<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
JABIL CIRCUIT, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
JABIL CIRCUIT, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 28, 1999
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Jabil
Circuit, Inc., a Delaware corporation (the "Company"), will be held on Thursday,
January 28, 1999 at 10:00 a.m., local time, in the Sunset Ballroom at the Vinoy
Country Club located at 600 Snell Isle Boulevard, St. Petersburg, Florida 33704
for the following purposes:
1. To elect seven directors to serve for the ensuing
year or until their successors are duly elected and qualified.
2. To approve an amendment to the Jabil Circuit, Inc.
1992 Stock Option Plan (the "Option Plan") to (i) provide annual limits
on the number of shares of the Company's Common Stock subject to stock
options that may be granted to each employee of the Company, and (ii)
increase the shares reserved for issuance under the Option Plan from
1,698,520 as of November 5, 1998 to 3,198,520 shares.
3. To approve an amendment to the Company's Certificate
of Incorporation to increase the number of authorized shares of Jabil
Common Stock from 60,000,000 to 120,000,000 shares.
4. To ratify the appointment of KPMG Peat Marwick LLP as
independent auditors for the Company for the fiscal year ending August
31, 1999.
5. To transact such other business as may properly come
before the Annual Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Only stockholders of record at the close of
business on December 8, 1998 are entitled to notice of and to vote at the Annual
Meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, to ensure your representation at the Annual Meeting, you are
urged to mark, date, sign and return the enclosed proxy as promptly as possible
in the postage-prepaid envelope enclosed for that purpose. YOU MAY REVOKE YOUR
PROXY IN THE MANNER DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT AT ANY TIME
BEFORE IT HAS BEEN VOTED AT THE ANNUAL MEETING. ANY STOCKHOLDER ATTENDING THE
ANNUAL MEETING MAY VOTE IN PERSON EVEN IF HE OR SHE HAS RETURNED A PROXY.
FOR THE BOARD OF DIRECTORS OF
JABIL CIRCUIT, INC.
Robert L. Paver
General Counsel and Secretary
St. Petersburg, Florida
December 21, 1998
<PAGE> 3
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE
REQUESTED TO COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED.
JABIL CIRCUIT, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 28, 1999
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of Jabil Circuit, Inc., a
Delaware corporation ("Jabil" or the "Company"), for use at the Annual Meeting
of Stockholders to be held on Thursday, January 28, 1999 at 10:00 a.m., local
time, and at any adjournment thereof, for the purposes set forth herein and in
the accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting
will be held in the Sunset Ballroom at the Vinoy Country Club located at 600
Snell Isle Boulevard, St. Petersburg, Florida. The Company's principal executive
office is located at 10800 Roosevelt Blvd., St. Petersburg, Florida 33716, and
its telephone number at that location is (727) 577-9749.
These proxy solicitation materials were mailed on or about December 21,
1998, together with the Company's 1998 Annual Report to Stockholders, to all
stockholders entitled to vote at the Annual Meeting.
RECORD DATE
Stockholders of record at the close of business on December 8, 1998
(the "Record Date") are entitled to notice of and to vote at the Annual Meeting.
As of the Record Date, 37,304,105 shares of the Company's Common Stock were
issued and outstanding. For information regarding security ownership by
management and by the beneficial owners of more than 5% of the Company's Common
Stock, see "Other Information--Share Ownership by Principal Stockholders and
Management." The closing sales price of the Company's Common Stock on the New
York Stock Exchange ("NYSE") on the Record Date was $65.06 per share.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Secretary of
the Company a written notice of revocation or a duly executed proxy bearing a
later date or by attending the Annual Meeting and voting in person.
VOTING AND SOLICITATION
Each stockholder is entitled to one vote for each share of Common Stock
on all matters presented at the Annual Meeting. Stockholders do not have the
right to cumulate their votes in the election of directors.
The cost of soliciting proxies will be borne by the Company. In
addition, the Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation materials to such beneficial owners. Proxies may also be solicited
by certain of the Company's directors, officers, and regular employees, without
additional compensation, personally or by telephone, telegram, letter or
facsimile.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual
Meeting is a majority of the shares of Common Stock outstanding on the Record
Date. Shares that are voted "FOR," "AGAINST" or "WITHHELD" from a matter are
treated as being present at the Annual Meeting for purposes of establishing a
quorum and are also treated as entitled to vote on the subject matter (the
"Votes Cast") with respect to such matter.
<PAGE> 4
While abstentions (votes "withheld") will be counted for purposes of
determining both the presence or absence for the transaction of business and the
total number of Votes Cast with respect to a particular matter, broker non-votes
with respect to proposals set forth in this Proxy Statement will not be
considered Votes Cast and, accordingly, will not affect the determination as to
whether the requisite majority of Votes Cast has been obtained with respect to a
particular matter.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to be
presented by such stockholders at the Company's 1999 Annual Meeting of
Stockholders must be received by the Company no later than August 24, 1999 in
order to be considered for possible inclusion in the proxy statement and form of
proxy relating to that meeting.
FISCAL YEAR END
The Company's fiscal year ends August 31.
2
<PAGE> 5
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
A board of seven directors is to be elected at the Annual Meeting. The
Board of Directors of the Company has authorized the nomination at the Annual
Meeting of the persons named herein as candidates. Unless otherwise instructed,
the proxy holders will vote the proxies received by them for the Company's seven
nominees named below, all of whom are presently directors of the Company. In the
event that any nominee of the Company is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be voted for any
nominee who shall be designated by the present Board of Directors to fill the
vacancy. The Company is not aware of any nominee who will be unable or will
decline to serve as a director. The term of office of each person elected as a
director will continue until the next Annual Meeting of Stockholders or until a
successor has been elected and qualified.
The names of the Company's nominees for director and certain
information about them are set forth below:
<TABLE>
<CAPTION>
Name Age Principal Position
- - ---- ------- ----------------------------------------------
<S> <C> <C>
William D. Morean.................. 43 Chief Executive Officer and Chairman of the
Board of the Company
Thomas A. Sansone.................. 49 President of the Company and Director
Ronald J. Rapp..................... 46 Executive Vice President, Operations, of the
Company and Director
Lawrence J. Murphy(3).............. 56 Director
Mel S. Lavitt(3)................... 61 Director
Steven A. Raymund(1)(2)............ 43 Director
Frank A. Newman(1)(2).............. 50 Director
</TABLE>
- - -------------------
(1) Member of the Stock Option Committee.
(2) Member of the Compensation Committee.
(3) Member of the Audit Committee.
Except as set forth below, each of the nominees has been engaged in his
principal occupation set forth above during the past five years. There are no
family relationships among any of the directors and executive officers of the
Company.
WILLIAM D. MOREAN. Mr. Morean has served as Chief Executive Officer and
Chairman of the Board since 1988 and as a director since 1978. Mr. Morean joined
the Company in 1977 and assumed management of day-to-day operations the
following year. Prior to serving as Chief Executive Officer and Chairman of the
Board, Mr. Morean served as President and Vice President and held various
operating positions with the Company.
THOMAS A. SANSONE. Mr. Sansone has served as President of the Company
since September 1988 and as a director since 1983. Mr. Sansone joined the
Company in 1983 as Vice President. Prior to joining Jabil, Mr. Sansone was a
practicing attorney.
RONALD J. RAPP. Mr. Rapp has served as Executive Vice President of
Operations since October 1996 and as a director since September 1988. Mr. Rapp
joined the Company in 1983 as Controller, was promoted to Treasurer in 1984 and
was promoted to Chief Financial Officer in 1988. Prior to joining Jabil, Mr.
Rapp was the Corporate Controller for Van Pelt Corporation, a wholesale
distributor of steel tubing products. Before joining Van Pelt, Mr. Rapp was a
certified public accountant with the accounting firm of Ernst & Ernst.
3
<PAGE> 6
LAWRENCE J. MURPHY. Mr. Murphy has served as a director of the Company
since September 1989. Since September 1997, Mr. Murphy has also served as an
independent consultant to the Company. From March 1992 until September 1997, Mr.
Murphy served as a director of Core Industries, Inc., a diversified
conglomerate, where he held various executive level positions since 1981,
including the position of Executive Vice President and Secretary from September
1990 to September 1997. Prior to joining Core Industries, Inc., Mr. Murphy was a
practicing attorney at the law firm of Bassey, Selesko, Couzens & Murphy, P.C.
and a certified public accountant with the accounting firm of Deloitte & Touche.
MEL S. LAVITT. Mr. Lavitt has served as a director of the Company since
September 1991. Mr. Lavitt has been a Managing Director at the investment
banking firm of C.E. Unterberg, Towbin (or its predecessor) since August 1992.
From June 1987 until August 1992, Mr. Lavitt was President of Lavitt Management,
a business consulting firm. From 1978 until June 1987, Mr. Lavitt served as an
Administrative Managing Director for the investment banking firm of L.F.
Rothschild, Unterberg, Towbin, Inc.
STEVEN A. RAYMUND. Mr. Raymund has served as a director of the Company
since January 1996. Mr. Raymund began his career at Tech Data Corporation, a
distributor of personal computer products, in 1981 as Operations Manager. He
became Chief Operating Officer in 1984 and was promoted to the position of Chief
Executive Officer of Tech Data Corporation in 1986. Since 1991, Mr. Raymund has
also served as Chairman of the Board of Tech Data Corporation.
