GOLDEN EAGLE GROUP, INC.
120 STANDIFER DRIVE
HUMBLE, TEXAS 77338
NOTICE OF ANNUAL MEETING
TO BE HELD JUNE 20, 1997
To all Stockholders of
GOLDEN EAGLE GROUP, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of GOLDEN EAGLE
GROUP, INC., a Delaware corporation (the "Company"), will be held at The Hotel
Sofitel, 425 North Sam Houston Parkway East, Houston, Texas 77060 on Friday,
June 20, 1997, at the hour of 9:00 A.M. for the following purposes:
To elect six Directors of the Company for the ensuing year;
To consider and vote upon a proposal to increase the number of shares of Common
Stock reserved for issuance pursuant to the Company's 1992 Stock Option Plan by
500,000 shares to 900,000 shares.
To consider and vote upon a proposal to increase the number of shares of Common
Stock reserved for issuance pursuant to the Company's 1994 Director Stock Option
Plan by 100,000 shares to 250,000 shares and to amend annual authorized share
grants and grant dates.
To consider and vote upon a proposal to ratify the selection of Coopers &
Lybrand as independent auditors for the Company's fiscal year ending December,
31, 1997; and
To transact such other business as may properly come before the meeting
All stockholders are cordially invited to attend; however, only
stockholders of record at the close of business on May 23, 1997 are entitled to
vote at such meeting or any adjournment thereof.
DONALD A. NODORFT
SECRETARY
Houston, Texas
May 26, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE ENCLOSED
PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY, AND RETURN
IT TO THE COMPANY IN THE PREADDRESSED ENVELOPE PROVIDED FOR THAT PURPOSE. ANY
STOCKHOLDER MAY REVOKE HIS PROXY AT ANY TIME BEFORE THE MEETING BY WRITTEN
NOTICE TO SUCH EFFECT, BY SUBMITTING A SUBSEQUENTLY DATED PROXY OR BY ATTENDING
THE MEETING AND VOTING IN PERSON.
<PAGE>
GOLDEN EAGLE GROUP, INC.
120 STANDIFER DRIVE
HUMBLE, TEXAS 77338
PROXY STATEMENT
The Board of Directors presents this Proxy Statement to all stockholders
and solicits their proxies for the Annual Meeting of Stockholders (the
"Meeting") to be held on June 20, 1997.
All proxies duly executed and received will be voted on all matters
presented at the Meeting in accordance with the specifications made in such
proxies. In the absence of specified instructions, proxies so received will be
voted (1) FOR each of the named nominees to the Company's Board of Directors,
(2) FOR the proposal to increase the number of shares of common stock reserved
for issuance pursuant to the Company's 1992 Stock Option Plan by 500,000 shares
to 900,000 shares, (3) FOR the proposal to increase the number of shares of
common stock reserved for issuance pursuant to the Company's 1994 Director Stock
Option Plan by 100,000 shares to 250,000 shares and to amend annual authorized
share grants and grant dates, and (4) FOR the proposal to ratify the selection
of Coopers & Lybrand as the Company's independent auditors for the fiscal year
ending December 31, 1997. The Board does not know of any other matters that may
be brought before the Meeting nor does it foresee or have reason to believe that
proxy holders will have to vote for substitute or alternate nominees.
If any other matter should come before the Meeting or any nominee is not
available for election, the persons named in the enclosed Proxy will have
discretionary authority to vote all proxies not marked to the contrary with
respect to such matters in accordance with their best judgment. A proxy may be
revoked at any time before being voted by written notice to such effect received
by the Company at the address set forth above, attention Donald A. Nodorft,
Secretary, by delivery of a subsequently dated proxy or by a vote cast in person
at the Meeting. The Company will pay the entire expense of soliciting proxies,
which solicitation will be by use of the mails. It is anticipated that these
proxy materials will be mailed to stockholders of the Company on or about May
26, 1997.
The Company's Annual Report to the Stockholders for the year ended
December 31, 1996, including financial statements, is being mailed with this
Proxy Statement to all stockholders entitled to vote at the Meeting. The Annual
Report does not constitute a part of the soliciting material.
Only stockholders of record at the close of business on May 23, 1997 are
entitled to vote at the Meeting. The total number of shares of Common Stock of
the Company outstanding as of April 15, 1997 was 5,730,000 shares. The Common
Stock is the only class of securities of the Company entitled to vote, each
share of Common Stock being entitled to one non-cumulative vote. A majority of
the shares of Common Stock outstanding and entitled to vote as of May 23, 1997,
or 2,865,001 shares, must be present at the Meeting in person or by proxy in
order to constitute a quorum for the transaction of business.
The affirmative vote of a plurality of the shares of Common Stock present
and voting at the Meeting is required for the election of Directors. The
affirmative vote of a majority of the shares of Common Stock present and voting
at the Meeting is required to pass upon the proposals to increase the number of
shares of common stock reserved for issuance pursuant to the Company's 1992
Stock Option Plan, to increase the number of shares of common stock reserved for
issuance pursuant to the Company's 1994 Director Stock Option Plan and to amend
related share grants and grant dates and to ratify the selection of Coopers &
Lybrand as independent auditors for the Company. Compagnie Daher de Gerance et
D'Armement ("Compagnie Daher") which holds approximately 45.8% of the Company's
outstanding
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Common Stock, has advised the Company that it intends to vote in favor of the
named nominees to the Company's Board of Directors and each of the other
proposals to be presented at the Meeting.
Pursuant to Delaware law, abstentions and broker non-votes are counted as
present for purposes of determining the presence of a quorum. However,
abstentions are treated as present and entitled to vote and thus have the effect
of a vote against a matter. A broker non-vote on a matter is considered not
entitled to vote on that matter and thus is not counted in determining whether a
matter requiring approval of a majority of the shares present and entitled to
vote has been approved or whether a plurality of the shares present and entitled
to vote has been voted.
A list of stockholders entitled to vote at the Meeting will be available
at the Company's offices, 120 Standifer Drive, Humble, Texas 77338, for a period
of ten days prior to the Meeting and at the Meeting itself for examination by
any stockholder.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth share ownership information as of April 28,
1997 with respect to (i) each person known to the Company to be a beneficial
owner of more than 5% of the Company's Common Stock, (ii) each Director of the
Company, (iii) the Chief Executive Officer and the two other most highly
compensated executive officers of the Company (the "Named Executive Officers")
and (iv) all executive officers and Directors of the Company as a group:
Name and Address
OF BENEFICIAL OWNER NUMBER OF SHARES(L) PERCENTAGE OWNERSHIP(L)
Compagnie Daher............ 2,626,965 (2) 45.8%
120 Standifer Drive
Humble, TX 77338
Patrick M. Daher........... 2,636,965 (2) 46.0%
120 Standifer Drive
Humble, TX 77338
Henri Youngblood........... 401,000 (3) 7.0%
22 Export Drive
Sterling, VA 20164
Patrick H. Weston.......... 320,035 (4) 5.6%
120 Standifer Drive
Humble, TX 77338
Carlos A. Macaluso......... 187,200 (5) 3.3%
11700 N.W. 100th Road
Medley, FL 33178
William G. Goldfarb........ 234,000 (6) 4.1%
2627 N.E. 203rd Street, suite 202
Miami, FL 33180
Keith Bates................ 10,000 (7) -
120 Standifer Drive
Humble, TX 77338
John F. Darden............. 10,000 (7) -
120 Standifer Drive
Humble, TX 77338
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Name and Address
OF BENEFICIAL OWNER NUMBER OF SHARES(L) PERCENTAGE OWNERSHIP(L)
Donald A. Nodorft 11,000 (8) -
120 Standifer Drive
Humble, TX 77338
All executive officers and
Directors as a group (eight
persons)................... 3,409,200 (9) 59.5%
(1) Except as otherwise noted, includes options and warrants to purchase
shares of Common Stock, which become exercisable within 60 days of the
date of this report.
(2) Represents 2,626,965 shares of Common Stock held by Compagnie Daher, of
which Mr. Daher is Chairman of the Board and Chief Executive Officer and
10,000 shares of Common Stock issuable upon the exercise of stock options.
(3) Includes 400,000 shares of Common Stock issued in connection with the July
95 acquisition by merger of World Trade Transport of VA. Inc. by the
Company.
(4) Includes 147,000 shares of Common Stock issuable upon the exercise of
stock options.
(5) Represents shares of Common Stock.
(6) Includes 34,000 shares of Common Stock issuable upon the exercise of stock
options.
(7) Represents 10,000 shares of Common Stock issuable upon the exercise of
stock options.
(8) Represents 11,000 shares of Common Stock issuable upon exercise of stock
options held by the Company's Vice President - Finance and Chief Financial
Officer.
(9) Includes all the shares of Common Stock described in notes (2) through
(8).
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<PAGE>
ELECTION OF DIRECTORS
Six Directors are to be elected at the Meeting to serve until the next
annual meeting of the Company's stockholders and until their respective
successors shall have been elected and shall have qualified or until their
earlier resignation, removal from office or death.
NOMINEES
The following table sets forth information concerning each nominee.
NAME AGE TITLE
Patrick M. Daher 47 Chairman of the Board and
Director
Patrick H. Weston 54 President, Chief Executive
Officer and Director
Carlos A. Macaluso 44 Executive Vice President
Latin America and
Director
William G. Goldfarb 70 Director
Keith Bates 57 Director
John F. Darden 50 Director
PATRICK M. DAHER was elected Chairman of the Board and a Director of the
Company in March 1994, upon completion of the acquisition by merger of Daher
America, Inc. (the "Merger"). Since 1991, Mr. Daher has been Chairman of the
Board and Chief Executive Officer of Compagnie DAHER, a French transportation
and logistics concern which became the Company's principal stockholder upon
completion of the Merger. From 1985 to 1990, Mr. Daher was Executive Vice
President of ETS DAHER & Co., a French-based freight forwarding concern.
PATRICK H. WESTON was elected President, Chief Executive Officer and a
Director of the Company in March 1994, upon completion of the Merger. From July
1985 until the Merger, Mr. Weston served as President and Chief Executive
Officer of DAHER America.
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CARLOS A. MACALUSO is Executive Vice President for Latin America and a
Director of the Company. Mr. Macaluso has served as a Director since 1983. From
1983 until completion of the Merger, Mr. Macaluso also served as President and
Chief Operating Officer of the Company. Mr. Macaluso has been employed by the
Company since 1981.
WILLIAM G. GOLDFARB co-founded the Company in 1979 and serves as a
Director of the Company, a position he has held since that time. Mr. Goldfarb
also served as Chairman of the Board of the Company from 1979 to September 1992.
He has served as a general partner of various limited partnerships and in
various executive capacities with privately-held companies, engaged in the
development of major residential and commercial real estate projects, including
Northern Capital Corporation, for approximately the past 25 years.
KEITH BATES was appointed to the Board of Directors of the Company in
August 1994. Mr. Bates has been affiliated with Colgate-Palmolive since 1961 in
various capacities most recently as Vice President of European Operations since
1995, as Vice President of Manufacturing-Latin America from 1992 to 1994, and as
Director of Manufacturing-Latin America from 1986 to 1992.
