) The Committee shall consist solely of not less than two Outside
Directors elected by the Board. The Board may from time to time
increase (and thereafter may decrease) the size of the Committee, elect
or remove members thereto (with or without cause) and fill any
vacancies however created; provided, however, that the minimum number
of members on the Committee must be two.
(c) The Committee shall meet at such times and places and upon such
notice as the Committee's Chair determines. A majority of the Committee
shall constitute a quorum. Any acts by the Committee may be taken at
any meeting at which a quorum is present and shall be by majority vote
of those members entitled to vote.
(d) The Committee shall determine which directors of BARRA shall be
granted Awards under the Plan, the timing of such Awards, the terms
thereof and the number of shares of Common Stock subject to each Award.
(e) The Committee shall have the sole authority, in its absolute
discretion, to adopt, amend and rescind such rules and
regulations as, in its opinion, may be advisable in the
administration of the Plan, to construe and interpret the Plan,
its rules and regulations, and the instruments evidencing Awards
granted under the Plan, and to make all other determinations
deemed necessary or
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advisable for the administration of the Plan. All decisions,
determinations and interpretations of the Committee shall be
binding on all Optionees.
SECTION 5
GRANT OF OPTIONS SUBJECT TO THE PLAN
(a) AWARD LIMITS.
(i) The Committee shall grant Options which do not
constitute Incentive Stock Options for 5,000 shares
of Common Stock to all current Non-Employee Directors
on April 24, 1997, pursuant to the terms of the Plan.
In the event that a new Non-Employee Director is
appointed to the Board or that a current member of
the Board becomes a Non-Employee Director, the
Committee shall grant Options which do not constitute
Incentive Stock Options for 15,000 shares of Common
Stock to such Non-Employee Director on the date such
person becomes a Non-Employee Director, pursuant to
the terms of the Plan.
(ii) On each anniversary of the date of the initial Option
grant in Section 5(a)(i) of the Plan, the Committee
shall grant Options which do not constitute Incentive
Stock Options for 4,000 shares of Common Stock to all
current Non-Employee Directors, pursuant to the terms
of the Plan.
(iii) The Committee shall also have the discretion to grant
Options to all members of the Board, whether or not
they are Non-Employee Directors, pursuant to the
terms of the Plan. In addition, in and to the extent
that the Code so permits, any Option granted under
this Section 5(iii) of the Plan may be an Incentive
Stock Option.
(b) SHARES SUBJECT TO THE PLAN. The aggregate number of shares of
Common Stock that may be issued under the Plan shall not exceed
200,000 shares. Any of such shares which remain unissued and
which are not subject to outstanding Options at the termination
of the Plan shall cease to be subject to the Plan but, until
termination of the Plan, the Corporation shall at all times
reserve a sufficient number of shares to meet the requirements of
the Plan. Shares shall be deemed to have been issued under the
Plan only to the extent actually issued and delivered pursuant to
an Award. To the extent that an Award lapses or the rights of its
Holder terminate, any shares of Common Stock subject to such
Award shall again be available for the grant of an Award. The
aggregate number of shares which may be issued under the Plan
shall be subject to adjustment in the same manner as provided in
Section 8 of the Plan with respect to shares of Common Stock
subject to Options then outstanding. Separate stock certificates
shall be issued by the Corporation for those shares acquired
pursuant to the exercise of an Incentive Stock Option and for
those shares acquired pursuant to the exercise of any Option
which does not constitute an Incentive Stock Option. The maximum
number of Shares of Common Stock with respect to which Options
may be granted during any calendar year to any Optionee shall not
exceed 20,000 shares.
(c) STOCK OFFERED. The stock to be offered pursuant to the grant of
an Award may be authorized but unissued Common Stock or Common
Stock previously issued and outstanding and reacquired by the
Corporation.
SECTION 6
ELIGIBILITY
An Incentive Stock Option Award made pursuant to the Plan may be granted only to
an individual who, at the time of grant, is a director of the Corporation who
is also an employee of the Corporation, a Parent or a Subsidiary. An
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Award of an Option which is not an Incentive Stock Option may be granted only to
an individual who, at the time of grant, is a director of the Corporation. An
Award made pursuant to the Plan may be granted on more than one occasion to the
same person, and such Award may include an Incentive Stock Option, an Option
which is not an Incentive Stock Option, or any combination thereof. Each Award
shall be evidenced by a written instrument duly executed by or on behalf of the
Corporation.