FRANK A. NEWMAN. Mr. Newman has served as a director of the Company
since January 1998. Mr. Newman joined Eckerd Corporation, a drug store chain, in
June 1993 as President and Chief Operating Officer, was appointed as President
and Chief Executive Officer in February 1996 and assumed the additional position
of Chairman of the Board in February 1997. From January 1986 until May 1993, Mr.
Newman was the President and Chief Executive Officer of F&M Distributors, Inc.
Mr. Newman currently is also a director of JoAnn Stores, Inc., Eckerd
Corporation and AmSouth Bancorporation.
REQUIRED VOTE; RECOMMENDATION OF THE BOARD OF DIRECTORS
If a quorum is present and voting, the seven nominees for director
receiving the highest number of affirmative votes of the shares present or
represented and entitled to be voted for them shall be elected as directors.
Votes withheld from any director are counted for purposes of determining the
presence or absence of a quorum for the transaction of business, but have no
other legal effect under Delaware law.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE
NOMINEES LISTED ABOVE.
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BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of four meetings
during the 1998 fiscal year. Each director attended all such meetings, except
Lawrence J. Murphy who missed one meeting while attending to other significant
Company business. The Board of Directors has a Compensation Committee, a Stock
Option Committee and an Audit Committee; however, it currently has no nominating
committee or other committee performing similar functions.
The Compensation Committee, which currently consists of Messrs. Raymund
and Newman, reviews and establishes specific compensation plans, salaries,
bonuses and other benefits payable to the Company's executive officers. During
fiscal year 1998, the Compensation Committee held one meeting.
The Stock Option Committee, which currently consists of Messrs. Raymund
and Newman, administers the Company's 1992 Stock Option Plan and the 1992
Employee Stock Purchase Plan. During fiscal year 1998, the Stock Option
Committee held one meeting.
The Audit Committee, which currently consists of Messrs. Murphy and
Lavitt, reviews and evaluates the results and scope of the audit and other
services provided by the Company's independent auditors. During fiscal year
1998, the Audit Committee held one meeting.
During fiscal year 1998, each incumbent director attended all meetings
held by all committees of the Board on which he served.
COMPENSATION OF DIRECTORS
Non-employee directors receive $5,000 per Board of Directors meeting
that they attend. No other director currently receives any cash compensation for
attendance at Board of Directors or committee meetings. Directors are entitled
to reimbursement for expenses incurred in connection with their attendance at
Board of Directors meetings and committee meetings. In addition, non-employee
directors are also eligible to receive stock option grants pursuant to the
Company's 1992 Stock Option Plan, as amended. See "Other Information -
Compensation Committee Interlocks and Insider Participation" for information
regarding compensation payable to Mr. Murphy for certain consulting services.
5
<PAGE> 8
PROPOSAL NO. 2
APPROVAL OF AMENDMENTS OF THE JABIL CIRCUIT, INC. 1992
STOCK OPTION PLAN
The Jabil Circuit, Inc. 1992 Stock Option Plan (the "Option Plan") was
adopted by the Board of Directors in November 1992 and was approved by the
stockholders in December 1992. The Option Plan was amended in 1995 and 1996 to
increase the size of the Option Plan. As of November 5, 1998, a total of
1,698,520 shares have been reserved for issuance under the Option Plan. The
Option Plan provides for the granting to employees (including employee officers
and directors) of the Company of incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended ("the Code"), and
for the granting of nonstatutory stock options and stock purchase rights to
employees and consultants (including non-employee directors) of the Company. The
Option Plan also permits the Company to grant stock purchase rights to purchase
Common Stock either alone, in addition to, or in tandem with, other awards
granted under the Option Plan and/or cash awards made outside of the Option
Plan. To date no stock purchase rights have been granted under the Option Plan.
PROPOSAL
In April 1998 and November 1998, the Board of Directors adopted
amendments to the Option Plan, subject to stockholder approval. The amendments
to the Option Plan provide (i) for annual limits on the number of shares of
Common Stock subject to stock options that may be granted to each optionee (the
"Annual Limit Amendment"), and (ii) for an increase in the aggregate number of
shares reserved for issuance under the Option Plan from the 1,698,520 shares
reserved on November 5, 1998 to 3,198,520 shares (the "Reserved Share
Amendment"). As of the date of the approval by the Board of Directors of the
Reserve Share Amendment, November 5, 1998, options to purchase a total of
1,489,390 shares were outstanding under the Option Plan, and 209,130 shares
remained available for future grants. Since that date, the Stock Option
Committee has granted options to purchase an additional 191,655 shares.
THE ANNUAL LIMIT AMENDMENT. The Board of Directors is submitting the
Annual Limit Amendment to the Company's stockholders for approval so that
certain awards under the Option Plan may qualify as "performance-based
compensation" under Section 162(m) of the Code. Section 162(m) of the Code
generally limits to one million dollars the annual corporate federal income tax
deduction for compensation paid to the chief executive officer or any of the
four other highest paid officers of a publicly-held corporation. The Company
intends that stock option grants under the Option Plan will qualify for the
performance-based compensation exclusion from this deduction limitation. In
order to qualify as performance-based compensation, a stock option grant under
the Option Plan must be approved by a committee consisting solely of two or more
outside directors. Also, the Option Plan must specify the maximum number of
shares of Common Stock with respect to which stock options may be granted to any
employee during a specified period of time. In addition, the Company's
stockholders must approve the material terms of the Option Plan, including the
limitation on the number of shares of Common Stock covered by stock options
granted to any employee during a specified period of time. The Annual Limit
Amendment to be submitted to the stockholders prohibits during any fiscal year
of the Company grants to any employee of stock options covering more than
882,520 shares of Common Stock.
THE RESERVED SHARE AMENDMENT. The Reserved Share Amendment is proposed
in order to give the Board of Directors flexibility to grant stock options under
the Option Plan. The Company believes that grants of stock options motivate high
levels of performance and provide an effective means of recognizing employee
contributions to the success of the Company. Moreover, option grants align the
interests of the employees with the interests of the stockholders. When the
Company performs well, employees are rewarded along with other stockholders. The
Company believes that option grants are of great value in recruiting and
retaining highly qualified technical and other key personnel who are in great
demand. The Board of Directors believes that the ability to grant options will
be important to the future success of the Company by allowing it to remain
competitive in attracting and retaining such key personnel.
REQUIRED VOTE; RECOMMENDATION OF THE BOARD OF DIRECTORS
Affirmative votes constituting a majority of the Votes Cast will be
required to approve the amendments to the Option Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS
PROPOSAL.
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SUMMARY DESCRIPTION OF OPTION PLAN
The following description of the principal features and effects of the
Option Plan is qualified in its entirety by reference to the text of the Option
Plan set forth in Appendix I attached hereto.
PURPOSE. The purposes of the Option Plan are to attract and retain the
best available personnel for positions of substantial responsibility, to provide
additional incentive to employees and consultants of the Company and to promote
the success of the Company's business.
ADMINISTRATION. The Option Plan may be administered by the Board of
Directors or a committee of the Board (the "Administrator"), which committee is
required to be constituted to comply with Rule 16b-3 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and applicable laws. Subject to
the other provisions of the Option Plan, the Administrator has the power to
determine the terms of any options and stock purchase rights granted, including
the exercise price, the number of shares subject to the option or stock purchase
right and the exercisability thereof. The Option Plan is currently administered
by the Stock Option Committee of the Board.
ELIGIBILITY. The Option Plan provides that the Administrator may grant
nonstatutory stock options and stock purchase rights to employees and
consultants, including non-employee directors. The Administrator may grant
incentive stock options only to employees. An optionee who has received a grant
of an option or a stock purchase right may, if he is otherwise eligible, receive
additional option or stock purchase right grants. With respect to any optionee
who owns stock possessing 10% or more of the voting power of all classes of
stock of the Company (a "10% Stockholder"), the exercise price of any incentive
stock option granted to such optionee must equal at least 110% of the fair
market value on the grant date and the maximum term of the option must not
exceed five years. The term of all other options granted under the Option Plan
may not exceed ten years. The Administrator selects the optionees and determines
the number of shares of Common Stock to be subject to each option. In making
such determination, the Administrator shall take into account the duties and
responsibilities of the employee or consultant, the value of his services, his
potential contribution to the success of the Company, the anticipated number of
years of future service and other relevant factors. The Administrator shall not
grant to any employee in any fiscal year of the Company options to purchase more
than 882,520 shares of Common Stock.
TERMS AND CONDITIONS OF OPTIONS. Each option granted under the Option
Plan is evidenced by a written stock option agreement between the optionee and
the Company and is subject to the following terms and conditions:
(a) Exercise Price. The Administrator determines the
exercise price of options to purchase shares of Common Stock at the
time the options are granted. However, the exercise price of an
incentive stock option must not be less than 100% (110% if issued to a
10% Stockholder) of the fair market value of the Common Stock on the
date the option is granted. For so long as the Company's Common Stock
is traded on the NYSE, the fair market value of a share of Common Stock
shall be the closing sales price for such stock (or the closing bid if
no sales were reported) as quoted on such system on the last market
trading day prior to the date of determination of such fair market
value.