JOHN F. DARDEN was elected a Director of the Company in November 1994.
Since 1986 Mr. Darden, a certified public accountant, has been Senior Vice
President-Finance and Chief Financial Officer of GAB Business Services, Inc. a
large insurance adjusting firm.
ELECTION OF DIRECTORS AND EXECUTIVE OFFICERS; VOTING AGREEMENTS
Directors of the Company hold their offices until the next annual meeting
of the Company's stockholders and until their successors have been duly elected
and qualified or their earlier resignation, removal from office or death.
Upon completion of the Merger, an agreement (the "Stockholders Agreement")
was entered into by and among the Company, Compagnie Daher, Patrick H. Weston,
Gary M. Goldfarb, Carlos A. Macaluso and William Goldfarb. (Gary M. Goldfarb,
Carlos A. Macaluso and William Goldfarb being collectively, the "GEG
Stockholders"), pursuant to which it was agreed that Compagnie Daher shall have
the right to designate four of the Company's seven Directors (the "Compagnie
Daher Designees") and the GEG Stockholders, in their capacity as Directors of
the Company, shall have the right to designate the remaining three Directors
(the "Company Designees"). Pursuant to the Stockholders Agreement, the Company
agreed to include the Compagnie Daher Designees and the Company Designees in
management's slate presented to stockholders at each annual meeting of
stockholders of the Company and use its best efforts to cause all such designees
to be elected. Compagnie Daher, Patrick H, Weston and the GEG Stockholders
agreed to vote their respective shares of Common Stock at each annual meeting of
stockholders of the Company for the election of the Compagnie Daher Designees
and the Company Designees as Directors of the Company.
In December 1996, in conjunction with the resignation of Gary M. Goldfarb
as both an officer and director, the parties to the Stockholders Agreement
amended the Stockholders Agreement whereby the new board designee to the seven
member board who shall take Gary Goldfarb's place shall be nominated by a
Nominating Committee established by the Board of Directors (the "Nominating
Committee Designee"), and shall be elected by a simple majority vote of the
shareholders of the Company as provided in the Company's bylaws. The parties
further agreed that the remaining two board positions held by William Goldfarb
and Carlos Macaluso may only be held by those two persons and that they could
not nominate designees. When either of these gentleman relinquish their board
seat, such seat
7
<PAGE>
shall then be filled through the Nominating Committee process as set out above.
Such director would then be submitted to a vote of the Shareholders at the
Company's next annual Stockholders meeting.
Patrick M. Daher, Patrick H. Weston, Keith Bates and John F Darden are
currently the Compagnie Daher Designees and Carlos A. Macaluso and William
Goldfarb are currently the Stockholder Designees. The provisions of the
Stockholders Agreement, as amended, regarding the election of the Company's
Directors will remain in effect for so long as Compagnie Daher owns not less
than 20% of the issued and outstanding Common Stock.
In lieu of nominating a candidate to fill the vacant seventh seat on the
board, on April 25, 1997 the Board resolved by unanimous consent to reduce the
number of directors from seven to six.
Officers of the Company serve at the pleasure of the Board of Directors
and until the first annual meeting of the Board of Directors following the next
annual meeting of the Company's stockholders and until their successors have
been chosen and qualified.
COMMITTEES
The Board of Directors has neither an audit committee nor a nominating
committee, but rather performs these functions as a whole.
COMPENSATION COMMITTEE. The Compensation Committee is currently comprised
of Patrick M. Daher, John F. Darden, Keith Bates and William G. Goldfarb. The
Compensation Committee's responsibilities consist of recommending and approving
the salary and fringe benefit policies of the Company, including compensation of
executive officers of the Company. The Compensation Committee was established in
April 1994.
1992 STOCK OPTION COMMITTEE. The 1992 Stock Option Committee is currently
comprised of Patrick M. Daher, William G. Goldfarb, John F. Darden and Keith
Bates. The 1992 Stock Option Committee administers the Company's Amended 1992
Stock Option Plan (the "1992 Option Plan") and recommends and approves grants of
stock options under the 1992 Stock Option Plan. The 1992 Stock Option Committee
was originally established in January 1992 and was re-established in August
1994.
DIRECTORS STOCK OPTION COMMITTEE. The Directors Stock Option Committee,
established in April 1994, is currently comprised of Patrick H. Weston and
Carlos A. Macaluso. The Directors Stock Option Committee's responsibilities
include administering the 1994 Directors Stock Option Plan (the "Directors
Plan").
ADDITIONAL INFORMATION CONCERNING DIRECTORS
The Board of Directors of the Company held four meetings during the year
ended December 31, 1996. Each Director, during the period he served as such, was
present at not less than 75% of the meetings of the Board of Directors held such
year.
All Directors are reimbursed for travel, lodging and similar expenses
incurred in connection with their attendance at meetings of the Board of
Directors. In addition to the foregoing, in August 1994, the Board of Directors
adopted the 1994 Directors Stock Option Plan which compensates non-employee
directors for their time and efforts on behalf of the Company with annual grants
of options to purchase Common Stock.
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Grants of options under the 1994 Directors Stock Option Plan, as
established at the November 11, 1994 Shareholder Meeting, are to be granted as
of the date of each Annual Shareholder Meeting. The Company did not have
Shareholder Meeting in 1995 for the fiscal year ended December 31, 1994 thus
outside directors did not receive the annual option grant prescribed in the 1994
Directors Plan. September 6, 1996, in recognition of the valuable time and
service given to the Company in 1994 by the outside directors, the Director
Stock Option Committee recommended, and the Board approved payment of a
directors fee of $10,000 to each of the four independent directors that served
in that year.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's Directors, executive officers and holders of more than ten percent
of the Company's Common Stock to file initial reports of ownership and changes
in ownership of Common Stock with the Securities and Exchange Commission (the
"SEC") and NASDAQ. Such persons are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
oral or written representations from certain reporting persons that no Forms 5
were required for those persons, the Company believes that, during the year
ended December 31, 1996, all filing requirements applicable to its Directors,
executive officers and greater than ten percent (10%) beneficial owners were
fulfilled.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSED
NOMINEES FOR DIRECTOR.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following compensation table sets forth, for the years ended December
31, 1996, 1995 and 1994, the cash and certain other compensation paid by the
Company to the Named Executive Officers. For further information concerning
named executive officers see " Election of Directors".
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------- -----------------
Other Annual Shares Underlying
Compensation Options/SARS
Name and Principal Position Year Salary ($) Bonus ($) ($) (#)
--------------------------- ---- --------- ------- ------ -------------
<S> <C> <C> <C> <C> <C>
Patrick H. Weston (1) 1996 237,000 104,800 (2) -
President and CEO 1995 192,883 18,600 (2) 100,000(3)
1994 181,167 7,000 (2) 47,000(3)
Gary M. Goldfarb (4)(5) 1996 143,900 30,000 (2) -
Executive Vice President 1995 136,027 9,300 (2) 12,000(3)(6)
Corporate Development 1994 117,394 5,000 (2) 47,000(3)
Carlos A. Macaluso (4) 1996 143,400 61,730 (2) -
Executive Vice President 1995 136,027 9,300 (2) 12,000(3)(6)
Sales and Marketing 1994 117,394 5,000 (2) 47,000(3)
Donald A. Nodorft (7) 1996 95,000 47,500 (2) 11,000(3)
Vice President, Finance
and Chief Financial Officer
</TABLE>
(1) Mr. Weston became the Company's President and CEO upon completion of the
Merger in March 1994.
(2) Represents less than ten percent of the Named Executive Officer's
compensation.
(3) Represents options granted under the Company's Amended 1992 Stock Option
Plan (the "1992 Option Plan").
(4) Upon completion of the Merger in March 1994, Mr. Goldfarb the Company
Chairman and CEO, became the Company's Executive Vice President-Corporate
Development and Mr. Macaluso, the Company's President and Chief Operating
Officer, became the Company's Executive Vice President-Sales and
Marketing. In 1996 Mr. Macaluso was appointed Executive Vice
President-South America.
(5) Mr. Goldfarb resigned as an officer and director in December 1996.
(6) In February 1995, Messrs. Goldfarb and Macaluso each agreed to accept
12,000 stock options under the 1992 Option Plan in lieu of the issuance of
additional shares of Common Stock after the Company met certain
performance goals in 1994 related to the October 1993 temporary salary
reduction agreement. See Employment Agreements.
(7) Mr. Nodorft became the Company's Vice President-Finance and CFO upon
completion of the Merger in March 1994. Total annual compensation for
years prior to 1996 was less than $100,000.
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1992 OPTION PLAN
The 1992 Option Plan provides for issuance of options covering up to
400,000 shares of Company Common Stock at a purchase price per share at least
equal to one hundred percent of fair market value of a share of Common Stock on
the date of grant. The purpose of the 1992 Option Plan is to provide additional
incentives to attract and retain qualified and competent persons as Directors,
officers, employees, consultants or agents who provide management services or
upon whose efforts and judgment the success of the Company is largely dependent,
through the encouragement of stock ownership in the Company by such persons. In
furtherance of this purpose, the 1992 Option Plan authorizes (a) the granting of
incentive or non-qualified (as defined in the 1992 Option Plan) stock options to
purchase Common Stock to persons satisfying the description above and (b) the
provision of loans for the purpose of financing the exercise of options and the
amount of taxes payable in connection therewith.
Options are intended to be granted primarily to those persons who possess
a capacity to contribute significantly to the successful performance of the
Company. Because persons to whom grants of options are to be made are to be
determined from time to time by the 1992 Stock Option Committee or the Board of
Directors, in its discretion, it is impossible at this time to indicate the
precise number, name or position of persons who will receive options or the
number of shares for which options will be granted to any such person, except to
the extent already granted.
In March 1997, the Company's Board of Directors adopted, subject to
approval by the Company's stockholders, a resolution to amend the 1992 Option
Plan to increase by 500,000 shares to 900,000 shares the number of shares of
Common Stock that are reserved for issuance.
1994 DIRECTORS PLAN
The 1994 Directors Plan provides for issuance of options covering up to
150,000 shares of Company Common Stock at a purchase price per share at least
equal to one hundred percent of fair market value of a share of Common Stock on
the date of grant. The Company's directors who are not employees of the Company
are eligible to participate in the Company's Director's Plan. Pursuant to the
Director's Plan non-employee directors are granted options to purchase shares of
Common Stock as follows: (i) options to purchase 5,000 shares of Common Stock
will be granted to each non non-employee Director who joins the Company as of
the date on which such person is elected or appointed to the Board of Directors
the ("Initial Grant Date"); and (ii) options to purchase 5,000 shares of Common
Stock will be granted to each non-employee Director on the date of each annual
meeting of stockholders, commencing with the first annual meeting occurring at
least six months after adoption of the 1994 Directors Plan. During the year
ended December 31, 1996, 20,000 additional grants were issued and all prior
grants are vested shares. As of April 28, 1997, options to purchase 64,000
shares of Common Stock had been granted under the Directors Plan.