SECTION 7
STOCK OPTIONS
(a) STOCK OPTION AGREEMENT. Each Option shall be evidenced by an
Option Agreement between the Corporation and the Optionee which
shall contain such terms and conditions as may be approved by the
Committee and agreed upon by the Holder. The terms and conditions
of the respective option Agreements need not be identical. Under
each Option Agreement, a Holder shall have the right to appoint
any individual or legal entity in writing as his or her
beneficiary under the Plan in the event of his death. Such
designation may be revoked in writing by the Holder at any time
and a new beneficiary may be appointed in writing on the form
provided by the Committee for such purpose. In the absence of
such appointment, the beneficiary shall be the legal
representative of the Holder's estate.
(b) OPTION PERIOD. The term of each Option shall be as specified by
the Committee at the date of grant and shall be stated in the
Option Agreement; provided, however, that an option may not be
exercised more than one hundred twenty (120) months from the date
it is granted.
(c) LIMITATIONS ON EXERCISE OF OPTION. Any Option granted pursuant to
Section 5(a)(i) of the Plan shall be vested and exercisable at
the rate of twenty percent (20%) per year over the five (5) years
from the date it is granted so long as the Optionee is
continuously a director of the Corporation. Any Option granted
pursuant to Section 5(a)(ii) shall be automatically vested and
exercisable on the date it is granted. Any Option granted
pursuant to Section 5(a)(iii) of the Plan shall be vested and
exercisable at the discretion of the Committee; provided,
however, that the rate of vesting shall be not longer than twenty
percent (20%) per year over the five (5) years from the date it
is granted.
(d) SPECIAL LIMITATIONS ON INCENTIVE STOCK OPTIONS. To the extent
that the aggregate Fair Market Value (determined at the time the
respective Incentive Stock Option is granted) of Common Stock
with respect to which Incentive Stock Options are exercisable for
the first time by an individual during any calendar year under
all incentive stock option plans of the Corporation (and any
Parent Corporation or Subsidiary) exceeds one hundred thousand
dollars ($100,000), such excess Incentive Stock Options shall be
treated as Options which do not constitute Incentive Stock
Options. The Committee shall determine, in accordance with
applicable provisions of the Code, Treasury Regulations and other
administrative pronouncements, which of an Optionee's Incentive
Stock Options will not constitute Incentive Stock Options because
of such limitation and shall notify the Optionee of such
determination as soon as practicable after such determination. No
Incentive Stock Option shall be granted to an individual if, at
the time the Option is granted, such individual owns stock
possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Corporation or of its
Parent Corporation or a Subsidiary, within the meaning of Section
422(b)(6) of the Code, unless (i) at the time such Option is
granted the Option price is at least one hundred ten percent
(110%) of the Fair Market Value of the Common Stock subject to
the Option and (ii) such Option by its terms is not exercisable
after the expiration of five years from the date of grant.
(e) OPTION PRICE. The purchase price of Common Stock issued under
each Option shall be the Fair Market Value of Common Stock
subject to the Option on the date the Option is granted, except
that, for Incentive Stock Options, the price shall be one hundred
ten percent (110%) of the Fair Market
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Value in the case of any person or entity who owns stock
comprising more than ten percent (10%) of the total combined
voting power of all classes of stock of the Corporation or its
Parent Corporation or Subsidiary.
(f) TERMINATION OF SERVICE AS A DIRECTOR. If an Optionee's service as
a director of the Corporation terminates for any reason including
death and disability: (1) the Options which are not vested and
not exercisable shall automatically terminate, unless otherwise
determined at the discretion of the Board; (2) the Options which
are vested and exercisable on the date of such termination may be
exercised not later than ninety (90) days (or such other period
of time as determined by the Committee) after the termination
date.
SECTION 8
RECAPITALIZATION OR REORGANIZATION
(a) Except as hereinafter otherwise provided, the aggregate number of
shares which may be issued pursuant to an Award and the
outstanding Awards shall be subject to an automatic pro rata
adjustment by the Committee as to the number and price of shares
of Common Stock in the event of changes in the outstanding Common
Stock by reason of stock dividends, stock splits, reverse stock
splits, reclassifications, recapitalizations, reorganizations or
other relevant changes in capitalization occurring after the date
of the grant of any such Options.