(b) Exercise of the Option. Each stock option agreement
specifies the term of the option and the date when the option is to
become exercisable. The terms of such vesting are determined by the
Administrator. An option is exercised by giving written notice of
exercise to the Company, specifying the number of full shares of Common
Stock to be purchased and by tendering full payment of the purchase
price to the Company.
(c) Form of Consideration. The consideration to be paid
for the shares of Common Stock issued upon exercise of an option is
determined by the Administrator and set forth in the option agreement.
Such form of consideration may vary for each option, and may consist
entirely of cash, check, promissory note, other shares of the Company's
Common Stock, any combination thereof, or any other legally permissible
form of consideration as may be provided in the option agreement.
(d) Termination of Employment. In the event an optionee's
continuous status as an employee or consultant terminates for any
reason (other than upon the optionee's death or disability), the
optionee may exercise his option, but only within such period of time
not to exceed 12 months from the date of such termination as is
determined by the Administrator (with such determination being made at
the time of grant and not exceeding 90 days in the case of an incentive
stock option) and only to the extent that the optionee was entitled to
exercise it at the date of such termination (but in no event may the
option be exercised later than the expiration of the term of such
option as set forth in the option agreement).
7
<PAGE> 10
(e) Disability. In the event an optionee's continuous
status as an employee or consultant terminates as a result of permanent
and total disability (as defined in Section 22(e)(3) of the Code), the
optionee may exercise his option, but only within 12 months from the
date of such termination, and only to the extent that the optionee was
entitled to exercise it at the date of such termination (but in no
event may the option be exercised later than the expiration of the term
of such option as set forth in the option agreement).
(f) Death. In the event of an optionee's death, the
optionee's estate or a person who acquired the right to exercise the
deceased optionee's option by bequest or inheritance may exercise the
option, but only within 12 months following the date of death, and only
to the extent that the optionee was entitled to exercise it at the date
of death (but in no event may the option be exercised later than the
expiration of the term of such option as set forth in the option
agreement).
(g) Termination of Options. Excluding options issued to
10% Stockholders, options granted under the Option Plan expire 10 years
from the date of grant. No option may be exercised by any person after
the expiration of its term.
(h) Nontransferability of Options. An option is not
transferable by the optionee, other than by will or the laws of descent
and distribution, and is exercisable during the optionee's lifetime
only by the optionee. In the event of the optionee's death, options may
be exercised by a person who acquires the right to exercise the option
by bequest or inheritance.
(i) Value Limitation. If the aggregate fair market value
of all shares of Common Stock subject to an optionee's incentive stock
option which are exercisable for the first time during any calendar
year exceeds $100,000, the excess options shall be treated as
nonstatutory options.
(j) Other Provisions. The stock option agreement may
contain such other terms, provisions and conditions not inconsistent
with the Option Plan as may be determined by the Administrator. Shares
covered by options which have terminated and which were not exercised
prior to termination will be returned to the Option Plan.
TERMS AND CONDITIONS OF STOCK PURCHASE RIGHTS. Each grant of stock
purchase rights under the Option Plan is evidenced by a restricted stock
purchase agreement between the rightholder and the Company and is subject to the
following terms and conditions.
(a) Rights to Purchase. The Option Plan permits the
Company to grant rights to purchase Common Stock of the Company either
alone, in addition to, or in tandem with other awards granted under the
Option Plan and/or cash awards made outside of the Option Plan. Upon
the granting of a stock purchase right under the Option Plan, the
offeree is advised in writing of the terms, conditions and restrictions
related to the offer, including the number of shares of Common Stock
that the offeree shall be entitled to purchase, the price to be paid
(which price shall not be less than 50% of the fair market value of the
shares as of the date of the offer), and the time within which the
offeree must accept such offer, which may not exceed six months from
the date upon which the Administrator made the determination to grant
the stock purchase right. The offer must be accepted by the execution
of a restricted stock purchase agreement between the Company and the
offeree.
(b) Repurchase Option. Unless the Administrator
determines otherwise, the restricted stock purchase agreement grants
the Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser's employment with the Company
for any reason (including death or disability). The purchase price for
shares repurchased pursuant to the restricted stock purchase agreement
is the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The
repurchase option lapses at a rate determined by the Administrator.
(c) Other Provisions. The restricted stock purchase
agreement may also contain such other terms, provisions and conditions
not inconsistent with the Option Plan as may be determined by the
Administrator in its sole discretion.
(d) Rights as a Stockholder. Once the stock purchase
right is exercised, the purchaser has all the rights of a stockholder
of the Company.
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<PAGE> 11
(e) Nontransferability of Stock Purchase Rights. A stock
purchase right is nontransferable by the rightholder, other than by
will or the laws of descent and distribution, and is exercisable during
the rightholder's lifetime only by the rightholder. In the event of the
rightholder's death, the stock purchase right may be exercised by a
person who acquires the right to exercise the stock purchase rights by
bequest or inheritance.
(f) Adjustment Upon Changes in Capitalization; Corporate
Transactions. In the event of changes in the outstanding stock of the
Company by reason of any stock splits, reverse stock splits, stock
dividends, mergers, recapitalizations or other change in the capital
structure of the Company, an appropriate adjustment shall be made by
the Board of Directors in: (i) the number of shares of Common Stock
subject to the Option Plan, (ii) the number and class of shares of
Common Stock subject to any option or stock purchase right outstanding
under the Option Plan, and (iii) the exercise price of any such
outstanding option or stock purchase right. The determination of the
Board of Directors as to which adjustments shall be made shall be
conclusive. In the event of a proposed dissolution or liquidation of
the Company, all outstanding options and stock purchase rights will
terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board of Directors. The Board
may, in the exercise of its sole discretion in such instances, declare
that any option and stock purchase right shall terminate as of a date
fixed by the Board and give each optionee or rightholder the right to
exercise his option or stock purchase right as to all or any part of
the optioned or restricted stock, including shares as to which the
option or stock purchase right would not otherwise be exercisable.
In the event of a merger of the Company with or into another
corporation, the sale of substantially all of the assets of the Company
or the acquisition by any person, other than the Company, of 50% or
more of the Company's then outstanding securities, each outstanding
option and stock purchase right shall be assumed or an equivalent
option and stock purchase right shall be substituted by the successor
corporation; provided, however, if such successor or purchaser refuses
to assume the then outstanding options or stock purchase rights, the
Option Plan provides for the acceleration of the exercisability of all
or some outstanding options and stock purchase rights.
(g) Amendment and Termination of the Option Plan. The
Board may at anytime amend, alter, suspend or terminate the Option
Plan. The Company shall obtain stockholder approval of any amendment to
the Option Plan in such a manner and to such a degree as is necessary
and desirable to comply with Rule 16b-3 of the Exchange Act or Section
422 of the Code (or any other applicable law or regulation, including
the requirements of any exchange or quotation system on which the
Common Stock is listed or quoted). Any amendment or termination of the
Option Plan shall not affect options or stock purchase rights already
granted and such options or stock purchase rights shall remain in full
force and effect as if the Option Plan had not been amended or
terminated, unless mutually agreed otherwise between the optionee or
rightholder and the Company, which agreement must be in writing and
signed by the optionee or rightholder and the Company. In any event,
the Option Plan shall terminate in November 2002. Any options or stock
purchase rights outstanding under the Option Plan at the time of its
termination shall remain outstanding until they expire by their terms.
FEDERAL TAX INFORMATION
Pursuant to the Option Plan, the Company may grant either "incentive
stock options," as defined in Section 422 of the Code, nonstatutory options or
stock purchase rights.
An optionee who receives an incentive stock option grant will not
recognize any taxable income either at the time of grant or exercise of the
option, although the exercise may subject the optionee to the alternative
minimum tax. Upon the sale or other disposition of the shares more than two
years after the grant of the option and one year after the exercise of the
option, any gain or loss will be treated as a long-term or short-term capital
gain or loss, depending upon the holding period. If these holding periods are
not satisfied, the optionee will recognize ordinary income at the time of sale
or disposition equal to the difference between the exercise price and the lower
of (i) the fair market value of the shares at the date of the option exercise or
(ii) the sale price of the shares. The Company will be entitled to a deduction
in the same amount as the ordinary income recognized by the optionee. Any gain
or loss recognized on such a premature disposition of the shares in excess of
the amount treated as ordinary income will be characterized as long-term or
short-term capital gain or loss, depending on the holding period.
All options that do not qualify as incentive stock options are referred
to as nonstatutory options. An optionee will not recognize any taxable income at
the time he or she receives a nonstatutory option grant. However, upon exercise
of the nonstatutory option, the optionee will recognize ordinary taxable income
generally measured as the excess of the fair
9
<PAGE> 12
market value of the shares purchased on the date of exercise over the purchase
price. Any taxable income recognized in connection with an option exercise by an
optionee who is also an employee of the Company will be subject to tax
withholding by the Company. Upon the sale of such shares by the optionee, any
difference between the sale price and the fair market value of the shares on the
date of exercise of the option will be treated as long-term or short-term
capital gain or loss, depending on the holding period. The Company will be
entitled to a tax deduction in the same amount as the ordinary income recognized
by the optionee with respect to shares acquired upon exercise of a nonstatutory
option.