In March 1997, the Company's Board of Directors adopted, subject to
approval by the Company's stockholders, a resolution to amend the 1994 Directors
Stock Option Plan (the "1994 Directors Plan") to, (a) increase by 100,000 shares
to 250,000 shares the number of shares of Common Stock in the Company's 1994
Directors Plan that are reserved for issuance, (b) increase to 7,500, the number
of options to be granted to each eligible director on the Initial Grant Date,
and (c) increase the annual Option grant to purchase shares each Eligible
Director shall receive to 7,500 on the last day of the Company's fiscal year
that ends at least six months after the Initial Grant Date for each such
Eligible Director.
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OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning individual grants of
stock options made during the fiscal year ended December 31, 1996 to each of the
Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
NUMBER OF REALIZABLE VALUE AT
SHARES % OF TOTAL ASSUMED ANNUAL
UNDERLYING OPTIONS GRANTED EXERCISE OR RATES OF STOCK PRICE
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION APPRECIATION
NAME GRANTED (#) (1)FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
- ----------------- ------------- -------------- --------- --------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Donald A. Nodorft 11,000 37% 2.500 03/04/1999 $2,795 $5,674
- -----------------
</TABLE>
(1) Represents options granted under the 1992 Option Plan.
STOCK OPTIONS HELD AT END OF FISCAL 1996
The following table provides information concerning stock options
exercised by each of the four named executive officers and the value of options
held by each such officer on December 31, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END FISCAL YEAR END (1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
EXERCISE(#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Patrick H. Weston - - 147,000 - $149,938 -
Gary M. Goldfarb 59,000 $141,775 - - - -
Carlos A. Macaluso 59,000 $141,775 - - - -
Donald A. Nodorft 24,000 $ 59,125 11,000 - $ 2,750 -
</TABLE>
(1) Based on a closing bid price on December 31, 1996 of $2.750 per share as
reported by NASDAQ.
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
In March 1994, the Company entered into a five-year employment agreement
with Patrick H. Weston, which provides for an annual base salary of $175,000 and
a monthly car allowance of $1,000. The Company is also party to employment
agreements with each of Gary M. Goldfarb and Carlos A. Macaluso expiring in
December 1997, which provide for annual base salaries of $125,000 each and
monthly car allowances of $550 each. In October 1993, Messrs. Goldfarb and
Macaluso agreed to a temporary reduction in salary rate to $105,000 per annum,
as described below.
The employment agreement with each of Messrs. Weston, Goldfarb and
Macaluso also provides that such officers will be entitled to participate in an
annual bonus pool to be established equal to five
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<PAGE>
percent of the Company's pre-tax income for each fiscal year before giving
effect to extraordinary gains, which bonus pool will be allocated among the
senior management of the Company by its Board of Directors. The employment
agreements may be extended for additional one-year terms unless terminated by
either party at least 90 days prior to the end of any term. Pursuant to such
employment agreements, the Company is obligated to pay each employee full
compensation pursuant to such agreement for the remainder of the term of such
agreement if the employee is terminated without cause. If an employee's
employment with the Company is terminated for any other reason, such employee
will not be entitled to any compensation pursuant to such agreement except for
any amounts accrued prior to such termination. Each of the employment agreements
contains non-competition and non-disclosure covenants.
In October 1993, in order to assist the Company in conserving capital,
Messrs. Goldfarb and Macaluso agreed to a temporary reduction in their salary
rates to $105,000 per annum. The Company agreed with each of them that their
prior salary levels would be restored if the Company achieves break-even or has
pre-tax income for two consecutive quarters during fiscal 1994. In addition, the
Company granted each of Messrs. Goldfarb and Macaluso options under the 1992
Option Plan to purchase 5,000 shares of Common Stock at an exercise price of
$3.88 per share and agreed that if the Company achieves break-even or has
pre-tax income during fiscal 1994, they would each be entitled to receive one
share of Common Stock for each $2.50 in cash compensation waived pursuant to the
salary reduction program. Messrs. Goldfarb and Macaluso had their salary levels
restored to $125,000 in October 1994 after the specified performance criteria
were met. In February 1995, Messrs. Goldfarb and Macaluso were each granted
12,000 options to purchase Common Stock by the Board of Directors at the
per-share market price at the time of the grant in lieu of an issuance of Common
Stock.
On December 12, 1996, Mr. Goldfarb resigned from his position as Executive
Vice President-Corporate Development to pursue various outside consulting
opportunities thereby terminating all remaining obligations under the employment
contract entered between he and the Company. Both parties agreed that it was in
the best interests of the Company for Mr. Goldfarb to be available on a
consulting basis to maintain continuity with certain business interests brought
to the Company by Mr. Goldfarb. The Company and Mr. Goldfarb thus agreed to
enter into a consulting agreement whereby Mr. Goldfarb will be available for
consultation for a monthly fee of $11,000 through November 30, 1997.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors reviews and
recommends the compensation arrangements for the named executive officers with
respect to salaries, bonuses and grants of options to purchase shares of Common
Stock under the Company's 1992 Stock Option Plan.
OBJECTIVES AND POLICIES
The Compensation committee strives to:
o motivate executive officers to create added value for the Company's
shareholders through compensation incentives that are tied to the
Company's operating performance
o reward executive officers for their individual performance and the
performance of the Company
o provide compensation and benefits at levels which enable the Company
to attract and retain high quality executives
To accomplish these objectives, the Compensation Committee retained a
professional consulting firm (Coopers & Lybrand, L.L.P.) in 1995 to evaluate and
advise the Committee on compensation
13
<PAGE>
alternatives for its executive officers. The consulting firm took into
consideration the respective responsibilities of said officers, the size of the
company, compensation programs in peer group competitors and in companies of
similar size and operating characteristics. The Committee used the consultant's
study to establish base compensation levels for 1996 for each of the named
executives which would accomplish the stated objectives, and then established a
strong incentive plan based on operating performance targets which would reward
the executives with additional bonus compensation and grants of options to
purchase Common Stock.
SUMMARY
The Compensation Committee, the Board of Directors and senior management,
takes executive compensation at the Company seriously. After reviewing the
Company's operating results for 1996, the Committee has concluded that the
amounts paid to executive officers in fiscal 1996 appropriately reflect
individual performance, are properly linked to established targets and goals of
the Company and are generally competitive with amounts paid to executive
officers of comparable companies.
COMPENSATION COMMITTEE
John F. Darden, Chairman
Patrick M. Daher
Keith Bates
William G. Goldfarb
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<PAGE>
PERFORMANCE GRAPH
.
The following graph compares the cumulative total shareholder return on
the Common Stock of the Company from December 31, 1992 (the Common Stock was
first offered to the public at an initial public offering price of $5.00 per
share on November 24, 1992) through December 31, 1996 with the cumulative total
return on the NASDAQ Composite Index and a peer group comprised of four publicly
traded international freight forwarders that most closely resemble the
operations of the Company (weighted for comparison purposes for stock market
capitalization). The graph assumes an investment of $100 in the Company's Common
Stock and reinvestment of all dividends. The Company did not pay any dividends
during this period. The NASDAQ Composite Index is published monthly. The
following companies comprise the peer group: Air Express International, Fritz
Companies, Expeditors International, and the Harper Group.
COMPARISON OF 48 MONTH CUMULATIVE TOTAL RETURN AMONG
GOLDEN EAGLE GROUP, INC., THE NASDAQ COMPOSITE INDEX AND A
PEER GROUP OF SIMILAR INTERNATIONAL FREIGHT FORWARDING COMPANIES
<TABLE>
<CAPTION>
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Nasdaq Composite Index......... 100.00 114.29 107.86 151.43 198.57
Golden Eagle Group............. 100.00 77.42 47.94 51.61 70.97
Peer Group..................... 100.00 96.46 140.64 225.42 175.16
</TABLE>
The Comparisons in this table are required by the Securities and Exchange
Commission and are not intended to forecast or be indicative of possible future
performance of the Company's Common Stock.
15
<PAGE>
CERTAIN TRANSACTIONS
AGENCY AGREEMENT. Upon completion of the Merger, the Company entered into
an exclusive agency agreement with Compagnie Daher pursuant to which the Company
appointed Compagnie Daher as its exclusive agent in France and Compagnie Daher
appointed the Company as its exclusive agent in the United States, other than
with respect to one of Compagnie Daher's existing accounts. Each party has the
right to terminate the agency agreement upon two months notice to the other
party. The other terms of the agency agreement are comparable to those between
the Company and its non-affiliated agents.
TRANSACTION BETWEEN CONTROL PERSONS. In February 1996, Patrick Weston, the
Company's CEO and a director, purchased 33,046 shares of Common Stock directly
from the Company's major stockholder, Compagnie Daher.
GOLDFARB CONSULTING AGREEMENT. The Company entered into a Consulting
Agreement dated December 12, 1996 with Gary M. Goldfarb, a former director and
executive officer of the Company (the "Goldfarb Consulting Agreement"), to which
Mr. Goldfarb agreed to assist the Company with transition of certain business
interests in which he was involved with prior to his resignation from the
Company on December 12th 1996. The Goldfarb Consulting Agreement provides for a
monthly consulting fee of $11,000 through November 30, 1997.
16
<PAGE>
PROPOSAL TO INCREASE THE NUMBER OF SHARES OF COMMON
STOCK RESERVED FOR ISSUANCE PURSUANT TO THE
COMPANY'S 1992 STOCK OPTION PLAN BY 500,000 TO 900,000 SHARES
GENERAL
In March 1997, the Company's Board of Directors adopted, subject to
approval by the Company's stockholders, a resolution to increase by 500,000 to
900,000 shares the number of shares of Common Stock in the Company's 1992 Stock
Option Plan (the "1992 Option Plan) that are reserved for issuance. The 1992
Option Plan presently authorizes 400,000 shares for issuance upon exercise of
stock options. The current text of the 1992 Option Plan, as modified pursuant to
this amendment, is attached as Exhibit A. The material features of the 1992
Option Plan are discussed below, but the description is subject to, and is
qualified in its entirety by, the full text of the 1992 Option Plan, as amended.
The purpose of the 1992 Option Plan is to provide additional incentives to
attract and retain qualified and competent persons as Directors, officers,
employees, consultants or agents who provide management services or upon whose
efforts and judgement the success of the Company is largely dependent, through
the encouragement of the stock ownership in the Company by such persons. In
furtherance of this purpose, the 1992 Option Plan authorizes (a) the granting of
incentive or nonqualified (as defined in the 1992 Option Plan) stock options to
purchase Common Stock to persons satisfying the description above and (b) the
provision of loans for the purpose of financing the exercise of options and the
amount of taxes payable in connection therewith.
The 1992 Option Plan is administered by a committee consisting of two or
more directors designated by the Board of Directors (the "1992 Stock Option
Committee") or, if a committee is not designated by the Board of Directors, by
the Board of Directors as a whole. The 1992 Stock Option Committee in its sole
discretion, determines the persons to be awarded options, the number of shares
subject thereto and the exercise price and other terms thereof. In addition, the
1992 Stock Option Committee has full power and authority to construe and
interpret the 1992 Option Plan, and the acts of the 1992 Stock Option Committee
are final, conclusive and binding upon all interested parties, including the
Company, its stockholders, its officers and employees, recipients of grants
under the 1992 Option Plan and all persons or entities claiming by or through
such persons. The Board has established the 1992 Stock Option Committee to
administer the 1992 Option Plan. The 1992 Stock Option Committee is currently
comprised of Patrick M. Daher, Keith Bates, John F. Darden and William G.