(b) The existence of the Plan and the Awards granted hereunder shall
not affect in any way the right or power of the Board or the
stockholders of the Corporation to make or authorize any
adjustment, recapitalization, reorganization or other change in
the capital structure of the Corporation, a Parent Corporation or
a Subsidiary or their business, any merger or consolidation of
the Corporation, a Parent Corporation or a Subsidiary, any issue
of debt or equity securities having any priority or preference
with respect to or affecting Common Stock or the rights thereof,
the dissolution or liquidation of the Corporation, a Parent
Corporation or a Subsidiary, or any sale, lease, exchange or
other disposition of all or any part of their assets or business
or any other corporate act or proceeding.
(c) The shares with respect to which Options may be granted are
shares of Common Stock as presently constituted but if and
whenever, prior to the expiration of an Option theretofore
granted, the Corporation shall effect a subdivision or
consolidation of shares of Common Stock or the payment of a stock
dividend on Common Stock without receipt of consideration by the
Corporation, the number of shares of Common Stock with respect to
which such Option may thereafter be exercised (i) in the event of
an increase in the number of outstanding shares shall be
proportionately increased , and the purchase price per share
shall be proportionately reduced, and (ii) in the event of a
reduction in the number of outstanding shares shall be
proportionately reduced, and the purchase price per share shall
be proportionately increased.
(d) If the Corporation recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise of an Option theretofore
granted, the Optionee shall be entitled to purchase under such
Option, in lieu of the number of shares of Common Stock as to
which such Option shall then be exercisable, the number and class
of shares of stock and securities, and the cash and other
property to which the Optionee would have been entitled pursuant
to the terms of the recapitalization if, immediately prior to
such recapitalization, the Optionee had been the holder of such
record of the number of shares of Common Stock then covered by
such Option.
(e) In the event of a Corporate Change, unless such time period is
otherwise deemed to be impractical by the Committee, then no
later than (i) two business days prior to any Corporate Change
referenced in Clause (i), (ii), (iii) or (v) of the definition
thereof or (ii) ten business days after any Corporate Change
referenced in Clause (iv) of the definition thereof, the
Committee shall act to accelerate the
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time at which Options then outstanding may be exercised so that
such Options may be exercised in full for a limited period of
time on or before a specified date (before or after such
Corporate Change) fixed by the Committee, after which specified
date all unexercised Options and all rights of Optionees
thereunder shall terminate.
(f) Except as hereinbefore expressly provided, issuance by the
Corporation of shares of stock of any class or securities
convertible into shares of stock of any class, for cash,
property, labor or services, upon direct sale, upon the exercise
of rights or warranty to subscribe therefore, or upon conversion
of shares or obligations of the Corporation convertible into such
shares or other securities, and in any case whether or not for
fair value, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number of shares of Common
Stock subject to Options theretofore granted, or the purchase
price per share of Common Stock subject to Options.
SECTION 9
AMENDMENT OR TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan or any Option or alter or
amend the Plan or any part thereof or any Option from time to time; provided
that no change in any Award previously granted may be made which would impair
the rights of the Holder without the consent of the Holder, and provided
further, that the Board may not, without approval of the stockholders, amend the
plan:
(a) to increase the aggregate number of shares which may be issued
pursuant to the provisions of the Plan on exercise or surrender
of Options;
(b) to change the minimum Option exercise price;
(c) to change the class of employees eligible to receive Awards or
increase materially the benefits accruing to employees under the
Plan;
(d) to extend the maximum period during which Awards may be granted
under the Plan;
(e) to modify materially the requirements as to eligibility for
participation in the Plan; or
(f) to decrease any authority granted to the Committee hereunder in
contravention of Rule 16b-3.
SECTION 10
OTHER
(a) NO RIGHT TO AN AWARD. Neither the adoption of the Plan nor any
action of the Committee shall be deemed to give an employee or
director any right to be granted an Option to purchase Common
Stock or any other rights hereunder except as may be evidenced by
an Option Agreement duly executed on behalf of the Corporation,
and then only to the extent of and on the terms and conditions
expressly set forth therein. The Plan shall be unfunded. The
Corporation shall not be required to establish any special or
separate fund or to make any other segregation of funds or assets
to assure the payment of any Award.
(b) NO EMPLOYMENT RIGHTS CONFERRED. Nothing contained in the Plan or
in any Award made hereunder shall (i) confer upon any employee or
director any right with respect to employment with the
Corporation or any Parent Corporation or Subsidiary, or (ii)
interfere in any way with the right of the Corporation or any
Parent Corporation or Subsidiary to terminate his or her
employment or his or her service as a member of the Board at any
time.