Stock purchase rights will generally be taxed in the same manner as
nonstatutory stock options. However, restricted stock is usually purchased upon
exercise of a stock purchase right. At the time of purchase, restricted stock is
subject to a "substantial risk of forfeiture" within the meaning of Section 83
of the Code. As a result, the purchaser will not recognize ordinary income at
the time of purchase. Instead, the purchaser will recognize ordinary income on
the dates when the shares cease to be subject to substantial risk of forfeiture.
The shares will generally cease to be subject to a substantial risk of
forfeiture when they are no longer subject to the Company's right to repurchase
the stock at the original purchase price upon the purchaser's termination of
employment with the Company (i.e., as the shares "vest"). At such times, the
purchaser will recognize the ordinary income measured as the difference between
the purchase price and the fair market value of the stock on the date of
vesting. However, a purchaser may accelerate to the date of purchase his
recognition of ordinary income, if any, and the beginning of any capital gain
holding period, by timely filing an election pursuant to Section 83(b) of the
Code. In such event, the ordinary income recognized, if any, would be equal to
the difference between the purchase price and the fair market value of the stock
on the date of purchase, and the capital gain holding period would commence on
the purchase date. The ordinary income recognized by a purchaser who is an
employee will be treated as wages and will be subject to tax withholding by the
Company. Generally, the Company will be entitled to a tax deduction in the
amount and at the time the purchaser recognizes ordinary income. Different rules
may apply in the case of corporate insiders.
The foregoing is only a summary of the effect of federal income
taxation upon the optionee or rightholder and the Company with respect to the
grant and exercise of options and stock purchase rights under the Option Plan,
does not purport to be complete, and does not discuss the tax consequences of
the optionee's death or the income tax laws of any municipality, state or
foreign country in which an optionee may reside.
10
<PAGE> 13
PROPOSAL NO. 3
APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
GENERAL
The Company's Certificate of Incorporation, as currently in effect (the
"Certificate"), provides that the Company is authorized to issue two classes of
stock consisting of 60,000,000 shares of Common Stock, $0.001 par value per
share, and 1,000,000 shares of Preferred Stock, $0.001 par value per share. In
November 1998, the Board of Directors authorized an amendment to the Certificate
to increase the authorized number of shares of Common Stock to 120,000,000
shares. The stockholders are being asked to approve at the Annual Meeting such
amendment to the Certificate. Under the proposed amendment, the first paragraph
of the Article numbered "Fourth" of the Certificate would be amended to read as
follows:
"This corporation is authorized to issue two classes of shares
to be designated respectively Preferred Stock ("Preferred") and Common
Stock ("Common"). The total number of shares of Preferred this
corporation shall have authority to issue shall be 1,000,000, $0.001
par value, and the total number of shares of Common which this
corporation shall have the authority to issue shall be 120,000,000,
$0.001 par value."
The Company currently has 60,000,000 authorized shares of Common Stock.
Of this authorized number, 37,304,105 shares were issued and outstanding as of
the Record Date. In addition, as of November 5, 1998, a total of 1,698,520
shares of Common Stock were reserved for future grant or for issuance upon the
exercise of outstanding options under the Option Plan and 353,467 shares were
reserved for issuance under the 1992 Employee Stock Purchase Plan.
PURPOSE AND EFFECT OF THE AMENDMENT
The principal purpose of the proposed amendment to the Certificate is
to authorize additional shares of Common Stock which will be available in the
event the Board of Directors determines that it is necessary or appropriate to
permit future stock dividends or stock splits, to raise additional capital
through the sale of securities, to acquire another company or its business or
assets, to establish strategic relationships with corporate partners, to provide
equity incentives to employees, officers or directors or to pursue other
matters. The Board of Directors has no present agreement, arrangement or
intention to issue any of the shares for which approval is sought. If the
amendment is approved by the stockholders, the Board of Directors does not
intend to solicit further stockholder approval prior to the issuance of any
additional shares of Common stock, except as may be required by applicable law.
The increase in authorized Common Stock will not have any immediate
effect on the rights of existing stockholders. However, the Board will have the
authority to issue authorized Common Stock without requiring future stockholder
approval of such issuances, except as may be required by applicable law. To the
extent that additional authorized shares are issued in the future, they may
decrease the existing stockholders' percentage equity ownership and, depending
on the price at which they are issued, could be dilutive to the existing
stockholders. The holders of Common Stock have no preemptive rights.
POTENTIAL ANTI-TAKEOVER EFFECT
The increase in the authorized number of shares of Common Stock and the
subsequent issuance of such shares could have the effect of delaying or
preventing a change in control of the Company without further action by the
stockholders. Shares of authorized and unissued Common Stock could (within the
limits imposed by applicable law and stock exchange policies) be issued in one
or more transactions which would make a change in control of the Company more
difficult, and therefore less likely. Any such issuance of additional stock
could have the effect of diluting the earnings per share and book value per
share of outstanding shares of Common Stock or the stock ownership and voting
rights of a person seeking to obtain control of the Company.
The Company is not presently aware of any pending or proposed
transaction involving a change in control of the Company. While it may be deemed
to have potential anti-takeover effects, the proposed amendment to increase the
authorized Common Stock is not prompted by any specific effort or takeover
threat currently perceived by management.
11
<PAGE> 14
REQUIRED VOTE; RECOMMENDATION OF THE BOARD OF DIRECTORS
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock entitled to vote is required to approve the amendment to
the Company's Certificate of Incorporation. Both abstentions and broker
non-votes will have the same effect as votes against this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS
PROPOSAL.
12
<PAGE> 15
PROPOSAL NO. 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP to audit the
financial statements of the Company for the fiscal year ending August 31, 1999.
KPMG Peat Marwick LLP (or its predecessor firm) has audited the Company's
financial statements since the fiscal year ended August 31, 1984. A
representative of KPMG Peat Marwick LLP is expected to be present at the Annual
Meeting, will have the opportunity to make a statement, and is expected to be
available to respond to appropriate questions.
REQUIRED VOTE; RECOMMENDATION OF THE BOARD OF DIRECTORS
Ratification of the appointment of the Company's independent auditors
requires the affirmative vote of a majority of the Votes Cast. In the event that
the stockholders do not approve the selection of KPMG Peat Marwick LLP, the
appointment of the independent auditors will be reconsidered by the Board of
Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS
PROPOSAL.
13
<PAGE> 16
OTHER INFORMATION
SHARE OWNERSHIP BY PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock
of the Company as of the Record Date by: (i) each of the Company's directors and
nominees for director; (ii) each of the Named Officers listed in the Summary
Compensation Table below; (iii) all current directors and executive officers of
the Company as a group; and (iv) each person known by the Company to own
beneficially more than 5% of the outstanding shares of its Common Stock. The
number and percentage of shares beneficially owned is determined under rules of
the Securities and Exchange Commission ("SEC"), and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under such
rules, beneficial ownership includes any shares as to which the individual has
sole or shared voting power or investment power and also any shares as to which
the individual has the right to acquire within 60 days of the Record Date
through the exercise of any stock option or other right. Unless otherwise
indicated in the footnotes, each person has sole voting and investment power (or
shares such powers with his or her spouse) with respect to the shares shown as
beneficially owned. A total of 37,304,105 shares of the Company's Common Stock
were issued and outstanding as of the Record Date.
<TABLE>
<CAPTION>
Number of Percent of
Directors, Named Officers and Principal Stockholders Shares Total
- - ---------------------------------------------------- ---------- ----------
<S> <C> <C>
Principal Stockholders:
William D. Morean(1)(2)...................................... 13,056,000 35.0%
c/o Jabil Circuit, Inc.
10800 Roosevelt Blvd.
St. Petersburg, Florida 33716
Audrey M. Petersen(1)(3)..................................... 8,029,165 21.5%
c/o Jabil Circuit, Inc.
10800 Roosevelt Blvd.
St. Petersburg, Florida 33716
Thomas A. Sansone(4)......................................... 2,263,900 5.9%
c/o Jabil Circuit, Inc.
10800 Roosevelt Blvd.
St. Petersburg, Florida 33716
Directors(5):
Ronald J. Rapp............................................... 10,000 *
Lawrence J. Murphy(6)........................................ 55,333 *
Mel S. Lavitt(7)............................................. 62,000 *
Steven A. Raymund(8)......................................... 14,400 *
Frank A. Newman(9)........................................... 2,400 *
Named Officers(5)(10):
Wesley B. Edwards(11)........................................ 77,079 *
Timothy L. Main.............................................. 62,807 *
All current directors and executive officers as a group
(22 persons)(12)........................................... 15,824,000 40.7%
----------
</TABLE>
- - -------------------
* Less than one percent.
(1) Includes 6,380,500 shares held by the William E. Morean Residual Trust,
as to which Mr. Morean and Ms. Audrey Petersen (Mr. Morean's mother)
share voting and dispositive power as members of the Management
Committee created under the Trust. Ms. Petersen is also a co-trustee of
the Trust.