Goldfarb.
Options are intended to be granted primarily to those persons who possess
a capacity to contribute significantly to the successful performance of the
Company. Because persons to whom grants of options are to be made are to be
determined from time to time by the 1992 Stock Option Committee or the Board of
Directors, in its discretion, it is impossible at this time to indicate the
precise number, name or position of persons who will receive options or the
number of shares for which options will be granted to any such person, except to
the extent already granted.
Assuming approval of the proposed amendment, an aggregate of 900,000
shares of Common Stock (subject to adjustment as discussed below) will he
reserved for sale upon exercise of options granted under the 1992 Option Plan.
As of April 15,1997, options to purchase 400,000 shares of Common Stock are
issued and outstanding under the 1992 Option Plan. The shares acquired upon
exercise of options granted under the 1992 Option Plan will be authorized and
unissued shares of Common Stock. The Company's stockholders will not have any
preemptive rights to purchase or subscribe for the shares reserved for issuance
under the 1992 Option Plan. If any option granted under the 1992 Option Plan
should expire or terminate for any reason other than having been exercised, the
unpurchased shares subject to that option will again be available for purposes
of the 1992 Option Plan.
17
<PAGE>
TERMS AND CONDITIONS
All options granted under the 1992 Option Plan are evidenced by a written
agreement between the Company and the grantee. Such agreements shall contain
such terms and conditions, consistent with the 1992 Option Plan, relating to the
grant, the time or times of exercise and other terms of the options as the
Committee prescribes.
Under the 1992 Option Plan, the option price per share for incentive stock
options may not be less than the fair market value of the underlying shares on
the date of grant. For purposes of the 1992 Option Plan, and for so long as the
Company's Common Stock is listed on Nasdaq, the term "fair market value" means
the mean between the closing high bid and low asked quotations of the Common
Stock as reported by Nasdaq on the business day preceding the date of grant. The
exercise price of an option may he paid in cash, or at the sole discretion of
the 1992 Stock Option Committee, by delivery of already owned shares of Common
Stock having a fair market value equal to the exercise price, or by a
combination of the foregoing. The 1992 Option Plan also authorizes the Company
to make loans to optionees to enable them to exercise their options. Such loans
must (i) provide for recourse to the optionee, (ii) bear interest at a rate of
10%, and (iii) be secured by the shares of Common Stock purchased. Cash payments
will be used by the Company for general corporate purposes. Payments made in
Common Stock must be made by delivery of stock certificates in negotiable form.
The use of already owned shares of Common Stock applies to payment for
the exercise of any option in a single transaction and to the "pyramiding" of
already owned shares in successive, simultaneous option exercises. In general,
pyramiding permits an option holder to start with as little as one share of
Common Stock and exercise an entire option to the extent then exercisable (no
matter what the number of shares subject thereto). By utilizing already owned
shares of Common Stock, no cash (except for fractional share adjustments) is
needed to exercise an option. Consequently, the optionee would receive Common
Stock equal in value to the spread between the fair market value of the shares
subject to the option and the exercise price of the option.
No option granted under the 1992 Option Plan is assignable or
transferable, other than by will or by the laws of descent and distribution.
During the lifetime of an optionee, an option is exercisable only by such
optionee. The expiration date of an option will be determined by the 1992 Stock
Option Committee at the time of the grant, but in no event will an option be
exercisable after the expiration of ten years from the dates of grant. An option
may be exercised at any time or from time to time or only after a period of time
or in installments, as the 1992 Stock Option Committee determines. The 1992
Stock Option Committee may in its sole discretion accelerate the date on which
any option may be exercised.
The unexercised portion of any option granted to an employee under the
1992 Option Plan shall automatically be terminated (a) three months after the
date on which the optionee's employment or relationship with the Company is
terminated for any reason other than (i) Cause (as defined in the 1992 Option
Plan); (ii) mental or physical disability; or (iii) death; (b) immediately upon
the termination of the optionee's employment or relationship with the Company
for Cause; (c) one year after the date on which the optionee's employment or
relationship with the Company is terminated by reason of mental or physical
disability; or (d) (i) one year after the date on which the optionee's
employment or relationship with the Company is terminated by reason of death of
the employee or (ii) one year after the date on which the optionee shall die if
such death shall occur during the one year period following the termination of
the optionee's employment or relationship with the Company by reason of mental
or physical disability.
18
<PAGE>
To prevent dilution of the rights of a holder of an option, the 1992
Option Plan provides for adjustment of the number of shares for which options
may be granted, the number of shares subject to outstanding options and the
exercise price of outstanding options in the event of any subdivision or
consolidation of shares, any stock dividend, recapitalization or other capital
adjustment of the Company. Provisions governing the effect upon options of a
merger, consolidation or other reorganization of the Company are also included
in the 1992 Option Plan.
FEDERAL INCOME TAX CONSEQUENCES
See "Federal Income Tax Consequences of the Plan" for a description of
tax consequences.
AMENDMENTS
The 1992 Option Plan will expire on September 15, 2002, and any option
outstanding on such date will remain outstanding until it has either expired or
has been exercised. The 1992 Stock Option Committee may amend, suspend or
terminate the 1992 Option Plan at any time, provided that such amendment may not
adversely affect the rights of any optionee under an outstanding option without
the affected optionee's written consent. In addition, the Committee may not
amend the 1992 Option Plan to, (a) increase the number of shares of Common Stock
reserved for issuance or change the class of persons eligible to receive
options, (b) permit the granting options that expire beyond the maximum 10
year-period, or (c) extend the termination date of the 1992 Option Plan, without
first obtaining stockholder approval.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO INCREASE
THE NUMBER OF SHARES OF COMMON STOCK RESERVED FOR ISSUANCE PURSUANT TO THE
COMPANY'S 1992 STOCK OPTION PLAN.
19
<PAGE>
PROPOSAL TO INCREASE THE NUMBER OF SHARES OF
COMMON STOCK RESERVED FOR ISSUANCE PURSUANT TO THE
COMPANY'S 1994 DIRECTORS STOCK OPTION PLAN BY 100,000 TO 250,000 SHARES AND
TO AMEND ANNUAL AUTHORIZED SHARE GRANTS AND GRANT DATES
GENERAL
In March 1997, the Company's Board of Directors adopted, subject to
approval by the Company's stockholders, a resolution to amend the 1994 Directors
Stock Option Plan (the "1994 Directors Plan") to, (a) increase by 100,000 shares
to 250,000 shares the number of shares of Common Stock in the Company's 1994
Directors Plan that are reserved for issuance, (b) increase to 7,500, the number
of options to be granted to each eligible director on the Initial Grant Date,
and (c) increase the annual Option grant to purchase shares each Eligible
Director shall receive to 7,500 on the last day of the Company's fiscal year
that ends at least six months after the Initial Grant Date for each such
Eligible Director. The current text of the 1994 Directors Plan as modified
pursuant to this amendment, is attached as Exhibit B. The material features of
the Directors' Plan are discussed below, but the description is subject to, and
is qualified in its entirety by, the full text of the 1994 Directors Plan, as
amended.
The purpose of the 1994 Directors Plan is to provide additional incentives
to attract and retain qualified competent non-employee Directors, upon whose
efforts and judgment the success of the Company is largely dependent, through
the encouragement of stock ownership in the Company by such persons. In
furtherance of this purpose, the 1994 Directors' Plan authorizes the granting of
nonqualified stock options to purchase Common Stock to non-employee Directors.
The Company currently has four non- employee Directors, Patrick M. Daher,
William G. Goldfarb and Keith Bates and John F. Darden each subject to
re-election at the Meeting.
The 1994 Directors Plan is administered by the Directors Stock Option
Committee (the "Directors Stock Option Committee"), which is currently comprised
of Patrick H. Weston and Carlos A. Macaluso. Pursuant to the Directors' Plan,
non-employee Directors are currently granted options to purchase shares of
Common Stock as follows: (i) options to purchase 5,000 shares of Common Stock
were automatically granted to all current non-employee Directors as of September
1, 1994; (ii) options to purchase 5,000 shares of Common Stock will be granted
to each new non-employee Director who joins the Company as of the date on which
such person is elected or appointment to the Board of Directors; and (iii)
options to purchase 5,000 shares of Common Stock will be granted to each
non-employee Director on the date of each annual meeting of stockholders,
commencing with the first annual meeting occurring at least six months after
adoption of the 1994 Directors Plan (with respect to current non-employee
Directors) or the election or appointment of new non-employee Directors, as the
case may be. For purposes of the 1994 Directors Plan, a Director is a
non-employee Director if he or she does not receive regular compensation from
the Company or its subsidiaries, other than Directors' fees and reimbursement
for expenses. The Directors Stock Option Committee has the authority to adopt
such rules and regulations and make such, determinations as are consistent with
the 1994 Directors Plan and as are necessary or desirable for the implementation
and administration of the 1994 Directors Plan, provided that the Committee does
not have any discretion with respect to the grant of options under the
Directors' Plan Except as set forth under "Options Granted Under the 1994
Directors Plan" below, it is impossible at this time to indicate the precise
number of options that will be granted to non-employee Directors under the 1994
Directors Plan, as the future composition of the Board cannot he determined.
The shares acquired upon exercise of options granted under the 1994
Directors Plan will be authorized and unissued shares of Common Stock. The
Company's stockholders will not have any preemptive rights to purchase or
subscribe for the shares reserved for issuance under the 1994 Directors Plan. If
any option granted under the 1994 Directors Plan should expire or terminate for
any reason, other than by reason of having been exercised in full, the
unpurchased shares subject to that option will again he available for issuance
pursuant to the 1994 Directors Plan.
20
<PAGE>
TERMS AND CONDITIONS
All options granted under the 1994 Directors Plan must be evidenced by a
written agreement between the Company and the optionee. The terms and conditions
of such agreement, including those relating to the grant, the time or times of
exercise and other terms of the options, must be consistent with the 1994
Directors Plan.
Under the 1994 Directors Plan, the exercise price per share for all
options shall be the fair market value of the underlying shares of Common Stock
on the date of grant. For purposes of the Directors' Plan, and for so long as
the Company's Common Stock is traded on Nasdaq, the term "fair market value" for
the Common Stock means the mean between the closing high bid and low asked
quotations of the Common Stock as reported by Nasdaq on the business day
preceding the date of grant. The exercise price of an option shall be paid to
the Company in cash in the event a non-employee Director elects to exercise such
option.
No option granted under the 1994 Directors Plan is assignable or
transferable, other than by will or by the laws of descent and distribution.
During the lifetime of an optionee, an option is exercisable only by him or her.