B-7
<PAGE>
(c) OTHER LAWS; WITHHOLDING. No fractional shares of Common Stock
shall be delivered, nor shall any cash in lieu of fractional
shares be paid. The Corporation shall have the right to deduct in
connection with all Awards any taxes required by law to be
withheld and to require any payments necessary to enable it to
satisfy its withholding obligations. The Committee may permit the
Holder of an Award to elect to surrender, or authorize the
Corporation to withhold shares of Common Stock (valued at their
Fair Market Value on the date of surrender or withholding of such
shares) in satisfaction of the Corporation's withholding
obligation, subject to such restrictions as the Committee deems
necessary to satisfy the requirements of Rule 16b-3.
(d) NO RESTRICTION OF CORPORATE ACTION. Nothing contained in the Plan
shall be construed to prevent the Corporation or any Parent
Corporation or Subsidiary from taking any corporate action which
is deemed by the Corporation or such Parent Corporation or
Subsidiary to be appropriate or in its best interest, whether or
not such action would have an adverse effect on the Plan or any
Award made under the Plan. No employee, director, beneficiary or
other person shall have any claim against the Corporation or any
Parent Corporation or Subsidiary as a result of such action.
(e) RESTRICTIONS ON TRANSFER. An Award shall not be transferable
otherwise than by will or the laws of descent and distribution
and shall be exercisable during the lifetime of the Holder only
by such Holder or the Holder's guardian or legal representative.
(f) INFORMATION TO EMPLOYEES. Optionees under the Plan shall receive
financial statements annually regarding the corporation during
the period the options are outstanding.
(g) RULE 16b-3. It is intended that the Plan and any grant of an
Award made to a person subject to Section 16 of the Exchange Act
meet all of the requirements of Rule 16b-3. If any provisions of
the Plan or any such Award would disqualify the Plan or such
Award hereunder, or would otherwise not comply with Rule 16b-3,
such provision or Award shall be construed or deemed amended to
conform to Rule 16b-3.
(h) GOVERNING LAW. The Plan and securities issued hereunder shall be
construed in accordance with the laws of the State of California
and all applicable federal law.
ADOPTED BY THE BOARD AS OF APRIL 24, 1997
APPROVED BY THE SHAREHOLDERS AS OF JULY 31, 1997
AMENDED BY THE BOARD AS OF AUGUST 5, 1999
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<PAGE>
PROXY
BARRA, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
AUGUST 3, 2000
The undersigned, revoking all prior proxies, hereby appoints Andrew Rudd,
M. Blair Hull and Norman J. Laboe, or any of them, each with full power of
substitution, the lawful attorneys and proxies of the undersigned to vote all
of the shares of Common Stock of BARRA, Inc. which the undersigned shall be
entitled to vote at the Annual Meeting of Stockholders to be held at 2100
Milvia Street, Berkeley, CA 94704, on Thursday, August 3, 2000 at 2:00 p.m.,
local time, and at any adjournments and postponements, with all the powers
the undersigned would possess if personally present, upon matters noted
below. The shares represented by this Proxy shall be voted as follows:
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
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<PAGE>
Please mark
your votes as
indicated in
this example /X/
FOR all WITHHOLD for all
nominees nominees
1. To elect as Directors of BARRA, Inc. the / / / /
nominees listed below:
A. George Battle, John F. Casey, Kamal Duggirala, M. Blair Hull,
Norman J. Laboe, Clyde W. Ostler, Andrew Rudd
(MARK NO BOX AND WRITE THE NAME(S) OF THE NOMINEE(S) WITHHELD IN THE SPACE
PROVIDED BELOW.)
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FOR AGAINST ABSTAIN
2. Approval of an amendment to the / / / / / /
Company's Bylaws to change the size of
the range of the Board of Directors from
four (4) to seven (7) to five (5) to
nine (9).
FOR AGAINST ABSTAIN
3. Approval of the adoption of the 2000 Equity / / / / / /
Participation Plan of BARRA, Inc.
FOR AGAINST ABSTAIN
4. Approval of an amendment to BARRA, Inc. / / / / / /
Directors Option Plan to authorize the
issuance of an additional 100,000 shares
thereunder.
FOR AGAINST ABSTAIN
5. Ratification of appointment of Deloitte & / / / / / /
Touche LLP as Independent accountants for
the fiscal year ending March 31, 2001.
PLEASE MARK, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2, 3, 4 AND 5. THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR PROPOSALS 1, 2, 3, 4 AND 5.
Please sign your name exactly as it appears to the left. In the case of
shares owned in joint tenancy or as tenants in common, all should sign.
Fiduciaries should indicate their title and authority.
Signature(s) ________________________________ Dated: __________________, 2000
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