(2) Includes (i) 6,575,500 shares held of record by Cheyenne Holdings
Limited Partnership, a Nevada limited partnership, of which Morean
Management Company is the sole general partner, as to which Mr. Morean
has sole voting and dispositive power, and (ii) 100,000 shares held of
record by Eagle's Wing Foundation, a private charitable foundation of
which Mr. Morean is a director and with respect to which Mr. Morean may
be deemed to have shared voting and dispositive power.
(3) Includes (i) 1,548,665 shares held by Morean Limited Partnership, a
North Carolina limited partnership, of which Morean-Petersen, Inc. is
the sole general partner, as to which Ms. Petersen has shared voting
and dispositive power; Ms. Petersen is the President of
Morean-Petersen, Inc., and (ii) 100,000 shares held by the Audrey
Petersen Revocable Trust.
(4) Includes (i) 790,000 shares held by TASAN Limited Partnership, a Nevada
limited partnership, of which TAS Management, Inc. is the sole general
partner, as to which Mr. Sansone has sole voting and dispositive power;
Mr.
14
<PAGE> 17
Sansone is President of TAS Management, Inc.; (ii) 191,000 shares held
by Life's Requite, Inc., a private charitable foundation of which Mr.
Sansone is a director and as to which Mr. Sansone may be deemed to have
shared voting and dispositive power, and (iii) 1,280,400 shares subject
to options held by Mr. Sansone that are exercisable within 60 days of
the Record Date.
(5) Messrs. Morean and Sansone are Directors and Named Officers of the
Company in addition to being Principal Stockholders.
(6) Includes 51,333 shares subject to options held by Mr. Murphy that are
exercisable within 60 days of the Record Date.
(7) Represents shares subject to options held by Mr. Lavitt that are
exercisable within 60 days of the Record Date.
(8) Represents shares subject to options held by Mr. Raymund that are
exercisable within 60 days of the Record Date.
(9) Represents shares subject to options held by Mr. Newman that are
exercisable within 60 days of the Record Date.
(10) Mr. Rapp is a Named Officer of the Company in addition to being a
director.
(11) Includes 74,000 shares subject to options held by Mr. Edwards that are
exercisable within 60 days of the Record Date.
(12) Includes 1,578,328 shares subject to options held by 10 executive
officers and four non-employee directors that are exercisable within 60
days of the Record Date.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file initial reports of ownership on Form 3
and changes in ownership on Form 4 or Form 5 with the SEC. Such officers,
directors and ten-percent stockholders are also required by SEC rules to furnish
the Company with copies of all such forms that they file.
Based solely on its review of the copies of such forms received by the
Company from certain reporting persons, the Company believes that, during the
fiscal year ended August 31, 1998, all Section 16(a) filing requirements
applicable to its officers, directors and ten percent stockholders were complied
with, except with respect to the following officers and directors. Mr. Frank A.
Newman did not timely file his Form 3. The number of required Form 4s that were
not timely filed by Messrs. Scott D. Brown, William D. Morean, Paul Bittner, and
Randon Haight and the number of transactions that were reported late are shown
in parentheses after their names: Brown (1,4), Bittner (1,1), Haight (2,5), and
Morean (1,5). Messrs. Brown's and Morean's transactions were reported on Form
4s, and Messrs. Haight's and Bittner's transactions were reported on Form 5s.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee was formed in November 1992 and is
currently composed of Messrs. Newman and Raymund. No member of the Compensation
Committee is currently or was formerly an officer or an employee of the Company
or its subsidiaries.
15
<PAGE> 18
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows, as to (i) the Chief Executive Officer, and
(ii) each of the four other most highly compensated executive officers (a) whose
salary plus bonus exceeded $100,000 during the last fiscal year, and (b) who
served as executive officers at fiscal year end, in addition to any individuals
who were not serving as executive officers at fiscal year end but who, if they
had been, would have been included among the four most highly compensated
executive officers (collectively the "Named Officers"), information concerning
compensation paid for services to the Company in all capacities during the three
fiscal years ended August 31, 1998:
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
FISCAL ------------------------------ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(2)
- - --------------------------- ------ --------- -------- ------------------
<S> <C> <C> <C> <C>
William D. Morean......................... 1998 $369,231 $300,000 $ 49,532
Chairman of the Board and 1997 284,616 340,736 62,299
Chief Executive Officer 1996 200,000 400,000 7,808
Thomas A. Sansone......................... 1998 369,231 300,000 41,206
President 1997 284,616 217,054 62,269
1996 200,000 400,000 7,808
Ronald J. Rapp............................ 1998 234,616 150,000 33,831
Executive Vice President, 1997 189,231 150,364 30,528
Operations 1996 130,000 121,015 6,021
Timothy L. Main........................... 1998 234,616 100,000 29,294
Senior Vice President, 1997 189,000 125,000 26,489
Business Development 1996 135,000 123,340 8,665
Wesley B. Edwards......................... 1998 184,616 100,000 28,845
Senior Vice President, 1997 145,385 130,242 20,479
Operations 1996 120,462 89,946 6,135
</TABLE>
- - -----------------------
(1) Compensation deferred at the election of executive is included in the
year earned.
(2) Represents payments pursuant to the Company's Profit Sharing Plan. The
Board of Directors determines the aggregate amount of payments under
the plan based on quarterly financial results. The actual amount paid
to individual participants is based on the participant's salary and
bonus actually paid (not necessarily earned) during such quarter.
During the last three fiscal years, the Company has not provided to the
Named Officers any compensation disclosable as "Other Annual Compensation"
(except for perquisites that, for any Named Officer, were less than the lesser
of $50,000 or 10% of such Named Officer's total salary and bonus), nor has it
granted any restricted stock awards or options to Named Officers. The Company
does not have any long-term incentive plans within the meaning of SEC rules.
OPTION GRANTS IN LAST FISCAL YEAR
There were no grants of stock options or stock appreciation rights made
during the fiscal year ended August 31, 1998 to any of the Named Officers.
OPTION EXERCISES AND FISCAL YEAR END OPTION VALUES
The following table sets forth certain information concerning the
exercise of options during the fiscal year ended August 31, 1998, and the
aggregate value of unexercised options at August 31, 1998, for each of the Named
Officers. The Company does not have any outstanding stock appreciation rights.
16
<PAGE> 19
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-The-Money Options at
August 31, 1998(#) August 31, 1998($)(1)
---------------------------- ----------------------------
Shares
Acquired on Value
Name Exercise(#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
- - ---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William D. Morean........ -- -- -- -- -- --
Thomas A. Sansone........ -- -- 1,280,400 -- $28,975,452 --
Ronald J. Rapp........... -- -- -- -- -- --
Timothy L. Main.......... 62,480 $ 1,413,922 -- -- -- --
Wesley B. Edwards........ -- -- 63,280 10,720 $ 1,320,654 $ 223,726
</TABLE>
- - -------------------
(1) The closing price for Jabil's common stock as reported through the NYSE
on August 31, 1998 was $23.50. Value is calculated on the basis of the
difference between the option exercise price and $23.50 multiplied by
the number of shares of Common Stock to which the exercise relates.
CERTAIN TRANSACTIONS
C.E. Unterberg, Towbin (or its predecessors) has performed certain
investment banking services for the Company in the past and may be asked to
perform investment banking services for the Company in the future. Mel S.
Lavitt, a director of the Company, is a Managing Director of C.E. Unterberg,
Towbin.
Mr. Murphy is currently working for the Company as a consultant on a
part-time basis. In exchange for providing the Company with consulting services,
Mr. Murphy received $150,000 during fiscal year 1998, and was granted an option
during fiscal year 1998 to purchase 10,000 shares of the Company's Common Stock.
17
<PAGE> 20
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
THE COMMITTEE'S RESPONSIBILITIES: The Compensation Committee of the
Board (the "Committee") has responsibility for setting and administering the
policies which govern executive compensation. The Committee is composed entirely
of outside directors. Reports of the Committee's actions are presented to the
full Board. The purpose of this report is to summarize the philosophical
principals, specific program objectives and other factors considered by the
Committee in reaching its determinations regarding the compensation of the
Company's executive officers.
COMPENSATION PHILOSOPHY: The Committee has approved principals for the
management compensation program which:
- encourage the development and the achievement of strategic
objectives that enhance long-term stockholder value,
- attract, retain and motivate key personnel who contribute to
long-term success of the Company, and
- provide a compensation package that recognizes individual
contributions and Company performance.
COMPENSATION METHODOLOGY: Jabil strives to provide a comprehensive
executive compensation program that is competitive and performance-based in
order to attract and retain superior executive talent. Each year the Committee
reviews market data and assesses Jabil's competitive position for three
components of executive compensation: (1) base salary, (2) annual incentives,
and (3) long-term incentives. To assist in benchmarking the competitiveness of
its compensation programs, Jabil uses William M. Mercer Incorporated ("Mercer"),
a nationally recognized executive compensation firm. Mercer utilizes a number of
national compensation surveys and provide databases for companies of similar
size to the Company, as well as specific analysis of the compensation
information contained in the proxy statements of a number of companies in the
same industry as the Company.