An option granted under the 1994 Directors Plan will not become exercisable
until six months after the date on which it is granted, and will remain
exercisable for a period of ten years thereafter. The unexercised portion of any
option granted to a non-employee Director under the 1994 Directors Plan will
automatically terminate one year after the date on which such person ceases to
be a Director; except, in the ease of the death of such person, the option will
remain exercisable by his or her estate or heirs for a period of three months.
To prevent dilution of the rights of a holder of an option, the 1994
Directors Plan provides for adjustment of the number of shares for which options
may he granted, the number of shares subject to outstanding options and the
exercise price of outstanding options in the event of any subdivision or
consolidation of shares, any stock dividend, recapitalization or other capital
adjustment of the Company. Provisions governing the effect upon options of a
merger, consolidation or other reorganization of the Company are also included
in the 1994 Directors Plan.
OPTIONS GRANTED UNDER THE 1994 DIRECTOR PLAN
As of April 28, 1997, 64,000 options to purchase Common Shares have been
granted under the 1994 Directors Plan.
FEDERAL INCOME TAX CONSEQUENCES
See "Federal Income Tax Consequences of the Plans" for a description of
tax consequences.
AMENDMENTS
No option may be granted under the 1994 Directors Plan after August 9,
2004, and any option outstanding on such date will remain outstanding until it
has either expired or has been exercised. The Directors Stock Option Committee
may amend, suspend or terminate the 1994 Directors Plan at any time, provided
that such amendment may not adversely affect the rights of an optionee under an
outstanding option without the affected optionee's written consent. In addition,
no such amendment may without first obtaining stockholder approval, (a) increase
the number of shares of Common Stock reserved for issuance, change the class of
persons eligible to receive options, or involve any other change or modification
requiring stockholder approval under Rule 16b-3 under the Securities Exchange
Act of 1934; (b) give discretion, to the Directors Stock Option Committee with
respect to the grant of options; or (c) extend the termination date of the
Directors Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION AND
APPROVAL OF THE AMENDED 1994 DIRECTORS STOCK OPTION PLAN AND THE PROPOSAL TO
INCREASE THE NUMBER OF COMMON SHARES RESERVED FOR ISSUANCE INCLUDED THEREIN.
21
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES OF THE PLANS
For purposes hereof, the 1992 Option Plan and the 1994 Directors Plan are
hereinafter referred to as the "Plans." The Plans are not qualified under the
provisions of Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), nor are they subject to any of the provisions of the Employee
Retirement income Security Act of 974, as amended.
NONQUALIFIED STOCK OPTIONS. An optionee granted a nonqualified stock
option under the Plans will generally recognize, at the date of exercise of such
option, ordinary income equal to the difference between the exercise price and
the fair market value of the shares of Common Stock subject to the nonqualified
stock option. This taxable ordinary income will be subject to Federal income tax
withholding and the Company will be entitled to a deduction for Federal income
tax purposes equal to the amount of ordinary income recognized by the optionee
provided that such amount constitutes an ordinary and necessary business expense
to the Company and is reasonable, and the Company satisfies its withholding
obligation with respect to such income.
If the 1992 Stock Option Committee permits an optionee to exercise a
nonqualified stock option under the 1992 Option Plan by delivering shares of the
Company's Common Stock, the optionee will not recognize gain or loss with
respect to the exchange of such shares, even if their then fair market value is
different from the optionee's tax basis. The optionee, however, will be taxed as
described above with respect to the exercise of the nonqualified stock option as
if he had paid the exercise price in cash, and the Company likewise will be
entitled to an equivalent tax deduction. Provided a separate identifiable stock
certificate is issued, the optionee's tax basis on that number of shares
received on such exercise which is equal to the number of shares surrendered on
such exercise will be equal to his tax basis in the shares surrendered and his
holding period for such number of shares received will be included in his
holding period for the shares surrendered. The optionee's tax basis and holding
period for the additional shares received on exercise of a nonqualified stock
option paid for, in whole or in part, with shares will be the same as if the
optionee had exercised the nonqualified stock option solely for cash.
INCENTIVE STOCK OPTIONS. Incentive stock options are "incentive stock
options" as defined in Section 422 of the Code. Under the Code, an optionee
generally is not subject to ordinary income tax upon the grant or exercise of an
incentive stock option. However, an employee who exercises an incentive stock
option by delivering shares of Common Stock previously acquired pursuant to the
exercise of an incentive stock option is treated as making a Disqualifying
Disposition (defined below) of such shares if the employee delivers such shares
before the expiration of the holding period applicable to such shares. The
applicable holding period is the longer of two years from the date of grant or
one year from the date of exercise. The effect of this provision is to prevent
"pyramiding", the exercise of an incentive stock option (i.e., the exercise of
the incentive stock option for one share and the use of that share to make
successive exercises of the incentive stock option until it is completely
exercised) without the imposition of current income tax.
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<PAGE>
The amount by which the fair market value of the shares acquired at the
time of exercise of an incentive stock option exceeds the purchase price of the
shares under such option will be treated an item of adjustment included in the
optionee's alternative minimum taxable income for purposes of the alternative
minimum tax. If, however, there is a Disqualifying Disposition in the year in
which the option is exercised, the maximum amount of the item of adjustment for
such year is the gain on the disposition of the Common Stock. If there is
Disqualifying Disposition in a year other than the year of exercise, the
dispositions will not result in an item of adjustment for such other year.
If, subsequent to the exercise of an incentive stock option (whether paid
for in cash or in shares), the optionee holds the shares received upon exercise
for a period that exceeds (a) two years from the date such incentive stock
option was granted or, if later (b) one year from the date of exercise (the
"Required Holding Period"), the difference (if any) between the amount realized
from the sale of such shares and their tax basis to the holder will be taxed as
long-term capital gain or loss. If the holder is subject to the alternative
minimum tax in the year of disposition, such holder's tax basis in his shares
will be increased for purposes of determining his alternative minimum tax for
such year, by the amount of the item of adjustment recognize with respect to
such shares in the year the option was exercised.
In general, after exercising an incentive stock option, an employee
disposes of the shares so acquired before the end of the Required Holding Period
(a "Disqualifying Disposition"), such optionee would be deemed in receipt of
ordinary income in the year of the Disqualifying Disposition in an amount equal
to the excess of the fair market value of the shares at the date the incentive
stock option was exercised over the exercise price. If the Disqualifying
Disposition is a sale or exchange that would permit a loss to be recognized
under the Code (were a loss in fact to be sustained), and the sales proceeds are
less than the fair market value of the shares on the date of exercise, the
optionee's ordinary income would be limited to the gain (if any) from the sale.
If the amount realized upon disposition exceeds the fair market value of the
shares on the date of exercise, the excess; would be treated as short-term or
long-term capital gain, depending on whether the holding period for such shares
exceeded one year.
An income tax deduction is not allowed to the Company with respect to the
grant or exercise of an incentive stock option or the disposition, after the
Required Holding Period, of shares acquired upon exercise. In the event of a
Disqualifying Disposition, a Federal income tax deduction will be allowed to the
Company in an amount equal to the ordinary income to he recognized by the
optionee, provided that such amount constitutes an ordinary and necessary
business expense to the Company and is reasonable, and the Company satisfies its
withholding obligation with respect to such income.
Incentive stock options may be granted under the 1992 Option Plan, but not
under the 1994 Directors Plan.
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<PAGE>
PROPOSAL TO RATIFY THE SELECTION OF INDEPENDENT AUDITORS
Unless instructed to the contrary, the persons named in the, enclosed
proxy intend to vote the same in favor of the ratification of the selection of
Coopers & Lybrand, L.L.P. as independent auditors to the Company for the fiscal
year ending December 31, 1997. It is anticipated that representatives of Coopers
& Lybrand will attend the meeting. Such persons will be afforded the opportunity
to make a statement and/or respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO RATIFY THE
SELECTION OF COOPERS & LYBRAND AS INDEPENDENT AUDITORS TO THE COMPANY FOR THE
FISCAL YEAR ENDING DECEMBER 31, 1997.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 1998
Annual Meeting of Stockholders pursuant to the provisions of Rule 14a-8 of the
Securities and Exchange Commission promulgated under the Securities Exchange Act
of 1934, as amended, must be received by the Company at its principal executive
offices by January 25, 1998 for inclusion in the Company's proxy statement and
form of proxy relating to such meeting.
GENERAL
As of the date of the Proxy Statement, the Company's management has no
knowledge of any business to be presented for consideration at the Annual
Meeting other than that described above. If any other business should properly
come before the Annual Meeting, it is intended that the shares represented by
proxies will be voted with respect thereto in accordance with the judgment of
the persons named in such proxies.
The cost of any solicitation of proxies by mail will be borne by the
Company. Arrangements may be made with brokerage firms and other custodians,
nominees and fiduciaries for the forwarding of material to and solicitation of
proxies from the beneficial owners of Common Stock held of record by such
persons, and the Company will reimburse such brokerage firms, custodians,
nominees and fiduciaries for the reasonable out of pocket expenses incurred by
them in connection therewith.
DONALD A. NODORFT,
SECRETARY
Houston, Texas
May 26, 1997
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED, UPON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS
THERETO. REQUESTS FOR COPIES OF SUCH REPORT SHOULD BE DIRECTED TO DONALD A.
NODORFT, SECRETARY, GOLDEN EAGLE GROUP, INC., 120 STANDIFER DRIVE, HUMBLE, TEXAS
77338.
24
<PAGE>
GOLDEN EAGLE GROUP, INC.
AMENDED AND RESTATED 1992 STOCK OPTION PLAN
1. PURPOSE. The purpose of this Plan is to advance the interests of GOLDEN
EAGLE GROUP, INC., a Delaware corporation (the "Company"), by providing an
additional incentive to attract and retain qualified and competent persons who
provide management and other services and upon whose efforts and judgment the
success of the Company is largely dependent, through the encouragement of stock
ownership in the Company by such persons.
2. DEFINITIONS. As used herein, the following terms shall have the meaning
indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Committee" shall mean the stock option committee appointed by
the Board pursuant to Section 13 hereof or, if not appointed by the Board.
(c) "Common Stock" shall mean the Company's Common Stock par value
$.01 per share.
(d) "Director" shall mean a member of the Board.