COMPONENTS OF COMPENSATION:
- BASE SALARY. Base salary is intended to be competitive with
the salaries of comparable executives at technology companies
of similar size and is also intended to reflect consideration
of an officer's experience, business judgment, and role in
developing and implementing overall business strategy for the
Company. The Committee believes that the Company's
compensation of executive officers falls within the median of
industry compensation levels. Base salaries are based upon
qualitative and subjective factors, and no specific formula is
applied to determine the weight of each factor. For all
executive officer positions, actual base salary levels are
currently targeted at average levels of the competition.
- BONUSES. Bonuses for executive officers are intended to
reflect the Company's belief that a portion of the annual
compensation of the executive should be contingent upon the
performance of the Company, as well as the individual's
contribution. Bonuses are paid on an annual or quarterly basis
and are based on qualitative and subjective factors, including
the pre-tax profitability of the Company, business
development, operational performance, and other measures of
efficiency appropriate to the officer compensated.
- LONG-TERM INCENTIVES. The Company utilizes stock options as
long-term incentives to attract and retain key personnel or
reward exceptional performance. Stock options are granted
periodically by the Stock Option Committee and are based on
both qualitative and subjective factors. Options are granted
with an exercise price equal to the fair market value of the
Company's Common Stock on the last market trading day prior to
the date of determination (determined in accordance with the
option plan) and grants made during the last fiscal year vest
over a period of 50 months. This approach is designed to
create stockholder value over the long-term since the options
will provide value to the recipient only when the price of the
stock increases above the exercise price.
CHIEF EXECUTIVE OFFICER AND PRESIDENT COMPENSATION: The base salaries
of Messrs. Morean and Sansone were increased to be competitive with the salaries
of comparable executives at technology companies of similar size, based on the
findings of the Mercer report, and to provide certain increases based upon
certain subjective factors and the overall operating performance of the Company
during fiscal year 1998. The Compensation Committee also awarded bonuses to
Messrs. Morean and Sansone based upon certain subjective factors and the overall
operating performance of the Company during fiscal year 1998.
18
<PAGE> 21
IRS LIMITS ON DEDUCTIBILITY OF COMPENSATION: In fiscal year 1998, the
Company took steps to try and mitigate certain potential impacts with respect to
Section 162(m) of the Internal Revenue Code of 1986, as amended. Section 162(m),
with certain exceptions, limits the Company's tax deduction for compensation
paid to Named Executives to $1,000,000 per covered executive year. The Company
expects no adverse tax consequences under Section 162(m) for fiscal year 1998.
By the Compensation Committee
FRANK A. NEWMAN
STEVEN A. RAYMUND
19
<PAGE> 22
COMPANY STOCK PRICE PERFORMANCE GRAPH
The Company's Common Stock has been listed on the NYSE since May 5,
1998, prior to which it was quoted on The Nasdaq Stock Market Inc.'s National
Market ("Nasdaq"). As a result of the change, the Company is required, under
applicable SEC rules, in this year's Proxy Statement, to provide a comparison of
the performance of the Common Stock with the market indices of both the NYSE and
Nasdaq. Accordingly, the following Performance Graph compares the Company's
cumulative total stockholder return on the Common Stock for a five-year period
(August 31, 1993 to August 31, 1998) with (i) the NYSE Stock Market Index, (ii)
the Nasdaq Stock Market Index and (iii) the Nasdaq Stock Market U.S. Companies
Index and the Nasdaq Stock Market - Computer Manufacturers Index. The comparison
assumes $100 was invested on August 31, 1993 in the Common Stock and in each of
the comparison groups, and assumes reinvestment of dividends (the Company paid
no dividends during the periods):
[STOCK PRICE PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
INDEX 8/31/93 8/31/94 8/31/95 8/30/96 8/29/97 8/31/98
- - ----- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Jabil Circuit, Inc. 100.0 81.8 163.6 148.5 1,436.4 569.7
NASDAQ Stock Market (US Companies) 100.0 104.1 140.2 158.1 220.5 209.8
NYSE Stock Market (US Companies) 100.0 104.6 124.9 148.0 202.4 211.9
NASDAQ Computer Manufacturers Stock 100.0 104.2 182.9 217.6 345.9 421.7
</TABLE>
20
<PAGE> 23
OTHER MATTERS
The Company knows of no other matters to be submitted to the Annual
Meeting. If any other matters properly come before the Annual Meeting, it is the
intention of the persons named in the enclosed proxy card to vote the shares
they represent as the Company may recommend.
It is important that your shares be represented at the Annual Meeting,
regardless of the number of shares that you hold. You are, therefore, urged to
mark, date, execute and return, at your earliest convenience, the accompanying
proxy card in the enclosed envelope.
THE BOARD OF DIRECTORS
St. Petersburg, Florida
December 21, 1998
21
<PAGE> 24
APPENDIX I
JABIL CIRCUIT, INC.
1992 STOCK OPTION PLAN
(AS AMENDED THROUGH NOVEMBER, 1998)
1. Purposes of the Plan. The purposes of this Stock Option Plan
are:
- to attract and retain the best available personnel
for positions of substantial responsibility,
- to provide additional incentive to Employees and
Consultants, and
- to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall
apply:
(a) "Administrator" means the Board or any of its
Committees as shall be administering the Plan, in accordance with Section 4 of
the Plan.
(b) "Applicable Laws" means the legal requirements
relating to the administration of stock option plans under state corporate and
securities laws and the Code.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "Committee" means a Committee appointed by the Board
in accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock, $.001 par
value, of the Company.
(g) "Company" means Jabil Circuit, Inc., a Delaware
corporation.
(h) "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services and who is
compensated for such services, including without limitation non-Employee
Directors who are paid only a director's fee by the Company or who are
compensated by the Company for their services as non-Employee Directors. In
addition, as used herein, "consulting relationship" shall be deemed to include
service by a non-Employee Director as such.
(i) "Continuous Status as an Employee or Consultant"
means that the employment or consulting relationship is not interrupted or
terminated by the Company, any Parent or Subsidiary. Continuous Status as an
Employee or Consultant shall not be considered interrupted in the case of (i)
any leave of absence approved by the Board, including sick leave, military
leave, or any other personal leave; provided, however, that for purposes of
Incentive Stock Options, any such leave may not exceed ninety (90) days, unless
reemployment upon the expiration of such leave is guaranteed by contract
(including certain Company policies) or statute, or (ii) transfers between
locations of the Company or between the Company, its Parent, its Subsidiaries or
its successor; or (iii) a change in the status of the Optionee from Employee to
Consultant or from Consultant to Employee.
(j) "Director" means a member of the Board.
<PAGE> 25
(k) "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
(l) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
(m) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(n) "Fair Market Value" means, as of any date, the value
of Common Stock determined as follows:
(i) If the Common Stock is fitted on any
established stock exchange or a national market system, including without
limitation the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotation ("NASDAQ") System, the Fair Market Value of a
Share of Common Stock shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such system or exchange (or
the exchange with the greatest volume of trading in Common Stock) on the last
market trading day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ
System (but not on the National Market System thereof) or is regularly quoted by
a recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(iii) In the absence of an established market for
the Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(o) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
(p) "Nonstatutory Stock Option" means an Option not
intended to qualify as an Incentive Stock Option.
(q) "Notice of Grant" means a written notice evidencing
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.
(r) "Officer" means a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(s) "Option" means a stock option granted pursuant to the
Plan.
(t) "Option Agreement" means a written agreement between
the Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.
(u) "Option Exchange Program" means a program whereby
outstanding options are surrendered in exchange for options with a lower
exercise price.
(v) "Optioned Stock" means the Common Stock subject to an
Option or Stock Purchase Right.
(w) "Optionee" means an Employee or Consultant who holds
an outstanding Option or Stock Purchase Right.
(x) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
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<PAGE> 26
(y) "Plan" means this 1992 Stock Option Plan.
(z) "Restricted Stock" means shares of Common Stock
acquired pursuant to a grant of Stock Purchase Rights under Section 11 below.
(aa) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.
(bb) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or
any successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan.
(cc) "Share" means a share of the Common Stock, as
adjusted in accordance with Section 13 of the Plan.
(dd) "Stock Purchase Right" means the right to purchase
Common Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of
Grant.
(ee) "Subsidiary" means a "subsidiary corporation",
whether now or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of
Section 13 of the Plan, the maximum aggregate number of Shares which may be
optioned and sold under the Plan is 3,198,520 Shares. The Shares may be
authorized, but unissued, or reacquired Common Stock. However, should the
Company reacquire Shares which were issued pursuant to the exercise of an Option
or Stock Purchase Right, such Shares shall not become available for future grant
under the Plan.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated).
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. If permitted
by Rule 16b-3, the Plan may be administered by different bodies with respect to
Directors, Officers who are not Directors, and Employees who are neither
Directors nor Officers.
(ii) Administration With Respect to Directors and
Officers Subject to Section 16(b). With respect to Option or Stock Purchase
Right grants made to Employees who are also Officers or Directors subject to
Section 16(b) of the Exchange Act, the Plan shall be administered by (A) the
Board, if the Board may administer the Plan in compliance with the rules
governing a plan intended to qualify as a discretionary plan under Rule 16b-3,
or (B) a committee designated by the Board to administer the Plan, which
committee shall be constituted to comply with the rules governing a plan
intended to qualify as a discretionary plan under Rule 16b-3. Once appointed,
such Committee shall continue to serve in its designated capacity until
otherwise directed by the Board. From time to time the Board may increase the
size of the Committee and appoint additional members, remove members (with or
without cause) and substitute new members, fill vacancies (however caused), and
remove all members of the Committee and thereafter directly administer the Plan,
all to the extent permitted by the rules governing a plan intended to qualify as
a discretionary plan under Rule 16b-3.
(iii) Administration With Respect to Other
Persons. With respect to Option or Stock Purchase Right grants made to Employees
or Consultants who are neither Directors nor Officers of the Company, the Plan
shall be
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<PAGE> 27
administered by (A) the Board or (B) a committee designated by the Board, which
committee shall be constituted to satisfy Applicable Laws. Once appointed, such
Committee shall serve in its designated capacity until otherwise directed by the
Board. The Board may increase the size of the Committee and appoint additional
members, remove members (with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by
Applicable Laws.
(b) Powers of the Administrator. Subject to the
provisions of the Plan, and in the case of a Committee, subject to the specific
duties delegated by the Board to such Committee, the Administrator shall have
the authority, in its discretion:
(i) to determine the Fair Market Value of the
Common Stock, in accordance with Section 2(n) of the Plan;
(ii) to select the Consultants and Employees to
whom Options and Stock Purchase Rights may be granted hereunder;
(iii) to determine whether and to what extent
Options and Stock Purchase Rights or any combination thereof, are granted
hereunder;
(iv) to determine the number of shares of Common
Stock to be covered by each Option and Stock Purchase Right granted hereunder;
(v) to approve forms of agreement for use under
the Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options or Stock Purchase Rights may be exercised (which may
be based on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any Option
or Stock Purchase Right or the shares of Common Stock relating thereto, based in
each case on such factors as the Administrator, in its sole discretion, shall
determine;
(vii) to reduce the exercise price of any Option
or Stock Purchase Right to the then current Fair Market Value if the Fair Market
Value of the Common Stock covered by such Option or Stock Purchase Right shall
have declined since the date the Option or Stock Purchase Right was granted;
(viii) to construe and interpret the terms of the
Plan;
(ix) to prescribe, amend and rescind rules and
regulations relating to the Plan;
(x) to modify or amend each Option or Stock
Purchase Right (subject to Section 15(c) of the Plan);
(xi) to authorize any person to execute on behalf
of the Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;
(xii) to institute an Option Exchange Program;
(xiii) to determine the terms and restrictions
applicable to Options and Stock Purchase Rights and any Restricted Stock, and
(xiv) to make all other determinations deemed
necessary or advisable for administering the Plan.
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<PAGE> 28
(c) Effect of Administrator's Decision. The
Administrator's decisions, determinations and interpretations shall be final and
binding on all Optionees and any other holders of Options or Stock Purchase
Rights.
5. Eligibility. Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Employees and Consultants. Incentive Stock Options may
be granted only to Employees. If otherwise eligible, an Employee or Consultant
who has been granted an Option or Stock Purchase Right may be granted additional
Options or Stock Purchase Rights.
6. Limitations.
(a) Each Option shall be designated in the Notice of
Grant as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value:
(i) of Shares subject to an Optionee's incentive
stock options granted by the Company, any Parent or Subsidiary, which (ii)
become exercisable for the first time during any calendar year (under all plans
of the Company or any Parent or Subsidiary) exceeds $100,000, such excess
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted, and the Fair Market Value of the Shares shall be
determined as of the time of grant.
(b) Neither the Plan nor any Option or Stock Purchase
Right shall confer upon an Optionee any right with respect to continuing the
Optionee's employment or consulting relationship with the Company, nor shall
they interfere in any way with the Optionee's right or the Company's right to
terminate such employment or consulting relationship at any time, with or
without cause.
(c) The following limitations shall apply to grants of
Options:
(i) No Employee shall be granted, in any fiscal
year of the Company, Options to purchase more than 882,520 Shares.
(ii) The limitation described in (i) above shall
be adjusted proportionately in connection with any change in the Company's
capitalization as described in Section 13 of the Plan.
(iii) If an Option is canceled in the same fiscal
year of the Company in which it was granted (other than in connection with a
transaction described in Section 13 of the Plan), the canceled Option will be
counted against the limitation described in (i) above. Furthermore, the
reduction of the exercise price of an Option shall be treated as a cancellation
of the Option and the grant of a new Option.
7. Term of Plan. Subject to Section 19 of the Plan, the Plan
shall become effective upon the earlier to occur of its adoption by the Board or
its approval by the stockholders of the Company as described in Section 19 of
the Plan. It shall continue in effect for a term of ten (10) years unless
terminated earlier under Section 15 of the Plan.
8. Term of Option. The term of each Option shall be stated in the
Notice of Grant; provided, however, that in the case of an Incentive Stock
Option, the term shall be ten (10) years from the date of grant or such shorter
term as may be provided in the Notice of Grant. Moreover, in the case of an
Incentive Stock Option granted to an Optionee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be five (5) years from
the date of grant or such shorter term as may be provided in the Notice of
Grant.
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<PAGE> 29
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option (A)
granted to an Employee who, at the time the Incentive Stock Option is granted,
owns stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of grant, (B) granted to any Employee, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant.
(ii) In the case of a Nonstatutory Stock Option,
the per Share exercise price shall be determined by the Administrator.
(b) Waiting Period and Exercise Dates. At the time an
Option is granted, the Administrator shall fix the period within which the
Option may be exercised and shall determine any conditions which must be
satisfied before the Option may be exercised. In so doing, the Administrator may
specify that an Option may not be exercised until the completion of a service
period.
(c) Form of Consideration. The Administrator shall
determine the acceptable form of consideration for exercising an Option,
including the method of payment. In the case of an Incentive Stock Option, the
Administrator shall determine the acceptable form of consideration at the time
of grant. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six months on the date of surrender, and (B) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;
(v) delivery of a properly executed exercise
notice together with such other documentation as the Administrator and the
broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price;
(vi) any combination of the foregoing methods of
payment; or
(vii) such other consideration and method of
payment for the issuance of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any
Option granted hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement.
An Option may not be exercised for a fraction of a
Share.
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<PAGE> 30
An Option shall be deemed exercised when the Company
receives: (i) written notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the stock certificate evidencing such Shares is issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 13 of the Plan.
Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Employment or Consulting Relationship.
In the event that an Optionee's Continuous Status as an Employee or Consultant
terminates (other than upon the Optionee's death or Disability), the Optionee
may exercise his or her Option, but only within such period of time as is
determined by the Administrator, and only to the extent that the Optionee was
entitled to exercise it at the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Notice of Grant).
In the case of an Incentive Stock Option, the Administrator shall determine such
period of time (in no event to exceed ninety (90) days from the date of
termination) when the Option is granted. If, at the date of termination, the
Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option within the
time specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
(c) Disability of Optionee. In the event that an
Optionee's Continuous Status as an Employee or Consultant terminates as a result
of the Optionee's Disability, the Optionee may exercise his or her Option at any
time within 12 months from the date of such termination, but only to the extent
that the Optionee was entitled to exercise it at the date of such termination
(but in no event later than the expiration of the term of such Option as set
forth in the Notice of Grant). If, at the date of termination, the Optionee is
not entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an
Optionee, the Option may be exercised at any time within 12 months following the
date of death (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent that the Optionee was entitled to exercise the Option at
the date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time
offer to buy out, for a payment in cash or Shares, an Option previously granted,
based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made. Any such cash
offer made to an Officer or Director shall comply with the provisions of Rule
16-3 relating to cash settlement of stock appreciation rights. This provisions
is intended only to clarify the powers of the Administrator and shall not in any
way be deemed to create any rights on the part of Optionees to buyout offers or
payments.
11. Stock Purchase Rights.
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<PAGE> 31
(a) Rights to Purchase. Stock Purchase Rights may be
issued either alone, in addition to, or in tandem with, other awards granted
under the Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the offeree in writing, by means of a Notice of Grant, of
the terms, conditions and restrictions related to the offer, including the
number of Shares that the offeree shall be entitled to purchase, the price to be
paid (which price shall not be less than 50% of the Fair Market Value of the
Shares as of the date of the offer), and the time within which the offeree must
accept such offer, which shall in no event exceed six months from the date upon
which the Administrator made the determination to grant the Stock Purchase
Right. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator
determines otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's employment with the Company for any reason
(including death or Disability). The purchase price for Shares repurchased
pursuant to the Restricted Stock Purchase Agreement shall be the original price
paid by the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at a rate determined
by the Administrator.
(c) Other Provisions. The Restricted Stock Purchase
Agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its sole
discretion. In addition, the provisions of Restricted Stock Purchase Agreements
need not be the same with respect to each purchaser.
(d) Rights as a Stockholder. Once the Stock Purchase
Right is exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.
12. Non-Transferability of Options and Stock Purchase Rights. An
Option or Stock Purchase Right may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.
13. Adjustments Upon Changes in Capitalization, Dissolution,
Merger, Asset Sale or Change of Control.