(e) "Disinterested Person" shall mean a Director who is not, during
the one year prior to his or her service as an administrator of this Plan,
or during such service, granted or awarded equity securities pursuant to
this Plan or any other plan of the Company or any of its affiliates,
except that:
(i) participation in a formula plan meeting the conditions in
paragraph (c)(2)(ii) or Rule l6b-3 promulgated under the
Securities Exchange Act shall not disqualify a Director from
being a Disinterested Person;
(ii) participation in an ongoing securities acquisition plan
meeting the conditions in paragraph (d)(2)(i) of Rule 16b-3
promulgated under the Securities Exchange Act shall not
disqualify a Director from being a Disinterested Person; and
(iii) an election to receive an annual retainer fee in either cash
or an equivalent amount of securities, or partly in cash and
party in securities, shall not disqualify a Director from
being a Disinterested Person;
(b) "Fair Market Value" of a Share on any date of reference shall be
the "Closing Price" (as defined below) of the Common Stock on the business
day immediately preceding such date, unless the Committee in its sole
discretion shall determine otherwise in a fair and uniform manner. For the
purpose of determining Fair Market Value, the "Closing Price" of the
Common Stock on any business day shall be (i) if the Common Stock is
listed or admitted for trading on any United States national securities
exchange, or if actual transactions are otherwise reported on a
consolidated transaction reporting system, the last reported sale price of
Common Stock on such exchange or reporting system, as reported in any
newspaper of general circulation, (ii) if the Common Stock is quoted on
the National Association of Securities Dealers Automated Quotations System
("NASDAQ"), or any similar system of automated dissemination of quotations
of securities prices in common use, the mean between the closing high bid
and low asked quotations for such day of Common Stock on such system, or
(iii) if neither clause (i) or (ii) is applicable, the mean between the
high bid and low asked quotations for the Common Stock as reported by the
National Quotation Bureau, Incorporated if at least two securities dealers
have inserted both bid and asked quotations for Common Stock on at least
five of the ten preceding days.
(c) "Incentive Stock Option" shall mean an incentive stock option as
defined in Section 422 of the Internal Revenue Code.
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(d) "Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(e) "Non-Statutory Stock Option" shall mean an Option which is not
an Incentive Stock Option.
(f) "Officer" shall mean the Company's Chairman of the Board,
President, principal financial officer, principal accounting officer (or,
if there is no such accounting officer, the controller), any
vice-president of the Company in charge of a principal business unit,
division or function (such as sales, administration or finance), any other
officer who performs a policy-making function, or any other person who
performs similar policy-making functions for the Company. As used in this
paragraph, the phrase "policy-making function" does not include
policy-making functions that are not significant. If pursuant to Item
401(b) of Regulation S-K (17 C.F.R. ss. 229.401(b)) the Company identifies
a person as an "executive officer," the person so identified shall be
deemed an "Officer" even though such person may not otherwise be an
"Officer" pursuant to the foregoing provisions of this paragraph.
(g) "Option" (when capitalized) shall mean any option granted under
this Plan.
(h) "Optionee" shall mean a person to whom a stock option is granted
under this Plan or any person who succeeds to the rights of such person
under this Plan by reason of the death of such person.
(i) "Plan" shall mean this Stock Option Plan for the Company.
(j) "Securities Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(k) "Share(s)" shall mean a share or shares of the Common Stock.
(l) "Subsidiary" shall mean any corporation (other than the Company)
in any unbroken chain of corporations beginning with the Company if, at
the time of the granting of the Option, each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50
percent or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
3. SHARES AND OPTIONS. The Company may grant to Optionees from time to
time Options to purchase an aggregate of up to Nine Hundred Thousand (900,000)
Shares from Shares held in the Company's treasury or from authorized and
unissued Shares. If any Option granted under the Plan shall terminate, expire,
or be cancelled or surrendered as to any Shares, new Options may thereafter be
granted covering such Shares. An Option granted hereunder shall be either an
incentive Stock Option or a Non-Statutory Stock Option as determined by the
Committee at the time of grant of such Option and shall clearly state whether it
is an Incentive Stock Option or Non-Statutory Stock Option. All Incentive Stock
Options shall be granted within 10 years from the effective date of this Plan.
4. DOLLAR LIMITATION. Options otherwise qualifying as Incentive Stock
Options hereunder will not be treated as Incentive Stock Options to the extent
that the aggregate fair market value (determined at the time the Option is
granted) of the Shares, with respect to which Options meeting the requirements
of Internal Revenue Code Section 422(b) are exercisable for the first time by
any individual during any calendar year (under all plans of the Company and its
parent and subsidiary corporations), exceeds $100,000.
5. CONDITIONS FOR GRANT OF OPTIONS.
(a) Each Option shall be evidenced by an option agreement that may
contain any term deemed necessary or desirable by the Committee, provided
such terms are not inconsistent with this Plan or any applicable law.
Optionees shall be those persons selected by the Committee from the
Company's regular employees, the Company's consultants, and Directors and
Officers of the Company who are not regular employees of the Company. Any
person who files with the Committee, in a form satisfactory to the
Committee, a written waiver of eligibility to receive any Option under
this Plan shall not be eligible to receive any Option under this Plan for
the duration of such waiver.
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(b) In granting Options, the Committee shall take into consideration
the contribution the person has made to the success of the Company and
such other factors as the Committee shall determine. The Committee shall
also have the authority to consult with and receive recommendations from
officers and other personnel of the Company with regard to these matters.
The Committee may, from time to time, in granting Options under the Plan
prescribe such other terms and conditions concerning such Options as it
deems appropriate, including without limitation, (I) prescribing the date
or dates on which the Option becomes exercisable, (ii) providing that the
Option rights accrue or become exercisable in installments over a period
of years, or upon the attainment of stated goals or both, (iii)
prescribing the number of shares to be covered by such Options, (iv)
determining whether the Options granted are intended to be Incentive Stock
Options, or (v) relating an Option to the continued employment of the
Optionee for a specified period of time, provided that such terms and
conditions are not more favorable to an Optionee than those expressly
permitted herein.
(c) The Options granted to employees under this Plan shall be in
addition to regular salaries, pension, life insurance or other benefits
related to their employment with the Company. Neither the Plan nor any
Option granted under the Plan shall confer upon any person any right to
employment or continuance of employment by the Company.
(d) Notwithstanding any other provision of this Plan, and in
addition to any other requirements of this Plan, Options may not be
granted to a Director or Officer unless the grant of such Options is
authorized by, and all of the terms of such Options are determined by, a
Committee appointed in accordance with Section 13 of this Plan and all of
whose members are Disinterested Persons.
6. OPTION PRICE. Except as otherwise provided in Section 14 hereof, in no
event shall the option price per Share of any Incentive Stock Option or any
Non-Statutory Stock Option be less than the Fair Market Value of the Shares
underlying such Option on the date such Option is granted.
7. EXERCISE OF OPTIONS. An Option shall be deemed exercised when (i) the
Company has received written notice of such exercise in accordance with the
terms of the Option, (ii) full payment of the aggregate option price of the
Shares as to which the Option is exercised has been made, and (iii) arrangements
that are satisfactory to the Committee in its sole discretion have been made for
the Optionee's payment to the Company of the amount that is necessary for the
Company to withhold in accordance with applicable Federal or state tax
withholding requirements. Unless further limited by the Committee in any Option,
the option price of any Shares purchased shall be paid in cash, by certified or
official bank check, by money order, with Shares or by a combination of the
above; provided further, however, that the Committee in its sole discretion may
accept a personal check in full or partial payment of any Shares. If the
exercise price is paid in whole or in part with Shares, the value of the Shares
surrendered shall be their Fair Market Value on the date the Option is
exercised. The Company in its sole discretion may, on an individual basis or
pursuant to a general program established in connection with this Plan, lend
money to an Optionee, guarantee a loan to an Optionee, or otherwise assist an
Optionee to obtain the cash necessary to exercise all or a portion of an Option
granted hereunder or to pay any tax liability of the Optionee attributable to
such exercise. If the exercise price is paid in whole or part with Optionee's
promissory note, such note shall (i) provide for full recourse to the maker,
(ii) be collateralized by the pledge of the Shares that the Optionee purchases
upon exercise of such Option, (iii) bear interest at the rate of 10%, and (iv)
contain such other terms as the Board in its sole discretion shall reasonably
require. No Optionee shall be deemed to be a holder of any Shares subject to an
Option unless and until a stock certificate or certificates for such Shares are
issued to such person(s) under the terms of this Plan. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as expressly provided
in Section 10 hereof.
8. EXERCISABILITV OF OPTIONS. Any Option shall become exercisable in such
amounts, at such intervals and upon such terms as the Committee shall provide in
such Option, except as otherwise provided in this Section 8.
(a) The expiration date of an Option shall be determined by the
Committee at the time of grant, but in no event shall an Option be
exercisable after the expiration of 10 years from the date of grant of the
Option
(b) Unless otherwise provided in any Option, each outstanding Option
shall become immediately fully exercisable:
(i) if there occurs any transaction (which shall include a series
of transactions occurring within 60 days or occurring pursuant
to a plan), that has the result that stockholders of the
Company immediately before such transaction cease to own at
least 51 percent of the voting stock of the Company or of any
entity that results from the participation of the Company in a
reorganization, consolidation, merger, liquidation or any
other form of corporate transaction;
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<PAGE>
(ii) if the shareholders of the Company shall approve a plan of
merger, consolidation, reorganization, liquidation or
dissolution in which the Company does not survive (unless the
approved merger, consolidation, reorganization, liquidation or
dissolution is subsequently abandoned); or
(iii) if the shareholders of the Company shall approve a plan for
the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company
(unless such plan is subsequently abandoned).
(a) The Committee may in its sole discretion accelerate the date on
which any Option may be exercised and may accelerate the vesting of any
Shares subject to any Option or previously acquired by the exercise of any
Option.
9. TERMINATION OF OPTION PERIOD.
(a) The unexercised portion of any Option shall automatically and
without notice terminate and become null and void at the time of the
earliest to occur of the following:
(i) three months after the date on which the Optionee's employment
is terminated or, in the case of a Non-Statutory Stock Option,
and unless the Committee shall otherwise determine in writing
in its sole discretion, the date on which the Optionee's
employment is terminated, in either case for any reason other
than by reason of (A) Cause, which, solely for purposes of
this Plan, shall mean the termination of the Optionee's
employment by reason of the Optionee's willful misconduct or
gross negligence, (unless otherwise defined in any Employment
Agreement then in effect between the Optionee and the
Company), (B) a mental or physical disability as determined by
a medical doctor satisfactory to the Committee, or (C) death;
(ii) immediately upon the termination of the Optionee's employment
for Cause;
(iii) one year after the date on which the Optionee's employment is
terminated by reason of a mental or physical disability
(within the meaning of Internal Revenue Code Section 22(e)) as
determined by a medical doctor satisfactory to the Committee;
(iv) (A) twelve months after the date of termination of the
Optionee's employment by reason of death of the employee, or
(B) three months after the date on which the Optionee shall
die if such death shall occur during the one year period
specified in Subsection 9(a)(iii) hereof.
(b) The Committee in its sole discretion may by giving written
notice ("cancellation notice") cancel, effective upon the date of the
consummation of any corporate transaction described in Subsections
8(b)(ii) or (iii) hereof, any Option that remains unexercised on such
date. Such cancellation notice shall be given a reasonable period of time
prior to the proposed date of such cancellation and may be given either
before or after approval of such corporate transaction.
10. ADJUSTMENT OF SHARES.
(a) If at any time while the Plan is in effect or unexercised
Options are outstanding there shall be any increase or decrease in the
number of issued and outstanding Shares through the declaration of a stock
dividend or through any recapitalization resulting in a stock split-up,
combination or exchange of Shares, then and in such event:
(i) appropriate adjustment shall be made in the maximum number of
Shares available for grant under the Plan, so that the same
percentage of the Company's issued and outstanding Shares
shall continue to be subject to being so optioned; and
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<PAGE>
(ii) appropriate adjustment shall be made in. the number of Shares
and the exercise price per Share thereof then subject to any
outstanding Option, so that the same percentage of the
Company's issued and outstanding Shares shall remain subject
to purchase at the same aggregate exercise price.