(a) Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the number of shares of Common Stock
covered by each outstanding Option and Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options or Stock Purchase Rights have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option or Stock Purchase Right, as well as the price per share of Common Stock
covered by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Option or Stock Purchase Right.
(b) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, to the extent that an Option
or Stock Purchase Right has not been previously exercised, it will terminate
immediately prior to the consummation of such proposed action. The Board may, in
the exercise of its sole discretion in such instances, declare that any Option
or Stock Purchase Right shall terminate as of a date fixed by the Board and give
each Optionee the right to
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<PAGE> 32
exercise his or her Option or Stock Purchase Right as to all or any part of the
Optioned Stock, including Shares as to which the Option or Stock Purchase Right
would not otherwise be exercisable.
(c) Merger or Asset Sale. Subject to the provisions of
paragraph (d) hereof, in the event of a merger of the Company with or into
another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option and Stock Purchase Right shall be assumed or an
equivalent option or right shall be substituted by the successor corporation or
a Parent or Subsidiary of the successor corporation. In the event that the
successor corporation does not agree to assume the Option or Stock Purchase
Right or to substitute an equivalent option or right, the Administrator shall,
in lieu of such assumption or substitution, provide for the Optionee to have the
right to exercise the Option or Stock Purchase Right as to all or a portion of
the Optioned Stock, including Shares as to which it would not otherwise be
exercisable. If the Administrator makes an Option or Stock Purchase Right
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Administrator shall notify the Optionee that the Option or
Stock Purchase Right shall be fully exercisable for a period of fifteen (15)
days from the date of such notice, and the Option or Stock Purchase Right will
terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or Stock Purchase Right shall be considered assumed if,
following the merger or sale of assets, the option or right confers the right to
purchase, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holders of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger or sale of assets was not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation and the participant, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in Fair Market
Value to the per Share consideration received by holders of Common Stock in the
merger or sale of assets.
(d) Change in Control. In the event of a "Change in
Control" of the Company, as defined in paragraph (e) below, then the following
acceleration and valuation provisions shall apply:
(i) Except as otherwise determined by the Board,
in its discretion, prior to the occurrence of a Change in Control, any Options
and Stock Purchase Rights outstanding on the date such Change in Control is
determined to have occurred that are not yet exercisable and vested on such date
shall become fully exercisable and vested;
(ii) Except as otherwise determined by the Board,
in its discretion, prior to the occurrence of a Change in Control, all
outstanding Options and Stock Purchase Rights, to the extent they are
exercisable and vested (including Options and Stock Purchase Rights that shall
become exercisable and vested pursuant to subparagraph (i) above), shall be
terminated in exchange for a cash payment equal to the Change in Control Price
(reduced by the Exercise Price applicable to such Options or Stock Purchase
Rights). These cash proceeds shall be paid to the Optionee or, in the event of
death of an Optionee prior to payment, to the estate of the Optionee or to a
person who acquired the right to exercise the Option or Stock Purchase Right by
bequest or inheritance.
(e) Definition of "Change in Control". For purposes of
this Section 13, a "Change in Control" means the happening of any of the
following:
(i) When any "person," as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than the Company, a
Subsidiary or a Company employee benefit plan, including any trustee of such
plan acting as trustee) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the combined voting power of
the Company's then outstanding securities; or
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<PAGE> 33
(ii) The occurrence of a transaction requiring
stockholder approval, and involving the sale of all or substantially all of the
assets of the Company or the merger of the Company with or into another
corporation.
(f) Change in Control Price. For purposes of this Section
13, "Change in Control Price" shall be, as determined by the Board, (i) the
highest Fair Market Value of a Share within the 60 day period immediately
preceding the date of determination of the Change in Control Price by the Board
(the "60-Day Period"), or (ii) the highest price paid or offered per Share, as
determined by the Board, in any bona fide transaction or bona fide offer related
to the Change in Control of the Company, at any time within the 60-Day Period,
or (iii) some lower price as the Board, in its discretion, determines to be a
reasonable estimate of the fair market value of a Share.
14. Date of Grant. The date of grant of an Option or Stock
Purchase Right shall be, for all purposes, the date on which the Administrator
makes the determination granting such Option or Stock Purchase Right, or such
other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Optionee within a reasonable time after
the date of such grant.
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.
(b) Stockholder Approval. The Company shall obtain
stockholder approval of any Plan amendment to the extent necessary and desirable
to comply with Rule 16b-3 or with Section 422 of the Code (or any successor rule
or statute or other applicable law, rule or regulation, including the
requirements of any exchange or quotation system on which the Common Stock is
listed or quoted). Such stockholder approval, if required, shall be obtained in
such a manner and to such a degree as is required by the applicable law, rule or
regulation.
(c) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company.
16. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant
to the exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
shall comply with all relevant provisions of law, including, without limitation,
the Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, Applicable Laws, and the requirements of any
stock exchange or quotation system upon which the Shares may then be listed or
quoted, and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
(b) Investment Representations. As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the
person exercising such Option or Stock Purchase Right to represent and warrant
at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.
17. Liability of Company.
(a) Inability to Obtain Authority. The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
(b) Grants Exceeding Allotted Shares. If the Optioned
Stock covered by an Option or Stock Purchase Right exceeds, as of the date of
grant, the number of Shares which may be issued under the Plan without
additional stockholder
10
<PAGE> 34
approval, such Option or Stock Purchase Right shall be void with respect to such
excess Optioned Stock, unless stockholder approval of an amendment sufficiently
increasing the number of Shares subject to the Plan is timely obtained in
accordance with Section 15(b) of the Plan.
18. Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
19. Stockholder Approval. Continuance of the Plan shall be subject
to approval by the stockholders of the Company within 12 months before or after
the date the Plan is adopted. Such stockholder approval shall be obtained in the
manner and to the degree required under applicable federal and state law.
11
<PAGE> 35
APPENDIX II
DETACH HERE
PROXY
JABIL CIRCUIT, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints ROBERT L. PAVER and CHRIS A. LEWIS, or
either of them, each with power of substitution and revocation, as the proxy or
proxies of the undersigned to represent the undersigned and vote all shares of
the Common Stock of Jabil Circuit, Inc. that the undersigned would be entitled
to vote if personally present at the Annual Meeting of Stockholders of Jabil
Circuit, Inc. to be held at The Vinoy Country Club, Sunset Ballroom, 600 Snell
Isle Boulevard, St. Petersburg, Florida 33704, on Thursday, January 28, 1999, at
10:00 a.m., and at any adjournments thereof, upon the matters set forth on the
reverse side and more fully described in the Notice and Proxy Statement for said
Annual Meeting and in their discretion upon all other matters that may properly
come before said Annual Meeting.
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
- - ----------- CONTINUED AND TO BE SIGNED ON REVERSE SIDE -----------
SEE REVERSE SEE REVERSE
SIDE SIDE
- - ----------- -----------
<PAGE> 36
DETACH HERE
PLEASE MARK
[X] VOTES AS IN
THIS EXAMPLE.
THE SHARES COVERED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
CHOICES MADE. WHEN NO CHOICE IS MADE, THIS PROXY WILL BE VOTED FOR ALL
LISTED NOMINEES FOR DIRECTOR, FOR PROPOSALS 2, 3 AND 4, AND AS THE
PROXYHOLDERS DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE ANNUAL MEETING.
<TABLE>
<CAPTION>
1. Election of Directors FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C>
NOMINEES: William D. Morean, Thomas A. Sansone, 2. To approve an amendment to [ ] [ ] [ ]
Ronald J. Rapp, Lawrence J. Murphy, the Jabil Circuit, Inc. 1992
Mel S. Lavitt, Steven A. Raymund Stock Option Plan to (i)
and Frank A. Newman provide annual limits on the
number of shares of the
FOR WITHHELD Company's Common Stock
[ ] ALL [ ] FROM ALL subject to stock options that
NOMINEES NOMINEES may be granted to each
employee of the Company,
and (ii) increase the shares
[ ] reserved for issuance under the
plan from 1,698,520 as of
- - -------------------------------------------------- November 5, 1998 to
For all nominees except as noted on the line above 3,198,520 shares.
FOR AGAINST ABSTAIN
3. To approve an amendment to [ ] [ ] [ ]
the Company's Certificate of
Incorporation to increase the
number of authorized shares of
Common Stock from
60,000,000 to 120,000,000
FOR AGAINST ABSTAIN
4. To ratify the selection of [ ] [ ] [ ]
KPMG Peat Marwick LLP as
independent auditors for the
Company
5. With discretionary authority on such other matters as may
properly come before the Annual Meeting.
MARK HERE IF YOU PLAN TO ATTEND THE ANNUAL MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
The Annual Meeting may be held as scheduled only if a majority of the shares
outstanding are represented at the Annual Meeting by attendance or proxy.
Accordingly, please complete this proxy, and return it promptly in the enclosed
envelope.
Please date and sign exactly as your name(s) appear on your shares. If signing
for estates, trusts, partnerships, corporations or other entities, your title or
capacity should be stated. If shares are held jointly, each holder should sign.
</TABLE>
Signature:_______________ Date:________ Signature:_______________ Date:_________