(a) Subject to the specific terms of any Option, the Committee may
change the terms of Options outstanding under this Plan, with respect to
the option price or the number of Shares subject to the Options, or both,
when, in the Committee's sole discretion, such adjustments become
appropriate by reason of a corporate transaction described in Subsections
8(b)(ii) or (iii) hereof
(b) Except as otherwise expressly provided herein, the issuance by
the Company of shares of its capital stock of any class, or securities
convertible into shares of capital stock of any class, either in
connection with direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the
Company convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to,
the number of or exercise price of Shares then subject to outstanding
Options granted under the Plan.
(c) Without limiting the generality of the foregoing, the existence
of outstanding Options granted under the Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate
(i) any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business; (ii) any
merger or consolidation of the Company; (iii) any issue by the Company of
debt securities, or preferred or preference stock that would rank above
the Shares subject to outstanding Options; (iv) the dissolution or
liquidation of the Company; (v) any sale, transfer or assignment of all or
any part of the assets or business of the Company; or (vi) any other
corporate act or proceeding whether of a similar character or other wise.
11. TRANSFERABILITY OF OPTIONS AND SHARES.
(a) Each Option shall not be transferable by the Optionee otherwise
than by will or the laws of descent and distribution, and each Option
shall be exercisable during the Optionee's lifetime only by the Optionee.
(b) Any Shares acquired by an Officer or Director pursuant to the
exercise of an Option may not be sold, assigned, pledged or otherwise
transferred prior to the expiration of the six-month period following the
date on which the Option was granted.
11. ISSUANCE OF SHARES. As a condition of any sale or issuance of Shares
upon exercise of any Option, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to assure
compliance with any such law or regulation including, but not limited to, the
following:
(a) a representation and warranty by the Optionee to the Company, at
the time any Option is exercised, that he is acquiring the Shares to be
issued to him for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares; and
(b) a representation, warranty and/or agreement to be bound by any
legends that are, in the opinion of the Committee, necessary or
appropriate to comply with the provisions of any securities law deemed by
the Committee to be applicable to the issuance of the Shares and are
endorsed upon the Share certificates.
11. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Committee, which shall
consist of not less than two Directors, each of which shall be
Disinterested Persons if so required by Section 5(d) hereof. The Committee
shall have all of the powers of the Board with respect to the Plan. Any
member of the Committee may be removed at any time, with or without cause,
by resolution of the Board and any vacancy occurring in the membership of
the Committee may be filled by appointment by the Board.
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<PAGE>
(b) The Committee, from time to time, may adopt rules and
regulations for carrying out the purposes of the Plan. The Committee's
determinations and its interpretation and construction of any provision of
the Plan shall be final and conclusive.
(c) Any and all decisions or determinations of the Committee shall
be made either (i) by a majority vote of the members of the Committee at a
meeting or (ii) without a meeting by the unanimous written approval of the
members of the Committee.
11. OPTIONS FOR 10% SHAREHOLDERS. Notwithstanding any other provisions of
the Plan to the contrary, an Incentive Stock Option shall not be granted to any
person owning directly or indirectly (through attribution under Section 424(d)
of the Internal Revenue Code) at the date of grant, stock possessing more than
10% of the total combined voting power of all classes of stock of the Company
(or of its parent or subsidiary [as defined in Section 424 of the Internal
Revenue Code] at the date of grant) unless the option price of such Option is at
least 110% of the Fair Market Value of the Shares subject to such Option on the
date the Option is granted, and such Option by its terms is not exercisable
after the expiration of five years from the date such Option is granted.
12. INTERPRETATION.
(a) The Plan shall be administered and interpreted so that all
Incentive Stock Options granted under the Plan will qualify as Incentive
Stock Options under section 422 of the Internal Revenue Code. if any
provision of the Plan should be held invalid for the granting of Incentive
Stock Options or illegal for any reason, such determination shall not
affect the remaining provisions hereof, but instead the Plan shall be
construed and enforced as if such provision had never been included in the
Plan.
(b) This Plan shall be governed by the laws of the State of Florida.
(c) Headings contained in this Plan are for convenience only and
shall in no manner be construed as part of this Plan.
(d) Any reference to the masculine, feminine, or neuter gender shall
be a reference to such other gender as is appropriate.
11. AMENDMENT AND DISCONTINUATION OF THE PLAN. The Committee may from time
to time amend the Plan or any Option; provided, however, that, except to the
extent provided in Section 10, no such amendment may, without approval by the
shareholders of the Company, (a) materially increase the benefits accruing to
participants under the Plan, (b) materially increase the number of securities
which may be issued under the Plan, or (c) materially modify the requirements as
to eligibility for participation in the Plan; and provided further, that, except
to the extent provided in Section 9, no amendment or suspension of the Plan or
any Option issued hereunder shall substantially impair any Option previously
granted to any Optionee without the consent of such Optionee.
12. EFFECTIVE DATE AND TERMINATION DATE. The effective date of the Plan is
the date on which the Board adopts this Plan, and the Plan shall terminate on
the 10th anniversary of the effective date.
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EXHIBIT B
GOLDEN EAGLE GROUP, INC.
AMENDED AND RESTATED 1994 DIRECTORS STOCK OPTION PLAN
1. PURPOSE. The purpose of this Plan is to advance the interests of GOLDEN
EAGLE GROUP, INC., a Delaware corporation, by providing an additional incentive
to attract and retain directors who are neither employees nor consultants
through the encouragement of stock ownership in the Company by such persons.
2. DEFINITIONS. As used herein, the following terms shall have the meaning
indicated:
(a) "Annual Meeting Date" shall mean the date of the annual meeting
of the Company's stockholders at which the Directors are elected.
(b) "Board" shall mean the Company's Board of Directors.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Committee" shall mean the stock option committee appointed by
the Board pursuant to Section 12 hereof, or if not appointed, the Board.
(e) "Common Stock" shall mean the Common Stock, par value $.01 per
share, of the Company.
(f) "Company" shall mean GOLDEN EAGLE GROUP, INC., a Delaware
corporation.
(g) "Director" shall mean a member of the Board.
(h) "Eligible Director" means any person who is a member of the
Board and who is not an employee, full time or part time, of or consultant
to the Company. For purposes of this Plan, a director who does not receive
regular compensation from the Company or its subsidiaries, other than
directors' fees and reimbursement for expenses, shall not be considered to
be an employee or consultant of the Company, even if such director is an
officer of the Company or a subsidiary of the Company.
(i) "Fair Market Value" of a Share on any date of reference shall be
the "Closing Price" (as defined below) of the Common Stock on the business
day immediately preceding such date, unless the Common Stock is not
publicly traded, in which case, "Fair Market Value" shall be the average
of the price of sales of Common Stock by the Company during the 90 days
prior to the date of grant or, if no sales have occurred during that
period "Fair Market Value" shall be as determined by the Committee in its
sole discretion in a fair and uniform manner. For this purpose, the
"Closing Price" of the Common Stock on any business day shall be (i) if
such Common Stock is listed or admitted for trading on any United States
national securities exchange, or if actual transactions are otherwise
reported on a consolidated transaction reporting system, the last reported
sale price of Common Stock on such exchange or reporting system, as
reported in any newspaper of general circulation, (ii) if the Common Stock
is quoted on the National Association of Securities Dealers Automated
Quotation System, or any similar system of automated dissemination of
quotations of securities prices in common use, the mean between the
closing high bid and low asked quotations for such day of the Common Stock
on such system, or (iii) if neither clause (i) or (ii) is applicable, the
mean between the high bid and low asked quotations for the Common Stock as
reported by the National Quotation Bureau, Incorporated if at least two
securities dealers have inserted both bid and asked quotations for the
Common Stock on at least five of the ten preceding days.
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(j) "Initial Grant Date" means (i) in the case persons who are
Eligible Directors of the Company the date the Plan is adopted by the
Board, the date is the first day of the next calendar month thereafter,
and (ii) in all other cases, the date on which a person is elected as a
member of the Board.
(k) "Option" (when capitalized) shall mean any option granted under
this Plan.
(l) "Option Agreement" means the agreement between the Company and
the Optionee for the grant of an option.
(m) "Optionee" shall mean a person to whom a stock option is granted
under this Plan or any person who succeeds to the rights of such person
under this Plan by reason of the death of such person.
(n) "Parent" means a "parent corporation" as defined in Section
425(e) and (g) of the Code.
(o) "Plan" shall mean this Directors Stock Option Plan for the
Company.
(p) "Share(s)" shall mean a share or shares of the Common Stock.
(q) "Subsidiary" shall mean any corporation (other than the Company)
in any unbroken chain of corporations beginning with the Company if, at
the time of the granting of the Option, each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
3. SHARES AND OPTIONS. Subject to Section 9 of this Plan, the Company may
grant to all Optionees from time to time Options to purchase a total of 300,000
Shares from authorized and unissued Shares. If any Option granted under the Plan
shall terminate, expire, or be canceled or surrendered as to any Shares, new
Options may thereafter be granted covering such Shares.
4. GRANTS OF OPTIONS.
(a) On the Initial Grant Date, each Eligible Director shall receive
the grant of an Option to purchase 7,500 Shares.
(b) Each Eligible Director shall receive an annual grant of an
Option to purchase 7,500 Shares on the last day of the Company's fiscal
year that ends at least six months after the Initial Grant Date for each
such Eligible Director.
(c) Upon the grant of each Option, the Company and the Eligible
Director shall enter into an Option Agreement, which shall specify the
grant date and the exercise price and shall include or incorporate by
reference the substance of this Plan and such other provisions consistent
with this Plan as the Committee may determine.
4. EXERCISE PRICE. The exercise price per Share of any Option shall he the
Fair Market Value of the Shares underlying such Option on the date such Option
is granted.
5. EXERCISE OF OPTIONS. An Option shall be deemed exercised when (i), the
Company has received written notice of such exercise in accordance with the
terms of the Option, (ii) full payment of the aggregate exercise price of the
Shares as to which the Option is exercised has been made, and (iii) arrangements
that are satisfactory to the Committee in its sole discretion have been made for
the Optionee's payment to the Company of the amount that is necessary for the
Company to withhold in accordance with applicable Federal or state tax
withholding requirements. The exercise price of any Shares purchased shall be
paid in cash, by certified or official bank check or personal check, by money
order, with Shares or by a combination of the above. If the exercise price is
paid in whole or in part with Shares, the value of the Shares surrendered shall
be their Fair Market Value on the date the Option is exercised. No Optionee
shall be deemed to be a holder of any Shares subject to an Option unless and
until a stock certificate or certificates for such Shares are issued to such
person(s) under the terms of the Plan. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date
such stock certificate is issued, except as expressly provided in Section 9
hereof.
6. EXERCISABILITY OF OPTIONS.
(a) Each Option granted hereunder shall not be exercisable until
after six months following its grant to an eligible director. Thereafter,
such option shall be exercisable in full. The expiration date of an Option
shall be ten years after the date of grant of the Option.
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(b) Unless otherwise provided in any Option, each outstanding Option
shall become immediately fully exercisable:
(i) if there occurs any transaction (which shall include a series
of transactions occurring within 60 days or occurring pursuant
to a plan), that has the result that stockholders of the
Company immediately before such transaction cease to own at
least 51% of the voting stock of the Company or of any entity
that results from the participation of the Company in a
reorganization, consolidation, merger, liquidation or any
other form of corporate transaction;
(ii) if the stockholders of the Company shall approve a plan of
merger, consolidation, reorganization, liquidation or
dissolution in which the Company does not survive (unless the
approved merger, consolidation, reorganization, liquidation or
dissolution is subsequently abandoned); or
(iii) if the stockholders of the Company shall approve a plan for
the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company
(unless such plan is subsequently abandoned).
8. TERMINATION OF OPTION PERIOD.
(a) The unexercised portion of any Option shall automatically and
without notice terminate and become null and void at the time of the
earliest to occur of the following:
(i) one year after the date on which the Optionee ceases to be a
Director for any reason other than by reason of Cause, which,
for purposes of this Plan, shall mean the removal of the
Optionee as a Director by reason of any act of (1) fraud or
intentional misrepresentation or (2) embezzlement,
misappropriation, or conversion of assets or opportunities of
the Company or any Subsidiary; and
(ii) immediately upon the removal of the Optionee as a Director for
Cause.
Prior to becoming null and void as provided above, an Option held at the
date on which an Optionee ceases to be a Director of the Company may be
exercised in whole or in part, but only to the extent such Option was
exercisable at the date of such Optionee ceased to be a Director.
(a) The Committee in its sole discretion may, by giving written
notice ("Cancellation Notice"), cancel any Option that remains unexercised
on the date of the. consummation of any corporate transaction:
(i) if the stockholders of the Company shall approve a plan of
merger, consolidation, reorganization, liquidation or
dissolution in which the Company does not survive (unless the
approved merger, consolidation, reorganization, liquidation or
dissolution is subsequently abandoned); or
(ii) if the stockholders of the Company shall approve a plan for
the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company
(unless such plan is subsequently abandoned),
provided that Cancellation Notice shall be given a reasonable period of
time prior to the proposed date of such cancellation, upon the giving of a
Cancellation Notice, all Options shall vest in full and at any time prior
to the date of cancellation the Option may be exercised in whole or in
part.
8. ADJUSTMENT OF SHARES.
(a) If at any time while the Plan is in effect or unexercised
Options are outstanding, there shall be any increase or decrease in the
number of issued and outstanding Shares through the declaration of a stock
dividend or through any recapitalization resulting in a stock split-up,
combination or exchange of Shares, then and in such event:
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<PAGE>
(i) appropriate adjustment shall be made in the maximum number of
Shares available for grant under the Plan, so that the same
percentage of the Company's issued and outstanding Shares
shall continue to be subject to being so optioned; and
(ii) appropriate adjustment shall be made in the number of Shares
and the exercise price per Share thereof then subject to any
outstanding Option, so that the same percentage of the
Company's issued and outstanding Shares shall remain subject
to purchase at the same aggregate exercise price.
(a) Subject to the specific terms of any Option, the Committee may
change the terms of Options outstanding under this Plan, with respect to
the exercise price or the number of Shares subject to the Options, or
both, when, in the Committee's sole discretion, such adjustments become
appropriate by reason of a corporate transaction described in Subsections
8(b)(i) or (ii) hereof
(b) Except as otherwise expressly provided herein, the issuance by
the Company of shares of its capital stock of any class, or securities
convertible into shares of capital stock of any class, either in
connection with a direct sale or upon the exercise of rights or warrants
to subscribe therefor, or upon conversion of shares or obligations of the
Company convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to,
the number or exercise price of the Shares then subject to outstanding
Options granted under the Plan.
(c) Without limiting the generality of the foregoing, the existence
of outstanding Options granted under the Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate
(i) any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business; (ii) any
merger or consolidation of the Company; (iii) any issue by the Company of
debt securities, or preferred or preference stock that would rank above
the Shares subject to outstanding Options; (iv) the dissolution or
liquidation of the Company; (v) any sale, transfer or assignment of all or
any part of the assets or business of the Company; or (vi) any other
corporate act or proceeding, whether of a similar character or otherwise.
8. TRANSFERABILITY OF OPTIONS. Each Option shall not be transferable by
the Optionee otherwise than by will or the laws of descent and distribution, and
each Option shall be exercisable during the Optionee's lifetime only by the
Optionee.
9. ISSUANCE OF SHARES. As a condition of any sale or of Shares upon
exercise of any Option, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to assure
compliance with any such law or regulation including, but not limited to, the
following:
(i) a representation and warranty by the Optionee to the Company,
at the time any Option is exercised, that he is acquiring the
Shares to be issued to him for investment and not with a view
to, or for sale in connection with, the distribution of any
such Shares; and
(ii) a representation, warranty and/or agreement to be bound by any
legends that arc, in the opinion of the Committee, necessary
or appropriate to comply with the provisions of any securities
law deemed by the Committee to be applicable to the issuance
of the Shares and are endorsed upon the Share certificates.
8. ADMINISTRATION OR THE PLAN.
(a) The Plan shall be administered by the Committee of not less than
two Directors who are not Eligible Directors. Any member of the Committee
may be removed at any time, with or without cause, by resolution of the
Board and any vacancy occurring in the membership of the Committee may be
filled by appointment by the Board.
(b) The Committee, from time to time, may adopt rules and
regulations for carrying out the purposes of the Plan. The Committee's
determinations and its interpretation and construction of any provision of
the Plan shall be final and conclusive.
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(c) Any and all decisions or determinations of the Committee shall
be made either (i) by a majority vote of the members of the Committee at a
meeting or (ii) without a meeting by the unanimous written approval of the
members of the Committee.
8. INTERPRETATION.
(a) If any provision of the Plan should be held invalid or illegal
for any reason, such determination shall not affect the remaining
provisions hereof, but instead the Plan shall be construed and enforced as
if such provision had never been included in the Plan. The determinations
and the interpretation and construction of any provision of the Plan by
the Committee shall be final and conclusive.
(b) This Plan shall be governed by the laws of the State of Florida.
(c) Headings contained in this Plan are for convenience only and
shall in no manner be construed as part of this Plan.
(d) Any reference to the masculine, feminine, or neuter gender shall
be a reference to such other gender as is appropriate.
8. TERM OF PLAN: AMENDMENT AND TERMINATION OR THE PLAN.
(a) This Plan shall become effective upon its adoption by the Board,
and shall continue in effect until all Options granted hereunder have
expired or been exercised, unless sooner terminated under the provisions
relating thereto. No Option shall be granted after 10 years from the date
of the Board's adoption of this Plan.
(b) The Plan shall be adopted by the Board and shall be presented to
the Company's stockholders for their approval by vote of a majority of
such stockholders present or represented at a meeting duly held, such
approval to be given within 12 months after the date of the Board's
adoption. Options may be granted prior to stockholder approval of this
Plan, but such Options shall be contingent upon such approval being
obtained and may not be exercised prior to such approval.
(c) The Board may from time to time amend the Plan or any Option;
PROVIDED, HOWEVER, that, except to the extent provided in Section 9, no
such amendment may (i) without approval by the Company's stockholders,
increase the number of Shares reserved for Options or change the class of
persons eligible to receive Options or involve any other change or
modification requiring shareholder approval under Rule 16b-3 of the
Securities Exchange Act of 1934, as amended, (ii) permit the granting of
Options that expire beyond the maximum ten year period described in
Subsection 7(a), or (iii) extend the termination date of the Plan as set
forth in Section 14(a); and, PROVIDED, FURTHER, that, except to the extent
otherwise specifically provided in Section 8, no amendment or suspension
of the Plan or any Option issued hereunder shall substantially impair any
Option previously granted to any Optionee without the consent of such
Optionee.
(d) Notwithstanding anything else contained herein, the provisions
of this Plan which govern the number of Options to be awarded to
non-employee directors, the exercise price per share under each such
Option, when and under what circumstances an Option will be granted and
the period within which each Option may be exercised, shall not be amended
more than once every six months (even with shareholder approval), other
than to conform to changes to the Code, or the rules promulgated
thereunder, and under the Employee Retirement Income Security Act of 1974,
as amended, or the rules promulgated thereunder, or with rules promulgated
by the Securities and Exchange Commission.
(e) The Board, without further approval of the Company's
stockholders, may at any time terminate or suspend this Plan. Any such
termination or suspension of the Plan shall not affect Options already
granted and such Options shall remain in full force and effect as if this
Plan had not been terminated or suspended. No Option may be granted while
the Plan is suspended or after it is terminated. The rights and
obligations under any Option granted to any Optionee while this Plan is in
effect shall not be altered or impaired by the suspension or termination
of this Plan without the consent of such Optionee.
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8. RESERVATION OF SHARES. The Company, during the term of the Plan, will
at all times reserve and keep available a number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
36
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[FRONT SIDE OF PROXY]
PROXY
GOLDEN EAGLE GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Patrick M. Daher and Patrick H. Weston,
jointly and severally, as Proxies, with the power of substitution, and
authorizes them to represent and to vote at the Annual Meeting of Stockholders
to be held June 20, 1997, or any adjournment thereof, all the shares of Common
Stock of Golden Eagle Group, Inc. held of record by the undersigned on May 23,
1997, as designated below.
1. Election of directors - director nominees:
Patrick M. Daher, Patrick H. Weston, Carlos A. Macaluso, William G.
Goldfarb, Keith Bates, John F. Darden.
[ ] FOR all nominees listed above [ ] WITHHOLD AUTHORITY
(except as indicated below) to vote for all nominees
Instruction: to withhold authority to vote for any of the above
nominees, write the nominee's name(s) on this line.
--------------------------------------------------------------------
2. To ratify the proposal to increase the number of shares of Common
Stock reserved for issuance pursuant to the Company's 1992 Stock
Option Plan by 500,000 to 900,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To ratify the proposal to increase the number of shares of Common
Stock reserved for issuance pursuant to the Company's 1994 Director
Stock Option Plan by 100,000 to 250,000 shares and to amend annual
authorized share grants and grant dates.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To ratify the selection of Coopers & Lybrand, L.L.P. as independent
accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. The Proxies are authorized to vote in their best judgment upon such
business as may properly come before the Annual Meeting.
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[REVERSE SIDE OF PROXY]
This Proxy, when properly executed, will be voted in the manner directed
by the undersigned stockholder. Please refer to the Proxy Statement for a
discussion of each of these matters. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR THE PROPOSALS. As to any other matter, said Proxies shall vote in
accordance with their best judgment.
Please sign exactly as name appears below. When shares are held joint
tenants, both should sign. If acting as attorney, executor, trustee, or in any
other representative capacity, sign name and title.
Dated ___________________________________, 1997
-----------------------------------------
Signature
-----------------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD USING THE ENCLOSED
ENVELOPE.
38
